The opinion of the court was delivered by: James E. Boasberg United States District Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs Roslyn and Wesley Gibson bring this action against Defendants Liberty Mutual Group, Inc. and Liberty Mutual Fire Insurance Company for declaratory relief and breach of contract under an insurance policy signed by the parties. Defendants have now filed a Motion to Dismiss the counts in Plaintiffs' Amended Complaint that seek declaratory relief (Counts I & II) on the ground that Plaintiffs have failed to state a claim upon which relief may be granted. The Court has reviewed Defendants' Motion, Plaintiffs' Opposition, and Defendants' Reply.
Plaintiffs allege that on November 14, 2009, a fire occurred at their property causing significant damage. Amended Compl., ¶ 9. Plaintiffs claim that prior to the fire, they contracted with Defendants for an all-risk insurance policy that explicitly included coverage for losses sustained as a result of fire. Id., ¶ 11. The policy was in full effect at the time of the fire. Id., ¶ 12. Following the fire, Plaintiffs allege that they made a timely claim under the policy for losses caused by the fire. Id., ¶ 13.
The parties thereafter engaged in settlement talks, but negotiations eventually broke down, and Plaintiffs filed a Complaint in the Superior Court for the District of Columbia. Opp. at 2. Defendants removed the Complaint to this Court on the basis of diversity jurisdiction and filed a motion to dismiss. Id. In response, Plaintiffs amended their Complaint. Id.
Plaintiffs' Amended Complaint contains three counts, two for declaratory relief and one for breach of contract. Count I alleges that the policy contains an appraisal provision that "allows for a summary determination of the amount of the loss." Amended Compl., ¶ 30. The Amended Complaint further alleges that, after the parties failed to agree upon the amount of the loss, Plaintiffs demanded that the amount be determined by appraisal. Id., ¶ 31. Plaintiffs claim that Defendants ignored the appraisal demand despite an obligation to participate in the process. Id., ¶¶ 33-34. As a result, Plaintiffs pray for a judgment declaring "that the Plaintiffs have complied with all policy conditions, that [Defendants have] an obligation to name [their] appraiser and allow the amount of the loss to be determined by appraisal." Id. at 7.
Count II of the Amended Complaint also seeks declaratory relief, but this count relates to the alleged "Replacement Costs" provisions in the policy. Id., ¶¶ 36-47. Plaintiffs allege in Count II that Defendants have breached the contract in a number of ways, including failing to pay the full claim in a timely manner. Id., ¶ 37. Plaintiffs further contend that Defendants are obligated to "initially pay the actual cash value, and upon replacement, restoration or repair, to pay any additional amounts." Id., ¶ 39. Because Defendants have failed to make the initial payment for actual cash value, Plaintiffs claim that they have been unable to pay for the restoration of their property; as a result, they are unable to determine the total difference between actual cash value and replacement costs. Id., ¶¶ 40-43. Count II, therefore, asks this Court to enter a judgment declaring that Plaintiffs are entitled to replacement costs once their value has been determined. Id. at 9.
Plaintiffs' third and final count is a claim for breach of contract. They allege that Defendants are obligated to pay for their losses caused by the fire under the contract, but have refused to do so. Id., ¶ 49-50. The Amended Complaint claims that Defendants' breaches include "the failure to pay [for losses caused by the fire], failure to pay the proofs of loss submitted, [their] failure to pay and act on this claim in in a timely manner, the failure to adjust the loss in a manner required by the policy . . . [their] failure to participate in the appraisal process, and the failure to abide by the implied contractual covenant of good faith and fair dealing." Id., ¶ 50. Plaintiffs further contend that Defendants' breaches resulted in damage to them, including "damage to the structure [of their property], the full replacement cost of the dwelling; the costs of the contents of the home . . . and other consequential and special damages." Id., ¶ 51. As a result of these alleged breaches, Plaintiffs pray for $455,000 in compensatory damages. Id. at 10.
Defendants now move this Court to dismiss Counts I and II of the Amended Complaint for failure to state a claim upon which relief can be granted. Defendants do not seek to dismiss Count III for breach of contract, but instead argue that Count III alone will resolve the entire dispute between the parties. Motion at 5.
Rule 12(b)(6) provides for the dismissal of an action where a complaint fails "to state a claim upon which relief can be granted." When the sufficiency of a complaint is challenged under Rule 12(b)(6), the factual allegations presented in it must be presumed true and should be liberally construed in plaintiff's favor. Leatherman v. Tarrant Cty. Narcotics & Coordination Unit, 507 U.S. 163, 164 (1993). The notice pleading rules are "not meant to impose a great burden on a plaintiff," Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 347 (2005), and he or she must thus be given every favorable inference that may be drawn from the allegations of fact. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 584 (2007). Although "detailed factual allegations" are not necessary to withstand a Rule 12(b)(6) motion, Twombly, 550 U.S. at 555, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (internal quotation omitted). Plaintiff must put forth "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Though a plaintiff may survive a 12(b)(6) motion even if "recovery is very remote and unlikely," Twombly, 550 U.S. at 555 (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)), the facts alleged in the complaint "must be enough to raise a right to relief above the speculative level." Id. at 555.
The Declaratory Judgment Act permits a federal court to make a declaration of the rights and other legal relations of interested parties. 28 U.S.C. § 2201(a). But, in order for a court to issue declaratory relief, it must first determine that there is a "case or controversy" within the meaning of Article III of the United States Constitution and the Declaratory Judgment Act. Id. This inquiry focuses on whether the controversy is "real and substantial." Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240-41 (1937). Stated more clearly, the inquiry should concentrate on "whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941).
Even if the Court finds a case or controversy exists, it must still consider whether it is appropriate to exercise its discretion to grant declaratory relief in the instant case. See 28 U.S.C. § 2201(a) (the court "may declare the rights and other legal relations of any interested party seeking such declaration") (emphasis added); see also National R.R. Passenger Corp. v. Consolidated Rail Corp., 670 F.Supp. 424, 431 (D.D.C. 1987), vacated on other grounds, 892 F.2d 1066 (D.C. Cir. 1990). Where declaratory relief would "cause a case to be tried piecemeal, or that only particular issues will be resolved without settling the entire controversy," a court should not exercise its discretion in favor of granting it. Newton v. State Farm Fire & Cas. Co., 138 F.R.D. 76, 79 (E.D.Va. 1991). In this analysis, the Court generally relies on two criteria: "(1) whether the judgment will 'serve a useful purpose in clarifying the legal relations in issue' or (2) whether the judgment will 'terminate and afford ...