K&K ROOFING AND CONSTRUCTION LLC’S MOTION TO DISMISS

FOR LACK OF SUBJECT MATTER JURISDICTION PAGE 1

 

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

ADMIRAL INSURANCE COMPANY §

§

Plaintiff, §

§

v. § CIVIL ACTION NO. 1:20-CV-00399

§ 

K&K ROOFING AND CONSTRUCTION §

LLC, §

§

Defendant. §

K&K ROOFING AND CONSTRUCTION LLC’S MOTION

TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION

Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, Defendant K&K Roofing

and Construction, LLC (“K&K”) files this Motion to Dismiss for Lack of Subject Matter

Jurisdiction. K&K respectfully would show this Court as follows: 

A. BACKGROUND

Following a tragic fire that occurred at the Iconic Village Apartmentsin San Marcos, Texas,

K&K was named as a defendant in the following underlying lawsuits:

• Cause No. D-1-GN-18-003866; Phillip Miranda, Individually and as Representative

of the Estate of James Miranda, Deceased vs. K&K Roofing & Construction, et al.;

in the 345th Judicial District Court of Travis County, Texas(the “Miranda Lawsuit”);

• Cause No. D-1-GN-18-004 799; Steven Victor Mroski and Zachary A. Rosenfeld vs.

K&K Roofing Construction, LLC, et al.; in the 200th Judicial District Court of Travis

County, Texas (the “Mroski Lawsuit”); and
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• Cause No. D-1-GN-20-002873; Karl Sutterfield, et al. v. K&K Roofing Company, et

al.; in the 126th Judicial District Court of Travis County, Texas (the “Sutterfield

Lawsuit”).1

K&K sought defense and indemnity coverage from Plaintiff, Admiral Insurance Company

(“Admiral”) for the Miranda Lawsuit, Mroski Lawsuit, and the Sutterfield Lawsuit (collectively, the

“Underlying Lawsuits”) under policy number CA000022058-03, which Admiral issued to K&K for

the policy period from July 20, 2017 to July 20, 2018 (the “Admiral Policy”).2

Admiral accepted defense coverage,subject to a reservation of rights, and appointed defense

counsel to represent K&K in the Underlying Lawsuits. Thereafter, Admiral filed this action,seeking

to have the Court issue a declaration that there is no coverage under the Admiral Policy for the

damages sought by the plaintiffs in the Underlying Lawsuits.3

By letter dated January 28, 2021, K&K formally withdrew its request for defense and

indemnity coverage for the Underlying Lawsuits under the Admiral Policy. See Exhibit A, Letter to

Admiral Dated January 28, 2021 (the “Notice Letter”). In the Notice Letter, K&K confirmed that it

no longerseeks defense or indemnity coverage from Admiral under the Admiral Policy with respect

to the Underlying Lawsuits or any other potential future litigation that involves the same facts and

circumstances as those in the Underlying Lawsuits. Exhibit A, Notice Letter, p. 3. K&K also stated

in the Notice Letter that it will not look to Admiral for reimbursement of any fees, costs, or expenses

asit relatesto the Underlying Lawsuits or any other potential future litigation that involvesthe same

1 The Sutterfield Lawsuit was originally filed in Dallas County Court at Law Number 3 (Cause No.: CC-20-00036-C).

That action was nonsuited and refiled in Travis County District Court on June 2, 2020.

2 Admiral Insurance Company’s Second Amended Original Complaint and Request for Declaratory Judgment (the

“Second Amended Complaint”) [Doc 11], p. 2; Exhibit A to the Second Amended Complaint [Doc 11-1, p. 4].

3 See Admiral Insurance Company’s Original Complaint and Request for Declaratory Judgment [Doc. 1], pp. 1, 3, 10–14.

Admiral filed a First Amended Complaint [Doc. 5] and the Second Amended Complaint [Doc. 11] seeking the same

relief.
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facts and circumstances as those in the Underlying Lawsuits. Id. Additionally, K&K confirmed in

the Notice Letter that it will not seek to be indemnified against any settlement or judgment against

K&K with respect to the Underlying Lawsuits or any other potential future litigation that involves

the same facts and circumstances as those in the Underlying Lawsuits. Id.

C. ARGUMENT AND AUTHORITIES

1. Legal Standard for Rule 12(b)(1) Motions to Dismiss

While “the court must dismiss [an] action” if it “determines at any time that it lacks subjectmatter jurisdiction,”4 a party may also bring a motion to dismiss for lack of subject-matter

jurisdiction under Rule 12(b)(1).5 Lack of subject matter jurisdiction may be found in any one of

three instances: (1) the complaint alone; (2) the complaint supplemented by undisputed facts

evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court’s

resolution of disputed facts.6 The burden of proof for a Rule 12(b)(1) motion to dismiss is on the

party asserting jurisdiction.7 Accordingly, the plaintiff—in this case, Admiral—constantly bearsthe

burden of proof that jurisdiction does, in fact, exist.8 In examining a Rule 12(b)(1) motion, the

district court is empowered to consider matters of fact that may be in dispute.9 Ultimately, a court

4 FED. R. CIV. P. 12(h)(3).

5 See FED. R. CIV. P. 12(b)(1).

6 King v. U.S. Dept. of Veterans Affairs, 728 F.3d 410, 413 (5th Cir. 2013).

7 Ballew v. Cont’l Airlines, Inc., 668 F.3d 777, 781 (5th Cir. 2012).

8 Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001); Andrade v. Teichroeb, 341 F. Supp. 3d 681, 684–85

(N.D. Tex. 2018).

9 Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981); Andrade, 341 F. Supp. 3d at 685.
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should grant a motion to dismiss for lack of subject matter jurisdiction if it appears certain that the

plaintiff cannot prove any set of facts in support of its claim that would entitle plaintiff to relief.10 

In this matter, K&K presents a factual challenge to this Court’sjurisdiction. In particular, by

withdrawing its claim for defense and indemnity coverage, the present action is moot as there no

longer remains a justiciable case or controversy between K&K and Admiral and no such justiciable

case or controversy will exist in the future, as K&K has bound itself not to pursue coverage in

connection with the Underlying Lawsuits.

11 Thus, K&K respectfully requests that the Court grant

K&K’s Motion to Dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure.

2. The Courtshould Dismissthe Second Amended Complaint Because this Case no

longer Involves a Justiciable Case or Controversy Supporting Federal SubjectMatter Jurisdiction

The Courtshould dismissthis case because Admiral’s claim for declaratory relief is moot. To

maintain a declaratory judgment action “an actual controversy must be extant at allstages ofreview,

not merely at the time the complaint is filed.”12 The Declaratory Judgment Act, 28 U.S.C. § 2201

(the “Act”), provides in pertinent part:

In a case of actual controversy within its jurisdiction . . . any court of the

United States, upon the filing of an appropriate pleading, may declare the

10 Home Builders Ass’n of Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006, 1010 (5th Cir. 1998); Andrade, 341 F.

Supp. 3d at 685.

11 FED. R. CIV. P. 12(b)(1); see Safeco Ins. Co. v. Smith, No. 4:17-CV-1552, 2018 WL 513668, at *3 (E.D. Mo. Jan. 23,

2018) (holding that, when an insured withdrew its claim for coverage, declaratory judgment action by insurer became

moot); Security Nat’l Ins. Co. v. FDIC, No. 13-6736, 2015 WL 1973346, at *3–4 (E.D. Pa. May 1, 2015) (finding that

withdrawal of an insurance claim renders moot a declaratory judgment between the insurer and insured); Am. Int’l

Specialty Lines Ins. Co. v. Pacifica Amber Trail LP, No. 11-CV-0336, 2013 WL 3205345, at *3 (S.D. Cal. June 24,

2013) (same); Selective Ins. Co. of South Carolina v. Phusion Projects, Inc., 836 F. Supp. 2d 731, 732–34 (N.D. Ill.

2011) (same); Unigard Ins. Co. v. Cont’l Warehouse, No. 00-CV-4279, 2001 WL 432396, at *2–3 (N.D. Cal. April 26,

2001) (recognizing that, even though there was an active controversy when the litigation initially was filed, the court

lacked subject matter jurisdiction when the insured subsequently withdrew its claim for coverage under the policy while

the declaratory judgment action was pending); State Farm Mut. Auto. Ins. Co. v. Ormston, 550 F. Supp. 103, 105 (E.D.

Pa. 1982).

12 Steffel v. Thompson, 415 U.S. 452, 460 n.10 (1974) (emphasis added).
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rights and other legal relations of any interested party seeking such

declaration, whether or not further relief is or could be sought. Any such

declaration shall have the force and effect of a final judgment or decree and

shall be reviewable as such.

In addressing the Act’s restriction to cases of actual controversy, the Supreme Court of the

United States has stated:

The Constitution limits the exercise of the judicial power to “cases” and

“controversies.” . . . The Declaratory Judgment Act of 1934, in its limitation

to “cases of actual controversy,” manifestly has regard to the constitutional

provision and is operative only in respect to controversies which are such in

the constitutional sense. The word “actual” is one of emphasis rather than of

definition . . . .

A “controversy” in this sense must be one that is appropriate for judicial

determination. A justiciable controversy is thus distinguished from a

difference or dispute of a hypothetical or abstract character; from one that is

academic or moot. The controversy must be definite and concrete, touching

the legal relations of parties having adverse legal interests. It must be a real

and substantial controversy admitting of specific relief through a decree of a

conclusive character, as distinguished from an opinion advising what the law

would be upon a hypothetical state of facts. Where there is such a concrete

case admitting of an immediate and definitive determination of the legal

rights of the parties in an adversary proceeding upon the facts alleged, the

judicial function may be appropriately exercised although the adjudication of

the rights of the litigants may not require the award of process or the payment

of damages.13

Further, in examining a Rule 12(b)(1) motion, “the district court is empowered to consider

matters of fact which may be in dispute.”14 The facts presented to this Court at this time establish

that an actual controversy no longer exists, never will exist in the future, and Admiral is now seeking

an impermissible advisory opinion.15 The United States Supreme Court has consistently recognized

13 Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239–41 (1937) (citations omitted); Rowan Co., Inc. v. Griffin, 876 F.2d

26, 27–28 (5th Cir. 1989);see also 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2757 (1983).

14 Andrade v. Teichroeb, 341 F. Supp. 3d 681, 684–85 (N.D. Tex. 2018).

15 Preiser v. Newkirk, 422 U.S. 395, 401 (1975); John Doe #1 v. Veneman, 380 F.3d 807, 814 (5th Cir. 2004).
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that, under Article III of the United States Constitution, “a federal court has neither the power to

render advisory opinions nor ‘to decide questionsthat cannot affect the rights of litigantsin the case

before them.’”16 Likewise, a federal court’sjudgment in a case must resolve “‘a real and substantial

controversy admitting of specific relief through a decree of a conclusive character, as distinguished

from an opinion advising what the law would be upon a hypothetical state of facts.’”17

When a claim for coverage under an insurance policy is withdrawn, there is no longer a

justiciable case or controversy sustaining federal jurisdiction for a declaratory judgment action.18

Recently, a federal district court in Missouri evaluated a similar circumstance. In Safeco Insurance

Company of America v. Smith, the insured pleaded guilty to molesting his daughter, S.M.S., for

several years, including the time when the homeowners’ policy issued by Safeco was in effect.

19 A

lawyer representing the interests of S.M.S. filed suit against the insured, and the insured submitted

the lawsuit to Safeco for defense and indemnity.20 Safeco filed a declaratory judgment action

pursuant to the Act against the insured and S.M.S., seeking a declaration that the homeowners’

policy did not provide coverage for the damages sought.21

The insured withdrew his claim for insurance coverage after Safeco moved for a default

judgment in the coverage litigation.22 Prior to granting the default, the court directed the defendants

to show cause as to why default should not be entered. Thereafter, the defendants submitted a letter

16 Veneman, 380 F.3d at 814 (quoting Prieser, 422 U.S. at 401).

17 Id.

18 See authority cited infra at Note 11.

19 No. 4:17-CV-1552, 2018 WL 513668, at *1 (E.D. Mo. Jan. 23, 2018).

20 Id.

21 Id.

22 Id.
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outlining that the insured was withdrawing hisrequest for coverage and did not intend to pursue any

coverage under the homeowners’ insurance policy for the damagessought in the underlying matter.

23

The court first rejected Safeco’s argument that the motion to dismiss was untimely,24

explaining that the question of whether there is a “live case or controversy . . . goes to the Article III

jurisdiction” of the court’s power.

25 Thus, the issue of “[m]ootness is a jurisdictional question

because the Court is not empowered to decide moot questions or abstract propositions.”26 The court

then explained that, when “an insured withdraws a claim for coverage, there is no longer a case or

controversy,” as the insured has disclaimed any intention of pursuing coverage under the policy.27

Other courts have found that there is no justiciable controversy between an insurer and insured in a

declaratory judgment action brought under the Act, even when the insured specifically reserves the

right to reassert a claim for coverage at a later time.28

In this matter, K&K has unequivocally and unconditionally withdrawn its demand for

defense and indemnity under the Admiral Policy with respect to the Underlying Lawsuits. Thus,

there remains no pending justiciable controversy between K&K and Admiral as to the Underlying

Lawsuits. Thisis demonstrated even more clearly by the fact that K&K did not, unlike the insured in

23 Id. at *1.

24 Id. at *2.

25 Id. (citing Arizonians for Official English v. Arizona, 520 U.S. 43, 64 (1997)).

26 Id.

27 Id.

28 See State Farm Mut. Auto. Ins. Co. v. Ormston, 550 F.Supp. 103, 105–06 (E.D. Pa. 1982);see also Am. Int’l Specialty

Lines Ins. Co. v. Pacifica Amber Trail LP, No. 11-CV-0336, 2013 WL 3205345, at *3 (S.D. Cal. June 24, 2013) (citing

Ormston with approval and finding that “the issue of whether the Policy entitles [the insured] to any insurance benefits

for the Settlement is an abstract legal question, and presents no actual controversy over which this Court has

jurisdiction”); Selective Ins. Co. of South Carolina v. Phusion Projects, Inc., 836 F. Supp. 2d 731, 732–34 (N.D. Ill.

2011) (explaining that the insurer “is not faced with the kind of ‘dilemma’ that the . . . Act sought to ameliorate: it is not

presently required to take any action with respect to the [underlying claims], or to refrain from taking any action, to
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many other cases, reserve the right to seek coverage at a later time. Thus, any ruling by this Court in

this matter would be nothing more than an impermissible advisory opinion.29

C. PRAYER

WHEREFORE, PREMISES CONSIDERED, K&K Roofing and Construction LLC prays

that this Court will enter an order dismissing Plaintiff’s claimsfor lack ofsubject matter jurisdiction

and awarding K&K such other and further relief, at law or in equity, to which it may show itself to

be justly entitled.

Respectfully submitted,

/s/ Douglas P. Skelley

Douglas P. Skelley

Lead Attorney to be Noticed

State Bar No. 24056335

doug@shidlofskylaw.com

Blake H. Crawford

State Bar No. 24065096

blake@shidlofskylaw.com

SHIDLOFSKY LAW FIRM PLLC

7200 N. Mopac Expy., Ste. 430

Austin, Texas 78731

512-685-1400 (Phone)

866-232-8412 (Fax)

ATTORNEYS FOR DEFENDANT K&K

ROOFING AND CONSTRUCTION LLC

eliminate the risk of liability”); Unigard Ins. Co. v. Cont’l Warehouse, No. 00-CV-4279, 2001 WL 432396, at *2–3

(N.D. Cal. April 26, 2001).

29 See FED.R.CIV. P. 12(h)(3) (stating that “[i]f the court determines at any time that it lacks subject-matter jurisdiction,

the court must dismiss the action”).
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CERTIFICATE OF SERVICE

I hereby certify that, on January 28, 2021, I electronically filed the foregoing document

with the clerk of court for the U.S. District Court, Western District of Texas, Austin Division,

using the electronic case filing system of the court. The electronic case filing system sent a “Notice

of Electronic Filing” to attorneys of record for all parties who have consented in writing to accept

service by electronic means.

/s/ Douglas P. Skelley

Douglas P. Skelley