The opinion
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WESTERN DIVISION
FRANKENMUTH MUTUAL }
INSURANCE COMPANY, }
}
Plaintiff, }
}
v. } Case No.: 7:21-CV-945-RDP
}
IVAN’S PAINTING LLC, et al., }
}
Defendants. }
MEMORANDUM OPINION
This case is before the court on Frankenmuth’s Motion to Strike Count IV and Dismiss
Count V of TCC, Inc.’s Cross-claim and Counterclaim Complaint. (Doc. # 15). The motion is fully
briefed (Docs. # 16, 21, 25) and ripe for decision. For the reasons provided below, the motion is
due to be granted in part and denied in part.
I. Background
TCC, Inc. was the general contractor for the construction of a new home in Tuscaloosa
County. (Docs. # 1 at 10; 11 at 6). Ivan’s Painting entered into a subcontract with TCC to perform
the painting and cleaning of window units. (Doc. # 1 at 10). The subcontract required Ivan’s
Painting to purchase an insurance policy that named TCC as an additional insured. (Doc. # 11 at
7). Ivan’s Painting provided TCC with a certificate of insurance that identified Frankenmuth
Frankenmuth Mutual Insurance Company as the insurer and verified that TCC was named an
additional insured. (Id. at 8).
Ivan’s Painting allegedly damaged eighty-seven windows at the new construction. (Docs.
# 1 at 10; 11 at 11). The homeowners demanded that TCC replace the damaged windows. (Id.). As
a result, TCC and Ivan’s Painting made a claim to Frankenmuth for the cost of replacing the
damaged window units. (Doc. # 1 at 11). Frankenmuth responded to the claims by indicating that
TCC may qualify as an additional insured under the policy but it “effectively denied coverage.”
(Doc. # 11 at 12).
Frankenmuth filed this declaratory judgment action asking the court to declare that its
policy does not provide coverage to either Ivan’s Painting or TCC for “loss from or related to the
damage to the window units.” (Doc. # 1 at 15). TCC also filed a counterclaim alleging two
pertinent causes of action: (1) a declaratory judgement claim seeking a declaration that
Frankenmuth’s policy covers TCC’s claim and (2) a breach of contract claim seeking damages for
Frankenmuth’s failure to abide by the terms of its insurance policy. (Doc. # 11 at 14-15).
Frankenmuth asks the court to strike TCC’s declaratory judgment claim under Rule 12(f) of the
Federal Rules of Civil Procedure and to dismiss TCC’s breach of contract claim under Rule
12(b)(6). (Doc. # 15).
II. Standards of Review
The Federal Rules of Civil Procedure require that a complaint provide “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
However, the complaint must include enough facts “to raise a right to relief above the speculative
level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Pleadings that contain nothing more
than “a formulaic recitation of the elements of a cause of action” do not meet Rule 8 standards,
nor do pleadings suffice that are based merely upon “labels and conclusions” or “naked
assertion[s]” without supporting factual allegations. Id. at 555, 557. In deciding a Rule 12(b)(6)
motion to dismiss, courts view the allegations in the complaint in the light most favorable to the
non-moving party. Watts v. Fla. Int’l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007).
To survive a motion to dismiss, a complaint must “state a claim to relief that is plausible
on its face.” Twombly, 550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Although “[t]he
plausibility standard is not akin to a ‘probability requirement,’” the complaint must demonstrate
“more than a sheer possibility that a defendant has acted unlawfully.” Id. A plausible claim for
relief requires “enough fact[s] to raise a reasonable expectation that discovery will reveal
evidence” to support the claim. Twombly, 550 U.S. at 556.
In considering a motion to dismiss, a court should “1) eliminate any allegations in the
complaint that are merely legal conclusions; and 2) where there are well-pleaded factual
allegations, ‘assume their veracity and then determine whether they plausibly give rise to an
entitlement to relief.’” Kivisto v. Miller, Canfield, Paddock & Stone, PLC, 413 F. App’x 136, 138
(11th Cir. 2011) (quoting Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)).
That task is context specific and, to survive the motion, the allegations must permit the court based
on its “judicial experience and common sense ... to infer more than the mere possibility of
misconduct.” Iqbal, 556 U.S. at 679. If the court determines that the well-pleaded facts, accepted
as true, do not state a claim that is plausible, the claims are due to be dismissed. Twombly, 550
U.S. at 570.
When confronted with a motion to strike a pleading matter, Rule 12(f) provides that “[t]he
court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent,
or scandalous matter.” Fed. R. Civ. P. 12(f). However, a motion to strike is a “drastic remedy to
be resorted to only when required for the purposes of justice ….” Augustus v. Bd. of Public
Instruction of Escambia Cnty. Fla., 306 F.2d 862, 868 (5th Cir. 1962) (citation omitted). Generally,
a motion to strike should be denied unless the challenged allegations in the complaint “have no
possible relationship to the controversy, may confuse the issues, or otherwise prejudice a party.”
Royal Ins. Co. of America v. M/Y Anastasia, 1997 WL 608722 at *3 (N.D. Fla. 1997) (citing Reyher
v. Trans World Airlines, Inc., 881 F.Supp. 574, 576 (M.D. Fla. 1995)). In other words, “it must be
shown that the allegations being challenged are so unrelated to the plaintiff’s claims as to be
unworthy of any consideration as a defense and that their presence in the pleading throughout the
proceeding will be prejudicial to the moving party.” 5C Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1380 (3d ed. 2004) (citations omitted).
III. Analysis
As explained more fully below, TCC’s Cross-claim and Counterclaim Complaint is a
shotgun pleading. The court will provide TCC an opportunity to replead. But, having said that, at
present Frankenmuth’s motion to strike and dismiss is due to be denied because there has not been
a showing of adequate prejudice to justify striking the declaratory judgment claim in Count IV,
nor has Frankenmuth established that the no-action clause precludes the possibility of stating a
viable breach of contract claim in Count V.
A. Shotgun Pleading
As a general rule, the Eleventh Circuit divides shotgun pleadings into four categories.
Weiland v. Palm Beach Cty. Sheriff’s Office, 792 F.3d 1313, 1321-23 (11th Cir. 2015). It has
explained that a shotgun pleading is one that:
(1) contain[s] multiple counts where each adopts the allegations of all preceding
counts; (2) [is] filled with “conclusory, vague, and immaterial facts not obviously
connected to any particular cause of action”; (3) do[es] not separate each cause of
action or claim into separate counts; or (4) assert[s] multiple claims against multiple
defendants but do[es] not specify which defendant is responsible for which acts or
omissions.
Brown v. Air Line Pilots Assoc, 813 Fed. App’x. 353, 355 (11th Cir. 2020) (citing Weiland, 792
F.3d at 1321-23 (11th Cir. 2015)). The common characteristic between all four types is the failure
“to give defendants adequate notice of the claims against them and the grounds which each claim
rests.” Weiland, 792 F.3d at 1323.
TCC’s Cross-claim and Counterclaim Complaint is a shotgun pleading of the first type
described in Weiland. Id. TCC’s counterclaim complaint contains five counts: two breach of
contract claims against Ivan’s Painting, a negligence claim against Ivan’s Painting, a declaratory
judgment claim against Frankenmuth, and a breach of contract claim against Frankenmuth. (Doc.
# 11 at 12-16). Each of the five counts “incorporate[] by reference all previous paragraphs as if
fully set forth herein.” (Id.). This method of pleading improperly leaves Defendants (and the court)
to guess as to which allegations pertain to which count. Further, Counts II through V not only
incorporate every previous factual allegation but also the paragraphs defining the claims in each
preceding count. The court will permit TCC to replead each count in its Cross-claim and
Counterclaim Complaint in accordance with Rule 8.
B. Count IV: Declaratory Judgment
Rule 12(f) provides, “[t]he court may strike from a pleading an insufficient defense or any
redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). However, a
motion to strike is a “drastic remedy to be resorted to only when required for the purposes of justice
….” Augustus, 306 F.2d at 868. Generally, a motion to strike should be denied unless the
challenged allegations in the complaint “have no possible relationship to the controversy, may
confuse the issues, or otherwise prejudice a party.” Royal Ins. Co. of America v. M/Y Anastasia,
1997 WL 608722 at *3. In other words, “it must be shown that the allegations being challenged
are so unrelated to the plaintiff’s claims as to be unworthy of any consideration as a defense and
that their presence in the pleading throughout the proceeding will be prejudicial to the moving
party.” 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1380 (3d
ed. 2004) (citations omitted).
Here, Frankenmuth has not met this burden. Even assuming that Count IV is merely a
mirror-image of Frankenmuth’s declaratory judgment action, the record does not reflect adequate
prejudice against Frankenmuth, and such a showing is necessary for a court to strike a counterclaim
like this. Accordingly, Frankenmuth’s motion to strike Count IV of TCC’s Cross-Claim and
Counterclaim Complaint under Rule 12(f) is due to be denied.
C. Count V: Breach of Contract
Frankenmuth next contends that TCC “cannot state a breach of contract claim … with
respect to the remediation costs” for three reasons. (Doc. # 16 at 9). First, there has not been a final
judgment against TCC or Ivan’s Painting holding either one responsible for the damage to the
window units. (Id.). Second, there has not been a settlement to which Frankenmuth has agreed.
(Id.). And third, the remediation costs were agreed to before Frankenmuth made any coverage
determination with respect to TCC’s claim. (Id.). In each of these instances, Frankenmuth argues
the policy does not provide for coverage.
Frankenmuth contends that the policy’s language supports its arguments. It notes that the
policy provides that, “[Frankenmuth] will pay those sums that the insured becomes legally
obligated to pay [].” (Doc. # 1-1 at 25). Frankenmuth also points to the “no action clause” in the
policy, which provides that:
No person or organization has a right under this Coverage Part:
a. To join us as a party or otherwise bring us into a “suit” asking for
damages from an insured; or
b. To sue us on this Coverage Part unless all of its terms have been fully
complied with.
A person or organization may sue us to recover on an agreed settlement or on a
final judgment against an insured; but we will not be liable for damages that are not
payable under the terms of this Coverage Part or that are in excess of the applicable
limit of insurance. An agreed settlement means a settlement and release of liability
signed by us, the insured and the claimant or the claimant’s legal representative.
(Doc. # 1-1 at 35).
The court is not convinced. As the Eleventh Circuit has explained, when an insurer refuses
to participate in settlement negotiations, “the insurer waives the right to assert the no-action clause
in a later suit to determine coverage” under Alabama law. Twin City Fire Ins. Co., Inc. v. Ohio
Cas. Ins. Co., Inc., 480 F.3d 1254, 1258 (11th Cir. 2007) (citing Liberty Mut. Ins. Co. v.
Wheelwright Trucking Co., 851 So. 2d 466, 475 (Ala. 2002)). In Twin City, an insurance company
argued that a similar no action clause -- as well as a “becomes legally obligated to pay” clause --
precluded it from being responsible for paying a settlement under the policy. Id. at 1258-61. The
Eleventh Circuit rejected that argument.
Frankenmuth tries to distinguish Twin City by stating that the settlement in Twin City
occurred after two events: (1) the filing of an actual lawsuit that the carrier refused to defend and
(2) a mediation that the insurer was invited to participate in but declined to do so. (Doc. # 24 at 7).
At least on the pleadings, the court cannot say those factual differences are material.1 If TCC
invited Frankenmuth to participate in a settlement negotiation to which Frankenmuth had a right
to participate, and Frankenmuth refused that invitation, then discovery would be necessary on the
issue of whether Frankenmuth has waived both the no-action clause and “legally obligated” clause
1 On the pleadings, it is unclear to the court the exact nature of the purported settlement talks (or lack thereof)
between TCC, Ivan’s Painting, and Frankenmuth. TCC’s contention that “[it] has made several demands to
Frankenmuth to provide coverage for the remediation costs and participate in settlement negotiations, but
Frankenmuth has consistently maintained the position that there is no coverage available under the Frankenmuth
Policy” (Doc. # 25-1 at 6) is supported by the allegations of TCC’s counterclaim complaint. (Doc. # 11 at 12). So,
those allegations are sufficient for this case to proceed past the pleadings to discovery. But, at the Rule 56 stage, the
parties should focus on exactly what occurred leading up to and at the settlement negotiations.
with respect to those negotiations. Similarly, the court cannot at this stage conclude that the fact
that TCC allegedly participated in settlement negotiations before the homeowners initiated a
lawsuit -- or for that matter before mediation occurred -- materially distinguishes Twin City. TCC
has alleged that (1) it invited Frankenmuth to settlement negotiations; (2) Frankenmuth refused
that invitation; (3) Frankenmuth had a right to participate; and (4) Frankenmuth denied coverage
for the payment of the settlement. That is sufficient for TCC to state a breach of contract claim,
despite the existence of the no-action and “legally obligated” clauses.
IV. Conclusion
The court concludes that Frankenmuth’s motion is due to be granted in part and denied in
part. TCC’s Cross-claim and Counterclaim Complaint is a shotgun pleading that must be repleaded
in accordance with Rule 8 (as interpreted by the Eleventh Circuit). But, Frankenmuth has failed to
show that the inclusion of TCC’s declaratory judgment claim will prejudice the parties or that
under Alabama law the no-action clause in the policy bars a breach of contract claim under Rule
12(b)(6).
A separate order in accordance with this Memorandum Opinion will be entered.
DONE and ORDERED this November 3, 2021.
UNITED STATES DISTRICT JUDGE