Abraham v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 31 March 2021
• Docket Number: Case No. 19-cv-3028
• Parties: ANNA ABRAHAM, et al., Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Illinois

ANNA ABRAHAM, et al., Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

Case No. 19-cv-3028

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

March 31, 2021

Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

The remaining Plaintiffs in this case—Mark Anderson, Laverne Gallant, and Cynthia Oliver ("Plaintiffs")—bring suit against Defendant State Farm Mutual Automobile Insurance Company ("Defendant" or "State Farm") for "failure to comply with a uniform legal standard" concerning the payment of personal injury protection ("PIP") claims within 30 days. [1-1] at 4.¹ Currently before the Court is Defendant's motion to dismiss the complaint for failure to state a claim [34]. For the following reasons, the motion to dismiss [34] is granted. The complaint [1-1] is dismissed in full. Plaintiffs are given until April 28, 2021 to file a motion for leave to file a first amended complaint, if they believe they can do so consistent with this opinion and Rule 11. A copy of the proposed first amended complaint must be attached to the motion. If no motion is filedby the specified date, the Court will convert this dismissal into a dismissal with prejudice, enter a final judgment, and terminate the action.

I. Background

The following facts are drawn from the governing complaint [1-1]. All well-pled facts are assumed to be true for purposes of Defendant's motion to dismiss. See White v. United Airlines, Inc., 987 F.3d 616, 620 (7th Cir. 2021).

This proposed class action complaint was removed from Cook County Circuit Court pursuant to the Class Action Fairness Act ("CAFA"). Plaintiffs seek class-wide declaratory relief and, in the alternative, injunctive relief, for Defendant's alleged "failure to comply with a uniform legal standard under which the defendant must provide to its insureds a meaningful written explanation, within the statutory 30-day deadline of each affected state's Personal Injury Protection statute, of (i) its inability or purported inability to complete its investigation of a given Personal Injury Protection claim within that statutory 30-day deadline, and (ii) withholding of payment of benefits for a given Personal Injury Protection claim within that same statutory 30-day deadline." [1-1] at 4.

The proposed class action originally was brought on behalf of two proposed classes, the first consisting of PIP claimants and the second consisting of all of Defendant's "current auto insurance policyholders" in Delaware, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, New York, North Dakota, Oregon, Pennsylvania, Texas, and Utah, which Plaintiffs refer to as "the PIP states." See [1-1] at 7. Pursuant to the parties' stipulations, see footnote 1, supra, only the second proposed class remains in the case, with Anderson, Gallant, and Oliver the only remaining named Plaintiffs. These Plaintiffs are all residents of Michigan.

The complaint alleges that "[u]nder the laws of each of the PIP states, a PIP insurer presented with a claim for PIP benefits—typically in the form of a medical bill—must either:

• Pay all or part of the claim;

• Advise the claimant in writing, within 30 days of the insurer's receipt of the claim, that further, specified information or verification is required in order to process the claim; or

• Advise the claimant in writing, within 30 days of the insurer's receipt of the claim, that all or part of the claim is denied.

According to the complaint, these "legal standards ... are uniform throughout the PIP states." [1-1] at 8. (The complaint does not, however, cite any legal authorities from any of the PIP states.)

The complaint describes two form letters that are purportedly sent by Plaintiff in response to medical-expense-related PIP claims (though none of the remaining Plaintiffs allege to have ever submitted such a claim). The first form letter states: "This matter is presently under investigation and as soon as a determination has been made, you will be notified." [1-1] at 9. The second reads: "Based on our investigation of the claim to date, there is a question as to whether this treatment is reasonable and necessary as a result of injuries sustained in [the auto accident in question]. Consideration for reimbursement of benefits will be made after a complete investigation of your claim." Id. The complaint refers to these two standard form letters as "We're investigating letters." See id. The complaint alleges that the We're investigating letters "do not meet, and in fact violate, the legal requirements for handling PIP claims in the PIP states." Id. at 10. "By deploying the standardized form letters," Plaintiffs allege, "State Farm arrogates to itself an open-ended window in which to complete its investigation and communicate a coverage determination," avoiding the 30-day deadlines purportedly set out in the laws of each PIP state. The complaint asserts that State Farm's alleged wrongful practices have "unilaterally diminished the value of the auto policies(and, more particularly, the Personal Injury Protection coverage) that it sold and issued to" Anderson, Gallant, and Oliver. Id. at 11.

Count I of the complaint is for declaratory relief. It does not specify what, in particular, Plaintiffs wish the Court to declare. Count II, advanced in the alternative, is for injunctive relief and seeks an order prohibiting Defendant from using the We're investigating letters.

II. Legal Standard

Federal Rule of Civil Procedure 8(a)(2) provides that, to state a claim for relief, a complaint "must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." "The questions under [this rule] are whether the defendant has fair notice of what he must defend himself against and whether there is some reason to believe he could be found liable at the end of the case." Williams v. Dart, 967 F.3d 625, 638 (7th Cir. 2020). Although "a complaint need not identify legal theories," it "nonetheless must allege some facts that support whatever theory the plaintiff asserts" in response to a motion to dismiss. Lavalais v. Village of Melrose Park, 734 F.3d 629, 635 (7th Cir. 2013) (affirming dismissal of complaint for failure to state a claim where plaintiff alleged that he "may assert a hostile work environment claim even though he did not assert such a claim in his complaint," because "[n]othing in [his] amended complaint ... fairly suggests a hostile work environment"). That is, "a plausible claim must include 'factual content' sufficient to allow the court 'to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Charleston v. Board of Trustees of University of Illinois at Chicago, 741 F.3d 769, 772 (7th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009))).

To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must allege facts which, when taken as true, "'plausibly suggest that the plaintiff has a right to relief, raising that possibility above a speculative level.'" Cochran v. Illinois State Toll Highway Auth., 828 F.3d 597, 599 (7thCir. 2016) (quoting EEOC v. Concentra Health Servs., 496 F.3d 773, 776 (7th Cir. 2007)). For purposes of a motion to dismiss under Rule 12(b)(6), the Court "'accept[s] as true all of the well-pleaded facts in the complaint and draw all reasonable inferences in favor of the plaintiff.'" Calderon-Ramirez v. McCament, 877 F.3d 272, 275 (7th Cir. 2018) (quoting Kubiak v. City of Chicago, 810 F.3d 476, 480-81 (7th Cir. 2016)). However, this "tenet ... is inapplicable to legal conclusions." Iqbal, 556 U.S. at 678, which "can [be] reject[ed] at the motion to dismiss stage." Dix v. Edleman Financial Services, LLC, 978 F.3d 507, 514 (7th Cir. 2020).

The Court reads the complaint and assesses its plausibility as a whole. See Atkins v. City of Chicago, 631 F.3d 823, 832 (7th Cir. 2011). The Court may also consider "documents that are attached to the complaint, documents that are central to the complaint and are referred to in it, and information that is properly subject to judicial notice." O'Brien v. Village of Lincolnshire, 955 F.3d 616, 621 (7th 2020). In opposing a Rule 12(b)(6) motion, a plaintiff is "free to 'elaborate on his factual allegations so long as the new elaborations are consistent with the pleadings.'" Peterson v. Wexford Health Sources, Inc., 986 F.3d 746, 753 n.2 (7th Cir. 2021) (quoting Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012)).

III. Analysis

Defendant moves to dismiss on several bases, including (1) failure to state a claim, (2) the Wilton Brillhart abstention doctrine, and (3) the filed rate doctrine. The Court finds the first argument dispositive. It is therefore unnecessary for the Court to consider the application of any abstention doctrines or affirmative defenses such as the filed rate doctrine. See Gunn v. Continental Casualty Co., 968 F.3d 802, 806 (7th Cir. 2020) (filed rate doctrine is an affirmative defense).

The complaint does not identify any particular legal theories or cite to any statutes or other sources of legal authority. This, standing alone, does make the complaint deficient because "'Plaintiffs need only plead facts, not legal theories, in their complaints.'" R3 Composites Corp. v. G&S Sales Corp., 960 F.3d 935, 941 (7th Cir. 2020) (quoting Reeves ex rel. Reeves v. Jewel Food Stores, Inc., 759 F.3d 698, 701 (7th Cir. 2014)). Thus, a complaint is not subject to dismissal under Rule 12(b)(6) simply for failing to specify a legal theory or for identifying an incorrect legal theory. See BRC Rubber & Plastics, Inc. v. Continental Carbon Corp., 900 F.3d 529, 543 n.36 (7th Cir. 2018). A plaintiff also is not precluded from opposing summary judgment, see Johnson v. City of Shelby, 574 U.S. 10, 11 (2014), Estate of Perry v. Wenzel, 872 F.3d 439 (7th Cir. 2017), or having a class certified, see Beaton v. SpeedyPC Software, 907 F.3d 1018, 1024 (7th Cir. 2018), based on a legal theory...