Monterey at Malibu Bay Condominium Association, Inc. v. Empire Indemnity Insurance Company

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 20-cv-24587-BLOOM/Otazo-Reyes

MONTEREY AT MALIBU BAY

CONDOMINIUM ASSOCIATION, INC.,

Plaintiff,

v.

EMPIRE INDEMNITY INSURANCE

COMPANY,

Defendant.

____________________________________/

ORDER

THIS CAUSE is before the Court upon Defendant Empire Indemnity Insurance

Company’s (“Defendant”) Motion for Attorneys’ Fees and Costs and to Stay Action, ECF No. [10]

(“Motion”), filed on December 14, 2020. Plaintiff Monterey at Malibu Bay Condominium

Association, Inc. (“Plaintiff”) filed a response in opposition to the Motion, ECF No. [13]

(“Response”),1 to which Defendant replied, ECF No. [14] (“Reply”). The Court has carefully

reviewed the Motion, all opposing and supporting submissions, the relevant record, the applicable

law, and is otherwise fully advised. For the reasons discussed below, Defendant’s Motion is

granted in part and denied in part.

I. BACKGROUND

In order to address the issues raised in the instant Motion, the Court must first set forth the

procedural history in this case, and in two previously filed and related cases.

1 In Plaintiff’s Response, it simultaneously presents a Motion to Compel Appraisal and to Stay Action, see

ECF No. [13], which has not been responded to by Defendant. As such, the Court will not address the

Motion to Compel Appraisal and to Stay Action in the instant Order.

A. Monterey I

On March 22, 2019, Plaintiff initiated its first action against Defendant in the Eleventh

Judicial Circuit in and for Miami-Dade County, Florida, and thereafter filed an Amended

Complaint on August 8, 2019. See Monterey at Malibu Bay Condo. Ass’n, Inc. v. Empire Indem.

Ins. Co., No. 1:19-cv-23353-LFL (S.D. Fla. 2019), ECF No. [1-2] at 2-5 (“Monterey I”). On

August 12, 2019, Defendant removed the case to federal court. Monterey I, ECF No. [1]. Plaintiff’s

Amended Complaint asserted a single count against Defendant for breach of contract, alleging that

Plaintiff entered into an insurance policy agreement (“Policy”) with Defendant for coverage of

Plaintiff’s condominium property located in Homestead, Florida (“Property”). Monterey I, ECF

No. [1-2] at 2-5. Plaintiff alleged that, while insured under the Policy, the Property was damaged

during Hurricane Irma and that the damage incurred was a covered loss under the Policy. Upon

receiving an insurance claim from Plaintiff, Defendant made a partial payment. Plaintiff alleged

that by making only partial payment, Defendant breached the Policy by failing to fully indemnify

Plaintiff for its total amount of damages. Id. at 3. Moreover, Plaintiff’s Sworn Proof of Loss

Statement claimed almost $34,000,000.00 in damages from the loss. Monterey I, ECF No. [1-6].

On August 27, 2020, Plaintiff filed a motion seeking voluntary dismissal of Monterey I

without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(2), which Defendant opposed.

Monterey I, ECF Nos. [64] & [67]. On October 15, 2020, after reviewing the briefing and hearing

argument on the motion, Magistrate Judge Louis granted Plaintiff’s motion over Defendant’s

objection, and conditioned the dismissal without prejudice upon the following terms: (1) “Plaintiff

is permitted to voluntarily dismiss its claim against Defendant without prejudice. However, if

Plaintiff re-files this action at a later date, Plaintiff shall pay all taxable costs and attorneys’ fees

that Defendant incurred in defending this action,” and (2) “Plaintiff must also preserve all

documents and other discovery requested in this suit,” so that Defendant can utilize such discovery

if Plaintiff refiles the case. Monterey I, ECF No. [87] at 7 (“Order of Dismissal”).

B. Monterey II

On August 22, 2020, while Monterey I was still pending, Plaintiff filed a Petition for

Declaratory Relief against Defendant, which was premised upon the same Policy, the same

Property, the same loss resulting from Hurricane Irma, and the same ultimate amount of claimed

damages. Monterey at Malibu Bay Condo. Ass’n, Inc. v. Empire Indem. Ins. Co., No. 1:20-cv-

23506-KMW (S.D. Fla. 2020), ECF No. [1] (“Monterey II”). On October 29, 2020, however, the

Court in Monterey II sua sponte dismissed the case without prejudice after the parties failed to

timely file their joint conference report as ordered. Monterey II, ECF No. [19].2

C. Monterey III

Turning to the instant action, on November 6, 2020, Plaintiff refiled its Petition for

Declaratory Relief against Defendant, which asserted the same claims as those raised in Monterey

II, seeking clarification of its rights under the Policy. ECF No. [1] (“Monterey III”). Of note here,

Monterey III again concerns the same parties, the same Policy, the same Property and

corresponding loss suffered after Hurricane Irma, and the same alleged amount of damages.

On December 14, 2020, Defendant filed the instant Motion seeking an award of attorneys’

fees and taxable costs incurred in defending Monterey I, pursuant to the conditions set forth in

Judge Louis’s Order of Dismissal, and requesting that the case be stayed until Plaintiff pays the

full amount of litigation expenses sought. Plaintiff, on the other hand, contends that Judge Louis’s

Order of Dismissal was limited to Plaintiff refiling the breach of contract action. Thus, Plaintiff

2 The Court in Monterey II also subsequently denied Plaintiff’s motion for reconsideration, which sought

to reopen the case based on its excusable neglect in failing to comply with the Court’s orders. See Monterey

II, ECF No. [21].

argues that it is not required to pay any of Defendant’s fees or costs incurred during Monterey I.

II. DISCUSSION

As noted above, Defendant now seeks payment of the attorneys’ fees and costs incurred in

defending Monterey I, pursuant to Rule 41 and the conditions set forth in Judge Louis’s Order of

Dismissal, because Plaintiff has refiled this case asserting substantially similar claims predicated

on the same facts and circumstances as those in Monterey I. Plaintiff disagrees with this

characterization, arguing that Defendant’s position during Monterey I was that the breach of

contract action was premature.3 Thus, based on Defendant’s representations, Plaintiff contends

that it was required to file the declaratory relief claims presented in Monterey II and Monterey III

before it could proceed with its breach of contract action. Additionally, Plaintiff maintains that the

conditions set forth in Judge Louis’s Order of Dismissal do not apply because they only come into

effect when Plaintiff refiles the breach of contract action. In its Reply, Defendant argues that

merely labeling the instant action as a petition for declaratory relief is not, on its own, sufficient to

establish that this case raises dissimilar issues from those asserted in previous litigation, and it

asserts that the claims in Monterey I and Monterey III, at their core, are nearly identical. As such,

Defendant seeks an award of all attorneys’ fees and costs incurred during Monterey I and requests

that this action be stayed until Plaintiff pays this award in full. Nevertheless, Defendant has not

submitted any documentation of the fees and costs it incurred during the Monterey I litigation.

Federal Rule of Civil Procedure 41(d) states as follows:

Costs of a Previously Dismissed Action. If a plaintiff who previously dismissed

an action in any court files an action based on or including the same claim against

the same defendant, the court:

3 The Court notes, however, that Plaintiff’s Response to the Motion is woefully deficient in that it fails to

directly address many of the arguments raised by Defendant. Instead, Plaintiff devotes the majority of its

Response to its own Motion to Compel Appraisal, and only devotes two and a half pages of briefing to

cursorily address the procedural history of this case and its interpretation of Judge Louis’s Order of

Dismissal without any citation to supporting law.

(1) may order the plaintiff to pay all or part of the costs of that previous

action; and

(2) may stay the proceedings until the plaintiff has complied.

Fed. R. Civ. P. 41(d). Thus, under Rule 41(d), “costs may be imposed where the plaintiff has

brought a second, identical, or nearly identical, claim and has requested identical, or nearly

identical, relief.” USA Entm’t Grp., Inc. v. City of Pompano Beach, No. 18-cv-62740, 2019 WL

498743, at *1 (S.D. Fla. Feb. 8, 2019) (quoting Esquivel v. Arau, 913 F. Supp. 1382, 1387 (C.D.

Cal. 1996)).

The Court has broad discretion under Rule 41 to award fees and costs when a plaintiff

dismisses and refiles certain claims in a separate action against the same defendant. See

Pontenberg v. Bos. Sci. Corp., 252 F.3d 1253, 1256 n.2, 1260 (11th Cir. 2001); see also Groom v.

Bank of Am., No. 8:08-cv-2567-T-27EAJ, 2010 WL 627564, at *1 (M.D. Fla. Feb. 23, 2010)

(“Rule 41(d) expressly contemplates the prejudicial impact on a defendant when a plaintiff

dismisses and re-files against that defendant.”). A party moving for costs under Rule 41(d) must

show that: (1) the plaintiff dismissed a previous action; (2) the plaintiff then commenced a second

action that is based upon or includes the same claim against the same defendants; and (3) the

defendant incurred costs in the prior action that will not be useful in the newly filed litigation. NF

Imp. & Exp., Inc. v. VIA Mat Int’l AG, No. 11-23371-CIV, 2012 WL 13013236, at *2 (S.D. Fla.

Sept. 25, 2012); Groom, 2010 WL 627564, at *5. A showing of bad faith is not required to recover

costs under the rule. Groom, 2010 WL 627564, at *5. Rather, in determining whether an award of

costs is appropriate, courts look to whether a plaintiff’s conduct satisfies the requirements of Rule

41(d) and whether the circumstances of the case warrant an award of costs to prevent prejudice to

the defendant. Id.

A review of each record in Plaintiff’s three cases clearly demonstrates that Defendant is

entitled to an award of attorneys’ fees and taxable costs previously incurred pursuant to Rule 41.

In particular, the parties engaged in extensive litigation in Monterey I, including attending a

mediation conference,4 which resulted in Defendant incurring significant litigation expenses.

Those expenses were amplified in part due to Plaintiff’s refusal to provide adequate discovery

responses and documentation of the damage sustained to the Property and its reluctance to permit

Defendant to conduct an inspection of the Property until ordered to do so by the Court.5 By

voluntarily dismissing Monterey I after more than a year and a half of litigation, only to later refile

a new case based on the same circumstances against the same defendant, Plaintiff has caused

Defendant to suffer prejudice that justifies an award of attorneys’ fees and costs previously

incurred under Rule 41(d).

Moreover, contrary to Plaintiff’s argument, Judge Louis’s Order of Dismissal did not

expressly limit the conditions of dismissal to instances where Plaintiff specifically refiled its

breach of contract claims. Rather, Judge Louis’s Order of Dismissal clearly and concisely explains

her rulings—namely, that the conditions of dismissal require Plaintiff to (1) reimburse Defendant

for all reasonable attorneys’ fees and taxable costs incurred during the proceedings in Monterey I

upon refiling this case and (2) preserve all documents and discovery requested and produced in

Monterey I so that Defendant may use any such discovery during Plaintiff’s refiled action. In

addition, in reviewing the claims asserted in each case, the Court notes that the discovery from

Monterey I will necessarily overlap with the discovery required in the instant action. Yet, when

taken to its logical conclusion, Plaintiff’s interpretation of Judge Louis’s Order of Dismissal would

yield the illogical result requiring that Plaintiff only preserve the discovery from Monterey I if it

4 See Monterey I, ECF No. [31] (Final Mediation Report).

5 See, e.g., Monterey I, ECF No. [22] (ordering Plaintiff to permit Defendant to conduct a property

inspection); ECF No. [42] (order granting Defendant’s motion to compel and requiring Plaintiff to

provide more complete discovery responses); ECF No. [62] (order to show cause regarding Plaintiff’s

repeated failure to comply with the Court’s discovery orders).

refiled its breach of contract action, but not any other action.

In this case, although Plaintiff has now asserted a claim for declaratory relief rather than a

claim for breach of contract, the Court finds that issues in Monterey I and Monterey III are based

upon the same nucleus of operative facts. See Russell-Brown v. Jerry, II, 270 F.R.D. 654, 660

(N.D. Fla. 2010) (“Rule 41(d) applies to any refiled case ‘based on or including’ the same claims

previously voluntarily dismissed. Thus, the mere addition of a defendant or a new claim or two

does not prevent the application of Rule 41(d) so long as there are claims in the new case that arise

from the same nucleus of operative facts such that the new case can be said to be ‘based on or

including’ previously brought and dismissed claims.”). Here, Monterey I and Monterey III both

concern the same Policy, the same Property, and the same sustained loss to the Property from

Hurricane Irma resulting in the same $34,000,000.00 in alleged damages.6 That this action seeks

clarification of Plaintiff’s rights and Defendant’s obligations under the Policy, instead of seeking

to resolve the question of whether Defendant breached the Policy, does not absolve Plaintiff of its

obligation to pay Defendant’s fees and costs as ordered in Monterey I. See Wishneski v. Old

Republic Ins. Co., No. 5:06-cv-148-Oc-10GRJ, 2006 WL 4764424, at *2 (M.D. Fla. Oct. 10, 2006)

(concluding that the subsequently refiled declaratory judgment action adding an additional breach

of contract claim was the same claim for the purposes of Rule 41(d) because “the case involve[d]

the identical subject matter as that involved in the previously dismissed action”).

Based on the discussion above, the Court concludes that Defendant is entitled to an award

of reasonable attorneys’ fees and taxable costs incurred during Monterey I. Accordingly,

Defendant’s Motion is granted in this regard. However, in substantiating the amount of attorneys’

6 See Monterey I, ECF No. [63] at 1 (Plaintiff’s Notice of a Similar Case indicating that, “[p]ursuant to the

same Policy and Property, on August 22, 2020, Plaintiff filed a filed a Petition for Declaratory Relief in the

United States District Court for the Southern District of Florida, which bears case number: 1:20-cv-23506-

KMW.”).

fees and taxable costs requested, Defendant must also establish that the expenses it seeks to recover

will not be useful in this litigation. See Hard Rock Cafe Int’l USA, Inc. v. RockStar Hotels, Inc.,

No. 17-cv-62013, 2018 WL 7144143, at *1 (S.D. Fla. July 16, 2018) (Generally, “the award of

litigation-related expenses may be limited to those incurred in ‘discovering information and

researching and pressing legal arguments that will not be useful in the later suit.’” (quoting

McCants v. Ford Motor Co., Inc., 781 F.2d 855, 860 (11th Cir. 1986))).7 As this Court is presently

without any basis to determine the amount of attorneys’ fees and costs incurred during Monterey

I that will not be useful in this litigation, it reserves ruling on the amount to be awarded.

Furthermore, the Court does not believe that a stay of this action is warranted, and Defendant’s

Motion is therefore denied as it relates to a stay of these proceedings. See USA Entm’t Grp., Inc.,

2019 WL 498743, at *3. Should Plaintiff fail to timely pay the amount of attorneys’ fees and costs

ultimately awarded by this Court, Defendant may refile its request for a stay of these proceedings

until it receives full payment.

7 See also Universal Prop. & Cas. Ins., Co. v. Lifetime Brands, Inc., No. 2:15-cv-14333, 2016 WL 4133149,

at *1 (S.D. Fla. June 6, 2016) (“The Court may also impose a condition of payment of attorney’s fees,

however, any award of attorney’s fees must be limited to fees for services that will not be useful in a

subsequent lawsuit.”); Ansely v. Spicer, No. 2:18-cv-01010, 2020 WL 597563, at *2 (M.D. Ala. Feb. 6,

2020) (noting that “much, if not all, of the legal work performed in this case is likely ‘recyclable’ in any

subsequent case and, therefore, not compensable.” (citing Cadle Co. v. Beury, 242 F.R.D. 695, 700 (S.D.

Ga. 2007))); Wolf v. Pac. Nat. Bank, N.A., No. 09-21531-CIV, 2010 WL 1462298, at *4 (S.D. Fla. Mar. 18,

2010) (“It is well understood that an award of fees for purposes of Rule 41 should not award such fees when

the work involved will prove necessary for the ultimate resolution of the second-filed action.”), report and

recommendation adopted, No. 09-21531-CIV, 2010 WL 1489995 (S.D. Fla. Apr. 13, 2010); Siek v. Am.

Airlines, Inc., No. 01-cv-4473, 2002 WL 2018833, at *2 (S.D. Fla. Aug. 14, 2002) (awarding attorneys’

fees and costs to the defendant as a condition to voluntary dismissal), report and recommendation adopted,

2002 WL 34394336 (S.D. Fla. Sept. 6, 2002); Trujillo v. Banco Cent. del Ecuador, 229 F. Supp. 2d 1369,

1376 (S.D. Fla. 2002) (awarding attorneys’ fees and costs after separating the amounts incurred in defense

of the lawsuit versus amounts usable in other pending litigation); Sobe News, Inc. v. Ocean Drive Fashions,

Inc., 199 F.R.D. 377 (S.D. Fla. 2001) (granting voluntary dismissal “on condition that Defendants are

reimbursed for their litigation-related expenses incurred in defending this suit, including reasonable

attorney’s fees”). Examples of services not useful in a later lawsuit include the cost of preparing motions

that were only useful in the original action. McCants, 781 F.2d at 860. However, attorneys’ fees related to

discovery are not recoverable where such discovery materials may be used in subsequent litigation. Id.

Case No. 20-cv-24587-BLOOM/Otazo-Reyes

I. CONCLUSION

Accordingly, itis ORDERED AND ADJUDGED that Defendant’s Motion for Attorneys’

Fees and Costs and to Stay Action, ECF No. [10], is GRANTED in part and DENIED in part.

Defendant’s request to stay this litigation is DENIED WITHOUT PREJUDICE. Moreover, as

it is presently unable to determine whether the fees and costs incurred will be useful in this action,

the Court reserves ruling as to the amount to be awarded. Within thirty (30) days from the date

of this Order, Defendant must submit documentation establishing the reasonable attorneys’ fees

and taxable costs incurred during the proceedings in Monterey I, as set forth in Local Rule 7.3, and

it must demonstrate that the fees and costs sought will not be useful in the instant litigation.

Defendant’s pending Motion for Enlargement of Time to Respond to Plaintiffs Motion to

Compel Appraisal and to Stay Action, ECF No. [15], is GRANTED in part and DENIED in

part. Defendant must respond to Plaintiff’s Motion to Compel Appraisal and to Stay Action, ECF

No. [13], by no later than January 19, 2021.

DONE AND ORDERED in Chambers at Miami, Florida, on January 11, 2021.

UNITED STATES DISTRICT JUDGE

Copies to:

Counsel of Record