Johnson v. Aetna Cas. & Sur. Co. of Hartford, Conn.

• Decision Date: 01 April 1980
• Docket Number: No. 5223,5223
• Citation: 608 P.2d 1299
• Parties: Carl A. JOHNSON, as his interest may appear, Appellant (Plaintiff), v. AETNA CASUALTY & SURETY CO. OF HARTFORD, CONN. 06115, and Richard G. Burk, Resident Claim Rep., 1616 Warren Ave., Cheyenne, Wyoming, Richard L. Bader, 214 E. 17th St., Cheyenne, Wyoming, and Unknowns Obstructing Justice, Appellees(Defendants).
• Court: Wyoming Supreme Court

Page 1299

608 P.2d 1299

Carl A. JOHNSON, as his interest may appear, Appellant (Plaintiff), v. AETNA CASUALTY & SURETY CO. OF HARTFORD, CONN. 06115, and Richard G. Burk, Resident Claim Rep., 1616 Warren Ave., Cheyenne, Wyoming, Richard L. Bader, 214 E. 17th St., Cheyenne, Wyoming, and Unknowns Obstructing Justice, Appellees(Defendants).

No. 5223.

Supreme Court of Wyoming.

April 1, 1980.

Rehearing Denied April 21, 1980.

Carl Johnson, pro se.

Richard P. Boley, Lathrop & Uchner, P. C., Cheyenne, for appellee Aetna Cas. & Sur. Co. of Hartford, Conn.

Donald J. Sullivan, Sullivan, Van Court & Ahlstrom, P. C., Cheyenne, for appellee Bader.

Before RAPER, C. J., and McCLINTOCK, THOMAS, ROSE and ROONEY, JJ.

McCLINTOCK, Justice.

Appellant seeks review of a district court order dismissing with prejudice his separate causes of action against an insurance company and a claims adjuster for failure to pay an insurance claim on real property. The questions presented by this appeal are:

(1) Whether the complaint as to each defendant fails to state a claim upon which relief can be granted as required by Rules 12(b)(6) and 9(b), W.R.C.P.

(2) Whether the cause of action against the company fails to allege the necessary conditions precedent for recovery under an insurance policy as required by Rule 9(c), W.R.C.P.

(3) Whether appellant has failed to join necessary parties as required by Rule 19, W.R.C.P.

We find that the district court erred in dismissing the complaint with prejudice and remand the case for further proceedings.

Appellant (Carl A. Johnson), Vincent J. Siren and Anne Marie Siren Levig were named plaintiffs in the original complaint, and appellee (Aetna Casualty & Surety Company of Hartford, Connecticut) and Richard G. Burk were named defendants. Appellant, acting pro se, alleged in his original complaint that four houses and outbuildings owned by him, his nephew (Vincent J. Siren) and his niece (Anne Marie Siren Levig) were damaged by a hail storm on June 16, 1977. He further alleged that this property was insured by appellee Aetna and even though appellant complied with all of the insurance policy requirements Aetna refused to pay for the hail damage and "threatened to cancel" the insurance policy. The case was set for trial and on the day of trial the district court judge granted Aetna's motion to strike the complaint on the grounds that Vincent J. Siren and Anne Marie Siren Levig did not sign the complaint nor were they represented by an attorney, and, furthermore, because appellant is not a member of the bar he could not represent these parties. Appellant was given ten days to amend his complaint. The order sustaining the motion to strike did not state that the complaint failed to state a claim for which relief could be granted, that Johnson had failed to allege necessary conditions precedent to recovery under the insurance policy, or that Vincent J. Siren and Anne Marie Siren Levig were necessary parties to the action.

Johnson timely filed an amended complaint naming only himself as plaintiff in compliance with the district court's order. The amended complaint did, however, add a new defendant, Richard L. Bader, an insurance adjuster and appellee in the case at bar. The original defendants moved to dismiss the amended complaint because of a failure to join indispensable parties as required by Rule 19, and for failure to state a claim upon which relief can be granted. A hearing was held on the motion to dismiss and after the hearing the district court dismissed the complaint with prejudice as to defendant Richard G. Burk and reserved ruling on the motion as to Aetna. The dismissal with prejudice as to Burk was not appealed. The district court held another hearing and at that time dismissed the entire amended complaint, pursuant to Rules 12(b)6 and 12(b)7, W.R.C.P. Johnson was given an additional ten days to amend his complaint.

After Johnson timely filed his second amended complaint Aetna and Bader once again moved to dismiss the complaint. Aetna alleged that Johnson failed to join necessary parties as required by Rule 19 and Bader alleged among other things that the second amended complaint failed to state a claim upon which relief can be granted. After a hearing the district court dismissed the complaint with prejudice.

The first question that we must address is whether the district court correctly dismissed this last complaint for failure to state a claim upon which relief can be granted. This court will only sustain such a dismissal if the complaint on its face shows that the plaintiff is not entitled to relief. A complaint is not subject to dismissal unless there is no doubt that the plaintiff cannot prove any set of facts that would entitle him to relief. State Highway Commission v. Bourne, Wyo., 425 P.2d 59, 63 (1967). Wyoming Rules of Civil Procedure are based upon the theory of notice pleading. Rule 8(a)(1), W.R.C.P. The plaintiff need only plead the operative facts involved in the litigation so as to give fair notice of the claim to the defendant. Harris v. Grizzle, Wyo., 599 P.2d 580, 583 (1979). And, as we have stated before, pleadings must be liberally construed in order to do justice to the parties and motions to dismiss must be sparingly granted. Harris, supra, 599 P.2d at 583; Bourne, supra, 425 P.2d at 63.

With these standards in mind, we find that appellant's second amended complaint as to the claim against Aetna is sufficient to withstand a Rule 12(b) (6) motion. Appellant alleges in his complaint that he owns the property that was damaged by the hail storm, that the property was insured against loss by Aetna, and that he complied with the insurance policy requirements. He further alleges that Aetna breached the insurance contract when the company refused to pay the claim made by Johnson for the hail damage.

The more difficult question is whether Johnson's complaint is sufficient to withstand a Rule 12(b)(6) motion as to the claim against appellee Bader. To begin with, Bader's motion to dismiss simply alleges that the complaint fails to state a basis or claim for which relief can be granted. And the order dismissing the complaint against Bader with prejudice likewise does not specify why the second amended complaint is deficient. However, after reviewing the second amended complaint we have concluded that the complaint is deficient in that it fails to comply with the requirements of Rule 9(b). Johnson alleges that Bader failed to make an honest inspection of his property. Count One of the complaint against Bader alleges that Johnson is entitled to punitive damages

". . . from defendant Bader for fraud deceit and willful reckless disregard of the plaintiff's rights for a fair, honest and independent inspection. Bader worked diligently for his master, Aetna."

While we have just discussed the minimal requirements of notice pleading under Rules 8(a)(1) and 12(b)(6), W.R.C.P., these rules are counterbalanced by Rule 9(b). Goldberg v. Baker, N.Y.D.C., 442 F.Supp. 659, 668 (1977). Rule 9(b) requires that

"(i)n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity."

The mere allegation of fraud in the complaint at bar is not sufficient because Rule 9(b) requires particularity as to fraudulent acts in order to inform the opposing party of the act that constitutes the claim. In order to comply with the requirement of Rule 9(b) a complaint must allege the circumstances that constitute the alleged fraud. As stated in Wright & Miller, Federal Practice and Procedure: § 1297:

". . . the reference to 'circumstances' is to matters such as the time, place and contents of the false representations, as well as the identity of the person making the representation and what he obtained thereby. It is the pleading of these matters with precision that serves the rule's purpose by apprising defendant of the claim against him and of the acts relied upon as constituting the fraud charged. A pleading that simply avers the technical elements of fraud does not have sufficient informational content to satisfy the rule's requirement."

Having determined that appellant does not allege the "circumstances" of the alleged fraudulent act, we find that this portion of the complaint does not meet the requirements of Rule 9(b) and we must now consider whether the district court properly dismissed the complaint against Bader with prejudice.

Courts have varied in their approach when a pleading does not meet the requirements of Rule 9(b). Frequently courts have treated a Rule 12(b)(6) motion as a motion for a more definite statement when the pleading fails to comply with Rule 9(b). 2A Moore's Federal Practice P 9.03. In Freedman v. Philadelphia Terminals Auction Co., D.C.E.D.Pa., 145 F.Supp. 820, 824 (1956), the court found that the complaint did not allege what misrepresentations plaintiffs were relying upon in alleging fraud. The court chose to treat the motion to dismiss as a motion for a more definite statement under Rule 12(e), F.R.C.P., and held that the defective count would be stricken unless the plaintiffs amended it in a manner so as to comply with Rule 9(b), F.R.C.P. Other courts have taken stricter views, dismissing the complaint or striking the defective count; however, these courts almost universally have done so with leave to amend. 2A Moore's Federal Practice P 9.03. In Barry v. St. Paul Fire & Marine Ins. Co., 1 Cir., 555 F.2d 3, 13 (1977), the district court judge found that the complaint failed to state the circumstances constituting fraud, and therefore did not meet the requirements of Rule 9(b). The lower court dismissed the count without prejudice. In affirming the district court's finding the appellate court stated:

"The judge was correct; the complaint could hardly be more vague. While the judge might have ordered a more definite statement, it was within his power to grant a dismissal without prejudice. If the plaintiffs can...