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Crum & Forster Specialty Insurance Co. v. The Edge Investors, Lp

United States District Court, W.D. North Carolina, Charlotte Division

June 2, 2014

CRUM & FORSTER SPECIALTY INSURANCE COMPANY, Plaintiff,
v.
THE EDGE INVESTORS, L.P., Defendant.

ORDER

DAVID C. KEESLER, Magistrate Judge.

THIS MATTER IS BEFORE THE COURT regarding "Defendant's Motion To Dismiss Plaintiff's Complaint For Declaratory Relief" (Document No. 14). This motion has been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b), and is ripe for disposition.

BACKGROUND

Crum & Forster Specialty Insurance Company ("Plaintiff" or "Crum & Forster") filed its "Complaint For Declaratory Relief" (Document No. 1) initiating this action against The Edge Investors, L.P. ("Defendant" or "Edge Investors") on January 23, 2014. Plaintiff seeks a declaration from the Court that it "does not have any obligation to defend or indemnify Edge Investors in connection with" The Edge No. One Condominium Association, Inc. v. The Edge Investors, L.P., et. al., Case No. 2013CA007785 (the "Underlying Action"), filed in the Circuit Court for the Fifteenth Judicial Circuit, In and For Palm Beach County, Florida, on or about May 6, 2013. (Document No. 1); see also, (Document No. 14-1, p.2 and Document No. 15, p.6).

The Underlying Action purportedly involves allegations of design and construction defects in a residential tower of condominium units and parking structures located in West Palm Beach, Florida (the "Project"). (Document No. 1, p.3). The Project was constructed in or about 2005-2007. Id . The complaint in the Underlying Action "alleges generally that as a result of the negligence of Edge Investors, certain design and construction defects have become evident at the Project." Id.

According to the Complaint,

Crum & Forster issued a commercial general liability policy to Edge Investors, policy number GLO 036646, effective from June 11, 2004 to June 11, 2005, and having limits of $1, 000, 000 per occurrence and $2, 000, 000 products/completed operations aggregate. This policy was renewed under the following policy numbers: (1) GLO 081251, effective from June 11, 2005 to June 11, 2006; (2) GLO091193, effective from June 11, 2006 to June 11, 2007; (3) GLO 101342, effective from June 11, 2007 to June 11, 2008; and (4) GLO 131124, effective from June 11, 2008 to June 11, 2009 (the "Crum & Forster Policies").

(Document No. 1, pp.3-4). Plaintiff attached the Crum & Forster Policies (the "Policies") to the Complaint as Exhibits B through F. See (Document Nos. 1-4 through 1-8). The Complaint does not appear to specifically allege that Defendant has sought coverage under the Policies related to the Underlying Action. (Document No. 1).

"Defendant's Motion To Dismiss Plaintiff's Complaint For Declaratory Relief" (Document No. 14) was filed on April 7, 2014. By the pending motion, Defendant contends that the Complaint should be dismissed pursuant to Federal Rules of Civil Procedure 12(b)(2) and/or 12(b)(3), or in the alternative, this action should be transferred to a more proper venue. (Document Nos. 14, 14-1). Plaintiff's "... Response In Opposition..." (Document No. 15), and "Defendant's Reply..." (Document No. 16), were timely filed on April 17 and April 28, 2014, respectively. As such the pending motion is ripe for review and disposition.

DISCUSSION

The crux of Defendant's argument in its motion to dismiss is that Defendant is not subject to personal jurisdiction in North Carolina, pursuant to North Carolina's long-arm statute and the due process standards of the Fourteenth Amendment to the U.S. Constitution. (Document No. 14-1). Defendant's key points include the following:

• Edge Investors is a Georgia limited partnership with a principal place of business in Atlanta, Georgia, and its business involves the Project in West Palm Beach, Florida;
• Crum & Forster's Policies were allegedly issued to Wood Real Estate Investors ("WREI") in North Carolina, however, WREI is not a party to this action or the Underlying Action;
• contrary to Plaintiff's allegations, at all relevant times, WREI was not a North Carolina corporation or entity, and did not have a principal ...

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