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Rock Custom Homes, Inc. v. American Zurich Insurance Co.

United States District Court, M.D. Florida, Fort Myers Division

September 17, 2019


          OPINION AND ORDER[1]


         Before the Court is Defendant American Zurich Insurance Company’s Motion to Dismiss (Doc. 4) and Plaintiff Rock Custom Homes, Inc.’s response in opposition (Doc. 13). For these reasons, the Court denies the Motion (Doc. 4).

         BACKGROUND [2]

         This is a Hurricane Irma insurance dispute. (Doc. 3). At the time of the storm, an American Zurich insurance policy (the “Policy”) covered Rock Custom.[3] (Doc. 3 at 2). Rock Custom suffered property damage, but American Zurich denied Rock Custom’s insurance claim. (Doc. 3 at 2). So Rock Custom filed this two-count Complaint in state court. The Complaint seeks a declaration of rights and obligations under the Florida Declaratory Judgment Act (Count 1) and breach of contract (Count 2). (Doc. 3 at 3-6). American Zurich removed here. (Doc. 1).


         A complaint must recite “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). This pleading standard “does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. (quoting Twombly, 550 U.S. at 570). A facially plausible claim allows a “court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. So the pleading must contain “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.


         The Motion only seeks dismissal of Count 1. (Doc. 4 at 5-7). American Zurich moves to dismiss on two grounds: failure to state a claim and Count 1 is duplicative of Count 2.

         A. Failure to State a Claim

         First, American Zurich argues the Complaint fails to state a claim under Florida law. (Doc. 4 at 3-5). Rock Custom contends this is a proper declaratory judgment action under state law. (Doc. 13). While neither party is correct, the Complaint is enough to withstand this Motion.

         “As a federal court sitting in diversity jurisdiction, we apply the substantive law of the forum state, in this case Florida, alongside federal procedural law.” Global Quest, LLC v. Horizon Yachts, Inc., 849 F.3d 1022, 1027 (11th Cir. 2017) (citation omitted). “Florida’s Declaratory Judgment Act, found in Chapter 86 of the Florida Statutes, is a procedural mechanism that confers subject matter jurisdiction on Florida’s circuit and county courts; it does not confer any substantive rights.” Coccaro v. Geico Gen. Ins., 648 Fed.Appx. 876, 880-81 (11th Cir. 2016) (“[T]he Florida Declaratory Judgment Act is procedural as opposed to substantive.”). Because the state law is procedural, federal law governs here. E.g., Costa Regency, L.L.C. v. HSBC Card Servs., Inc., No. 8:19-cv-1362-T-33JSS, 2019 WL 2567926, at *3 (M.D. Fla. June 21, 2019) (“Although the Complaint seeks a declaration under Section 86.011, Florida Statutes, the case has been removed to federal court, and so, the federal Declaratory Judgement Act, 28 U.S.C. § 2201, governs.”). So the Court will construe Count 1 as seeking relief under the federal Declaratory Judgment Act. E.g., CJS Inv’rs, LLC v. Berke, No. 6:18-cv-374-Orl-31DCI, 2018 WL 6589713, at *3 (M.D. Fla. Dec. 14, 2018) (“Accordingly, the Court will construe Count II as though [plaintiff] sought relief under the federal Declaratory Judgment Act, 28 U.S.C. § 2201, rather than Florida’s.”).

         Neither party makes argument related to the federal Declaratory Judgment Act, instead focusing on the inapplicable state law. For that reason alone, the Motion could be dismissed. Wilmington Sav. Fund Soc’y, FSB v. Bus. Law Grp., P.A., No. 8:15-cv-2831-T-36TGW, 2016 WL 11491321, at *4-5 (M.D. Fla. Sept. 30, 2016) (“Because Defendants have made no argument that the claim should be dismissed under this [federal] Act, at this juncture, the Court will deny Defendants’ motion to dismiss.”). But even looking at the correct law, the Complaint appears sufficient.

         An “actual controversy” between the parties is necessary to maintain a declaratory judgment action. Blitz Telecom Consulting, LLC v. Peerless Network, Inc., 151 F.Supp. 3d 1294');">151 F.Supp. 3d 1294, 1302 (M.D. Fla. 2015). So courts must decide “whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (citation omitted). A controversy is not enough if it is unripe, moot, or purely advisory. Blitz, 151 F.Supp. 3d at 1302. The power to make declaratory judgments is discretionary. Id. at 1303. And claims should proceed “if declaratory relief would (1) serve a useful purpose in clarifying and settling the legal relations in issue, and (2) terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.” Id. (internal quotation marks and citation omitted).

         Here, Count 1 presents a substantial controversy for the Court to resolve. Rock Custom alleges an adverse legal relationship along with a live dispute over obligations under the Policy. This is not a hypothetical disagreement. Policy coverage is unresolved. So there is a fight over whether American Zurich must provide coverage for substantial damages to Rock Custom’s property. Thus, the Complaint alleges an actual controversy to ...

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