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Barber v. RLI Insurance Co.

December 22, 2008

CATHY G. BARBER, STEVEN B. BARBER, AND STEVEN B. BARBER, II, PLAINTIFFS,
v.
RLI INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Scullin, Senior Judge

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Plaintiffs bring this declaratory judgment action against Defendant RLI Insurance Company ("RLI"), asserting the following claims: (1) violations of state insurance law for failure to investigate the accident and notify Plaintiffs of its decision to deny coverage and disclaim liability in a timely manner and (2) two claims for breach of contract. Plaintiffs move, pursuant to Fed. R. Civ. P. 12(c), for judgment on the pleadings on the basis that Defendant cannot establish a set of facts that would preclude Plaintiffs from obtaining relief and that Defendant's failure to make a timely disclaimer renders its disclaimer ineffective as a matter of law. Plaintiffs also move pursuant to Fed. R. Civ. P. 12(f) to strike Defendant RLI's affirmative defenses. Finally, Plaintiffs move for attorney's fees under the authority of Mighty Midgets Inc. v. Centennial Ins. Co., 47 N.Y.2d 12, 21 (1979). Defendant cross-moves pursuant to Fed. R. Civ. P. 12(c) for judgment on the pleadings for failure to state a claim.

II. BACKGROUND

In 1997, Plaintiffs purchased the M/V PAPA BEAR, a 1997 Cobalt 22 foot open bow boat with a 7.4 liter engine (the "Boat"). Plaintiffs obtained a primary insurance policy through Continental Casualty Company that provided bodily injury and property damage coverage with a limit of $300,000 per occurrence ("Continental Policy").

On June 7, 2005, Plaintiffs obtained a personal umbrella liability policy from Defendant RLI with a $1,000,000 limit for the period of June 7, 2005, through June 7, 2006 ("RLI Policy").*fn1

Plaintiffs Steven B. and Cathy G. Barber are the named insureds in the RLI Policy, and Plaintiff Steven B. Barber, II, their son, is a blood relative under the RLI policy.

On June 11, 2005, Plaintiff Steven B. Barber, II operated the Boat carrying a number of guests on Lake George in New York with the permission of Plaintiff Cathy Barber. The Boat ran aground on Tea Island in Lake George causing severe injuries to a number of the guests on the Boat. On June 12, 2005, Plaintiffs Steven B. and Cathy G. Barber notified their insurance agent, Avid Insurance Agency, Inc., Continental, and RLI of the incident. Both Continental and RLI inspected the Boat in July and November of 2005.

On July 20, 2005, Marlene Izzano, a guest on the Boat, commenced a lawsuit in New York Supreme Court in the County of Warren against Plaintiff Steven B. Barber, II. Thereafter, numerous other lawsuits were commenced against one or all of the Plaintiffs.

On November 23, 2005, Plaintiff Cathy G. Barber commenced an action in this Court, No. 05-CV-1464, for exoneration from or limitation of liability. On January 31, 2006, BOAT U.S., the marine insurance claims representative of Continental, tendered its defense of the claims against Plaintiffs, requested that Defendant RLI withdraw its reservation of rights and provide defense and coverage, and advised Defendant RLI that Continental tendered to Defendant RLI its policy limits of $300,000 to assume and conduct the defense and handling of claims from this incident.

III. DISCUSSION

A. Rule 12(c) Standard

Both parties have moved pursuant to Fed. R. Civ. P. 12(c), which permits the entry of judgment as a matter of law on the basis of the pleadings alone. See Jackson v. Immediate Credit Recovery, Inc., No. CV-05-5697, 2006 WL 343180, *3 (E.D.N.Y. Nov. 28, 2006) (citing Burns Int'l Sec. Servs. v. Int'l Union, UPGWA, 47 F.3d 14, 16 (2d Cir. 1995)). Pleadings include attached exhibits and documents incorporated by reference. See id. (citation omitted). The same standard applies to Rule 12(c) motions as applies to Rule 12(b)(6) motions. See id. (quotation omitted).

Under Rule 12(b)(6), "[a] complaint must plead 'enough facts to state a claim for relief that is plausible on its face.'" Patane v. Clark, 508 F.3d 106, 111-12 (2d Cir. 2007) (quoting Bell Atlantic Corp. v. Twombly, --- U.S. ----, 127 S.Ct. 1955, 1974, 167 L.Ed. 2d 929 (2007)). The Second Circuit interprets Twombly to require "a flexible 'plausibility standard,' which obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible" rather than a heightened fact-pleading requirement. Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007).

The court must draw inferences in favor of the non-moving party. See State of N.Y. v. Oneida Indian Nation of N.Y., No. 1:95-CV-554, 2007 WL 2287878, *3 (N.D.N.Y. Aug. 7, 2007) (citation omitted). A court should grant a motion for judgment on the pleadings "only if the movant establishes 'that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law.'"Ogilvy Group Sweden, AB v. Tiger Telematics, Inc., No. 05 Civ. 8488, 2006 WL 547785, *2 ...


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