Jameson v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 14 May 2012
• Docket Number: No. 11–4272–CV–C–FJG.,11–4272–CV–C–FJG.
• Parties: Carol JAMESON, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Western District of Missouri

871 F.Supp.2d 862

Carol JAMESON, Plaintiff,

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

No. 11–4272–CV–C–FJG.

United States District Court,

W.D. Missouri,

Central Division.

May 14, 2012.

Nathan A. Duncan, Craig R. Heidemann, Douglas, Haun & Heidemann, Bolivar, MO, for Plaintiff.

Cornelius M. Murphy, Thomas J. Frederick, Winston & Strawn, LLP, Chicago, IL, Dale Lee Beckerman, Tanya M. Rodecker Wendt, Deacy & Deacy, LLP, Kansas City, MO, for Defendant.

ORDER

FERNANDO J. GAITAN, JR., District Judge.

Pending before the Court are (1) State Farm Mutual Automobile Insurance Company's Motion to Dismiss and Motion to Strike and Request for Oral Argument (Doc. No. 21); (2) Plaintiff's Motion for Leave to File Second Amended Complaint and Motion to Stay Ruling on Motion to Dismiss (Doc. No. 25); and (3) State Farm's Motion for Leave to File Sur–Reply in Opposition to Plaintiff's Motion for Leave to File Second Amended Complaint and Motion to Stay Ruling on Motion to Dismiss (Doc. No. 35).

As an initial matter, the request for oral argument will be DENIED. Further, the Court finds defendant's proposed sur-reply to be unnecessary and duplicative of arguments already raised; therefore, defendant's motion for leave to file sur-reply (Doc. No. 35) will be DENIED. The Court will now turn to defendant's motion to dismiss and plaintiff's motion for leave to file second amended complaint.

I. Background

On October 11, 2011, plaintiff filed her complaint against State Farm, alleging that she was injured in an automobile accident with an underinsured motorist and made a claim to her insurer, State Farm. Plaintiff alleges that State Farm made an offer to settle plaintiff's claims for $33,000, and plaintiff rejected that offer. Then, plaintiff alleges that on August 26, 2011, State Farm “reduced” its offer to $23,000.¹Plaintiff alleges that “State Farm's actions in reducing the value of an underinsured motorist claim after a policy holder indicates they reject an offer and plan to sue” is an attempt to “coerce and punish Plaintiff for deciding to file suit against Defendant by lowering its valuation of her case from $33,000 to $23,000 after it learned Plaintiff rejected the settlement in the amount of $33,000 and intended to file suit.” Doc. No. 1, ¶¶ 34, 38. Plaintiff, in her original complaint, made claims for (1) breach of contract and vexatious refusal to pay; (2) declaratory judgment; (3) Class Action—Unfair Claims Practices—State Farm; and (4) breach of fiduciary duty.

On November 30, 2011, defendant filed a motion to dismiss, indicating (1) plaintiff's allegations of breach and vexatious refusal to pay were contradicted by the exhibits attached to her complaint; (2) plaintiff fails to state a claim for declaratory judgment; (3) plaintiff's class action for unfair claims practices should be dismissed, as there is no cause of action for unfair claims practices under Missouri law; and (4) plaintiff's breach of fiduciary claims fail because there is no fiduciary duty between an insurer and its insured under Missouri law.

Plaintiff did not respond to the motion to dismiss. Instead, plaintiff filed her first amended complaint on December 16, 2011, which she could do as a matter of right. The first amended complaint alleges claims for (1) breach of contract and vexatious refusal to pay; (2) breach of contract (breach of implied covenant of good faith and fair dealing) as to a proposed class, challenging the practice of advancing payment of a lower settlement offer during an impasse in negotiations; and (3) declaratory judgment and equitable relief as to a proposed class. This time, plaintiff did not attach to the complaint the letters from State Farm which indicated that acceptance of the $23,000 advance payment does not prevent plaintiff from negotiating a higher amount of settlement. Defendant's first motion to dismiss was denied as moot by Order dated December 22, 2011 (Doc. No. 20).

Thereafter, defendant filed a motion to dismiss plaintiff's first amended complaint for failure to state a claim (Doc. No. 21, filed on January 3, 2012), making similar arguments as were made in regards to the original complaint, and arguing that plaintiff cannot avoid dismissal by simply not attaching the letters from State Farm to her amended complaint.

After being granted an extension of time to respond to the motion to dismiss, on January 30, 2012, plaintiff filed her motion for leave to file Second Amended Complaint and motion to stay ruling on the motion to dismiss (Doc. No. 25), indicating that plaintiff is removing one count, dividing her previous claims into separate counts, and including additional factual allegations in support of her claims. Plaintiff's proposed class is

all individuals who, within ten years prior to the institution of this suit, have made claims for underinsured motorist benefits under a policy of automobile insurance issued by State Farm in the State of Missouri wherein Defendant State Farm ... [e]xtended an offer to settle an underinsured motorist claim, then later reduced that offer to a lower amount after the claimant rejected the offer of settlement for the higher figure, filed a lawsuit or threatened to file a lawsuit ... [a]nd where State Farm later paid an amount via settlement or judgment which was greater than the lower amount offered after settlement was rejected.

Doc. No. 25, Ex. 1, ¶ 91. Plaintiff also seeks injunctive relief, permanently enjoining defendant from engaging in the claims settlement practices described in her secondamended complaint. Plaintiff also requests in her proposed second amended complaint “imposition of a court-supervised program overseeing [State Farm's] claims settlement practices.” Plaintiff asks that the Court stay briefing on the motion to dismiss, as granting the motion for leave to amend would make the motion to dismiss moot.

On February 10, 2012, defendant filed its suggestions in opposition to plaintiff's motion for leave to file second amended complaint. Defendant argues plaintiff's motion for leave to amend is futile as plaintiff's complaints for breach of contract and vexatious refusal to pay remain contradicted by the correspondence attached to the original complaint. Defendant also notes that plaintiff is not a member of the class she seeks to represent, as her class definition includes only people who have been paid “an amount via settlement or judgment which was greater than the lower amount offered after settlement was rejected.” Defendant also argues that plaintiff's tactics of not responding to repeat motions to dismiss, but instead seeking to continually amend her complaint, are gamesmanship that should not be rewarded.

II. Standard

When ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations in the complaint. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A plaintiff need not provide specific facts in support of his allegations. Erickson v. Pardus, 551 U.S. 89, 93–94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007). But the plaintiff “must include sufficient factual information to provide ‘grounds' on which the claim rests, and to raise a right to relief above a speculative level.” Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir.2008). “[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.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). This requires a plaintiff to plead “more than labels and conclusions, and a formulaic recitation of the elements of the cause of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. A complaint must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory. Id. at 562, 127 S.Ct. 1955 (quoted case omitted). The standard “simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of” the claim. Id. at 556, 127 S.Ct. 1955.

Rule 15 directs courts to grant leave to amend “freely ... when justice so requires.” While Rule 15 envisions a liberal amendment policy, justice does not require the filing of a futile amendment. Stricker v. Union Planters Bank, N.A., 436 F.3d 875, 878 (8th Cir.2006). A proposed amendment is futile if it could not withstand a motion to dismiss for failure to state a claim. Zutz v. Nelson, 601 F.3d 842, 850 (8th Cir.2010).

Under Federal Rule of Civil Procedure 12(f), a court may “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). Motions to strike are not favored and are infrequently granted, because they propose a drastic remedy. Stanbury Law Firm, P.A. v. IRS, 221 F.3d 1059, 1063 (8th Cir.2000). Nonetheless, resolution of such a motion lies within the broad discretion of the Court. Id. “[A]llegations may be stricken if they have no real bearing on the case, will likely prejudice the movant, or where they have criminal overtones.” Kay v. Sunbeam Prods., Inc., No. 2:09–cv–4065–NKL, 2009 WL 1664624, at *1 (W.D.Mo. June 15, 2009).

III. AnalysisA. Motion for Leave to File Second Amended Complaint

The Court will first consider whether plaintiff's motion for leave to file second amended complaint should be granted. Defendant opposes plaintiff's motion for leave, indicating in part that plaintiff's filing of amended complaints or motions for leave to file amended complaints in response to defendant's motions to dismiss is a “wait and see” approach to litigation that should not be rewarded. Defendant asserts that it would be prejudiced if plaintiff is allowed to file a second amended complaint, as it has “twice filed motions to dismiss Plaintiff's complaint, showing its hand and providing Plaintiff with the...