Hudson Excess Insurance Company v. Pino

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 23-cv-21262-BLOOM/Torres

HUDSON EXCESS INSURANCE

COMPANY,

Plaintiff,

v.

GEORGE IGNACIO PINO, et al.,

Defendants.

______________________________________/

OMNIBUS ORDER ON MOTION FOR JUDGMENT ON THE PLEADINGS AND

MOTION FOR LEAVE TO AMEND COMPLAINT

THIS CAUSE is before the Court upon Defendants Kathya Puig, Rodolfo Fernando Puig,

and Katerina Puig’s (collectively, the “Puig Family”) Motion for Judgment on the Pleadings, ECF

No. [32] (“Motion for Judgment”). Plaintiff Hudson Excess Insurance Company (“Hudson

Excess”) filed a Response in Opposition, ECF No. [38], to which the Puig Family filed a Reply,

ECF No. [39]. In the interim, Hudson Excess filed a Motion for Leave to File a Third Amended

Complaint for Declaratory Judgment, ECF No. [37] (“Motion to Amend”). The Puig Family filed

a Response in Opposition, ECF No. [41], to which Hudson Excess filed a Reply, ECF No. [43].

The Court has reviewed the Motion for Judgment and Motion to Amend, all supporting and

opposing submissions, the record in this case, the applicable law, and is otherwise fully advised.

For the reasons set forth below, The Puig Family’s Motion for Judgment is granted, and Hudson

Excess’ Motion to Amend is denied.

I. BACKGROUND

On March 17, 2023, the Puig Family filed their complaint for damages (“Underlying

Action”) in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida,

against George Ignacio Pino, Cecilia S. Pino (the “Pinos”), and five additional defendants,1 Kathya

Puig v. George Ignacio Pino, et al., Case No. 23-004898 CA (31). ECF No. [1-1]. The Underlying

Action asserts nine counts of negligence against seven defendants for catastrophic injuries

Katerina Puig suffered due to a collision on board a boat operated by George Pino and the

subsequent negligent treatment by medical personnel. That matter remains pending in state court.

On April 1, 2023, Hudson Excess filed its Complaint before this Court, ECF No. [1], and

on April 19, 2023, its First Amended Complaint, ECF No. [5]. Following leave of Court, it filed

the operative Second Amended Complaint for Declaratory Judgment, seeking a declaratory

judgment that “the Hudson Excess Policy does not provide coverage, and Hudson Excess has no

duty to indemnify, with respect to the injuries alleged in the Tort Complaint” (Count I) and a

declaration “that the Hudson Excess Policy does not impose a duty to defend Mr. or Mrs. Pino

with respect to the Tort Complaint” (Count II). ECF No. [8] at 11-12. Hudson Excess alleges that

its excess policy only applies to injuries caused by occurrences to which both its coverage and the

coverage of the Primary Insurer, Citizens, apply. Id. ¶ 27. Further, “[b]ecause the Citizens

Watercraft Liability Exclusion bars coverage for the Tort Plaintiff’s injuries, there is likewise no

coverage for such injuries under the Hudson Excess Policy.” Id.

In their Motion for Judgment, the Puig Family contends that (1) the primary insurer,

Citizens, is an indispensable party pursuant to Rule 19 of the Federal Rules of Civil Procedure; (2)

1 The additional defendants named in the underlying state court action are Giovanni Quintero, Brian Burt,

Yusniel Collado, Ocean Reef Vo lunteer Fire Department, Inc., and Global Sky Aircharter, Inc. (d/b/a

Trauma Star).

The Hudson Excess Policy provides that it has no duty to defend the Pinos in the Underlying

Action, thus failing to present a justiciable controversy; and (3) without a final judgment in the

Underlying Action, Hudson Excess lacks a ripe claim and fails to present an actual controversy as

required under the Federal Declaratory Judgment Act, 28 U.S.C. § 2201(a). See generally ECF

No. [32]. Hudson Excess responds that the Puig Family has failed to establish that they are entitled

to relief under Rule 19, Citizens is not a required party, and any argument that there is no case or

controversy ignores the record. See generally ECF No. [38].

Before filing its Response, Hudson Excess filed its Motion to Amend seeking to file a Third

Amended Complaint. Hudson Excess seeks to remove its allegation that “because Citizen’s

Watercraft Liability Exclusion precludes coverage under Citizen’s policy, there is no coverage

under Hudson’s policy” and to assert an alternate theory that “Hudson [Excess] has no duty to

defend and indemnify based upon the language in its policy without reference to the watercraft

exclusion in Citizen’s policy.” ECF No. [37] ¶ 8. The Puig Family responds that the plain language

of Hudson Excess’ policy cannot be “reframed” to satisfy the case or controversy requirement as

the Excess Policy unambiguously states that “[Hudson Excess has] no duty or obligation to assume

responsibility for the investigation, settlement, or defense of any claim made or suit brought

against the ‘Insured.’” ECF No. [41] at 4. This argument goes to why the Puig Family contends

that there is no case or controversy here. Hudson Excess replies that there is a possible defense

trigger in its Excess Policy, which states, “[w]hen insurance is not available to the ‘Insured’ under

any ‘primary insurance’ . . . we may, at our sole discretion, assume charge of the settlement or

defense of any claim . . . seeking damages to which this policy [applies].” ECF No. [43] at 2; see

also ECF No. [8-2] at 18. Further, the Second Amended Complaint alleges that the Pinos requested

a defense from Hudson Excess, and that Citizens denied coverage for the Underlying Action. As

such, the action is ripe and the proposed Third Amended Complaint, if granted leave to file,

“cure[s] the issue of subject matter jurisdiction.” ECF No. [43] at 2-3.

II. LEGAL STANDARD

A. Leave to Amend

District courts “have broad discretion in permitting or refusing to grant leave to amend.”

Garfield v. NDC Health Corp., 466 F.3d 1255, 1270 (11th Cir. 2006) (quoting Foman v. Davis,

371 U.S. 178, 182 (1962)). The Federal Rules of Civil Procedure direct that before trial, “[t]he

court should freely give leave [to amend] when justice so requires.” Fed. R. Civ. P. 15(a)(2). Leave

to amend should be “freely given” absent a showing of “futility of amendment.” 466 F.3d at 1270

(citing Foman, 371 U.S. at 182). When an amended complaint would still be “properly dismissed

or be immediately subject to summary judgment for the defendant,” a district court could

determine that leave to amend the complaint is futile. Cf. Rivas v. Bank of N.Y. Mellon, 777 F.

App’x 958, 965 (11th Cir. 2019) (citing Cockrell v. Sparks, 510 F.3d 1307, 1310 (11th Cir. 2007)).

B. Motion for Judgment on the Pleadings

“After 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 appropriate

where there are no material facts in dispute and the moving party is entitled to judgment as a matter

of law.” Cannon v. City of W. Palm Beach, 250 F.3d 1299, 1301 (11th Cir. 2001); see also Perez

v. Wells Fargo N.A., 774 F.3d 1329, 1335 (11th Cir. 2014); Palmer & Cay, Inc. v. Marsh &

McLennan Cos., 404 F.3d 1297, 1303 (11th Cir. 2005); Riccard v. Prudential Ins. Co., 307 F.3d

1277, 1291 (11th Cir. 2002). “A motion for judgment on the pleadings admits the [non-moving

party’s] factual allegations and impels the district court to reach a legal conclusion based on those

facts.” Gachette v. Axis Surplus Ins. Co., No. 19-23680-CIV, 2020 WL 2850587, at *1 (S.D. Fla.

Apr. 1, 2020) (quoting Dozier v. Prof’l Found. for Heath Care, Inc., 944 F.2d 814, 816 (11th Cir.

1991)). “In determining whether a party is entitled to judgment on the pleadings, [courts] accept

as true all material facts alleged in the non-moving party’s pleading, and [] view those facts in the

light most favorable to the non-moving party.” Perez, 774 F.3d at 1335 (citing Hawthorne v. Mac

Adjustment, Inc., 140 F.3d 1367, 1370 (11th Cir. 1998)). “A motion for judgment on the pleadings

is governed by the same standard as a motion to dismiss under Fed. R. Civ. P. 12(b)(6).” King v.

Akima Glob. Servs., LLC, 775 F. App’x 617, 620 (11th Cir. 2019).

The Declaratory Judgment Act provides that “[i]n a case of actual controversy within its

jurisdiction . . . any court of the United States, upon the filing of an appropriate pleading, may

declare the rights and other legal relations of any interested party seeking such declaration, whether

or not further relief is or could be sought. Any such declaration shall have the force and effect of

a final judgment or decree and shall be reviewable as such.” 28 U.S.C. § 2201(a). “Basically, the

question in each case is whether the facts alleged, under all the circumstances, show that there is a

substantial controversy, between parties having adverse legal interests, of sufficient immediacy

and reality to warrant the issuance of a declaratory judgment.” Am. Ins. Co. v. Evercare Co., 430

F. App’x 795, 798 (11th Cir. 2011) (quoting GTE Directories Pub. Corp. v. Trimen Am., Inc., 67

F.3d 1563, 1567 (11th Cir. 1995)).

C. Failure to Join an Indispensable Party

Dismissal of an action pursuant to Rule 12(b)(7) of the Federal Rules of Civil Procedure,

for failure to join a party under Rule 19, is a “two-step inquiry.” Focus on the Family v. Pinellas

Suncoast Transit Auth., 344 F.3d 1263, 1279 (11th Cir. 2003); N.H. Ins. Co. v. Cincinnati Ins. Co.,

No. 14-0099-CG-N, 2014 WL 3428911, at *2 (S.D. Ala. July 15, 2014).

“First, a court must decide whether an absent party is required in the case under Rule

19(a).” Int’l Importers, Inc. v. Int’l Spirits & Wines, LLC, No. 10-61856-CIV, 2011 WL 7807548,

at *8 (S.D. Fla. July 26, 2011) (citing Molinos Valle Del Cibao v. Lama, 633 F.3d 1330, 1344

(11th Cir. 2011)). If a court determines that an absent party does satisfy the Rule 19(a) criteria,

i.e., that the party is a required party, the court must order that party joined if its joinder is feasible.

See Fed. R. Civ. P. 19(a)(2); Collegiate Licensing Co. v. Am. Cas. Co. of Reading, Pa., 842 F.

Supp. 2d 1360, 1365-66 (N.D. Ga. 2012). If the absent party is not required, the litigation continues

as is. See, e.g., Devs. Sur. & Indem. Co. v. Harding Vill., Ltd., No. 06-21267-CIV, 2007 WL

465519, at *2 (S.D. Fla. Feb. 9, 2007).

If the party is required and joinder is not feasible, the district court moves to the second

inquiry, that is, whether “in equity and good conscience, the action should proceed among the

existing parties or should be dismissed.” Raimbeault v. Accurate Mach. & Tool, LLC, 302 F.R.D.

675, 683 (S.D. Fla. 2014) (citing Fed. R. Civ. P. 19(b); and Challenge Homes, Inc. v. Greater

Naples Care Ctr., Inc., 669 F.2d 667, 669 (11th Cir. 1982)).

III. DISCUSSION

A. Motion for Judgment

i. Rule 19(a)

In their Motion for Judgment, the Puig Family argues that Hudson Excess failed to join

Citizens, an indispensable party. Under Rule 19(a), a nonparty is a required party to be joined if

feasible and if “joinder will not deprive the court of subject-matter jurisdiction,” and must be joined

if: (1) “in that [parties’] absence the court cannot accord complete relief among existing parties;”

(2) “disposing of the action” absent that party “may impair the [nonparty’s] ability to protect the

interest; or (3) “leave an existing party subject to a substantial risk of incurring [] multiple or

otherwise inconsistent obligations” because of the nonparty’s absence. Fed R. Civ. P. (19)(a)(1).

The Puig Family alleges that “Hudson [Excess’] duty to indemnify is expressly contingent upon

nonparty Citizen’s duty to indemnify,” making “a determination regarding Citizen’s duty to

indemnify” necessary to “afford complete relief to Hudson [Excess].” ECF No. [32] at 5. The Puig

Family contends that they have a substantial interest in a judicial determination that is binding on

both of its insurers, not only the excess insurer, Hudson Excess. Moreover, absent Citizens, the

Pinos are at risk of obtaining inconsistent judgments and Citizens has a substantial interest in a

determination regarding its duty to indemnify as well. Id.

The Puig Family relies on Rhone-Poulenc, Inc. v. Int’l Ins. Co., 877 F. Supp. 1170 (N.D.

Ill. 1995), which held that “Rule 19 [] does not turn on labels [but rather] the effect [] of the policy

is the important issue.” Id. at 1174. “If construction of an absent insurer’s primary policy is

necessary to determine [] liability—that is, [] liability may be contingent or dependent on whether

an absent insurer's policy applies—the action should not proceed without the absent insurer.” Id.

The Puig Family contends that this principle supports their argument that as Citizens is a required

party per Rule 19(a), complete relief cannot be afforded in its absence, favoring dismissal. ECF

No. [32] at 5-8.

The Puig Family next contends that Citizens cannot be joined because it would divest this

Court of subject matter jurisdiction as Citizens is a citizen of Florida for purposes of diversity

jurisdiction. ECF No. [32] at 7, 12. Citizens would be required to join as co-plaintiff given the

alignment of “Insurer versus Insured and Injured Party.” City of Vestavia Hills v. Gen. Fid. Ins.

Co., 676 F.3d 1310, 1314 (11th Cir. 2012) (citations omitted). If the parties’ interests are the same,

they “must be aligned together . . . even where the parties’ interests were in opposition outside of

the issues raised in the subject action.” Id. “A district court’s failure to do so [would be reversed].”

Id.

Moreover, the Puig Family points out that Citizens is immune from suit as it is an entity of

the State of Florida. See Fla. Stat. 627.351(6). Further, “Citizens Property Insurance Company

(‘Citizens’) is entitled to immunity unless the same has been waived.” Citizens Prop. Ins. Corp. v.

Poe Financial Group, Inc., No. 8:07-cv-1078-T-JSM, 2008 WL 879041 (M.D. Fla. 2008); see also

Knap v. Citizens Prop. Ins. Corp., No 09-22370, 2009 WL 10699967 (S.D. Fla. 2009). Were

Citizens named in this action, and waive immunity, Citizens would necessarily be aligned with

Hudson Excess as a co-plaintiff, divesting the Court of diversity jurisdiction. ECF No. [32] at 12.

As such, joinder of Citizens is not feasible.

Hudson Excess responds that Citizens is not a required party pursuant to Rule 19(a) but

agrees that if it were, “joinder of Citizens is not feasible because Citizens is an arm of [Florida].”

ECF No. [38] at 6. See also Seminole Tribe of Fla. v. Fla., 514 U.S. 44, 55 (1996) (holding that

“the Eleventh Amendment prohibits [even] Congress from making the State of Florida capable of

being sued in federal court.”).

ii. Rule 19(b)

The Puig Family asserts that as Citizens is a required party, but joinder is not feasible, a

Rule 19(b) analysis is therefore required to determine whether the Court can proceed with the

litigation “in equity and good conscience.” ECF No. [32] at 7. To do so, the following factors must

be analyzed: (1) “the extent to which a judgment rendered in the person’s absence might prejudice

that [party]”; (2) “the extent to which any prejudice could be lessened or avoided by [] protective

provisions in the judgment, shaping the relief, or other measures”; (3) “whether a judgment

rendered in that [party’s] absence would be adequate”; and (4) “whether the plaintiff would have

an adequate remedy if the action were dismissed for nonjoinder.” Id. In applying those factors, the

Puig Family argues that there is substantial risk of prejudice to all existing parties from inconsistent

judgments should Citizens later seek a determination or litigate in a different action. Id. Moreover,

the Court cannot shape any relief that would avoid prejudice, since a judgment without Citizens

would be inadequate as it would not be binding on Citizens nor resolve Hudson Excess’ duty to

indemnify. Lastly, Hudson Excess has an adequate remedy if this action is dismissed for

nonjoinder as it is “free to seek the same relief [] in the same venue as the Underlying Action.” Id.

at 8.

Conversely, Hudson Excess argues that a Rule 19(b) analysis “gives the Court flexibility

to allow an action to go forward [] when no prejudice would result either to the party or to the

absentee and effective relief can be granted.” ECF No. [38] at 6; See Barow v. OM Financial Life

Ins. Co., No. 8:11-cv-00159-T-33TBM, 2011 WL 2649987, at *2 (M.D. Fla. July 6, 2011).

Further, Hudson Excess asserts that an appellate court may reverse or remand a Rule 19(b)

dismissal as an abuse of discretion for “collapsing the multi-factorial Rule 19(b) inquiry into one

dispositive fact” — inability to join a sovereign entity. Gensetix, Inc. v. Board of Regents of Univ.

of Tex. System, 966 F.3d 1316, 1325 (Fed. Cir. July 24, 2020). Hudson Excess contends that

Gensetix supports its interpretation that Rule 19(b) does not necessarily favor dismissal when

joinder of a state entity is not feasible.

Hudson Excess argues that each of the four Rule 19(b) factors favor proceeding with the

litigation. In Gensetix, the appellate court held that prejudice is greatly reduced when a required

party that cannot be joined has “identical interests” to a party already in the litigation that will

adequately protect the interests of the non-joined party as if they are “aligned.” Id. at 1326. If

another party can “step into [its] shoes” and protect its interests, dismissal is improper because

prejudice is mitigated when the action proceeds with its interests protected. Id. Hudson Excess

asserts that it would “protect Citizen’s interests because [it] and Citizens both contend that there

is no coverage under Citizens’ policy” and are aligned in this way. ECF No. [38] at 8. For those

reasons, Hudson Excess argues that there is no prejudice to Citizens or the other existing parties

under the first and second factors of Rule 19(b).

Further, as to the third Rule 19(b) factor, Hudson Excess posits that Citizens has already

denied coverage, has not sought a declaration, and there is no evidence “that the Pinos intend to

sue Citizens.” Id. As such, an adequate judgment is expected without Citizens and with “no risk

of incurring inconsistent obligations.” Id. Finally, as to the fourth Rule 19(b) factor, Hudson

Excess argues that it “would not have an adequate remedy if [the action] is dismissed” and it would

be prejudiced if its right to bring suit in “the present forum” is denied. Id. at 9.

Hudson Excess also states that “the burden is on the party raising the defense to show that

the [party that] is not joined is needed for just adjudication.” Barow, 2011 WL 264987, at *1.

Hudson Excess asserts that the Puig Family failed to meet this burden with appropriate case law

as a case the Puig Family relied upon was vacated and on remand, that plaintiff’s motion to dismiss

for failure to join necessary and indispensable parties was denied. Rhone-Poulenc, Inc. v. Int’l Ins.

Co., 1996 WL 328011, at *10 (N.D. Ill. June 11, 1996). Moreover, Hudson Excess argues that the

additional cases cited are inapposite in at they reflect rulings on “follow form” policies and its

insurance policy with the Pinos is a Personal Umbrella Policy, not a “follow form” policy. ECF

No. [38] at 12. As such, Hudson Excess claims that it can preclude coverage “regardless of whether

Citizens’ policy provides coverage” rather than “if the loss is excluded under the primary policy.”

Id. Hudson Excess maintains that dismissal is improper as “there is only one underlying carrier

and neither its presence nor its absence has any impact on whether Hudson’s [] standalone

watercraft exclusion policy precludes coverage.” Id. at 13.

Further, Hudson Excess does not dispute that in Schlumberger Industries, Inc. v. National

Sur. Corp., 36 F.3d 1274 (4th Cir. 1994), the underlying insurers were indispensable and destroyed

diversity. Instead, Hudson Excess argues that different insurance policies covered different policy

periods, creating potential for inconsistent judgments. ECF No. [38] at 13. Hudson Excess argues

that there is no similar timeline issue here creating the potential for inconsistent judgments based

on when coverage was triggered, therefore Schlumberger fails to support the Puig Family’s Rule

19(b) dismissal argument. Id.

The Court agrees that a Rule 19(b) analysis favors dismissal. Citizens is a required party

as Hudson Excess’ operative Complaint places Citizens and its denial letter central to this dispute.

ECF No. [8] at ¶¶ 22, 23, 26, and 27. While Hudson Excess contends that its policy is a stand-

alone policy and therefore avoids potential risks associated with varying determinations of

liability, Hudson Excess’ and Citizens’ watercraft exclusions are similar, creating the potential for

inconsistent obligations. Compare ECF No. [8] ¶ 18 with id. ¶ 19 (providing details on the Hudson

Excess Watercraft and Citizens Watercraft policy exclusions). Inconsistent obligations would be

prejudicial, and furthermore, protective provisions cannot avoid that a determination on Citizens’

obligations is needed. Next, a judgment without Citizens is not binding on Citizens and therefore

not adequate given it is a required party central to the dispute. Finally, Rule 19(b)(4) requires

consideration of an adequate remedy if the action is dismissed. If dismissed, Hudson Excess may

litigate this dispute with Citizens in state court, as it has argued that the Puig Family or the Pinos

may do as well. ECF No. [38] at 8.

Finally, Hudson Excess argues that the Puig Family failed to meet their burden to show

that Citizens is necessary for a just adjudication due to case law cited. Hudson Excess argues that

the premise the Puig Family relied upon in Rhone, that liability is contingent upon whether an

absent insurer’s policy applies, fails as that case was remanded. However, the question on appeal

in Rhone was whether the insurance policy in question was primary or excess to determine whether

a motion to dismiss for failure to join a necessary party was proper. Rhone-Poulenc Inc. v.

International Ins. Co., 71 F.3d 1299, 1301 (7th Cir. 1996). On remand, the court found that the

defendant insurer was in fact primarily liable, exhaustion of other insurance policies was therefore

not required, and no other insurance policy needed to be analyzed or construed to determine the

coverage to the insured. Rhone-Poulenc, Inc. v. International Ins. Co., No. 94 C 3303, 1996 WL

435180, at *10 (N.D. Ill Jul. 31, 1996). The motion to dismiss was denied due to the failure to

show that other insurers that were absent were necessary parties under Rule 19. Id. The court noted

that “cases where excess insurers are sued without joining [] primary insurers are distinguishable.”

Id. Here, the Court has determined that Citizens is a necessary party under Rule 19, it’s policy as

the primary insurer applies. As Citizens is an absent party, dismissal remains proper.

Moreover, the Puig Family’s reliance on Schlumberger is proper and demonstrates that

Citizens is necessary for a just adjudication. Schlumberger Industries, Inc., 36 F.3d 1274.

Schlumberger supports the Puig Family as it stands for the proposition that “where multiple

insurers cover the insured’s same liability for the same time period, all the insurers are

indispensable parties to an adjudication as to coverage.” Id. at 1286 (citation omitted). The

potential distinction in Schlumberger asserted by Hudson Excess does not defeat the core

proposition that underlying insurers are necessary and indispensable parties under Rule 19 in

litigation as to coverage between an insured and its excess insurer. Rather, Schlumberger held that

when different insurance policies covered different policy periods that issue “presents an even

stronger case for indispensability.” Id. (emphasis added).

In sum, the Court finds that Rule 19 favors dismissal.

iii. Duty to Defend

The Puig Family argues that the Hudson Excess’ duty to defend “presents no justiciable

controversy.” ECF No. [32] at 13. The Puig Family points out there is no dispute regarding Hudson

Excess’ claim that it does not have a duty to defend, as the Excess Policy is unambiguous, only

requiring a “plain reading” that “[Hudson Excess has] no duty or obligation to assume

responsibility for the investigation, settlement, or defense of any claim made or suit brought

against the ‘Insured.’” Id. at 13; see also ECF No. [8-2] at 18. The Puig Family maintains that

“ʻthe case or controversy’ requirement of Article III of the United States Constitution provides that

a declaratory judgment may only be issued in the case of an ‘actual controversy.’” Emory v. Peeler,

756 F.2d 1547, 1552 (11th Cir. 1985).

Hudson Excess responds that its Excess Policy triggers a defense obligation. Its “Defense

and Settlement” provision states: “with respect to occurrences which are covered under Coverage

A of this policy but which are not covered or required to be covered by the underlying insurance,

the Company, if no other insurer has an obligation to do so, shall defend any suit against the

insured.” ECF No. [38] at 13. Hudson Excess’ provision for Maintenance of Primary Insurance

provides that “if ‘primary insurance’ is unavailable to the ‘Insured’ due to any reason . . . the

insurance afforded by this policy shall apply in the same manner as though such ‘primary policies’

. . . [are] in effect, so maintained, and available.” Id. at 14; see also ECF No. [8-2] at 20. Citizens

denied defense coverage to the Pinos for the Underlying Action. As the Pino Family admitted to

making a defense demand on Hudson Excess as per their Answer and Affirmative Defenses to the

Amended Complaint, and Hudson Excess contends that it denied this defense to the Pino Family,

Hudson Excess maintains that a ripe case or controversy therefore exists satisfying jurisdiction for

a declaratory judgment. Compare ECF [24] at ¶31 with ECF No. [8] at ¶31.

Hudson Excess contends that its argument the pleadings demonstrate that a case or

controversy exists is supported by American Family Life Assurance Co. v. United States Fire Co.,

885 F.2d 826 (11th Cir. 1989), which held that a contractual provision in an excess policy obligated

an excess insurer to provide a defense once the primary insurer denied coverage. Id. at 832. Once

“the primary insurer denies coverage, the excess insurer would be obligated to defend.” Id.

(quoting Couch on Insurance 2d § 51:36, at 446). While insurance coverage is not being litigated

in the Underlying Action, Hudson Excess nevertheless argues that it should not be deprived of a

declaration on its duty to defend given its policy language, the denial from the underlying, primary

insurer, and the Pino Family’s request that it also provide a defense. ECF No. [38] at 14.

As a preliminary matter, the Second Amended Complaint concedes that Hudson Excess

has no duty to defend. Thus, there is no actual controversy. Moreover, Hudson Excess’ “Defense

and Settlement” provision is only triggered if (1) the “occurrence [is] covered under [] this policy

[and] not covered or required to be covered by the underlying insurance” and (2) when no other

insurer has an obligation to defend the insured. ECF No. [38] at 13. Those provisions are at odds

with Hudson Excess’ arguments.

Furthermore, Hudson Excess’ reliance on American Family Life Assurance is misplaced.

There, American Insurance was sued and sought a defense and coverage from its primary and its

excess insurers, both of which had policies with contractual defense clauses. Am. Fam. Life

Assurance, 885 F.2d at 829. The primary insurer offered a defense, but denied coverage, the excess

insured denied both, and so American Life hired counsel to aid in its defense. Id. Later, American

Life prevailed against the insurers for attorney’s fees, and the insurers appealed. Id. On appeal, the

excess insurer argued that it did not owe a duty to defend because it was the excess insurer. Id. at

832. The Eleventh Circuit held that “it is true that in the absence of a contractual obligation [the]

excess insurance carrier was not obligated to provide a defense. . . . however, there was a provision

in the contract imposing such an obligation on [the excess insurer].” Id. As such, American Family

supports that an excess insurer does not have a duty to defend without express policy language

creating a clear contractual obligation — a potential trigger for a duty to defend as alleged by

Hudson Excess would not suffice. See id. at 832. Here, there is no express policy language that

creates an obligation to defend, and no case or controversy related to that issue, regardless of the

Pino Family’s demand.

iv. Duty to Indemnify

The parties present arguments on whether the duty to indemnify is ripe both in the Motion

for Judgment and Motion to Amend. The Puig Family contends that, absent a final judgment in

the Underlying Action, Hudson Excess’ duty to indemnify is not ripe, and no actual controversy

exists as required under the Federal Declaratory Judgment Act. ECF No. [32] at 15-16. “[T]he

duty to indemnify does not ripen until the state-court plaintiff has obtained a favorable judgment.”

Dream Builders of S. Fla. Corp. v. Mid-Century Cas. Co., No. 18-23123, 2019 WL 3821552 at *4

(S.D. Fla. Aug. 15, 2019). Dismissal is routine when an insurer seeks an unripe declaratory

judgment as to pending state-court litigation. Atain Specialty Ins. Co. v. Sanchez, No. 8:17-cv-

1600-T-23AEP, 2018 WL 1991937, at *3 (M.D. Fla. Apr. 27, 2018). “[T]he duty to indemnify is

dependent upon the entry of a final judgment, settlement, or a final resolution of the underlying

claims.” Northland Cas. Co. v. HBE Corp., 160 F. Supp. 2d 1348, 1360 (M.D. Fla. Sept. 30, 2001).

Hudson Excess responds that early determinations on the duty to indemnify are

encouraged. ECF No. [38] at 15. Courts have “recogniz[ed] the potential benefits of a coverage

determination on the duty to indemnify before conclusion of an underlying negligence suit []

allowing for intelligent decision-making regarding settlement.” First Mercury Ins. Co. v. Excellent

Computing Distribs., Inc., 648 F. App’x 861, 866 (11th Cir. 2016). Moreover, prior to any

determination in the Underlying Action, Hudson Excess argues that a resolution of coverage would

be useful to all parties “as they contemplate how best to proceed” which may “facilitate settlement

in the underlying action.” ECF No. [38] at 16.

The Court agrees with the Puig Family. Declaratory judgments as to indemnity by an

insurer requires a finding of adjudicated liability. Dream Builders supports this principle holding

that “federal courts across the country have routinely accepted [that] the duty to indemnify does

not generally ripen unto the state-court plaintiff has obtained a favorable judgment against the

insured in the underlying state case.” 2019 WL 3821552, at *4. In Dream Builders, an action

involving an insurance coverage dispute filed in state court, a party sought realignment for a

determination of ripeness, which the court rejected. Id. (“the Eleventh Circuit [has] held that the

duty to indemnify does not ripen until the state-court plaintiff has obtained a favorable judgment.”)

(citations omitted). The court in Atain also held that a declaratory judgment on indemnification

was unripe and premature as to an underlying state court action involving injuries sustained in a

car accident. 2018 WL 1991937, at *1. There, the court dismissed the insurer’s requests for a

declaratory judgment. Id. at *3. Again, the court determined that the law is clear, “[a]n insurer’s

duty to indemnify is not ripe for adjudication unless and until the [] insured has been held liable in

the underlying action.” Id. at 2. (citations omitted). “Because an insurer’s duty to indemnify is

dependent on the outcome of a case, any declaration as to the duty to indemnify is premature unless

there has been a resolution of the underlying claim.” Id. (citations omitted).

Hudson Excess’ reliance on First Mercury’s holding that failure to consider and weigh

potential benefits of a liability determination could be an abuse of discretion is misplaced.

“[i]ntelligent decision-making regarding settlement” still requires joinder of Citizens as a

necessary party and the Rule 19(b) analysis favors dismissal without Citizens. Atain also supports

this argument. 2018 WL 1991937, at 3 (“[a]lthough clarification of the indemnity question might

expedite a settlement, that uncertain prospect must yield to the benefits of dismissal.”) (citation

omitted). Further, “the possibility of facilitating settlement ‘alone is not sufficient justification for

addressing premature, unripe issues.’” Id. (citation omitted).

B. Motion to Amend

Hudson Excess seeks to file a Third Amended Complaint to remove its allegations in the

operative Second Amended Complaint, namely that “because Citizens’ Watercraft Liability

Exclusion precludes coverage under Citizens’ policy, there is no coverage under Hudson’s policy.”

ECF No. [37] at 2; see also ECF No. [8] ¶ 27. Hudson Excess contends that its Motion to Amend

is “in part, to respond to the [Puig Family’s] Motion for Judgment on the Pleadings [] that Citizens

is an indispensable party” and to instead “make clear that Hudson [Excess] has no duty to defend

and indemnify based upon the language in its policy without reference to the watercraft exclusion

in Citizens’ policy.” ECF No. [37] ¶¶ 7, 8. Hudson Excess’ Personal Liability Provision states that

it will pay up to its policy limit “for those sums in excess of the limits of liability of the ‘primary

insurance’ that the ‘Insured’ becomes legally obligated to pay as damages . . . to which both this

coverage and the ‘primary insurance’ apply.” ECF No. [37-1] at 7. Further, Hudson Excess’

exclusions provides that Personal Liability and Medical Payments to others do not apply if the

occurrences arising out of “watercraft . . . powered by one or more outboard motors with more

than 25 total horsepower if the outboard is owned by and ‘insured.’” ECF No. [37-1] at 8.

Allegations in the Underlying Action include that the Pinos owned and operated the boat in the

Underlying Action, which was powered by “two 300-horesepower V6 Yamaha outboard engines.”

ECF No. [37-1] at 10.

Hudson Excess argues that a declaratory judgment is proper as denial of a demand to

defend an insured is sufficient to satisfy the case or controversy requirement. Allstate Prop. & Cas.

Ins. Co. v. Peluchette, 15-CV-80325, 2015 WL 11438215, at *3 (S.D. Fla. July 30, 2015) (citing

Atl. Cas. Ins. Co. v. GMC Concrete Co., No. CIV.A. 07-0563WSB, 2007 WL 4335499, at *5 (S.D.

Ala. Dec. 7, 2007) (“[c]ourts have recognized a controversy exists regarding the duty to defend

when an insured seeks a defense from an insurance company, but the insurance company denies

that it is obligated”). In their Answer, the Pino Family admitted to making a demand upon Hudson

Excess to defend them in the Underlying Action. Compare ECF No. [24] ¶31 with ECF No. [8]

¶31. Therefore, in its proposed Third Amended Complaint, Hudson Excess requests that this Court

“declare that the Hudson Excess Policy does not provide coverage, and Hudson Excess has no

duty to defend and therefore no duty to indemnify” the Pinos. ECF No. [37-1] at 11. Hudson Excess

contends that the “application of [its] Watercraft Exclusion policy will not be litigated in the

underlying action” thus favoring a coverage determination to allow for potential settlement prior

to adjudication. ECF No. [43] at 4.

Regarding the duty to defend, the Puig Family responds that the Excess Policy

“unambiguously claims that no [] duty [to defend] exists,” and Hudson Excess cannot present a

ripe claim as “its duty to indemnify is a hypothetical issue contingent on events that may never

arise.” ECF No. [41] at 2. The Puig Family rests their argument on the plain language in the Excess

Policy that Hudson Excess “has no duty, or obligation to assume responsibility for the

investigation, settlement, or defense of any claim made or suit brought against the ‘Insured.’” ECF

No. [41] at 4. The Puig Family contends that “if there is no contractual duty to defend in the parties’

contract there is no duty to defend” citing to Allstate Ins. Co. v. RJT Enterprises, Inc., 692 So. 2d

142, 144 (Fla. 1997). The Puig Family argues that the new claim Hudson Excess seeks to put forth

in the proposed Third Amended Complaint is not ripe and the Federal Declaratory Judgment Act

requires an “actual controversy.” Emory v. Peeler, 756 F.2d 1547, 1552 (11th Cir. 1985).

Moreover, “the continuing controversy may not be conjectural, hypothetical, or contingent; it must

be real and immediate.” Id. Showing “an actual ‘injury in fact’ — some harm to a legal interest

that is ‘actual or imminent, not ‘conjectural’ or ‘hypothetical’” is necessary. Bowen v. First Family

Fin. Servs., Inc., 233 F. 3d 1331, 1339 (11th Cir. 2000) (quoting Lujan v. Defenders of Wildlife,

504 U.S. 555, 560-61 (1992)).

Regarding the duty to indemnify, The Puig Family argues that such duty it is a mere

“remote” possibility because the claim is dependent on a chain of events: the Underlying Action

must be resolved to determine if a judgment is entered against the Pinos. If a judgment is entered,

then the judgment must be deemed a covered claim under Citizens primary insurance policy, “then,

and only then, can Hudson’s duty to indemnify be analyzed with certainty and finality.” ECF No.

[41] at 6. The Puig Family cites Bowen v. First Family Fin. Servs., Inc., 233 F.3d 1331 for the

proposition that to establish an Article III case or controversy, the facts alleged must demonstrate

“a substantial likelihood that [a party] will suffer injury in the future.” Id. at 1339. A remote

possibility of future injury is insufficient. Malowney v. Fed. Collection Deposit Grp., 193 F.3d

1342, 1347 (11th Cir. 1999).

Hudson Excess replies that its duty to indemnify is a ripe controversy because a primary

insurance policy does not need to be exhausted before an excess insurer can establish that an actual

controversy exists. Publix Super Markets, Inc., v. Fireman’s Fund Ins. Co., No. 8:22-cv-2569-

CEH-AEP, 2023 WL 6049680, at *6 (M.D. Fla. Sept. 15, 2023) (finding that “complaints that

plausibly allege that the exhaustion of primary coverage is likely have been found to establish an

actual controversy.”). Absent a formal request for coverage, allegations establishing a high

likelihood that a request for coverage might be forthcoming are sufficient to establish a controversy

for purposes of a declaratory judgment and to survive a motion to dismiss. See Houston Specialty

Ins. Co., v. Titleworks of SW Fla., Inc., No. 2:15-cv-219-FtM-29DNF, 2015 WL 5599175, at *4

(M.D. Fla. Sept. 22, 2015). Additionally, Hudson Excess reasons that the risk of coverage is a

sufficient basis for a declaratory judgment as “the ‘test for sufficiency of a complaint is not whether

the plaintiff will succeed in obtaining the decree he seeks . . . but whether he is entitled to a

declaration of rights at all.’” Hartford Fire Ins. Co., et al. v. Weathertrol Maint. Corp., No. 16-

24509, 2017 WL 5643298, at *3, (S.D. Fla. Feb. 21, 2017). Hudson Excess also argues that final

adjudication is not a requirement for justiciability of an insurer’s duty to defend. Hudson Excess

relies on Peluchette that a ripe controversy is found when an insured seeks a defense, but it is

denied. Peluchette, WL 11438215, at *3.

The facts here are distinguishable from the cases upon which Hudson Excess relies. In

Peluchette, the insurer sought a declaration that an uncontroverted, contractual duty to defend

clause in its policy applied even though an insured party refused to be defended by Allstate. Id., at

*1. While the court held that a ripe controversy exists regarding a duty to defend when an insured

seeks a defense and is denied, the court also refused to establish that a “right under the policy to

provide a defense [exists] if a duty to defend exists” as the right to defend is distinct from a duty

to defend and can only found when the contract explicitly reserves that right. Id. at *3. The insurer

in Peluchette failed to “demonstrate the existence of a substantial controversy [] of immediacy to

warrant a declaratory judgment regarding its duty to defend.” Id. at *4. Peluchette is unavailing to

Hudson Excess’ argument that once an insurer denies a defense to an insured, a ripe controversy

exists as there was no denial of coverage in that case and a ripe controversy was not found. Further,

the court noted that clear, contractual provisions are necessary to determine whether a duty or a

right exists between an insured and the insurer. Id. at *3-4.

Hudson Excess’ reliance on Publix is also unavailing. In that case, Publix, the plaintiff,

was a named defendant in sixty-one lawsuits related to “opioid prescription practices” in its

pharmacies and had already incurred “millions” in litigation defense costs. Publix, 2023 WL

6049680, at *2. Publix alleged that it contacted its insurers, and each denied or was “reasonably

expected to deny” defense and indemnity coverage for the opioid lawsuits. Id. Publix urged the

court to consider communications between itself and two it its insurers to demonstrate that “a live,

actual controversy” existed. Id. at *3. The court held that Publix’s request for a declaratory

judgment was “premature and unripe” despite the many lawsuits in which Publix was named as a

defendant because Publix had “neither been found liable in nor settled any of the actions against

it.” Id. at *5. Furthermore, “courts in the Eleventh Circuit have broadly agreed that declaratory

relief regarding an insurance company’s duty to indemnify an insured in a pending lawsuit is

unripe until the conclusion of the underlying litigation.” Id. Here, the Underlying Action is still

pending in state court and liability has not been determined. Publix makes clear that the standard

to establish a ripe controversy before liability is assessed must be “high—in fact ‘all but certain’”

at the moment a complaint is filed. Id. (citing GTE Directories Pub. Corp. V. Trimen America,

Inc., 67 F.3d 1563, 1568 (11th Cir. 1995)). The court explained that the “all but certain” threshold

was met in GTE when that plaintiff who already litigated with a party, sought a declaration “on its

right to contact the defendant’s customers” when threatened with additional lawsuits for any

contact with those customers. Id. There, the immediate contingency based upon prior adjudication

“presented a justiciable controversy” as no contingent issue was left to be addressed. Id. Hudson

Excess’ argument that because the alleged injuries are so devastating that exhaustion of the primary

insurance policy is likely is therefore unavailing.

Finally, Hudson Excess’ reliance on Titleworks is also misplaced. In Titleworks, the legal

controversy was deemed ripe not because a request for coverage or a demand under the policies

was made, but because one insurer was “currently incurring expenses in an attempt to clear title”

to the property, had “a contractual and common law right to recover those expenses from [the other

party,]” and had initiated a notice of claim. Titleworks, 2015 WL 5599175, at *4. Therefore the

“practical likelihood” that the recovery would be sought was “quite high.” Id. The facts as alleged

allowed the court to conclude that “there [was] a legal conflict between [the parties] of sufficient

immediacy and reality to warrant the issuance of a declaratory judgment.” Id.

Absent the “all but certain” threshold to establish a ripe controversy, a party must wait for

liability to be adjudicated before a declaration on a duty to indemnify. This Court has already held

that “ʻ[b]ecause an insurer’s duty to indemnify is dependent on the outcome of a case, any

declaration as to the duty to indemnify is premature unless there has been a resolution of the

underlying claim.’” Mt. Hawley Ins. Co. v. Maitland Cntr., LLC, et al., No. 18-cv-80452, 2018

WL 3634579 (S.D. Fla. July 30, 2018). See also Hartford Fire Ins. Co., et al. v. Weathertrol Maint.

Corp., No. 16-24509-CIV, 2017 WL 5643298, at *5 (S.D. Fla. Feb. 21, 2017) (“an insurer’s duty

to indemnify is not ripe for adjudication in a declaratory judgment action until the insured is in

fact held liable in the underlying suit.”) (citations omitted). See also Peluchette, 15-CV-80325,

2015 WL 11438215, at *4 (S.D. Fla. July 30, 2015) (“ʻ[c]ase law is legion for the proposition that

an insurer’s duty to indemnify is not ripe for adjudication unless and until the insured or putative

insured has been held liable in the underlying action.’” (citations omitted)).

The Court finds that, even considering the proposed Third Amended Complaint, Hudson

Excess’ request for a declaratory judgment is not ripe and cannot satisfy the actual case or

controversy requirement. The pending Underlying Action involves multiple defendants, each with

separate counts of negligence at issue. Many of the negligence counts relate to trauma and medical

treatment that Katerina Puig received — the allegations as to the Pino Family are not the sole

issues to be adjudicated and there has been no determination as to liability at this juncture.

A. Amendment is Futile

Hudson Excess contends that leave to amend should only be denied “when a plaintiff has

engaged in undue delay, bad faith, dilatory motives, [when] the amended pleading would prejudice

the defendants” or when an amended complaint cannot survive Rule 12(b)(6) scrutiny. ECF No.

[37] ¶ 14. Hudson Excess maintains that its proposed Third Amended Complaint does not suffer

from these deficiencies. Id.

The Puig Family responds that the proposed Third Amended Complaint contains the same

deficiencies as the operative Second Amended Complaint, namely that Hudson Excess is seeking

a declaration regarding a nonexistent duty to defend, its duty to indemnify is unripe, and Citizens

is a required party that cannot be joined. ECF No. [41] at 6. Further, The Puig Family asserts that

absent resolution of the Underlying Action, no amendment can cure these deficiencies. Id.

Hudson Excess replies that its policy contains a possible defense trigger that may create a

duty to defend such that “there is a case or controversy, and that the Puig Family is wrong that the

amendment is futile and fails to cure the issue of subject matter jurisdiction.” ECF No. [42] at 3.

Hudson Excess relies on the language within its Policy, the DEFENSE AND SETTLEMENT

provision, and its Maintenance of Primary Insurance provision as possible defense triggers. ECF

Nos. [37-1] at 7, [43] at 2.

Tellingly, the provisions in the policy do not create a contractual duty to defend its insured.

As in Cf. Rivas, when an amended complaint would still be “properly dismissed” a district court

may find that leave to amend the complaint is futile. 777 F. App’x at 965. Hudson Excess argues

that its Watercraft Exclusion precludes coverage for the occurrence in the Underlying Action

without reference to Citizens. ECF No. [43] at 1. However, if there is a defense trigger, Hudson

Excess has written its Defense and Settlement language conditionally, such that any defense would

be assumed at its “sole discretion,” not that there is a clear duty to defend the insured. ECF No.

[37-1] at 7. As to the Maintenance provision, Hudson Excess has only alleged that Citizens denied

coverage for this occurrence, not that it is unavailable. Even assuming arguendo that coverage

under the Citizens policy is unavailable, the Maintenance provision does not trigger a new duty.

Instead, Hudson Excess’ Policy would remain in effect as is, with no additional duties triggered.

Therefore, neither argument as to those policy provisions presents a duty to defend.

Moreover, Hudson Excess’ proposed Third Amended Complaint identifies an additional

“insuring agreement” in its Policy with the Pinos, “COVERAGE L,” which states that its coverage

is dependent on a legal determination of liability of its insured that both it and the primary insurer

must cover:

We will pay up to our Limit of Liability for those sums in excess of the limits of

liability of the “primary insurance” that the “Insured” becomes legally obligated to

pay as damages. . . caused by an occurrence to which both this coverage and the

“primary insurance” apply.

ECF No. [37-1] at 6-7.

Case No. 23-cv-21262-BLOOM/Torres

Accordingly, the Court finds that any amendment is futile. The proposed Third Amended

Complaint cannot change the fundamental issue that the Underlying Action remains pending, and

as there is no determination as to liability, this case is not ripe and cannot meet the “case or

controversy” requirement necessary to warrant a declaratory judgment. When an amended

complaint would still be “properly dismissed” a district court can determine that leave to amend

the complaint is futile. Cf Rivas, 777 F. App’x at 965. Consequently, Hudson Excess’ Motion to

Amend is denied.

IV. CONCLUSION

Accordingly, it is ORDERED AND ADJUDGED as follows:

1. The Puig Family’s Motion for Judgment, ECF No. [32], is GRANTED.

2. Hudson Excess’ Motion for Leave to File Amended Complaint, ECF No. [37], is

DENIED.

3. The Clerk of Court shall CLOSE this case and all deadlines are terminated.

DONE AND ORDERED in Chambers at Miami, Florida, on December 20, 2023.

BETHBLOOM ———(i‘“OC

UNITED STATES DISTRICT JUDGE

ce: Counsel of Record

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