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Owners Insurance Co. v. Remodeling Depot, Inc.

United States District Court, S.D. Georgia

March 29, 2018




         Before the Court is Defendants Remodeling Depot, Inc. and Kenneth Wayne Hosti's Motion to Dismiss. (Doc. 28.) For the following reasons, Defendants' motion is DENIED. However, Plaintiff Owners Insurance Company's claim for a declaratory judgment regarding its duty to indemnify is STAYED.


         This case involves a dispute over insurance coverage for alleged acts of negligence with respect to a home renovation. In May 2015, Defendants Joann Lyon and Michael E. Lindsey ("Homeowners") hired Defendant Remodeling Depot, Inc., owned by Defendant Kenneth Wayne Hosti, [1] to remodel part of their home. (Doc. 1 ¶¶ 10-11.) Defendant Hosti personally supervised and directly participated in the construction. (Id. ¶ 13.) The project was to commence on March 18, 2015 and be completed by May 1, 2015. (Id. ¶ 12.)

         Zoning issues delayed the start of construction. (Id. ¶ 15.) In addition, Defendant Homeowners were unhappy with the quality of Defendant Remodeling Depot's work. (Id. ¶ 16.) Ultimately, Defendant Homeowners filed suit in the State Court of Chatham County alleging that Defendant Remodeling Depot "failed to perform its design and construction work in a timely and workmanlike manner, failed to ensure that costs of the Project were reasonable and necessary, failed to apply payments made by Homeowners to costs of the Project, and failed to complete the work substantially and in accordance with plans and specifications." (Id.) Defendant Homeowners alleged that Defendant Hosti was also responsible for these shortcomings because he negligently failed to properly administer, direct, and supervise the project. (Id. ¶ 18.)

         Defendant Remodelers is covered by a commercial general liability insurance policy issued by Plaintiff. (Id. ¶ 21.) Based on this policy, Defendant Remodelers seek to have Plaintiff both defend and indemnify them in the State Court lawsuit. (Id. ¶ 22.) Plaintiff provided Defendant Remodelers with a reservation-of-rights letter and then undertook the defense in that proceeding. (Id. ¶¶ 23-24.) However, Plaintiff filed suit in this Court seeking a declaratory judgment that it does not have a duty to either defend or indemnify Defendant Remodelers in the underlying State Court action because the commercial general liability policy does not provide coverage for the alleged wrongful conduct in that case. (Id. ¶ 25.)

         In their Motion to Dismiss, Defendant Remodelers argue that the issue of indemnification is not ripe for adjudication because no insured has been deemed liable for any loss. (Doc. 28 at 3-4.) Also, Defendant Remodelers contend that the issue concerning Plaintiff's duty to defend in the underlying state court case should be dismissed because Plaintiff prejudicially delayed bringing this declaratory judgment action. (Id. at 5-6.) Finally, Defendant Remodelers maintain that this Court should abstain from exercising jurisdiction over this case in favor of the underlying action in state court. (Id. at 6-10.)

         In response, Plaintiff argues that it should be permitted to present evidence concerning its duty to indemnify. (Doc. 30 at 8-10.) Plaintiff also contends that it has not unreasonably prejudiced Defendant Remodelers by any delay in filing this case. (Id. at 10-14.) Finally, Plaintiff maintains that abstention would be improper in this case because there is not a parallel state court proceeding that involves identical parties and issues. (Id. at 14-23.)



         Federal Rule of Civil Procedure 8(a)(2) requires a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." "[T]he pleading standard Rule 8 announces does not require 'detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Igbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "A pleading that offers 'labels and conclusions' or a * formulaic recitation of the elements of a cause of action will not do.' " Id. (quoting Twombly, 550 U.S. at 555). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.' " Id. (quoting Twombly, 550 U.S. at 557) (alteration in original).

         "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Id. (quoting Twombly, 550 U.S. at 570). For a claim to have facial plausibility, the plaintiff must plead factual content that "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1261 (11th Cir. 2009) (quotations omitted) (quoting Iqbal, 556 U.S. at 678). Plausibility does not require probability, "but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678. "Where a complaint pleads facts that are "merely consistent with' a defendant's liability, it "stops short of the line between possibility and plausibility of entitlement to relief.' " Id. (quoting Twombly, 550 U.S. at 557) . Additionally, a complaint is sufficient only if it gives "fair notice of what the . . . claim is and the grounds upon which it rests." Sinaltrainal, 578 F.3d at 1268 (quotations omitted) (quoting Twombly, 550 U.S. at 555) .

         When the Court considers a motion to dismiss, it accepts the well-pleaded facts in the complaint as true. Sinaltrainal, 578 F.3d 1252 at 1260. However, this Court is "not bound to accept as true a legal conclusion couched as a factual allegation." Iqbal, 556 U.S. at 678. Moreover, "unwarranted deductions of fact in a complaint are not admitted as true for the purpose of testing the sufficiency of [plaintiff's] allegations." Sinaltrainal, 578 F.3d at 1268 (citing Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.3d 1242, 1248 (11th Cir. 2005)). That is, "[t]he rule 'does not impose a probability requirement at the pleading stage, ' but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295-96 (11th Cir. 2007) (quoting Twombly, 550 U.S. at 545).

         II. D ...

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