United States District Court, N.D. Alabama, Southern Division
MEMORANDUM OPINION 
H. ENGLAND, III UNITED STATES MAGISTRATE JUDGE.
Monroe Guaranty Insurance Company and FCCI Insurance Company
(collectively “Plaintiffs”) initiated this
declaratory judgment action against Defendants Pinnacle
Manufacturing, LLC (“Pinnacle Mfg.”), Joby
Satterfield, Jason Satterfield (collectively the
“Pinnacle Defendants”), and Zach Smith to
determine rights and obligations under a Commercial General
Liability (“CGL”) Policy and an Umbrella Policy
issued to the Pinnacle Mfg. (Doc. 1). The Pinnacle Defendants
are defendants in a state court lawsuit brought by Zach
Smith, Smith v. Pinnacle Manufacturing, LLC, et al.,
Civil Action No. CV-2017-900095, currently pending in the
Circuit Court in Blount County, Alabama (the
“Underlying Action”). Plaintiffs assert that the
CGL and Umbrella Policies do not provide coverage for the
type of damages alleged in the Underlying Action and seek a
declaration from this Court that there is no coverage.
(See docs. 1, 23, & 24).
filed a motion for judgment on the pleadings pursuant to
Federal Rule of Civil Procedure 12(c) and a brief in support
thereof. (Docs. 23 & 24). Upon receipt of the motion, the
undersigned set a deadline for any opposition to the motion
to be filed. (Doc. 25). That deadline has passed, and no
opposition to the motion for judgment on the pleadings was
filed. Accordingly, having considered Plaintiffs' motion
and brief, as well as the applicable law, the motion for
judgment on the pleadings (doc. 23), is
Standard of Review
Rule of Civil Procedure 12(c) provides: “After the
pleadings are closed but within such time as not to delay the
trial, any party may move for judgment on the
pleadings.” “Judgment on the pleadings is
appropriate where no issue of material fact remains
unresolved and the moving party is entitled to judgment as a
matter of law.” Mergens v. Dreyfoos, 166 F.3d
1114, 1117 (11th Cir. 1999). “When reviewing judgment
on the pleadings, we must take the facts alleged in the
complaint as true and view them in the light most favorable
to the nonmoving party.” Id. “If upon
reviewing the pleadings it is clear that the [moving party]
would not be entitled to relief under any set of facts that
could be proved consistent with the allegations, the court
should dismiss the complaint.” Horsley v.
Rivera, 292 F.3d 695, 700 (11th Cir. 2002). However, on
a motion for judgment on the pleadings, the court is not
allowed to consider any matter that is outside of the
pleadings. If matters outside the pleadings are presented and
are not excluded by the Court then the motion must be treated
as one for summary judgment. Fed.R.Civ.P. 12(d).
The Underlying Action
Underlying Action is generally premised upon Pinnacle
Mfg.'s termination of Smith as an independent sales agent
and his alleged economic damages flowing from that
termination. (See doc. 1-1). Specifically, Smith
alleges he and Pinnacle Mfg. entered into an independent
sales agreement in January 2015, and in December 2015,
Pinnacle Mfg. sent Smith a notice of termination advising him
that their agreement would be terminated effective January
29, 2016. (Id. at ¶¶ 6, 12-13). Smith
further alleges Pinnacle Mfg. improperly solicited business
from his customers following the termination notice and
failed to pay compensation from revenues generated from his
customers. (Id. at ¶¶ 18-19). Based on
these factual allegations, Smith alleges six causes of action
against the Pinnacle Defendants, including: Count I
Intentional Interference with a Business Relationship, Count
II Suppression, Count III Wantonness, Count IV Unjust
Enrichment, Count V Open Account, and Count VI Breach of
Intentional Interference with a Business Relationship alleges
the Pinnacle Defendants “intentionally interfered with
the business relationship between [Smith] and [Smith]'s
account customers” and Smith “has incurred
damages as a result of the [Pinnacle] Defendants'
unlawful interference.” (Doc. 1-1 at ¶¶
II Suppression of Material Facts alleges:
[The Pinnacle Defendants “breached their duty and
defrauded [Smith] by representing that [Smith] would continue
as an independent contractor for Defendant Pinnacle.
Defendants suppressed the material facts of refusing to pay
[Smith] for the orders and customers relationships developed
by [Smith]. Said suppression of material facts and fraud were
committed negligently, recklessly, wantonly and/or willfully
or with the intent to defraud and deceive [Smith].
As a proximate cause of the fraud and suppressed material
facts by Defendant, [Smith] has suffered damages. [Smith] has
suffered loss of income, stress, anxiety, and emotional and
(Doc. 1-1 at ¶¶ 30, 32).
III Wantonness alleges the Pinnacle Defendants “were
conscious that the Independent Sales Representative Agreement
would be terminated that same day by Pinnacle and Jason
Satterfield” and “failed to disclose to [Smith]
that [the Pinnacle] Defendants were terminating the
Independent Sales Representative Agreement.” (Doc. 1-1
at ¶¶ 35, 36). Smith alleges he was “caused
to suffer damages, including loss of revenue, increased
business costs and damages to reputation and character”
due to the Pinnacle Defendants' wanton conduct.
(Id. at ¶ 38).
IV Unjust Enrichment alleges the Pinnacle Defendants
“have been unjustly enriched by receiving compensation
and/or financial benefit from orders and/or sales from
[Smith]'s customers.” (Doc. 1-1 at ¶ 43).
Open Account alleges the Pinnacle Defendants have failed to
pay the amounts owed for orders and sales from Smith's
customers after January 29, 2016. (Doc. 1-1 at ¶ 48).
VI Breach of Contract alleges Pinnacle Mfg. breached the
Independent Sales Representative Agreement by failing to
perform and pay compensation to Smith for orders known and/or
reasonably anticipated or accounted for. (Doc. 1-1 at ¶
seeks compensatory and punitive damages for all counts,
except Counts V and VI for which he only seeks compensatory
damages. (Doc. 1-1)
Guaranty issued a CGL Policy on an occurrence basis for the
period of April 15, 2015 through April 15, 2016.
(See doc. 1-2). FCCI Insurance issued the Umbrella
Policy on an occurrence basis for the period of April 15,
2015 through April 15, 2016. (See doc. 1-3).
Policy's principal form is Form CG00011207, titled
“COMMERCIAL GENERAL LIABILITY COVERAGE FORM.” In
pertinent part, the CGL Policy provides:
SECTION 1 - COVERAGES
COVERAGE A - BODILY INJURY AND PROPERTY
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally
obligated to pay as damages because of “bodily
injury” or “property damage” to which this
insurance applies. We will have the right and duty to defend
the insured against any “suit” seeking those
damages. However, we will have no duty to defend the insured
against any “suit” seeking damages for
“bodily injury” or “property damage”
to which this insurance does not apply . . . .
b. This insurance applies to "bodily injury" and
"property damage" only if:
(1) The "bodily injury" or "property
damage" is caused by an "occurrence" that
takes place in the "coverage territory" . . . .