United States District Court, District of Columbia
MEMORANDUM OPINION AND ORDER
TIMOTHY J. KELLY United States District Judge
declaratory-judgment action, a liability insurer (Plaintiff
Harford Mutual Insurance Company, or “Harford”)
brings suit against its insured, a construction company and
its owners (the Defendants). This Opinion addresses three
outstanding issues. First, the Court has raised sua
sponte the issue of whether it has jurisdiction over
this action under Article III of the U.S. Constitution and
the Declaratory Judgment Act, 28 U.S.C. §§
2201-2202. Second, Harford has moved to strike
Defendants' Second Amended Answer and Counterclaim.
See ECF No. 28. Third, Harford has moved to dismiss
Defendants' first amended counterclaim, which seeks
attorney's fees, for failure to state a claim under
Federal Rule of Civil Procedure 12(b)(6). See ECF
reasons set forth below, the Court will dismiss Harford's
Amended Complaint for lack of subject matter jurisdiction.
Harford may seek to remedy the deficiencies identified in
this Opinion by filing a second amended complaint on or
before May 28, 2018. The pending motions for summary judgment
(ECF Nos. 15 and 17) will be denied as moot, although the
parties may file renewed motions if Harford files a second
amended complaint over which this Court has jurisdiction. The
Court will also grant both Harford's motion to strike and
its motion to dismiss.
Factual and Procedural Background
Harford's Claim for Declaratory Judgment
case is a dispute over attorney's fees. Defendants face
two lawsuits filed in the Superior Court of the District of
Columbia by customers who allege that Defendants improperly
performed certain construction work. See ECF No. 4
(“Am. Compl.”) ¶¶ 6-8, 18. Harford
concedes that, as Defendants' liability insurer, it has a
duty to defend them in the Superior Court lawsuits, even
though it is doing so under a reservation of rights.
Id. ¶¶ 10-11. It disagrees with
Defendants, however, on how much it should have to pay.
Defendants assert that their chosen counsel in the Superior
Court lawsuits has reasonably charged fees as high as $625
per hour. Id. ¶ 15. Harford claims that those
fees are unreasonably high, and has agreed to pay only a
“blended rate” of $275 per hour. Id.
declaratory-judgment action, Harford asks the Court to
determine what a reasonable attorney's fee would be to
defend against the two Superior Court lawsuits. Id.
¶ 21. Specifically, in its prayer for relief, Harford
asks that the Court:
1. Enter a judgment declaring the reasonable and fair market
rate, on an hourly basis, that will apply to the work
undertaken by counsel of the Defendants' choosing in
connection with the defense of the two cases now pending in
the Superior Court for the District of Columbia against the
2. For such other and further relief as this Court deems
necessary and just.
Id. at 6. Harford asserts that this Court has
jurisdiction based on the Declaratory Judgment Act and
diversity of citizenship. Id. ¶¶ 2, 20-21.
The parties agree that Harford's claim is governed by
District of Columbia law. See ECF No. 15 at 8-9; ECF
No. 17-1 at 10. The parties have filed motions for summary
judgment on the merits of Harford's claim. ECF Nos. 15,
December 7, 2017, the Court held a status conference during
which it questioned whether it could properly exercise
jurisdiction over this action. The parties subsequently
submitted supplemental briefing on that issue. See
ECF Nos. 29, 30. Both parties agree that Harford has a duty
to defend Defendants in the underlying Superior Court
actions, and argue jurisdiction exists because there is an
actual case or controversy regarding the amount of
attorney's fees that Harford should pay. See ECF
No. 29 at 5; ECF No. 30 at 9-10.
Defendants' Counterclaim for Attorney's Fees
October 13, 2017, Defendants answered Harford's Amended
Complaint and filed a counterclaim for attorney's fees
under District of Columbia law. ECF No. 14. Harford moved to
dismiss the counterclaim on November 3. ECF No. 16. On
November 17, Defendants filed an Amended Answer and
Counterclaim, ECF No. 20 (“Am. Ans.”), mooting
Harford's initial motion to dismiss. The amended
counterclaim generally asserts that Harford's conduct in
the insurance dispute has been vexatious, oppressive, and in
bad faith. Id. ¶¶ 75-76. The amended
counterclaim further specifies that Harford has unreasonably
refused to pay Defendants' legitimate attorney's
fees, has unreasonably delayed making payments, and has made
misstatements of fact and law that benefited Harford at
Defendants' expense. See Id. ¶¶ 77-87.
Based on these allegations, Defendants request various forms
of relief, including “litigation expenses and
attorney's fees” incurred in this action. See
Id. at 11-12.
filed a renewed motion to dismiss the first amended
counterclaim on December 1. ECF No. 25. Defendants then filed
a Second Amended Answer and Counterclaim, ECF No. 26, and a
“notice” asserting that Harford's renewed
motion was now moot, ECF No. 27. Harford moved to strike the
Second Amended Answer and Counterclaim, asserting that it was
improperly filed under Federal Rule of Civil Procedure 15 and
did not moot Harford's renewed motion to dismiss. ECF No.
28. Defendants opposed the motion to strike, and in doing so
also set forth arguments opposing ...