United States District Court, N.D. Alabama, Southern Division
OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.
the tangled web of insurance coverage in this case, a
relatively simple question comes before the court: for which
torts are Defendants plausibly liable for allegedly
incorporating a void exclusion into liability insurance
Great American E&S Insurance Co., New Century Insurance
Services, Inc., and AmWINS Insurance Brokerage of California,
LLC filed Rule 12(b)(6) motions to dismiss five of nine
counts in Plaintiff Jones Stephens's amended complaint.
(Docs. 75, 95, and 96, respectively). Defendants contend that
Jones Stephens has not alleged that they plausibly committed
the torts of civil conspiracy, negligence or wantonness, or
to rtious interference with contract by allegedly modifying
insurance policies to deny coverage to Jones Stephens for
products liability claims.
following reasons, the court will DENY IN PART and GRANT IN
PART the motions to dismiss, after which the civil conspiracy
claim against all Defendants, the negligence and wantonness
claim against Great American, and the several claims the
Defendants have not moved to dismiss will remain.
STANDARD OF REVIEW
motion to dismiss challenges the legal sufficiency of a
complaint. Under Rule 12(b)(6) of the Federal Rules of Civil
Procedure, a defendant can move to dismiss a complaint for
“failure to state a claim upon which relief can be
granted.” The complaint will survive the motion to
dismiss if it alleges “enough facts to state a claim to
relief that is plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007).
complaint to be “plausible on its face, ” it must
contain enough “factual content that allows the court
to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). And the court accepts
as true the factual allegations in the complaint.
all allegations can defeat a motion to dismiss.
“[L]abels and conclusions” and speculation
“will not do.” Twombly, 550 U.S. at 555.
So, the court will look only at well-pled facts, and
if those facts, accepted as true, state a plausible claim for
relief, then the complaint will survive the motion to
dismiss. Iqbal, 556 U.S. at 678.
Stephens, an Alabama corporation, is a wholesale distributor
of plumbing products and sells primarily to wholesale
resellers. It purchased several products from Coastal Ningbo,
a Chinese corporation, from June 2007 to August 2015 and sold
those products in the United States.
Stephens required Costal Ningbo to maintain United States
general liability insurance policies for the products it sold
to Jones Stephens as a condition precedent for Jones
Stephens's purchases. Jones Stephens also required
Coastal Ningbo to name Jones Stephens as an additional
insured party on those insurance policies.
Ningbo purchased general liability insurance policies for the
products it shipped to Jones Stephens from Great American.
New Century and AmWINS “were the insurance brokers and
agents involved in negotiating the insurance coverage.”
(Doc. 68 at ¶ 4). From 2007 to 2015, Costal Ningbo
periodically sent Jones Stephens updates to its proof of
insurance indicating good standing and Jones Stephens's
status as an additional insured under the Great American
Stephens also alleges that it and Coastal Ningbo had a
written contract under which Coastal Ningbo agreed to defend
and indemnify Jones Stephens against claims arising out of
Jones Stephens's distribution of Coastal Ningbo's
August 2015, Jones Stephens stopped buying Coastal
Ningbo's products. Then, according to Jones Stephens,
Coastal Ningbo repudiated its obligation to defend and
indemnify Jones Stephens from liability arising out of
Coastal Ningbo's products. (Doc. 68 at ¶ 31). Jones
Stephens also alleges that all Defendants worked together to
incorporate an exclusion into the Great American insurance
policies, made effective retroactively as of the
policies' commencement dates, that excluded coverage for
claims arising on or after June 26, 2015. (Id. at
¶¶ 32-33). According to Jones Stephens,
“[t]his exclusion creates inherent ambiguities in the
applicable policies, is void as a matter of law, and violates
public policy.” (Id. at ¶ 34). And Jones
Stephens alleges that, after incorporating the exclusion,
“Great American, counter to its obligation under its
policies, without any reasonable basis, and absent any
arguable reason, has systematically and continually denied
Plaintiff's request for defense and indemnification for
claims involving Coastal Ningbo's products.”
(Id. at ¶ 35).
on these factual allegations, Jones Stephens brings nine
counts in its amended complaint: (1) declaratory judgment
that Great American is obligated to defend and indemnify
Jones Stephens; (2) bad faith against Great American for
endorsing the exclusion and denying Jones Stephens's
claims; (3) breach of contract against Coastal Ningbo for
refusing to defend and indemnify Jones Stephens; (4) common
law indemnity against Coastal Ningbo for a specific product
that it sold to Jones Stephens; (5) civil conspiracy against
all Defendants for conspiring to modify the insurance
policies; (6) negligence and wantonness against Great
American, New Century, and AmWINS for breaching their duty of
care owed to Jones Stephens by modifying the insurance
policies; (7) negligent failure to procure insurance against
New Century and AmWINS; (8) unjust enrichment against Great
American, New Century, and AmWINS for the insurance premiums
Jones Stephens paid; and (9) tortious interference with
contract against all Defendants for depriving Jones Stephens
of its contractual rights to defense and indemnification from
Coastal Ningbo and Great American.
American, New Century, and AmWINS have moved the court to
dismiss counts five through nine under Rule 12(b)(6) of the
Federal Rules of Civil Procedure. So the court turns next to
whether the amended ...