Drakes Collision, Inc. v. Auto Club Grp. Ins. Co.

• Decision Date: 30 November 2020
• Docket Number: Civil Case No. 19-13517
• Parties: DRAKES COLLISION, INC., et al., Plaintiffs, v. AUTO CLUB GROUP INSURANCE CO., et al., Defendants.
• Court: U.S. District Court — Eastern District of Michigan

DRAKES COLLISION, INC., et al., Plaintiffs, v. AUTO CLUB GROUP INSURANCE CO., et al., Defendants.

Civil Case No. 19-13517

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

November 30, 2020

Honorable Linda V. Parker

OPINION AND ORDER

This lawsuit arises from an October 22, 2019 "raid" of Plaintiff Drakes Collision, a motor vehicle repair facility. The raid was conducted allegedly by Defendants Oakland County Auto Theft Squad ("OCATS"), National Insurance Crime Bureau ("NICB"), NICB employee Larry Lafonde, and officers from the Oakland County Sheriff's Department, Southfield Police Department, and Farmington Hills Police Department. Plaintiffs allege that the raid was precipitated by reports from insurance adjusters working for Defendant Auto Club Group Insurance Company ("Auto Club"): Defendants Melissa Comini, Sheryl Rembo, and Josh Taylor. In addition to Drakes Collision, Plaintiffs are several Drakes Collision employees: Bassam Shammami, Jaquelyn Sawicki, Katelyn McNulty, Amjad Alaarj, Mark Sedgeman, Thomas Pannette, and John Pannette.

In an Amended Complaint filed January 21, 2020, Plaintiffs assert several counts against Defendants:

I. Federal Claim Violation of the Federal Civil Rights Act of 1871 42 U.S.C § 1983 Fourth and Fourteenth Amendment Violations - False Arrest, False Imprisonment, and Unreasonable Search and Seizure (as to Defendant[s] OCATS, NICB and NICB agent Larry Lafonde);

II. Federal Claim Conspiracy to Violate the Federal Civil Rights Act of 1871 42 U.S.C. § 1983 Fourth and Fourteenth Amendment Violations - False Arrest, False Imprisonment, and Unreasonable Search and Seizure (as to Defendants AAA¹, NICB, Lafonde, Comini, Rembo and Taylor);

III. Federal Claim Violation of the Second Amendment of the United States of America and Fourteenth Amendment Equal Protection Under the Laws (as to Defendants Quisenberry, Baldes, Defendant NICB and Defendant Larry Lafonde);

IV. State Law Claim False Arrest (as to Defendant OCATS, Defendant Officers, Defendant NICB and Lafonde);

V. State Claim False Imprisonment (as to Defendant[s] OCATS, Officers, NICB and Lafonde);

VI. Violation of MCL 500.2110B - Michigan Anti-Steering Statute the Insurance Code of 1956(Excerpt) (as to Defendant AAA Insurance, Defendant Comini);

VII. Violation of Michigan Compiled Law 600.2911(1) - Defamation Per Se and Defamation (as to Defendant[s] OCATS, Baldes, AAA, Rembo, Comini and Taylor); and,

VIII. Civil Conspiracy (as to All Defendants).

(Am. Compl., ECF No. 19 (capitalization removed).) The matter is presently before the Court on motions to dismiss filed by Defendants Auto Club, Comini, Rembo, and Taylor (collectively the "Auto Club Defendants") (ECF No. 22), Oakland County Sheriff's Department Police Officer Chad Jackson (ECF No. 25); Farmington Hills Police Department Officer Justin Berry (ECF No. 26) and Southfield Police Department Officer Jarod Womble (ECF No. 37.) The motions have been fully briefed. Finding the facts and legal issues adequately addressed in the parties' submissions, the Court is dispensing with oral argument with respect to the pending motions pursuant to Eastern District of Michigan Local Rule 7.1(f).

I. Standard of Review

Defendants' motions to dismiss are filed pursuant to Federal Rule of Civil Procedure 12(b)(6), except for Womble's motion which is filed pursuant to Rule 12(c). However, a motion for judgment on the pleadings pursuant to Rule 12(c) is subject to the same standard of review as a Rule 12(b)(6) motion to dismiss forfailure to state a claim upon which relief can be granted. Grindstaff v. Green, 133 F.3d 416, 421 (6th Cir. 1998).

A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint. RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir. 1996). Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." To survive a motion to dismiss, a complaint need not contain "detailed factual allegations," but it must contain more than "labels and conclusions" or "a formulaic recitation of the elements of a cause of action . . .." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint does not "suffice if it tenders 'naked assertions' devoid of 'further factual enhancement.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557).

As the Supreme Court provided in Iqbal and Twombly, "[t]o 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.'" Id. (quoting Twombly, 550 U.S. at 570). "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." Id. (citing Twombly, 550 U.S. at 556). The plausibility standard "does not impose a probability requirement at the pleadingstage; it simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of illegal [conduct]." Twombly, 550 U.S. at 556.

Plaintiffs repeatedly assert throughout their response briefs that the Amended Complaint sufficiently alleges claims against the moving defendants when viewed through the "no-set-of-facts" standard outlined in Conley v. Gibson, 355 U.S. 41, 45-46 (1957).² (See, e.g., Resp. Br. at 5, 10, 13, ECF No. 28 at Pg ID 716, 721, 724; Resp. Br. at 4, ECF No. 29 at Pg ID 751; Resp. Br. at 10, ECF No. 39 at Pg ID 1065.) Plaintiffs further repeatedly state that motions to dismiss are "disfavored and rarely granted[,]" citing cases preceding the Supreme Court's decisions in Iqbal and Twombly. (See, e.g., Resp. Br. at 6-7, ECF No. 29 at Pg ID 753-54.) Yet Iqbal and Twombly "raised the bar for pleading requirements beyond the old 'no-set-of-facts' standard of Conley v. Gibson[.]" Courie v. Alcoa Wheel & Forged Products, 577 F.3d 625, 629 (6th Cir. 2009) (citations omitted).

Complaints regularly survived motions to dismiss under the Conley standard, because it "was designed to screen out only those cases that patently had no theoretical hope of success." Id. Those were cases where the allegations were "sufficiently fantastic to defy reality as we know it: claims about little green men,or the plaintiff's recent trip to Pluto, or experiences in time travel." Iqbal, 556 U.S. at 1959 (Souter, J., dissenting); Courie, 577 F.3d at 629 (quoting Justice Souter's dissent). Subsequent to Iqbal and Twombly, however, a complaint survives only if it "contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Courie, 577 F.3d at 629 (quoting Iqbal, 556 U.S. at 678).

In deciding whether the plaintiff has set forth a "plausible" claim, the court must accept the factual allegations in the complaint as true. Erickson v. Pardus, 551 U.S. 89, 94 (2007). This presumption is not applicable to legal conclusions, however. Iqbal, 556 U.S. at 668. Therefore, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555).

Ordinarily, the court may not consider matters outside the pleadings when deciding a Rule 12(b)(6) motion to dismiss. Weiner v. Klais & Co., Inc., 108 F.3d 86, 88 (6th Cir. 1997) (citing Hammond v. Baldwin, 866 F.2d 172, 175 (6th Cir. 1989)). A court that considers such matters must first convert the motion to dismiss to one for summary judgment. See Fed. R. Civ. P 12(d). However, "[w]hen a court is presented with a Rule 12(b)(6) motion, it may consider the [c]omplaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to [the] defendant's motion to dismiss,so long as they are referred to in the [c]omplaint and are central to the claims contained therein." Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008).

II. Factual Background

Drakes Collison is a motor vehicle repair facility located in Southfield, Michigan. (Am. Compl. ¶ 29, ECF No. 19 at Pg ID 372.) It is licensed by the State of Michigan. (Id. ¶ 39, Pg ID 377.) Drakes Collision's primary source of business is derived from repairing the damaged vehicles of insured motorists. (Id. ¶ 29, Pg ID 372) Those motorists are insured by a variety of insurance carriers, including Auto Club. (Id. ¶ 31, Pg ID 373.) Insurance carriers have contractual relationships with specific repair facilities—referred to as Direct Repair Program shops—pursuant to which labor rates and part prices have been negotiated. (Id. ¶ 30, Pg ID 372-73.) Drakes Collision is not such a shop. (Id.)

Under Michigan's Motor Vehicle Service and Repair Act ("Act" or "MVSRA"), Michigan's Secretary of State, his or her designate, and law enforcement officials are authorized to perform "periodic unannounced inspections of the premises, parts records, and parts inventories" of licenses repair facilities. Id. ¶ 39, Pg ID 377); see also Mich. Comp. Laws § 257.1317(1). These inspections must occur "[d]uring reasonable business hours[.]" (Id.) Licensedrepair facilities, such as Drakes Collision, are required by statute to allow access to their premises for these inspections. (Id.)

On October 22, 2019, OCATS³, NICB, and NICB agent Lafonde conducted such an inspection—or "warrantless search" as Plaintiffs describe it—of Drakes Collision. (Am. Compl. ¶ 41, ECF No. 19 at Pg ID 377-78.) The inspection occurred during Drakes Collision's normal business hours, while customers were present. (Id. ¶ 43, Pg ID 378.)

The OCATS officers and Lafonde arrived at Drakes Collision in numerous police vehicles and "blocked the roadways and effectively interrupted and shut down all business operations." (Id.) While Plaintiffs allege the officers were in uniform and armed (id.), materials attached to Plaintiffs' Amended Complaint reflect they were...