United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
A. ROSS UNITED STATES DISTRICT JUDGE.
matter is before the Court on Defendant Evanston Insurance
Company's (“Evanston”) fully briefed motion
to dismiss Plaintiff State Auto Property and Casualty
Company's (“State Auto”) Petition for
Declaratory Action (Doc. 9). For the reasons set forth below,
Evanston's motion will be denied.
matter arises out of a coverage dispute between State Auto
and Evanston regarding whether Evanston must defend Buff
Enterprises, LLC (“Buff Enterprises”) and Jordan
Pea (“Pea”) in a pending products liability
personal injury action in the Circuit Court of St. Clair
County, Illinois, styled Catherine Bauer v. 1st Phorm
International, LLC, Buff Enterprises, and Jordan Pea,
Case No. 13-L-390 (“underlying lawsuit”).
Specifically, State Auto is defending Buff Enterprises and
Jordan Pea in the underlying lawsuit as insureds under a
Business Owners Policy issued to Buff Enterprises, and
Evanston is defending 1st Phorm International, LLC
(“1st Phorm”) under a general liability policy
(“Evanston policy”) issued to 1st Phorm.
Petition for Declaratory Judgment, State Auto alleges that
the Additional Insured-Vendors endorsement (“Vendors
endorsement”) of the Evanston policy provides coverage
to Buff Enterprises and Jason Pea with respect to the sale of
1st Phorm's products, but that Evanston has declined to
defend them in the Bauer lawsuit. (Petition for Declaratory
Judgment (“Pet.”), Doc. No. 5 at ¶¶ 6,
8). State Auto claims that Buff Enterprises and Pea tendered
the defense of the underlying lawsuit to Evanston, but
Evanston declined, and continues to decline, coverage. State
Auto alleges that the Evanston policy provides coverage to
Buff Enterprises and Pea. State Auto further alleges it has
provided Buff Enterprises and Pea with a defense to the
underlying lawsuit and is entitled to contribution from
Evanston for its share of defense costs incurred.
(Id. at ¶¶ 11-13).
motion to dismiss, Evanston argues there is no coverage for
Buff Enterprises and Pea because (1) they did not sell any
product; (2) their acts allegedly caused or contributed to
Bauer's injury; and (3) they relabeled the products.
(Doc. 5). In response, State Auto argues that Evanston cannot
avoid its duty to defend Buff Enterprises and Pea unless it
can prove that there is no possibility of coverage. (Doc. 13
at 3). It argues that Evanston cannot prevail because the
Petition for Declaratory Judgment has alleged facts that give
rise to a claim potentially within the Evanston policy.
purpose of a Rule 12(b)(6) motion to dismiss for failure to
state a claim is to test the sufficiency of the
plaintiff's petition. Young v. City of St.
Charles, 244 F.3d 623, 627 (8th Cir. 2001). In ruling on
a motion to dismiss, the Court “accept[s] the
allegations contained in the complaint as true and draw[s]
all reasonable inferences in favor of the nonmoving
party.” Cole v. Homier Dist. Co., Inc., 599
F.3d 856, 861 (8th Cir. 2010) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)).
court tests the sufficiency of a petition for declaratory
judgment not by determining whether plaintiff is entitled to
the relief prayed for, but by asking whether it is entitled
to a declaration of rights or status on the facts pleaded.
State ex rel. Petti v. Goodwin-Raftery, 190 S.W.3d
501, 504 (Mo.Ct.App. 2006); Farm Fire & Cas. Co. v.
Alberici, 852 S.W.2d 388, 389 (Mo.Ct.App. 1993). The
petition alone is considered (id.), and it must
state facts which support the plaintiff's allegations and
demonstrate a justiciable controversy
(Goodwin-Raftery, 190 S.W.3d at 504). The Court
accepts as true “all of the well-pleaded facts and
their concomitant reasonable inferences, ignoring all
conclusions.” Teat v. Director of Revenue, 806
S.W.2d 754, 757 (Mo.Ct.App. 1991).
review of the Petition and memoranda pertaining to the
present motion to dismiss, the Court finds that dismissal is
not appropriate at this time. At the motion to dismiss stage,
the only issue before the Court is whether the petition
states a cause of action that is plausible on its face. Here,
State Auto sets forth the provisions of the Evanston policy
that it claims provides coverage to Buff Enterprises and Pea
in the underlying lawsuit. Accepting all as true the facts in
the Petition, it is plausible that the provisions of the
Evanston policy could provide coverage to Buff Enterprises
State Auto properly alleged that Buff Enterprises and Pea
claimed there was coverage and that they tendered the defense
of the underlying action. The Petition alleged that Evanston
refused coverage and that State Auto disagrees with
Evanston's interpretation of the policy. See
generally Alberici, 852 S.W.2d at 389. Upon these
averments, State Auto stated a claim sufficient for the Court
to declare the rights of the parties in light of the Evanston
policy. Such a declaration might, of course, include a
finding that Evanston has no duty to defend Buff Enterprises
or Pea in the underlying action.
motion to dismiss and response thereto, the parties argue the
merits of whether the Evanston policy provides coverage to
Pea and Buff Enterprises in the underlying lawsuit. However,
those considerations are more appropriate for a motion for
summary judgment. The Court does not, at this stage,
determine whether State Auto is entitled to the relief
IT IS HEREBY ORDERED that Defendant Evanston Insurance
Company's Motion to Dismiss  is DENIED.
FURTHER ORDERED that within ten (10) days of the date of this
Order, the parties shall submit a proposed scheduling plan
for any ...