Security National Insurance Company v. The City of Miami Beach, Florida

United States District Court

for the

Southern District of Florida

Security National Insurance )

Company, Plaintiff, )

)

Civil Action No. 22-22357-Civ-Scola

v. )

)

The City of Miami Beach and others, )

Defendants. )

Order

This matter is before the Court on the parties’ multiple cross-motions for

judgment on the pleadings, to dismiss, and to set aside default. The Defendant

City of Miami Beach (the “City”) moves for judgment on the pleadings on Count I

of the complaint filed by the Plaintiff, Security National Insurance Company

(“SNIC”). (ECF No. 16.) SNIC filed a response to the motion (ECF No. 25), and the

City filed a reply. (ECF No. 32.) SNIC also filed a motion to dismiss Count I, III,

and VI of the City’s counterclaim (ECF No. 27), to which the City responded (ECF

No. 34), and SNIC replied. (ECF No. 37.) Cross-Defendant A&A Drainage, Inc.

(“A&A”) moves to set aside its default on the City’s crossclaim (ECF No. 30) and to

dismiss the City’s crossclaim. (ECF No. 26.) The City timely responded to both

motions. (ECF No. 33.) A&A did not reply in support of either motion, and the

time for it to do so has passed. After careful consideration of the briefing, the

record, and the relevant legal authorities, the Court denies the City’s motion for

judgment on the pleadings (ECF No. 16), grants SNIC’s motion to dismiss (ECF

No. 27), grants A&A’s motion to set aside default (ECF No. 30), and denies

A&A’s motion to dismiss (ECF No. 26.)

1. Background

This case centers around an insurance dispute between SNIC, the City, and

A&A relating to an underlying personal injury lawsuit in Florida state court.

(Compl., ECF No. 1, ¶¶ 1, 8-13, 26-28.) The insurance dispute arose when

Defendant Monica O’Chaney1 brought a negligence action in state court against

A&A and the City relating to injuries she suffered after falling into a storm drain

on a Miami Beach sidewalk. (Compl. ¶ 9.)

According to the allegations in the state-court complaint, A&A “was doing

maintenance and repairs to the sidewalk and/or storm drain manhole cover

located at the corner of 11th Street and Meridian Avenue, Miami Beach, Florida”

1 Defendant O’Chaney has not yet been served, and the Court has granted SNIC an extension of

time to serve her because she has been evading service of process in this action. (ECF No. 39.)

on November 2, 2018.2 (Id. Ex. A ¶ 2.) A&A allegedly failed to properly secure the

manhole cover or sufficiently warn passersby of the potential dangers associated

with the work it was performing on the manhole cover. (Id. Ex. A ¶¶ 3, 5.) Ms.

O’Chaney was injured “when she fell into the storm drain” after stepping on the

storm drain manhole cover while “walking on the sidewalk,” which “collapsed”

when she stepped on it. (Id. Ex. A ¶ 5.)

In the state-court negligence action, Ms. O’Chaney pleaded a claim for

negligence against A&A for its failure to prevent the accident, alleging multiple

breaches of A&A’s duty to maintain the safety of the sidewalk area on which it

was working and to warn pedestrians of any potential dangers associated with its

work. (Id. Ex. A ¶ 6.) Ms. O’Chaney similarly pleaded a claim for negligence

against the City, alleging that 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 safety of the sidewalk or sufficiently warn passersby of danger. (Id.

Ex. A ¶ 11.) Notably, as the Court will address in greater detail later, Ms.

O’Chaney never asserted a claim for vicarious liability against the City based on

A&A’s conduct as the City’s contractor. (See generally id. Ex. A.) Instead, the

negligence claim against the City is premised upon the City’s ownership and

control of the sidewalk and manhole cover. (Id. Ex. A ¶¶ 11, 13-14.)

Following the filing of the underlying lawsuit, the City sent a tender letter to

A&A seeking coverage relating to the state-court negligence action as an

additional insured under A&A’s insurance policy with SNIC (the “Policy”).

(Countercl. ¶ 18.) SNIC eventually denied coverage to the City. (Id. ¶¶ 25-26.) The

parties continued to dispute the City’s ability to claim additional insured status

under the Policy, leading to SNIC’s filing of this action. (Compl. ¶¶ 16-17.)

SNIC filed its complaint seeking four counts of declaratory relief. In the first

count, it seeks a declaration that it has no duty to defend the City under the

terms of the Policy in the underlying lawsuit. (Id. ¶¶ 33-41.) In the second, it

seeks a declaration that it has no duty to indemnify the City with regards to the

underlying lawsuit. (Id. ¶¶ 42-51.) In the third, it seeks a declaration that it has

no duty to defend the City under the terms of an endorsement to the Policy. (Id.

¶¶ 52-61.) Finally, in the fourth count, it seeks a declaration that it has no duty

to indemnify the City under the terms of the endorsement. (Id. ¶¶ 62-72.)

In response, the City filed counterclaims against SNIC and crossclaims

against A&A. In its first count, the City seeks declaratory relief against both SNIC

and A&A that SNIC and A&A have a duty to defend the City in the underlying

2 Although the underlying complaint and SNIC’s complaint do not expressly allege it, the City

alleges (and no party disputes) that A&A was acting as the City’s contractor to accomplish work

on the storm drain manhole cover at the time of the incident. (See, e.g., Def. City’s Countercl.,

ECF No. 13, ¶ 13.)

lawsuit under the terms of the Policy. (Countercl. ¶¶ 37-40.) In its second count,

the City alleges that A&A breached its contract with the City and owes the City

contractual indemnification relating to the underlying lawsuit. (Id. ¶¶ 41-47.) In

its third count, the City asserts a similar breach of contract indemnification claim

against SNIC. (Id. ¶¶ 48-58.) In its fourth count, the City alleges that A&A owes it

common law indemnification relating to the underlying lawsuit. (Id. ¶¶ 59-65.) In

its fifth count, the City alleges that A&A breached its contract with the City by

failing to maintain required insurance covering the City. (Id. ¶¶ 66-72.) Finally, in

its sixth count, the City alleges that SNIC is estopped from asserting any

additional defenses to disclaim coverage under the Policy due to SNIC’s delay in

asserting any such possible defenses. (Id. ¶¶ 73-83.)

After filing its counter and crossclaims, the City moved for judgment on the

pleadings on Count I of SNIC’s complaint, asserting that under the plain terms of

the policy and as a matter of Florida law, SNIC has a duty to defend the City in

the underlying lawsuit. (Def. City’s Mot. for J. on Pleadings, ECF No. 16, at 1.)

SNIC argues in response that Florida law holds that SNIC does not have a duty to

defend the City under the Policy because the underlying lawsuit does not base its

claim against the City on vicarious liability. (Pl. Resp., ECF No. 25, at 2.)

SNIC then moved to dismiss Counts I, III, and VI of the City’s counterclaim,

asserting (among other reasons) that the City’s affirmative claims fail as a matter

of law for the same reason its motion for judgment on the pleadings must fail: the

underlying complaint does not make a vicarious liability claim against the City.

(Pl. Mot. to Dismiss Countercl., ECF No. 27, at 2-3.) The City, unsurprisingly,

argues its position on its motion for judgment on the pleadings in response. (Def.

City’s Resp. at 2.)

Defendant and Cross-Defendant A&A, meanwhile, moves to dismiss Counts

I, II, IV, and V of the City’s crossclaim. (Cross-Def. A&A’s Mot. to Dismiss Cross-

cl., ECF No. 26, at 2-3.) A&A also moves to set aside the clerk’s default that has

been entered against it (ECF No. 23) because A&A failed to timely respond to the

crossclaim. (Cross-Def. A&A’s Mot. to Set Aside Default, ECF No. 30.) A&A argues

that the City’s crossclaims are either procedurally deficient or fail to state a claim

as a matter of law. (Cross-Def. A&A’s Mot. to Dismiss at 2-3.) A&A also argues

that good cause exists to set aside the clerk’s default. (Cross-Def. A&A’s Mot. to

Set Aside Default at 3-6.) The City, responding jointly to both motions, argues

that its crossclaims are procedurally proper and legally cognizable, and that A&A

cannot establish good cause to set aside its default because A&A’s default was

willful, it fails to present meritorious defenses, and the City cannot simply pay

any judgment on the underlying claim and then seek recovery from A&A after the

fact. (Cross-Pl. City’s Omnibus Resp. at 2-4.)

Central to the Court’s resolution of the motions is the Policy’s “Additional

Insureds Endorsement,” which the parties quote extensively in and attach to their

pleadings:

ADDITIONAL INSURED – OWNERS, LESSEES OR CONTRACTORS –

AUTOMATIC STATUS WHEN REQUIRED IN CONSTRUCTION

AGREEMENT WITH YOU

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

3 The Court assumes, without finding, that the City qualifies as an additional insured under the

Policy for the purposes of its analysis in this order.

does not apply to the duty to defend. (Def. City’s Mot. for J. on Pleadings at 9-12.)

But the breadth of the Florida Supreme Court’s language in Garcia defeats both

of the City’s arguments. 969 So. 2d at 291. The Florida Supreme Court’s holding

that the policy language “limits an additional insured’s coverage to instances of

vicarious liability” is in no way restricted to only circumstances where a party

seeks indemnification instead of defense. Nor is it limited to the factual

circumstances of that case. Rather, the Florida Supreme Court was clear in its

decision. Where an insurance contract provides coverage to an additional insured

“because of the acts or omissions of the named insured,” such a provision will

only provide coverage in “instances of vicarious liability.” Id. Here, the Policy’s

Additional Insured Endorsement is applicable only “with respect to liability . . .

caused, in whole or in part by . . . [A&A’s] acts or omissions.” (Compl., Ex. B, form

no. CG 20 33 07 04.) Therefore, under Florida law,4 the City must demonstrate

that the underlying complaint alleges some form of vicarious liability to trigger a

duty to defend (or indemnify) by SNIC.

(2) The Underlying Complaint Makes No Allegations of Vicarious Liability

Against the City

The City argues that the underlying complaint sets out allegations of

vicarious liability, or the functional equivalent, by alleging that the City is liable

for Ms. O’Chaney’s damages based on a theory of breach of its nondelegable duty

as a premises owner. (Def. City’s Mot. for J. on Pleadings at 6-10.) The City relies

heavily on Armiger v. Associated Outdoor Clubs, Inc. (Id. at 8-9 (citing 48 So. 3d

864, 874-76 (Fla. 2d DCA 2010)).) SNIC asserts that allegations of a premises

owner’s nondelegable duty are allegations of direct negligence and cannot be

considered vicarious. (Resp. to Def. City’s Mot. for J. on Pleadings at 8.)

The Court agrees with SNIC’s position. A premises owner’s breach of its

nondelegable duty to maintain the safety of the premises implicates the premises

owner’s direct, not vicarious, negligence. Armiger, 48 So. 3d at 874-75. Armiger

addresses this at length, holding there that the trial court erred by considering

allegations of a party’s breach of its nondelegable duty to be anything other than

direct negligence. Id. at 874 (“Once again, Associated’s oft-repeated notion that a

cause of action for the breach of a nondelegable duty is a separate and distinct

cause of action from an action based on ‘active’ or ‘direct’ negligence led the

circuit court into error.”).

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

4 The Court’s interpretation of this contractual language is bound by the decisions of the Florida

Supreme Court in this diversity action. Silverberg v. Paine, Webber, Jackson & Curtis, Inc., 710

F.2d 678, 690 (11th Cir. 1983) (A federal court applying state law is bound to adhere to the state

court’s decisions “whether or not the federal court agrees with the reasoning on which the state

court’s decision is based or the outcome which the decision dictates.”).

only vicariously liable, on the other hand, when it “has not breached any duty to

the plaintiff; its liability is based solely on the legal imputation of responsibility

for another party's tortious acts.” Id. Armiger concludes by observing that “the

occasional imprecision in analysis and joint classification for the purpose of

convenience in discussion does not alter the fundamental differences between

direct liability for the breach of a nondelegable duty and vicarious liability for the

tortious acts of another.” Id. at 876.

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

5 Although the Court does not address SNIC’s arguments against the sixth count of the City’s

counterclaim in detail, the City cannot obtain relief under that count as a matter of law because

the Court has already held that SNIC has no duty to defend or indemnify the City under the

Policy. The Court also declines to address SNIC’s other arguments against the City’s motion for

judgment on the pleadings and in support of its own motion to dismiss.

the facts.” Id. In other words, a “definite recitation of the facts” is not the

standard—that exceeds the standard. Id.

Here, A&A suggests that it has meritorious defenses. (Cross-Def. A&A’s

Mot. to Set Aside Default at 4 (asserting as defenses the City’s “breach of the

contract, that [A&A] performed all of its duties under the contract, and that [the

City] cannot recover twice on the same damages.”) While A&A provides little more

than a “hint of a suggestion” that it has meritorious defenses, and those defenses

may not ultimately succeed on the merits, A&A’s assertions are sufficient to set

aside its default under the liberal standard applied. See, e.g., Griffin, 2008 WL

162754, at *3. The Court therefore grants A&A’s motion to set aside default.

(2) The City Sufficiently Pleads Its Crossclaims Against A&A

Finally, A&A moves to dismiss Counts I, II, IV, and V of the City’s

crossclaim. (Cross-Def. A&A’s Mot. to Dismiss Cross-cl. at 2-3.) A&A argues that

the City “improperly seeks affirmative relied for damages in a declaratory action,”

improperly pleads its counts for declaratory judgment, and that the crossclaim

should be dismissed under the doctrine of forum non conveniens because the

City could have and should have brought its claims against A&A in Florida state

court. (Id. at 5-15.) The City responds that its claims are appropriate and properly

pleaded and that forum non conveniens does not apply to alternate domestic

venues. (Cross-Pl. City’s Omnibus Resp. at 5-11.)

First, the City may properly plead a count for a crossclaim for monetary

relief under breach of contract where the complaint pleads only counts for

declaratory relief. Fed. R. Civ. P. 13(g) (“A pleading may state as a crossclaim any

claim by one party against a coparty if the claim arises out of the transaction or

occurrence that is the subject matter of the original action or of a counterclaim,

or if the claim relates to any property that is the subject matter of the original

action.”) (emphasis added); see also Allstate Co. v. James, 779 F.2d 1536, 1539

(11th Cir. 1986) (holding crossclaim for monetary damages to be properly within

court’s ancillary jurisdiction where the original complaint brought a claim for

declaratory relief in federal court based on diversity jurisdiction).

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