Fishberg v. State Farm Fire and Casualty Co.
| Decision Date | 20 July 2021 |
| Docket Number | 20-cv-6664 (LJL) |
| Parties | KIETH FISHBERG, Plaintiff, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Defendant State Farm Fire and Casualty Co. (“Defendant” or “State Farm”) moves, pursuant to Fed.R.Civ.P 12(b)(6), to dismiss the second through fourth causes of action in the first amended complaint, at Dkt. No. 26 (“Amended Complaint”), as well as Plaintiff's demand for punitive damages and demand for attorney's fees. Dkt. No. 28.
The following allegations, drawn from the Amended Complaint, are taken as true for purposes of this motion to dismiss.
Plaintiff Keith Fishberg (“Fishberg” or “Plaintiff”) is a residential tenant in Apartment 4B of the cooperative apartment building located at 131 East 15th Street in Manhattan (the “Premises”). Dkt No. 26 ¶ 1. He also is the insured under a Renter's Policy of Insurance issued to him under policy number 56-BBX-H373-4, which was in effect from June 11, 2019 to June 11, 2020 (the “Policy”).
The Policy in pertinent part provides as follows:
The Policy further provides:
The Policy also provides coverage for remediation of fungus and losses caused by fungus. Id. ¶10.
Plaintiff alleges that on or before August 2019, while the Policy was in effect, the Premises suffered substantial damages when the ceiling collapsed due to a windstorm, causing a water leak from the roof as a result of a severe rainstorm, and that Plaintiff's personal property sustained damage or was rendered useless. Id. ¶¶ 12-13. Plaintiff also alleges that he lost use of the Premises and was forced to expend monies to repair, remediate, and restore his personal property. Id. ¶¶ 15-16.
Plaintiff submitted a timely notice of claim under the Policy to State Farm and alleges that he fully complied with the notice provisions of the Policy as well as other conditions precedent to payment for what he claims was a “Covered Loss” under the Policy, but that, by letter dated August 20, 2019, State Farm denied coverage to the Plaintiff. Id. ¶¶ 17-19. He also alleges that State Farm failed to investigate the alleged Covered Loss and that it refused to adjust the claim. Id. ¶¶ 20-21.
He asserts four causes of action. His first cause of action is for breach of contract. Id. ¶¶ 23-27. In his second cause of action, he alleges that State Farm refused to timely investigate and adjust the claim in good faith. Id. ¶¶ 28-38. Specifically Plaintiff claims that the Defendant only telephoned the building manager where the loss occurred and relied solely on information supplied by the building manager, without sending an adjuster to the building. Id. ¶¶ 30-32. He claims consequential damages in the form of the costs of medical bills, loss of monies, and loss of the use of the Premises as a residence as well as incidental business activities as a result of State Farm's failure to investigate and adjust the claim in good faith. Id. ¶¶ 35-38.
Plaintiff's third cause of action is for materially unfair and deceptive acts and practices in violation of N.Y. General Business Law § 349. Id. ¶¶ 39-57 (“Section 349”). Plaintiff alleges that Defendant maintains a publicly accessible website describing the renters insurance that it makes available to the public for purchase. Id. ¶ 40. Plaintiff further alleges that the website represents to members of the public that they may need renters insurance if their belongings are lost in a fire or other accident and that renters insurance covers accidents including water damage from plumbing and weather, including damage from “windstorms, hail, and water damage from freezing of plumbing systems.” Id. ¶¶ 43-44. Plaintiff alleges that the website is ambiguous as to what is covered but that a reasonable person would understand the website to convey that the renters insurance covers losses such as that sustained by Plaintiff and would be induced to purchase a policy thereby. Id. ¶¶ 46-47. Plaintiff claims that the fact that Defendant has denied coverage demonstrates the website is misleading. Id. ¶¶ 53-57. Plaintiff alleges “[u]pon information and belief, ” that Defendant's “offending practice is not an isolated incident, but a consumer-oriented and routine practice that has affected many similarly situated insureds, and does, or has the potential to, affect the public at large.” Id. ¶ 56.
In his fourth cause of action, Plaintiff alleges that Defendant engaged in “willful and wanton” misconduct and engaged in “improper procedure and tactics and violate[d] applicable law, rules and regulations in denying his claim and failing to investigate, adjust and pay the loss in accordance with the Policy, ” and as a result Plaintiff is entitled to punitive damages. Id. ¶ 61.
Plaintiff initiated this action on July 21, 2020 by filing the Summons and Complaint in the Supreme Court of the State of New York, New York County. On August 20, 2020, Defendant timely removed the action to this Court based upon diversity jurisdiction. Dkt. No. 1. On September 24, 2020, State Farm timely filed a partial motion to dismiss the claims and demand for damages that are the subject of the instant motion. Dkt. Nos. 12-14. In response, Plaintiff filed the Amended Complaint on November 16, 2021. Dkt. Nos. 25-26. Defendant filed its motion to dismiss the Amended Complaint on December 4, 2020. Dkt. No. 28.
To survive a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), a complaint must include “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. 554, 570 (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.” Id. “Determining whether a complaint states a plausible claim for relief will . . . be a context specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. Put another way, the plausibility requirement “calls for enough fact to raise a reasonable expectation that discovery will reveal evidence [supporting the claim].” Twombly, 550 U.S. at 556; accord Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 46 (2011). However, although the Court must accept all the factual allegations of a complaint as true, it is “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). The ultimate issue “is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.” Walker v. Schult, 717 F.3d 119, 124 (2d Cir. 2013) (quoting Scheuer v. Rhodes, 416 U.S. 232, 235-36 (1974)); see also DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 113 (2d Cir. 2010) () (internal quotation marks and citation omitted).
Defendant moves to dismiss the second through the fourth causes of action. It argues that (1) New York does not recognize a tort claim for bad faith denial of insurance coverage in first-party insurance cases; (2) the Section 349 claim fails to make any specific allegations of consumer-oriented conduct or deceptive acts; (3) there is no independent cause of action under New York law for punitive damages and the complaint does not allege conduct based upon which punitive damages could be awarded; and (4) the Policy does not entitle Plaintiff to attorney's fees if his claims are successful.
Defendant argues that Plaintiff's second cause of action must be dismissed because New York law does not recognize an independent claim for bad faith denial of insurance coverage. Plaintiff responds that the second cause of action is addressed to Defendant's breach of the convent of good faith and fair dealing and addresses different conduct from that alleged in the first cause of action. The first cause of action is addressed to Defendant's denial of insurance coverage; the second cause of action is predicated on State Farm's failure to send a claims adjuster to inspect his claimed loss and thus it is separate and apart from State Farm's wrongful claim denial claim. Dkt No. 38 at 5-6.
Defendant is correct that, except in cases where an insurance company refuses to defend or settle a claim brought by a third party against an insured, “New York law does not recognize an independent cause of action for bad faith denial of insurance coverage.” Vitrano v. State Farm Ins. Co. 2008 WL 2696156, at *3 (S.D.N.Y. July 7, 2008) (renters insurance policy); ...
To continue reading
Request your trial