United States District Court, E.D. Missouri, Eastern Division
OPINION, MEMORANDUM AND ORDER
matter is before the Court on the motion of defendant S.M.S.
to dismiss plaintiff's claim against her as moot,
pursuant to Rule 12(b)(1), Fed.R.Civ.P. Plaintiff Safeco
Insurance Company of America has filed a response in
opposition and the issues are fully briefed.
Safeco Insurance Company of America issued a policy of
homeowners' insurance to Randall Tramp for the period of
December 1, 2014, to December 1, 2015. On October 13, 2016,
Tramp pleaded guilty to molesting his daughter S.M.S. for
several years, including during the policy's coverage
period. See Guilty Plea Petition [Doc. # 1-3];
see also Superseding Indictment [Doc. # 1-2]. In
November 2016, attorney George Tillman filed a civil action
in state court against Tramp on behalf of S.M.S. and her
mother Sharon Smith. See Petition [Doc. # 1-1]. That
case is scheduled for trial on April 16, 2018. [Doc. # 29 at
p. 4]. In addition, Mr. Tillman made a demand for coverage
under the homeowners' insurance policy that plaintiff
issued to Tramp. Complaint at ¶ 17 [Doc. # 1].
filed this action pursuant to the Declaratory Judgment Act,
28 U.S.C. §§ 2201 et seq., against
defendants Tramp, Smith, and S.M.S. Plaintiff seeks a
declaration that the homeowners' policy does not afford
coverage for the damages sought by S.M.S. and Smith in the
state-court action. Defendants did not file answers or enter
their appearance and the Clerk of Court entered default
against defendants Tramp and Smith. On plaintiff's
motion, the Court appointed Jeffrey S. Russell as guardian ad
litem to represent the interests of the minor defendant
S.M.S., and directed him to show cause why default should not
be entered against her. Mr. Russell reports that he spoke
with Attorney Tillman to determine what course of action is
in the best interests of S.M.S. He asked Mr. Tillman to
submit a letter to plaintiff withdrawing his prior demand for
coverage. In a letter dated December 4, 2017, Mr. Tillman
informed counsel for plaintiff that he does “not intend
to pursue on behalf of S.M.S. any coverage under the
homeowner's insurance policy” issued to defendant
Tramp and formally withdrew his prior demand
letter. [Doc. # 28-1]. Guardian Russell also
states that he will not assert a claim on behalf of S.M.S.
[Doc. # 30 at p.7-8, n.3]. He seeks dismissal of
plaintiff's claims against S.M.S. as moot.
Court first addresses plaintiff's contention that
defendant's motion to dismiss is untimely under Rule 12,
Fed.R.Civ.P. “With limited exception, failure to file a
motion within the time prescribed in Rule 12(b) is fatal for
Rule 12 motions.” Thomas D. Wilson Consulting, Inc.
v. Keeley & Sons, Inc., No. 405CV02115 ERW, 2006 WL
2788389, at *3 (E.D. Mo. Sept. 26, 2006). This argument is
factually flawed, because the motion was filed fourteen days
after the event that defendant argues moots plaintiff's
claim - Attorney Tillman's letter withdrawing
defendant's claim for coverage. Plaintiff's argument
is also substantively flawed because mootness implicates a
court's power to decide the claims before it, no matter
when it arises. Article III, § 2, of the Constitution
confines federal courts to the decision of
“Cases” or “Controversies.”
Arizonans for Official English v. Arizona, 520 U.S.
43, 64 (1997). The question of whether “there remains a
live case or controversy . . . goes to the Article III
jurisdiction.” Id. at 67. “Mootness is a
jurisdictional question because the Court is not empowered to
decide moot questions or abstract propositions.”
North Carolina v. Rice, 404 U.S. 244, 246 (1971).
“It is of no consequence that the controversy was live
at earlier stages in this case; it must be live when we
decide the issues.” State of S.D. v. Hazen,
914 F.2d 147, 150 (8th Cir. 1990). A party claiming
declaratory judgment jurisdiction, as plaintiff does here,
must “establish that such jurisdiction existed at the
time the claim for declaratory relief was filed and that
it has continued since.” Selective Ins. Co. of
S.C. v. Phusion Projects, Inc., 836 F.Supp.2d 731, 733
(N.D. Ill. 2011) (emphasis in original) (citation omitted).
Thus, the Court is obligated to determine whether
plaintiff's claim against S.M.S. is moot.
“case is moot if the dispute ‘is no longer
embedded in any actual controversy about the plaintiffs'
particular legal rights.'” Already, LLC v.
Nike, Inc., 568 U.S. 85, 91 (2013) (quoting Alvarez
v. Smith, 558 U.S. 87, 93 (2009)). In the insurance
context, “[t]he justiciability of a declaratory
judgment action . . . hinges on whether a defendant is
actually seeking to obtain coverage under the plaintiff's
policy.” Sec. Nat'l Ins. Co. v. Amchin,
No. CV 15-750, 2016 WL 1392258, at *5 (E.D. Pa. Apr. 7,
2016); see also Sec. Nat. Ins. Co. v. F.D.I.C., No.
CIV.A. 13-6736, 2015 WL 1973346, at *3 (E.D. Pa. May 1, 2015)
(“This case and controversy is entirely dependent upon
Defendant seeking to obtain coverage under the
Policy.”). Where, as here, an insured withdraws a claim
for coverage, there is no longer a case or controversy.
See Id. (“Plaintiff's liability to provide
coverage exists because of Defendant's request for
coverage. Since that request has been withdrawn, and it has
been represented that it will never be resubmitted in the
future, any question of Plaintiff's liability is
extinguished.”); Travelers Prop. Cas. Co. of Am. v.
Centex Homes, No. 1:14-CV-1450-LJO-GSA, 2015 WL 966205,
at *3 (E.D. Cal. Mar. 4, 2015) (declaratory judgment action
moot once insured withdrew claim); Am. Int'l
Specialty Lines Ins. Co. v. Pacifica Amber Trail, LP,
No. 11CV0336-LAB-WVG, 2013 WL 3205345, at *3 (S.D. Cal. June
24, 2013) (“[T]he bottom line is that Pacifica is not
pursuing insurance coverage now” and “the issue
of whether the Policy entitles Pacifica to any insurance
benefits for the Settlement is an abstract legal question,
and presents no actual controversy over which this Court has
jurisdiction.'); Unigard Ins. Co. v. Cont'l
Warehouse, No. C-00-4279 WHO, 2001 WL 432396, at *2
(N.D. Cal. Apr. 26, 2001) (“There is no dispute between
Continental Warehouse and Unigard unless and until
Continental Warehouse resubmits a claim on the Unigard
policy. This may never occur.”); State Farm Mut.
Auto. Ins. Co. v. Ormston, 550 F.Supp. 103, 106 (E.D.
Pa. 1982) (withdrawal of claim for insurance suffices to make
an action moot). Here, Attorney Tillman has withdrawn the
claim for coverage and Guardian Russell has disclaimed any
intention of pursuing coverage on behalf of S.M.S. Thus,
there is no longer a live controversy between plaintiff and
cites several cases to support its argument that the case is
not moot because Mr. Tillman's letter does not foreclose
the possibility that the demand for coverage will be
reasserted. In Certain Underwriters at Lloyd's London
v. Argonaut Ins. Co., 500 F.3d 571 (7th Cir. 2007), the
defendant filed a demand for arbitration and then missed a
contractual deadline to select an arbitrator, thereby
allowing the plaintiff to select both arbitrators. After the
plaintiff filed an action to confirm the arbitrators under
the Federal Arbitration Act, the defendant withdrew its
demand for arbitration and argued that the FAA action was
moot. The court held that the withdrawal did not moot the
controversy because the defendant “specifically and
expressly reserved all of its rights to seek recovery . . .
with regard to this loss at any time in the future.”
Id. at 573. The court found that the defendant was
attempting to avoid the consequences of its failure to timely
appoint an arbitrator and was likely to renew its demand for
arbitration. Id. at 575. (“When all
indications are that the defendant is likely to pursue again
the course of conduct giving rise to the action, courts have
not hesitated to declare that the controversy is not
moot.”) In this case, S.M.S. did not expressly reserve
her rights to file her claim in the future. More
significantly, S.M.S. gains no advantage by withdrawing a
claim that she genuinely intends to pursue because nothing in
the procedural posture of this case precluded Attorney
Tillman or Guardian Russell from seeking leave to file an
answer and litigating this case. Thus, there is no basis for
finding that S.M.S. withdrew the coverage demand in order to
avoid an adjudication of the merits of plaintiff's claim.
other cases cited by plaintiff are similarly inapplicable. In
Safeco Ins. Co. of Am. v. Constitution State Ins.
Co., 881 F.2d 1084 (9th Cir. 1989) (unpublished
decision), the insurer sought a declaration that it did not
have a duty to defend its insureds in various civil actions.
The district court declined to exercise jurisdiction and the
insurer appealed. After the insurer filed its notice of
appeal, the insured defendants withdrew their claims for
defense. The Ninth Circuit determined that the appeal was not
moot because the insureds expressly reserved the right to
reassert their claims at a later time. Here again,
defendant S.M.S. has not made such a reservation. In St.
Paul Fire & Marine Ins. Co. v. T.J. Lambrecht
Construction Co., Inc., No. 01- 6496, 2001 WL 1609374,
at *3 (N.D. Ill.Dec.14, 2001), the insured was named in a
state court personal-injury action and tendered the complaint
and multiple amended complaints to the insurer for a defense.
The insurer brought a declaratory judgment action in federal
court. The insured argued that the action was moot because it
did not tender the seventh amended complaint to the insurer
for a defense. The court found that the decision not to
tender the seventh complaint did not moot the action because
there was no indication that the insured would not tender the
suit for defense again. Id. By contrast, in this
case, there was a single demand for coverage which has been
affirmatively withdrawn. Similarly, in Del Webb's
Coventry Homes, Inc. v. National Union Fire Ins. Co.,
No. 13-1330, 2014 WL 5817318, at *2-3 (C.D. Cal. Nov. 10,
2014), the court held that the action was not moot where the
insured's withdrawal of its claim for coverage was
contingent on favorable rulings from the court on other
pending motions. The withdrawal in this case is not subject
to any such contingencies.
asserts that the present controversy is not moot because
defendant S.M.S., upon reaching adulthood, might choose to
assert a claim against the policy. Where “future
contingencies . . . will determine whether a controversy ever
actually becomes real, ” courts “should focus on
‘the practical likelihood that the contingencies will
occur.'” Phusion Projects, Inc., 836
F.Supp.2d at 733-34 (quoting Associated Indemnity Corp.
v. Fairchild Industries, Inc., 961 F.2d 32, 35 (2nd Cir.
1992)) (ellipsis in original). The courts have held that the
possibility of a future coverage claim is not a sufficient
basis for exercising declaratory judgment jurisdiction.
See Associated Indus. Ins. Co., Inc. v. Stahl Cowen
Crowley Addis LLC, No. 15 C 4296, 2016 WL 3088142, at *3
(N.D. Ill. June 2, 2016) (“If and when SCCA retenders
the defense and indemnity of the LNI litigation to AIIC, AIIC
need only file a declaratory judgment suit identical to this
one, and all parties involved would be in the same position
as they were prior to the withdrawal.”);
Pacifica, 2013 WL 3205345, at *3 (“Dismissing
this action creates an opportunity for [the insured] to
select other forums in which to sue, sure, but at this point,
future lawsuits are pure speculation.”). Furthermore,
waiting until there is an actual claim for coverage imposes
“no discernible prejudice” on plaintiff.
Phusion Projects, Inc., 836 F.Supp.2d at 734
(“Even in the event defendants decide to assert a claim
for coverage at some point in the future . . ., plaintiff
will be no worse off at that point than it is today.”).
Court concludes that, because defendant S.M.S. has withdrawn
her prior demand for coverage, there is no longer an actual
controversy between her and plaintiff. Defendant's motion
to dismiss will be granted.
Court extends its gratitude to Mr. Russell for accepting the
appointment as guardian ad litem and for his invaluable
assistance in resolving this case.
IT IS HEREBY ORDERED that the motion of
defendant S.M.S. to dismiss plaintiffs claim for ...