Insurance
— Uninsured motorists — Insureds, who were involved in vehicle collision due
to negligence of an uninsured motorist and suffered serious and permanent
injury, commenced action after insurer refused to pay for insureds’ losses,
asserting claims for uninsured motorist benefits, bad faith, and declaratory
judgment to determine liability and damages — Bad faith — Claim for bad faith
pursuant to Section 624.155, Florida Statutes, is premature, as the underlying
contract claim pursuant to insurance policy has yet to be resolved —
Abatement, not dismissal, is a more efficient means of disposing of plaintiffs’
premature bad faith claim — Declaratory judgment — Although claim for
declaratory judgment purports to state a claim under Florida’s Declaratory
Judgment Act, claim is more properly construed as purporting to state a claim
under federal Declaratory Judgment Act because Florida’s statute is a
procedural mechanism that confers subject matter jurisdiction, and not any
substantive rights, and Florida’s procedural rules are inapplicable in this
case based on diversity jurisdiction — Claim for declaratory judgment must be
dismissed, as controversy is not sufficiently concrete where underlying claim
brought pursuant to insurance policy has yet to be resolved

ILENE SHAPIRO, and ANTHONY JULIAN, Plaintiffs, v. GOVERNMENT
EMPLOYEES INSURANCE COMPANY, Defendant. U.S. District Court, Southern District
of Florida. Case No. 14-CIV-62792-BLOOM/Valle. January 8, 2015. Beth Bloom,
Judge.

ORDER
ON DEFENDANT’S MOTION TO DISMISS

This matter is before the Court upon Defendant Government
Employees Insurance Company’s Motion Dismiss, ECF No. [5]. The Court has
reviewed the Motion, all opposing and supporting filings, and the record in
this case, and is otherwise fully advised in the premises. For the reasons that
follow, Defendant’s Motion is now granted in part and denied in part.

I.
BACKGROUND1

This matter stems from an automobile accident occurring on
or about May 18, 2014, wherein Plaintiffs, Ilene Shapiro and Anthony Julian
(collectively, “Plaintiffs”), occupied a motor vehicle that was involved in a
collision due to the negligence of an uninsured motorist. See Compl.,
ECF No. [1] at 9 ¶¶ 6, 9. As a result of the collision, Plaintiffs suffered
serious and permanent injury. Id. at 9-10 ¶¶ 8, 11. During the relevant
time period, Plaintiffs maintained an insurance policy issued by Defendant
Government Employees Insurance Company (“Geico”), which afforded them
uninsured/underinsured motorist coverage. Id. at 8 ¶ 4. Upon timely
notice of the collision and proof of claim, Defendant Geico refused to pay
Plaintiffs for their losses. Id. at 9 ¶ 10. Accordingly, on October 15,
2014, Plaintiffs commenced this action in the Seventeenth Judicial Circuit in
and for Broward County, Florida, asserting claims for uninsured motorist
benefits (Count I), bad faith in violation of Fla. Stat. § 624.155 (Count II),
and declaratory judgment to determine liability and total amount of damages
pursuant to §§ 86.011 and 86.111, et seq., Florida Statutes (Count III).
See id. at 9-16 ¶¶ 9-29. On December 9, 2014, Defendant removed the
matter to this Court based on diversity of citizenship. See id. at 1-5.
Defendant now seeks dismissal of Counts II and III. See Mot., ECF No.
[5].

II.
LEGAL STANDARD

A pleading in a civil action must contain “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R.
Civ. P. 8(a)(2). While a complaint “does not need detailed factual
allegations,” it must provide “more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) [20 Fla. L. Weekly Fed.
S267a]; see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) [21 Fla. L.
Weekly Fed. S853a] (explaining that Rule 8(a)(2)’s pleading standard “demands
more than an unadorned, the-defendant-unlawfully-harmed-me accusation”). Nor
can a complaint rest on “ ‘naked assertion[s]’ devoid of ‘further factual
enhancement.’ ” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S.
at 557 (alteration in original)). The Supreme Court has emphasized “[t]o
survive a motion to dismiss a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’ ”
Id. (quoting Twombly, 550 U.S. at 570). When reviewing a motion
to dismiss, a court, as a general rule, must accept the plaintiff’s allegations
as true and evaluate all plausible inferences derived from those facts in favor
of the plaintiff. See Chaparro v. Carnival Corp., 693 F.3d 1333, 1337
(11th Cir. 2012) [23 Fla. L. Weekly Fed. C1508a]; Miccosukee Tribe of
Indians of Fla. v. S. Everglades Restoration Alliance, 304 F.3d 1076, 1084
(11th Cir. 2002) [15 Fla. L. Weekly Fed. C976a]. While the Court is required to
accept all of the allegations contained in the complaint and exhibits attached
to the pleadings as true, this tenet is inapplicable to legal conclusions. Iqbal,
556 U.S. at 678; Thaeter v. Palm Beach Cnty. Sheriff’s Office, 449 F.3d
1342, 1352 (11th Cir. 2006) [19 Fla. L. Weekly Fed. C561a]. The Supreme Court
was clear that courts “are not bound to accept as true a legal conclusion
couched as a factual allegation.” Twombly, 550 U.S. at 555. It is
through this lens that the Court now evaluates the instant matter.

III.
DISCUSSION

Defendant asserts that Count II for bad faith pursuant to
Fla. Stat. § 624.155 is premature as the underlying contract claim, which is
the subject of this litigation, has yet to be resolved. See Mot., ECF
No. [5] at 2-4. Further, Defendant contends that Plaintiffs’ request for
declaratory judgment is duplicative and improper as it seeks a determination of
liability and damages, that is, the same dispute raised by Count I’s claim for
uninsured motorist benefits. Id. at 4-7. Plaintiffs oppose dismissal on
these counts, averring that abatement, not dismissal, is the proper course of
action with respect to Count II, and that Count III is not otherwise improper. See
Resp., ECF No. [8]. The Court addresses these issues in turn.

A. Count II for Bad Faith
Pursuant to Fla. Stat. § 624.155, is not Ripe

In Blanchard v. State Farm, the Supreme Court of
Florida noted that in order to maintain an action for bad faith, the underlying
action for benefits must first be resolved:

If an uninsured motorist is
not liable to the insured for damages arising from an accident, then the
insurer has not acted in bad faith in refusing to settle the claim. Thus, an
insured’s underlying first-party action for insurance benefits against the
insurer necessarily must be resolved favorably to the insured before the cause
of action for bad faith in settlement negotiations can accrue. It follows
that an insured’s claim against an uninsured motorist carrier for failing to
settle the claim in good faith does not accrue before the conclusion of the
underlying litigation for the contractual uninsured motorist insurance
benefits. Absent a determination of the existence of liability on the part of
the uninsured tortfeasor and the extent of the plaintiff’s damages, a cause of
action cannot exist for a bad faith failure to settle.

Blanchard v. State Farm Mut. Auto. Ins. Co.,
575 So. 2d 1289, 1291 (Fla. 1991) (emphasis added); see also Tropical
Paradise Resorts, LLC v. Clarendon Am. Ins. Co., No. 08-60254-CIV, 2008 WL
3889577, at *2 (S.D. Fla. Aug. 20, 2008) (stating that “[i]n order for a claim
for bad faith under Fla. Stat. § 624.155 to accrue, a plaintiff must allege
that a determination of the defendant’s liability has been made”). The parties
do not appear to dispute the fact that this claim is premature, but rather,
quarrel over the appropriate relief. On the one hand, Defendant asserts that
dismissal without prejudice is the proper resolution, while, on the other hand,
Plaintiffs implore the Court to abate the claim rather than dismiss it. Courts
are divided when confronted with this scenario. Compare Certain Interested
Underwriters at Lloyd’s, London v. AXA Equitable Life Ins. Co., No.
10-62061-CV, 2013 WL 3892956, at *3 (S.D. Fla. July 26, 2013) [24 Fla. L.
Weekly Fed. D217a] (finding abatement to be the “more efficient alternative”) with
Granat v. Axa Equitable Life Ins. Co., No. 06-21197-CIV, 2006 WL 3826785,
at *6 (S.D. Fla. Dec. 27, 2006) (dismissing bad faith claim without prejudice).
Ultimately, the decision of whether to abate or dismiss without prejudice rests
in the sound discretion of the trial court. See Vanguard Fire & Cas. Co.
v. Golmon, 955 So. 2d 591, 595 (Fla. 1st DCA 2006) [31 Fla. L. Weekly
D2835a] (noting that “the trial court has authority to abate the statutory
claims, rather than to dismiss them, if it appears to the court that abatement
would be in the interest of judicial economy”); see also Landmark Am. Ins.
Co. v. Studio Imports, Ltd., Inc., 76 So. 3d 963, 964 (Fla. 4th DCA 2011)
[36 Fla. L. Weekly D2482a] (stating that the “trial court can decide to either
dismiss the bad faith claim without prejudice or abate the claim until the
underlying breach of contract issue is resolved”).

Plaintiffs contends that abatement of this matter furthers
judicial economy as such a remedy will obviate the need for filing a second
lawsuit, which would result in both a waste of Plaintiffs’ financial resources,
as well as placing the matter before an entirely new judge who may be
unfamiliar with the case. See Resp., ECF No. [8] at 4. The Court has
previously recognized the value of abatement in this circumstance, finding that
the “preservation of issues serves the dual purpose of empowering courts to
heighten adjudicative efficiency and avoiding unnecessary repetition in filing
or other waste of limited private resources.” O’Rourke v. Provident Life
& Acc. Ins. Co., 48 F. Supp. 2d 1383, 1385 (S.D. Fla. 1999). While the
Court disagrees with the assertion that a new judge would be placed at a
disadvantage when confronted with this case down the road, Defendant has,
nonetheless, failed to present a persuasive reason for why abatement should not
be permitted in this matter. Accordingly, in the exercise of discretion, the
Court finds that abatement, not dismissal, is a more efficient means of
disposing with Plaintiffs’ premature bad faith claim.

B. Count III for Declaratory Judgment is Improper

Turning to Defendant’s argument that Count III for
declaratory judgment is duplicative, the Court agrees. Although Count III
purports to state a claim under §§ 86.011 and 86.111, et seq., Florida
Statutes, “Florida’s Declaratory Judgment Act is a procedural mechanism that
confers subject matter jurisdiction on Florida’s circuit and county courts; it
does not confer any substantive rights.” Garden Aire Vill. S. Condo. Ass’n
Inc. v. QBE Ins. Corp., 774 F. Supp. 2d 1224, 1227 (S.D. Fla. 2011)
(quoting Strubel v. Hartford Ins. Co. of the Midwest, Case No.
8:09-cv-01858-T-17-TBM, 2010 WL 745616, at *2 (M.D. Fla. Feb. 26, 2010)).
Accordingly, because this matter is before the Court based on the Court’s
diversity jurisdiction, Florida’s procedural rules are inapplicable and Count
III is properly construed as purporting to state a claim under 28 U.S.C. §
2201. Id.

“Consistent with the ‘cases’ and ‘controversies’ requirement
of Article III, the Declaratory Judgment Act, 28 U.S.C. § 2201, specifically
provides that a declaratory judgment may be issued only in the case of an
‘actual controversy.’ ” Malowney v. Fed. Collection Deposit Grp., 193
F.3d 1342, 1347 (11th Cir. 1999) (citing Emory v. Peeler, 756 F.2d 1547,
1551-52 (11th Cir. 1985)). This controversy must not be “conjectural,
hypothetical, or contingent; it must be real and immediate, and create a
definite, rather than speculative threat of future injury.” Id. Here,
Plaintiffs have incorrectly applied Florida’s declaratory judgment statutes.

On this point, the Court agrees with our sister district in Smith
v. 21st Century Centennial Ins. Co., No. 8:14-V-2531-T-26TBM, 2014 WL
5474591 (M.D. Fla. Oct. 29, 2014) [25 Fla. L. Weekly Fed. D52a]. In Smith,
the plaintiff initially pursued the matter in state court under a nearly
identical complaint, alleging three matching counts: underinsured motorist
coverage, statutory bad faith, and declaratory judgment. Id. at *1. In
dismissing the declaratory judgment claim with prejudice, the court reasoned
there was “no actual controversy prior to the determination of the damages
suffered in the underlying contract claim.” Id. The Middle District has
continued to hold in line with Smith, dismissing declaratory judgment
claims filed prior to resolution of the underlying contract claim. See,
e.g., Dela Cruz v. Progressive Select Ins. Co., No. 8:14-CV-2717-T-30TGW,
2014 WL 6705414, at *2 (M.D. Fla. Nov. 26, 2014) (“There is no actual
controversy prior to the determination of the damages suffered in the
underlying contract claim. Further, a declaration that quantifies an amount of
damages for a future bad faith claim does not resolve the entire controversy
because Plaintiff will still have to prove the insurer’s bad faith.”). As
Plaintiffs’ underlying claim brought pursuant to the insurance policy (Count I)
has yet to be resolved, Count III for declaratory relief is inappropriate as
the controversy is not sufficiently concrete at this time. Thus, the claim must
be dismissed.

IV.
CONCLUSION

Accordingly, it is ORDERED AND ADJUDGED as follows:

1. Defendant Government Employees Insurance Company’s Motion
Dismiss, ECF No. [5], is hereby GRANTED IN PART and DENIED IN PART.

a. The Motion is GRANTED with
respect to Plaintiffs’ declaratory judgment claim under Count III, which shall
be DISMISSED.

b. In all other respects, the
Motion is DENIED.

2. Count II of the Complaint which encompasses Plaintiffs’
claim for statutory bad faith under Fla. Stat. § 624.155 is ABATED pending
resolution of the uninsured/underinsured motorist benefits claim in Count I.

3. As Defendant has already answered the Complaint with
respect to Count I, ECF No. [6], no further answer is required at this time.

__________________

1The facts are garnered from
Plaintiffs’ Complaint, ECF No. [1].

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