United States District Court, N.D. Indiana, Hammond Division
DYNASTY INTERNATIONAL LLC and BRUCE MICHAEL ABRAHAMSON, Plaintiffs,
LEXINGTON INSURANCE COMPANY, Defendant.
OPINION AND ORDER
MAGISTRATE JUDGE JOHN E. MARTIN, UNITED STATES DISTRICT
matter is before the Court on a Motion for Leave to Amend
Plaintiffs' Complaint [DE 27], filed by Plaintiffs on
July 15, 2016. Defendant responded on July 29, 2016.
Plaintiffs have not replied, and the time to do so has
are successors in interest to a property in Highland,
Indiana, which they leased to Chrysler Realty Company.
Chrysler in turn acquired an insurance policy covering the
property with Defendant Lexington Insurance Company.
the property was damaged, Plaintiffs requested reimbursement
for their damages from Lexington, but Lexington declined to
pay. Lexington said that Chrysler's policy did not list
Plaintiffs as loss payees or insureds.
sued Lexington, but the Court dismissed Plaintiffs'
initial complaint for failing to allege a plausible claim for
relief. Specifically, the Court found that Plaintiffs had not
plausibly alleged that they were parties to the policy such
that Lexington breached the policy when it refused to
compensate Plaintiffs for their loss. Plaintiffs argued that
they were in fact named insureds either (a) under the
policy's language; or (b) because Aon Risk Services
Central, Inc. had added them to the policy by issuing a
certificate of insurance. But the Court found that (a)
Plaintiffs had failed to allege that they were encompassed by
the policy's definition of “insured”; (b)
Plaintiffs had failed to allege an agency relationship
between Lexington and Aon; and (c) even if Plaintiffs
had adequately alleged agency, “a certificate
insurance, without more, is insufficient to amend a policy to
add an additional insured” [DE 26].
Plaintiffs have filed a motion for leave to file an amended
complaint. They say the proposed amended complaint attached
to the motion cures the initial complaint's deficiencies.
Lexington objects and says that the Court should deny
Plaintiffs' motion for leave and dismiss the case with
party seeks leave to amend a pleading, the Court
“should freely give leave when justice so
requires.” Fed.R.Civ.P. 15(a)(2). The decision to grant
or deny a motion to amend lies within the district
court's discretion, but if the underlying facts or
circumstances relied upon by a plaintiff are potentially a
proper subject of relief, the party should be afforded an
opportunity to test the claim on the merits. Foman v.
Davis, 371 U.S. 178, 182 (1962); Campbell v.
Ingersoll Milling Mach. Co., 893 F.2d 925, 927 (7th Cir.
1990). By contrast, leave to amend is “inappropriate
where there is undue delay, bad faith, dilatory motive on the
part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the
opposing party by virtue of allowance of the amendment, or
futility of the amendment.” Villa v. City
of Chicago, 924 F.2d 629, 632 (7th Cir. 1991) (emphasis
added). An amendment is “futile” if it would not
withstand a motion to dismiss or motion for summary judgment.
Vargas-Harrison v. Racine Unified Sch. Dist., 272
F.3d 964, 974 (7th Cir. 2001); Sound of Music Co. v.
3M, 477 F.3d 910, 923 (7th Cir. 2007).
the Court finds that allowing Plaintiffs to file the proposed
amended complaint would be futile, because the proposed
amended complaint would not survive a motion to dismiss. Even
with several new allegations, the proposed amended complaint
still does not plausibly allege that Plaintiffs were a party
to the policy.
proposed amended complaint includes three new allegations
that are relevant: (1) that Plaintiffs were listed as
additional insureds “on the Policy” (¶ 24);
(2) that Plaintiffs were listed as additional insureds, loss
payees, mortgagees, or lenders “by specific
endorsement” (¶ 25); and (3) that Aon Risk
Services Central, Inc., acting as Lexington's agent,
listed Plaintiffs as additional insureds via a certificate of
property insurance (¶¶ 26-28). The Court will
address each new allegation in turn.
The allegation that Plaintiffs were listed as additional
insureds “on the Policy”
the proposed amended complaint newly alleges that Plaintiffs
were listed as additional insureds “on the
Policy” (¶ 24). But the policy attached to the
proposed amended complaint contradicts this allegation: it
does not name Plaintiffs as insureds or as additional
insureds. See Commercial Property Policy, DE 27-4 at
17 (listing insureds as “Chrysler LLC and all
subsidiary, affiliated, associated, or allied companies,
corporations, entities or organizations ” and listing
no additional insureds). So while the proposed amended
complaint alleges that the policy listed Plaintiffs as
additional insured, the policy itself contradicts that
allegation. And “when a written instrument contradicts
allegations in the complaint to which it is attached, the
exhibit trumps the allegations.” Northern Indiana
Gun & Outdoor Shows v. City of South Bend, 163 F.3d
449, 454 (7th Cir. 1998).
policy does list Chrysler as a named insured, and the initial
complaint-like the proposed amended complaint-alleged that
Plaintiffs had a landlord-tenant relationship with a Chrysler
subsidiary. But the Court dismissed the initial complaint
because “entering into a leasing relationship with a
Chrysler subsidiary hardly makes Plaintiffs a
‘subsidiary, affiliate, associate, or allied'
entity of Chrysler” [DE 26]. In other words, the
initial complaint did not “allege facts indicating that
[Plaintiffs had] a relationship with Chrysler” such
that the policy covered them [DE 26]. Because the proposed
amended complaint is identical to the initial complaint in