United States District Court, D. Maryland
Catherine C. Blake United States District Judge.
case involves a dispute between insurance companies as to
which is liable for a settlement paid in relation to a
Florida personal injury case. Now pending before the court is
the defendants' motion to dismiss. The motion is fully
briefed and no oral argument is necessary. For the
reasons stated below, the court will grant the motion as to
the claim of equitable contribution and deny it as to the
claim of equitable subrogation.
AND PROCEDURAL HISTORY
4, 2012, Aldace Turner was attempting to walk down a trailer
at his job site when he fell and sustained back injuries.
Second Amended Compl. ("SAC") ¶ 21, ECF 5-1.
The trailer was placed at the job. site by Allied Trailer
Sales and Rentals ("Allied") for use by Manhattan,
a construction company and the general contractor, and MCC
Mechanical, a subcontractor which was providing HVAC
installation and mechanical services for the project.
Id. ¶¶ 23-25. According to the plaintiff,
Continental Casualty Company ("Continental"), the
trailer was leased by Allied to Manhattan. Id.
¶ 23. After Mr. Turner's fall, in August 2012, MCC
agreed to take over Manhattan's lease of the trailer,
through a "Trailer Takeover
Application." Id. ¶ 28.
Turner and his wife, Suzie Turner, filed suit against Allied
in Florida. Id. ¶ 1. At the time, Continental
insured Allied pursuant to an umbrella insurance policy, but
Allied did not notify Continental about the litigation until
after the verdict was returned. Id. ¶ 38.
Instead, pursuant to the lease agreements for the trailer,
which included insurance provisions, Allied tendered its
defense to MCC's primary commercial general liability
insurer, Travelers Property Casualty ("Travelers
Casualty"), id. ¶¶ 34-35, and
Travelers Casualty assumed exclusive control of Allied's
defense in exchange for Allied's agreement not to pursue
its contractual indemnity claims against MCC or Manhattan,
id. ¶¶ 46-47. According to Continental,
Travelers Casualty turned down a settlement offer from Suzie
Turner and one from Aldace Turner, and proceeded to trial,
which resulted in a jury verdict of $3, 855, 755 against
Allied. Id. ¶¶ 49-51.
March 23, 2018, Allied notified Continental of the litigation
and the verdict against it. Id. ¶ 55. In
response, Continental issued a coverage position letter
disclaiming coverage on the basis that the underlying
insurance limits of liability had not been exhausted and
Allied had failed to timely notify Continental of the claim
or the underlying suit. Id. ¶ 60. On August 14,
2018, Continental then filed this action in the Circuit Court
for Howard County, seeking a judicial declaration that it had
no coverage obligation for the judgment or, alternatively, a
declaration regarding the priority of the coverage among
itself and Travelers Casualty, Starr, and Old Republic
General Insurance Corporation
("ORIC"), which were the various insurance carriers
insuring Manhattan and MCC at the time of the
accident. Id. ¶ 61.
September 18, 2018, the Turners, Allied, Travelers Casualty,
Travelers Indemnity Company of Connecticut ("Travelers
Connecticut"),  and Continental attended a mediation in
Orlando to resolve who would pay the judgment. Id.
¶¶ 62-63. At the mediation, the Turners, Travelers
Casualty, Travelers Connecticut, and Allied negotiated an
agreement, which Continental alleges was
"collusive," wherein Travelers Casualty and
Travelers Connecticut agreed to pay the Turners $2, 000, 000
pursuant to the limits of their respective policies, and the
Turners agreed to release Travelers Indemnity from any
coverage obligation it had to Allied under the MCC excess
policy. Id. ¶ 64. Under the agreement, Allied
also released Travelers Indemnity, Travelers Casualty, and
Travelers Connecticut from any liability they had under the
insurance policies. Id. ¶ 65. Also, Allied
assigned its rights under the Continental umbrella policy to
the Turners, and the Turners filed suit against Continental
for recovery of the rest of the judgment. Id. ¶
67. On January 23, 2019, Continental settled with the Turners
in that case for $350, 000. Id. ¶ 68;
Settlement Agreement, SAC Ex. 12, ECF 5-14.
February 12, 2019, Continental filed its first amended
complaint and, on April 1, 2019, filed its second amended
complaint. In the second amended complaint, Continental
brought claims of equitable contribution and equitable
subrogation against Travelers Casualty, Travelers Indemnity,
Travelers Connecticut (collectively, "Travelers")
and ORIC, arguing that they should reimburse Continental for
its settlement payment to the Turners. Travelers filed a
motion to dismiss in the Circuit Court for Howard County, to
which Continental filed its opposition. On May 1, 2019,
Continental settled with ORIC, and ORIC was dismissed from
the case. Notice of Removal at 2, ECF 1. Continental and ORIC
were both Illinois citizens, but with ORIC dismissed,
complete diversity existed, and Travelers removed the case to
this court. Id.
survive a motion to dismiss, the factual allegations of a
complaint "must be enough to raise a right to relief
above the speculative level on the assumption that all the
allegations in the complaint are true (even if doubtful in
fact)." Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555 (2007) (citations omitted). "To satisfy
this standard, a plaintiff need not 'forecast'
evidence sufficient to prove the elements of the claim.
However, the complaint must allege sufficient facts to
establish those elements." Walters v. McMahen,
684 F.3d 435, 439 (4th Cir. 2012) (citation omitted).
"Thus, while a plaintiff does not need to demonstrate in
a complaint that the right to relief is 'probable,'
the complaint must advance the plaintiffs claim 'across
the line from conceivable to plausible.'"
Id. (quoting Twombly, 550 U.S. at 570).
Additionally, although courts "must view the facts
alleged in the light most favorable to the plaintiff,"
they "will not accept 'legal conclusions couched as
facts or unwarranted inferences, unreasonable conclusions, or
arguments'" in deciding whether a case should
survive a motion to dismiss. U.S. ex rel. Nathan v.
Takeda Pharm. North Am., Inc., 707 F.3d 451, 455 (4th
Cir. 2013) (quoting Wag More Dogs, LLC v. Cozart,
680 F.3d 359, 365 (4th Cir. 2012)).
applies Maryland law throughout its motion to dismiss, while
Continental argues that Florida law should apply. As the
relevant substantive law is the same in Florida and Maryland,
the court finds it unnecessary to determine at this stage
which law should apply.