UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

HAMMOND DIVISION

DYNASTY INTERNATIONAL LLC and )

BRUCE MICHAEL ABRAHAMSON, )

 Plaintiffs, )

 )

 v. ) CAUSE NO.: 2:15-CV-374-JD-JEM

)

LEXINGTON INSURANCE COMPANY, )

Defendant. )

OPINION AND ORDER

This matter is before the Court on a Motion for Leave to Amend Plaintiffs’ Complaint [DE

27], filed by Plaintiffs on July 15, 2016. Defendant responded on July 29, 2016. Plaintiffs have not

replied, and the time to do so has passed. 

I. Background

Plaintiffs are successors in interest to a property in Highland, Indiana, which they leased to

Chrysler Realty Company. Chrysler in turn acquired an insurance policy covering the property with

Defendant Lexington Insurance Company. 

When the property was damaged, Plaintiffs requested reimbursement for their damages from

Lexington, but Lexington declined to pay. Lexington said that Chrysler’s policy did not list Plaintiffs

as loss payees or insureds.

Plaintiffs sued Lexington, but the Court dismissed Plaintiffs’ initial complaint for failing to

allege a plausible claim for relief. Specifically, the Court found that Plaintiffs had not plausibly

alleged that they were parties to the policy such that Lexington breached the policy when it refused

to compensate Plaintiffs for their loss. Plaintiffs argued that they were in fact named insureds either

(a) under the policy’s language; or (b) because Aon Risk Services Central, Inc. had added them to

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the policy by issuing a certificate of insurance. But the Court found that (a) Plaintiffs had failed to

allege that they were encompassed by the policy’s definition of “insured”; (b) Plaintiffs had failed

to allege an agency relationship between Lexington and Aon; and (c) even if Plaintiffs had

adequately alleged agency, “a certificate insurance, without more, is insufficient to amend a policy

to add an additional insured” [DE 26].

Now, Plaintiffs have filed a motion for leave to file an amended complaint. They say the

proposed amended complaint attached to the motion cures the initial complaint’s deficiencies.

Lexington objects and says that the Court should deny Plaintiffs’ motion for leave and dismiss the

case with prejudice. 

II. Analysis

When a party seeks leave to amend a pleading, the Court “should freely give leave when

justice so requires.” Fed. R. Civ. P. 15(a)(2). The decision to grant or deny a motion to amend lies

within the district court’s discretion, but if the underlying facts or circumstances relied upon by a

plaintiff are potentially a proper subject of relief, the party should be afforded an opportunity to test

the claim on the merits. Foman v. Davis, 371 U.S. 178, 182 (1962); Campbell v. Ingersoll Milling

Mach. Co., 893 F.2d 925, 927 (7th Cir. 1990). By contrast, leave to amend is “inappropriate where

there is undue delay, bad faith, dilatory motive on the part of the movant, repeated failure to cure

deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of

allowance of the amendment, or futility of the amendment.” Villa v. City of Chicago, 924 F.2d 629,

632 (7th Cir. 1991) (emphasis added). An amendment is “futile” if it would not withstand a motion

to dismiss or motion for summary judgment. Vargas-Harrison v. Racine Unified Sch. Dist., 272 F.3d

964, 974 (7th Cir. 2001); Sound of Music Co. v. 3M, 477 F.3d 910, 923 (7th Cir. 2007).

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Here, the Court finds that allowing Plaintiffs to file the proposed amended complaint would

be futile, because the proposed amended complaint would not survive a motion to dismiss. Even

with several new allegations, the proposed amended complaint still does not plausibly allege that

Plaintiffs were a party to the policy. 

The proposed amended complaint includes three new allegations that are relevant: (1) that

Plaintiffs were listed as additional insureds “on the Policy” (¶ 24); (2) that Plaintiffs were listed as

additional insureds, loss payees, mortgagees, or lenders “by specific endorsement” (¶ 25); and (3)

that Aon Risk Services Central, Inc., acting as Lexington’s agent, listed Plaintiffs as additional

insureds via a certificate of property insurance (¶¶ 26-28). The Court will address each new

allegation in turn.

A. The allegation that Plaintiffs were listed as additional insureds “on the Policy”

First, the proposed amended complaint newly alleges that Plaintiffs were listed as additional

insureds “on the Policy” (¶ 24). But the policy attached to the proposed amended complaint

contradicts this allegation: it does not name Plaintiffs as insureds or as additional insureds. See

Commercial Property Policy, DE 27-4 at 17 (listing insureds as “Chrysler LLC and all subsidiary,

affiliated, associated, or allied companies, corporations, entities or organizations ” and listing no

additional insureds). So while the proposed amended complaint alleges that the policy listed

Plaintiffs as additional insured, the policy itself contradicts that allegation. And “when a written

instrument contradicts allegations in the complaint to which it is attached, the exhibit trumps the

allegations.” Northern Indiana Gun & Outdoor Shows v. City of South Bend, 163 F.3d 449, 454 (7th

Cir. 1998).

The policy does list Chrysler as a named insured, and the initial complaint—like the

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proposed amended complaint—alleged that Plaintiffs had a landlord-tenant relationship with a

Chrysler subsidiary. But the Court dismissed the initial complaint because “entering into a leasing

relationship with a Chrysler subsidiary hardly makes Plaintiffs a ‘subsidiary, affiliate, associate, or

allied’ entity of Chrysler” [DE 26]. In other words, the initial complaint did not “allege facts

indicating that [Plaintiffs had] a relationship with Chrysler” such that the policy covered them [DE

26]. Because the proposed amended complaint is identical to the initial complaint in this regard, it

follows that the proposed amended complaint likewise does not allege facts indicating that the policy

covered Plaintiffs because of Plaintiffs’ relationship with Chrysler. 

In sum, the proposed amended complaint does not cure the initial complaint’s failure to

plausibly allege that the policy’s definition of “insured” encompassed Plaintiffs.

B. The allegation that Plaintiffs were listed as additional insureds, loss payees,

mortgagees, or lenders “by specific endorsement”

Second, the proposed amended complaint newly alleges that Plaintiffs were listed as

additional insureds, loss payees, mortgagees, or lenders “by specific endorsement” (¶ 25). The

proposed amended complaint does not allege any facts that support this allegation, and moreover

the allegation is contradicted by the fact that the policy attached to the proposed amended complaint

does not include any endorsement naming Plaintiffs as additional insureds, loss payees, mortgagees,

or lenders. A written instrument attached to a complaint trumps the complaint’s allegations,

Northern Indiana Gun & Outdoor Shows, 163 F.3d at 454, and consequently Plaintiffs’ proposed

amended complaint does not plausibly allege that the policy covered Plaintiffs by way of an

endorsement.

C. The allegation that Aon, as Lexington’s agent, listed Plaintiffs as additional

insureds via a certificate of property insurance

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Third, the proposed amended complaint alleges that Aon was Lexington’s agent and that Aon

listed Plaintiffs as additional insureds via a certificate of property insurance (¶¶ 26-28). But when

the Court dismissed the initial complaint the Court noted that even with such an allegation of agency,

“a certificate of insurance, without more, is insufficient to amend a policy to add an additional

insured.” See DE 26 (citing Am. Family Ins. Co. v. Globe Am. Cas. Co., 774 N.E.2d 932, 939 (Ind.

Ct. App. 2002)). And even assuming that it is possible to allege facts showing a manifestation of

intent to incorporate a certificate’s terms into a policy such that the terms are incorporated—it may

not be possible, see DE 26—the proposed amended complaint here does not allege any facts

indicating a manifestation of such intent. So this new allegation is irrelevant.

III. Conclusion

Because allowing Plaintiffs to file the proposed amended complaint would be futile, the

Court DENIES Plaintiffs’ Motion for Leave to Amend Plaintiffs’ Complaint [DE 27].

The Court declines to address Lexington’s request in its response brief that the Court dismiss

the case with prejudice. Such a motion must be filed separately. See N.D. Ind. L.R. 7-1.

To the extent Plaintiffs still believe they may be able to plead a valid claim for relief, they

may seek leave to file an amended complaint on or before November 23, 2016.

SO ORDERED this 25th day of October, 2016. 

s/ John E. Martin 

MAGISTRATE JUDGE JOHN E. MARTIN

UNITED STATES DISTRICT COURT

cc: All counsel of record

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