Jamal v. Travelers Lloyds of Texas Ins. Co.

• Citation: 129 F.Supp.2d 1024
• Decision Date: 26 January 2001
• Docket Number: No. CIV. A. H-99-4369.,CIV. A. H-99-4369.
• Parties: Ashraf A. JAMAL, Plaintiff, v. TRAVELERS LLOYDS OF TEXAS INSURANCE COMPANY and Travelers Property & Casualty Insurance Company, Defendants.
• Court: United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas

129 F.Supp.2d 1024

Ashraf A. JAMAL, Plaintiff, v. TRAVELERS LLOYDS OF TEXAS INSURANCE COMPANY and Travelers Property & Casualty Insurance Company, Defendants.

No. CIV. A. H-99-4369.

United States District Court, S.D. Texas.

January 26, 2001.

Allan G. Levine, Hirsch and Westheimer PC, Gregory S. Levine, Attorney at Law, Jeffrey Robert Matthews, Attorney at Law, Toby C. Easley, Attorney at Law, Houston, for Ashraf A. Jamal, plaintiffs.

Nicholas E. Zito, Markle Ramos et al., Houston, Laurence E. Boyd, Attorney at Law, Angleton, Gerald J. Nielsen, Nielsen Law Firm, Metairie, LA, for Travelers Lloyds of Texas Insurance Company, Travelers Property and Casualty Insurance Company, defendants.

MEMORANDUM AND ORDER

CRONE, United States Magistrate Judge.

Pending before the court is Defendant Travelers Property & Casualty Insurance Company's ("TPCIC") Motion to Dismiss Pursuant to Rule 12(b)(6) and Rule 12(c)(# 28). TPCIC seeks dismissal of Plaintiff Ashraf A. Jamal's ("Jamal") extra-contractual, state law claims on the grounds that they are preempted by federal law. Having reviewed the pending motion, the submissions of the parties, the pleadings, and the applicable law, the court is of the opinion that TPCIC's motion to dismiss should be granted in part and denied in part.

I. Background

Defendants Travelers Lloyds of Texas Insurance Company ("Travelers Lloyds") and TPCIC are insurance carriers authorized to do business in Texas. Travelers Lloyds sells privately underwritten Texas homeowners' insurance, while TPCIC sells federally underwritten flood insurance, referred to as Standard Flood Insurance Policies ("SFIP"), part of the National Flood Insurance Plan ("NFIP") under the National Flood Insurance Act ("NFIA"). Both TPCIC and Travelers Lloyds sell insurance through independent agents. At least one such agent, Holt & Hochman Insurance Agency ("H & H"), sells both homeowners' policies for Travelers Lloyds's and SFIPs for TPCIC.

In August 1997, Jamal purchased two insurance policies through H & H, Travelers Lloyds' Texas Standard Homeowners Policy Form B # 216SQ 40057646 PTC and TPCIC's SFIP # 6-0031-5168-2, pertaining to his residence located at 7310 Lake Lane in Houston, Texas. The policies were renewed in August 1998. The homeowners' policy covers up to $101,000.00 for losses resulting from damage to the building and up to $66,000.00 for losses to its contents, with a $250.00 deductible. The SFIP covers up to $78,000.00 for the building and up to $30,000.00 on its contents, with no deductible. According to Jamal, H & H was acting as an agent for TPCIC and Travelers Lloyds when it sold the policies. Jamal also maintains that H & H's representatives "explained that the two policies combined to provide full protection, basically, the flood policy protecting loss excluded from the homeowners policy and vice versa."

On September 10, 1998, Tropical Storm Frances struck Houston. According to Jamal, over the course of two days, his house was flooded and otherwise damaged by the storm. Jamal contends that the actual cash value of his home prior to the loss was $140,000.00 and the value of the contents was $137,000.00, while, after the storm, the actual cash value, presumably of both building and contents combined, was $25,000.00. He further asserts that the cost to repair and replace the damaged building was $140,000.00 and that the actual damage to the insured contents was $130,000.00. He notified both Travelers Lloyds and TPCIC of the damages, enumerating each loss and making a total claim of $270,000.00. At the time Jamal filed his original petition, he had received $71,203.72 on his claims. It is unclear which company or companies paid this sum.

On October 29, 1999, Jamal filed his original petition in the 113th Judicial District Court of Harris County, Texas, asserting that, under the insurance contracts, the two policies combined covered his entire loss of $270,000.00 and that, taking into account the $71,203.72 already paid, he is now due $198,796.28. He alleges claims for breach of contract, breach of the duty of good faith and fair dealing, and breach of the Texas Insurance Code. For these violations, Jamal seeks actual damages, exemplary damages, statutory penalties, attorneys' fees, pre- and post-judgment interest, and court costs.

On August 25, 2000, TPCIC filed its motion to dismiss, contending that Jamal's extra-contractual claims are preempted or otherwise not cognizable under federal law, the governing law with respect to SFIPs.

II. Analysis

A. Dismissal Under Rule 12(b)(6)

A motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure tests only the formal sufficiency of the statement of a claim for relief. It is not a procedure for resolving contests about the facts or the merits of a case. In ruling on such a motion, the court must accept the factual allegations of the complaint as true, view them in a light most favorable to the plaintiff, and draw all reasonable inferences in the plaintiff's favor. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Beanal v. Freeport-McMoran, Inc., 197 F.3d 161, 164 (5th Cir.1999); Brown v. Nationsbank Corp., 188 F.3d 579, 585 (5th Cir.1999), cert. denied, 530 U.S. 1274, 120 S.Ct. 2740, 147 L.Ed.2d 1004 (2000); Indest v. Freeman Decorating, Inc., 164 F.3d 258, 261 (5th Cir.1999); Jefferson v. Lead Indus. Ass'n, Inc., 106 F.3d 1245, 1250 (5th Cir.1997); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir.1996). The court may not look beyond the four corners of the plaintiff's pleadings. See Indest, 164 F.3d at 261; Baker, 75 F.3d at 196; McCartney v. First City Bank, 970 F.2d 45, 47 (5th Cir.1992). The court may, however, consider matters that are outside of the pleadings if those materials are matters of public record. See Davis v. Bayless, 70 F.3d 367, 372 n. 3 (5th Cir. 1995); Cinel v. Connick, 15 F.3d 1338, 1343 n. 6 (5th Cir.), cert. denied, 513 U.S. 868, 115 S.Ct. 189, 130 L.Ed.2d 122 (1994); see also 5A CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2d § 1357, at 299 (1990). The Fifth Circuit has also suggested that the court may consider documents attached to a motion to dismiss if they are referred to in the complaint and are central to the plaintiff's claim. See Collins v Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir.2000) (citing Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.1993)).

"`A motion to dismiss under rule 12(b)(6) "is viewed with disfavor and is rarely granted."'" Id. (quoting Lowrey v. Texas A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir.1997) (quoting Kaiser Aluminum & Chem. Sales v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982), cert. denied, 459 U.S. 1105, 103 S.Ct. 729, 74 L.Ed.2d 953 (1983))). The motion must be denied unless it appears to a certainty that the plaintiff can prove no set of facts that would entitle him to relief. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Brown, 188 F.3d at 585; Jefferson, 106 F.3d at 1250; Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir.1995); U.S. Abatement Corp. v. Mobil Exploration & Producing U.S., Inc., 39 F.3d 556, 559 (5th Cir.1994); Leffall v. Dallas Indep. Sch. Dist., 28 F.3d 521, 524 (5th Cir.1994). "`The question therefore is whether, in the light most favorable to the plaintiff and with every doubt resolved in his behalf, the complaint states any valid claim for relief.'" Shipp v. McMahon, 234 F.3d 907, 911 (5th Cir.2000) (quoting 5A CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357, at 332-36 (2d ed.1990)).

"`In order to avoid dismissal for failure to state a claim, however, a plaintiff must plead specific facts, not mere conclusory allegations.'" Collins, 224 F.3d at 498 (quoting Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1067 (5th Cir. 1994)). "`[C]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.'" Jefferson, 106 F.3d at 1250 (quoting Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir. 1993)); accord Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir.1995); see Tuchman, 14 F.3d at 1067. "`[T]he complaint must contain either direct allegations on every material point necessary to sustain a recovery ... or contain allegations from which an inference fairly may be drawn that evidence on these material points will be introduced at trial.'" Campbell, 43 F.3d at 975 (quoting 3 CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2d § 1216, at 156-59 (1990) (footnote omitted)). "`[A] statement of facts that merely creates a suspicion that the pleader might have a right of action' is insufficient." Id. (quoting 3 CHARLES A. WRIGHT & ARTHUR R. MILLER, supra., at 163 (footnote omitted)). "`Dismissal is proper if the complaint lacks an allegation regarding a required element necessary to obtain relief ....'" Id. (quoting 2A JAMES W. MOORE ET AL., MOORE'S FEDERAL PRACTICE ¶ 12.07 [2.-5], at 12-91 (1995) (footnote omitted)). "The court is not required to `conjure up unpled allegations or construe elaborately arcane scripts to' save a complaint." Id. (quoting Gooley v. Mobil Oil Corp., 851 F.2d 513, 514 (1st Cir.1988)).

B. The National Flood Insurance Program

"The National Flood Insurance Act of 1968 established a national flood insurance program that enables property owners to purchase insurance against flood risks at reasonable rates." Hanover Bldg. Materials, Inc. v. Guiffrida, 748 F.2d 1011, 1012 (5th Cir.1984); see 42 U.S.C. §§ 4001(a), (c), 4002(b); Flick v. Liberty Mut. Fire Ins. Co., 205 F.3d 386, 387 (9th Cir.), cert. denied, ___ U.S. ___, 121 S.Ct. 305, 148 L.Ed.2d 245 (2000); Van Holt v. Liberty Mut. Fire Ins. Co., ...