10820703v.2

IN THE UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF FLORIDA 

TALLAHASSEE DIVISION 

HANOVER INSURANCE ) 

COMPANY ) 

) 

Plaintiff, ) 

) 

v. ) No.: 4:20-cv-00148-AW-CAS 

) 

FLORIDA COALITION AGAINST ) 

DOMESTIC VIOLENCE, INC., ) 

et al., ) 

) 

Defendants, ) 

______________________________ ) 

HANOVER INSURANCE COMPANY’S GLOBAL RESPONSE 

IN OPPOSTION TO DEFENDANTS’ MOTIONS TO DISMISS 

Plaintiff Hanover Insurance Company (“Hanover”), files this global 

response in opposition to the separate Motions to Dismiss or Stay filed by the 

following defendants: (1) Florida Coalition against Domestic Violence, Inc. 

(“FCADV”) [Dkt. #15]; (2) Tiffany Carr [Dkt. #19]; (3) Sandra Barnett [Dkt. #20]; 

(4) Patricia Duarte [Dkt. #17]; (5) Melody Keeth, Laurel Lynch, Angela DiazVidaillet, Shandra Riffey, Theresa Beachy, Sheryl Schwab, and Penny Morrill 

[Dkt. #12]; and (6) Lorna Taylor1 [Dkt. #24] (collectively, the “Defendants”). 

 

1

 In lieu of a standalone motion, Taylor has filed a Notice of Joinder stating 

that she joins in the motion to dismiss filed by Keeth, Lynch, Diaz-Vidaillet, 

Riffey, Beachy, Schwab, and Morrill. 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 1 of 34
- 2 - 

10820703v.2

I. INTRODUCTION 

This matter involves an insurance coverage dispute based on exclusions in a 

Nonprofit D&O Policy (the “Policy”) issued by Hanover to FCADV, a Florida notfor-profit corporation that has received tens of millions of dollars in federal and 

state grant monies to help victims of domestic violence, pursuant to two Grant 

Contracts with the Florida Department of Children and Families (“DCF”). 

To prevent providing coverage for a proverbial “burning building,” 

Hanover’s Policy contains an exclusion from such coverage, commonly referred to 

as a Prior & Pending Proceedings Exclusion. This exclusion expressly avoids 

coverage for “any Claim...[b]ased upon, arising out of or in any way related to 

any” “litigation” or “written demand pending against any Insured”

2

 prior to 

December 19, 2019. (Underlining and italics added). 

However, based on undisputed facts, five written demands were made by 

DCF to FCADV prior to the inception of Hanover’s Policy, and these demands 

form the basis for the underlying lawsuits filed by DCF and the Attorney General 

of Florida against Defendants (“the State Litigation”). As such, the Prior & 

Pending Proceedings Exclusion bars coverage for any Insured, including 

Defendants. 

 

2 Bolded terms shall be defined according to their definition in the Hanover 

Policy. See Ex. 1 to Hanover Complaint. 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 2 of 34
- 3 - 

10820703v.2

Nevertheless, Hanover has offered to defend these Defendants from the State 

Litigation, subject to its right to reimbursement if there is no coverage, while at the 

same time seeking a declaration from this Court that no coverage for the State 

Litigation exists based upon the Prior & Pending Proceedings Exclusion. 

Defendants have moved to dismiss Hanover’s coverage Complaint through a 

coordinated set of filings, which assert the following arguments that a dismissal or 

stay is warranted: (1) there is a duty to defend, notwithstanding the Prior & 

Pending Exclusion; (2) this Court should use its inherent authority to stay the case 

because it purportedly “overlaps” with the factual allegations in the State 

Litigation; (3) this Court should abstain and decline to accept jurisdiction over the 

present coverage dispute; and (4) not all interested parties are joined in this action. 

As none of these arguments are availing, Defendants’ motion should be denied. 

Regarding the first argument, Defendants ignore the standard for 

determining whether a declaratory judgment plaintiff has stated a claim upon 

which relief can be granted – the standard under Rule 12(b)(6). To state a claim for 

declaratory judgment, a plaintiff must only allege the existence of an “actual 

controversy.” Schwab v. Hites, 896 F.Supp.2d 1124, 1132 (M.D. Fla. 2012). As 

Hanover has clearly identified an actual controversy regarding its duty to defend 

the Defendants, a motion to dismiss under Rule 12(b)(6) cannot succeed. Indeed, 

FCADV has conceded this point in its own, subsequently-filed lawsuit seeking 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 3 of 34
- 4 - 

10820703v.2

declaratory judgment (No. 4:20-cv-00309), wherein it expressly states that “an 

actual controversy exists between HANOVER and FCADV.” See FCADV 

Complaint (Exhibit A [Dkt. #19-1] to Carr’s Motion to Dismiss), ¶37 (emphasis 

added). 

Regarding the second argument, Defendants fail to properly state the 

applicable law. Pursuant to strong Florida policy embodied in Higgins v. State 

Farm Fire & Cas. Co., 894 So.2d 5 (Fla. 2004), and its state and federal court 

progeny, not only is this declaratory judgment action ripe for immediate 

adjudication, but Hanover is entitled to prompt resolution of the question of its 

duty to defend the Defendants in the State Litigation. Moreover, because the key 

coverage issue framed in Hanover’s Complaint for Declaratory Relief (i.e., the 

existence of five “written demands” prior to the inception of the Hanover Policy 

and the application of the Prior & Pending Proceedings Exclusion) does not 

overlap with the liability or damages issues in the State Litigation in any way – let 

alone any meaningful way, there is no reason to postpone or stay resolution of this 

issue, including a determination of Hanover’s duty to defend the Insureds. 

As for Defendants’ remaining arguments, abstention is not warranted under 

the Colorado River Doctrine, the governing standard here. Furthermore, Hanover 

has asserted a Crossclaim and Counterclaim in the FCADV Lawsuit and has 

moved to consolidate it into this action, which would join all potentially interested 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 4 of 34
- 5 - 

10820703v.2

parties to this dispute undermining the need for abstention. As Hanover has no 

duty to defend or indemnify any Insured for the State Litigation through the Prior 

& Pending Proceedings Exclusion, and an actual controversy exists, Hanover is 

entitled to a declaration of its rights, and the motions to dismiss or stay should be 

denied. 

II. ARGUMENT 

A. Preliminary Issues 

1. To Survive a Rule 12(b)(6) Challenge, Hanover’s Declaratory 

Judgment Complaint Need Only State an “Actual Controversy” 

To prevail on a Rule 12(b)(6) motion, Defendants must show that Hanover’s 

Complaint fails to “state a claim to relief that is plausible on its face.” See Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 570 (2007). The court must accept the material 

allegations of the complaint as true and draw all reasonable inferences in 

Hanover’s favor. Kirby v. Siegelman, 195 F.3d 1285, 1289 (11th Cir. 1999). 

Dismissal at the 12(b)(6) stage is warranted only “when the factual allegations of 

the complaint affirmatively disprove the alleged cause of action.” Morse, LLC v. 

United Wisconsin Life Ins. Co., 356 F. Supp. 2d 1296, 1299 (S. D. Fla. 2005). 

Defendants argue that Hanover’s Complaint, when examined through the 

framework of the “eight corners” (i.e., the DCF Lawsuit and the Hanover Policy), 

fails to dispel “any doubt” that Hanover should be relieved of its duty to defend, 

warranting dismissal under Rule 12(b)(6). (See, e.g., Keeth’s Motion to Dismiss, at 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 5 of 34
- 6 - 

10820703v.2

p. 12.) However, this is not the correct standard on a motion to dismiss a 

declaratory judgment action. To the contrary, in the context of a declaratory 

judgment action, if a plaintiff alleges an “actual controversy,” it has stated a cause 

of action for declaratory relief. See Schwab, supra, 896 F.Supp.2d 1124, 1132. To 

this end, “[a] complaint for declaratory judgment should not be dismissed if the 

plaintiff established the existence of a justiciable controversy.... The test for the 

sufficiency of a complaint for declaratory judgment is not whether the plaintiff will 

succeed in obtaining the decree he seeks favoring his position, but whether he is 

entitled to a declaration of rights at all.” Id. (emphasis added); see also Perez v. 

IndyMac FSB, No. 6:12-cv-1146-0r1-28TBS, 2012 U.S. Dist. LEXIS 158403, at 

*12 (M.D. Fla. Nov. 5, 2012); Citizens Prop. Ins. Corp. v. Ifergane, 114 So. 3d 

190, 194 (Fla. App. 2012). 

Here, Hanover easily alleges an “actual controversy” between it and the 

Insureds – a point that the insured entity, FCADV, has conceded through the filing 

of its own declaratory judgment action that alleges the existence of an “actual 

controversy” between itself and Hanover. See FCADV Complaint [Dkt. #19-1], 

¶37. The Defendants’ claim that Hanover must dispel “any doubt” to survive their 

12(b)(6) motion is therefore a misstatement of this Court’s standard for 

adjudicating Defendants’ motions. Moreover, as explained herein, through the 

eight corners rule, Hanover has no duty to defend the Insureds, and instead, 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 6 of 34
- 7 - 

10820703v.2

Hanover will be entitled to a declaration in its favor once all of the motions before 

this Court are adjudicated. 

2. The Key Terms and Conditions of the Hanover Policy 

Hanover issued to FCADV a Nonprofit Entity Advantage Policy (the 

“Policy”). See Ex. 1 to Hanover Complaint. Section IV of the D&O Coverage of 

the Policy contains the Prior & Pending Proceedings Exclusion, which provides: 

A. Exclusions Applicable to All Insuring Agreements 

This insurance does not apply to Loss for any Claim: 

* * * 

2. Prior & Pending Proceedings 

Based upon, arising out of or in any way related to any 

litigation, administrative or arbitration proceeding, written 

demand pending against any Insured, or any order, decree 

or judgment entered prior to or on the Prior & Pending 

Proceedings Date set forth in Item 5. of the D&O 

Declarations. 

Id. The “Prior & Pending Proceedings Date set forth in Item 5. of the D&O 

Declarations is “12/19/2019.” Id. “Loss” means “Defense Expenses and the 

amount that the Insured is legally obligated to pay as a result of a Claim

including:...[m]onetary judgments, awards or settlements...”. Id. “Claim” is 

defined to include a “[c]ivil proceeding” (id.) – like the State Litigation. 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 7 of 34
- 8 - 

10820703v.2

3. FCADV’s Contractual Obligation to, “Upon Demand,” Make 

Records Available to DCF 

The DCF Lawsuit (attached to Hanover’s Complaint as Exhibit 2) expressly 

alleges that FCADV failed to comply with its contractual obligation to produce 

documents. Specifically, the DCF Lawsuit alleges that “[d]espite its contractual 

obligations, FCADV repeatedly and continuously failed and refused to comply 

with, and breached, Contracts LN967 and LJ990,” which required production of 

documents and information. See, DCF Lawsuit, ¶22. Both contracts, moreover, 

make clear that FCADV shall provide documents to DCF “upon demand.” 

(Emphasis added.) See, Hanover Complaint, ¶¶96-97 (attaching Contracts as 

Exhibits 3 and 4 thereto). 

4. Under Florida Law, if There is No Duty to Defend, There is No 

Duty to Indemnify 

Multiple defendants argue that any declaration on Hanover’s duty to 

indemnify would be premature, since the duty to indemnify is dependent on the 

outcome of the underlying State Litigation, which has not yet been resolved. 

However, where, as here, there is no duty to defend under the Prior & Pending 

Proceeding Exclusion, there can be no duty to indemnify, a circumstance that 

completely nullifies Defendants’ argument. 

Under Florida law, an insurer’s duty to defend is triggered if the allegations 

of a complaint brought against the insured fall within the scope of the insurer’s 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 8 of 34
- 9 - 

10820703v.2

duty. E.S.Y., Inc. v. Scottsdale Ins. Co., 139 F.Supp. 3d 1341, 1351 (S.D. Fla. 

2015). A court looks no further than to the terms of the insurance policy and the 

allegations of the complaint brought against the insured to determine if the duty to 

defend is triggered. Id. at 1351-52. There is, however, no duty to defend when the 

complaint shows that a policy exclusion applies to exclude coverage. Md. Cas. Co. 

v. Fla. Atl. Orthopedics, P.L., 771 F. Supp. 2d 1328, 1332 (S.D. Fla. 2011). 

Particularly germane here, “[t]he duty to defend is broader than the duty to 

indemnify, [] and thus it is well-settled under Florida law that where an insurer has 

no duty to defend, it has no duty to indemnify its insured.” Clarendon Nat'l Ins. 

Co. v. Vickers, 2006 U.S. Dist. LEXIS 102990, 2006 WL 8434796, at *3 (S.D. Fla. 

May 25, 2006) (collecting cases). Accordingly, “a court’s determination that the 

insurer has no duty to defend requires a finding that there is no duty to indemnify.” 

Philadelphia Indem. Ins. Co. v. Yachtsman’s Inn Condo Ass’n, Inc., 595 F. Supp. 

2d 1319, 1322 (S.D. Fla. 2009); David R. Farbstein, P.A. v. Wesport Ins. Corp., 

No. 16-CV-62361, 2017 U.S. Dist. LEXIS 125990, 2017 WL 3425327, at *9 (S.D. 

Fla. Aug. 9, 2017) (determining, despite the ongoing underlying proceedings, that 

there could be no duty to indemnify because the insurer was under no duty to 

defend). Accordingly, as Hanover’s rights can be completely adjudicated by this 

Court in the present action, there is no reason to dismiss or stay the present case. 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 9 of 34
- 10 - 

10820703v.2

B. The Prior & Pending Proceedings Exclusion Bars Coverage for the 

State Litigation for All Insureds 

Defendants contend that Hanover’s Complaint should be dismissed or stayed 

because Hanover’s duty to indemnify is dependent on the resolution of the State 

Litigation. But as the relevant facts demonstrating the applicability of the Prior & 

Pending Proceedings Exclusion are not in dispute, and because Hanover has no 

duty to indemnify, because it has no duty to defend, there are no grounds for 

staying this action pending the resolution of the State Litigation – much less 

outright dismissing it. 

A stay is also not warranted on the basis that certain former directors of 

FCADV have moved to dismiss the DCF Action and could therefore potentially be 

let out of that action – those motions do not dictate Hanover’s duty to defend or 

indemnify, and as discussed below, the Prior & Pending Proceedings Exclusion 

operates to bar coverage regardless of which Insureds are party to this case. 

1. Prior to the Hanover Policy’s Inception, DCF Made No Fewer Than 

Five “Written Demand” Letters to FCADV 

While the State Litigation is in its relative infancy, this is not a case where it 

would be beneficial to wait for the development of an underlying factual record; 

indeed, the core allegations relevant to the Prior & Pending Proceedings Exclusion 

are clear, straightforward, and not in dispute. 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 10 of 34
- 11 - 

10820703v.2

According to the DCF Lawsuit, between August 27, 2018 and January 31, 

2020, “DCF, through both its OIG and OGC, made repeated and multiple demands 

for production of documents reflecting the income and expenditure of funds provided 

by DCF.” DCF Lawsuit, ¶48.f. (Ex. 2 to Hanover Complaint). Specifically, DCF 

sent six “written demands” to FCADV – including, importantly, five “written 

demands” prior to December 19, 2019 (the date stated in the Prior & Pending 

Proceedings Exclusion) – but FCADV failed to provide said information and 

documents. Indeed, the DCF Lawsuit alleges that “[d]espite its contractual 

obligations, FCADV repeatedly and continuously failed and refused to comply 

with, and breached, Contracts LN967 and LJ990, including, but not limited to, 

by:...Failing to maintain and provide adequate financial records;...[and] Failing 

to comply with inspections, reviews, investigations or audits deemed necessary by 

the DCF Office of the Inspector General (OIG).” Id., ¶22 (emphasis added). A 

detailed recitation of the allegations in the DCF Lawsuit, including the content of 

each of the written demands, is set forth in Hanover’s Complaint, which is 

incorporated herein. See, [Dkt. #1], ¶¶ 50 – 80. 

2. The Hanover Policy’s Inception on December 19, 2019 

Despite having received five “written demand” letters, FCADV obtained its 

first ever Policy from Hanover which commenced on December 19, 2019 (but, 

critically, FCADV failed to disclose the five “written demands” in Hanover’s 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 11 of 34
- 12 - 

10820703v.2

Policy Application). As noted above, the Policy specifically excludes any Claim

arising out of prior “written demand” pending against any Insured. 

3. The State Litigation 

After FCADV’s receipt of the five “written demand” letters, and after 

Hanover issued its Policy, the two actions comprising the State Litigation (i.e., the 

DCF Lawsuit and the AG Lawsuit) were both filed on March 4, 2020. 

The DCF Lawsuit alleges that FCADV and the individual Defendants 

entered into two Contracts (Contracts LN967 and LJ990) with DCF. Ex. 2, ¶20. 

Both contracts mandated that FCADV shall provide documents to DCF “upon 

demand.” (Emphasis added.) See, Hanover Complaint, ¶¶96-97. The DCF Lawsuit 

alleges that pursuant to these two Contracts, DCF sent five prior “written 

demands” to FCADV seeking documents related to the payment of excessive 

compensation to FCADV executives, which the DCF Lawsuit alleges FCADV and 

its executives failed to provide. 

The AG Lawsuit, like the DCF’s prior written demands and the DCF 

Lawsuit, directly relates to the alleged excessive compensation (i.e., salary, 

bonuses and PTO) received by Carr as CEO of FCADV. Ex. 12 to Hanover 

Complaint, ¶¶25-26. The AG Lawsuit alleges: “DCF has made efforts from 2018 

forward to obtain all pertinent records of FCADV from it, but FCADV has engaged 

in a campaign of stonewalling by which it has resisted producing requested records. 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 12 of 34
- 13 - 

10820703v.2

While FCADV has slowly been turning over its records to DCF, many of its records 

have contained redactions. To date...FCADV still has not fully complied with DCF’s 

requests for records.” Id., ¶33. 

4. The Prior and Pending Proceedings Exclusion Applies to Exclude 

Coverage for the State Litigation Because the State Litigation is 

“Based Upon” and “Arises Out of” the Five Prior Written Demand 

Letters 

The applicability of the Hanover Policy’s Prior & Pending Proceedings 

Exclusion to the State Litigation (i.e., the “Claim”) is clear on its face. The 

exclusion provides that “[t]his insurance does not apply to Loss for any 

Claim:...[b]ased upon, arising out of or in any way related to any...litigation, 

[or]...written demand pending against any Insured...prior to [December 19, 

2019].” (Underlining and italics added). 

Although short-handedly referenced as the “Prior & Pending Proceedings” 

Exclusion, or the “Prior & Pending Litigation” Exclusion, these exclusions 

routinely also bar coverage for prior “demands” – see, e.g., the “Prior Litigation 

Exclusion” enforced by the Eleventh Circuit in HR Acquisition I Corp. v. Twin City 

Fire Ins. Co., 547 F.3d 1309, 1317 (11th Cir. 2008): “[t]he ‘prior litigation’ 

exclusion exempts from coverage a Claim related to ‘any demand, suit, or other 

proceeding against any Insured which was pending on or existed prior to the 

applicable Prior Litigation Date.’” (Emphasis added). See also, United States Liab. 

Ins. Co. v. Kelley Ventures, LLC, 137 F. Supp. 3d 1312 (S.D. Fla. 2015) (“USLI is 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 13 of 34
- 14 - 

10820703v.2

relieved of its duty to defend under the Pending or Prior Litigation Exclusion... it 

simply excludes from coverage a...demand in writing that the insured received 

before the Policy coverage began.”) (Emphasis added). The Hanover Prior & 

Pending Proceedings Exclusion is broadly worded to include any Claim arising out 

of prior “written demands,” like those set forth in the communications from DCF 

to FCADV, which took place over the many months before the commencement of 

the Hanover Policy. 

Indeed, in this case, the DCF Investigation commenced its examination of 

executive compensation at FCADV on August 27, 2018 – over 15 months before 

the inception of the Policy on December 19, 2019. As part of that investigation, 

DCF, based on the express provisions of the two DCF-FCADV Contracts, made 

five written demands to FCADV for it to produce documents and provide 

information on executive compensation at FCADV. The ensuing State Litigation 

(the Claim for which FCADV and the other Insureds are seeking coverage from 

Hanover) resulted from these “written demands,” including FCADV’s lack of 

compliance with the “written demands” as elucidated herein. It is readily apparent 

that under the language of the Prior & Pending Proceedings Exclusion, the State 

Litigation is based upon, arises out of, and is related to the five “written demands,” 

which were pending before the December 19, 2019 inception date. 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 14 of 34
- 15 - 

10820703v.2

Moreover, the written demands were not incidental or tangential to DCF’s 

Investigation – rather, they were integral components that were expressly made 

under the two DCF-FCADV Contracts and apart of the two lawsuits that make up 

the State Litigation. For example, the Contracts both state that “[u]pon demand,” 

FCADV was obligated to produce records or documents to DCF. See Contract 

LN967, Section 25.c. (Ex. 4); and Contract LJ990, Section 5.1.1 (Ex. 3). Indeed, 

in the DCF Lawsuit, DCF expressly alleges that it “made repeated and multiple 

demands for production of documents reflecting the income and expenditure of funds 

provided by DCF.” Ex. 2, ¶48.f. (emphasis added). Meanwhile, the AG Lawsuit 

avers that “DCF has made efforts from 2018 forward to obtain all pertinent records of 

FCADV from it, but FCADV has engaged in a campaign of stonewalling by which it 

has resisted producing requested records.” Ex. 12, ¶33. There can be no dispute that 

State Litigation depends upon and repeatedly complains of FCADV’s failures to 

adequately respond to the five “written demands.” 

Over the years, Florida courts have routinely enforced the application of 

Prior & Pending Exclusions. In Vozzcom, Inc. v. Great American Insurance 

Company, 666 F. Supp. 2d 1332 (S.D. Fla. 2009), aff’d 2010 U.S. App. LEXIS 

6852 (11th Cir. 2010), the District Court for the Southern District of Florida 

interpreted a substantively identical Prior & Pending Exclusion, and held that “the 

[subsequent] claim requires only a tenuous connection” to the prior matter in order 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 15 of 34
- 16 - 

10820703v.2

to be excluded under the policy. Id. at 1340. See also, United States Liab. Ins. Co. 

v. Kelley Ventures, LLC, 137 F. Supp. 3d 1312 (S.D. Fla. 2015); Acosta, Inc. v. 

Nat’l Union Fire Ins. Co., 39 So. 3d 565 (Fla. 1st DCA 2010); Health First, Inc. v. 

Capitol Specialty Ins. Corp., 230 F. Supp. 3d 1285 (M.D. Fla. 2017); RSUI Indem. 

Co. v. Atty’s. Title Ins. Fund, Inc., 2016 U.S. Dist. LEXIS 97088 (M.D. Fla. June 

6, 2016). Here, there is a clear and detailed nexus between the prior “written 

demands” and the State Litigation. Accordingly, there is no reasonable dispute that 

the State litigation arises from these “written demands.” 

Finally, there can be no reasonable dispute that the letters described herein 

are, in fact, “written demands.” In Feldman v. Imperium Ins. Co., 2015 U.S. Dist. 

LEXIS 135478 (M.D. Fla. Oct. 5, 2015), the insurance policy defined “Claim” as 

“a demand made upon any INSURED for DAMAGES, including, but not limited 

to, service suit [sic] or institution of any alternative dispute resolution proceedings 

against any INSURED.” (Emphasis added.) See also, Lyublanovits v. Zebny (In re 

Jones), 243 So. 3d 503, 505 (Fla. 2d Dist. 2018); State ex rel. Williams v. Coleman, 

131 Fla. 872, 888, 180 So. 360 (Fla. 1938) (Florida Supreme Court concurring 

opinion noted: “The same Dictionary defines the word ‘demand’ in part as follows: 

‘To ask or call for with authority; to call for urgently, peremptorily or 

insistently.’”). 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 16 of 34
- 17 - 

10820703v.2

Here, the five letters from a governmental agency DCF to FCADV, sent 

pursuant to the two express DCF-FCADV Contracts, that contractually mandated 

the production of records and documents “upon demand,” are most certainly 

“written demands.” Indeed, in the DCF Lawsuit, DCF itself expressly alleges that 

the written letters DCF sent to the FCADV “made repeated and multiple demands 

for production of documents reflecting the income and expenditure of funds provided 

by DCF.” Ex. 2, ¶48.f. (emphasis added). These various writings certainly describe 

an authoritative and urgent request for documents and information, to which DCF 

claims it was entitled under two contracts. Indeed, after FCADV’s continuous 

“stonewalling” (the Florida Attorney General’s description) from producing these 

documents, the State Litigation was filed against FCADV. 

Based upon the foregoing, it is clear that Hanover has no duty to defend the 

Insureds under the eight corner rule, and that there is an obvious controversy about 

Hanover’s duty to defend, which this Court should address and adjudicate at its 

earliest opportunity. Accord Schwab, supra; Higgins, supra. For these reasons, 

Defendants’ motions to dismiss, each of them, should be denied. 

C. There is No Basis to Stay this Case Based upon the Encroachment on 

Issues in the State Litigation 

In Higgins v. State Farm Fire & Cas. Co., 894 So. 2d 5, 15 (Fla. 2004), 

the Florida Supreme Court expressly recognized that: 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 17 of 34
- 18 - 

10820703v.2

A prompt determination of coverage potentially benefits the 

insured, the insurer, and the injured party. If coverage is promptly 

determined, the insurance carrier is able to make an intelligent 

decision on whether to settle the claim. If the insurer is precluded 

from having a good faith issue of coverage expeditiously 

determined, this interferes with early settlement of claims. The 

plaintiff certainly benefits from a resolution of coverage in favor of 

the insured. On the other hand, if coverage does not exist, the 

plaintiff may choose to cut losses by not continuing to litigate 

against a defendant who lacks insurance coverage. 

This fundamental concept is followed in federal courts, which agree with the 

commonsense proposition that a prompt determination as to coverage benefits all 

parties. See, e.g., Colony Ins. Co. v. Village at Dadeland Condo. Ass'n, No. 09-

22369, 2010 WL 1817038, at *2-3 (S.D. Fla. Apr. 15, 2010) (denying motion to 

dismiss and motion to stay based on Higgins); Nationwide Mut. Fire Ins. Co. v. 

Myers, No. 5:08-cv-142, 2009 WL 890385, at *3 (M.D. Fla. Mar. 31, 2009) 

(same). Following Higgins, and the three part test outlined therein, this Court 

should not use its discretion to stay this coverage dispute regarding Hanover’s duty 

to defend, particularly where both FCADV and Hanover agree that a justiciable 

controversy exists and that a resolution of this coverage dispute is presently 

necessary.3

 

3

 Here, the Higgins factors weigh against a stay in that (1) the present case 

and the State Litigation are mutual exclusive, and (2) a lack of coverage would 

certainly impact a claim for monetary damages in the State Litigation, particularly 

for the individual insureds. See e.g. Accord Homeowners Prop. & Cas. Ins. Co. v. 

Hurchalla, 171 So.3d 230, 233 (Fla. 4th Dist. 2015) 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 18 of 34
- 19 - 

10820703v.2

Moreover, the key, applicable exclusion requires absolutely no factual 

development, and can be applied based solely on the allegations of the State 

Litigation. See, e.g. Sec. First Ins. Co. v. Phillips, 2020 Fla. App. LEXIS 8308 

(June 12, 2020) (reversing dismissal of declaratory judgment complaint and 

finding that a court could make a declaratory determination as to whether an 

event occurred prior the inception of the insurance policy); Philadelphia Indem. 

Ins. Co. v. Yachtsman's Inn Condo Ass 'n, 595 F. Supp. 2d 1319, 1324-25 (S.D. 

Fla. 2009) (finding that pollution exclusion unambiguously applied to allegations 

of a complaint resulting in no duty to defend or indemnify); Hermitage Ins. Co. v. 

Studio, Inc. Night Club Corp., 2009 WL 103664, at *3 (M.D. Fla. Jan. 15, 2009) 

(finding that insurer did not have a duty to defend or indemnify insured for 

complaint alleging an assault and battery based on assault and battery exclusion). 

Indeed, there is no dispute as to the existence of the prior “written demand” 

letters from the DCF to FCADV, the only fact needed by Hanover to trigger the 

Prior & Pending Proceeding Exclusion. Since this case will not encroach upon 

any factual disputes in the State Litigation and Defendants have not shown that it 

will do so, and since the issues presented to this Court for declaratory relief can 

and should be expeditiously determined by this Court, Defendants’ efforts to stay 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 19 of 34
- 20 - 

10820703v.2

this coverage action should be denied.4 Accord Hurchalla, supra (in quashing 

stay order under Higgins analysis, and placing burden of showing prejudice from 

coverage action on the policyholder and found that none existed). 

D. Under Eleventh Circuit Precedent on Preemption, the Colorado River

Doctrine – Not the Wilton-Brillhart Doctrine – Applies 

On March 20, 2020, Hanover filed this coverage lawsuit; and then, ten 

weeks later, on June 3, 2020, FCADV filed a similar coverage lawsuit in Florida 

state court (the FCADV Lawsuit). Now, certain of Defendants argue that under the 

Wilton/Brillhart doctrine, this Court should elect not to exercise its diversity 

jurisdiction and dismiss Hanover’s Coverage Lawsuit,5 in favor of the later-filed 

State Court Lawsuit (which is now also before this Court). 

However, under Eleventh Circuit precedent (as stated in a pre-1981 Fifth 

Circuit decision6), the Wilton/Brillhart doctrine7 applies only where a lawsuit seeks 

 

4

 Regarding the other exclusions/coverage issues raised in Hanover’s 

Complaint, beyond the Prior & Pending Proceeding Exclusion, to the extent that 

adjudication of those exclusion impact indemnity, and not Hanover’s duty to 

defend, Hanover does not oppose a stay regarding those issues while the duty to 

defend issue is adjudicated by this Court. 

5 See, e.g., Carr’s Motion to Dismiss [Dkt. #19], p. 1 (“Defendant Tiffany 

Carr...files this Motion to Dismiss...pursuant to the Wilton-Brillhart Abstention 

Doctrine...”). 

6 See, e.g., Bonner v. Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (“We 

hold that the decisions of the United States Court of Appeals for the Fifth Circuit 

(the ‘former Fifth’ or the ‘old Fifth’), as that court existed on September 30, 1981, 

handed down by that court prior to the close of business on that date, shall be 

binding as precedent in the Eleventh Circuit, for this court, the district courts, and 

the bankruptcy courts in the circuit.”); Plaintiff B v. Francis, 2010 U.S. Dist. 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 20 of 34
- 21 - 

10820703v.2

declaratory relief alone. PPG Industries, Inc. v. Continental Oil Co., 478 F.2d 674, 

679 (5th Cir. 1973) (“the strict holding of Brillhart” applies to “an action seeking 

only declaratory relief.”).8 Conversely, where, as here, a lawsuit seeks both 

declaratory relief and coercive relief (e.g., monetary relief), then the Colorado 

River doctrine governs this Court’s decision whether to exercise its federal 

diversity jurisdiction. And Colorado River mandates that a federal Court should 

decline to exercise jurisdiction only in “exceptional circumstances” – which are not 

present here. See, Colorado River Water Conservation Dist. v. United States, 424 

U.S. 800, 813, 817 (1979). 

 

LEXIS 10293, at *4 (N.D. Fla. Feb. 5, 2010) (“Pursuant to Bonner v. City of 

Prichard, 661 F.2d 1206 (11th Cir. 1981), the decisions of the Fifth Circuit before 

September 30, 1981 are binding precedent on all federal courts within the Eleventh 

Circuit.”). 

7 See Wilton v. Seven Falls, Co., 515 U.S. 277 (1995) and Brillhart v. Excess 

Ins. Co., 316 U.S. 491 (1942). 

8

 The Fifth Circuit has continuously reaffirmed the PPG decision several 

times: “Brillhart is only applicable ‘when a district court is considering abstaining 

from exercising jurisdiction over a declaratory judgment action.’ In contrast, when 

an action contains any claim for coercive relief, the Colorado River abstention 

doctrine is ordinarily applicable.” Kelly Inv., Inc. v. Cont’l Common Corp., 315 

F.3d 494, 497 n.4 (5th Cir. 2002) (citation omitted). Other circuits have made 

similar holdings. See, e.g., Kanciper v. Suffolk County Society for the Prevention of 

Cruelty to Animals, Inc., 722 F.3d 88 (2d Cir. 2013) (“Wilton does not apply 

where, as here, a plaintiff does not seek purely declaratory relief, but also...seeks 

damages caused by the defendant’s conduct.”); Sinclair Oil Corp. v. Amoco 

Production Co., 982 F.2d 437, 440 (10th Cir. 1992) (Court drew a bright line 

between “declaratory actions” and “coercive actions,” observing that unlike claims 

for coercive relief, “declaratory actions do not invoke the federal judiciary’s 

‘virtually unflagging obligation’ to exercise its jurisdiction.”). 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 21 of 34
- 22 - 

10820703v.2

For example, in Mega Life & Health Ins. Co. v. Tordion, 399 F. Supp. 2d 

1366 (S.D. Fla. 2005), an insurer filed a federal lawsuit seeking declaratory and 

coercive relief against its insured, while a parallel state action was also pending. Id.

at 1368. The insured argued under Wilton and Brillhart, the federal court should 

“abstain from exercising jurisdiction and dismiss this [federal] action.” Id. at 1369. 

The district court, however, held that “[u]nder the Colorado River doctrine, when a 

party seeks coercive relief in addition to declaratory relief, federal courts have a 

virtually ‘unflagging obligation...to exercise the jurisdiction given them,’ and 

should only abstain in ‘exceptional circumstances’”; the court further noted that 

“the ‘rule is generally that the pendency of an action in the state court is no bar to 

proceedings concerning the same matter in the Federal Court having jurisdiction.’” 

Id. at 1370 (quoting Colorado River, 424 U.S. at 813, 817). 

Similarly, in Hall v. Sargeant, 2018 U.S. District LEXIS 171099 (S.D. Fla. 

Oct. 1, 2018), a declaratory judgment action was filed that also sought “coercive 

relief,” and the Florida District Court was asked to decide whether to apply the 

Colorado River doctrine, or Wilton/Brillhart. The district court noted that 

“decisions of the Fifth Circuit before October 1, 1981, remain binding precedent 

on this Court,” and defendant “has not identified an Eleventh Circuit decision 

overturning PPG Industries.” Id. at *14. The court held that because there was not 

“any evidence in the record” from which the Court could conclude that plaintiff’s 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 22 of 34
- 23 - 

10820703v.2

coercive claims were “frivolous” or added “solely as a means of defeating WiltonBrillhart abstention,” then the claims were “mixed” and Wilton-Brillhart did not 

apply. Id. at *15. See also Zurich Am. Ins. Co. v. European Tile & Floors, Inc., 

2016 U.S. Dist. LEXIS 81222, at *7 (M.D. Fla. June 22, 2016) (“[W]hen a 

complaint contains both declaratory and non-declaratory judgment claims, courts 

have relied on the principles of Colorado River, as opposed to Wilton/Brillhart”). 

In this case, Hanover is seeking more than just declaratory relief – as set 

forth in Count II of its Complaint (¶127), it seeks recovery of its payment of all 

Defense Costs paid to the defendants in the State Litigation. As this claim for 

monetary relief is entirely consistent with Florida’s substantive law,9 it is most 

certainly not frivolous – nor is it asserted simply to defeat Wilton/Brillhart

abstention. Indeed, in Hanover’s initial coverage letter, Hanover expressly 

conditioned its payment of the defendants’ Defense Costs on: (i) Hanover’s right 

 

9

 Under Florida law, if it is determined that Hanover has no duty to defend, 

Hanover has an absolute right to recover all monies it has paid to the Defendants. 

See, e.g., Certain Interested Underwriters at Lloyd’s, London v. Halikoytakis, 556 

Fed. Appx. 932, 933 (11th Cir. May 20, 2014) (“Under Florida law, a liability 

insurer that has reserved the right to seek reimbursement is entitled to recover fees 

and costs once it is determined that the insurer has no duty to defend.”); Colony 

Ins. Co. v. G&E Tires & Serv., Inc., 777 So. 2d 1034, 1039 (Fla. 1st DCA 2000) 

(“[The insurer] Colony timely and expressly reserved the right to seek 

reimbursement of the costs of defending clearly uncovered claims...Colony is 

entitled to reimbursement.”). 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 23 of 34
- 24 - 

10820703v.2

to file a Coverage Lawsuit against the Defendants; and (ii) Hanover’s right, under 

Florida law, to recover all Defense Costs paid to the defendants.10 

In addition, Hanover has asserted further coercive relief against the 

Defendants through its Crossclaim in the related FCADV Lawsuit – which, again, 

Hanover has moved to consolidate into this action. Specifically, Hanover’s 

Crossclaim asserts multiple causes of action against the Defendants for 

reimbursement of Defense Costs it has already paid, including Fraud for 

misrepresentations in the Policy Application (failing to disclose the five prior 

“written demands” against FCADV),11 Unjust Enrichment, and Money Had and 

Received. See, Hanover Crossclaim [No. 4:20-cv-00309, Dkt. #5]. If Hanover’s 

consolidation request is granted, then each of those claims will also merge into this 

case. Accordingly, the Colorado River doctrine governs Hanover’s Lawsuit here 

and, respectfully, this Court has a “virtually ‘unflagging obligation...to exercise 

 

10 See, Colony Ins. Co. v. G&E Tires & Serv., Inc., 777 So. 2d 1034, 1039 

(Fla. 1st DCA 2000) (“[The insurer] Colony timely and expressly reserved the 

right to seek reimbursement of the costs of defending clearly uncovered 

claims...Colony is entitled to reimbursement.”). 

11 See Mega Life & Health Ins. Co., 399 F. Supp. 2d at 1369-1370 (S.D. Fla. 

2005) (holding that misrepresentations in policy application gives rise to claims for 

“coercive relief,” including rescission, such that “Colorado River, rather than 

Brillhart and Wilton, governs whether this federal court action should be dismissed 

on abstention grounds”). See also, Government Emples. Ins. Co. v. Dizol, 133 F.3d 

1220, 1225 (9th Cir. 1998) (“When other claims are joined in an action for 

declaratory relief (e.g.,...rescission...) the district court should not, as a general 

rule, remand or decline to entertain the claim for declaratory relief.”) (emphasis 

added). 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 24 of 34
- 25 - 

10820703v.2

the jurisdiction given [it],’” and “should only abstain in ‘exceptional 

circumstances.’” Hall, 2018 U.S. District LEXIS 171099 at *15 (quoting Colorado 

River, 424 U.S. at 813). 

The Hall court identified several additional factors to consider in deciding 

whether to dismiss a suit on abstention grounds under Colorado River, including: 

“(1) whether one of the courts has assumed jurisdiction over property; (2) the 

inconvenience of the federal forum; (3) the potential for piecemeal litigation; (4) 

the order in which the forums obtained jurisdiction; (5) whether federal or state law 

will be applied; and (6) the adequacy of each forum to protect the parties’ rights. In 

applying these factors, one must keep in mind that the ‘abstention inquiry must be 

heavily weighed in favor of the exercise of jurisdiction.’” Hall, 2018 U.S. District 

LEXIS 171099 at **15-16 (citations omitted). Here, the balance of factors weighs 

in favor of keeping federal jurisdiction. 

As to Factor 1, the Court has not assumed jurisdiction over property. 

As to Factor 2, the federal forum is not inconvenient when compared to the 

state forum; indeed, the Second Judicial District of Leon County is located a mere 

0.3 miles from the District Court. (“The Court takes judicial notice that the federal 

courthouse in West Palm Beach is approximately three city blocks away from the 

15th Judicial Circuit's courthouse. The second factor does not weigh in favor of 

abstention.” Hall, 2018 U.S. District LEXIS 171099 at *16).

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 25 of 34
- 26 - 

10820703v.2

As to Factor 3 (the potential for piecemeal litigation), Hanover has removed 

the FCADV Lawsuit and moved to consolidate it into this action, in part to prevent 

piecemeal litigation. 

As to Factor 4 (the order in which the forums obtained jurisdiction), it 

clearly favors maintaining jurisdiction here: Hanover filed this action on March 20, 

2020, ten weeks before the filing of the FCADV Lawsuit (i.e., June 3, 2020). 

As to Factor 5 (whether federal or state law will be applied), Florida law 

governs coverage under the Hanover Policy; however, this Court is asked simply to 

compare the underlying lawsuits with Hanover’s Policy language, to determine if a 

Policy exclusion applies or not – a routine issue in federal court. This is not a 

“complex question of state law” that favors abstention. See, Hall, 2018 U.S. 

District LEXIS 171099 at *17 (“The fifth factor ‘only strongly favors abstention if 

the case involves “complex questions of state law.”’ The instant case involves 

straightforward issues of Florida law...which this Court is fully competent to 

adjudicate.”). 

Finally, as to Factor 6 (the adequacy of each forum to protect the parties’ 

rights), Hanover has an absolute right to proceed against Defendants in federal 

court under Article III, Section 2 of the United States Constitution and 28 U.S.C. § 

1332. As the Hall court noted that “[w]hile the undersigned has no doubt that the 

15th Judicial Circuit could provide a fair and equitable forum to Plaintiffs, 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 26 of 34
- 27 - 

10820703v.2

Congress has, for policy reasons, afforded them the option to proceed here. 

Nothing in this record weighs against allowing them their preferred forum. The 

sixth factor favors retention of federal jurisdiction over this dispute.” Id. at **17-

18. The same rationale applies here, and this Court should, respectfully, decline to 

dismiss this suit on abstention grounds under Colorado River. 

Finally, even assuming, arguendo, that this Court determines 

Wilton/Brillhart – and not Colorado River – applies here (which it does not), the 

balance of the applicable Wilton/Brillhart factors still favor maintaining federal 

jurisdiction. In Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328 (11th Cir. 

2005), the Eleventh Circuit provided nine factors, or “guideposts,” for 

“consideration to aid district courts in balancing state and federal interests,” with 

the caveat that the “list is neither absolute nor is any one factor controlling.” Id. at 

1331. Therefore, “the Court has no obligation to consider each and every factor on 

the [Ameritas] list and is free to consider any other factors it deems relevant or 

significant.” Bright House Networks, LLC v. Pinellas Cnty., No. 14-1237, 2014 

WL 4794786, *8 (M.D. Fla. Sept. 25, 2014) (citation and quotation marks 

omitted). Specifically, Factors 2 through 9 all militate in favor of upholding 

federal jurisdiction over this dispute. 

Defendants’ contention that Ameritas Factor 1 could not be more “lopsided” 

in their favor is misleading, as Defendants focus solely on “the strength of the 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 27 of 34
- 28 - 

10820703v.2

state’s interest,” when Factor 1 actually is “the strength of the state’s interest in 

having the issues raised in the federal declaratory action decided in the state 

courts...”. Ameritas, 411 F.3d at 1331 (emphasis added). Hanover does not dispute 

that the State of Florida is strongly invested in the outcome of the underlying State 

Litigation – but whether Hanover has a duty to defend or indemnify the Insureds

is a much narrower question that can be readily dealt with separately by this Court. 

As to Ameritas Factor 2 (whether a judgment in federal court would settle 

the controversy), the answer is “yes,” as the ruling that Hanover seeks would 

definitively state that Hanover has no duty to defend or indemnify the Insureds, 

and would entitle Hanover to reimbursement for Defense Expenses. On this point, 

the Defendants repeat their misguided argument that this case depends upon the 

State Litigation to resolve factual issues – it does not; instead, as discussed 

throughout this brief, the facts actually bearing on coverage are not in dispute (i.e., 

the five prior “written demand” letters), and there is no danger of a “contrary 

factual determination” in state court. As such, Ameritas Factor 7 (whether the 

underlying factual issues are important) therefore strongly favors upholding federal 

jurisdiction. Similarly overblown are the Defendants’ arguments that potential 

inconsistencies on the facts could cause “friction” between federal and state courts 

(Ameritas Factor 5), and that the state court is in a better position to evaluate the 

facts (Ameritas Factor 8). Again, this Court is being asked to decide whether five 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 28 of 34
- 29 - 

10820703v.2

undisputed prior “written demand” letters trigger the Prior & Pending Proceedings 

Exclusion; Hanover does not seek adjudication of any facts – let alone any harmful 

“facts” – at issue in the underlying State Litigation. 

Another theme of the Defendants’ Wilton/Brillhart analysis is that Hanover 

has a fully available alternative remedy – namely, wait for the State Litigation to 

resolve and then act on factual determinations made there to determine coverage. 

See, e.g., Carr Motion to Dismiss, p. 16. While this is indeed an “alternative 

remedy,” it is far from a “superior alternative remedy” (Ameritas Factor 6) – and it 

completely ignores the Florida Supreme Court’s mandate in Higgins, supra, that 

endorses fast resolution of coverage disputes to benefit all of the parties. 

Consistent therewith, Defendants’ suggestion ignores the significant costs to 

Hanover for defending numerous parties, represented by different counsel, in more 

than one lawsuit – particularly where, based on the exclusions discussed herein, 

there is no actual benefit in “waiting,” and, in fact, it is quite contrary to Higgins. 

This coverage action was not premature, and it was not an instance of “procedural 

fencing” (Ameritas Factor 4) in the face of an “easily anticipated” State Coverage 

Suit.12 Instead, consistent with the Florida Supreme Court in Higgins, 894 So.2d at 

15 (encouraging that “[a] prompt determination of coverage benefits the insured, 

 

12 How is FCADV’s filing an identical coverage lawsuit six weeks later 

seeking identical relief in state court not “procedural fencing,” when FCADV 

could easily have added Travelers as a Third-Party Defendant, and its other 

“Nominal Defendants” to this existing lawsuit? 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 29 of 34
- 30 - 

10820703v.2

the insurer, and the insured party”), it was a valid exercise of Hanover’s right to 

seek swift resolution of a dispute in federal court (Ameritas Factor 3 – whether the 

federal court serves a useful purpose) based on insurance coverage law – hardly an 

uncommon topic in federal courts, and far from a complex issue of state law that 

might be better suited to a state forum (Ameritas Factor 9 – nexus between issues 

and state law). 

Therefore, even if this Court where to apply Wilton/Brillhart and Ameritas, 

there is no basis for abstention. 

E. Through the Crossclaim/FCADV Lawsuit – Which Hanover has Moved 

to Consolidate into this Case – All Potentially Interested Parties are 

Now Joined to this Dispute 

1. Penny Morrill 

In the Keeth Defendants’ Motion to Dismiss [Dkt. #12, p.3], they assert a 

separate argument that Hanover’s claims against Penny Morrill, specifically, 

should be dismissed because, while her name appears in the caption of the 

Complaint, it is missing from the list of parties within the body of the pleading. As 

a result, they contend, there is no factual allegation that Morrill is a Florida citizen, 

and so she should be dismissed for lack of subject matter jurisdiction and/or failure 

to state a claim. Id., pp. 3-4. While the Keeth Defendants are correct that 

allegations of citizenship are required to establish diversity jurisdiction, Taylor v. 

Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994), the omission as to Morrill was 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 30 of 34
- 31 - 

10820703v.2

clearly inadvertent, as she undoubtedly belongs in this case as a former director of 

FCADV who is a defendant in the underlying litigation. As Morrill is already a 

party to the underlying dispute, and she is represented in this action in a group of 

several other former directors, there is no prejudice to her in in excusing the 

unintended oversight. In any event, in the related FCADV Lawsuit, Morrill is also 

a named defendant – as a “citizen and resident of the State of Florida,” and in 

response Hanover has asserted a Crossclaim against the former directors, including 

Morrill, specifically asserting jurisdictional allegations against her. Hanover has 

moved to consolidate the FCADV Lawsuit, including the Crossclaim, into this 

action, and if that request is granted, Morrill’s objection will further be rendered 

moot. The motion to dismiss in this case as to Morrill is therefore unavailing, and 

should be denied.13 

2. Travelers, DCF, and the Florida AG 

Finally, certain Defendants argue that Hanover’s failure to join “necessary” 

and “indispensable” parties to its lawsuit – namely, Travelers, DCF, and the 

Florida AG – warrant dismissal of the entire action under Fed. R. Civ. P. 12(b)(7) 

and 19. See, FCADV’s Motion to Dismiss [Dkt. #15], pp. 14-21. Hanover 

disagrees with this position, as Travelers (which had a separate, non-overlapping 

 

13 In the event that the FCADV Lawsuit is not consolidated into this action, 

and this Court deems the allegations against Morrill as inadequate, Hanover will, 

respectfully, seek leave to amend its Complaint to cure this “technical” issue. 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 31 of 34
- 32 - 

10820703v.2

insurance policy), DCF, and the AG do not determine whether Hanover has a duty 

to defend and indemnify the Insureds. Put another way, these additional parties do 

not need to be part of this action for this Court to make a ruling as to coverage 

under the Hanover Policy, and therefore are neither “necessary” nor 

“indispensable.” See Fed. R. Civ. P. 19 (setting forth factors for when a party must 

be joined, including whether a judgment rendered in the party’s absence would be 

adequate, and the extent to which a judgment rendered in the party’s absence might 

prejudice any party). 

Nevertheless, and similar to with Morrill, the issues should be moot, since 

Hanover has moved to consolidate the FCADV Lawsuit – which includes Hanover, 

Travelers, DCF, and the AG – into this case, which would join all purportedly 

interested parties here. All claims involving Hanover and the Insureds would then 

be resolved under one caption, which would be in the interest of judicial economy 

and efficiency. Finally, it is revealing that in this action FCADV claims Hanover’s 

Complaint should be dismissed because it did not include “necessary” and 

“indispensable” parties such as DCF or the AG, whereas in the FCADV Lawsuit it 

categorizes DCF and the AG as “Nominal Defendants,” which the Eleventh Circuit 

defines as “neither necessary nor indispensable” to the action. Thermoset Corp. v. 

Bldg. Materials Corp. of Am., 849 F.3d 1313, 1317 (11th Cir. 2017). This 

inconsistency in pleadings demonstrates the lack of merit in the technical 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 32 of 34
- 33 - 

10820703v.2

jurisdictional arguments asserted against Hanover here. Defendants’ argument 

under Rule 12(b)(7) and Rule 19 should be rejected so that the valid and actual 

dispute among the parties may be properly addressed. 

III. CONCLUSION 

For the foregoing reasons, Hanover respectfully requests that this Court deny 

Defendants’ motions to dismiss or stay the Complaint, and that it award Hanover 

any such other and further relief as this Court deems just and equitable. 

IV. WORD LIMIT CERTIFICATION 

The undersigned hereby certifies that the word count for this document is 

7,812. 

July 3, 2020 

Respectfully submitted, 

HANOVER INSURANCE COMPANY 

By: /s/ Erik J. Tomberg 

ERIK J. TOMBERG, ESQUIRE 

(admitted pro hac vice) 

Wilson Elser Moskowitz 

Edelman & Dicker LLP 

55 West Monroe Street, Suite 3800 

Chicago, IL 60603 

(312) 704-0550 

erik.tomberg@wilsonelser.com

SEAN M. McDONOUGH, ESQUIRE 

Florida Bar No. 896446 

sean.mcdonough@wilsonelser.com 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 33 of 34
- 34 - 

10820703v.2

Wilson Elser Moskowitz 

Edelman & Dicker LLP 

111 North Orange Avenue Suite 1200 

Orlando, Florida 32801 

407-203-7599 - Phone 

407-648-1376 - Facsimile 

CERTIFICATE OF SERVICE

I hereby certify that on July 3, 2020, a true and correct copy of the foregoing 

was filed with the Northern District of Florida via CM/ECF and served by 

operation of the court’s electronic filing system upon all registered participants, 

and paper copies will be served via first class mail on those indicated as nonregistered participants. 

/s/ Erik J. Tomberg 

ERIK J. TOMBERG, ESQ. 

Case 4:20-cv-00148-RH-MAF Document 31 Filed 07/03/20 Page 34 of 34