Kar v. Safeco Ins. Co. of Am.
| Docket Number | 4:23-CV-207 RLW |
| Decision Date | 24 July 2023 |
| Parties | ARINDAM KAR, et al., Plaintiffs, v. SAFECO INSURANCE COMPANY OF AMERICA, et al. Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
This removed diversity case is before the Court on Defendant Liberty Mutual Insurance Company's (“Liberty Mutual”) Motion to Dismiss. (ECF No. 6.) Plaintiffs Arindam Kar and Shanna Kar (“Plaintiffs”) oppose the motion. Liberty Mutual did not file a reply memorandum and the time to do so has passed, so the motion is fully briefed. Because Plaintiffs' Petition fails to states a plausible claim for relief against Liberty Mutual, the motion to dismiss will be granted.
This case arises from a claim for property damage to the Plaintiffs' home located in St. Louis, Missouri, that Plaintiffs allege occurred during a storm on or about July 9 2021. The case was filed in St. Louis City Circuit Court and was removed by defendants Liberty Mutual and Safeco Insurance Company of America (“Safeco”) on February 21 2023, pursuant to 28 U.S.C. §§ 1441, 1446, and 1332(a)(1).
Defendant Safeco issued a homeowners policy of insurance coverage for Plaintiffs' residence. Plaintiffs' Petition (ECF No 5) alleges that Safeco is a New Hampshire corporation registered to do business in Missouri and Liberty Mutual is a Massachusetts company registered to do business in Missouri. (Id. at 2, ¶¶ 4, 6.) Plaintiffs allege that both defendants are in the business of insuring real property in the City of St. Louis against certain losses, including hail and storm damage. (Id. ¶¶ 5, 7.) Plaintiffs also allege that “[u]pon information and belief Defendant Liberty Mutual owns, controls, or otherwise operates Defendant Safeco Insurance as a ‘Liberty Mutual' company.” (Id. ¶ 8.) Plaintiffs allege that Safeco and Liberty Mutual agreed to insure their residence pursuant to the policy at issue. (Id. at 11, ¶ 73.)
The Petition asserts state law claims for breach of contract, vexatious refusal to pay insurance claim pursuant to Missouri Revised Statutes §§ 375.420 and 375.296, and equitable estoppel to deny coverage. Plaintiffs' claims are directed against both defendants.
The Petition references three exhibits, the “Safeco Insurance/Liberty Mutual” Homeowners Policy No. OZ4896364 at issue, designated as Exhibit 1 (ECF No. 5 at 3, ¶ 12); a home inspection report prepared by Architective Home Inspections, Ltd., designated as Exhibit 2 (id. at 5, ¶ 32); and an inspection and estimate from St. Louis Slate & Tile Roofing Company, designated as Exhibit 3 (id. at 6, ¶ 40). It does not appear that Plaintiffs filed the three exhibits with their Petition in state court, as no exhibits accompany the Petition attached to the Notice of Removal as part of the state court record (ECF No. 1-1), or the Petition as docketed in this Court. (ECF No. 5.)
Plaintiffs submit three exhibits with their opposition to Liberty Mutual's motion to dismiss. These are a Safeco Homeowners Policy, not including a declarations page (Ex. 1, ECF No. 12-1); a Safeco Insurance Company of America claim denial letter (Ex. 2, ECF No. 12-2); and a Missouri Secretary of State's Office 2023-2024 Biennial Registration Report for Safeco Insurance Company of America (Ex. 3.)
Defendant Liberty Mutual filed its motion to dismiss and, a few minutes later, filed its joint Answer (ECF No. 8) with Defendant Safeco. Liberty Mutual's motion asserts it is entitled to be dismissed from this action because it did not issue the homeowners insurance policy to the Plaintiffs, it is not a real defendant party in interest, and it is merely alleged to be the parent corporation of Safeco and cannot be liable on that basis.
“To survive a motion to dismiss for failure to state a claim, the complaint must show the plaintiff ‘is entitled to relief,' Fed.R.Civ.P. 8(a)(2), by alleging ‘sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'” In re Pre-Filled Propane Tank Antitrust Litig., 860 F.3d 1059, 1063 (8th Cir. 2017) (en banc) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). In reviewing a Rule 12(b)(6) motion, the Court accepts all factual allegations as true and construes all reasonable inferences in the light most favorable to the nonmoving party. Usenko v. MEMC LLC, 926 F.3d 468, 472 (8th Cir. 2019). The Court does not, however, accept as true a plaintiff's conclusory allegations or legal conclusions drawn from the facts. Waters v. Madson, 921 F.3d 725, 734 (8th Cir. 2019).
The complaint must “allege sufficient facts that, taken as true, ‘state a claim to relief that is plausible on its face.'” K.T. v. Culver-Stockton Coll., 865 F.3d 1054, 1057 (8th Cir. 2017) (alteration in original) (quoting Iqbal, 556 U.S. at 678) (internal quotation marks omitted). A facially plausible claim is one “that allows the court to draw [a] reasonable inference that the defendant is liable for the misconduct alleged.” Wilson v. Ark. Dep't of Human Servs., 850 F.3d 368, 371 (8th Cir. 2017) (internal quotation omitted). In addressing a motion to dismiss, a court “may consider the pleadings themselves, materials embraced by the pleadings, exhibits attached to the pleadings, and matters of public record.” Mills v. City of Grand Forks, 614 F.3d 495, 498 (8th Cir. 2010) (cited case omitted).
As a threshold issue, Liberty Mutual's filing of an Answer immediately after its motion to dismiss does not moot the dismissal motion. See 5B Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1347 at n.2, Westlaw (database updated April 2023) (“Rule 12(b) encourages the responsive pleader to file a motion to dismiss before pleading, but it does not prohibit the filing of the motion with the party's answer.”) (citing Beary v. W. Publ'g Co., 763 F.2d 66, 68 (2d Cir. 1985)).
Turning to the merits of the motion to dismiss, Liberty Mutual states that the policy at issue in Plaintiffs' Petition was issued by Defendant Safeco, not Liberty Mutual, and that only Safeco is Plaintiffs' insurer. Liberty Mutual asserts that a primary requirement for any breach of contract or vexatious refusal to pay claim under Missouri statutes is a contractual relationship between the plaintiff and the defendant, which is lacking here. Liberty Mutual further argues that taken as true, Plaintiffs' allegation that Liberty Mutual owns, controls, or otherwise operates Safeco as a “‘Liberty Mutual' company” is insufficient to state a claim against it, because the general rule in Missouri is that parent corporations are not liable for the acts of their subsidiary corporations, and courts ordinarily protect the separate legal identities of individual corporations, even if one corporation owns all or part of another.
In opposing the motion to dismiss, Plaintiffs point to the reference at the top of the first page of the Safeco Homeowners Policy (ECF No. 12-1), to “Safeco Insurance, A Liberty Mutual Company.” Plaintiffs point to a similar reference on the first page of the claim denial letter (ECF No. 12-2).[1]
Finally, Plaintiffs cite to Safeco's Biennial Registration Report filed with the Missouri Secretary of State (ECF No. 12-3), compare this to the list of corporate officers on Liberty Mutual's website, and assert that “every person listed as an officer and director for Safeco is an officer for Liberty Mutual.” (ECF No. 12 at 3.) Plaintiffs conclude, “Clearly, Safeco is controlled and operated by Liberty Mutual and its senior management.” (Id.) Safeco's filings with the Missouri Secretary of State and Plaintiffs' representations as to Liberty Mutual's officers are not matters embraced by the pleadings. Plaintiffs' final argument asks the Court to examine matters outside the pleadings on the motion to dismiss, which the Court declines to do.
For purposes of resolving the motion to dismiss, the Court accepts as true Plaintiffs' factual allegations that Liberty Mutual owns Safeco and that Safeco holds itself out as “A Liberty Mutual Company.” Plaintiffs' allegation that Liberty Mutual “controls or otherwise operates” Safeco is a legal conclusion, however, and the Court does not accept this as true for purposes of the motion to dismiss.[2]See Waters, 921 F.3d at 734.
In a diversity action, state law governs the rules for construing contractual agreements. Orion Fin. Corp. of S. Dak. v. American Foods Group, Inc., 281 F.3d 733, 738 (8th Cir. 2002).
The parties appear to agree that Missouri law governs this action. In determining the scope of Missouri law, the Court is bound by the decisions of the Missouri Supreme Court. Taylor v. St. Louis County Bd. of Election Comm'rs, 625 F.3d 1025, 1027 (8th Cir. 2010). Decisions from the Missouri Court of Appeals are also relevant and “must be followed when they are the best evidence of Missouri law.” Id. at 1028, n.2 (quoting Bockelman v. MCI Worldcom, Inc., 403 F.3d 528, 531 (8th Cir. 2005)).
“‘To establish a submissible case of breach of contract, a plaintiff must first establish the existence of an agreement.'” Viacom Outdoor, Inc. v Taouil, 254 S.W.3d 234, 238 (Mo.Ct.App. 2008)) (quoting Gateway Exteriors, Inc. v. Suntide Homes, Inc., 882 S.W.2d 275, 279 (Mo. Ct .App. 1994)); Midwest Bankcentre v. Old Republic Title Co. of St. Louis, 247 S.W.3d 116, 128 (Mo.Ct.App. 2008) (...
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