Davis v. Nationwide Mut. Fire Ins. Co.

• Decision Date: 05 May 2011
• Docket Number: Case No. 4:10cv101.
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Roman DAVIS, Plaintiff,v.NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Defendant.

783 F.Supp.2d 825

Roman DAVIS, Plaintiff,

v.NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Defendant.

Case No. 4:10cv101.

United States District Court, E.D. Virginia,Newport News Division.

May 5, 2011.

Roman Davis, pro se.Lawrence Steven Emmert, Steven Bruce Schwartzman, for Defendant.

AMENDED OPINION AND ORDER

F. BRADFORD STILLMAN, United States Magistrate Judge.

Plaintiff, Roman Davis, brought this pro se civil action against Defendant, Nationwide Mutual Fire Insurance Company. Presently before the Court are: Plaintiff's Objection to Moving the Civil Action from State Court to Federal Court (ECF No. 10), filed on October 19, 2010; Defendant's Motion to Dismiss Extra–Contractual and Tort Claims (ECF No. 12), filed on November 3, 2010; Plaintiff's Motion for a Trial by Jury (ECF No. 25), filed on December 7, 2010; and Defendant's Motion to Quash Plaintiff's Jury Demand (ECF No. 28), filed on December 21, 2010. The Court will rule on these motions without oral hearing pursuant to Local Civil Rule 7(J) and Rule 78(b) of the Federal Rules of Civil Procedure.

I. PROCEDURAL HISTORY

Plaintiff initiated this action in the Circuit Court of York County–Poquoson on July 21, 2010. Plaintiff's original state-court complaint did not contain a jury demand. Compl., ECF No. 1 attach. 1. On August 17, 2010, the matter was removed by the Defendant to this Court pursuant to 28 U.S.C. § 1331. Notice of Removal, ECF No. 1.

Defendant filed its first Motion to Dismiss and supporting memorandum on August 23, 2010. ECF Nos. 5–6. Plaintiff filed a brief in opposition on September 7, 2010. ECF No. 8. In the last paragraph of Plaintiff's brief in opposition to the motion to dismiss, Plaintiff stated that “[t]he Plaintiff ask [sic] the Court to schedule a trial date with a jury and dismiss the motion to dismiss.” Pl.'s Opp'n Br. 8, ECF No. 8. Plaintiff's one-page state-court complaint listed four conclusory allegations, with the only readily apparent cause of action being non-payment of an insurance claim. This Court granted the motion to dismiss with leave for Plaintiff to amend. Order, October 6, 2010, ECF No. 9. On October 19, 2010, the Court received and filed Plaintiff's Amended Complaint and an “objection” requesting that the Court remand the case to state court. ECF Nos. 10–11.

Plaintiff's Amended Complaint expanded upon the conclusory statements contained in the original state-court complaint. Plaintiff's primary claim (labeled as Count 1) alleges that Defendant failed, under the terms of the insurance policy, to reimburse him for the full value of losses claimed in connection with a November 2009 flood. Am. Compl. 2, ECF No. 11. Plaintiff also raised a series of claims (labeled as Counts 2A, 2B, 2C, and 2D) that address issues beyond the Defendant's alleged breach of the insurance contract.

On November 3, 2010, Defendant filed a Motion to Dismiss Extra–Contractual and Tort Claims and memorandum in support (ECF Nos. 12–13), its opposition to Plaintiff's motion to remand the case and memorandum in support (ECF Nos. 14, 16), and its Answer to Count 1 of the Amended Complaint (ECF No. 15).

Plaintiff filed his brief in opposition to Defendant's motion to dismiss on November 10, 2010. ECF No. 19. On December 3, 2010, this Court issued its Rule 16(b) Scheduling Order. ECF No. 24. Paragraph 8 of the Rule 16(b) Scheduling Order stated: “Trial by jury has not been demanded.” Id. at 4. Plaintiff filed his Motion for a Trial by Jury and supporting memorandum four days later on December 7, 2010. ECF Nos. 25–26. In lieu of a responsive brief, Defendant filed a Motion to Quash Jury Demand on December 21, 2010. ECF No. 28. Plaintiff filed an untimely brief in response to the Motion to Quash Jury Demand on March 24, 2011. ECF No. 43.

II. Defendant's Motion to Dismiss

A. Standard of Review

Federal Rule of Civil Procedure 12(b)(6) authorizes a defendant to move to dismiss for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Under the demanding strictures of a Rule 12(b)(6) motion, the plaintiff's complaint is to be construed in a “light most favorable to the plaintiff.” E. Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir.2000).

To survive dismissal, the complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bonds v. Leavitt, 629 F.3d 369, 385 (4th Cir.2011) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)); see also Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). As the Fourth Circuit has explained,

The plausibility standard requires a plaintiff to demonstrate more than “a sheer possibility that a defendant has acted unlawfully.” It requires the plaintiff to articulate facts, when accepted as true, that “show” that the plaintiff has stated a claim entitling him to relief, i.e., the “plausibility of ‘entitlement to relief.’ ”

Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir.2009) (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). Nevertheless, when considering a 12(b)(6) motion to dismiss, the Court's task is limited to deciding whether the plaintiff is entitled to offer evidence in support of his or her claims, not whether the plaintiff will eventually prevail. Twombly, 550 U.S. at 563, 127 S.Ct. 1955.

B. Preemption

Plaintiff's Amended Complaint sets forth a series of claims against Defendant that arise from Defendant's partial denial of a flood damage claim submitted by Plaintiff under a Standard Flood Insurance Policy (“SFIP”) issued by Defendant under the auspices of the National Flood Insurance Program (“NFIP”). The NFIP was established by Congress under the National Flood Insurance Act of 1968 (“NFIA”) in order to make flood insurance available from the federal government on reasonable terms and conditions. 42 U.S.C. §§ 4001 et seq. The Director of the Federal Emergency Management Agency (“FEMA”) functions as the sole administrator of the NFIP. Battle v. Seibels Bruce Ins. Co., 288 F.3d 596, 599 (4th Cir.2002). Under FEMA regulations, “all policies issued under the NFIP must be issued using the terms and conditions of the Standard Flood Insurance Policy (SFIP).” Id. Under these terms, Defendant operates as an insurance carrier under FEMA's Write–Your–Own (WYO) Program.

The WYO Program is a program whereby private insurance companies are allowed to issue, under their own names as insurers, flood insurance policies under the Government Program. Insurance companies which participate in the WYO Program are known as “WYO Companies.” ... “A WYO Company issuing flood insurance coverage shall arrange for the adjustment, settlement, payment and defense of all claims arising from policies of flood insurance it issues under the [NFIP], based upon the terms and conditions of the [SFIP].”

Premiums collected by WYO Companies, after deducting fees and costs, must be deposited in the National Flood Insurance Fund in the United States Treasury.... In short, premiums collected on policies written by WYO Companies do not belong to those companies. Thus, claim payments on such policies are a direct charge on the United States Treasury.

Battle, 288 F.3d at 599–600 (citations omitted).

Principally, in Count 1 of the Amended Complaint, Plaintiff alleges that Defendant breached the SFIP contract by refusing to pay his claim for flood damages. Am. Compl. 2, ECF No. 11. In Count 2 of the Amended Complaint, Plaintiff asserts four additional causes of action distinct from his contractual insurance coverage claim. The Court, cognizant that Plaintiff is proceeding pro se, liberally construes the Amended Complaint's facts and allegations.¹ First, in Count 2A, Plaintiff asserts the SFIP contract sold to him by Defendant is “illegal,” containing certain “illegal preferences, limitations, restrictions, [and] exclusions.” Id. at 4. Second, in Count 2B, Plaintiff asserts that the Defendant failed to disclose certain terms that limited coverage with respect to post-FIRM buildings prior to his payment of the premium. Id. Third, in Count 2C, Plaintiff claims that Defendant insured Plaintiff under a more expensive policy than was necessary for Plaintiff's property. Id. at 5. Fourth, in Count 2D, Plaintiff asserts that Defendant discriminated against him based on the construction date of his home, denying coverage for flood damage to certain parts of his home while his neighbors received full reimbursement for damage to their earlier-constructed homes. Id.

In the motion to dismiss now under consideration, Defendant argues that these “extra-contractual claims” are preempted under federal law. ² As this Court stated in its order dismissing Plaintiff's original complaint, Plaintiff's claims do not present a “typical insurance matter” because the insurance was purchased pursuant to the NFIP. Order of Oct. 6, 2010, at 2, ECF No. 9. Defendant, as a WYO Company, is bound by the provisions of the NFIA and implementing regulations promulgated by FEMA. In analyzing the nexus between the federal government and an insurance provider under the NFIP, the Fourth Circuit has stated that “a suit against a WYO Company is essentially a suit against FEMA. Likewise, a money judgment against a WYO Company is essentially a judgment against the government.” Studio Frames, Ltd. v. Standard Fire Ins. Co., 483 F.3d 239, 252 (4th Cir.2007).

There are three types of federal preemption: (1) express preemption; (2) field preemption; and (3) conflict preemption. “The first two types of preemption turn on the intent of Congress, which either may be explicitly apparent (express preemption) or inferred from a comprehensive federal regulatory scheme (field preemption).” Peal v. N.C. Farm Bureau Mut. Ins. Co., 212 F.Supp.2d 508, 513 (E.D.N.C.2002) (citing Worm v. Am. Cyanamid Co., 970 F.2d 1301, 1304 (4th Cir.1992)). Conflict preemption exists, regardless of congressional intent, whenever a state law or claim actually...