United States District Court, M.D. Alabama, Northern Division
MEMORANDUM OPINION AND ORDER
A. BAKER UNITED STATES MAGISTRATE JUDGE
Long Excavating & Recycling, LLC, Brock Cody, and Charles
Stewart Long, Jr., sue Defendants, Bates Hewett & Floyd
Insurance Agency, Dee Dee Germany, and Westfield Bank, FSB,
for breach of contract, fraud, negligence, wantonness and/or
recklessness. (Doc. 52). Before the court is Defendant
Westfield Bank, FSB's Motion to Dismiss the Second
Amended Complaint. (Doc. 54). Plaintiffs assert a single
claim for breach of contract against Westfield Bank, FSB.
(Doc. 52 at 7-10). The matter has been fully briefed by the
parties, and the court heard argument on September 24, 2018.
For the reasons that follow, the court grants in part
and denies in part Westfield Bank, FSB's motion.
matter was removed to this court on the basis of diversity of
citizenship pursuant to 28 U.S.C. § 1332(a). The parties
do not contest personal jurisdiction. Defendants sought to
change venue to the Southern Division of the Middle District,
but that motion was denied without prejudice. (Docs. 3, 11).
Background and Statement of Facts
21, 2017, Plaintiffs initiated this action by the filing of a
three-count complaint in Bullock County, Alabama Circuit
Court against Defendants, Bates Hewett & Floyd Insurance
Agency and its agent employee, Dee Dee Germany.
(Doc. 1-9). On July 28, 2017, Defendants removed the case to
this court pursuant to 28 U.S.C. §§ 1332, 1441, and
1446, on the basis of diversity of citizenship and an amount
in controversy exceeding $75, 000. (Doc. 1).
moved to transfer the case to the Southern Division of the
Middle District of Alabama because none of the parties reside
in the Northern Division. (Doc. 3). Although Defendants
acknowledge in the motion to transfer that the subject fire
loss occurred in Bullock County, which is in the Northern
Division, they nevertheless argue that the witnesses,
documents, and conversations are located or occurred
elsewhere. The court denied the motion without prejudice.
Defendants answered the complaint (Doc. 27), the parties
jointly moved to amend their pleadings to add Westfield Bank,
FSB as a party defendant, which the court granted. (Docs. 28,
29). Thereafter, Plaintiffs filed a second amended complaint
on June 19, 2018. (Doc. 52). Plaintiffs allege that Brock
Cody and Charles Stewart Long, Jr., are the owners and sole
members of Long Recycling Excavating, LLC (“Long
Excavating”), which is a logging business. (Doc. 52,
¶¶ 7, 8). Long Excavating contracted to perform
logging work in Bullock County, Alabama. Id. ¶
8. As part of the terms of the logging contract, Long
Excavating was required to procure and maintain insurance
coverage for its equipment and logging activities in the
cutting of a timber tract in Bullock County. Id.
¶ 9. Plaintiffs, Brock Cody and Charles Long, Jr.,
obtained insurance coverage on behalf of Long Excavating
through Bates Hewett & Floyd Insurance Agency
(“Bates”), an insurance agency located in
Palatka, Florida, and its agent, Defendant Dee Germany.
Id. ¶¶ 10, 11. Bates brokered insurance
coverage for Plaintiffs with Arch Insurance Company and/or
Arch Insurance Group (“Arch”) based in Kansas
City, Missouri. Id. ¶ 12. Bates also obtained
financing for Plaintiffs under a Premium Finance Agreement
with Defendant Westfield Bank, FSB (“Westfield”)
that paid Plaintiff's entire annual insurance premium to
Arch. Id. ¶ 14. In turn, Plaintiffs were to
make monthly premium payments to Westfield. Id. Once
insurance coverage was obtained for Long Excavating in March
2016, Plaintiffs began making the periodic insurance premium
payment and engaged in logging work in Bullock County,
Alabama. Id. ¶ 15.
insurance policy covered multiple pieces of equipment owned
by Long Excavating including a 1988 John Deere Skidder Model
648D and a 2007 Hydro-Ax 2470. Id. ¶ 16. In May
of 2016, Plaintiffs made an insurance claim for the 1988 John
Deere Skidder that was destroyed in a fire loss, and Arch
paid the claim as a covered loss. Id. ¶ 17. In
April 2016, Plaintiffs added a 2013 John Deere skidder Model
748H, which increased the total monthly premium from $526.74
to $952.25. Id. ¶ 18.
prior to July 8, 2016, Plaintiff Long Excavating failed to
timely pay a monthly insurance premium payment. Id.
¶ 19. On July 8, Westfield mailed Long Excavating a
Notice of Intent to Cancel Insurance due to the unpaid
premium. Id. ¶ 20. Thereafter, Long Excavating
made the premium payment, and Long Excavating's insurance
coverage with Arch was reinstated. Id. In July 2016,
Plaintiffs decided to sell the 2013 John Deere skidder and
the portion of the lump sum premium payment for the John
Deere skidder was returned to Westfield. Id. ¶
on September 8, 2016, Plaintiff Long Excavating failed to
make a timely monthly insurance premium payment, and
Westfield sent a Notice of Intent to Cancel Insurance.
Id. ¶ 22. The Notice of Intent to Cancel
Insurance notified Long Excavating that if the outstanding
premium payment was not received by September 23, 2016, Long
Excavating's coverage would be canceled effective
September 23, 2016. Id. Two days prior, on September
21, 2016, Westfield received $1, 572.37 payment in returned
premium from Arch as a result of Plaintiffs' sale of the
2013 John Deere skidder. Id. ¶ 23. On September
23, 2016, Westfield issued a Notice of Cancellation that
canceled insurance coverage for Long Excavating, effective
12:01 AM on September 23, 2016. Id. ¶ 24.
Friday, September 30, 2016, Brock Cody called Bates and spoke
with his insurance representative Germany, who instructed
Brock Cody to immediately make payment to Westfield Bank in
the amount of $1, 763.72. Id. ¶¶ 25, 26.
She represented that the payment would satisfy all
outstanding insurance premiums for Long Excavating and would
pay all future remaining premiums for Long Excavating to
maintain coverage with Arch Insurance through April 2017.
Id. ¶ 27. Specifically, Germany represented to
Brock Cody that payment of $1, 763.72 would allow his
insurance coverage with Arch Insurance to be reinstated, as
it had been in the past, and that the equipment with Long
Excavating would be covered. Id. ¶ 28. Brock
Cody made the payment on Friday, September 30, 2016, and the
payment posted on Monday, October 3, 2016. Id.
October 3 and 7, 2016, Brock Cody spoke with Germany who
assured him that the coverage will be reinstated.
¶¶ 31-35. Long Excavating continued logging
operations based on Germany's representations. ¶ 36.
On October 14, 2016, unbeknownst to the Plaintiffs, Germany
learned that Long Excavating's insurance coverage would
not be reinstated and that Long Excavating had no insurance
coverage. ¶ 37. Germany failed to communicate to Brock
Cody or Charles Stewart Long, Jr., that the insurance
coverage for Long Excavating was not reinstated, and that as
a result, Long Excavating had no insurance coverage for its
equipment. ¶ 38. Germany and Bates failed to procure
replacement coverage for Long Excavating. ¶ 40.
October 20, 2016, while engaged in logging operations, Long
Excavating's 2007 Hydro-Ax Model 2470 was totally
destroyed by fire. Id. ¶ 41. Brock Cody
immediately made a claim to Bates for the fire loss.
Id. ¶ 42. Thereafter, Germany communicated to
Charles Long, Jr., and Brock Cody that Long Excavating's
insurance coverage was not reinstated, that no replacement
coverage had ...