United States District Court, D. Maryland
EVANSTON INSURANCE COMPANY; SUSSEX INSURANCE COMPANY f/k/a COMPANION SPECIALTY INSURANCE COMPANY; UNITED SPECIALTY INSURANCE COMPANY; and PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY Plaintiffs
DAN RYAN BUILDERS, INC. Defendant
MEMORANDUM AND ORDER RE: DISMISSAL
J. Garbis United States District Judge.
Court has before it Dan Ryan Builders, Inc.'s Motion to
Dismiss [ECF No. 54] and the materials submitted relating
thereto. The Court has held a hearing and has had the benefit
of the arguments of counsel.
instant action relates to coverage under commercial general
liability (“CGL”) policies that several insurers
issued to Dan Ryan Builders, Inc. (“Dan Ryan”)
and certain of its subcontractors.
times relevant, Dan Ryan has been a residential home builder.
In a period from a time prior to September 2005 through 2010,
Dan Ryan and its subcontractors built a number of homes in
West Virginia in high radon areas.
October 31, 2014, two putative class actions (the
“Underlying Actions”) were filed in the Circuit Court of
Jefferson County, West Virginia, alleging that Dan Ryan and
its subcontractors (“the Subs”) defectively
constructed the homes at issue, allowing excessive radon into
the homes and thereby putting the homeowners at risk for lung
Ryan and the Subs sought to have their respective insurers
provide defenses and indemnity. All of the insurers have
denied coverage for various reasons, including a
“pollution exemption.” As discussed herein, the
litigation regarding coverage is now pending in overlapping
litigation in the Circuit Court for Frederick County,
Maryland and the District of Maryland. By the instant motion,
Dan Ryan seeks, in effect, to have the litigation
consolidated and proceed in the Circuit Court for Frederick
Ryan as Insured
Ryan is the insured in relevant policies issued by Evanston
Insurance Company (“Evanston”), Sussex Insurance
Company f/k/a Companion Specialty Insurance Company
(“Sussex”), United Specialty Insurance Company
(“USIC”), and Pennsylvania National Mutual
Casualty Insurance Company (“Penn National”).
Subs as Insureds
Subs are insureds in relevant policies issued by Erie
Insurance Exchange (“Erie”), Nationwide Mutual
Insurance Company/Nationwide Mutual Fire Insurance Company
(“Nationwide”), and Frederick Mutual Insurance
Company (“Frederick Mutual”).
Ryan as Additional Insured
Ryan is an additional insured in the relevant Subs'
policies issued by Erie, Nationwide, and Frederick Mutual.
April 2015, Erie filed “no coverage” declaratory
judgment actions, later consolidated in the Circuit Court for Frederick
County, Maryland, against Dan Ryan, the Subs, and the
plaintiffs in the Underlying Actions. Nationwide and
Frederick Mutual later intervened as Plaintiffs.
September 28, 2016, Dan Ryan filed third-party complaints
against Evanston, Sussex, USIC, and Penn National in the
State Court Action.
present, all concerned with the relevant insurance coverage -
Dan Ryan, its insurers, the Subs and their insurers, and the
plaintiffs in the Underlying Actions - are parties in the
instant federal case is a “no
coverage” declaratory judgment action filed by
Evanston against Dan Ryan invoking the Court's diversity
jurisdiction under 28 U.S.C. § 1332(a). When filed,
there was complete diversity between Plaintiff
Defendant Dan Ryan.
ensued developments that present the jurisdictional issue
depicted in the instant motion as set forth in the following
Dan Ryan answered and counterclaimed.
Dan Ryan converted from a Maryland corporation to
Dan Ryan Builders West Virginia, LLC, a Maryland
limited liability company. Yeager Affidavit ¶
4, Ex. 2, ECF No. 56.
Dan Ryan's parent company, DRB Enterprises,
Inc., converted to DRB Enterprises, LLC, a Delaware
limited liability company.
Sumitomo Forestry America, Inc. (“Sumitomo
America”) became a member of DRB Enterprises,
Sussex (a South Carolina Corporation)
intervened as a Plaintiff.
USIC, a citizen of Delaware and Texas, intervened
as a plaintiff. 
Penn National  (a Pennsylvania citizen)
intervened as a plaintiff.
instant motion, Dan Ryan seeks dismissal for lack of
diversity or by abstention. Alternately, Dan Ryan contends that
Erie, Nationwide, and Frederick Mutual (its additional
insurers) must be joined to the instant action as necessary
and indispensable parties, an action that would defeat
diversity jurisdiction, and requests the Court dismiss under
12(b)(1) governs motions to dismiss for lack of subject
matter jurisdiction. Biktasheva v. Red Square Sports,
Inc., 366 F.Supp.2d 289, 294 (D. Md. 2005). It is well
established that “[t]he burden of proving subject
matter jurisdiction on a motion to dismiss is on the
plaintiff, the party asserting jurisdiction.” Adams
v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982).
court may “consider evidence outside the
pleadings” in a 12(b)(1) motion to determine if it has
jurisdiction over the case. Richmond, Fredericksburg
& Potomac R.R. Co. v. United States, 945 F.2d 765,
768 (4th Cir. 1991). “Unless the jurisdictional facts
are intertwined with the facts central to the merits of the
dispute, the district court may then go beyond the
allegations of the complaint and resolve the jurisdictional
facts in dispute by considering evidence outside the
pleadings, such as affidavits.” U.S. ex rel.
Vuyyuru v. Jadhav, 555 F.3d 337, 348 (4th Cir. 2009)
(quoting Adams v. Bain, 697 F.2d 1213, 1219 (4th
court should grant the 12(b)(1) motion only if the material
jurisdictional facts are not in dispute and the moving party
is entitled to prevail as a matter of law.” ...