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American Empire Surplus Lines Insurance Co. v. Davie Shoring, Inc.

United States District Court, E.D. Louisiana

August 8, 2017


         SECTION I



         Before the Court is Davie Shoring's motion to dismiss certain claims in the above-captioned matter pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. Davie Shoring also requests that the Court stay consideration of, or dismiss pursuant to principles of abstention, any remaining claims. American Empire opposes the motion.

         For the foregoing reasons, the Court will dismiss some of American Empire's claims, but it will not abstain from adjudicating the remaining claims.


         This case centers on two insurance policies issued by American Empire to Davie Shoring in the mid-2000s.[1] The first policy's coverage period spanned from December 30, 2005 to December 30, 2006 (“the 2005-06 policy”), [2] and the second policy's coverage period spanned from December 30, 2006 to December 12, 2007 (“the 2006-07 policy”).[3]

         These policies impose duties on American Empire to defend and indemnify Davie Shoring with respect to various types of legal claims brought against Davie Shoring.[4] The policies include certain exclusions and exceptions.[5] The policies also provide that Davie Shoring has no right to sue American Empire under the policies' coverage provisions “unless all of [the policies'] terms have been fully complied with” by Davie Shoring.[6] Those terms include notifying American Empire “as soon as practicable of an ‘occurrence' or an offense which may result in a claim, ” as well as fulfilling recordkeeping, notification, and cooperation requirements “[i]f a claim is made or ‘suit' is brought.”[7]

         American Empire alleges that Davie Shoring has not complied with these terms. According to American Empire,

an unknown number of plaintiffs have filed suits against Davie Shoring in which they seek to recover money damages to compensate them for property damage to their real and personal property or bodily injuries that they claim to have sustained as a result of either Davie Shoring's breach of its contract with the plaintiffs or its negligence.[8]

         American Empire contends that these plaintiffs are asserting legal claims against Davie Shoring that fall within the policies' coverage periods, but that Davie Shoring has not fulfilled its obligations under the policies with respect to the suits filed on those claims. As an example, American Empire points to one active state court case against Davie Shoring: Amy Law v. Davie Shoring, Inc. (“Underlying Lawsuit”).[9]Filed on August 20, 2007, the Underlying Lawsuit involves claims arising out of a contract between Davie Shoring and the Underlying Lawsuit plaintiff that is dated March 24, 2006.[10] American Empire alleges that it learned about the Underlying Lawsuit on January 29, 2016, when the Underlying Lawsuit plaintiff served American Empire with an amended petition for damages asserting a claim against American Empire for the first time in that litigation.[11]

         American Empire now seeks a declaration that “no coverage exists for the claims asserted against Davie Shoring” in the Underlying Lawsuit “because Davie Shoring failed to provide timely notice of the suit and claim to American Empire.”[12]Moreover, American Empire seeks a declaration that “[t]o the extent that other lawsuits have been filed against Davie Shoring [(“Unknown Lawsuits”)] and [Davie Shoring] has not provided notice of those suits or claims to American Empire in compliance with” the 2005-06 and 2006-07 policies, “no coverage is owed for those lawsuits as a result of Davie Shoring's failure to timely notify American Empire of the pending suit and claims.”[13]

         American Empire also seeks declarations that 1) the claims asserted in the Underlying Lawsuit and the Unknown Lawsuits do not qualify as “occurrences” under the policies;[14] 2) the claims asserted in the Underlying Lawsuit and the Unknown Lawsuits fall under the “York Work Exclusion” in the policies;[15] and 3) “no coverage exists for claims against Davie Shoring” in the Underlying Lawsuit “because Davie Shoring . . . fail[ed] to cooperate with American Empire in both the defense and settlement” of the case.[16] Finally, American Empire seeks reimbursement for “amounts it has paid to defend itself and Davie Shoring against” the Underlying Lawsuit and the Unknown Lawsuits “as damages resulting from Davie Shoring's breach of [c]ontract.”[17]

         With respect to its present motion, Davie Shoring argues that any legal claims arising from the Unknown Lawsuits should be dismissed as unripe[18] or, alternatively, dismissed pursuant to Rule 12(b)(6).[19] Davie Shoring also argues that dismissal under Rule 12(b)(6) is appropriate as to American Empire's claim for reimbursement.[20] Finally, Davie Shoring argues that, to the extent that the Court does not dismiss American Empire's claims, the Court should either stay or dismiss the case on abstention grounds.[21]



         Davie Shoring argues that American Empire's claims related to the Unknown Lawsuits should be dismissed as unripe under Rule 12(b)(1).

         Rule 12(b)(1) of the Federal Rules of Civil Procedure provides for the dismissal of an action where the court finds that it does not have subject matter jurisdiction. Where “a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the merits.” Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). This approach “prevents a court without jurisdiction from prematurely dismissing a case with prejudice.” Id.

         “A case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case.” Home Builders Ass'n of Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006, 1010 (5th Cir. 1998). “Courts may dismiss for lack of subject matter jurisdiction on any one of three different bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.” Clark v. Tarrant County, 798 F.2d 736, 741 (5th Cir. 1986) (citing Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981)). Where the defendant has questioned the court's subject matter jurisdiction, the plaintiff has the burden of “proving by a preponderance of the evidence that the trial court does” possess the requisite jurisdiction to hear the case. Patterson v. Weinberger, 644 F.2d 521, 523 (5th Cir. 1981).

         Ripeness is an “essential component[ ] of federal subject-matter jurisdiction.” Sample v. Morrison, 406 F.3d 310, 312 (5th Cir. 2005). “A court should dismiss a case for lack of ‘ripeness' when the case is abstract or hypothetical.” New Orleans Public Serv., Inc. v. The Council of the City of New Orleans, 833 F.2d 583, 586 (5th Cir. 1987). The primary considerations in the ripeness inquiry are “the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.” Id. “A case is generally ripe if any remaining questions are purely legal ones; conversely, a case is not ripe if further factual development is required.” Id.

         With respect to ripeness in the declaratory judgment context, “[a] declaratory judgment action is ripe for adjudication only where an ‘actual controversy' exists.” Orix Credit All. Inc. v. Wolfe, 212 F.3d 891, 896 (5th Cir. 2000). Generally speaking, an actual controversy exists where “a substantial controversy of sufficient immediacy and reality [exists] between parties having adverse legal interests.” Id. (quoting Middle South Energy, Inc. v. City of New Orleans, 800 F.2d 488, 490 (5th Cir. 1986)) (alteration in original). “Whether particular facts are sufficiently immediate to establish an actual controversy is a question that must be addressed on a case-by-case basis.” Id.


         Davie Shoring contends that American Empire's claims with respect to the Unknown Lawsuits are unripe.[22] In Davie Shoring's view, American Empire is attempting to “extend and repurpose the particular circumstances of [the Underlying Lawsuit] into justification for broad declaratory relief from any and all . . . potential claims for which coverage may or may not be available under” the 2005-06 and 2006-07 policies.[23]

         For its part, American Empire contends that its inability to affirmatively identify the Unknown Lawsuits does not merit dismissal on ripeness grounds. To American Empire, because these other lawsuits are “already filed in various Louisiana courts, ” its inability to identify them is “irrelevant to an analysis of ripeness.”[24]

         The Court concludes that American Empire's claims against Davie Shoring with respect to the Unknown Lawsuits are unripe. These claims lack “sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007); see also Orix Credit, 212 F.3d at 896. While American Empire states in its opposition to the present motion that it has thus far identified “nine additional suits” filed in federal and state courts in Louisiana that “may be at issue” in this case, [25] American Empire has not amended its complaint to add information respecting these other lawsuits. In fact, even in its opposition American Empire does not explain why it believes that these lawsuits implicate the 2005-06 and 2006-07 policies. For all the Court knows, American Empire has simply identified cases where Davie Shoring is a party, but it has not distinguished the cases based on their subject matter-and this seems likely, as American Empire also acknowledges in its opposition, after pointing toward these nine other lawsuits, that “it cannot identify specific underlying suits that are at issue” at this time.[26]

         Whether any lawsuits concerning the 2005-06 and 2006-07 policies other than the Underlying Lawsuit have even been filed against Davie Shoring is purely abstract and hypothetical at this point in the present litigation. New Orleans Public Serv., 833 F.2d at 586. Were the Court to do as American Empire asks, the resulting opinion would be nothing more than “an opinion ...

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