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holding that an out-of-state defendant had waived its right to contest personal jurisdiction in federal district court in Georgia because it had previously brought suit against its co-defendant in Georgia state court on claims arising out of the same nucleus of operative fact
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CIVIL ACTION FILE No. 1:21-CV-00739-SCJ
2022-01-18
AUTO-OWNERS INSURANCE COMPANY, Plaintiff, v. G&D CONSTRUCTION GROUP, INC. and Metcon, Inc., Defendants.
Kim M. Jackson, Bovis, Kyle, Burch & Medlin, LLC, Atlanta, GA, Matthew Allen Lawson Anderson, Pro Hac Vice, Bovis, Kyle, Burch, & Medlin, LLC, Greensboro, NC, for Plaintiff. Benjamin Harold Sawyer, Eric L. Hurst, Hurst Sawyer & Toler LLC, Atlanta, GA, for Defendant Metcon, Inc.
Kim M. Jackson, Bovis, Kyle, Burch & Medlin, LLC, Atlanta, GA, Matthew Allen Lawson Anderson, Pro Hac Vice, Bovis, Kyle, Burch, & Medlin, LLC, Greensboro, NC, for Plaintiff.
Benjamin Harold Sawyer, Eric L. Hurst, Hurst Sawyer & Toler LLC, Atlanta, GA, for Defendant Metcon, Inc.
ORDER
STEVE C. JONES, UNITED STATES DISTRICT JUDGE This matter appears before the Court on the Motion to Dismiss filed by Defendant Metcon, Inc. ("Metcon"). Doc. No. [17]. Plaintiff Auto-Owners Insurance Company ("Auto-Owners") responded. Doc. No. [19]. Metcon did not reply. The Court rules as follows.
G&D Construction Group, Inc. ("G&D"), the other Defendant in this action, did not join Metcon, Inc.’s Motion to Dismiss, nor has it answered or otherwise responded. The Clerk entered default against G&D on June 24, 2021. Minute Order of June 24, 2021.
All citations are to the electronic docket unless otherwise noted, and all page numbers are those imprinted by the Court's docketing software.
I. BACKGROUND
Auto-Owners brings this declaratory judgment action against Metcon and G&D to declare whether Auto-Owners owes certain insurance coverage obligations to G&D, including the obligations to defend or indemnify G&D, and any obligations to Metcon in relation to the claims asserted by Metcon in the lawsuit styled Metcon, Inc. v. G&D Construction Group, Inc., in the Superior Court of Gwinnett County, State of Georgia, Civil Action No. 21-A-00102-3 ("Underlying Lawsuit"). Doc. No. [1] ¶ 1. Auto-Owners is not a party in the Underlying Lawsuit. Doc. No. [17-1], 1–2. The Court draws facts primarily from the Complaint (Doc. No. [1]), accepting all well-pleaded facts as true and viewing them in the light most favorable to Auto-Owners. Am. United Life Ins. Co. v. Martinez, 480 F.3d 1043, 1056 (11th Cir. 2007). But the Court may ignore legal conclusions in the Complaint and consider matters of which it can take judicial notice. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322–23, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007).
In December of 2013, Metcon was hired by NP 301, LLC ("NP 301"), a Georgia company, to act as the general contractor for the construction of a hotel in Lumberton, North Carolina (the "Project"). Doc. No. [1] ¶¶ 14–15. Metcon later retained G&D, a Georgia corporation with a principal place of business in Lawrenceville, Georgia, to perform certain exterior insulation finishing system ("EIFS") construction work on the Project. Id. ¶¶ 3, 16. Meanwhile, Auto-Owners had issued certain commercial general liability and umbrella insurance policies to G&D as the named insured (the "Policies"). Id. ¶¶ 46–53.
In May of 2020, NP 301 sued Metcon in the Superior Court of Fulton County, Georgia, Civil Action No. 2020CV336620 (the "NP 301 Lawsuit"). Id. ¶¶ 17–18; Doc. No. [1-1]. The NP 301 Lawsuit alleges claims against Metcon related to the construction work performed on the Project, including claims for damages arising from the allegedly improper installation of the EIFS, which allegedly resulted in water intrusion to the building. Doc. No. [1] ¶¶ 19–25. The NP 301 Lawsuit was stayed, and the matter submitted to arbitration. Id. ¶ 26.
On January 7, 2021, Metcon filed the Underlying Lawsuit. Id. ¶¶ 1, 28–38; Doc. No. [1-2]. In the Underlying Lawsuit, Metcon seeks damages from G&D related to G&D's work on the Project, asserting claims for breach of contract, breach of warranties, negligence, and indemnity. Doc. Nos. [1] ¶¶ 33–38; [1-2]. In addition to monetary damages, Metcon's complaint in the Underlying Lawsuit seeks an order requiring G&D to join the arbitration proceedings arising from the NP 301 Lawsuit as a party defendant. Doc. Nos. [1] ¶ 38; [1-2], 12 at ¶ F.
Auto-Owners filed this declaratory judgment action on February 22, 2021, seeking a determination from this Court that it owes no insurance coverage obligations under the Policies to either G&D or Metcon in connection with the claims asserted by Metcon in the Underlying Lawsuit. Doc. No. [1] ¶ 1. Auto-Owners states that this Court has diversity jurisdiction over this action because Auto-Owners is a citizen of a different state than Metcon and G&D, and the amount in controversy exceeds $75,000.00. Id. ¶¶ 10–12. Auto-Owners states that the Court also has jurisdiction of this declaratory judgment action pursuant to 28 U.S.C. § 2201. Id. ¶ 13. Further, Auto-Owners alleges that Metcon is subject to personal jurisdiction and venue in this Court because Metcon "entered into contracts in Georgia related to this dispute and submitted itself to Georgia jurisdiction by filing the Underlying Lawsuit in this District." Id. ¶ 9.
Auto-Owners alleges that Metcon is a North Carolina corporation with a principal place of business in Georgia. Doc. No. [1] ¶ 4. In its Motion to Dismiss, Metcon argues that the allegation as to its principal place of business is incorrect. Doc. No. [17-1], 2–3, 5–7. Metcon states that it has never had a principal place of business in Georgia and that Auto-Owners mistook Metcon for an administratively dissolved Georgia corporation also called Metcon, Inc. Id. at 5. Metcon asks the Court to take judicial notice of business records filed with the Georgia Secretary of State and North Carolina Secretary of State showing that Metcon's principal place of business is in North Carolina, and that Metcon is not the Georgia Metcon, Inc. that was administratively dissolved in 1996. Id. at 6–7.
The above dispute does not affect whether there is diversity jurisdiction because Auto-Owners is completely diverse from Metcon and G&D, however this issue is resolved. Nevertheless, whether Metcon's principal place of business is in Georgia may affect whether this Court has general jurisdiction over Metcon. Thus, the Court will address this issue. As Metcon argues, courts can take judicial notice of public records maintained by a secretary of state. NP 301, LLC v. Liberty Mut. Ins. Co., No. 1:20-CV-02298-LMM, 2020 WL 10622591, at *5 (N.D. Ga. Aug. 7, 2020) ; Ladies Mem'l Ass'n, Inc. v. City of Pensacola, Fla., No. 3:20CV5681/MCR/EMT, 2020 WL 8449155, at *2 (N.D. Fla. Aug. 25, 2020) (listing cases finding that courts take judicial notice of facts derived from secretary of state websites). Also, while the Court accepts a complaint's well-pleaded facts as true, it may consider corrections proven by materials of which the Court can take judicial notice. See Tellabs, Inc., 551 U.S. at 322–23, 127 S.Ct. 2499.
Here, after review of the secretary of states’ records, the Court takes judicial notice of the fact that Metcon is a North Carolina corporation whose principal place of business is and has been in North Carolina. Accordingly, to the extent this finding is relevant to general jurisdiction, Metcon is a citizen only of North Carolina and is not a citizen of Georgia. Again, this finding does not change the complete diversity of the parties.
Metcon moved to dismiss under Rules 12(b)(2) and 12(b)(6). Doc. No. [17]. Plaintiff responded in opposition (Doc. No. [21]), and Metcon did not reply. The Court will discuss the parties’ arguments in greater depth below. This matter is now ripe for review, and the Court rules as follows.
II. LEGAL STANDARDS
A. Federal Rule of Civil Procedure 12(b)(2)
"A plaintiff's complaint is subject to dismissal if there is a lack of personal jurisdiction over the defendant." Rothschild & Co. Continuation Holdings A.G. v. Sklarov, 440 F. Supp. 3d 1385, 1389 (N.D. Ga. 2020) (citing Fed. R. Civ. P. 12(b)(2) ). A plaintiff bears the initial burden of pleading sufficient facts to state a prima facie case of personal jurisdiction over a nonresident defendant. Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc., 593 F.3d 1249, 1274 (11th Cir. 2010).
A federal court sitting in diversity typically undertakes a two-step inquiry in determining whether personal jurisdiction exists: The exercise of jurisdiction must (1) be appropriate under the state long-arm statute and (2) not violate the Due Process Clause of the Fourteenth Amendment. United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009). However, "where neither the forum state's long-arm statute nor the due process minimum contacts analysis is satisfied, a court may exercise personal jurisdiction over a party if the party consents." Waite v. All Acquisition Corp., 901 F.3d 1307, 1312 (11th Cir. 2018). A litigant may give express or implied consent to the personal jurisdiction of a court. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n.14, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ; cf. Collett v. Olympus Med. Sys. Corp., 437 F. Supp. 3d 1272, 1279 (M.D. Ga. 2020) (discussing how a court should undertake a Due Process analysis when "an out-of-state defendant ... has not consented to suit there " (emphasis added)).
While a personal jurisdiction analysis under Georgia law generally requires application of Georgia's long-arm statute, Georgia courts have held that litigants can consent to personal jurisdiction and thereby waive the requirements of the state's long-arm statute. See, e.g., YP, LLC v. Ristich, 341 Ga. App. 381, 382, 801 S.E.2d 80, 81 (2017) (stating that personal jurisdiction in that case was based not on Georgia's long-arm statute but instead on the defendant's waiver of personal jurisdiction); see also OFC Cap. v. Colonial Distribs., Inc., 285 Ga. App. 815, 818–19, 648 S.E.2d 140, 143 (2007) (stating that "waivers of personal jurisdiction are expressly permitted" in Georgia).
A district court should rule on a motion to dismiss for lack of personal jurisdiction before ruling on a motion to dismiss for failure to state a claim. See Posner v. Essex Ins. Co., 178 F.3d 1209, 1214 & n.6 (11th Cir. 1999) (considering a jurisdictional argument first because "[a] court without personal jurisdiction is powerless to take further action").
B. Federal Rule of Civil Procedure 12(b)(6)
A defendant may move to dismiss a complaint for failure to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6). A complaint has failed to state a claim if the facts as pled, accepted as true, do not state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 687, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; Twombly, 550 U.S. at 561–62, 570, 127 S.Ct. 1955. Labels, conclusions, and formulaic recitations of the elements of the cause of action "will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. To state a plausible claim, a plaintiff need only plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. "[W]hile notice pleading may not require that the pleader allege a specific fact to cover every element or allege with precision each element of a claim, it is still necessary that a complaint contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory." Fin. Sec. Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1282–83 (11th Cir. 2007) (quotations omitted).
III. ANALYSIS
The Court will first address Metcon's arguments that this case should be dismissed for lack of personal jurisdiction. The Court will then turn to Metcon's arguments that the case should be dismissed for failure to state a claim.
A. This Court Has Personal Jurisdiction Over Metcon
Metcon contends that the Court does not have personal jurisdiction over Metcon because it: (1) does not have a principal place of business in Georgia and there is no other basis for general jurisdiction; (2) did not enter any contracts in Georgia, and thus there is no related basis for specific jurisdiction; and (3) did not consent to personal jurisdiction in this Court by filing the Underlying Lawsuit. See Doc. No. [17-1]. Because the Court finds Metcon's filing of the Underlying Lawsuit disposes of this question, the Court focuses on that issue.
The Court does acknowledge, however, that Metcon has shown that Georgia is not Metcon's state of incorporation or principal place of business, which eliminates one way in which this Court could have general jurisdiction over Metcon. See Thomas v. Ford Motor Co., 289 F. Supp. 3d 941, 944 (E.D. Wis. 2017) ("Corporations are found to have ‘continuous and systematic’ contacts with a forum State in which they are incorporated and their principal place of business is located."). Thus, for the Court to have general jurisdiction over Metcon, Auto-Owners would need to show that Metcon otherwise has contacts with Georgia that are "so continuous and systematic as to render [Auto-Owners] ‘essentially at home’ in" Georgia. Atlantis Hydroponics, Inc. v. Int'l Growers Supply, Inc., 915 F. Supp. 2d 1365, 1375 (N.D. Ga. 2013). Auto-Owners has not made this showing, so the Court finds no basis for general jurisdiction here.
Metcon argues that there is no specific jurisdiction here because this case does not arise out of or relate to any relevant conduct in or contact with Georgia. See id. at 4–5. For example, Metcon argues that because Auto-Owners is not a party in the Underlying Lawsuit, the Court should not find that this action filed by Auto-Owners arose out of or relates to the Underlying Lawsuit. See id. at 4–5, 10. Similarly, Metcon argues that consent to jurisdiction in one case extends to that case alone, and thus Metcon's consent to jurisdiction in the NP 301 Lawsuit does not render it subject to jurisdiction in this Court. Id. at 9–10.
Further, Metcon argues that its involvement in the Underlying Lawsuit and NP 301 Lawsuit in Georgia's state courts does not constitute sufficient contact with Georgia to satisfy the Fourteenth Amendment's Due Process Clause. Id. at 10–12. Specifically, Metcon contends that being forced to defend this case in a Georgia federal court offends traditional notions of fair play and substantial justice because Metcon is a small out-of-state company, the burden of defending this case in Georgia would be significant, Georgia has no interest in the outcome of this case since it relates to an underlying dispute arising out of a construction project in North Carolina, and Metcon has no other claims pending against Auto-Owners. See id. at 12. Thus, Metcon argues that this action is unfair and unjust, violates due process, and should be dismissed. See id.
In response, Auto-Owners argues that this Court has personal jurisdiction over Metcon because Metcon established contacts "directly related" to this action by filing the Underlying Lawsuit in a Georgia court and thereby "purposefully avail[ing] itself of the benefits and protections of Georgia's laws." Doc. No. [21], 2. Auto-Owners states that one of these benefits is the right to a potential recovery under the Policies, which affects Auto-Owners. Id. Thus, Auto-Owners argues, this action does not offend traditional notions of fair play and substantial justice, and by filing the Underlying Lawsuit, Metcon was on notice that it could fairly be haled into court in Georgia for a related matter. See id. Metcon and Auto-Owners cite conflicting out-of-circuit decisions that discuss whether a litigant consents to personal jurisdiction in a forum as to a certain subject matter or legal issue by acquiescing to or filing related litigation in that forum. After careful review and consideration, the Court finds that the cases Auto-Owners cites are better reasoned, and the Court applies that law here.
A litigant can implicitly consent to personal jurisdiction by "express[ing] acquiescence in the prosecution of a cause in a given forum." Gen. Contracting & Trading Co., LLC v. Interpole, Inc., 940 F.2d 20, 22 (1st Cir. 1991) (citations omitted). Thus, "[a] defendant who purposely avails himself of a particular forum state's courts by initiating a lawsuit there impliedly submits to that forum's jurisdiction with regard to all actions arising from the same nucleus of operative facts, or sharing the same transactional core." Marron v. Whitney Grp., 662 F. Supp. 2d 198, 200 (D. Mass. 2009) ; see also Dow Chem. Co. v. Calderon, 422 F.3d 827, 834 (9th Cir. 2005) (stating that "personal jurisdiction exists where a defendant also independently seeks affirmative relief in a separate action before the same court concerning the same transaction or occurrence"); cf. Huff v. Pharr, 748 F.2d 1553, 1555 (11th Cir. 1984) (finding that because a defendant had previously litigated in a California court, he had "made full use of the procedures available to him" by that state court, and because a later action "involved a claim uniquely connected with the defendant's previous" litigation in that forum, the court found that it was not unfair to require the defendant to submit again to the jurisdiction of California's courts). Under this rule, federal courts have found that an out-of-state litigant's filing of a lawsuit in a state constitutes submission to the forum's personal jurisdiction, which allows the court to "bypass" a "conventional long arm analysis." See Interpole, Inc., 940 F.2d at 22. Courts applying this rule from Interpole have determined that "out-of-state defendants who filed lawsuits in a state court waived their right to assert that a federal court in the same forum (i.e., the same state) lacked personal jurisdiction over that defendant for purposes of adjudicating claims which were related to the same facts which gave rise to the state court suit." Praetorian Specialty Ins. Co. v. Auguillard Const. Co., 829 F. Supp. 2d 456, 465 (W.D. La. 2010) (citations omitted); see also Capriotti's Sandwich Shop, Inc. v. Taylor Fam. Holdings, Inc., 857 F. Supp. 2d 489, 501 (D. Del. 2012) (finding that defendants "waived jurisdictional defenses and consented to the jurisdiction of" the federal court in Delaware "by filing suit in the Delaware Court of Chancery"); Larson v. Galliher, No. 2:06 CV 1471 RCJ GWF, 2007 WL 81930, at *2 (D. Nev. Jan. 5, 2007) ("It would be unfair to allow Galliher to utilize the Nevada state courts as a plaintiff in his dispute with Larson and then grant him immunity from having to defend any suits in the forum. Therefore, Defendant Galliher has impliedly consented to the jurisdiction of this Court through filing his earlier slander action in Nevada court."). In addressing due process concerns, these courts have stated that such out-of-state litigants "can claim no unfairness based upon [the] court's exercise of jurisdiction over [them], since one who enjoys the full benefits of access to a forum's courts as plaintiff may not simultaneously claim immunity from that forum's authority as defendant." Marron, 662 F. Supp. 2d at 201.
Importantly, in the context of personal jurisdiction, the "forum" generally includes a state's courts and the federal courts also sitting in that state. See Interpole, Inc., 940 F.2d at 23 n.4. Thus, for purposes of this personal jurisdiction analysis, if a litigant files a lawsuit in a state's courts, a related lawsuit filed in a federal court located in that state is a lawsuit filed in the same forum. See id.; Marron v. Whitney Grp., 662 F. Supp. 2d 198, 200 n.9 (D. Mass. 2009) (stating that "the courts of a forum state include those federal courts located within the state for purposes of personal jurisdiction").
Of particular relevance to this action is the decision in Praetorian Specialty Ins. Co. While many cases following Interpole have involved related lawsuits with the same litigants, Praetorian was a federal declaratory judgment action in which the plaintiff was an insurance company that was not a party to the underlying, related state-court personal injury action. See Praetorian, 829 F. Supp. 2d at 459–60. The plaintiffs in the underlying action were out-of-state individuals who sued alleged tortfeasors in Louisiana state court. Id. at 460. Praetorian had issued insurance policies to one of the alleged tortfeasors, and Praetorian filed the declaratory judgment action in federal court in Louisiana to determine whether Praetorian owed coverage in relation to the underlying lawsuit. Id. The out-of-state litigants were named as defendants in the federal declaratory judgment action, and they moved to dismiss for lack of personal jurisdiction. Id. They argued that their filing of the state-court lawsuit did not constitute sufficient minimum contacts for specific jurisdiction or amount to a consent to personal jurisdiction in the federal lawsuit brought by a plaintiff that was not even a party to the underlying lawsuit. See id. at 460, 463. Praetorian, on the other hand, argued that the Louisiana federal court had personal jurisdiction over the out-of-state litigants for purposes of the declaratory judgment action because they filed the underlying lawsuit that (1) arose out of the same nucleus of operative facts and (2) constituted a consent to personal jurisdiction. Id. at 462.
Relying on Interpole and its progeny, the Louisiana federal court sided with Praetorian. See id. at 463–70. First, the court found that the out-of-state litigants had waived their right to contest personal jurisdiction in the declaratory judgment action by filing in Louisiana state court the underlying lawsuit that "arose from the nucleus of operative facts which formed the basis of the" declaratory judgment lawsuit in federal court. Id. at 463–65. Second, the court found that the out-of-state litigants purposefully availed themselves of the benefits of the forum by filing the related, underlying lawsuit in state court, which gave the federal court specific jurisdiction over the out-of-state litigants for purposes of the related declaratory judgment action. See id. at 465–68. In sum, the Louisiana federal court found that it had personal jurisdiction over out-of-state litigants in a declaratory judgment action that was related to the lawsuit those out-of-state litigants had filed in Louisiana state court, even though the declaratory judgment action was filed by a non-party to the state-court action.
The parties in this case did not cite to caselaw from the Eleventh Circuit or Georgia citing Interpole, and the Court's research yielded no decision from the Eleventh Circuit or Georgia courts citing Interpole. Neither did the Court find any cases from this circuit or Georgia discussing the exact jurisdictional issue at bar. After careful review of the relevant authority, the Court believes that Georgia and the Eleventh Circuit would adopt the reasoning in Interpole, and so this Court does the same.
To start its analysis, the Court reiterates that not only has Metcon apparently consented to jurisdiction in a Georgia court via the NP 301 Lawsuit, Metcon also affirmatively filed the Underlying Lawsuit against G&D. By filing the Underlying Lawsuit, Metcon purposely availed itself of this forum's courts and thereby impliedly submitted to this forum's jurisdiction as to all actions arising from the same nucleus of operative facts or sharing the same transactional core. Here, the Court finds that this action and the Underlying Lawsuit are related and arise from the same nucleus of operative facts. Although the claims in the Underlying Lawsuit more directly involve the alleged EIFS installation issues associated with the North Carolina hotel construction, the Court finds that the claims in this declaratory judgment action derive from that same set of facts. After all, Auto-Owners is seeking a declaration as to whether it owes obligations under the Policies in relation to the installation issues alleged in the Underlying Lawsuit. Put another way, the acts or omissions alleged in the Underlying Lawsuit are what ultimately caused Auto-Owners to file this action. And the Court finds it likely that the nucleus of facts in the Underlying Lawsuit will be implicated in this action, even if the questions in this action will determine coverage under the Policies rather than liability for the alleged EIFS installation issues. Furthermore, although Auto-Owners is not a party in the Underlying Lawsuit, the fact that the parties named in the Underlying Lawsuit are named as Defendants in this action only further shows that these cases are related.
Thus, the Court finds that Metcon consented to and waived its right to contest personal jurisdiction in this declaratory judgment action by filing the related Underlying Lawsuit in a Georgia state court. And as the Interpole line of cases has held, this finding obviates the need for a personal jurisdiction analysis under Georgia's long-arm statute or the Due Process Clause. Because the Court finds that it has personal jurisdiction over Metcon, the Court finds that Metcon's Motion to Dismiss Under Rule 12(b)(2) is due to be denied.
To be sure, plenty of courts have held that a party does not waive personal jurisdiction as a defense by filing a prior, unrelated lawsuit in a forum. See, e.g., King v. Smieja, No. CV-08-14-BLG-CSO, 2008 WL 11350059, at *5 (D. Mont. Oct. 31, 2008) ; Olympia Steel Bldg. Sys. Corp. v. Gen. Steel Domestic Sales, LLC, No. CIV A 06-1597, 2007 WL 1816281, at *3 (W.D. Pa. June 22, 2007) (participation in earlier litigation within forum on entirely different claims and with different parties did not waive jurisdictional defense); Ibrani v. Mabetex Project Eng'g, No. C-00-0107 CRB, 2002 WL 1226848, at *7–8 (N.D. Cal. May 31, 2002) (rejecting argument that the defendant waived personal jurisdiction by filing an unrelated lawsuit against the plaintiff in the same forum four years earlier). But that is not the case here. Auto-Owners's declaratory judgment action is related to the Underlying Lawsuit, which Metcon brought, because the acts and omissions alleged in the Underlying Lawsuit have led to potential liability that may trigger obligations of Auto-Owners under the Policies. And this Court has found that when an insurance company brings a federal declaratory judgment action asking the court to determine whether the insurer owes obligations that could be triggered in a state-court lawsuit, the declaratory judgment action and state-court action are "related" even if the state-court action does not directly involve the insurer's coverage obligations. See Phila. Indem. Ins. Co. v. AGCO Corp., No. 1:10-CV-4148-TWT, 2011 WL 2652139, at *3 (N.D. Ga. July 6, 2011). Thus, even though Auto-Owners is not a party in the Underlying Lawsuit, the declaratory judgment action that Auto-Owners brought can still be related to the Underlying Lawsuit. Also, to be clear, this Court is not stating that it would have had personal jurisdiction over Metcon if it had filed any lawsuit in Georgia. But the Court is stating that it has personal jurisdiction over Metcon for this lawsuit given its close relation to the Underlying Lawsuit that Metcon filed, and in which Metcon has purposefully availed itself of the benefits and protections of Georgia's laws.
The Court adds, however, that from a due process perspective, it does not find it to be fundamentally unfair to require Metcon to defend an action in the same forum in which it affirmatively filed its own related action. See Marron, 662 F. Supp. 2d at 201. Of course, that question of unfairness would not have answered whether Metcon's filing of the Underlying Lawsuit brought Metcon within the ambit of Georgia's long-arm statute, which does not provide jurisdiction coextensive with due process but instead "imposes independent obligations that a plaintiff must establish for the exercise of personal jurisdiction that are distinct from the demands of procedural due process." Diamond Crystal Brands, Inc., 593 F.3d at 1259. And the Court has found no authority from Georgia stating that the filing of a related action in this forum can, by itself, subject a litigant to Georgia's long-arm statute. Because the Court finds that Metcon waived any such personal jurisdiction arguments, however, that is an issue for another day.
B. Auto-Owners Has Not Failed to State a Claim
Metcon argues that Auto-Owners has failed to state a claim under the Declaratory Judgment Act because there is no concrete, non-conjectural case or controversy between Metcon and Auto-Owners, primarily because they are not adverse parties in any other ongoing litigation. See Doc. No. [17-1], 12–14. Auto-Owners responds that because Metcon alleges tort claims against G&D in the Underlying Lawsuit, Metcon "is a necessary party in this declaratory judgment action regarding the rights and responsibilities of Auto-Owners to G&D, as its insured, in [the Underlying Lawsuit]." Doc. No. [21], 2–3, 19–20.
A court may declare the rights and other legal relations of any interested party in the case of an actual controversy within its jurisdiction. 28 U.S.C. § 2201. The Declaratory Judgment Act gives federal courts "unique and substantial discretion in deciding whether to declare the rights of litigants." Stevens v. Osuna, 877 F.3d 1293, 1311 (11th Cir. 2017) ; see also Manuel v. Convergys Corp., 430 F.3d 1132, 1134 (11th Cir. 2005) ("The decision to hear a declaratory judgment action is reviewed for abuse of discretion."). Courts have long recognized that a declaratory judgment action to determine an insurer's duties under an insurance policy—where the policy has been issued and is implicated in another action or is the subject of a claim for coverage—is properly addressed by federal courts under the Constitution and the Declaratory Judgment Act. See Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 239–44, 57 S.Ct. 461, 81 L.Ed. 617 (1937) ; see also Travelers Indem. Co. v. Bally Total Fitness Holding Corp., 448 F.Supp.2d 976, 984 (N.D. Ill. Sept. 11, 2006) (stating that the case or controversy requirement is satisfied for a declaratory judgment action once a suit has been brought against the insured that might lead to a claim against the insurer). Additionally, the Eleventh Circuit has held that tort claimants are indispensable parties to an insurer's declaratory judgment action against an insured. See Am. Safety Cas. Ins. Co. v. Condor Assocs., Ltd., 129 F. App'x 540, 542 (11th Cir. 2005) ; Earnest v. State Farm Fire & Cas. Co., 475 F. Supp. 2d 1113, 1117 (N.D. Ala. 2007).
Here, the Court finds that because Metcon brings tort claims against G&D in the Underlying Lawsuit (see, e.g., Doc. No. [1-2], ¶¶ 33–39 (negligence claim against G&D)), Metcon is an indispensable party to this litigation. Additionally, in considering whether to exercise its discretion to hear this declaratory judgment action, the Court notes that "[f]ederal district courts routinely issue declaratory judgments about liability insurers’ duties to defend and indemnify against the claims in an underlying state tort lawsuit." Nat'l Tr. Ins. Co. v. S. Heating & Cooling Inc., 12 F.4th 1278, 1290 (11th Cir. 2021) (Brasher, J., concurring). Because this presents such a routine request for a declaration regarding an insurer's duties under a policy, the Court exercises its discretion to retain this action. IV. CONCLUSION
Also, the Court notes that federal courts routinely preside over declaratory judgment actions brought by insurers in which the defendants are parties in an underlying action, even if only some of those defendants are insureds under the insurance policies at issue. See, e.g., Auto-Owners Ins. Co. v. Walker, No. 5:11-CV-04042-AKK, 2012 WL 3628783 (N.D. Ala. Aug. 17, 2012) ; Phila. Indem. Ins. Co., No. 1:10-CV-4148-TWT, 2011 WL 2652139 (N.D. Ga. July 6, 2011). Thus, to the extent Metcon intimates that no controversy can exist here because Metcon is not an insured under the Policies, the Court disagrees.
Accordingly, the Court DENIES Metcon's Motion to Dismiss (Doc. No. [17]). The Court ORDERS the parties to file their Joint Preliminary Report and Discovery Plan within fourteen (14) days of the entry of this Order.
IT IS SO ORDERED this 18th day of January, 2022.