Filed: Jul. 14, 2011
Latest Update: Feb. 22, 2020
Summary: [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ FILED U.S. COURT OF APPEALS No. 11-10865 ELEVENTH CIRCUIT Non-Argument Calendar JULY 14, 2011 _ JOHN LEY CLERK D.C. Docket No. 5:10-cv-00096-LGW-JEG ARCH INSURANCE COMPANY, llllllllllllllllllllllllllllllllllllllll Plaintiff - Appellant, versus CLEMENTS, PURVIS & STEWART, P.C., llllllllllllllllllllllllllllllllllllllll Defendant - Appellee. _ Appeal from the United States District Court for the Southern District of G
Summary: [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ FILED U.S. COURT OF APPEALS No. 11-10865 ELEVENTH CIRCUIT Non-Argument Calendar JULY 14, 2011 _ JOHN LEY CLERK D.C. Docket No. 5:10-cv-00096-LGW-JEG ARCH INSURANCE COMPANY, llllllllllllllllllllllllllllllllllllllll Plaintiff - Appellant, versus CLEMENTS, PURVIS & STEWART, P.C., llllllllllllllllllllllllllllllllllllllll Defendant - Appellee. _ Appeal from the United States District Court for the Southern District of Ge..
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 11-10865 ELEVENTH CIRCUIT
Non-Argument Calendar JULY 14, 2011
________________________ JOHN LEY
CLERK
D.C. Docket No. 5:10-cv-00096-LGW-JEG
ARCH INSURANCE COMPANY,
llllllllllllllllllllllllllllllllllllllll Plaintiff - Appellant,
versus
CLEMENTS, PURVIS & STEWART, P.C.,
llllllllllllllllllllllllllllllllllllllll Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Georgia
________________________
(July 14, 2011)
Before BARKETT, MARCUS and FAY, Circuit Judges.
PER CURIAM:
Appellant Arch Insurance Company (“Arch Insurance”) filed a complaint
against Appellee Clements, Purvis, & Stewart, P.C. (“Clements Purvis”) alleging a
claim for negligent misrepresentation relating to audits performed by Clements
Purvis. In response to Clements Purvis’ motion to dismiss, Arch Insurance filed
an opposition and a motion for leave to amend its complaint in the instance that
the district court found its initial complaint deficient. The district court denied
Arch Insurance’s motion for leave to amend, and subsequently granted Clements
Purvis’ motion to dismiss. Arch Insurance appealed. For the reasons stated
below, we find that the district court did not abuse its discretion in denying the
motion for leave to amend. Further, we find that Arch Insurance’s negligent
misrepresentation claim is not supported by a sufficient factual basis to survive a
motion to dismiss. Consequently, we affirm both the denial of the motion for
leave to amend and the dismissal of the complaint.
I. BACKGROUND
In 2005 and 2006, Arch Insurance issued performance bonds to a
construction company, Douglas Asphalt Company (“Douglas Asphalt”), after
reviewing Douglas Asphalt’s financial statements, which were audited by
Clements Purvis. Subsequently, Douglas Asphalt suffered financial difficulties
and was unable to fulfill its obligations under its construction contracts. As a
result, Arch Insurance incurred significant financial losses.
In September 2010, Arch Insurance filed a complaint against Clements
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Purvis raising a claim for negligent misrepresentation. Arch Insurance alleged that
Clements Purvis negligently made material misrepresentations in its audits of
Douglas Asphalt upon which Arch Insurance relied to its financial detriment. On
October 19, 2010, Clements Purvis filed a motion to dismiss the complaint. Arch
Insurance filed its opposition to the motion to dismiss on November 4, 2010.
Concurrently, Arch Insurance also filed a motion for leave to amend the complaint
in the future if the court found the complaint deficient when ruling on the motion
to dismiss.
On December 8, 2010, the Magistrate Judge denied the motion for leave to
amend the complaint, but stated that Arch Insurance could request leave to amend
the complaint immediately if it so desired. Arch Insurance did not do so.
Subsequently, on January 25, 2011, the district court granted the motion to
dismiss. Arch Insurance timely appealed, alleging that the district court erred both
by denying the motion for leave to amend and by dismissing the complaint.
II. STANDARD OF REVIEW
We review a dismissal of a complaint under Fed.R.Civ.P. 12(b)(6) de novo.
Speaker v. U.S. Dep’t of Health and Human Services Centers for Disease Control
and Prevention, 623 F.3d 1371, 1379 (11th Cir. 2010). We “accept[ ] the factual
allegations in the complaint as true and construe[ ] them in the light most
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favorable to the plaintiff.” Id. We review a denial of leave to amend a complaint
for abuse of discretion. Green Leaf Nursery v. E.I. DuPont De Nemours and Co.,
341 F.3d 1292, 1300 (11th Cir. 2003).
III. DISCUSSION
In its complaint, Arch Insurance raises a claim of negligent
misrepresentation, alleging that Clements Purvis made negligent
misrepresentations in its audits of the 2004 and 2005 financial statements of
Douglas Asphalt. A claim of negligent misrepresentation under Georgia law has
three elements: (1) a party negligently supplies false information to foreseeable
persons, known or unknown; (2) such persons’ reliance on that information was
reasonable; and (3) economic injury proximately resulted from that reliance.
Atwater v. Nat’l Football League Players Ass’n, 626 F.3d 1170, 1182 (11th Cir.
2010). Although Arch Insurance need not specifically plead every element to
survive a motion to dismiss, its complaint must “state a claim to relief that is
plausible on its face.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570,
127
S. Ct. 1955, 1974,
167 L. Ed. 2d 929 (2007). “A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal,
129 S. Ct. 1937, 1949,
173 L. Ed. 2d 868 (2009). The complaint must include
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enough facts “to raise a right to relief above the speculative level.” Twombly, 550
U.S. at 555, 127 S.Ct. at 1965.
In this case, Arch Insurance’s negligent misrepresentation claim is not
supported by a significant factual basis to raise its right to relief above the
speculative level. The complaint contains mere conclusory allegations that
Clements Purvis was negligent. For example, the complaint fails to include facts
regarding the tests Clements Purvis performed or failed to perform or facts
regarding how Clements Purvis’ actions deviated from the standard of care.
Further, the complaint fails to state what information in the audited financial
statements was inaccurate or constituted a misrepresentation. Thus, the complaint
lacked a sufficient factual basis upon which the district court could infer the
existence of an essential element of the claim and dismissal was warranted.
In addition, the district court did not abuse its discretion by denying Arch
Insurance’s motion for leave to amend. Arch Insurance’s motion was premature as
it requested leave to amend only if the motion to dismiss was granted. Further,
Arch Insurance did not indicate what would be changed in the complaint; nor did
it attach an amended complaint. In denying Arch Insurance’s motion for leave to
amend on December 8, 2010, the district court specifically stated that Arch
Insurance could request leave to amend the complaint at that time if it so desired,
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but Arch Insurance filed no such motion. Even after the court ruled on January
25, 2011 by granting Clements Purvis’ motion to dismiss, Arch Insurance still did
not file a motion for leave to amend. Under those circumstances, the district court
did not abuse its discretion by denying Arch Insurance’s motion for leave to
amend.
IV. CONCLUSION
For the reasons stated above, we affirm both the order denying Arch
Insurance’s motion for leave to amend and the order dismissing Arch Insurance’s
complaint.
AFFIRMED.
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