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Great American Alliance Co. v. Bravo Food Service LLC

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

November 21, 2019

GREAT AMERICAN ALLIANCE COMPANY, Plaintiff,
v.
BRAVO FOOD SERVICE LLC, et al., Defendants.

          MEMORANDUM OPINION

          R. DAVID PROCTOR UNITED STATES DISTRICT JUDGE.

         This matter is before the court on Cahaba Valley Health Services, Inc.'s Motion to Dismiss. (Doc. # 6). The Motion has been fully briefed (see Docs. # 6, 10) and is ripe for review. For the reasons stated below, Defendant's Motion is due to be denied.

         I. Background

         This action arises out of a state court case, Cahaba Valley Health Services v. Jackson Business, LLC, et al., No. CV 2013-900049, which was filed on June 28, 2013. The plaintiff in that case -- Cahaba Valley Health Services (“Cahaba”) -- asserted state law claims against Bravo Food Service LLC (“Bravo”). (Doc. # 1 at 8-9, ¶¶ 16-17).[1]

         On March 23, 2019, the jury in that case returned a verdict in favor of Cahaba Valley Health Services. (Id. ¶ 20). The state court entered judgment against Bravo Food Service LLC on three counts (see Id. ¶¶ 20-22), and awarded Cahaba damages in the amount of $850, 000.[2]

         Plaintiff in this case, Great American Alliance Company (“Great American”), insures Bravo under a SAFEPAK Business Owners Insurance policy. (Id. at 3). Under the terms of the policy, Great American agreed to:

pay those sums that the Insured becomes legally obligated to pay as damages because of “bodily injury, ” “property damage, ” or “personal and advertising injury” 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, ” “property damage, ” or “personal and advertising injury” to which this insurance does not apply. We may at our discretion, investigate any “occurrence” or offense and settle any claim or “suit” that may result.

(Id. at 82).

         On July 1, 2019, Great American filed this case seeking a declaratory judgment that it owes neither a defense nor indemnity to Bravo. (Doc. # 1). Great American argues it does not owe coverage because: (1) under the relevant terms of the insurance policy, pure economic loss is outside of the policy's terms;[3] and (2) there is no coverage under the Policy for the state-court jury verdict against Bravo. (Id. at 10-11, ¶¶ 25, 32).

         On July 25, 2019, Cahaba filed its own declaratory judgment action against Great American in state court alleging that Great American “owes Bravo Foods full coverage for the underlying verdict, ” which Cahaba is entitled to. (Doc. # 10-2 at 11). Great American removed the action to this court on July 30, 2019. (Doc. # 10-2 at 2). On September 20, 2019, this court granted Great American's Motion for Realignment of the Parties and Motion to Consolidate. (Doc. # 15). Cahaba's state-court declaratory judgment action was consolidated with Great American's declaratory action. This court properly has subject-matter jurisdiction over the parties, and both declaratory judgment actions are before the court.

         On July 20, 2019, Cahaba, which stands in Bravo's shoes in this action, filed its Motion to Dismiss Great American's declaratory judgment, arguing that (1) the claim for declaratory judgment is barred by Alabama's six-year statute of limitations for breach-of-contract claims, and (2) the pendency of the underlying state court action in Bibb County Circuit Court warrants dismissal. (Doc. # 6 at 3-4).

         II. Standard of Review

         The Federal Rules of Civil Procedure require that a complaint provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). However, the complaint must include enough facts “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Pleadings that contain nothing more than “a formulaic recitation of the elements of a cause of action” do not meet Rule 8 standards, nor do pleadings suffice that are based merely upon “labels and conclusions” or “naked assertion[s]” without supporting factual allegations. Id. at 555, 557. In deciding a Rule 12(b)(6) motion to dismiss, courts view the allegations in the complaint in the light most favorable to the non-moving party. Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007).

         To survive a motion to dismiss, a complaint must “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “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 alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Although “[t]he plausibility standard is not akin to a ‘probability requirement, '” the complaint must demonstrate “more than a sheer possibility that a defendant has acted unlawfully.” Id. A plausible claim for relief requires “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence” to support the claim. Twombly, 550 U.S. at 556.

         In considering a motion to dismiss, a court should “1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, ‘assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.'” Kivisto v. Miller, Canfield, Paddock & Stone, PLC, 413 F.Appx. 136, 138 (11th Cir. 2011) (unpublished) (quoting Am. Dental Assn. v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)). That task is context specific and, to survive the motion, the allegations must permit the court based on its “judicial experience and common sense . . . to infer more than the mere possibility of misconduct.” Iqbal, 556 U.S. at 679. If the court determines that well-pleaded facts, accepted as true, do not state a claim that is plausible, the claims are due to be dismissed. Twombly, 550 U.S. at 570.

         III. ...


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