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Haman, Inc. v. Chubb Custom Insurance Co.

United States District Court, N.D. Alabama, Southern Division

January 7, 2019

HAMAN, INC., Plaintiff/Counterclaim Defendant,
v.
CHUBB CUSTOM INSURANCE COMPANY, Defendant/Counterclaim Plaintiff.

          MEMORANDUM OPINION

          KARON OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.

         This insurance dispute comes before the court on Plaintiff/Counterclaim Defendant Haman, Inc.'s motion to dismiss Defendant/Counterclaim Plaintiff Chubb Custom Insurance Company's counterclaim. (Doc. 15). In its counterclaim, Chubb seeks two declaratory judgments regarding appraisal of Haman's insurance claims. The court will GRANT the motion to dismiss because Chubb has not alleged a justiciable controversy to invoke the court's jurisdiction over Chubb's requests for a declaratory judgment.

         I. STANDARD OF REVIEW

         A counterclaim must satisfy the same pleading requirements as a complaint, so courts review a motion to dismiss a counterclaim under the same standard as a motion to dismiss a complaint. Byrd v. Williams, 2016 WL 362404, at *1 n.2 (N.D. Ala. Jan. 29, 2016).

         Like a complaint, a counterclaim must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). If the counterclaim fails to meet this requirement, the plaintiff may move to dismiss the counterclaim for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). The court will grant the motion to dismiss if the well-pled factual allegations in the counterclaim, which the court accepts as true, fail to state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         Here, the motion to dismiss does not challenge the well-pled quality of Chubb's factual allegations. Instead, it asserts that the court cannot provide any relief based on the facts in the counterclaim. For the following reasons, the court agrees.

         II. BACKGROUND

         Chubb issued a commercial property insurance policy that provided coverage for damage to Haman's motel. Haman first submitted a claim to Chubb for fire damage to the motel on or about April 10, 2014. Haman and Chubb agreed on the total amount of loss from the fire, and Chubb paid Haman that amount under the policy. (Doc. 6 at ¶¶ 5-8) (citations refer to paragraph numbers in the counterclaim section of Chubb's responsive pleading, pages 30-40).

         Afterwards, Haman retained Charles Howarth to appraise the fire loss. Mr. Howarth submitted a repair estimate for the fire loss in an amount much larger than what Chubb paid for the fire loss. (Doc. 6 at ¶ 10).

         Mr. Howarth, on behalf of Haman, demanded appraisal of the fire loss pursuant to the appraisal provision of the insurance policy. The policy's appraisal provision provided that if the parties disagreed as to the amount of loss, either party could make a demand to the other for an appraisal of the loss. Then, each party would select a competent and impartial appraiser, the two appraisers would select an umpire, the two appraisers would state separately the amount of loss, and then if the appraisers failed to agree, they would submit their differences to the umpire. (Doc. 6 at ¶ 24).

         Chubb objected to Mr. Howarth serving as Haman's appraiser because, according to Chubb, Mr. Howarth “possesses a direct financial interest in the outcome of the appraisal under the contingency fee agreement between his company . . . and Haman, which sets [his] compensation as a fee based on a percentage of the insurance funds recovered for the claim.” (Doc. 6 at ¶¶ 14, 26).

         Haman also submitted a claim for windstorm damage to the motel's roof and interior on or about March 26, 2015. Haman claimed that the windstorm damaged the interior of the motel because of water seepage. Chubb paid Haman only for the damage to the roof; Chubb did not pay for the interior water damage because its expert determined that improper installation and deterioration, which are excluded causes of loss under the insurance policy, damaged the interior. (Doc. 6 at ¶¶ 15- 16, 21).

         Mr. Howarth demanded appraisal of the wind loss. Chubb objected to appraisal because the policy did not cover the interior damages that Haman supposedly wanted to appraise. Chubb then denied Haman's claim for the interior damages. (Doc. 6 at ¶¶ 21-23).

         III. ...


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