UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NUMBER: 10-60285 CIV-UNGARO IRONSHORE INDEMNITY, INC.
Plaintiff, v.
BANYON 1030-32, LLC, BANYON CAPITAL, LLC., BANYON FUNDING, LLC, BANYON RESOURCES, LLC,
BANYON INVESTMENTS, LLC. (DELAWARE), BANYON INVESTMENTS, LLC. (NEVADA), BANYON USVI LLC, BANYON INCOME FUND, LP.
Defendants.
________________________________________/
DEFENDANTS’, BANYON 1030-32, LLC, BANYON CAPITAL, LLC., BANYON FUNDING, LLC, BANYON RESOURCES, LLC, BANYON INVESTMENTS, LLC. (DELAWARE), BANYON INVESTMENTS, LLC. (NEVADA), BANYON USVI LLC, BANYON INCOME FUND, LP. MOTION TO DISMISS THE TWO COUNT AMENDED
COMPLAINT FILED BY IRONSHORE INDEMNITY, INC.
Pursuant to Fed. R. Civ. P. 12(b)(6), 12 (f), 19(a) and Rule 7.1 of the Local Rules of the United States District Court for the Southern District of Florida, Defendants, BANYON 1030-32, LLC, BANYON CAPITAL, LLC., BANYON FUNDING, LLC, BANYON RESOURCES, LLC, BANYON INVESTMENTS, LLC. (DELAWARE), BANYON INVESTMENTS, LLC. (NEVADA), BANYON USVI LLC, BANYON INCOME FUND, LP, (“Banyon”) hereby move to dismiss the two count amended complaint filed by IRONSHORE INDEMNITY, INC. (hereinafter “Ironshore”) and to strike immaterial, impertinent matters from the Complaint against them. Count I is titled “Rescission Pursuant to Florida Statutes § 627.409” and Count II is titled “Declaratory Judgment Action for Determination of No Coverage Under Exclusions.” Each of the Counts realleges and reavers each of the Party, Jurisdiction and Venue Allegations,
and the General Allegations. Neither of the Counts states a claim upon which relief can be granted and therefore the Complaint must be dismissed.
Plaintiff fails to allege in either the General Allegations or in Count I that all proper and present antagonistic or adverse interests are before the Court by proper process. Instead, Plaintiff asserts in numbered paragraph 68 there are “persons and/or entities who have, or reasonably may have an actual, present, adverse, and antagonistic interest in the subject matter” of the complaint, “including but not limited to the Banyon Companies. (emphasis added.) Numbered paragraph 69 of the Complaint names specific Banyon entities, but qualifies the list stating IRONSHORE is not certain which two companies named Banyon Investments, LLC was the proper party. Plaintiff’s claim is based upon a policy of insurance it issued and is therefore required to know who is a named insured under its policy. Defendants have a right to know exactly which entities are being joined as defendants. It is improper to list as defendants entities Plaintiff in the reasonable exercise of due diligence would know are not insureds under Plaintiff’s policy.
IRONSHORE admits Banyon returned both the form Application and a PowerPoint presentation to substantiate and further explain the application. IRONSHORE’S Underwriting Department had a duty to review the entire submission. If there was any ambiguity that was the insurer’s opportunity to request a satisfactory explanation prior to issuing a policy. The insurer elected not to inquire and therefore waived its right to rescind the policy based on any alleged inconsistency between the form application and the PowerPoint presentation.
Plaintiff has attached as part of Exhibit “F” to its Complaint an alleged copy of a plea agreement entered into by Scott W. Rothstein in case number 09-60331-CR-COHN United States District Court, Southern District of Florida. The Plea Agreement attached is not a certified copy of the purported agreement. Further, nowhere in the Plea Agreement are any of
the Defendants in this action referenced. Scott Rothstein is not a party to the instant action and the attachment of his alleged Plea Agreement is unnecessary and an attempt to prejudice the Court. Pursuant to Fla. R. Civ. P. 1.130(a)… “No papers shall be unnecessarily annexed as exhibits. The pleadings shall contain no unnecessary recitals of deeds, documents, contracts, or other instruments.” The alleged Plea Agreement should be stricken pursuant to Fla. R. Civ. P. 1.130(a).
A declaratory action is not available where the object of the action is to try disputed questions of fact as to determinative issues rather than to seek a construction of definitive stated rights, status, or other relations. Questions of fact, however, may be determined in a declaratory proceeding if necessary to construe legal rights. See “X” Corporation v. “Y” Person, 622 So.2d 1098 (Fla. 2nd DCA 1993).
A declaratory judgment action must demonstrate a bona fide, actual, present and practical need for the declaration. See Wilson v. County of Orange, 881 So.2d 625 (Fla. 5th DCA 2004).
In the instant action IRONSHORE instituted a claim for rescission based on fraud. The allegations contained therein, however, attempt unsuccessfully to plead fraud. In numbered paragraph 71 Plaintiff alleges Defendants made material misrepresentations in the application. To state a legal viable claim for fraud four (4) elements must be pled with requisite particularity.
a. A false statement concerning a specific material fact; b. The maker’s knowledge that the representation is false;
c. An intention that the representation induces another’s reliance; and
d. Consequent injury by the other party acting in reliance on the representation.
See Wadlington v. Continental Medical Services, Inc., 907 So.2d 631 (Fla. 4th DCA 2005); Madness, L.P. v. DiTocco Knostruction, Inc., 873 So.2d 427 (Fla. 4th DCA 2004);
National Ventures, Inc. v. Water Glades 300 Condominium Association, 847 So.2d 1070 (Fla. 4th DCA 2003).
IRONSHORE has failed to plead a claim for fraud with the required requisite particularity and has failed to allege any consequent injury it sustained. Plaintiff admits in numbered paragraph 33 that at the same time it received the completed form application from Defendants it also received a PowerPoint presentation and Banyon Account Overview. Any inconsistencies between the form application and the supplemental documentation could have been investigated by Plaintiff’s underwriting department prior to issuance of the policy. Failure to do so is a waiver of Plaintiff’s right to rescind the policy for any inconsistency between the documents.
Plaintiff contends a representative of the Defendants, George G. Levin, presented a biographical sketch which listed his accomplishments. Plaintiffs would like to bring an action against the Defendants because Mr. Levin’s biography only listed positive achievements and accomplishments. There is no cognizable cause of action in Florida for presenting a positive self image.
The Plaintiff has failed to meet the requirements listed in this Court’s order dismissing the complaint on May 28, 2010 [D.E. 34]. The amended complaint fails to show how this cause is a ripe controversy for the court. The Plaintiff’s allegations do not meet the requirements for an actual controversy.
Plaintiff contends the policy of insurance does not provide coverage for the loss relying on two exhibits cited to exhibits A and B as the authority for the non-coverage. Exhibit A is a letter to counsel for Razorback to counsel for IRONSHORE placing the carrier on notice of its
claim. Exhibit B is a narrative “proof of loss form” submitted by Defendants. Exhibits A and B do not support Plaintiff’s request for relief.
MEMORANDUM OF LAW
I. IRONSHORE INDEMNITY, INC.’s Complaint Fails to Meet the Pleading Standard and is Subject to Dismissal
To survive a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), a plaintiff must plead “ ‘either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory.’ ” See Sea Shelter IV, LLC v. TRG Sunny Isles V, Ltd., 2009 WL 692469*2 (S.D. Fla. March 17, 2009) (citing Roe v. Aware Woman Ctr., for Choice, Inc., 253 F.3d 678, 683 (11th Cir. 2001). Plaintiff’s allegations must be more than “labels and conclusions.” Id. (citing Financial Sec. Assur., Inc. v. Stephens, Inc., 500 F.3d 1276, 1282 (11th Cir. 2007) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). “The factual allegations in the complaint must ‘possess enough heft’ to set forth a ‘plausible entitlement to relief.’ ’’ Id.
Expounding upon the requirements as set forth in Twombly, in Ashcroft v. Iqbal, 129 S.Ct. 1937, L.Ed.2d 868 (2009), the Supreme Court recently stated, “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” The Court further explained that assertions of unlawful activity were not entitled to the assumption of truth and that only the “well-pleaded, nonconclusory factual allegation[s]” should be reviewed to determine whether they gave rise to a “plausible suggestion” of illegal activity. Ashcroft, at 16. Based upon these parameters, for the reasons set forth below, IRONSHORE’S Complaint fails to set forth a cause of action under which relief may be granted and should be dismissed. Plaintiff attempts not only to assert unlawful activity in its amended complaint but also erroneously attempts to bolsters its
accusatory assertions by including assertions for other pending, unproven lawsuits “Boot Strapping.”
Prior to filing this amended complaint, the Plaintiff filed a complaint on or about February 26, 2010. Plaintiff’s complaint was dismissed by this Court’s Order on May 28th, 2010, [D.E. 34]. This Court’s Order allowed Plaintiff the option of filing an amended complaint. The order also explained in great detail order why the complaint was dismissed. The reasons for the dismissal stem from the Plaintiff’s failure to bring a ripe controversy before this court. On or about June 3, 2010, the Defendant filed an amended complaint. The amended complaint fails to meet the standards explained in the order previously entered by this Court and the amended complaint should also be dismissed.
II. IRONSHORE INDEMNITY, INC.’s Pleading Includes Immaterial and
Impertinent Allegations That Should be Stricken Pursuant to Rule 12(f) Fed. R. Civ. P.
In its General Allegations section Plaintiff focuses on the activities of one Scott W. Rothstein, Esq., a non-party to the instant action. Inflammatory language regarding his actions is utilized to create an antagonistic attitude towards the Defendants in the instant action. The Plaintiff in this action is portrayed as a victim of Mr. Rothstein. The alleged heinous nature of the criminal activities of a non-party cannot constitute a legal basis for the instant action. A foray into dissecting the actions of Mr. Rothstein are a waste of judicial resources and irrelevant to sustaining Plaintiff’s causes of action against Defendants. The scandalous allegations should be stricken from the Complaint. See Rule 12(f) Fed. R. Civ. P.; Fantasy, Inv. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993) (affirming Court’s grant of motion to strike, noting that the stricken allegations, “created serious risks of prejudice to Fantasy, delay, and confusion of the issues.”) rev’d on other grounds, 510 U.S. 517, 114 S. Ct. 1023, 127 L.Ed. 2d 455 (1994); Van
Slyke v. Capital One Bank, 503 F. Supp. 2d 1353, 1367 (N.D. Cal. 2007) (on reconsideration) (granting motion to strike allegations that “simply cannot form the basis” of deceit claim proffered by plaintiff); Thomas v. Hickman, 2006 U.S. Distr. LEXIS 72988, * 112 (E.D. Cal. 2006) (striking a request for punitive damages, stating, “Granting a motion to strike may be proper if it will make the trial less complicated or if allegations being challenged are so unrelated to plaintiffs’ claims as to be unworthy of any consideration as a defense and that their presence in the pleading will be prejudicial to the moving party.”)
The prejudice that would befall the Defendants should these allegations be permitted to remain in the Complaint is evident: this action would become a mini-trial on other lawsuits in which IRONSHORE was not even a party, and Defendants would be forced to engage in meaningless discovery and motion practice regarding these wholly irrelevant issues. Allowing these allegations to stand would result in confusion and a waste of judicial resources.
III. Plaintiff Improperly Imputes Liability to Defendants Through Its Condemnation of a Non-party’s Actions.
IRONSHORE in numbered paragraphs 2 through 10 specifies the members of each limited liability company and limited partnership it has sued in the instant action. Plaintiff is unable to allege any of those entities include Scott W. Rothstein, Esq. as a member. If Mr. Rothstein’s actions as alleged by Plaintiff constitutes the factual basis for the instant action he should have been joined as an indispensible party. An indispensible party is one whose interest in a lawsuit is such that a final decree cannot be issued without either affecting that interest or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience. See Niles-Bement-Pond co. v. Iron Moulders Union, 254 U.S. 77, 80 (1920). The appearance of an indispensible party to testify as a witness
at trial does not avoid dismissal for failure to join an indispensible party. Moore v. Leisure Pool Service, Inc., 412 So.2d 392 (Fla. 5th DCA 1982).
In Mr. Rothstein’s absence, Defendants are entitled to have this action dismissed. Persons whose joinder is desirable from standpoint of complete adjudication and elimination of relitigation must be joined where feasible in diversity cases. Fed. R. Civ. P. 19(a). See Tick v. Cohen, 787 F.2d 1490 (11th Cir. 1986).
IV. Plaintiff’s Complaint, Count I, Is Premised Upon an Inaccurate Construction of a Statute
Plaintiff alleges in numbered paragraph 60, that it “has satisfied all conditions precedent to bringing the instant lawsuit.” In support of this assertion it cites to Florida Statute § 627.409. However, that statute does not speak to any of the requirements for rescission enumerated by Plaintiff. To wit: Florida Statute § 627.409 is silent regarding: notice of rescission; return and/or tender of all premiums paid; payment of statutory interest; and reasonable time period for completing these items after discovery of grounds for avoiding the policy. However, those are the criteria Plaintiff contends are mandated by that statute. Plaintiff’s unreasonable construction of a statute constitutes grounds for dismissal of this action.
V. Plaintiff’s Complaint, Count II, Improperly Asserts Conclusionary Allegations as Facts
Plaintiff attempts in Count II to persuade this Court that the Exclusions section of the policy precludes coverage for claims brought against Banyon by unnamed third parties. This Count fails to state a cause of action for many of the same reasons Count I is deficient. Specifically, Plaintiff fails to properly identify all the entities who are required to be listed as parties to this action, fails to join an indispensible party, avers it is unable to identify the actual entities it insures under its own policy, improperly petitions this Court to determine coverage
issues beyond the scope of the policy and presents conclusionary allegations as facts. As a result Count II is fatally deficient and as a matter of law should be dismissed.
VI. Response to Allegations Initially Presented in the Amended Complaint
The recent order dismissing the complaint states that it considered whether the complaint adequately plead the existence of a case or controversy and the order concluded the compliant was not sufficient for an action to be present before this Court. The Court cites to Article III of the Constitution which limits the “judicial power” of the United State to the resolution of cases and controversies. The Court also cites to DiMaio v. Democratic Nat. Committee, 520 F.3d 1299, 1301 (11th Cir. 2008) which explains that a plaintiff has the burden of satisfying the prerequisites for standing even when the relief sought is a Declaratory Judgment. The court in DiMaio
explains, “a declaratory judgment may only be issued in the case of an actual controversy.” Id. The “controversy may not be conjectural, hypothetical, or contingent; it must be real and immediate, and create a definite, rather than speculative threat of future injury.” Malowney v. Fed. Collection Deposit Group, 193 F.3d 1342 (11th Cir. 1999).
The Court dismissed the complaint [D.E. 1] because it
[d]oes not identify any particular claims made against it under the Excess Policy (or against the underlying insurers). Instead, IRONSHORE alleges in Counts I and II that:
There is a bone fide, actual, present, practical need for the declaration, as there are presently claims being submitted against Banyon Companies as a result of the collapse of Rothstein’s criminal enterprise referenced in detail above, there are separate claims which have been brought against IRONSHORE, and The BANYON companies have made or will make claims under the policy as a result of the Rothstein Ponzi Scheme.
This Court’s order explains the complaint is dismissed because the complaint, “contains no allegations that the underlying coverage has been exhausted or even that these claims are
sufficient to create more than $30 million in exposure.”(D.E. 34 p. 4.) Due to the failure to properly plead an allegation of underlying coverage, this Court deemed the complaint as facially insufficient to establish an actual case or controversy. The status of the action as alleged in amended complaint has not changed. Plaintiff has failed to properly plead allegations of underlying coverage or establishment of an actual case or controversy. The Plaintiff made a few minor changes in the Amended Complaint, none of which change the substance of the pleadings to the extent required by the law and this Court.
The Order on the Motion to Dismiss explained in detail why the complaint was dismissed based on the failure for the Plaintiff to plead an actual case or controversy. “There can be no actual case or controversy without any indication that these claims are likely to exhaust the underlying coverage of 30 million”. CITE ORDER AT 4. The Court goes further and adds a footnote which explains, “[e]ven with such allegations, it is unlikely an actual case or controversy would exist absent exhaustion of the underlying coverage. (emphasis added.) This Court recognizes for there to be an actual controversy with respect to IRONSHORE’S layer of insurance, the underlying coverage policy must be invoked first. The primary policy of insurance has to pay a claim before there is any potential liability of the excess layers of insurance. With respect to the instant action, the Defendants have not received policy benefits from Federal Insurance Company (“Federal”), the underlying carrier, nor has Federal indicated it is paying limits on the policy. Instead, Federal has affirmatively denied coverage for this loss failing to make any payment to BANYON for its loss. Accordingly, potential liability for the excess carriers has yet to be triggered. So long as Federal remains in this status, any claim or controversy of IRONSHORE remains the same and no actual case or controversy exists.
This Court cites a very recent 2009 case directly on point. Goodyear Tire & Rubber Co.
v. Nat’l Union Ins. Co., 2009 WL 3518070 *4 (N.D. Ohio October 23, 2009), “dismissing
declaratory action involving excess insurer for lack of case or controversy despite a demand sufficient to reach into excess layer because it was undisputed that the underlying layer was not exhausted and that excess coverage was contingent on exhaustion.” (D.E. 34 p. 4-5.) In this case, the IRONSHORE is unable to show unto the Court how this contingent coverage was being implicated as a result of the exhaustion of proceeds with respect to the underlying policy issued by Federal Insurance Company. Moreover, even if Federal Insurance Company pays policy limits on a claim, there is no case or controversy until the obligation for payment under the IRONSHORE policy is clear. IRONSHORE’S obligation for potential liability is invoked only after claims reach the attachment point of $30,000,000.00.
This Court should require evidence of probability that the underlying policy has been exhausted. The amended complaint does not allege any new facts or actions by Federal Insurance Company which would indicate Federal has rescinded its coverage denial.
In the Order dismissing Plaintiff’s Complaint, the Court states, “[a]dditionally, IRONSHORE’S vague allegations of ‘separate claims’ against it and of claims of the Banyon Companies ‘have made and/or will make” are facially insufficient to establish to establish an actual controversy regardless of IRONSHORE’S excess status. (D.E. 34 p. 5.) In the amended complaint, IRONSHORE fails to make new assertions which indicate an actual case or controversy. IRONSHORE merely adds five (5) small paragraphs regarding potential liability and three (3) exhibits. The Plaintiff states there is a ripe action for adjudication because:
a. Razorback Funding, LLC (a loss payee under the policy) has filed suit demanding coverage for damages in excess of $32,000,000.00 plus interest, costs, and attorney fees. Listed in paragraph 12 of the Amended Complaint and referencing Rule 26 disclosures filed in the Southern District in Razorback Funding, LLC v. Federal Insurance Company,
et al. Case No. 10-60171-CV-JAL.
b. “Razorback Funding, LLC has demanded policy limits of the primary and excess insurers in a letter dated November 30, 2009.
(D.E. 35 p. 4-5 and 26-27.)
The above-referenced facts as listed in the Amended Complaint but do not change the status of the case. This action must still be dismissed for failure to assert an actual case or controversy. Plaintiff was aware of the Razorback action at the time it filed its original complaint [D.E. 1] which was previously dismissed. Plaintiff previously advised the Court of this potential claim and the Court was not persuaded by this information in connection with the Complaint. The Court should not be persuaded now. The Plaintiff adds no new facts regarding payment being triggered to IRONSHORE . The Plaintiff fails to show this Court the potential for a claim payment because it fails to show an actual controversy exists, the obligations of IRONSHORE remain contingent on the action of Federal.
Plaintiff did not make many additions to the amended complaint; the vast majority of the allegations are the same as the allegations in the Complaint which was dismissed by sua sponte
order on May 28, 2010. In the amended complaint, the Plaintiff adds three additional exhibits exhibit A is a letter requesting payment by Razorback Funding, LLC, exhibit B is a “Proof of Loss” narrative letter submitted on behalf of the Banyon Entities, and exhibit G is a letter dated
February 26 from counsel for Plaintiff in this action to Defendants returning the premium in an attempt rescind the policy.
Exhibit A offers no new information regarding any case or controversy against the Plaintiff. This was information previously listed in the dismissed complaint. The Plaintiff was purported provided this information in or around November 2009 and, Plaintiff was in
possession of this document at the time of filing the dismissed complaint. This Court was previously put on notice of this claim and still dismissed this action.
Exhibit B is a narrative of the loss submitted by the Defendants to Federal Insurance Company and the other excess insurers. This narrative letter provides a notice of the loss. This is the same loss Banyon provided to the insurers subsequent to when it learned of the theft. This is not an additional claim. The dismissed complaint filed by the Plaintiff included information regarding this claim and this Court ruled this action was not ripe for litigation because the Plaintiffs did not have an actual controversy. Adding this exhibit and language regarding this proof of loss does not change the payment obligations of Plaintiff and the case is still not ripe for adjudication. Moreover, thirty (30) days have passed since the “proof of loss” was submitted to Federal Insurance Company and Federal has not accepted coverage for the loss or issued any payments in connection with any claims arising out of the policy.
Exhibit G is a letter sent to the Defendants returning partial premium funds. This letter was sent to Defendants enclosing a copy of the complaint and summons in this matter. This letter was sent on the same day the complaint was filed. This letter does not implicate any new obligation of the Plaintiff, nor does it change the status of this matter. The Plaintiff had this information when it filed the dismissed complaint, Plaintiff appears to be adding this information
as an afterthought and a desperate attempt to show the matter is ripe. However, this letter and this information do not change the status of Plaintiff’s obligations and the matter remains unripe.
In the amended complaint, the Plaintiff makes a new assertion that “there is ‘practical likelihood’ that the contingencies necessary to trigger excess coverage will occur (to wit, liability in excess of $30,000,000.00” (footnote citation by Plaintiff). The Plaintiff makes this allegation but fails to support the allegation with the facts of the case. The Plaintiff does include a footnote. The footnote lists a string citation list of cases which include E.R. Squibb & Sons, Inc v. Lloyd’s & Cos., 241 F.3d 154, 177-178 (2d Cir. N.Y. 2001). The only language the Plaintiff cites with this case is, “whether matter is justicible depends on whether there is a ‘practical likelihood’ that the excess carriers policies would be reached.” Id. at 177. IRONSHORE does not explain what exactly was required by the court in Squibb to show there was practical likelihood the excess carriers would be reached. IRONSHORE does not explain how the facts in Squibb are similar to the facts in the instant action. The court in Squibb held that there was a practical likelihood that coverage under a pharmaceutical company’s high level of excess liability insurance would be reached with respect to product liability claims. Id. In Squibb, the court determined there was a practical likelihood for coverage when there were “thousands of settled, pending and future actions in against it in cases involving (the drug) DES.” Id at160. During the course of the litigation, all the disputes with the primary insurance company “were at an end” and only the excess insurers were the remaining defendants in the action. Id. Obviously, IRONSHORE did not provide the court with an analysis of this case because it realizes how Squibb fails to be analogous to this matter. In Squibb, the potential case or controversy was able to be determined because the facts regarding the potential for claims reaching the excess layers could be
Squibb, the bottom layer of insurance was active. In Ironshore, the bottom layer of insurance is not active.
Plaintiff’s footnote quotes two (2) other cases. The citation for case listed as 2000 D.N.H 201 does not correspond with the case name, SIG Arms v. Employers Ins. The Defendants cannot review this case without a proper citation. However, the rule cited by Plaintiff in connection with SIG Arms, does not provide additional information regarding what is required for a ruling of “practical likelihood” in connection with an action related to an excess insurer. Instead, the case citation merely explains excess policies may be triggered by underlying suits and satisfy the controversy under Article III. This case offers no insight or authority with respect to how or why IRONSHORE’S amended complaint is proper.
The final case in the string citation footnote is Raytheon Co. v. Cont’t Cas. Co. 123 F. Supp. 2d 22, 31 (D. Mass. 2000). Raytheon explains a determination regarding a sufficient controversy with an excess carrier requires a fact-base analysis, evaluation by the court of the record, and substantial evidence. Id at 30. As examples of substantial evidence, Raytheon cites to Certain Underwriters at Lloyd’s v. St. Joe Minerals Corp., 90 F.3d 671, 676 (2d Cir. 1996), wherein to show the potential liability, the court reviewed claims, costs, and evidences of legal defenses. In Raytheon, the court determined there was an actual cause and controversy based on the potential likelihood for claims; this was a very fact intensive analysis. In the subject case, IRONSHORE has failed to provide facts showing a ripe controversy as was shown in St. Joe. Furthermore, a material difference between the instant matter and Raytheon relates to the primary policy of insurance. In Raytheon the insurer, CNA, is an excess carrier and is also the primary insurer. Raytheon at 31. IRONSHORE is a separate and independent excess carrier in the subject action.
The only other potentially substantive additions to the amended complaint do not change the status of the cause. The Plaintiff includes an inference to information which was not divulged at a “recent Rule 2004 Examination of Szafranski”. D.E. 5, paragraph symbol 79. Plaintiff contends Szafranski did not offer information or answer questions regarding involvement of dealings between Banyon and Rothstein. The purported failure of a non-party not discussing involvement of the Banyon companies and Rothstein is another attempt by Plaintiff to create an antagonistic attitude towards the Defendants in the instant action by attempting to link the Defendants with the criminal activity of non-party, Scott Rothestein. Plaintiff fails to attach any transcript or pleading as an exhibit.
Plaintiff added an assertion that the Banyon misrepresented the risk involved in settlement purchases. Plaintiff might attempting to allege a misrepresentation with respect to classification of the settlement purchases but the information listed in paragraph 59 of the amended complaint is difficult to understand. Defendants do not know what the Plaintiff is attempting to establish with this unsupported allegation but if Plaintiff is seeking to show the policy should be rescinded because of these purported representation, the Plaintiff’s allegations fail to meet the burden required.
The Plaintiff adds new information it contends it relied on in connection with the procurement of the policy in paragraph 38 of the amended complaint. This is information not cited in the dismissed complaint but the Plaintiff fails to properly explain clearly where and what the language quoted originated. The Plaintiff merely lists as representation “made in emails from the BANYON Companies. The Plaintiff is required to plead this information with specificity and explain how the Plaintiff relied on this information, who provided this
information, who received this information and how this information is considered a material misrepresentation.
CONCLUSION
For all of the foregoing reasons, Defendants, BANYON 1030-32, LLC, BANYON CAPITAL, LLC., BANYON FUNDING, LLC, BANYON RESOURCES, LLC, BANYON INVESTMENTS, LLC. (DELAWARE), BANYON INVESTMENTS, LLC. (NEVADA), BANYON USVI LLC, BANYON INCOME FUND, LP, respectfully request that the Court dismiss each of IRONSHORE INDEMNITY, INC.’s two count complaint for declaratory judgment with prejudice, together with whatever additional relief the Court deems just and proper including the awarding of costs incurred in defending against the Complaint.
Respectfully submitted,
___/s/ Jean F. Niven, Esq.
Jean F. Niven, Esq.
Florida Bar No.: 407607
William F. Merlin, Jr., Esq.
Florida Bar No. 364721
MERLIN LAW GROUP, P.A.
777 South Harbour Island Blvd
Suite 950 Tampa, FL 33602 Tel: (813) 229-1000 Fax: (813) 229-3692 [email protected] [email protected] Attorneys for Defendants
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on June 9, 2010, I electronically filed the foregoing document with the Clerk of Court using CM/ECF and I hereby certify that the foregoing document is being served this day on all counsel of record or pro se parties identified on the attached Service List in the manner specified, either via transmission of Notices of Electronic Filing generated by CM/ECF or in some other authorized manner for those counsel or parties who are not authorized to received electronically Notices of Electronic Filing.
___/s/ Jean F. Niven
William F. Merlin, Jr.
Florida Bar No.: 407607
MERLIN LAW GROUP, P.A.
777 South Harbour Island Blvd
Suite 950 Tampa, FL 33602 Tel: (813) 229-1000 Fax: (813) 229-3692 [email protected] [email protected] Attorneys for Defendants
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 10-60285-CIV-UNGARO
SERVICE LIST Robert D. McIntosh, (FBN 115490) Robert H. Schwartz (FBN 0301167) Adam B. Cooke (FBN 0634182) ADORNO & YOSS LLP
888 S.E. 3rd Ave, Suite 500 Ft. Lauderdale, FL 33316-1159 [email protected] [email protected] [email protected] Tel: (954) 523-5885 Fax:(954) 760-9531
