Two rules of law were applied and one additional rule of law was observed by the Federal District Judge in Ocean's 11 Bar & Grill, Inc. v. Indemnity Insurance Corp., 2011 WL 3843931 (S.D. Fla. August 26, 2011). This is an action filed by Ocean's 11 under an otherwise unidentified "liability policy" providing Coverage for assault and battery according to the Policy terms. Ocean's 11 filed a complaint in which it alleged two counts in Florida State Court as Indemnity's Policyholder: (1) Declaratory Judgment and (2) Breach of Contract.
Two rules of law were applied; one was noted and after that, was applied in silence.
The first rule of law applied after removal to Federal Court was that a Declaratory Judgment Action in Florida is valid over an unambiguous Insurance Contract and to determine facts in some cases, whether the DJA is filed by an Insurance Company or, as here, by a Policyholder. Id. at *2-*3.
Indemnity presented this case for decision on a Motion to Dismiss. Indemnity next argued that the DJA should be dismissed based on a rule known to all experienced Insurance lawyers, which is that a DJA requires allegations of "doubt" about the meaning of the Insurance Policy at issue, whereas a count or claim for alleged Breach of Contract requires an allegation of, essentially, 'no doubt at all.' In this peculiar case, the Federal Court noted that DJAs are ordinarily filed as DJAs with no accompanying Breach of Contract claim, as in this case. Id. at *4. Here, "if the Court dismissed the declaratory-relief claim, Plaintiff's relief request [for what the Court labeled "an injunction or specific performance"] will be wiped out in part.... As a result, at this point, the Court will allow the two claims to move forward in tandem." Id. [Emphasis added.]
A third rule of law was noted but not expressly applied by the Federal Court in this case. The Federal Judge noted that recently, "federal courts in Florida have declined to apply Florida's Declaratory Judgment Act -- declaring it to be procedural only -- and have instead applied the Federal Declaratory Judgment Act." Id. at *2 n.2. The Federal Judge further noted that "Florida, however, states the relevant statutes, those contained in Chapter 86, are substantive." Id. citing Fla. Stat. ยง 86.101. The Federal Court proceeded to address the present DJA under Chapter 86 of the Florida Statutes.
"That's a Fact, Jack."
Indemnity Insurance attempted to unilaterally rescind the Policy before Ocean's 11 filed suit. When Ocean's 11 filed suit, it asked for "an injunction or specific performance" in a Declaratory Judgment count, and for money damages in a Breach of Contract count. Its complaint apparently presumed the existence of an Insurance Contract for a Court to declare. The Federal Court in this case apparently agreed. After mentioning the Indemnity Insurance Company "rescission by letter," id. at *1, the Court proceeded to declare the Contract and to simultaneously entertain the Breach of Contract action as well.
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