HURST BOILER & WELDING COMPANY INC v. EVANSTON INSURANCE COMPANY

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
VALDOSTA DIVISION
HURST BOILER & WELDING 	:
COMPANY, INC., 	:
:
Plaintiff, 	:
:
v. 	: 	CASE NO.: 7:25-CV-51 (LAG)
:
EVANSTON INSURANCE 	:
COMPANY, 	:
:
Defendant. 	:
:
ORDER
Before the Court are Defendant Evanston Insurance Company’s Partial Motion to
Dismiss for Failure to State a Claim and Brief in Support (Partial Motion to Dismiss) (Doc.
7) and Motion for Hearing on Partial Motion to Dismiss for Failure to State a Claim
(Motion for Hearing) (Doc. 8). For the reasons below, the Partial Motion to Dismiss is
GRANTED and the Motion for Hearing is DENIED.
BACKGROUND
This suit arises from a claim for damages under an insurance contract.1 On April 23,
2025, Plaintiff Hurst Boiler & Welding Co., Inc. filed a Complaint against Defendant
Evanston Insurance Company alleging breach of insurance contract. (Doc. 1). Defendant
issued Plaintiff Policy No. MMAENV002061 (the Policy), for a coverage term of
September 24, 2020 to September 24, 2022. (Id. ¶ 4; see Doc. 1-1). The Policy includes
Professional Services Liability coverage, subject to its terms and conditions. (Doc. 1 ¶ 4;
see Doc. 1-1 at 40–44). The Policy provides, in relevant part, that the “[insurer] will pay
those sums that the insured becomes legally obligated to pay as ‘damages’ arising out of
1 	On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court accepts all facts
alleged in Plaintiff’s Complaint (Doc. 1) as true. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56
(2007); Anderson v. Wilco Life Ins., 17 F.4th 1339, 1344 (11th Cir. 2021) (citation omitted).
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an act, error, or omission committed by the insured, or on behalf of the insured, to which
this insurance applies.” (Doc. 1-1 at 40). “Damages” is defined as “a monetary judgment
(including pre and post judgment interest), award or settlement, including punitive or
exemplary damages where insurable by law.” (Id. at 44). By the terms of the Policy,
“damages” does not include “[c]laimaints’ attorneys’ fees or damages awarded for breach
of contract, except attorneys’ fees awarded for the successful prosecution of a ‘claim’
otherwise covered by [the Policy].” (Id.).
The underlying matter for which Plaintiff claims it is entitled to coverage arises out
of an Equipment Engineering, Procurement and Construction Purchase Contract (EPC
Contract) between Plaintiff and Carolina Poultry Power RG1, LLC (Carolina). (Doc. 1 ¶
5). The EPC Contract concerned the “design, construction and operation” of a project in
Farmville, North Carolina. (Id.). The design, construction, testing, and initial operations on
the project continued from 2018 through 2021. (Id. ¶ 6). On January 6, 2022, Carolina
terminated the contract with Plaintiff for alleged default; and on January 10, 2023, Carolina
initiated an arbitration action (the Arbitration) against Plaintiff. (Id.; see Doc. 1-2 at 3). In
the Arbitration, Carolina alleged (1) breach of contract, (2) engineering and design
negligence, (3) contractual indemnity, and (4) unfair and deceptive trade practices. (Doc.
1-2 at 3–4). Upon receipt of Carolina’s Statement of Claim filed in the Arbitration, Plaintiff
“tendered its defense to [Defendant] under the Policy[.]” (Doc. 1 ¶ 7). Defendant agreed to
defend Plaintiff under a “Reservation of Rights to subsequently deny any duties of defense
or indemnity” and opted not to provide assigned defense counsel for Plaintiff. (Id.).
Defendant further instructed Plaintiff to retain legal counsel to defend Carolina’s claims
against it. (Id.). During the Arbitration, Defendant indemnified Plaintiff “for a portion of
the defense fees and costs, . . . but not all of the fees and costs necessarily incurred to defend
the Arbitration action.” (Id. ¶ 8).
On or about November 1, 2024, the Arbitration panel issued its Arbitration Award.
(Id. ¶ 9; see Doc. 1-2). The Arbitration Award provided, in relevant part, that Carolina was
“entitled to an award of . . . damages for [Plaintiff’s] breaches of contract[.]” (Doc. 1-2 at
68). Plaintiff was obligated to pay the damages award of $2,331, 202.00 plus daily accruing
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interest on the principal sums awarded as set forth in the Arbitration Award. (Doc. 1 ¶ 9;
Doc. 1-2 at 69). The Arbitration Award further determined that Carolina “shall receive
nothing” on any of its negligence claims, indemnity claims, or unfair and deceptive trade
practices claims. (Doc. 1-2 at 68–69).
Plaintiff filed the above-captioned matter on April 23, 2025. (Doc. 1). Plaintiff
alleges that Defendant has breached the Policy because it (1) failed and refused to fully and
properly indemnify Plaintiff for defense fees and costs associated with the Arbitration, and
(2) failed and refused to fully indemnify Plaintiff for its professional services liability as
determined by the Arbitration. (Id. ¶ 11). On May 29, 2025, Defendant filed a Partial
Motion to Dismiss and a Motion for Hearing. (Docs. 7, 8). After receiving an extension,
Plaintiff timely filed a Response to the Partial Motion to Dismiss on July 3, 2025. (Doc.
18; see Docket). Defendant filed a Reply on July 16, 2025. (Doc. 19). Thus, the Partial
Motion to Dismiss is ripe for review. See M.D. Ga. L.R. 7.3.1(A).
LEGAL STANDARD
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)2, “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, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 570). A claim is plausible on its face if the complaint alleges enough
facts to “allow[] the court to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Id. (citation omitted). A complaint must plead “enough fact[s] to
2 	The Court notes that Defendant’s Answer was filed on the same day Defendant filed its Partial
Motion to Dismiss. (Docs. 6, 7). Defendant raises the defense of failure to state a claim both in the Answer
and Motion to Dismiss. (Doc. 6 at 7; see generally Doc. 7). Generally, where a defendant asserts a failure
to state a claim defense in the Answer, it cannot “assert the defense in a Rule 12(b)(6) motion” as the Motion
would be untimely. Whitehurst v. Wal–Mart Stores East, L.P., 329 F. App’x 206, 208 (11th Cir. 2008) (per
curiam). When that occurs, the Court “may construe the Rule 12(b)(6) motion as one seeking judgment on
the pleadings under Rule 12(c).” Id. (citation omitted). “[W]hen construed as a Rule 12(c) motion for
judgment on the pleadings, [Defendant’s] motion would be timely.” Id. As the Answer and Motion
essentially were filed simultaneously and as “[a] motion for judgment on the pleadings pursuant to Federal
Rule of Civil Procedure 12(c) is subject to the same standard as a Rule 12(b)(6) motion to dismiss,” the
Court will deem the Motion to Dismiss as timely filed. U.S. v. Wood, 925 F.2d 1580, 1581 (11th Cir. 1991)
(per curiam) (citation omitted); see also Everidge v. Wells Fargo Bank, No. 5:12-CV-497(LJA), 2015 WL
5786738, at *8 n.8 (M.D. Ga. Sept. 29, 2015).
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raise a reasonable expectation that discovery will reveal evidence” of the defendant’s
liability. Twombly, 550 U.S. at 556. The Court must “take the factual allegations in the
complaint as true and construe them in the light most favorable to the plaintiff[,]” but the
same liberal reading does not apply to legal conclusions. Anderson, 17 F.4th at 1344–45
(first citing Edwards v. Prime, Inc., 602 F.3d 1276, 1291 (11th Cir. 2010); and then citing
Iqbal, 556 U.S. at 678). “[A] plaintiff armed with nothing more than conclusions” cannot
“unlock the doors of discovery[.]” Iqbal, 556 U.S. at 678–79. Additionally, “[t]hreadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, do
not suffice.” Id. at 678 (citation omitted).
DISCUSSION
I. 	Partial Motion to Dismiss
Defendant argues that Plaintiff’s claim alleging that Defendant failed to indemnify
Plaintiff for the Arbitration Award should be dismissed under the terms of the Policy. (Doc.
7 at 6). “As the Court’s jurisdiction in this matter is based on diversity of citizenship, the
Court must apply the choice of law rules of the forum state—Georgia.” Elder v. Reliance
Worldwide Corp., 563 F. Supp. 3d 1221, 1230 (N.D. Ga. 2021) (citing U.S. Fid. & Guar.
Co. v. Liberty Surplus Ins. Corp., 550 F.3d 1031, 1033 (11th Cir. 2008)). Georgia generally
follows the lex loci contractus choice of law rule governing contracts; however, “unless
the law of the foreign jurisdiction is contrary to Georgia public policy or the foreign
jurisdiction has no substantial relationship with the parties or the transaction[,]” Georgia
courts will uphold choice of law provisions stipulated to in contractual agreements. Eudy
v. GCM Coastal, LLC, No. 1:22-CV-2418-MHC, 2023 WL 6371015, at *4 (N.D. Ga. 2023)
(first citing Federated Rural Elect. Ins. Exch. V. R.D. Moody & Assocs., Inc., 468 F.3d
1322, 1325 (11th Cir. 2006); and then citing Rayle Tech, Inc. v. DeKalb Swine Breeders,
133 F.3d 1405, 1409 (11th Cir. 1998)). The Policy between Plaintiff and Defendant
contains a New York choice of law provision. (Doc. 1-1 at 27). Application of New York
law to the contract at issue would not contravene Georgia public policy; however, New
York has no substantial relationship with the parties or the transaction. Plaintiff is a Georgia
corporation with its principal office located in Georgia, and Defendant is an Illinois
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corporation with its principal office located in Illinois. (Doc. 1 ¶¶ 1–2). Moreover, the
underlying Arbitration, held in Georgia, concerned a North Carolina project. (Id. ¶ 5; see
Doc. 1-2 at 9). Furthermore, both Parties agree that the outcome in either jurisdiction—
Georgia or New York—will be the same. (Doc. 7 at 7 n.3; Doc. 18 at 4 n.1). Therefore, the
Court will apply Georgia law, notwithstanding the Parties’ choice of New York law
provision in the Policy.
“[U]nder Georgia law, the duty to defend an insured is separate and independent
from the obligation to indemnify.” Elan Pharm. Rsch. Corp. v. Emps. Ins. of Wausau, 144
F.3d 1372, 1375 (11th Cir. 1998) (citing Penn-Am. Ins. v. Disabled Am. Veterans, Inc., 490
S.E.2d 374, 376 (Ga. 1997)). An insurer’s duty to indemnify is not ripe until the underlying
lawsuit is resolved or the insured’s liability is established. Mid-Continent Cas. Co. v.
Delacruz Drywall Plastering & Stucco, Inc., 766 F. App’x 768, 770 (11th Cir. 2019). Here,
Plaintiff’s liability was established when the Arbitration panel issued its Arbitration Award
in favor of Carolina. (See Doc. 1-2 at 69). Thus, Defendant’s duty to indemnify is ripe.
Moreover, under Georgia law, “the parties to an insurance policy are bound by its
plain and unambiguous terms.” Hays v. Ga. Farm Bureau Mut. Ins. Co., 722 S.E.2d 923,
925 (Ga. Ct. App. 2012) (citation omitted). A court may not “strain to extend coverage
where none was contracted or intended.” Id. at 926 (citation omitted). “[A]n insurer seeking
to invoke a policy exclusion carries the burden of proving its applicability in a given case.”
First Specialty Ins. Corp., Inc. v. Flowers, 644 S.E.2d 453, 455 (Ga. Ct. App. 2007)
(citation omitted). An insurer can carry this burden by “relying exclusively upon the
allegations against the insured in the underlying complaint.” Id. (citation omitted). Because
the Arbitration Award explicitly provided that damages were not imposed on Plaintiff for
anything other than Carolina’s breach of contract claim and because the Policy’s definition
of 	damages 	specifically 	excludes 	“damages 	awards 	for 	breach 	of 	contract[,]” 	the
Arbitration Award is not covered under the Policy. (Doc. 1-1 at 40, 44; Doc. 1-2 at 68–71).
Contrary to Plaintiff’s argument that “the Court cannot be bound by the arbitrary
legal theory assigned by an unaffiliated Arbitration [p]anel in finding liability against
[Plaintiff] and in favor of . . . Carolina[,]” under Georgia law, the doctrines of claim and
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issue preclusion apply to arbitration proceedings. (Doc. 18 at 10); Bennett v. Cotton, 536
S.E.2d 802, 804 (Ga. Ct. App. 2000) (citation omitted). Preclusion doctrines apply “even
if some new factual allegations have been made, some new relief has been requested, or a
new defendant has been added.” Bennett, 536 S.E.2d at 804 (citation omitted). Plaintiff
was given a full and fair opportunity to litigate Carolina’s breach of contract claim against
it in the underlying Arbitration, and Plaintiff was found liable for breach of contract. (Doc.
1-2 at 68). Plaintiff cannot now relitigate this issue.
Accordingly, Plaintiff has failed to state a claim for which relief can be granted, and
Defendant’s Partial Motion to Dismiss (Doc. 7) is GRANTED.
II. 	Motion for Hearing
Defendant’s Motion for Hearing “requests a hearing on its Partial Motion to
Dismiss[.]” (Doc. 8 at 1). Neither the Federal Rules of Civil Procedure nor the Court’s
local rules entitle litigants to oral argument on motions to dismiss. See Coney v. Macon-
Bibb County, No. 5:19-cv-00145-TES, 2019 WL 13098500, at *1 (M.D. Ga. June 6, 2019)
(citations omitted) (collecting cases); M.D. Ga. L.R. 7.5 (explaining that courts in this
district decide all motions “without a hearing unless otherwise ordered by the court on its
own motion or in its discretion upon request of counsel”). As set forth above, the Court has
resolved the Partial Motion to Dismiss based on the filings. Thus, a hearing is unnecessary,
and Defendant’s Motion for Hearing (Doc. 8) is DENIED.
CONCLUSION
Accordingly, Defendant’s Partial Motion to Dismiss (Doc. 7) is GRANTED and
Defendant’s Motion for Hearing (Doc. 8) is DENIED.
SO ORDERED, this 11th day of February, 2026.
/s/ Leslie A. Gardner
LESLIE A. GARDNER, CHIEF JUDGE
UNITED STATES DISTRICT COURT
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