United States District Court, W.D. Texas, San Antonio Division
Liberty Corporate Capital Ltd. and Amtrust Corporate Member Ltd., Plaintiffs,
Stuart Roy Kalmus, Eric Tiedtke, and Tiedtke Marketing Group, Inc., Defendants.
C. LAMBERTH, UNITED STATES DISTRICT JUDGE
the Court is defendants Eric Tiedtke and Tiedtke Marketing
Group's Motion to Dismiss Plaintiffs' First Amended
Complaint Pursuant to Federal Rule of Civil Procedure
12(b)(1), filed January 5, 2017, ECF No. 19. Having
considered the motion, responses, replies, exhibits, filings,
and applicable law, the Court will deny the defendants'
Dr. Stuart Roy Kalmus was a self-employed dentist who suffers
from a bilateral essential tremor of his hands, arms, and
shoulders which has been progressive over the past twenty
years. Pis.' Am. Compl. 3-4, ECF No. 14. Dr. Kalmus first
consulted his primary care physician regarding his essential
tremor on March 9, 2012. Id. at 4. On October 19,
2012, Dr. Kalmus sought specialized medical attention for his
essential tremor from a neurologist, was prescribed
medication, and was diagnosed with an essential tremor just
over a month later. Id.
around June 30, 2013, Dr. Kalmus applied for permanent and
total disability insurance. Id. at 5. Dr.
Kalmus' application was prepared by defendant Eric
Tiedtke and/or defendant Tiedtke Marketing Group, Inc., and
the insurance policy went into effect July 1, 2013.
Id. Two months later, Dr. Kalmus consulted with
another neurologist regarding his essential tremor.
Id. It is undisputed that Dr. Kalmus was aware of
his condition before, during, and after applying for the
around July 13, 2015, Dr. Kalmus sent a Proof of Loss
statement to Hanleigh Management, Inc., the policy's
Coverholder. Id. The Proof of Loss statement
declares that Dr. Kalmus became permanently and totally
disabled as a result of his essential tremor on July 1, 2015.
Id. at 6. Hanleigh Management, Inc. investigated Dr.
Kalmus' claim, at which point Dr. Kalmus provided them
with medical records which verified his diagnosis of
essential tremor and his subsequent disability. Id.
Liberty Corporate Capital Ltd. and AmTrust Corporate Member
Ltd. are the underwriters of Dr. Kalmus' policy. In their
amended complaint, plaintiffs seek declaratory judgment that
(1) Dr. Kalmus' essential tremor is a pre-existing
condition not covered by the policy; (2) there is no loss due
to injury or sickness under the policy; (3) the pre-existing
condition limitation bars coverage; (4) Rider #1 bars
coverage for Dr. Kalmus' claim; (5) Dr. Kalmus'
essential tremor did not manifest itself while the policy is
in force and his total disability did not commence within 1
year of a covered sickness; and (6) there is a lack of
fortuity. Id. at 9-20. In the alternative,
plaintiffs seek declaratory judgment that defendant Eric
Tiedtke and/or defendant Tiedtke Marketing Group, Inc. should
indemnify plaintiffs for any damages resulting from
defendants' breach of the agency relationship.
Id. at 20. Specifically, the plaintiffs claim that
Tiedtke misrepresented the nature of the policy's
coverage of preexisting conditions.
Kalmus has filed a counterclaim against all plaintiffs for
breach of contract, violations of the Prompt Payment of
Claims provisions of the Texas Insurance Code, violations of
the Texas Deceptive Trade Practices Act (DTPA), and
violations of the Texas Insurance Code attributable to the
plaintiff underwriters. Second Am. Answer, Counter-cl., and
Cross-cl. 11-14, ECF No. 18. Dr. Kalmus has also filed a
cross-claim against Eric Tiedtke and Tiedtke Marketing Group
for violations of the DTP A, violations of the Texas
Insurance Code, and Negligent Misrepresentations.
Id. at 15-19.
Eric Tiedtke and Tiedtke Marketing Group filed a Motion to
Dismiss plaintiffs' original complaint pursuant to
Federal Rules of Procedure 12(b)(1) and 12(b)(6). Mot. to
Dismiss 1-2, ECF No. 10. Defendants argued that this Court
lacks jurisdiction because the matter is not ripe for
consideration since there has not yet been a judgment or a
determination as to coverage, and that even if the matter is
ripe that the plaintiffs failed to plead facts which would
allow the plaintiffs to indemnify Eric Tiedtke or the Tiedtke
Marketing Group. Id. at 4-6.
filed an amended complaint shortly thereafter, and defendants
Eric Tiedtke and Tiedtke Marketing Group filed a Motion to
Dismiss the plaintiffs' amended complaint pursuant to
Federal Rule of Civil Procedure 12(b)(1). Mot. to Dismiss
Pis.' First Am. Compl. 1-2. Defendants argued that the
matter is not ripe for consideration since there has not yet
been a judgment or a determination as to coverage.
Id. at 3-5.
Federal Rules of Civil Procedure require this Court to
dismiss a cause for lack of subject matter jurisdiction
"when the court lacks the statutory or constitutional
power to adjudicate the case." Home Builders Assn.
of Mississippi, Inc. v. City of Madison, 143 F.3d 1006,
1010 (5th Cir. 1998). In matters of jurisdiction, "the
burden of establishing federal jurisdiction rests on the
party seeking the federal forum." Howery v. Allstate
Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001).
Federal Declaratory Judgment Act only grants the federal
courts jurisdiction to provide declaratory relief in "a
case of actual controversy." 28 U.S.C. § 2201(a).
When considering a declaratory judgment action, a district
court must engage in a three-step inquiry: (1) whether it is
justiciable; (2) whether, if the court has jurisdiction, it
has the authority to grant declaratory relief; and (3)
whether the court should exercise its discretion to decide
the action. Orix Credit Alliance, Inc. v. Wolfe, 212
F.3d 891, 896 (5th Cir. 2000). With regards to the first
step, "A declaratory judgment action is ripe for
adjudication only where an 'actual controversy'
exists. Id. (quoting 28 U.S.C. § 2201(a)). An
actual controversy is typically found when there is "a
substantial controversy of sufficient immediacy and reality
between parties having adverse legal interests."
Middle South Energy, Inc. v. New Orleans, 800 F.2d
488, 490 (5th Cir. 1986). When looking at ripeness, a case
that is ripe is one in which any remaining issues are
"purely legal, and will not be clarified by further
factual development." Thomas v. Union ...