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American Coastal Insurance Co. v. Electrolux Home Products, Inc.

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

October 9, 2019

AMERICAN COASTAL INSURANCE COMPANY, FEDNAT INSURANCE COMPANY and DENISE TALT, a Florida corporation, as subrogee of Eagle Ridge Condominium Association, Inc., Plaintiffs,

          OPINION AND ORDER [1]


         Before the Court is Defendant Electrolux Home Products, Inc.'s Motion to Dismiss the Second Amended Complaint (Doc. 49) and Plaintiffs FedNat Insurance Company and American Coastal Insurance Company's Responses in Opposition (Doc. 53; Doc. 51). For the following reasons, the Motion is granted with leave to amend.


         This is a products liability case stemming from a fire allegedly caused by Electrolux's electric ranges. The Court recounts the factual background as pled in Plaintiff's Second Amended Complaint, which it must take as true to decide whether the Second Amended Complaint states a plausible claim. See Chandler v. Sec'y Fla. Dep't of Transp., 695 F.3d 1194, 1198-99 (11th Cir. 2012). Talt purchased an electric range manufactured by Electrolux in early 2013. (Doc. 48 at 4). Over three years later, while it was on self-cleaning mode, the range caught fire in Talt's apartment in the Eagle Ridge Condominiums. (Doc. 48 at 4). The fire spread to a surrounding unit owned by the Leutz family and areas owned by the Eagle Ridge Condominium Association. (Doc. 48 at 4).

         Eagle Ridge's insurer, American Coastal Insurance Company (ACIC), paid Eagle Ridge $49, 533.33 for repairs. (Doc. 48 at 6). Talt's insurer, FedNat, paid Talt $60, 088.34 for repairs. (Doc. 48 at 6). And the Leutz family's insurer, also FedNat, paid the Leutzes $27, 344.15 for repairs. (Doc. 48 at 7). Both insurance companies sue Electrolux to recover the amount they paid to the insured parties, claiming that they are subrogated to the rights of their insureds. (Doc. 48 at 5-7). Talt sues on her own behalf for $85, 301.37 in unspecified “additional losses.” (Doc. 48 at 7). Electrolux moves to dismiss FedNat from this case for lack of standing and to dismiss Count III brought by ACIC under Fed.R.Civ.P. 12(b)(6).


         When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court must accept all factual allegations as true and view them in a light most favorable to the plaintiff. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). This consideration is limited “to the pleadings and exhibits attached thereto[.]” Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000) (quotations omitted). However, a complaint listing mere “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555 (2008). Likewise, “[f]actual allegations that are merely consistent with a defendant's liability” are insufficient. Chaparro v. Carnival Corp, 693 F.3d 1333, 1337 (11th Cir. 2012) (internal quotations and citations omitted). And the allegations must not force the court to speculate or operate on mere suspicion. Twombly, 550 U.S. at 555. In contrast, the Court will not dismiss a complaint where the Plaintiff pleads facts that make the claim facially plausible. See Twombly, 550 U.S. at 570. A claim is facially plausible when the court can draw a reasonable inference, based on the facts pleaded, that the opposing party is liable for the alleged misconduct. See Iqbal, 556 U.S. at 678. This plausibility standard requires “more than a sheer possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted) (citing Twombly, 550 U.S. at 557). Thus, when the complaint contains “well-pleaded allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679.


         Count I, strict products liability, is brought on behalf of all Plaintiffs. Count II, breach of implied warranty of merchantability, is brought on behalf of FedNat and Talt only. Count III, failure to warn, is brought on behalf of all Plaintiffs.

         1. FedNat's Standing (all counts)

         In the First Amended Complaint, FedNat alleged that it had standing to sue as subrogee of Talt and the Leutzes “by virtue of” making contractual insurance payments. (Doc. 40 at 6). In response to Electrolux's previous motion to dismiss, the Court examined the law of contractual and equitable subrogation, explaining that FedNat could not be subrogated to Talt or the Leutzes solely by making these payments. (Doc. 47 at 4-6).

         Rather, if FedNat was alleging contractual subrogation, it must allege that there was a subrogation agreement between itself and its insureds. (Doc. 47 at 4).

         However, the Second Amended Complaint perpetuates the same problems. The subrogation paragraphs of the Second Amended Complaint read almost identically to the first, adding only two sentences. CompareDoc. 40 at ¶¶ 33, 35 withDoc. 48 at ¶¶ 33, 35. After claiming, again, that FedNat is subrogated to Talt and the Leutzes “by virtue of” their payments, the Second Amended Complaint adds: “[a] true and correct copy of the Talt Subrogation Assignment is attached hereto as Exhibit E” and “the Leutz Subrogation Assignment is attached hereto as Exhibit F.” (Doc. 48 at 6, 7; Doc. 48-5 (Talt subrogation agreement); Doc. 48-6 (Leutz subrogation agreement)). But the Talt and Leutz subrogation agreements are dated and signed August 2, 2019 and July 30, 2019, respectively - several months after the first complaint was filed in this case. (Doc. 48-5; Doc. 48-6; seeDoc. 1). Electrolux argues that the recency of the subrogation agreements is fatal to FedNat's claims of standing. (Doc. 49 at 4-5). The Court agrees.

         Standing is assessed at the time a suit is originally filed. Davis v. FEC, 554 U.S. 724, 734 (2008). A subrogee acquires standing to sue through subrogation. SeeDixie Nat'l Bank v. Emp'rs Commercial Union Ins. Co.,463 So.2d 1147, 1151 (Fla. 1985). There are there are two forms of subrogation - contractual and equitable. Dade Cty. Sch. Bd. v. Radio Station Wqba, 731 So.2d 638, 646 (Fla. 1999). Thus, to show standing, FedNat must allege it was contractually or equitably subrogated to Talt and ...

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