United States District Court, N.D. Alabama, Middle Division
MEMORANDUM OPINION AND ORDER
VIRGINIA EMERSON HOPKINS United States District Judge.
a civil action filed by the plaintiff, Penn-Star Insurance
Company (“Penn-Star”) against the defendants,
Eric Steven Swords, Billy Denson d/b/a Denson House &
Mobile Home (“Denson”), and Chris Hayes.
Penn-Star seeks a declaration of its rights under a
commercial insurance policy issued to Denson. Specifically,
Penn-Star seeks an order from this Court holding that it has
no duty to defend or indemnify Denson and Hayes in a
currently pending state court lawsuit filed against Denson
and Hayes in the Circuit Court of Marshall County, Alabama.
(See doc. 1 at 8-11); (Doc. 1 at 2).
case is before the Court on Denson's and Hayes's (the
“Movants”) Motion To Dismiss for “failure
to state a claim upon which relief can be granted.”
Fed.R.Civ.P. 12(b)(6). The Movants' argument is two-fold.
(See generally doc. 1). First, the Movants argue
that “[t]he Declaratory Judgment should be dismissed
and/or stayed because the relief sought requires
determination of parallel factual and legal issues pending
adjudication in an ongoing State Court action.” (Doc. 9
at 2) (emphasis omitted). Second, the Movants argue that
“[t]he Plaintiff's Duty to Indemnify under its
policy of insurance is not ripe for adjudication and
therefore the Court lacks subject-matter jurisdiction.”
(Doc. 9 at 6) (emphasis omitted). In the alternative, the
Movants ask the Court to stay the proceedings. (Doc. 9 at 7).
Penn-Star opposes the Motion To Dismiss the duty to defend
claim but is unopposed to staying the issue of the duty to
indemnify. (Doc. 12 at 2-7).
reasons stated herein, the motion will be
GRANTED in part and DENIED
12(b)(6) motions argue that a complaint has “fail[ed]
to state a claim upon which relief can be granted.”
Fed.R.Civ.P. 12(b)(6). A complaint has to state “a
short and plain statement of the claim showing that the
pleader is entitled to relief.” Id. at
Supreme Court gave more clarity on these standards in the
Twombly and Iqbal cases. In Iqbal,
the court stated that:
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.” A
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Supreme Court went on to explain how courts should evaluate
complaints. “While legal conclusions can provide the
complaint's framework, they must be supported by factual
allegations. When there are well-pleaded factual allegations,
a court should assume their veracity and then determine
whether they plausibly give rise to an entitlement to
relief.” Id. at 679.
the Court must take “the allegations in the complaint
as true and constru[e] them in the light most favorable to
the nonmoving party.” Kizzire v. Baptist Health
System, Inc., 441 F.3d 1305, 1308 (11th Cir. 2006).
motion to dismiss the complaint based on ripeness implicates
Federal Rule of Civil Procedure 12(b)(1). See Little v.
Strange, 796 F.Supp.2d 1314, 1318 (M.D. Ala. 2011). The
standard for 12(b)(1) motions is as follows:
A Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction asserts either a facial or factual challenge to
the complaint. A factual attack challenges “the
existence of subject matter jurisdiction in fact,
irrespective of the pleadings, and matters outside the
pleadings, such as testimony and affidavits, are
considered.” A facial attack, on the other hand,
challenges the complaint on its face and “require[s]
the court merely to look and see if [the] plaintiff has
sufficiently alleged a basis of subject matter
jurisdiction.” Under these review mechanisms, a “
‘court has the power to dismiss for lack of subject
matter jurisdiction on any of three separate bases: (1) the
complaint alone; (2) the complaint supplemented by undisputed
facts evidenced in the record; or (3) the complaint
supplemented by undisputed facts plus the court's
resolution of disputed facts.' ”
Id. at 1318-19 (internal citations omitted).
Finally, Federal Rule of Civil Procedure 12(h)(3) states that
“[i]f the court determines at any time that it lacks
subject-matter jurisdiction, the court must dismiss the
action.” Fed.R.Civ.P. 12(h)(3).
[sic] issued a policy of commercial general liability
insurance to named insureds Billy Denson and Denson House
& Mobile Home Movers bearing policy number PAC7072344,
with an effective period from 9/4/2014 through 9/4/2015,
subject to an each occurrence limit of $1, 000, 000.”
(Doc. 1 at 4). The underlying state court action originates
from a workplace accident occurring on January 28, 2015.
(Doc. 1 at 3). The Complaint states:
10. Swords alleges that on or about January 28, 2015, he was
employed by Denson House. Id. at ¶9. He alleges
he was told by Hayes, a co-employee to "ride atop a home
that was being pulled by a motorized vehicle . . .to move
wires out of the path of Billy Denson's truck which had a
home secured to it." Id. at ¶¶10-11.
11. While riding on top of the home, Swords came into contact
with live electrical wires, resulting in severe injuries
which required amputation of both arms and burns to his back.
Id. at ¶14.
(Doc. 1 at 3-4). Swords sued Denson and Hayes on February 19,
2016. (Doc. 1-1 at 2).
12. Against the defendants to this action, Swords asserts
claims for Workers Compensation; employer's liability
pursuant to Ala. Code §25-6-1 (1975); negligence;
wantonness; and willful conduct pursuant to Ala. Code
§25-5-11 (1975). The complaint seeks damages for
permanent injury, including the amputation of both arms,
permanent injury, permanent impairment, past and future
medical bills, pain and suffering, mental anguish, lost wages
and unspecified compensatory and punitive damages, in
addition to a determination of permanent and total
(Doc. 1 at 4). “The claim was tendered to Penn-Star for
the defense of the insured(s) and/or employees and indemnity
entered for any judgment entered against it.” (Doc. 1
present declaratory action, Penn-Star cites to numerous
provisions in the commercial general liability insurance
policy. (Doc. 1 at 5-8). Among other provisions, Penn-Star cited
to the “employee injury exclusion(s)” and the
“auto liability exclusion.” (See doc. 1
at 5-8). The Court draws the conclusion that Penn-Star cites
these lengthy provisions to argue that either, or both, of
the provisions exempts them from the duty to defend, or
indemnify, Denson and Hayes.
Declaratory Judgment Act is codified in 28 U.S.C.
§2201(a). The Act “gives federal courts
competence to make a declaration of rights; it does not
impose a duty to do so.” Ameritas Variable Life
Ins. Co. v. Roach, 411 F.3d 1328, 1330 (11th Cir. 2005)
(citing Brillhart v. Excess Ins. Co. of America, 316
US. 491, 494 (1942)). The Act does not give “‘an