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Peerless Insurance Co. v. Weo Carpentry, LLC

United States District Court, D. Maryland

June 5, 2019

PEERLESS INSURANCE COMPANY, Plaintiff,
v.
WEO CARPENTRY, LLC, Defendant.

          MEMORANDUM ORDER

          RICHARD D. BENNETT UNITED STATES DISTRICT JUDGE.

         Plaintiff Peerless Insurance Company ("Plaintiff or "Peerless") brings this action alleging that the Defendant, WEO Carpentry, LLC ("Defendant" or "WEO") is in breach of several insurance contracts. The parties have reached an impasse concerning the true name of the Defendant. Plaintiffs Complaint brings suit against "WEO Construction," but Defendant insists its correct name is "WEO Carpentry, LLC." WEO has filed three Motions seeking Judgment in its favor based solely on this misnomer: a Motion for Judgment on the Pleadings (ECF No. 16); a Motion for Summary Judgment (ECF No. 17), which was subsequently withdrawn (ECF Nos. 21, 23); and a Second Motion for Summary Judgment (ECF No. 20). Plaintiff has not responded to these Motions. Instead, Plaintiff has filed a Motion for Leave to File Amended Complaint (ECF No. 32), seeking, puzzlingly, to substitute "WEO Carpentry" and not "WEO Carpentry, LLC" as the Defendant. The parties' submissions have been reviewed and, suffice it to say, no hearing is necessary. See Local Rule 105.6 (D. Md. 2018). For the reasons stated herein, Defendant's Motion for Judgment on the Pleadings (ECF No. 16) is DENIED; Defendant's Second Motion for Summary Judgment (ECF No. 20) is DENIED; and Plaintiffs Motion for Leave to File Amended Complaint (ECF No. 32) is DENIED AS MOOT. "WEO Carpentty, LLC" is HEREBY SUBSTITUTED in place of "WEO Construction." The Clerk of this Court is directed to recaption this case accordingly.

         BACKGROUND

         This case arises from Defendant WEO's alleged breach of several one-year workers' compensation insurance contracts supplied by Plaintiff, Peerless, between June 2013 and July 2016. (Compl. ¶¶ 6-8, ECF No. 1.) Peerless asserts that, between all four policies, WEO owes a total of $996, 831.15 in outstanding premiums. (Id. at¶ 13.) Peerless commenced this action on April 10, 2018 alleging four Counts of Breach of Contract (Counts I, II, III, and IV) and one count of Unjust Enrichment (Count V). (Complaint, ECF No. 1.) Jurisdiction is based on diversity of citizenship pursuant to 28 U.S.C. § 1332: Peerless, a New Hampshire Corporation, has sued WEO, a Maryland corporation, in an amount exceeding $75, 000.00. (Id. at 1.)

         WEO asserts that it has been misidentified in this action. In its Complaint, Peerless named "WEO Construction" as the Defendant. (Id.) On August 14, 2018, WEO Carpentry, LLC filed an Answer and Counterclaim, noting that it had been incorrectly identified in Plaintiffs Complaint. (ECF No. 11.) In its Answer, WEO maintains that it attempted to resolve this issue with Peerless's attorneys through voicemail and email, but did not receive a response. (Id. at 1.) As an affirmative defense, WEO asserts that Peerless failed to join a required party pursuant to Rule 19 of the Federal Rules of Civil Procedure by identifying the Defendant in this action as "WEO Construction" rather than "WEO Carpentry, LLC."

         WEO seeks Judgment in its favor based on Plaintiffs failure to supply the correct entity name in its Complaint. On September 27, 2018 WEO filed a Motion for Judgment on the Pleadings (ECF No. 16) pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, seeking Judgment based on Peerless's failure to name the correct Defendant. In the Motion, WEO represents that it discussed the identification issue with counsel for Peerless on August 23, 2018. The Motion also attaches a Trade Name Cancellation Application filed by WEO Construction on September 18, 2017 with the State of Maryland, Department of Assessments and Taxation, Charter Division. (Defs Mot. for J. Ex. B, ECF No. 16-4.) There is evidence that this Application was granted and that WEO Construction is no longer an active trade name. (Def.'s Mot. for J. Ex. A, ECF No. 16-3.)

         On September 27, 2018, WEO filed a Motion for Summary Judgment (ECF No. 16), again seeking Judgment based on Peerless's failure to name the correct Defendant in its Complaint. This time, however, WEO submitted an Affidavit from William E. Ordonez, the owner of WEO Carpentry, LLC. (Def.'s Mot. Summ. J. Ex. A, ECF No. 17-3.) In the Affidavit, Ordonez represents that WEO Carpentry has been the name of his business since 2006 and that he formed WEO Carpentry, LLC on February 4, 2015. (Id. at ¶ 3.) He explained that he first procured worker's compensation insurance for his business using C&E Financial Services ("C&E"), a Liberty Mutual agent in Baltimore, in 2010. (Id. at ¶ 4.) On August 5, 2013 Peerless, which is owned by Liberty Mutual, issued a one-year worker's compensation insurance policy in the name of "WEO Construction." (Id.) Despite Ordonez's numerous complaints to C&E that this name was incorrect, each subsequent insurance policy issued by Peerless over the next three policy years incorrectly listed "WEO Construction" as the insured entity. (Id. at ¶¶ 4-5.) Finally, in February 2017, Peerless re-issued the 2014/2015, 2015/2016 and 2016/2017 policies with the correct entity name, "WEO Carpentry, LLC." (Id. at ¶ 6.) Ordonez admits that he received notice of this lawsuit when Peerless served him at his current address in Nottingham, Maryland with the operative Complaint in this matter, which attaches four worker's compensation insurance policies naming "WEO Construction" as the insured. (Id. at ¶ 7.)

         On October 23, 2018, WEO Hied a Second Motion for Summary Judgment (ECF No. 20) after withdrawing its first Motion. The Motion adds no new arguments, but supplements Mr. Ordonez's Affidavit with cover sheets of the re-issued policies, all three of which list "WEO Carpentry, LLC" as the insured entity. (Supp. Aff. of William E. Ordonez, Exs. 2, 3, 4, ECF No. 20-3.) Additionally, the Affidavit has been amended to indicate that Mr. Ordonez's 2013 personal income tax return lists "WEO Construction" as his business name. (Supp. Aff. of William E. Ordonez ¶ 8.) Mr. Ordonez speculates that his tax preparer may have incorrectly used this name by searching the Maryland State Department of Assessments & Taxation database. (Id.)

         Peerless did not file a response to WEO's motions and has not otherwise challenged the representations of WEO or Mr. Ordonez. On February 11, 2019 Peerless filed a Motion for Leave to File Amended Complaint (ECF No. 32) which seeks to Amend the Complaint to "reflect the current name of the defendant." (Id..at 1.) An attached version of the Amended Complaint, however, names "WEO Carpentry" and not "WEO Carpentry, LLC" as the Defendant. (Proposed Amended Complaint, ECF No. 32-1.)

         STANDARD OF REVIEW

         I. Motion for Judgment on the Pleadings Pursuant to Rule 12(c).

         Defendant moves for Judgment on the Pleadings under Rule 12(c) of the Federal Rules of Civil Procedure, citing Plaintiffs failure to join a required party. Rule 12(c) authorizes a party to move for judgment on the pleadings any time after the pleadings are closed, so long as the motion is made early enough so as not to delay trial. See Fed. R. Civ. P. 12(c). Pleadings are considered closed "upon the filing of a complaint and answer (absent a court-ordered reply), unless a counterclaim, crossclaim, or third-party claim is interposed, in which event the filing of an answer to a counterclaim, crossclaim answer, or third-party answer normally will mark the close of the pleadings." 5C Charles Alan Wright, et al, Federal Practice & Procedure § 1367 (4th Ed. May 2019). A party may raise the failure to join a required party under Rule 19 in a Motion for Judgment on the Pleadings. See Fed. R. Civ. P. 12(h)(2).

         Rule 19 invites a two-step inquiry. First, this Court must consider "whether a party is necessary to a proceeding because of its relationship to the matter under consideration." Home Buyers Warranty Corp. v. Hanna, 750 F.3d 427, 433 (4th Cir. 2014) (quoting Teamsters Local Union No. 171 v. Keal Driveaway Co., 173 F.3d 915, 917 (4th Cir. 1999). Second, if the party is necessary but joinder would destroy diversity jurisdiction, this Court must decide under Rule 19(b) "whether the proceeding can continue in that party's absence." Buyers Warranty Corp., 750 F.3d at 433 (quoting Teamsters Local Union No. 171, 173 F.3d at 917-18).

         II. Motion for Summary Judgment ...


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