PersaudBramante Apartments, L.L.C. v. Underwriters at Lloyd's of London

681 F.Supp.3d 1022

PERSAUDBRAMANTE APARTMENTS, L.L.C., Plaintiff, v. UNDERWRITERS AT LLOYD'S OF LONDON, Ironshore Specialty Insurance Company,Steadfast Insurance Company, and First Specialty Insurance Corporation,also known as First Specialty Insurance Company, Defendants.

File No. 23-cv-218 (ECT/DTS)

United States District Court, D. Minnesota

Signed July 11, 2023

Edward E. Beckmann, Beckmann Law Firm, LLC, Bloomington, MN, for Plaintiff PersaudBramante Apartments, L.L.C.

Akira Cespedes Perez, Daniel J. Millea, and Mackenzie R. Moy, Zelle LLP, Minneapolis, MN, for Defendants Underwriter's

at Lloyd's of London, Ironshore Specialty Insurance Company, and Steadfast Insurance Company.

Aidan M. McCormack and Mark Deckman, DLA Piper LLP (US), New York, NY, and Richard R. Voelbel, Felhaber, Larson, Fenlon & Vogt, PA, Minneapolis, MN, for Defendant First Specialty Insurance Corporation, a/k/a First Specialty Insurance Company.

OPINION AND ORDER

Eric C. Tostrud, United States District Court Judge

After a fire damaged an apartment building, the building's owner sought coverage from its insurers. The insurers paid what they determined was the actual cash value of the loss, but not the replacement cost value that the insured sought. The insured brought this lawsuit for the difference. Because one of the insurance policies at issue requires the owner to bring any claims in New York, rather than Minnesota, those claims must be dismissed.

I¹

Plaintiff PersaudBramante Apartments LLC owns a large apartment building in New Brighton, Minnesota. Am. Compl. [ECF No. 6] ¶ 8. The property is insured by, among others, Defendants Underwriters at Lloyd's of London (Lloyd's), First Specialty Insurance Corporation, Ironshore Specialty Insurance Company, and Steadfast Insurance Company. Id. ¶ 10. After a December 2019 fire caused extensive damage to the building, the insurers determined that the replacement cost for the damage was $2,680,607.76, with an actual cash value of $1,734,112.74. Id. ¶¶ 9, 12. The insurers paid Plaintiff the actual cash value amount. Id. ¶ 12.

In May 2021, Plaintiff sent the insurers proof it had repaired the property, spending more than $2.9 million on those repairs. Id. ¶ 17, 21. Plaintiff demanded that the insurers pay the replacement cost, but they refused. Id. ¶ 17-18. Plaintiff claims in this lawsuit that this refusal constitutes a breach of contract, and also seeks a declaration that the insurers owe Plaintiff the full replacement cost, minus any payments previously made.

Three of the Defendant insurers—Lloyd's, Ironshore, and Steadfast—answered the Amended Complaint. ECF Nos. 16, 17. The fourth, Defendant First Specialty Insurance Corporation, brought the instant motion to dismiss, contending that a mandatory forum-selection clause in the insurance contract requires dismissal of Plaintiff's claims against it. First Specialty has merged with SwissRe Corporate Solutions Capacity Insurance Corporation (SwissRe) and the company is now known as SwissRe.

SwissRe seeks a dismissal without prejudice under Rule 12(b)(6), or, alternatively, dismissal on forum non conveniens grounds. Its supporting papers, however, do not address forum non conveniens principles. Rather, SwissRe asserts as an alternative to its Rule 12(b)(6) argument that the lawsuit is untimely under the insurance policy's time-of-suit provision.

II

Federal jurisdiction is premised on diversity of citizenship. 28 U.S.C. § 1332; see also Am. Compl. ¶ 6. Plaintiff is a Minnesota limited-liability company, but despite direction from Magistrate Judge David T. Schultz, see ECF No. 4, Plaintiff did not specify in the Amended Complaint the citizenship of each member of the LLC. See Am. Compl. ¶ 6 (stating that diversity jurisdiction exists because "Plaintiff is a limited liability company" and Defendants are not Minnesota citizens); see also OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 347 (8th Cir. 2007) ("An LLC's citizenship, for purposes of diversity jurisdiction, is the citizenship of each of its members."). Without information regarding each LLC member's citizenship, Plaintiff "has not satisfied its burden of alleging diversity jurisdiction." Am. Seeds, LLC v. Dalchow, No. 12-cv-2951 JNE/LIB, 2012 WL 5931721, at *2 (D. Minn. Nov. 27, 2012). In the usual case, this would require dismissal without prejudice for lack of subject-matter jurisdiction. See id. (ordering the plaintiff to file an amended complaint specifically alleging the citizenship of each party or face dismissal for lack of subject-matter jurisdiction).

This is not the parties' first litigation over the apartment-building fire in this Court, however. PersaudBramante Apartments, L.L.C. v. Underwriters at Lloyd's of London, No. 22-cv-57 (ECT/ECW) (D. Minn. filed Jan. 10, 2022). The previous lawsuit was removed from Minnesota state court and the notice of removal states that Plaintiff's "manager and sole member" is a citizen of Minnesota. 22-CV-57 ECF No. 1 at 6. At the hearing, both parties represented that this allegation was still true. Because the citizenship allegation is a matter of public record, it is appropriate to rely on it to determine whether complete diversity exists. Noble Sys. Corp. v. Alorica Cent., LLC, 543 F.3d 978, 983 (8th Cir. 2008).

Lloyd's is a foreign corporation incorporated in England and Wales, with a principal place of business in England. Am. Compl. ¶ 2. In the United States, Lloyd's principal place of business is in New York. Id. Moving Defendant First Specialty/SwissRe is incorporated in Missouri and has its principal place of business there. Id. ¶ 3. Ironshore is incorporated in Arizona, with its principal place of business in Massachusetts. Id. ¶ 4. Steadfast is organized in Delaware and has its principal place of business in Illinois. Id. ¶ 5. As noted, Plaintiff's sole member is a Minnesota citizen. The amount in controversy exceeds $75,000—Plaintiff is seeking nearly one million dollars from the insurers. Id. ¶¶ 12, 17. Diversity jurisdiction exists in this case.

III

In reviewing a motion to dismiss for failure to state a claim under Rule 12(b)(6), a court must accept as true all of the factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor. Gorog, 760 F.3d at 792 (citation omitted). Although the factual allegations need not be detailed, they must be sufficient to "raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation omitted). The complaint must "state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

A

There is some dispute as to the contents of the policy at issue. SwissRe appended to its moving papers a property insurance policy issued by First Specialty Insurance Corporation to Property Risk Management Association Inc. - Tower 2.² Koch Decl. Ex. 1 [ECF No. 27-1] at 3 ("SwissRe Policy").³ The SwissRe Policy reflects that an additional premium was paid to make PersaudBramante Apartments LLC a "Named Insured" under the policy. Id. at 130.

Plaintiff attached to its briefing in opposition a "policy binder" that its principal, Terry Persaud, received from his local insurance broker in June 2019. ECF No. 35-2. Plaintiff claims that because this document does not contain the choice-of-law or forum-selection clauses on which SwissRe bases its motion, there is a dispute of fact as to whether these clauses were included in Plaintiff's policy and whether Plaintiff had notice of them, and thus whether they are enforceable.

The policy binder Persaud references is a compendium of different insurance provisions relating to the property. Id. The exhibit contains insurance provisions applicable to policies issued by CNA, id. at 14-68; Steadfast Insurance Company/Lloyd's, id. at 69-93; Zurich North America, id. at 94-126; Scottsdale Insurance Company, id. at 129-139; The Princeton Excess and Surplus Lines Insurance Company, id. at 140-157; RSUI Indemnity Company/Landmark American Insurance Company/Covington Specialty Insurance Company, id. at 158-204; Ironshore Specialty Insurance Company, id. at 205-37; Homeland Insurance Company of New York/OneBeacon Insurance Group, id. at 238-55; Lloyd's, id. at 256-68; Hallmark Specialty Insurance Company, id. at 269-290; Arch Specialty Insurance Company, id. at 291-308; an unidentified company, id. at 309-57; Endurance American Specialty Insurance Co., id. at 358-78; Evanston Insurance Company/Aspen Specialty Insurance Company, id. at 379-94; Allied World Assurance Company, Ltd., id. at 395-401; Chubb European Group, id. at 402-03; Colony Insurance Company, id. at 404-13; and Aspen Specialty Insurance Company, id. at 414-21.

No section of this document purports to contain a policy or policy provisions applicable to SwissRe. And the document itself makes clear that it is a summary of changes to each insurer's individual policy that is applicable to Policy Risk Management Association, not a complete policy for each insurer. The broker, a company called AmWINS Brokerage of Georgia, see id. at 2, included in the exhibit a summary of the surplus insurance covering the property which lists the "layer" and policy number for each insurer. Id. at 8. More importantly, however, none of the insurance documents in this exhibit purport to be a complete insurance policy. Rather, the documents from each insurer are obviously merely exceptions and endorsements to the policies they each issued to Policy Risk Management Association. E.g., id. at 238-55 (pollution exclusion; nuclear, chemical, and biological exclusion; fungus, wet rot, dry rot, virus and bacteria exclusion; electronic data and cyber vandalism exclusion;...