Source: http://www.forerunner.com/fyi/law/raney-v-aw/91tpmtd11-18-98.htm
Timestamp: 2013-12-12 20:13:22
Document Index: 268568923

Matched Legal Cases: ['§ 1332', '§ 1332', '§ 248', '§ 1367', '§ 1367', '§ 1367', '§626', '§626']

THIRD-PARTY DEFENDANTS' DISPOSITIVE MOTION TO DISMISS THIRD PARTY COMPLAINT
MEREDITH T. RANEY, JR.,	Plaintiff,
The Third-Party Defendants, SPHERE DRAKE INSURANCE COMPANY PLC, (SPHERE DRAKE) and WESTCO CLAIMS MANAGEMENT COMPANY, INC., (WESTCO) by and through the undersigned counsel, pursuant to Fed. R.Civ.P. 12(b)(1) and (6), hereby move this Honorable Court to Dismiss the Third-Party Complaint, as follows:
Failure to Allege Subject Matter Jurisdiction
The Third Party Complaint purports to allege subject matter jurisdiction based upon 28 U.S.C. § 1332, alleging diversity of citizenship between the Defendants/Third Party Plaintiffs (AWCC) and the Third Party Defendants. However, on its face, the allegations of diversity are insufficient to establish subject matter jurisdiction in this Court. Therefore, the Third Party Complaint must be dismissed, pursuant to Fed. R.Civ.P. 12(b)(1).
Where the allegations of subject matter jurisdiction are in question, the Court must consider the allegations of the Complaint as tree, to determine whether sufficient basis for subject matter jurisdiction has been alleged. Helton v. United States, 532 F. Supp. 813 (S.D. Ga. 1982); Menchaca v. Chrysler Credit Corp., 613 F. 2d 507 (5th Cir. Ct. 1980), rehearing den. 622 F. 2d 1043, cert. den. 449 U.S. 953. Taking the allegations of subject matter jurisdiction in the Third Party Complaint as tree, AWCC fails to allege sufficient basis for subject matter jurisdiction, for failure to allege complete diversity of the parties, and for failure to adequately allege the citizenship of SPHERE DRAKE.
Diversity of jurisdiction does not exist unless each Defendant is a citizen of a different state from each Plaintiff; diversity must be complete. See, Strickland v. Holiday RV Superstores, Inc., 817 F. Supp. 951 (M.D. Fla. 1993), affirmed 28 F. 3d 115; Cabalceta v. Standard Fruit Co., 883 F. 2d 1553 (11th Cir. Ct. 1989). The Third Party Complaint admits that AWCC "are all residents and citizens of the State of Florida," as is the Plaintiff, MEREDITH RANEY. Therefore, there is not complete diversity amongst the parties, and jurisdiction is not proper under § 1332.
Moreover, AWCC fails to establish diversity between themselves and the Third Party Defendants, as the Third Party Complaint fails to allege the citizenship of SPHERE DRAKE. Paragraph 3 of the Third Party Complaint merely alleges that SPHERE DRAKE is "a foreign business entity situated in London, England, U.K." and asserts that it accepts services of process in New York. The Third Party Complaint fails to allege the citizenship or principal place of business of SPHERE DRAKE, and therefore fails to establish diversity jurisdiction. Taylor v. Appleton, 30 F. 3d 1365 (11th Cir. Ct. 1994).
Finally, as a factual attack on the alleged diversity, AWCC cannot support their bald allegation that the amount in controversy exceeds the jurisdictional minimum of $75,000, where the Third Party Complaint specifically acknowledges that "Raney's claims are insubstantial," which the Third Party Complaint also characterizes as "frivolous[.]" See, Third Party Complaint at ¶¶ 13, 45. Indeed, it appears that RANEY's claims are specifically precluded by the very statute under which they are brought, 18 U.S.C. § 248(D)(2), wherein Congress specifically stated that the statute shall not be construed to create new remedies for interference with free speech or other First Amendment activities, occurring outside of a facility, regardless of the point of view expressed. Given these facts, it is unreasonable to allege that defense costs will exceed $75,000 for a frivolous action which is expressly prohibited by the statute alleged in the Plaintiff's Complaint.(See footnote 1)
Accordingly, AWCC fails to properly invoke this Court's subject matter jurisdiction, and the Third Party Complaint must be dismissed. (See footnote 2)
(Footnote 1) Additionally, in his Motion for Summary Judgment, Raney has demanded the statutory damages of $5,000.00 per occurrence, in lieu of actual damages, limiting the amount sought for indemnification to $15,000.00. While Raney also seeks attorney's fees and punitive damages, the policies at issue expressly exclude claims for punitive damages.
(Footnote 2) Because the subject matter jurisdiction of the first party complaint is premised upon federal question jurisdiction, the Third Party Complaint arguably may be subject to jurisdiction under 28 U.S.C. § 1367. However, AWCC has not pled this basis for subject matter jurisdiction, and the Court cannot create its own jurisdiction by embellishing otherwise deficient allegations. See, Pontier v. City of Clearwater, 881 F. Supp. 1565 (M.D. Fla. 1995). Moreover, even were jurisdiction appropriate under § 1367(a), jurisdiction over the Third Party Complaint still should be declined, based upon the factors set forth in § 1367(c).
Even were this Court to determine that subject matter jurisdiction existed, the Third Party Complaint fails to state a cause of action, and therefore must be dismissed pursuant to Fed. R. Civ.P. 12(b)(6).
AWCC alleges that both SPHERE DRAKE and WESTCO breached contracts with AWCC. The insurance policies which are the subject matter of the Third Party Complaint were entered into by SPHERE DRAKE and AWCC. WESTCO was not a party to those insurance policy contracts. Therefore, AWCC cannot maintain a cause of action against WESTCO for breach of contract as no contract existed between the parties.
In TLZ Proverties v. Kilbum-Young Asset Management Corp., 937 F. Supp. 1573, 1578 (M.D. Fla. 1996), this District held that "it is essential to the creation ora contract that there be mutual or reciprocal assent to a certain and definite proposition." The Court found that there was no evidence of mutual assent or acceptance of an offer to construe that a contract existed. Id at 1579. The court concluded that under Florida law, there is no contract unless the parties have a definite and distinct understanding. Id at 1578.
As WESTCO was not a party to the insurance policies allegedly breached, AWCC's cause of action cannot be maintained against WESTCO. Under Florida law, there can be no contract without offer and acceptance. Blumberg v. Pinellas County, 836 F. Supp. 839, 845 (M.D. Fla. 1993). As the Third Party Complaint does not allege a contract between AWCC and WESTCO, Count I must be dismissed as to WESTCO.
Counts II and III:
AWCC alleges in Counts II and III that both SPHERE DRAKE and WESTCO tortiously violated their fiduciary duties and acted in reckless disregard in denying coverage and a defense to AWCC. These claims present alternative theories of recovery for the same allegations set forth in the breach of contract claim (Count I). Under Florida law, the economic loss rule precludes causes of action based on torts which are not independent of an alleged breach of contract.
In HTP. Ltd. v. Lineas Aereas Costarricenses. S.A., 685 So. 2d 1238, 1239 (Fla. 1996), the Florida Supreme Court held that absent some conduct resulting in personal injury or property damage, there can be no independent tort flowing from a contractual breach which would justify a tort claim solely for economic losses. The court reasoned that an independent tort would be one that requires proof of facts separate and distinct from the breach of contract. Id.
In Hotels of Key Largo. Inc. v. RHI Hotels. Inc.. 694 So. 2d 74 (Fla. 3rd DCA 1997), rev. denied, 700 So. 2d 685 (Fla. 1997), the court held that when alleged tortious acts are "interwoven and indistinct from the heart of the contractual agreement", an independent action in tort cannot be maintained separate from the breach of contract. Id at 75. When the alleged tort is inseparable from the essence of the agreement between the parties, the economic loss rule applies. Id Therefore, the parties are limited to pursuing their rights in contract. Id.
As AWCC is not claiming a tort independent of the alleged breach of contract, Counts II and III are barred by the economic loss rule. AWCC's claims that SPHERE DRAKE and WESTCO tortiously violated their fiduciary duties are inexorably intertwined with the claim for breach of contract. Where the allegations of tortious conduct re directly related to the allegations of breach of contract, the ecottomic loss rule precludes the tort claims. Straub Capital Corporation v, Chopin, 23 Fla. L. Weekly D2222 (Fla. 4th DCA 1998); HTP, 685 So. 2d at 1239.
As AWCC's claims lie in contract, Count II and III must be dismissed pursuant to the economic loss rule.
Counts IV, V, VI, VII, VIII and IX:
In Counts IV through IX, AWCC alleges that SPHERE DRAKE and WESTCO committed various violations of Florida's Unfair Insurance Trade Practices Act (UITPA), §626.9541, Fla. Stat. Among the allegations set forth by AWCC are that SPHERE DRAKE and WESTCO did not reasonably investigate the claim, denied claims without investigation, failed to warn of exclusions and denials, and misled and misrepresented the terms of the policy to AWCC. In each of these Counts, AWCC seeks damages based on these alleged statutory violations.
Counts IV, V, VI, VII, VIII and IX all must be dismissed as §626.9541, Fla. Stat. does not create an independent cause of action. That statute provides for administrative remedies only, and does not create a private cause of action.
In Keehn v. Carolina Casual Insurance Co., 758 F.2d 1522 (11th Cir. Ct. 1985), the Court affirmed summary judgment in favor of the defendant insurance company. The trial court properly found that UITPA provided only administrative remedies for its violations, and did not create a new cause of action. Id at 1524.
As ¶626.9541, Fla. Stat. only provides administrative remedies for violations, AWCC fails to state a cause of action for Counts IV through IX. Florida courts have unanimously held that UITPA provides no new remedy at law. See, e. g., Cycle Dealers Insurance, Inc. v. Bankers Insurance Co,, 394 So. 2d 1123 (Fla. 5th DCA 1981). Accordingly, Counts IV, V, VI, VII, VIII and IX must be dismissed.
AWCC alleges in Count X that SPHERE DRAKE and WESTCO acted in bad faith in its denial of coverage for the Complaint by RANEY. However, under Florida law, a first party bad faith claimant cannot state a cause of action until there has been a determination of the insured's damages.
In Talat Enterprises. Inc. v. Aetna Casualty Surety Co., 952 F.Supp. 773 (M.D. Fla. 1996), this District held that "Iai first-party bad faith claimant cannot state a cause of action until he can allege that there has been a determination of the insured's damage, whether by litigation or arbitration." Id at 776. (Citations omitted).
As AWCC has not obtained a determination in its breach of contract claim yet, the Court must dismiss Count X for failure to state a cause of action.
For the foregoing reasons, the Third Party Complaint should be dismissed for failure to allege subject matter jurisdiction, or alternatively for failure to state a cause of action.
Attorneys for SPHERE DRAKE & WESTCO
2801 Ponce de Leon Blvd., 9th Floor