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Admiral Insurance Company v. Michael C. Adges et al

June 27, 2012

ADMIRAL INSURANCE COMPANY, PLAINTIFF,
v.
MICHAEL C. ADGES ET AL., DEFENDANTS.



The opinion of the court was delivered by: J. Paul Oetken, District Judge:

MEMORANDUM AND ORDER

The Plaintiff in this action, Admiral Insurance Company ("Admiral" or "Plaintiff"), filed its complaint on November 16, 2011. (Dkt. No. 1 ("Compl.").) The complaint seeks a declaratory judgment concerning Admiral's duties under a Lawyers Professional Liability Insurance policy issued to Defendant Law Office of Michael C. Adges. (Id.; see also Lawyers Professional Liability Insurance, Policy Number 9951662, Dkt. No. 16-1 (the "Policy").) Admiral specifically seeks relief regarding two actions filed in the Supreme Court for the State of New York, Nassau County: Robert S. Wooten and Ernestine Wooten-Kolajo v. Michael C. Adges and Michael C. Adges, D/B/A Silver Lining Realty, Index No. 0932/10 (the "Wooten Action") and Aloia Construction v. Michael C. Adges, Esq., Index No. 012474/10. (Compl. at 3-5.)

On April 9, 2012, Admiral filed the instant motion (Dkt. No. 36) for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) as to Counts II and III in the complaint in this action, which relate to the Wooten Action. No defendant has filed any opposition to this motion. For the reasons discussed below, the motion will be granted.

I. Background*fn1

The Policy names the insured as "Law Office of Michael C. Adges." (Policy at 3 of 27.) The Wooten Action was filed on or about April 26, 2010, by Robert S. Wooten and Ernestine Wooten-Kolajo, who are both defendants in this action. Their complaint in the Wooten Action asserted claims against Michael C. Adges and Michael C. Adges D/B/A Silver Lining Realty arising out of a May 31, 2007 real estate transaction. (See Verified Complaint, Robert S. Wooten and Ernestine Wooten-Kolajo v. Michael C. Adges and Michael C. Adges, D/B/A Silver Lining Realty, Dkt. No. 1, Ex. A, 16-22 of 59 (the "Wooten Complaint").)

The Wooten Complaint states eight causes of action: (1) conversion; (2) misappropriation; (3) fraud; (4) failure to provide accounting; (5) constructive trust; (6) breach of fiduciary duty; (7) deceptive trade practices; and (8) criminal indifference. (Wooten Complaint.) All of these claims are preceded by a statement that "[a]t all times hereinafter mentioned, upon information and belief, defendant Michael C. Adges was doing business under the trade name and style of Silver Lining Realty . . . ." (Id. ¶ 3.) All of the claims are also preceded by a statement that "Silver Lining Realty was and is an entity wholly owned by and/or wholly controlled by defendant Michael C. Adges." (Id. ¶ 4.)

II. Legal Standard

"The standard for addressing a Rule 12(c) motion for judgment on the pleadings is the same as that for a Rule 12(b)(6) motion to dismiss for failure to state a claim." Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006). On a Rule 12(c) motion, the Court must accept as true the non-movant's allegations and draw all reasonable inferences in the non-movant's favor. See id.; Sheppard v. Beerman, 18 F.3d 147, 150 (2d Cir. 1994). On such a motion, the Court is limited to reviewing the pleadings, any documents that are attached thereto, incorporated by reference, or "integral" to the allegations even if not explicitly incorporated by reference, and facts of which the Court may take judicial notice. See, e.g., ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007).

III. Discussion

A. Choice of Law

Because this dispute is before the Court on diversity jurisdiction, the relevant choice-oflaw rules are those of the forum state, New York. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). "Under New York choice of law rules, the first inquiry in a case presenting a potential choice of law issue is whether there is an actual conflict of laws on the issues presented." Fed. Ins. Co. v. Am. Home Assur. Co., 639 F.3d 557, 566 (2d Cir. 2011) (citing Fieger v. Pitney Bowes Credit Corp., 251 F.3d 386, 393 (2d Cir. 2001)). In cases where no actual conflict is shown by any party, this Court has applied New York law. See Arakelian v. Omnicare, Inc., 735 F. Supp. 2d 22, 30 n.5 (S.D.N.Y. 2010). Here, Admiral, a Delaware corporation with its principal place of business in New Jersey, argues that New York law applies. No defendant has either shown a conflict between New York's law and that of any other state or argued that any other state's law applies. Accordingly, the Court applies New York law.

B. Coverage

When a lawsuit is brought against an insured, "if the allegations, on their face, do not bring the case within the coverage of the policy, there is no duty to defend or indemnify." Tartaglia v. Home Ins. Co., 240 A.D. 2d 396, 397, 658 N.Y.S. 2d 388, 390 (N.Y. App. Div. 2d Dep't 1997).

Here, the Policy provides two exclusions from coverage for claims related to an insured's business activities other than the practice of law. Specifically, the Policy states that Admiral shall not be liable to defend, or to make any payment for any Damages or ...


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