United States District Court, M.D. Georgia, Macon Division
CHIS, LLC, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
LIBERTY MUTUAL HOLDING COMPANY INC., et al., Defendants.
MARC T. TREADWELL, District Judge.
Before the Court is Defendant Peerless Indemnity Insurance Co.'s motion to dismiss. (Doc. 13). For the following reasons, the motion is DENIED.
In this putative class action, Plaintiff CHIS, LLC seeks relief on behalf of itself and others similarly situated for the Defendants' alleged refusal to assess and pay damages for diminution in value when claims are made under their business or commercial property insurance policies. CHIS alleges it "timely reported a claim for direct physical loss to its building resulting from water damage" but that, in violation of Georgia law and in breach of their insurance policy with CHIS, the Defendants failed to assess and pay damages for diminution in the value of CHIS's property. (Doc. 11, ¶ 2).
Though CHIS has not yet moved for class certification, it envisions two classes: (1) the "Policyholder Class" comprised of "[a]ll persons currently insured under businessowners insurance policies issued by Liberty Mutual that provide coverage for property located in the State of Georgia, " and (2) the "Covered Loss Class" comprised of "[a]ll persons formerly or currently insured under businessowners insurance policies issued by Liberty Mutual that provide coverage for property located in the State of Georgia" who presented claims within the past six years for loss resulting from water damage for which damages for diminution in value were not paid. (Doc. 11, ¶ 58).
CHIS asserts claims for breach of contract (Count 1) and for a declaratory judgment pursuant to 28 U.S.C. § 2201 (Count 2). Peerless has only moved to dismiss Count 2, the Declaratory Judgment Act claim. The sole argument Peerless makes in its motion to dismiss is that because CHIS has an adequate remedy at law in the form of its breach of contract claim, its claim for declaratory relief should be dismissed. CHIS responds that (1) the absence of an adequate remedy at law is not required to bring a claim pursuant to the Declaratory Judgment Act; and (2) it does not have an adequate remedy at law "because Defendants' practice of refusing to assess and pay for diminution in value under the policies is ongoing, " and therefore, "Plaintiff and other policyholders would find themselves needing to file a new lawsuit each time their insured properties suffered a covered loss to require Defendants to assess for diminished value." (Doc. 25 at 7).
Contrary to Peerless's argument, the existence of an adequate legal remedy is not a bar to a claim for a declaratory judgment but rather a factor for the Court to consider in determining whether to issue declaratory relief. See Fed.R.Civ.P. 57 ("The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate."); Tierney v. Schweiker, 718 F.2d 449, 457 (D.C. Cir. 1983); Kenneth F. Hackett & Assocs., Inc. v. GE Capital Info. Tech. Solutions, Inc., 744 F.Supp.2d 1305, 1309-10 (S.D. Fla. 2010); Johnson v. Geico Gen. Ins. Co., 2008 WL 4793616, at *3 (S.D. Fla.). The Court recognizes that this issue may need to be revisited, but the Court cannot say at this point that CHIS has an adequate remedy at law. More importantly, the existence of such a remedy does not preclude declaratory relief. The Court also notes that the real issues in this case will likely emerge if CHIS moves for class certification. The Court is mindful of the hurdles presented by Wal-Mart Stores, ...