Ainger v. Great Am. Assurance Co.

• Decision Date: 22 September 2022
• Docket Number: Civil Action 2020-0005
• Parties: THOMAS AINGER and ELIZABETH A. KLIESCH, Plaintiffs, v. GREAT AMERICAN ASSURANCE COMPANY, SIWELL, INC., AMERICAN FINANCIAL GROUP, and DOES 1-9, Defendants.
• Court: U.S. District Court — Virgin Islands

THOMAS AINGER and ELIZABETH A. KLIESCH, Plaintiffs, v. GREAT AMERICAN ASSURANCE COMPANY, SIWELL, INC., AMERICAN FINANCIAL GROUP, and DOES 1-9, Defendants.

Civil Action No. 2020-0005

United States District Court, D. Virgin Islands

September 22, 2022

Attorneys:

Lee J Rohn, Esq., St. Croix, U.S.V.I., For Plaintiffs.

Carol Ann Rich, Esq., St. Thomas, U.S.V.I., For Defendant Great American Assurance Company.

J Daryl Dodson, Esq., St. Thomas, U.S.V.I., For Defendant Siwell, Inc.

Richard H. Dollison, Esq., St. Thomas, U.S.V.I., For Defendant American Financial Group.

MEMORANDUM OPINION

WILMA A. LEWIS, District Judge.

THIS MATTER comes before the Court on Defendant Great American Assurance Company's (“Defendant Great American”) “Motion to Dismiss First Amended Complaint” (Dkt. No. 28), Plaintiff Thomas Ainger and Plaintiff Elizabeth A. Kliesch's (“Plaintiffs”) Opposition thereto (Dkt. No. 38) and Defendant Great American's Reply (Dkt. No. 51); Defendant American Financial Group, Inc.'s (“Defendant AFG”) “Motion to Dismiss Plaintiffs' Complaint” (Dkt. No. 30), Plaintiffs' Opposition thereto (Dkt. No. 40), and Defendant AFG's Reply (Dkt. No. 52); and Defendant Siwell, Inc.'s (“Defendant Siwell”) “Motion to Dismiss Pursuant to F. R. Civ. P. 12(b)(6)” (Dkt. No. 32), Plaintiffs' Opposition thereto (Dkt. No. 48), and Defendant Siwell's Reply (Dkt. No. 53).

For the reasons discussed below, the Court will grant in part and deny in part Defendant Siwell's Motion to Dismiss; deny Defendant Great American's Motion to Dismiss; and grant Defendant AFG's Motion to Dismiss, except to the extent that it seeks dismissal of Plaintiffs' claims with prejudice. The Court will grant Plaintiffs leave to amend their Complaint.

I. BACKGROUND

On September 19, 2019, Plaintiffs filed a Complaint in the Superior Court of the Virgin Islands (Dkt. No. 1-1), which was later amended (Dkt. No. 12-1). Defendant Great American removed the action to this Court on January 27, 2020. (Dkt. No. 1). The Amended Complaint asserts claims of breach of express and implied contract, estoppel, negligence, fraud, breach of fiduciary duties, breach of the implied covenant of good faith and fair dealing, unjust enrichment, tortious interference with a business relationship, conversion of chattels or personal property, and intentional or negligent infliction of emotional distress. (Dkt. No. 12-1). Plaintiffs allege that they own properties at Remainder Plot 47A and 47AB Estate La Grande Princesse, Christiansted, St. Croix and that Defendant Great American provided insurance coverage for those properties. Id. at ¶ 6. According to the Amended Complaint, Defendant Great American is wholly owned by Defendant AFG and the insurance on the properties was provided “through” Defendant Siwell doing business as Capital Mortgage Services of Lubbock, Texas (“Capital Mortgage”). Id. at ¶¶ 56. Plaintiffs allege that, when the properties were damaged in 2017 by Hurricane Maria, Defendant Great American and Defendant Siwell failed to timely inspect and assess the damage to the properties. Id. at ¶¶ 7-8. Due to the alleged delay in action by Defendant Great American and Defendant Siwell, Plaintiffs engaged a public adjuster to quantify their losses and were delayed in making the needed repairs to the properties. Id. at ¶¶ 10-11. Plaintiffs allege that they have not received the full payment of the insurance proceeds and Defendant Siwell failed to ensure that Plaintiffs were adequately paid. Id. at ¶¶ 14-16. Plaintiffs also allege that the rates charged for their insurance were “exorbitant” and “were not arrived at on a competitive basis.” Id. at ¶ 18.

All Defendants have moved to dismiss the Amended Complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (Dkt. Nos. 28, 30, 32). Plaintiffs have opposed Defendants' Motions to Dismiss. (Dkt. Nos. 38, 40, 48).

II. APPLICABLE LEGAL PRINCIPLES

Federal Rule of Civil Procedure 12(b)(6) calls for dismissal of a complaint if it “fail[s] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “To survive a motion to dismiss, 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 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S. at 556). The Third Circuit, as articulated in Connelly v. Lane Constr. Corp., employs a three-step process in applying the analysis established by the Supreme Court in Bell Atlantic v. Twombly and Ashcroft v. Iqbal:

Under the pleading regime established by Twombly and Iqbal, a court reviewing the sufficiency of a complaint must take three steps. First, it must “tak[e] note of the elements [the] plaintiff must plead to state a claim.” Second, it should identify allegations that, “because they are no more than conclusions, are not entitled to the assumption of truth.” Finally, “[w]hen there are well-pleaded factual allegations, [the] court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.”

Connelly, 809 F.3d 780, 787 (3d Cir. 2016) (quoting Ashcroft, 556 U.S. at 675, 679) (internal citations omitted); see also Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011) (stating that when ruling on a motion to dismiss for failure to state a claim, courts accept a plaintiff's “factual allegations as true, [and] construe the complaint in the light most favorable to the plaintiff.” (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)) (internal quotation marks omitted)).

III. DISCUSSION

A. Consideration of Exhibits Attached to Motion to Dismiss

The Court must first address whether it may consider the documents Defendant Great American has attached to its Motion to Dismiss. Defendant Great American has presented three exhibits with which Plaintiffs take issue:

(1) Exhibit 1 contains a “Notice of Lender Placed Homeowners (Hazard) Coverage” dated January 19, 2017, “Evidence of Insurance” reflecting Certificate Number GRH0071429 and an effective date of December 17, 2016, and Mortgage Protection Insurance with Policy Number 4091391 (“Master Policy”);

(2) Exhibit 2 contains a Mortgage between Plaintiffs and Capital Mortgage Services; and

(3) Exhibit 3 contains a “Notice of Lender Placed Homeowners (Hazard) Coverage” dated April 28, 2016 and “Evidence of Insurance” reflecting Certificate Number GRH0064163 and an effective date of December 17, 2015.^[1]

Plaintiffs dispute the authenticity of these documents and argue that the Court may not consider them on a Motion to Dismiss. (Dkt. No. 38 at 2-9).

At the Rule 12(b)(6) stage, “courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record.” Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). However, courts may also consider “an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document.” See id.; see also Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (“In deciding a Rule 12(b)(6) motion, a court must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents.”); Pryor v. NCAA, 288 F.3d 548, 560 (3d Cir. 2002) (“Further, documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered.” (quoting 62 Fed. Proc., L.Ed. § 62:508)); Claxton v. Oriental Bank (formerly Bank of Nova Scotia), Civil Action No. 19-CV-0069, 2022 WL 3683800, at *3 (D.V.I. Aug. 25, 2022) (“District courts may rely on documents appended to a motion to dismiss that are ‘integral to . . . the complaint.' That remains true so long as such documents are part of the public record or are ‘undisputedly authentic.'” (internal citations omitted)); Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) (“[C]ourts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record. However, an exception to the general rule is that a document integral to or explicitly relied upon in the complaint may be considered without converting the motion to dismiss into one for summary judgment.” (quoting Pension Benefit Guar. Corp., 998 F.2d at 1196 and In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)) (internal quotation marks omitted)).^[2]

If a court considers matters outside the scope of the rule articulated above, the motion to dismiss must be converted to a motion for summary judgment. Bruni v. City of Pittsburgh, 824 F.3d 353, 360 (3d Cir. 2016) (when “matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under [Federal] Rule [of Civil Procedure] 56.” (quoting Fed.R.Civ.P. 12(d)) (internal quotation marks omitted)). Where a court converts a motion to dismiss into a motion for summary judgment, “[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.” Id. (quoting Fed.R.Civ.P. 12(d)) (internal quotation marks omitted).

With regard to Exhibit 1, Defendant Great American argues that “attaching a copy of the insurance policy is appropriate because it forms the basis of Plaintiffs['] claims.” (...