United States District Court, M.D. Florida, Orlando Division
Gregory A. Presnell, Judge
matter comes before the Court on the Motion to Dismiss Bad
Faith Claims (Doc. 25) filed by the Plaintiff, Stewart Title
Guaranty Company (henceforth, “Stewart Title”),
and the response in opposition (Doc. 29) filed by the
Defendant, The Machado Family Limited Partnership No. 1 (the
to the allegations of the Defendant's Answer and
Counterclaim (Doc. 22), which are accepted in pertinent part
as true for purposes of resolving the instant motion, the
Machado Partnership is the assignee of a $1.4 million lenders
title policy (henceforth, the “Policy”) issued by
Stewart Title in connection with a purchase of roughly 1, 300
acres of land (henceforth, the “Property”) in
Central Florida by Joseph and Marsha O'Berry. (Doc. 22 at
8). The Machado Partnership is also the assignee of a
mortgage on the Property. (Doc. 22 at 10). The legal
description of the Property included in the mortgage
contained errors. (Doc. 22 at 9).
2011, the Machado Partnership sued the O'Berrys to
foreclose on the mortgage; in 2012, while that suit was still
pending, the O'Berrys filed for bankruptcy protection.
(Doc. 22 at 10). In late 2013, the Bankruptcy Court approved
a settlement requiring the O'Berrys to transfer the
Property to the Machado Partnership. (Doc. 22 at 10). When
the Machado Partnership attempted to prepare a warranty deed
for the transfer, it discovered the errors in the legal
description of the Property included in the mortgage. (Doc.
22 at 11). It also learned that the original lender had filed
a claim with Stewart on behalf of the Machado Partnership.
(Doc. 22 at 11). The Machado Partnership contacted Stewart
and informed the company (1) that the errors in the legal
description were blocking the transfer of the Property, and
(2) that it was suffering losses that would continue to
increase until the property was transferred. (Doc. 22 at
11-12). Stewart's response consisted of a handful of
emails and a few telephone calls over the next three months,
leading the Machado Partnership to believe the insurer had
abandoned it. (Doc. 22 at 12).
of the problem with the legal description of the Property,
the Machado Partnership was forced to engage in additional
months of litigation in Bankruptcy Court with the
O'Berrys. (The O'Berrys contended that the legal
description included in the warranty deed prepared by the
Machado Partnership encompassed more land than the couple was
required to transfer under the settlement agreement. (Doc. 22
at 13).) Throughout this litigation, Stewart would send the
Machado Partnership emails to “check in” on the
status of litigation, but did nothing else. (Doc. 22 at
September 2015, the Bankruptcy Court ruled in favor of the
Machado Partnership. Subsequently, Stewart agreed to pay (and
did pay) the approximately $200, 000 in attorneys' fees
the Machado Partnership had incurred defending the title to
the Property. (Doc. 22 at 15). However, despite negotiations
and a January 17, 2017 mediation, the parties were unable to
come to an agreement regarding additional damages the Machado
Partnership contends it suffered during the litigation, such
as diminution of value of the Property resulting from timber
taken by the O'Berrys.
January 30, 2017, Stewart filed the instant suit, seeking a
declaration that its payment of the Machado Partnership's
attorney fees had satisfied its obligations under the policy.
On April 20, 2017, the Machado Partnership filed its
counterclaim, asserting claims for breach of contract (Count
I) and statutory bad faith (Count II). By way of the instant
motion, Stewart seeks dismissal of Count II.
Rule of Civil Procedure 8(a)(2) requires “a short and
plain statement of the claim showing that the pleader is
entitled to relief” so as to give the defendant fair
notice of what the claim is and the grounds upon which it
rests, Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct.
99, 103, 2 L.Ed.2d 80 (1957), overruled on other
grounds, Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A Rule
12(b)(6) motion to dismiss for failure to state a claim
merely tests the sufficiency of the complaint; it does not
decide the merits of the case. Milbum v. United
States, 734 F.2d 762, 765 (11th Cir.1984). In ruling on
a motion to dismiss, the Court must accept the factual
allegations as true and construe the complaint in the light
most favorable to the plaintiff. SEC v. ESM Group,
Inc., 835 F.2d 270, 272 (11th Cir.1988). The Court must
also limit its consideration to the pleadings and any
exhibits attached thereto. Fed.R.Civ.P. 10(c); see also
GSW, Inc. v. Long County, Ga., 999 F.2d 1508, 1510 (11th
plaintiff must provide enough factual allegations to raise a
right to relief above the speculative level,
Twombly, 550 U.S. at 555, 127 S.Ct. at 1966, and to
indicate the presence of the required elements, Watts v.
Fla. Int'l Univ., 495 F.3d 1289, 1302 (11th Cir.
2007). Conclusory allegations, unwarranted factual deductions
or legal conclusions masquerading as facts will not prevent
dismissal. Davila v. Delta Air Lines, Inc., 326 F.3d
1183, 1185 (11th Cir. 2003).
Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173
L.Ed.2d 868 (2009), the Supreme Court explained that a
complaint need not contain detailed factual allegations,
“but it demands more than an unadorned,
the-defendant-unlawfully-harmed-me accusation. A pleading
that offers labels and conclusions or a formulaic recitation
of the elements of a cause of action will not do. Nor does a
complaint suffice if it tenders naked assertions devoid of
further factual enhancement.” Id. at 1949
(internal citations and quotations omitted). “[W]here
the well-pleaded facts do not permit the court to infer more
than the mere possibility of misconduct, the complaint has
alleged - but it has not ‘show[n]' - ‘that
the plaintiff is entitled to relief.'” Id.
at 1950 (quoting Fed.R.Civ.P. 8(a)(2)).
Machado Partnership asserts its bad faith claim pursuant to
Fla. Stat. § 624.155(1)(b)(1), ...