Endurance American Insurance Company v. ABG Caulking Contractors, Inc.

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

ENDURANCE AMERICAN

INSURANCE CO.

CIVIL ACTION

v.

NO. 20-174-JWD-RLB

ABC CAULKING CONTRACTORS, INC.,

ET AL.

CONSOLIDATED WITH

HDI GLOBAL SPECIALTY

SE, f/k/a INTERNATIONAL

INSURANCE COMPANY OF

HANNOVER SE

CIVIL ACTION

v.

NO. 20-494-JWD-RLB

RD&M, INC.

RULING AND ORDER

This matter comes before the Court on RD&M Inc.’s Motion to Dismiss/Stay Indemnity

Claims & Motion for More Definite Statement (Doc. 21) (the “Motion”). HDI Global Specialty

(“HGS”) opposes the Motion. (Doc. 69.) No reply was filed. Oral argument is not necessary. The

Court has carefully considered the law, the facts in the record, and the arguments and submissions

of the parties and is prepared to rule. For the following reasons, the Motion is granted in part and

denied in part.

In sum, HGS’s request for a declaratory judgment with respect to its duty to indemnify is

unripe and nonjusticiable under Louisiana law. Consequently, HGS’s indemnity claim will be

dismissed without prejudice. In addition, RD&M’s Motion requesting a more definite statement

will be denied. Given the dismissal of HGS’s indemnity claim, that Motion will be denied as moot

with respect to the indemnity claim and denied with respect to the duty-to-defend claim.

I. Factual and Procedural Background

A. Introduction

This dispute concerns two consolidated matters arising from a construction project. The

first suit is Endurance American Insurance Company v. ABC Caulking Contractors, Inc., et al.,

No. 20-174 (the “Endurance suit” or “Endurance”). The second is HDI Global Specialty SE f/k/a

International Insurance Company of Hannover SE v. RD&M, Inc., No. 20-494 (the “HGS suit” or

“HGS v. RD&M”).

In the latter, Plaintiff is HDI Global Specialty SE f/k/a International Insurance Company

of Hannover SE (“HGS”), a liability insurer that issued certain Comprehensive General Liability

insurance policies (hereinafter the “HGS policies”) to Defendant RD&M, Inc. (“RD&M”). (HDI

Second Amended Complaint for Declaratory Judgment (“HGS Second Amended Complaint” or

“HGS SAC”) ¶¶ 2-5, Doc. 15.) The HGS suit is an action for declaratory judgment to determine

the parties’ respective rights and duties under the HGS polices, (id. ¶ 5), and the instant Motion

arises in that case.

Turning to the underlying facts, sometime before 2017, University House Baton Rouge,

LLC (“University House”) hired LMK Baton Rouge Construction, LLC (“LMK”) to perform a

renovation project on an apartment complex located at 740 West Chimes Street in Baton Rouge,

Louisiana (the “Property”). (HGS SAC ¶ 9, Doc. 15.) Acting as the general contractor, LMK

entered into agreements with various subcontractors to perform specific work at the Property; one

of those subcontractors was RD&M. (Endurance Compl. No. 20-174, ¶ 6, Doc. 1.)

On or around May 19, 2017, in another suit not in this Court, University House filed a

Petition for Damages against LMK alleging breach of contract and seeking damages regarding the

allegedly defective construction and renovation of the Property. (Id. ¶ 5.) LMK’s insurer,

Endurance American Insurance Company (“Endurance”), paid University House $4,000,000 to

settle the claims against LMK. (Id. ¶ 17.)

B. The Endurance Lawsuit

On March 23, 2020, Endurance filed suit in this Court against the various subcontractors,

including RD&M, seeking to recover from them “any and all payments that it made on behalf of

LMK.” (Id. ¶ 18.) Each subcontractor agreement, including the one between LMK and RD&M,

contains a provision stating that the subcontractor must defend and indemnify LMK for any claims,

liability, loss, damage, or injuries—including reasonable attorney’s fees—caused by the

subcontractor’s “fault or negligence” in performing or failing to perform its work. (Id. ¶ 7.) Based

on this contractual indemnity agreement, and the fact that Endurance paid the limits of its policy

to settle the case against its insured, “Endurance is legally and conventionally subrogated to

LMK’s right” to recover the money it paid in settlement. (Id. ¶ 17.)

During the renovation project, RD&M “performed flashing work to the siding and installed

blinds and exterior door trim” at the Property. (Endurance Compl. ¶ 12, Doc. 1.) Endurance alleges

that RD&M’s “deficient work allowed moisture intrusion resulting in damage to the Property,”

(id.), and that, as such, RD&M is liable to it for the respective damage that RD&M’s “faulty or

defective work” caused (id. ¶ 18).

C. The HGS Second Amended Complaint

As HGS’s insured, RD&M “seeks defense and indemnity under the HGS policies” for the

claims asserted against it in the Endurance lawsuit. (HGS SAC ¶ 6, Doc. 15.) Consequently, on

October 1, 2020, HGS filed the Second Amended Complaint seeking a judgment declaring that it

has no duty to defend, indemnify, or provide coverage to RD&M for the claims asserted against

RD&M by Endurance. (Id. ¶ 8.)

Specifically, the HGS Second Amended Complaint first asserts that RD&M is not entitled

to coverage, a legal defense, or indemnity under the HGS policies because of the “Contractors

Special Conditions Endorsement,” which states the following: “[a]s a condition precedent to

coverage for any claim for . . . damage based . . . upon work performed by independent

contractors,” the insured is required to, inter alia, have “received a written indemnity agreement

from the independent contractor holding the insured harmless for all liabilities, including costs of

defense, arising from the work of the independent contractor.” (Id. ¶ 14 (quoting “Contractors

Special Conditions Endorsement” (Form No. IICHL 40 07 02 12)).) HGS alleges that, because

RD&M hired an independent contractor to perform all the work that it had contractually agreed to

perform for LMK but failed to obtain a written indemnity agreement from that independent

contractor, RD&M failed to satisfy the condition precedent for coverage under the HGS policies.

(Id. ¶ 15.) Accordingly, HGS argues that it has no duty to defend or indemnify RD&M for any

liabilities arising from the work performed by the independent contractor on RD&M’s behalf. (Id.)

The HGS Second Amended Complaint similarly relies on other exclusions for its

proposition that HGS has no duty to defend, indemnify, or provide coverage to RD&M with

respect to the Endurance lawsuit.1 (Id. ¶¶ 16-17.) In addition, HGS requests that it be allowed to

withdraw from the defense of RD&M immediately and that “[HGS] be awarded the fees and costs

that it has incurred defending [RD&M].” (HGS SAC ¶ 20, Doc. 15.)

1 In particular, the HGS SAC presents language contained in the “Products or Work Exclusion” endorsement (Form

No. IICHL 40 22 02 12) and the “Other Insurance” provision contained in Section IV of the HGS policies; however,

the HGS SAC provides no further discussion on how these provisions apply to the instant dispute. (See id.)

D. The Instant Motion and Consolidation

On November 4, 2020, RD&M filed the instant Motion. (Mot., HGS suit, No. 20-494, Doc.

21.) Thereafter, on November 12, 2020, the suit between HGS and RD&M was transferred to

Judge deGravelles and consolidated with the Endurance lawsuit upon HGS’s unopposed motion.

(Id., Doc. 23.) HGS then filed a memorandum in opposition to RD&M’s Motion on December 2,

2020. (Opp’n. No. 20-174, Doc. 69.) No reply was filed.

II. Legal Standard

A. Rule 12(b)(1) Standard

The Court construes RD&M’s Motion as one made under Federal Rule of Civil Procedure

12(b)(1) for lack of subject matter jurisdiction, even though RD&M cited no rule for this request.

See Regions Ins., Inc. v. Ace Property & Cas. Ins. Co., 80 F. Supp. 3d 730, 731 (M.D. La. 2015).

“Motions filed under Rule 12(b)(1) of the Federal Rules of Civil Procedure allow a party

to challenge the subject matter jurisdiction of the district court to hear a case.” Ramming v. United

States, 281 F.3d 158, 161 (5th Cir. 2001) (citing Fed. R. Civ. P. 12(b)(1)). “Lack of subject matter

jurisdiction may be found in any one of three instances: (1) the complaint alone; (2) the complaint

supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by

undisputed facts plus the court's resolution of disputed facts.” Id. (citing Barrera–Montenegro v.

United States, 74 F.3d 657, 659 (5th Cir. 1996)).

“The burden of proof for a Rule 12(b)(1) motion to dismiss is on the party asserting

jurisdiction.” Id. (citing McDaniel v. United States, 899 F. Supp. 305, 307 (E.D. Tex. 1995)).

“Accordingly, the plaintiff constantly bears the burden of proof that jurisdiction does in fact exist.”

Id. (citing Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980)).

“When a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court

should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the merits.”

Id. (citing Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir. 1977) (per curiam)). “In examining

a Rule 12(b)(1) motion, the district court is empowered to consider matters of fact which may be

in dispute.” Id. (citing Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981)). “Ultimately, a

motion to dismiss for lack of subject matter jurisdiction should be granted only if it appears certain

that the plaintiff cannot prove any set of facts in support of his claim that would entitle plaintiff to

relief.” Ramming, 281 F.3d at 161 (citing Home Builders Ass'n of Miss., Inc. v. City of Madison,

Miss., 143 F.3d 1006, 1010 (5th Cir. 1998)).

B. Rule 12(e) Standard

This Court has previously stated:

Rule 12(e) provides that “a party may move for a more definite statement of a

pleading to which a responsive pleading is allowed but which is so vague or

ambiguous that the party cannot reasonably prepare a response.” Fed. R. Civ. P.

12(e); see also Beanel v. Freeport–McCoran, Inc., 197 F.3d 161, 164 (5th Cir.

1999) (“If a complaint is ambiguous or does not contain sufficient information to

allow a responsive pleading to be framed, the proper remedy is a motion for a more

definite statement under Rule 12(e)”). The complaint must “give the defendant fair

notice of what the plaintiff's claim is and the grounds upon which it rests.”

Swierkiewicz v. Sorema N. A., 534 U.S. 506, 512 (2002). A Rule 12(e) motion may

be appropriate “if a pleading fails to specify the allegations in a manner that

provides sufficient notice.” Id. at 514. When evaluating a motion for a more definite

statement, the Court must assess the complaint in light of the minimal pleading

requirements of Rule 8. Babcock & Wilcox Co. v. McGriff, Seibels & Williams,

Inc., 235 F.R.D. 632, 633 (E.D. La. 2006); see Fed. R. Civ. P. 8(a)(2) (requiring a

“short and plain statement of the claim showing that the pleader is entitled to

relief”). Given the liberal pleading standard set forth in Rule 8(a), Rule 12(e)

motions are disfavored. Adams v. Southland Trace, 2012 WL 12986191, at *5

(M.D. La. Feb. 29, 2012). The trial judge is given considerable discretion in

deciding whether to grant a Rule 12(e) motion. Id. Finally, a Rule 12(e) motion is

not a substitute for the discovery process. Ford v. Cain, 2016 WL 447617, at *2

(M.D. La. Feb. 4, 2016).

People's Workshop, Inc. v. Fed. Emergency Mgmt. Agency, No. CV 17-107, 2018 WL 1528191,

at *2-3 (M.D. La. Mar. 28, 2018) (deGravelles, J.).

III. Discussion

A. Summary of Ruling

There are essentially two issues before the Court. The first is whether the indemnity claim

is ripe for adjudication and, by extension, whether the Court has jurisdiction to decide that claim.

The second is whether the HGS Second Amended Complaint is sufficiently specific enough to

survive a Rule 12(e) motion. Fed. R. Civ. P. 12(e).

Having carefully considered the law, the allegations in the HGS Second Amended

Complaint, and the arguments and submission of the parties, the Court will grant RD&M’s Motion

to dismiss the indemnity claim. Under Louisiana law, as interpreted by this Court and others, the

question of whether an insurer owes a duty to indemnify is generally unripe until resolution of the

underlying lawsuit against the insured. Therefore, the Court will dismiss the indemnity claim

without prejudice.

Given the Court’s holding, it will deny HGS’s Motion to find that the HGS Second

Amended Complaint was not specific enough under Rule 12(e). Specifically, the Motion requesting

a more definite statement is denied as moot with respect to the duty-to-indemnify claim and denied

with respect to the duty-to-defend claim.

B. Parties’ Arguments

1. RD&M’s Original Memorandum (HGS suit, No. 20-494, Doc. 21-1)

RD&M first argues that HGS’s request for a declaratory judgment regarding its duty to

indemnify RD&M should be dismissed because it is premature and thus nonjusticiable. (Mem.,

HGS suit, No. 20-494, Doc. 21-1 at 5.) RD&M cites jurisprudence from the U.S. Court of Appeals

for the Fifth Circuit2 and the Eastern District of Louisiana to contend that, unlike the duty to

defend, claims with respect to the duty to indemnify are not ripe “until the underlying issue of

liability is resolved and the Defendant is cast in judgment.”3 (Id. at 6.) According to RD&M, the

duty-to-defend issue differs from the duty-to-indemnify issue for purposes of ripeness because

whether an insurer is obligated to defend its insured can be determined solely by examining the

complaint and the insurance policy. (Id. at 5.) In contrast, determining whether an insurer is

obligated to indemnify first requires factual development to the extent that liability—or non-

liability—can be established in the underlying suit. (Id. at 7-8.)

For example, RD&M points out that the duty to indemnify can only arise if it has been

established that the claims the insured seeks indemnity for are covered by the insurance policy.

(Id.) RD&M then asserts that whether the endorsements and exclusions HGS relies on actually

preclude coverage in this case depends on several questions of fact that have yet to be decided.

(Id.) Therefore, RD&M contends that because its liability has not yet been determined in the

underlying Endurance matter—which is now consolidated with this suit—HGS’s request for an

adjudication of its indemnity obligation to RD&M is nonjusticiable as premature, and thus should

be dismissed.4

2 From this point on, where the Court mentions the “Fifth Circuit,” it is referring to the United States Court of Appeals

for the Fifth Circuit. The Court will specifically state “Louisiana Fifth Circuit” when referring to the Louisiana Fifth

Circuit Court of Appeal.

3 See Doc. 21-1 at 6 n.24 (citing New England Ins. Co. v. Barnett, 465 F. App’x 302, 308 (5th Cir. 2012); Coregis Ins.

Co. v. Sch. Bd. Of Allen Par., No. CV 07-30844, 2008 WL 2325632, at *2 (5th Cir. June 6, 2008); Hof as Tr. of Est.

of FoodServiceWarehouse.Com, LLC v. LaPorte, No. CV 19-10696, 2020 WL 6286207, at *3-4 (E.D. La. Oct. 27,

2020); Threadgill v. Orleans Par. Sch. Bd., No. CV 02-1122, 2013 WL 3777036, at *2 (E.D. La. July 8, 2013) (quoting

Travelers Cas. & Sur. Co. of Am. v. Univ. Facilities, Inc., No. CV 10-1682, 2012 WL 1198611, at *11 (E.D. La. Apr.

10, 2012)); Morad v. Aviz, No. CV 12-2190, 2013 WL 1403298, at *4 (E.D. La. Apr. 5, 2013)).

4 To support its Motion, RD&M also brings attention to the “LMK State Court Lawsuit” recently filed against RD&M

in the 19th Judicial District Court (Mem., HGS suit, No. 20-494, Doc. 21-1 at 3; see also Doc. 21-3), arguing that the

existence of this suit only adds to the seriousness of the risk that any ruling on the indemnity claims by this Court

“will impinge on the rulings or factual findings of other Courts” (id., Doc 21-1 at 8). This suit is not discussed in

HGS’s opposition.

RD&M alternatively argues that, if the Court finds that this suit should not be dismissed,

then HGS’s request for a declaration regarding its duty to indemnify should be stayed for the same

reason it should be dismissed—its nonjusticiability. (Mem., HGS suit, Doc. 21-1 at 8.) RD&M

cites no authority that supports staying only one claim, however, as it asks the Court to do here.

Next, RD&M urges the Court to require HGS to plead its allegations and “policy defenses”

in a more definite manner under Federal Rule of Civil Procedure 12(e). (Id.) RD&M argues that

the HGS SAC “is vague and indefinite to the extent it ‘pleads all the terms, conditions, exclusions

and limitations of the [HGS] policies in support of the relief sought [therein].’ ” (Id. (quoting HGS

SAC Doc. 15 at 3).)

Specifically, RD&M asserts that the HGS SAC’s language fails to provide RD&M with

adequate notice of what is being claimed and thus fails to satisfy the pleading standard expounded

in Swierkiewicz v. Sorema N. A., 534 U.S. 506, 512 (2002). (Id.) According to RD&M, “[t]he law

is well-settled that ‘an insurance company may not simply rely on a conclusory allegation that

somewhere in its “entire policy” a defense to suit may exist.’” (Id. at 2 n.5.) Instead, HGS must

point to each specific “defense” contained in its policies when bringing a claim that those policies

exclude coverage. (Id. at 2, 8.)

2. HGS’s Opposition (No. 20-174, Doc. 69)

HGS opposes the Motion for several reasons. First, HGS argues that the Court should not

dismiss or stay its request for declaratory judgment on its duty to indemnify because the claim is

ripe and justiciable. (Opp’n. No. 20-174, Doc. 69 at 2, 5.) The crux of HGS’s ripeness argument

is that the doctrine of hardship is “one of the key considerations” for determining ripeness, and

HGS claims it would suffer grave hardship should judgment be withheld. (Id. (citing Regions Ins.,

Inc. v. Ace Prop. & Cas. Ins. Co., 80 F. Supp. 3d 730, 735 (M.D. La. 2015) (Jackson, J.)).)

Specifically, if this action is dismissed or stayed, HGS points out that defense costs will continue

to mount during the pendency of the underlying liability issue, forcing HGS to wait and “roll the

dice on the outcome” while its risk of future hardship worsens. (Id. at 5 (quoting Regions, 80 F.

Supp. 3d at 736).)

Moreover, HGS emphasizes the fact that the declaratory judgment suit was consolidated

with the underlying Endurance suit after RD&M filed its Motion. (Id.) HGS maintains that, after

this Court considers the recent consolidation, judicial economy and efficiency, and the danger of

substantial hardship, the necessary conclusion will be that it should maintain and decide HGS’s

action. (Id.)

Additionally, HGS contends that its action should be neither dismissed nor stayed because,

when the duty to defend and the duty to indemnify are presented together (as here), and when the

“same reasons that negate the duty to defend likewise negate any possibility the insurer will ever

have a duty to indemnify,” both issues are ripe and justiciable before a determination of liability.

(Id. at 5-6.) However, HGS simply concludes that the “same reasons” negating both duties exist

here without articulating how that conclusion was reached or what those reasons are. (Opp’n. No.

20-174, Doc. 69 at 6.) And while HGS does cite to Columbia Cas. Co. v. Georgia & Fla. RailNet,

Inc., 542 F.3d 106, 111 (5th Cir. 2008) and Moore v. Home Depot USA, Inc., 352 F. Supp. 3d 640,

649 (M.D. La. 2018) (Jackson, J.) as supporting this conclusion, no explanation as to why those

cases apply here is provided. (Id. at 6 n.13, n.14.)

HGS further alleges that the group of cases presented in RD&M’s Motion are

distinguishable from the instant dispute because none of those cases declared the action premature

when (1) the duty to defend and the duty to indemnify were presented together, and (2) the reasons

which negate both duties were before the court. (Id. at 6.) To illustrate this point, HGS points to

Coregis Ins. Co. v. Sch. Bd. Of Allen Par., No. 07-30844, 2008 WL 2325632, at *2 (5th Cir. June

6, 2008), a case cited by RD&M, and asserts that this case is inapplicable to the issue at hand since

the court only dealt with the duty to indemnify. (Id.)

Next, HGS addresses RD&M’s alternative request to stay the declaratory judgment action,

arguing that for the same reasons this action should not be dismissed (stated above), this action

should also not be stayed. (Id.) In addition, HGS contends that RD&M “fails to cite any authority

for the relief requested” and similarly fails to provide any specific argument for why the Court

should order a stay of the action. (Id.) As such, HGS argues that RD&M has “waived” its request

for a stay and thus that request should be denied. (Opp’n. No. 20-174, Doc. 69 at 6 n.15 (citing

Brumfield v. Zapata Gulf Marine Corp., No. CV 90-1319, 1992 WL 16345, at *1 (E.D. La. Jan.

21, 1992); Hudson v. Forest Oil Corp., No. CV 02-2225, 2003 WL 21276385, at *4, *7 (E.D. La.

June 2, 2003), aff'd, 372 F.3d 742 (5th Cir. 2004)).)

Finally, HGS submits that RD&M’s request for a more definite statement under Federal

Rule of Civil Procedure 12(e) should likewise be denied because the HGS SAC is specific and

definite with respect to the portions of the HGS policies that support its requested relief. (Id. at 7.)

According to HGS, when evaluating a Rule 12(e) motion, the court must assess the complaint in

light of the minimum pleading standard set forth in Federal Rule of Civil Procedure 8(a). (Id.)

Then, if the complaint is “so vague and ambiguous” that the responding party “cannot reasonably

prepare a response,” the court may grant the motion. (Id.; Fed. R. Civ. P. 12(e).) HGS also directs

the Court to Reedom v. Jones, No. CV 10-378, 2010 WL 4875636, at *1 (E.D. La. Nov. 22, 2010),

which states that “[g]iven the liberal pleading standard set forth in Rule 8, Rule 12(e) motions are

disfavored.” (Opp’n. No. 20-174, Doc. 69 at 7 n.16.)

HGS maintains that the HGS SAC more than satisfies Rule 8(a)(2) because it provides a

clear and concise statement of the claim—it specifically alleges that there is no coverage and no

duty to defend or indemnify—and the grounds upon which that claim rests. (Id. at 7.) Specifically,

HGS claims that the HGS SAC provides a detailed factual background, points to specific policy

language, and references specific exclusions, endorsements, and conditions precedent. (Id.) HGS

notes, for instance, that the HGS SAC specifically states that RD&M failed to satisfy a condition

precedent for coverage (i.e., the requirement that RD&M procure a written indemnity agreement

with the independent contractor). (Id. at 8.) According to HGS, the operative complaint clearly

provides RD&M with notice as to why it is not entitled to coverage under the HGS policies. (Id.)

Moreover, HGS distinguishes the cases cited in RD&M’s Motion on this point, arguing that they

all focus on a defendant’s waiving of affirmative defenses after failing to raise them in the answer.

(Id.)

In closing, HGS again asks the Court to deny RD&M’s Motion in its entirety by ruling that

the declaratory judgment action is ripe for adjudication and that the HGS SAC is definite enough

for RD&M to prepare a response.

C. Applicable Law

1. Liability Insurer’s Duties Generally

In general, a liability insurer owes two duties to its insured: the duty to defend and the duty

to indemnify. Although related, an insurer’s duty to defend is separate and distinct from its duty

to indemnify. Cambridge Integrated Servs. Grp., Inc. v. Concentra Integrated Servs., Inc., 697

F.3d 248, 254 (5th Cir. 2012) (applying Louisiana law); Morad v. Aviz, No. CV 12-2190, 2013

WL 1403298, at *3 (E.D. La. Apr. 5, 2013); Martco Ltd. P’ship v. Wellons, Inc., 588 F.3d 864,

872 (5th Cir. 2009).

Under Louisiana law, whether the insurer owes a duty to defend is determined by

application of the “eight corners rule,” which directs the court to examine the four corners of the

complaint and the four corners of the insurance policy without resort to extrinsic evidence. Arch

Ins. Co. v. Outreach Cmty. Dev. Corp., No. CV 15-721, 2017 WL 8944048, at *5 (M.D. La. Dec.

21, 2017) (deGravelles, J.) (citing Mossy Motors, Inc. v. Cameras Am., 04-0726 (La. App. 4 Cir.

3/2/05), 898 So. 2d 602, 606); Martco, 588 F.3d at 872; Moore v. Home Depot USA, Inc., 352 F.

Supp. 3d 640, 649 (M.D. La. 2018) (Jackson, J.). If the facts alleged in the complaint could

“possibly fall within matters covered under the policy,” then the duty to defend is triggered. Arch

Ins., 2017 WL 8944048, at *5 (citing Martco, 588 F.3d at 872). Although many of the claims

alleged may be clearly precluded under an applicable policy exclusion, if the complaint discloses

“a single allegation” for which coverage is “not unambiguously excluded,” a duty to defend

nevertheless exists. Id. (citing Hanover Ins. Co. v. Superior Labor Servs., Inc., No. CV 14-1930,

2017 WL 2973079, at *9 (E.D. La. July 12, 2017)). Because the duty-to-defend issue must be

decided solely by examination of the complaint and the insurance policy, that inquiry is ripe for

adjudication before resolution of the insured’s underlying suit. Columbia Cas. Co. v. Georgia &

Fla. RailNet, Inc., 542 F.3d 106, 110 (5th Cir. 2008) (applying Texas law).

In contrast, the duty to indemnify cannot be determined until the insured’s liability has

been resolved, because the duty to indemnify “is triggered by the actual facts that establish liability

in the underlying suit.” Id. (citing Guar. Nat'l Ins. Co. v. Azrock Indus. Inc., 211 F.3d 239, 243

(5th Cir. 2000) (internal citations omitted)); see also Martco, 588 F.3d at 872 (applying Louisiana

law, the Fifth Circuit noted that “[w]hile factual inquiries beyond the complaint are prohibited with

respect to the duty to defend, they are indispensable in assessing the duty to indemnify”).

“Louisiana law generally provides that until the underlying issue of liability is resolved and the

defendant is cast in judgment, the issue of indemnity is premature and nonjusticiable.” Hof as Tr.

of Est. of FoodServiceWarehouse.Com, LLC v. LaPorte, No. CV 19-10696, 2020 WL 6286207, at

*3 (E.D. La. Oct. 27, 2020) (quoting New England Ins. Co. v. Barnett, 465 F. App’x 302, 308 (5th

Cir. 2012) (citing Mossy Motors, Inc., 898 So. 2d at 607)). As this Court has stated:

The duty to indemnify generally does not arise “until the indemnitee actually makes

payment or sustains loss.” Quinlan v. Liberty Bank & Tr. Co., No. 89-C-1644, 575

So. 2d 336, 340 (La. 1990); see also First Nat. Bank of Louisville v. Lustig, 975

F.2d 1165, 1167 (5th Cir. 1992). However, the “duty to indemnify is justiciable

before the insured's liability is determined in the liability lawsuit when the insurer

has no duty to defend and the same reasons that negate the defense likewise negate

any possibility the insurer will ever have a duty to indemnify.” See Columbia Cas.

Co. v. Georgia & Florida RailNet, Inc., 542 F.3d 106, 111 (5th Cir. 2008) (applying

Texas law); see also Morad v. Aviz, 2013 WL 1403298, at *3 (E.D. La. Apr. 5,

2013) (citing Columbia Cas. Co. for this principle in case applying Louisiana and

Mississippi law).

Arch Ins., 2017 WL 8944048, at *5.

2. Exception to the General Rule for the Duty to Indemnify

Pursuant to this exception, courts can adjudicate duty-to-indemnify claims before entry of

judgment in the underlying suit if two requirements are satisfied. First, the court must determine

through application of the eight corners rule that the insurer does not owe a duty to defend. Second,

the court must determine that the same reasons the insurer owes no duty to defend also show that

there is no chance any of the underlying claims could be covered under the policy down the road.

In Arch Insurance, this Court emphasized the latter point, explaining that this exceedingly

“narrow exception” is invoked when “there is no ‘possibility’ that the insurer will ever have a duty

to indemnify.” 2017 WL 8944048, at *7 (emphasis added) (citing Quinlan, 575 So. 2d at 340;

First Nat. Bank of Louisville, 975 F.2d at 1167; Columbia Cas. Co., 542 F.3d at 111). In other

words, the exception relied on by HGS is not necessarily invoked simply because the insurance

policy appears to exclude coverage for the claims based on the allegations made in the complaint.

If there is a slight possibility that any one of the claims will “broaden or change” such that it might

be covered under the policy, then the exception is not satisfied; the indemnity obligation is

premature until the insured’s liability is determined. Id.

D. Analysis

At the outset, it is important to note two things. First, “district courts have discretion to

decline to grant relief as to the duty to indemnify under the authorization of the Declaratory

Judgment Act.” Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523, 536-37 (5th Cir.

2004). Second, because the Fifth Circuit has stated that Texas and Louisiana apply essentially the

same rules with respect to an insurer’s disputed duties to defend and indemnify, Fifth Circuit

jurisprudence involving Texas law will apply here—to the extent it is applicable—with equal

force. See Coregis, 2008 WL 2325632, at *2 n.5.

1. The Duty to Indemnify and Ripeness Generally

In its Motion, RD&M asserts that through a “distinct subset of ripeness jurisprudence”

involving insurance coverage disputes, the Fifth Circuit has already answered the justiciability

question before this Court today. (Mem., HGS suit, Doc. 21-1 at 4, 5.) As such, RD&M maintains

that HGS’s request for a declaration on its duty to indemnify is premature and nonjusticiable. (Id.)

For the following reasons, the Court agrees.

In Northfield, at the time the district court was tasked with determining the insurer’s

defense and indemnity obligations, the underlying litigation was still pending. 363 F.3d at 537

(applying Texas law). The Fifth Circuit affirmed the district court’s decision, holding that the

insurer had a duty to defend the insured in the underlying suit, but that, because the underlying

litigation had not yet been completed, the duty-to-indemnify question was unripe and

nonjusticiable. Id.

Since Northfield, the Fifth Circuit has consistently reaffirmed the validity of that general

rule. See Martco, 588 F.3d at 872 (stating that factual development regarding liability is necessary

before the duty to indemnify can be decided and holding that the insurer had a duty to defend and

indemnify, but the duty-to-indemnify claim was only ripe because the underlying litigation had

already been completed) (applying Louisiana law); see also Columbia Cas. Co., 542 F.3d at 111

(stating that generally, the duty to indemnify question is not ripe until after resolution of the

underlying suit and finding that the indemnity question was ripe, but solely because the insurance

policy did not impose a duty to defend, causing a narrow exception to apply); see also Coregis,

2008 WL 2325632, at *2 (stating that under both Texas and Louisiana law, “the indemnity issue

is nonjusticiable pending resolution of the liability suit”).

Like the insurance company in Northfield, HGS asks this Court to declare that it has no

duty to defend or indemnify its insured in an underlying matter that has not yet been resolved.

Based on the Fifth Circuit’s holding in Northfield, this Court must decline to decide HGS’s

indemnity obligation to RD&M, and accordingly rule that the indemnity claim is not ripe for

adjudication.

Other courts—as well as this one—have reached similar conclusions when charged with

determining an insurer’s duty to defend and duty to indemnify together. See Arch Ins., 2017 WL

8944048, at *7-8; Morad, 2013 WL 1403298, at *4 (granting insurer’s motion to dismiss and

finding that the issue with respect to the insurer’s duty to indemnify was “not justiciable before

the resolution of the underlying suit”); Travelers Cas. & Sur. Co. of Am. v. Univ. Facilities, Inc.,

No. CV 10-1682, 2012 WL 1198611, at *1, *11 (E.D. La. Apr. 10, 2012) (concluding that the

insurer owed a duty to defend but that the duty to indemnify issue was premature because the

arbitration had not yet determined liability).

Of particular significance is this Court’s ruling and rationale in Arch Insurance, a case in

which the insurer argued it was entitled to summary judgment based on the policy showing that

there was no coverage—and thus no obligation to defend or indemnify the insured—for the claims

and damages sought in the underlying action. 2017 WL 8944048, at *4. Although the Court there

granted the insurer’s motion for summary judgment in part, finding that there was no duty to

defend, it denied the insurer’s motion with respect to the duty to indemnify. Id. at *8. Applying

the well-established principle that the duty to indemnify is generally unripe “prior to the entry of

judgment in [the] underlying action,” the Court found that the insurer’s indemnity obligation to its

insured was nonjusticiable at that time because the underlying lawsuit whereby the insured’s

liability was to be determined remained unresolved. Id. at *2, *8. In reaching this result, the Court

additionally noted that it “discern[ed] little risk in leaving the duty to indemnify to be decided at

another time in view of the facts as they actually exist.” Id. at *7.

Arch Insurance and the present case are similar in several respects. First, like in Arch

Insurance, the underlying matter of liability in this case remains pending at the time this Court

must make a determination on coverage, the duty to defend, and the duty to indemnify. Id. at *2.

Second, both cases involve a general liability insurance policy and some property damage arising

out of allegedly defective work. Id. Additionally, in both actions, the insurer’s primary argument

is that no coverage, legal defense, or indemnity is owed to its insured because of the applicability

of certain exclusions in the policy. Arch Ins., 2017 WL 8944048, at *2. In Arch Insurance, the fact

that the policy exclusions precluded coverage and showed there was no duty to defend certain

claims did not persuade this Court to stray from the general rule that the duty to indemnify is unripe

before liability has been determined. The exclusions and endorsements that HGS alleges foreclose

coverage in this case do not either.

2. Exception to the General Rule

Relying on Columbia Cas. Co., 542 F.3d 106 and Moore, 352 F. Supp. 3d 640, HGS

contends that the indemnity claim in this case is ripe before a determination of liability because

(1) no duty to defend exists here, and (2) the same reasons that negate the duty to defend likewise

negate the duty to indemnify. (Opp’n. No. 20-174, Doc. 69 at 2.) Without explicitly saying as

much, HGS essentially argues that its indemnity claim is not premature because it meets the

exception to the general ripeness rule discussed above. (Id.)

Again, Arch Insurance is relevant to the analysis. There, this Court found that the claims

asserted against the insured in the underlying suit were clearly not covered under the policy due to

the policy’s Asbestos Exclusion; hence, the “eight corners” of the insurance policy and petition

foreclosed coverage and showed there was no duty to defend. Arch Ins., 2017 WL 8944048, at *7.

Moving to the indemnity issue, the Court analyzed whether the exception could apply and allow

the Court to adjudicate the indemnity claim before resolution of the underlying action. Id.

This Court acknowledged that (1) the insurer owed no duty to defend, and (2) any claim

the plaintiff would state against the insured in the underlying lawsuit was “very likely” to “be

covered by the Asbestos Exclusion or one of the other exclusions.” Id. In other words, the same

reasons that prevented the insurer from owing a duty to defend—the exclusions—were also “very

likely” to negate any duty to indemnify. Id.

Nevertheless, this Court found that there was still a slight possibility that the insurer could

have a duty to indemnify down the road. Id. It was possible that “the underlying action [could]

broaden or change to encompass some claim that might be covered under the Policy,” and that

slight possibility ended the analysis; the Court concluded that the exception was not met. Id.

Likewise, Mark v. Sunshine Plaza, Inc., No. CV 16-455, 2016 WL 6876645 (E.D. La. Nov.

22, 2016) illustrates just how limited this exception is. There, the plaintiff brought suit under the

Americans with Disabilities Act (“ADA”), alleging that the shopping center owned by defendant

was not accessible due to a number of features “that [were] non-compliant with ADA

Regulations;” thus, plaintiff’s claim was essentially that the non-accessibility of the property

violated her rights as a qualified individual with a disability. Id. at *3. The insurance policy only

required the defendant’s insurer to pay for damages that occurred as a result of “bodily injury,”

“property damage,” or “personal and advertising injury” as defined in the policy. Id. at *4. The

defendant’s insurer argued that the claims fell outside coverage of the relevant insurance policy

and, accordingly, it had no duty to defend or indemnify the defendant for non-covered claims. Id.

at *1. The Eastern District agreed with the insurer and concluded that the indemnity issue could

be adjudicated at that time because the ripeness exception was satisfied. Id. at *6.

The critical difference between Mark v. Sunshine Plaza and Arch Insurance is that in the

former case, there was no possibility that an action for non-compliance with the ADA’s property-

accessibility requirements could morph or broaden to encompass a claim resulting from “bodily

injury,” “property damage,” or “personal and advertising injury.” Id. at *5. Even when liberally

interpreting those terms in favor of the insured, the court found that the claims alleged in the injured

party’s complaint had no chance of changing to the extent that they could be covered under the

policy. Mark v. Sunshine Plaza, Inc., 2016 WL 6876645, at *5. In contrast, the Arch Insurance

Court found that there was a possibility, however slight, that the underlying action could “broaden

or change” to encompass at least one claim that the commercial general liability policy might

cover. 2017 WL 8944048, at *7.

Because HGS fails to further explain how or why the exception applies in this case, the

Court can only assume it is because HGS believes two things: (1) that it owes no duty to defend

RD&M in the underlying matter because the various exclusions in the HGS policies

unambiguously preclude coverage for the claims; and (2) the same reasons (the exclusions) that

negate HGS’s duty to defend also negate HGS’s duty to indemnify, because if the insurance policy

provides no coverage for the claims, an insurer has no indemnity obligation with respect to those

claims.

But, when faced with the same scenario in Arch Insurance, this Court rejected that

argument and concluded that the exception did not apply. Id. Thus, the instant issue is more

factually analogous to Arch Insurance than it is to Mark v. Sunshine Plaza, primarily because the

claims brought against RD&M—like those brought against the insurer in Arch Insurance–arise

out of allegedly defective construction and, like in Arch Insurance, there is still a possibility the

claims asserted by Endurance could be covered under the HGS policies. Therefore, the Court

concludes that HGS’s duty-to-indemnify claim fails to satisfy this narrow exception.

In addition, HGS’s reliance on Columbia Cas. Co. and Moore for its assertion that the

above-mentioned exception applies here is unpersuasive as both of those cases are factually

distinguishable. In Columbia Cas. Co., the indemnity issue did not satisfy the exception addressed

herein. Instead, the Fifth Circuit found that the indemnity claim there was ripe because another

exception was met—one born out of a Texas appellate court’s decision. See Columbia Cas. Co.,

542 F.3d at 111 (relying on Roman Cath. Diocese of Dallas, ex rel. Grahmann v. Interstate Fire

& Cas. Co., 133 S.W.3d 887, 890 (Tex. App. 2004) (because the insurance policy did not provide

for a duty to defend the insured in any situation, and it seemed clear that the policy could not cover

the claim the insured sought indemnity for, the court found it appropriate to decide indemnity

before the underlying suit was resolved)). The insurance policy involved in Columbia Cas. Co. did

not contain a “duty to defend” provision as that duty is understood at all; instead, the “defense”

provision resembled something more like a “right to associate” or be involved at the insurer’s sole

option, so the duty to defend issue was not even before the court. Id. at 108.

Moore likewise does not control the issue before this Court.5 There, Home Depot sought

defense and indemnity from an insurer based on a “maintenance services agreement” between

Home Depot and the insured, Design Air. Moore v. Home Depot USA, Inc., No. CV 16-810, 2017

WL 5180431, at *6 (M.D. La. Nov. 8, 2017). The insurer filed a crossclaim against Home Depot

seeking a declaratory judgment that it had no duty to defend or indemnify Home Depot. Id. at *2.

In response, Home Depot moved to dismiss the insurer’s claim, arguing that the request was unripe

because the duty to indemnify generally “cannot be determined until fault is allocated.” Id. at *5.

Home Depot was not a named or additional insured under the policies issued to Design

Air, the insurer had not issued any policies to Home Depot, and the agreement between Home

Depot and the insured did not obligate the insurer to indemnify or defend Home Depot. Id. at *6.

For these reasons, the Court found that the exception was met. Id. at *5. The insurer “need not

indemnify Home Depot for the same reasons it need not defend Home Depot”; thus, both the

indemnity and defense claims were justiciable. Id. The instant case differs from Moore because,

among other things, the party seeking indemnity and defense in this case (RD&M) is an insured

under the HGS policies and, unlike the insurer in Moore, HGS has not alleged sufficient facts to

establish that there is no possibility HGS will ever be obligated to indemnify RD&M.

5 Though HGS cites to Moore v. Home Depot USA, Inc., 352 F. Supp. 3d 640 (M.D. La. 2018) to support its proposition

that the exception discussed above applies here, nowhere in that opinion did the Court either mention the ripeness

exception HGS refers to or engage in any analysis of the insurer’s duty to indemnify. (See Opp’n. No. 20-174, Doc.

69 at 2 n.3.) In a previous opinion from that case, however, Judge Jackson found that the ripeness exception discussed

above was satisfied. See Moore v. Home Depot USA, Inc., No. CV 16-810, 2017 WL 5180431 (M.D. La. Nov. 8,

2017). That decision, not the one cited by HGS, will be addressed herein.

3. The Ripeness Principles Set Out in Arch Insurance, Not Regions,

Control Here Because Regions is Factually Distinguishable

Finally, although HGS’s principal ripeness argument—that its indemnity claim is ripe

under the doctrine of hardship—appears colorable, it simply cannot be reconciled with the ripeness

jurisprudence directly on point from the Fifth Circuit, Eastern District, and this Court. Notably,

HGS contends that the indemnity issue is ripe for adjudication now because, if judgment is

withheld, HGS would endure substantial hardship as defense costs continue to increase. (Opp’n.

No. 20-174, Doc. 69 at 2, 5.) The chief case HGS relies on to support this argument is Regions,

and, as explained below, Regions is factually distinguishable in several respects and thus

inapplicable to the issue at hand. 80 F. Supp. 3d 730.

In Regions, the plaintiff brought a declaratory judgment action seeking a declaration that it

had no duty to indemnify the two defendants, Ace and Loggers, with respect to two state court

lawsuits the defendants had already settled. Id. at 731. Ace moved to dismiss the action as

premature, rooting its argument in the fact that Ace and Loggers were engaged in a binding

arbitration proceeding, the purpose of which was to produce “a legal determination of damages

suffered by Ace and Loggers and the relative liability between those parties.”6 Id. at 735 (emphasis

added). Specifically, Ace argued that the plaintiff’s declaratory judgment action would not ripen

until resolution of the pending arbitration because the outcome of that proceeding would affect

which of the two parties, if either, would have a viable indemnity claim against the plaintiff. Id. at

732, 734.

The Regions Court ultimately held that the action was ripe and justiciable. Id. at 736. Judge

Jackson reached this conclusion by employing a two-part ripeness test, which requires the court to

6 The arbitration between the defendants stemmed from a dispute between them regarding their “respective duties” in

the already-settled state court lawsuits. Id. at 732. The Regions plaintiff was not a party to the arbitration proceeding.

Id.

consider “the fitness of the issues for judicial decision and the hardship to the parties of

withholding court consideration.” Id. at 733 (citing New Orleans Pub. Serv., Inc. v. Council of City

of New Orleans, 833 F.2d 583, 586 (5th Cir. 1987)). The Court also importantly noted that “[a]

case is generally ripe if any remaining questions are purely legal ones; conversely, a case is not

ripe if further factual development is required.” Regions, 80 F. Supp. 3d at 733.

In its determination that the action involved an actual controversy such that it was fit for

judicial review, the Court reasoned that a declaratory judgment action is not premature simply

because a contingency—here being the outcome of the arbitration—“could eliminate the

possibility of” the adverse party “having a viable claim.” Id. at 734 (emphasis added). Moreover,

the Court pointed out that no further factual development was necessary for the arbitration panel

to make its legal determination—all facts relevant to the plaintiff’s alleged “liability” or indemnity

obligation to Ace and Loggers had already been fully developed. Id. at 735.

As to the other key consideration for determining ripeness, the Court found that the plaintiff

would suffer a substantial hardship should judgment on the indemnity obligation be withheld. Id.

at 736. In reaching this conclusion, the Court emphasized two things, the first being that waiting

until the termination of the arbitration to seek a declaration of rights would force the plaintiff to sit

tight while defense costs and interest born by both defendants “continue to pile up.” Id. at 735. In

addition, the Court noted that the possibility of “duplicative litigation” resulting from the

“substantial likelihood” that the defendants would attempt to subpoena the plaintiff in their

pending arbitration only further persuaded the Court that its review at that time was needed to

prevent substantial hardship. Id.

As mentioned above, the ripeness principles espoused in Regions, especially the doctrine

of hardship, is not controlling here because Regions and the present case differ in significant ways.

First, the Regions plaintiff sought a declaration that it had no duty to indemnify the two defendants

for amounts they had already expended to defend and settle the underlying lawsuits. Regions, 80

F. Supp. 3d at 731. In other words, the underlying suits where liability is determined had already

been resolved by the time Judge Jackson was asked to determine the plaintiff’s indemnity

obligations, whereas the Endurance matter in the instant case where RD&M’s liability is to be

determined remains pending.

Secondly, and related to the previous point, the cases differ because no further factual

development was needed concerning the occurrences that allegedly created the Regions plaintiff’s

obligation to indemnify the defendants. Id. at 735. In contrast, the Endurance matter, recently

consolidated with this present action, will require development of facts establishing RD&M’s

liability—or non-liability—before the question of whether HGS must indemnify RD&M is ready

to be considered. As RD&M’s Motion points out, for example, the duty to indemnify only applies

to claims that are actually covered under the policy, and several factual determinations necessary

to determine whether Endurance’s claims are covered or excluded under the HGS policies remain

unresolved. (Mem., HGS suit, Doc. 21-1 at 7-8.)

4. The Court Will Dismiss HGS’s Indemnity Claim Without Prejudice

Given the Court’s finding that HGS’s indemnity claim is unripe and nonjusticiable, the

question remaining is which route to take procedurally. In this respect, the Court has three options:

(1) grant RD&M’s Motion in part and dismiss the indemnity claim without prejudice; (2) decline

to rule on HGS’s duty to indemnify until RD&M’s liability in the underlying matter is resolved;

or (3) grant RD&M’s alternative Motion and stay the declaratory judgment action where the

indemnity claim is concerned. Each option will be discussed in turn.

In U.S. Fire Ins. Co. v. A-Port, LLC, No. CV 14-441, 2015 WL 1416490 (E.D. La. Mar.

26, 2015), the Eastern District faced the same decision. There, an insurer sought a declaratory

judgment that it owed no duty to defend or indemnify its insured against a state court action. Id. at

*1. The insured filed a motion to dismiss the action for lack of subject matter jurisdiction or,

alternatively, to stay the action pending resolution of the underlying suit.7 Id. The court found that

the indemnity claim was unripe, and, resultantly, granted the motion in part and dismissed that

claim without prejudice. Id. The court concluded that the duty-to-defend claim, however, was ripe

for decision and there was “no reason the [c]ourt should decline to hear it.” Id. at *5. Accordingly,

the court denied the insured’s motion to dismiss or alternatively stay in this respect and decided

the duty-to-defend claim would remain pending. Id. at *1, *5.

On the other hand, in similar situations, the Eastern District has taken the second route

mentioned above by simply declining to rule on the issue until the underlying matters were

resolved. See Westport Ins. Corp. v. Preis & Roy, P.L.C., No. CV 11-2741, 2012 WL 1745519, at

*2 (E.D. La. May 16, 2012) (“But all this means is that the [c]ourt would decline to entertain

dispositive motions on these issues”). For instance, in Westport, the insured filed a counterclaim

seeking declaratory relief on a number of issues, one being whether the insurer was obligated to

defend and indemnify its insured in the underlying legal malpractice suit brought in state court. Id.

at *1. The insurer moved to dismiss the counterclaim, arguing that it was not ripe for adjudication

because there had been no liability finding against the insured in state court. Id. at *2. Alternatively,

the insurer moved to stay the counterclaim pending the outcome of the underlying suit. Id.

The court stated that it saw no reason to stay, much less dismiss, the insured’s counterclaim.

Id. The court decided holding off on a decision instead of formally staying the counterclaim was

7 The insured also moved “in the further alternative” to compel joinder of a party. U.S. Fire Ins. Co. v. A-Port, LLC,

No. CV 14-441, 2015 WL 1416490, at *1 (E.D. La. Mar. 26, 2015). That alternative motion need not be addressed

here.

proper because it found that “certain . . . claims [were] not ripe for adjudication,” discovery would

proceed “far more efficiently as to all claims at one time[,]” and “[s]taying certain claims in a

piecemeal fashion would only serve to delay the litigation longer, particularly the claims pending

before this [c]ourt.” Id. Dealing with about seven different issues within the counterclaim, the court

did not explicitly state that the indemnity claim was unripe in its reasoning. The court did

emphasize, however, that “[u]nder the Declaratory Judgment Act, district courts have discretion

to refuse to rule on the duty to indemnify pending completion of the underlying litigation.”

Westport Ins. Corp., 2012 WL 1745519, at *2 (citing Northfield, 363 F.3d at 536-37); see also

Hanover Ins. Co. v. Superior Lab. Servs., Inc., No. 11-2375, 2016 WL 7156067 (E.D. La. Dec. 8,

2016) (finding that the insurer’s request for a declaration on its indemnity claim was premature,

the court denied the motion to stay and declined to rule on the insurer’s duty to indemnify until

liability in the underlying suit was resolved).

The case before the Court today is more similar to U.S. Fire than it is to Westport, and thus,

pursuant to its broad discretion, the Court chooses to follow the result in the former case.

Moreover, the Court is convinced that judicial efficiency and economy will be better served by

dismissing HGS’s indemnity claim without prejudice, as opposed to postponing a decision on

HGS’s duty to indemnify until RD&M’s liability is determined.

Finally, as to RD&M’s alternative Motion to stay the indemnity claim, although courts do

have the authority to stay one action pending the resolution of the other action in a consolidated

matter, RD&M has pointed to no authority for staying a single claim that is part of an action

encompassing several claims. And RD&M makes clear that it is alternatively moving the Court to

stay HGS’s request regarding its indemnity claim only. (See Mot. Doc 21 at 2; see also Mem. Doc.

21-1 at 1, 8.) Accordingly, RD&M’s request in this respect is unworkable and will be denied.

Assuming for a moment that RD&M moves for a stay of HGS’s entire declaratory

judgment action, however, the Court is still inclined to deny that request and instead dismiss the

indemnity claim only. “The United States Court of Appeals for the Fifth Circuit has held that it is

‘well-settled’ that a district court has broad ‘discretion over whether to decide or dismiss a

declaratory judgment action.’ ” Massachusetts Bay Ins. Co. v. Lewis, No. 10-585, 2011 WL

1261145, at *2 (M.D. La. Mar. 31, 2011) (Jackson, J.) (quoting Travelers Ins. Co. v. La Farm

Bureau Fed'n., 966 F.2d 774, 778 (5th Cir.1993)).

The issue of whether RD&M is entitled to a legal defense from HGS is one that can, and

should, be determined sooner rather than later. The Court has the HGS policies and the Endurance

Complaint (Compl. No. 20-174, Doc. 1) (that is, the “eight corners”), replete with facts and claims

concerning RD&M’s alleged liability. Pursuant to its broad discretion, the Court declines to stay

the entire action, and will instead only dismiss the indemnity claim due to its nonjusticiability.

To sum up, HGS’s request for a declaratory judgment with respect to its duty to indemnify

is unripe and nonjusticiable under Louisiana law. Accordingly, RD&M’s Motion will be granted

in part and HGS’s indemnity claim will be dismissed without prejudice.

5. The HGS Second Amended Complaint is Specific and Definite Enough

to Survive a Rule 12(e) Motion

As mentioned above, RD&M additionally moves this Court to require HGS to provide a

more definite statement pursuant to Federal Rule of Civil Procedure 12(e). Because the Court has

ruled that the indemnity claim will be dismissed as premature, there is no need to decide RD&M’s

request for a more definite statement with respect to the indemnity claim, as that issue is moot.

With respect to HGS’s duty-to-defend claim, however, the Court finds that the HGS SAC is more

than sufficient to survive a Rule 12(e) motion.

“Rule 12(e) provides that ‘a party may move for a more definite statement of a pleading to

which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot

reasonably prepare a response.’ Fed. R. Civ. P. 12(e).” People's Workshop, 2018 WL 1528191, at

*2. Put another way, a Rule 12(e) motion may be proper if the complaint is “so vague or

ambiguous” that it “fails to specify the allegations in a manner that provides sufficient notice” to

the responding party. Id. (quoting Swierkiewicz, 534 U.S. at 514). As this Court has previously

stated, “When evaluating a motion for a more definite statement, the Court must assess the

complaint in light of the minimal pleading requirements of Rule 8.” Id. at *3 (citing Babcock &

Wilcox Co., 235 F.R.D. at 633; Fed. R. Civ. P. 8(a)(2) (requiring a “short and plain statement of

the claim showing the pleader is entitled to relief”)).

In the HGS SAC, HGS points to specific exclusions and endorsements in the HGS policies

to support its claim that it owes no duty to defend RD&M against Endurance. For example, HGS

directly quotes language from the Contractors Special Conditions Endorsement, which provides

that “[a]s a condition precedent to coverage for any claim for injury or damage based, in whole or

in part, upon work performed by independent contractors, the insured must have, prior to the start

of work and the date of the occurrence giving rise to the claim or suit: 1) received a written

indemnity agreement from the independent contractor holding the insured harmless for all

liabilities, including costs of defense, arising from work of the independent contractor.” (HGS SAC

¶ 14, Doc. 15 (quoting “Contractors Special Conditions Endorsement” (Form No. IICHL 40 07 02

12)) (internal citations omitted).) In addition to the requirement that the insured obtain a written

indemnity agreement, the endorsement lists three additional requirements as conditions precedent

to coverage under the policies. (See id.)

The HGS SAC then states that, “[u]pon information and belief,” RD&M hired an

independent contractor to perform all of the work RD&M originally agreed to perform for the

general contractor and Endurance’s insured, LMK. (Id. ¶ 14.) “However, since there was no written

agreement between RD&M, Inc. and the independent contractor it hired to perform the work, and

specifically, because RD&M, Inc. failed to procure a written indemnity agreement from the

independent contractor holding RD&M, Inc. harmless for all liabilities . . . as required under the

HGS policies as a condition precedent to coverage . . . coverage is excluded” by this endorsement

for the claims asserted by Endurance. (Id. ¶ 15.) The HGS SAC additionally cites language from

the “Products or Work Exclusion Endorsement” (id. ¶ 16) and the “Other Valid & Collectible

Insurance Available” provision (id. ¶ 17) as precluding coverage here. The HGS SAC goes on to

assert that, “[b]ased on the foregoing, HGS seeks a judicial declaration that . . . HGS has no

obligation to provide RD&M, Inc. with a legal defense in connection with the Endurance lawsuit.”

(HGS SAC ¶ 19, Doc. 15.)

HGS’s explanation as for why the two latter policy provisions preclude coverage and any

legal obligation of defense is, admittedly, somewhat vague and lacking in factual background to

show why coverage is excluded in this particular case. Given the liberal pleading standard set forth

in Rule 8(a), however, and HGS’s more than sufficient explanation as to why the Contractors

Special Conditions Endorsement applies, the HGS SAC as a whole certainly provides a “short and

plain statement” of its claim that HGS owes no duty to defend and is thus entitled to declaratory

judgment. Fed. R. Civ. P. 8(a)(2).

Furthermore, the cases RD&M relies upon in its Motion are distinguishable and thus

inapplicable to the issue before the Court today because those cases deal with failure to specifically

plead insurance exclusions as affirmative defenses in the answer or another responsive pleading.

(See Mem., HGS suit, Doc. 21-1 at 2 n.5.) For instance, in Dixie Sav. & Loan Ass’n v. Pitre, the

liability insurer argued that the trial court erred because it should have held that there was no

coverage under the policy for the claims asserted against the insured. 99-154, p. 24 (La. App. 5

Cir. 7/27/99), 751 So. 2d 911, 924. Relying on Louisiana Code of Civil Procedure Article 1005,

the Louisiana Fifth Circuit reasoned that it could not consider the merits of this assignment of error

because the insurer had failed to raise any affirmative defenses relating to coverage under the

policy. Id. at 925. Specifically, the problem was that the insurer’s answer had merely asserted that

the “policy is its own best evidence and the provisions, exlcusions, and limitations therein are pled

herein as though copied in extenso” without pointing to specific policy language and explaining

why those provisions applied. Id. at 924.

The dispute between HGS and RD&M differs for several reasons. First, this case deals

with a motion for a more definite statement regarding allegedly ambiguous claims contained in the

operative complaint (the HGS SAC), whereas Dixie deals with waiver of an affirmative defense

due to failure to raise it in the answer. Additionally, the HGS SAC did not fail to mention what

provisions of the policy excluded coverage entirely by pleading the HGS policies “in extenso,”

like the answer in Dixie did, but instead pointed to specific language from the HGS policies to

support its claim.

To sum up, while the HGS SAC is by no means perfect, it is more than adequate to satisfy

the liberal pleading standard set forth in Rule 8(a) and provide RD&M with sufficient notice of

HGS’s duty-to-defend claim. The Court finds that the HGS SAC is not “so vague or ambiguous

that the [responding] party cannot reasonably prepare a response,” especially considering that

RD&M did, in fact, respond to HGS’s claims in its Motion by specifically attacking HGS’s reliance

on the Contractors Special Conditions Endorsement. Fed. R. Civ. P. 12(e); (see Mem. Doc. 21-1

at 6-7 (where RD&M brings into question the meaning of “independent contractor” as used in the

policies).) Therefore, with respect to HGS’s claim that it owes no duty to defend, RD&M’s request

for a more definite statement is denied.

IV. Conclusion

Accordingly,

IT IS ORDERED that on RD&M Inc.’s Motion to Dismiss/Stay Indemnity Claims &

Motion for More Definite Statement (Doc. 21) filed by RD&M, Inc., is GRANTED IN PART and

DENIED IN PART. With respect to RD&M’s request that HGS’s indemnity claim be dismissed,

the Motion is GRANTED, and HGS’s request for declaratory relief with respect to its duty to

indemnify is DISMISSED WITHOUT PREJUDICE. With respect to RD&M’s request for a

more definite statement, the Motion is DENIED. As to the duty-to-indemnify claim, the Motion

requesting a more definite statement is DENIED AS MOOT; as to the duty-to-defend claim, it is

DENIED.

Signed in Baton Rouge, Louisiana, on September 8, 2021.

S

JUD GE JOHN W. deGRAVELLES

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA