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United Fire and Casualty Co. v. Caskey Drywall NM, LLC

United States District Court, D. New Mexico

July 16, 2018

UNITED FIRE AND CASUALTY COMPANY, an Iowa corporation, Plaintiff,
v.
CASKEY DRYWALL NM LLC; a Texas limited liability company, CENTEX CONSTRUCTION OF NEW MEXICO, LLC, a Delaware limited liability company; CENTEX HOMES, a Nevada general partnership; CENTEX REAL ESTATE CORPORATION, a Nevada corporation; PULTE DEVELOPMENT NEW MEXICO, INC., a Michigan corporation; THE PRESIDIO CONDOMINIUM ASSOCIATION, INC., a New Mexico nonprofit corporation; and THE PRESIDIO HOMEOWNER ASSOCIATION, INC., a New Mexico nonprofit corporation, Defendants.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court upon Defendants The Presidio Condominium Association, Inc. and The Presidio Homeowner Association, Inc.'s (collectively, Presidio) “Motion for Judgment on the Pleadings, ” filed February 16, 2018. (Doc. 13). Plaintiff United Fire and Casualty Company (United Fire) filed a response on March 9, 2018, and Presidio filed a reply on March 23, 2018. (Docs. 16 and 20). Having considered the Motion for Judgment on the Pleadings and the accompanying briefing, the Court denies both Presidio's request for a hearing on the Motion and Motion for Judgment on the Pleadings.

         A. The Complaint for Declaratory Judgment and Other Relief (Complaint) (Doc. 1)

         1. The Underlying State Lawsuit

         This insurance declaratory judgment case arises from an underlying state lawsuit brought by Presidio against Defendants Centex Construction of New Mexico, LLC; Centex Homes; Centex Real Estate Corporation; and Pulte Development New Mexico, Inc. (collectively, Centex), among others. (Doc. 1-2). In that lawsuit, Presidio seeks damages from Centex “for defects in the selection, design, construction, development, assembly, and installation of the common area components in” what is known as “The Presidio, ” a collection of condominiums and townhomes. (Doc. 1-2) at ¶¶ 1 and 3. In response to Presidio's claims, Centex filed a third-party complaint against Defendant Caskey Drywall New Mexico LLC (Caskey), an independent contractor working for Centex, alleging it caused drywall defects related to The Presidio construction project. (Doc. 1-3) at 15 ¶ 17(g). The state court subsequently entered an order compelling arbitration of the state action. (Doc. 13-1).

         2. The Insurance Policy at Issue

         United Fire previously issued a commercial general liability insurance policy to Caskey while Centex claims to be an additional insured under that policy. (Doc. 1) at 1 and ¶ 4. Pursuant to the United Fire policy, “United Fire is currently defending Caskey Drywall on the third-party claims by Centex, and is contributing to the defense of Centex on the claims by Presidio allegedly arising from the work of Caskey Drywall.” Id. at 2. United Fire is providing those defenses “subject to reservation of rights under the applicable policy.” Id.

         3. The Claims in this Declaratory Judgment Lawsuit

         Although the underlying state liability lawsuit is still pending, United Fire filed this declaratory judgment lawsuit under the Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202, naming Centex, Presidio, and Caskey as Defendants. With respect to Presidio, specifically, United Fire alleges that

[t]here is a disagreement and dispute between United Fire on the one hand, and Caskey Drywall, Centex and Presidio on the other hand, which is ripe and appropriate for judicial determination by way of declaratory judgment. This Court is asked to, and should, exercise its discretion to determine the rights and obligations of United Fire and Caskey Drywall, Centex and Presidio under the Policy, with regard to the defense and indemnification of the claims asserted in the Underlying Action.

(Doc.1) at ¶ 29. United Fire further contends that it “is entitled to a declaratory judgment that it has no duty to defend or indemnify Caskey Drywall or Centex with regard to the claims asserted in the Underlying Action” and that “Centex and Caskey Drywall are obligated to reimburse” United Fire for the funds they received from United Fire to defend the underlying lawsuit.[1] Id. At ¶¶ 32 and 36.

         B. The Motion for Judgment on the Pleadings

         Presidio brings this Motion for Judgment on the Pleadings under Fed.R.Civ.P. 12(c). Presidio argues that United Fire “lacks standing to assert a right to declaratory relief against Presidio because there is no privity contract between [United Fire] and Presidio.” (Doc. 13) at ¶ 16. Presidio also contends that the declaratory judgment claim against it “fails because Presidio has not asserted any claims against [United Fire] which could serve as predicate for a declaratory judgment action.” Id. If Presidio prevails on the Motion for Judgment on the Pleadings, Presidio seeks an award of costs. (Doc. 13) at 4. In addition, Presidio requests that the Court hold a hearing on the Motion for Judgment on the Pleadings. (Doc. 35) at 1.

         United Fire opposes the Motion for Judgment on the Pleadings in its entirety. Aside from arguing against the merits of the Motion for Judgment on the Pleadings, United Fire argues that the Court should deny the Motion for Judgment on the Pleadings because Presidio failed to comply with Local Rule 7.1(a) (“Movant must determine whether a motion is opposed, and a motion that omits recitation of a good-faith request for concurrence may be summarily denied.”).

         C. ...


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