SECURITY NATIONAL INSURANCE COMPANY

v.

THE CITY OF MIAMI BEACH, FLORIDA

A. Section II – Who Is An Insured is amended to include as an additional insured any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy. Such person or organization is an additional insured only with respect to liability for “bodily injury”, “property damage” or “personal and advertising injury” caused, in whole or in part, by:

1. Your acts or omissions; or

2. The acts or omissions of those acting on your behalf;

in the performance of your ongoing operations for the additional insured.

A person’s or organization’s status as an additional insured under this endorsement ends when your operations for that additional insured are completed.

B. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply:

This insurance does not apply to:

1. “Bodily injury”, “property damage” or “personal and advertising injury” arising out of the rendering of, or the failure to render, any professional architectural, engineering or surveying services, including:

a. The preparing, approving, or failing to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders or drawings and specifications; or b. Supervisory, inspection, architectural or engineering activities.

2. “Bodily injury” or “property damage” occurring after:

a. All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the location of the covered operations has been completed; or

b. That portion of “your work” out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project.

(Compl., Ex. B., form no. CG 20 33 07 04.)

2. Legal Standards

As set forth in Federal Rule of Civil Procedure 12(c), “[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). “Judgment on the pleadings is proper when no issues of material fact exist, and the moving party is entitled to judgment as a matter of law based on the substance of the pleadings and any judicially noticed facts.” Cunningham v. Dist. Attorney's Office, 592 F. 3d 1237, 1255 (11th Cir. 2010).

A court ruling on a Rule 12(c) motion must “accept all the facts in the complaint as true and view them in the light most favorable to the nonmoving party.” Id. A motion for judgment on the pleadings is subject to the same analysis as a motion to dismiss pursuant to Rule 12(b)(6).

See Hawthorne v. Mac Adjustment, Inc., 140 F. 3d 1367, 1370 (11th Cir. 1998).

A court considering a motion to dismiss, filed under Federal Rule of Civil Procedure 12(b)(6), must accept all of the complaint’s allegations as true, construing them in the light most favorable to the plaintiff. See Pielage v. McConnell, 516 F. 3d 1282, 1284 (11th Cir. 2008).

Although a pleading need only contain a short and plain statement of the claim showing that the pleader is entitled to relief, a plaintiff must nevertheless articulate “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). “But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged— but it has not shown—that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (internal punctuation omitted) (quoting Fed. R. Civ. P. 8(a)(2)).

A court must dismiss a plaintiff’s claims if she fails to nudge her “claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 570. While the Court must accept well-pleaded facts as true, it need not assume the truth of conclusory allegations, nor are parties entitled to have the Court view unwarranted deductions of fact or argumentative inferences in their favor. See, e.g., Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (holding mere “labels and conclusions, and a formulaic recitation of the elements of a cause of action” insufficient to survive motion to dismiss); see also Fin. Sec. Assurance, Inc. v. Stephens, Inc., 500 F. 3d 1276, 1282 (11th Cir. 2007) (per curiam).

A court may also properly consider documents attached to the complaint, answer, or motion so long as they are (1) central to the plaintiff's claim, and (2) undisputed. See Horsley v. Feldt, 304 F. 3d 1125, 1134–1135 (11th Cir. 2002); cf. Griffin Indus., Inc. v. Irvin, 496 F. 3d 1189, 1205–06 (11th Cir. 2007) (including exhibits among factual allegations to be considered on 12(b)(6) motion to dismiss, stating “when the exhibits contradict the ... allegations of the pleading, the exhibits govern”).

Regardless of a plaintiff’s allegations, “the court may dismiss a complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) when, on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action.” Marshall Cnty. Bd. of Educ. v. Marshall Cnty. Gas Dist., 992 F. 2d 1171, 1174 (11th Cir. 1993). “It is the general rule that default judgments are ordinarily disfavored because cases should be decided upon their merits whenever reasonably possible.” Creative Tile Marketing, Inc. v. SICIS Intern., 922 F. Supp. 1534, 1536 (S.D. Fla. 1996) (Moore, J.).

A court may set aside a clerk’s default for good cause shown. Fed. R. Civ. P. 55(c); see also Compania Interamericana Export-Import, S.A. v. Compania Dominicana de Aviacion, 88 F. 3d 948, 951 (11th Cir. 1996). “‘Good cause’ is a mutable standard, varying from situation to situation. It is also a liberal one—but not so elastic as to be devoid of substance.” Id. To determine whether good cause exists, the Court considers (1) whether the default was culpable or willful; (2) whether setting it aside would prejudice the adversary; and (3) whether the defaulting party presents a meritorious defense. Id.

3. Analysis

A. SNIC and the City’s Cross-Motions The Court will address the City’s motion for judgment on the pleadings and SNIC’s motion to dismiss the City’s counterclaim at the same time, as both motions present essentially the same core legal argument. SNIC and the City argue primarily about whether the language in the Policy’s Additional Insured Endorsement requires SNIC to defend the City in the underlying lawsuit. (Def. City’s Mot. for J. on Pleadings; Pl.’s Mot. to Dismiss Countercl.) Because the parties’ pleadings both reference the Policy’s terms, and the interpretation of contract terms is a legal issue for the Court to resolve, the Court may properly determine the application of the Additional Insured Endorsement on the parties’ motions. Stephens v. Mid-Continent Cas. Co., 749 F. 3d 1318, 1321 (11th Cir. 2014) (“The interpretation of provisions in an insurance contract is a question of law.”).

To do so, the Court focuses on the “eight corners” of SNIC’s complaint in this action and the underlying state-court complaint, which SNIC attaches as an exhibit to its complaint here. Travelers Indem. Co. of Conn. v. Richard Mckenzie & Sons, Inc., 10 F. 4th 1255, 1261 (11th Cir. 2021).

The Court also observes, counter to SNIC’s argument, that it may properly consider the City’s motion for judgment on the pleadings because the pleadings are closed between the City and SNIC. See Perez v. Wells Fargo N.A., 774 F. 3d 1329, 1337 (11th Cir. 2014) (“The rationale underlying Rule 12(c) further supports this notion: that competing pleadings pertinent to the [complaint] be available for the court to consider on a motion for judgment on the pleadings.”). (1) Florida State Law Interprets the Contract Language at Issue to Require Allegations of Vicarious Liability to Trigger the Duty to Defend The City’s and SNIC’s arguments both depend on the interpretation and application of the Policy’s Additional Insured Endorsement. The City argues that the plain terms of the endorsement obligate SNIC to defend it in the underlying lawsuit. (Def. City’s Mot. for J. on Pleadings at 6.) SNIC argues that the terms of the endorsement, as conclusively interpreted by the Florida Supreme Court, relieve SNIC of any duty to defend or indemnify the City in the underlying action. (Pl.’s Mot. to Dismiss Countercl. at 2-3.) The relevant portion of the Additional Insured Endorsement reads, with the parties’ names identified based on the assumption that the City qualifies as an “additional insured” under the Policy, as follows:

A. Section II – Who Is An Insured is amended to include as an additional insured [the City] for whom [A&A is] performing operations when [A&A] and [the City] have agreed in writing in a contract or agreement that [the City] be added as an additional insured on [A&A’s] policy. [The City] is an additional insured only with respect to liability for “bodily injury”, “property damage” or “personal and advertising injury” caused, in whole or in part, by:

1. [A&A’s] acts or omissions; or

2. The acts or omissions of those acting on [A&A’s] behalf; in the performance of [A&A’s] ongoing operations for the [City].

(Compl., Ex. B, form no. CG 20 33 07 04) (emphasis added).

SNIC argues in both its response and its motion to dismiss that the language above—particularly the “caused, in whole or in part, by” language—has been definitively interpreted by the Florida Supreme Court in Garcia v. Federal Insurance Company to require allegations of vicarious liability against the City before SNIC has a duty to defend (or indemnify) the City.³ (Pl.’s Mot. to Dismiss Countercl. at 16 (citing 969 So. 2d 288, 294 (Fla. 2007)).) The City counters that Garcia’s holding is either distinguishable or the underlying complaint asserts claims for non-direct liability against the City. (Def. City’s Mot. for J. on Pleadings at 9-12; Resp. to Pl.’s Mot. to Dismiss at 10.) In Garcia, the Florida Supreme Court answered two certified questions from the Eleventh Circuit, the second of which is relevant here: “Does an insurance policy providing coverage for an additional insured ‘with respect to liability because of acts or omissions’ of the named insured limit coverage to instances in which the additional insured is vicariously liable for acts of the named insured?” 969 So. 2d at 289. The Florida Supreme Court answered that question in the affirmative. Id. The policy language at issue in Garcia was substantially similar to the language at issue here. Id. at 290.

There, the policy provided that the insurer would provide coverage for “covered persons” where “covered persons” included “any other person or organization with respect to liability because of acts or omissions of you or a family member.” Id. (emphasis added).

In reviewing that language, the Florida Supreme Court held “that the phrase ‘any other person with respect to liability because of acts or omissions of the named insured’ is unambiguous and limits an additional insured’s coverage to instances of vicarious liability.” Id. at 291 (emphasis added).

As SNIC points out, the Southern District of Florida has also previously confirmed that Garcia’s holding governs nearly identical insurance policy terms. Amerisure Ins. Co. v. Seneca Specialty Ins. Co., No. 20-20442-Civ, 2020 WL 3317035, at *4-5 (S.D. Fla. June 18, 2020) (Moreno, J.).

In Amerisure, this court reviewed policy language that provided coverage for additional insureds “with respect to liability . . . caused, in whole or in part by” the primary insured’s “acts or omissions.” Id. at *4. Under Garcia, this Court reasoned, such a policy term is unambiguous and requires allegations of vicarious liability to be triggered. Id. at *5. The same is true here: the Additional Insured Endorsement is not vague or ambiguous, its language is essentially the same as language that has been definitively interpreted by the Florida Supreme Court, and therefore it requires allegations of vicarious liability before an insurer becomes responsible to defend (or indemnify) an additional insured. Garcia, 969 So. 2d at 291; Amerisure, 2020 WL 3317035, at *5. The City also argues that Garcia and Amerisure are distinguishable in their factual postures and that Garcia’s holding is limited to the duty to indemnify, so

Armiger clearly states that a breach of a nondelegable duty is “direct” negligence. Id. at 875.

A premises owner’s “liability for the breach of a nondelegable duty arises from direct—instead of imputed—liability.” Id. A party is

The underling complaint alleges a single count of negligence against the City. (Compl., Ex. A ¶ 15.).

That count alleges the City “owned, controlled, and/or maintained” the sidewalk on which the manhole cover was located, and that the City also failed to maintain the sidewalks’ safety or sufficiently warn passersby of danger. (Id. Ex. A ¶ 11.) The sole count against the city does not allege that the City is liable based on the acts of another party. (Id. Ex. A ¶¶ 9-15.) Nowhere does the complaint allege a claim for vicarious liability against the City, which is required to bring such a claim under Florida law. Amerisure, 2020 WL 3317035, at *5 (“Florida law is clear: ‘to pursue a vicarious liability claim, the claimant must specifically plead it as a separate cause of action.’”) (citation omitted).

There is no plausible reading of the underlying complaint under which the Court could construe its allegations against the City as allegations of vicarious liability. Garcia. 969 So. 2d at 291; Armiger, 48 So. 3d at 874-75; Amerisure, 2020 WL 3317035, at *4-5. The Court therefore finds that the underlying complaint brings only a direct claim for breach of the City’s nondelegable duty. As such, SNIC does not owe the City any duty to defend it under the Policy. See, e.g., Baron Oil Co. v. Nationwide Mut. Fire Ins. Co., 470 So. 2d 810, 813–14 (Fla. 1st DCA 1985) (“if the complaint alleges facts showing two or more grounds for liability, one being within the insurance coverage and the other not, the insurer is obligated to defend the entire suit.”).

As the Court observed at the outset, its interpretation of the Policy’s Additional Insured Endorsement is central to both the City’s motion for judgment on the pleadings and SNIC’s motion to dismiss the City’s counterclaim for failure to state a claim upon which relief may be granted. (Def. City’s Mot. for J. on Pleadings at 3; Pl.’s Mot. to Dismiss at 6-7.).

Based on the “eight corners” of the complaint and the underlying complaint, SNIC cannot have breached the Policy or any duty (either to defend or to indemnify) that it owed to the City, because the underlying complaint brings only direct allegations of the City’s breach of its nondelegable duty. (Compl., Ex. A ¶¶ 9-15); Travelers, 10 F. 4th at 1261. The Court therefore denies the City’s motion for judgment on the pleadings (ECF No. 16) and grants SNIC’s motion to dismiss Counts I, III, and VI of the City’s counterclaim against SNIC.⁵ B. A&A Drainage’s Motions to Set Aside Default and to Dismiss the City’s Crossclaim (1) Good Cause Exists to Set Aside A&A’s Default A&A argues that good cause exists to set aside its default because it did not willfully ignore the deadline to respond to the City’s crossclaim, a one-day delay in response does not prejudice the City, and it presents meritorious defenses to the City’s crossclaim. (Cross-Def. A&A’s Mot. to Set Aside Default at 3-4.) The City concedes in response that A&A’s default did not prejudice the City, but argues that A&A’s default was willful and that A&A fails to sufficiently detail its defenses. (Cross-Pl. City’s Omnibus Resp. at 2-3.) The Court does not find A&A’s default to be willful. See, e.g., Rensel v. Centra Tech, Inc., No. 17-24500-Civ, 2019 WL 7376756, at *1 (S.D. Fla. Sept. 12, 2019) (Scola, J.) (denying motion to set aside default where defendant’s failure to timely respond was willful because “the Court has given [the defendant] ample opportunity to comply with the court’s orders” but the defendant failed to do so over a period of months).

A&A’s response to the service of the City’s crossclaim— setting aside served court documents and assuming them to be duplicates without reading them—is doubtlessly negligent. (Cross-Def. A&A’s Mot. to Set Aside Default at 3.) But it does not rise to the level of willfulness required to sustain A&A’s default. The Court also finds that A&A has sufficiently stated “a hint of a suggestion” that it has meritorious defenses. See, e.g., Griffin IT Media, Inc. v. Intelligentz Corp., No. 07-80535-Civ, 2008 WL 162754, at *3 (S.D. Fla. Jan. 16, 2008) (Marra, J.) (observing that, “with respect to a meritorious defense, ‘likelihood of success is not the measure’ . . . the movant need only provide ‘a hint of a suggestion’ that [its] case has merit.”) (cleaned up).

The City relies on Griffin for the proposition that A&A must demonstrate by “a ‘clear and specific statement showing, not by conclusion, but by definite recitation of facts’ that it has a colorable defense.” Id. But this misreads Griffin. The court there observed that the moving party had provided far more than the standard to meet the meritorious defense factor because it had established its defenses “by a definite recitation of

Second, the City’s count for declaratory relief against A&A (Count I) is properly pleaded. Alternative pleading is allowed under the Federal Rules of Civil Procedure and the Federal Declaratory Judgment Act. Fed. R. Civ. P. 8(d)(2); 28 U.S.C. § 2201(a). Further, courts routinely hold that claims for declaratory relief may be pleaded alongside breach of contract claims. See, e.g., Gerdau Ameristeel US Inc. v. Zurich Am. Ins. Co., No. 20-82217-Civ, 2021 WL 7682525, at *1 (S.D. Fla. May 25, 2021) (Middlebrooks, J.) (“the mere fact that a claim is redundant and/or unnecessary does not in and of itself constitute grounds for dismissal under Rule 12(b)(6) for failure to state a claim.”).

Additionally, as the City points out, its claim for declaratory relief against A&A seeks “forward-looking” relief, while its claim for breach of contract seeks “backward-looking” relief. 550 Seabreeze Dev., LLC v. Ill. Union Ins. Co., No. 19-24611-Civ, 2020 WL 473610, at *2 (S.D. Fla. Jan. 29, 2020) (Scola, J.) (“Declaratory judgment claims may properly coexist with breach of contract claims when they provide the plaintiff a form of relief unavailable under the breach of contract claim.”).

Finally, the doctrine of forum non conveniens does not apply where the alternate forum is a domestic state court within the same judicial district as the federal court in question. Doran v. City of Clearwater, Fla., 814 F. Supp. 1077, 1078 (M.D. Fla. 1993) (“The application of the doctrine of forum non conveniens to dismiss this case or to remand to State court would be improper.”).

It is telling that A&A cites no case law for the proposition that application of forum non conveniens would be appropriate in these circumstances and instead relies largely on Florida state court opinions focusing on forum-shopping. (Cross-Def. A&A’s Mot. to Dismiss Cross-cl. at 6-13.) The City did not select federal court to hear this dispute; SNIC did. And, as the City observes, the state court has not yet decided whether to allow the City to brings its crossclaims against A&A in the state court action. (Cross-Pl. City’s Omnibus Resp. at 9.) The parties may address any potential for double recovery or disparate outcomes between this matter and the state-court action should such an issue arise. The City properly pleads its claims for declaratory relief and breach of contract against A&A, and the doctrine of forum non conveniens is inapplicable where the proposed alternate forum is a domestic state court within the same judicial district as the federal court.

Therefore, the Court denies A&A’s motion to dismiss Counts I, II, IV, and V of the City’s crossclaim.

4. Conclusion

For the reasons stated above, the Court [the Court denies the City’s motion for judgment on the pleadings (ECF No. 16).

The Court grants SNIC’s motion to dismiss (ECF No. 27) and dismisses counts one, three, and six of the City’s counterclaim complaint against Defendant SNIC with prejudice. The Court grants Cross-Defendant A&A’s motion to set aside default. (ECF No. 30.) Finally, the Court denies Cross-Defendant A&A’s motion to dismiss the City’s counterclaim. (ECF No. 26.) Cross-Defendant A&A shall file its answer to the City’s counterclaim no later than November 11, 2022. Further, the parties shall simultaneously, within twenty (20) days from the date of this order, submit supplemental briefing addressing whether the Court should grant judgment on the pleadings in favor of SNIC on the claims for declaratory judgment in its complaint, based on the Court’s findings in this order. Each party’s filings shall comply with the Southern District of Florida Local Rules governing the length and other typographical requirements for motions. Done and ordered in Miami, ONES 2 Robert N. Scola, Jr. United States District Judge