Labrake v. State Farm Mut. Auto. Ins. Co.
| Decision Date | 23 April 2021 |
| Docket Number | 7:20-cv-01430-LSC |
| Parties | KEVIN LABRAKE, et al., Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, et al., Defendants. |
| Court | U.S. District Court — Northern District of Alabama |
Plaintiffs Kevin LaBrake, April LaBrake, and Megan Townsend (collectively, "Plaintiffs") bring this action against Defendants State Farm Mutual Automobile Insurance Company ("State Farm") and Metropolitan Casualty Insurance Company ("Metropolitan") (collectively, "Defendants"). Plaintiffs assert state law claims against Defendants for breach of contract, bad faith, and for underinsured motorist coverage. Before the Court are Defendants' Motions to Dismiss (docs. 13 & 14). The motions are fully briefed and are ripe for review. For the reasons stated below, the motions are due to be granted in part and denied in part.
Plaintiffs are citizens of New York. Defendants are corporations. State Farm is incorporated in Illinois and has its principal place of business in Illinois. Metropolitan is incorporated in Rhode Island and has its principal place of business in Rhode Island.2 Defendants conduct business in Alabama, where they also have registered agents to receive service of process. Plaintiffs have insurance policies with Defendants, which were purchased and executed in New York.
On July 7, 2017, Plaintiffs were involved in an automobile accident. Lasondra C. Gordon Spencer ("Spencer") collided with the front of Plaintiffs' vehicle. Plaintiffs suffered severe and permanent injuries, as well as emotional harm. On January 16, 2019, Plaintiffs filed suit against Spencer in Alabama state court, alleging negligence and/or wantonness. On February 13, 2019, Spencer's insurance carrier offered a settlement of $50,000 to Plaintiffs. Plaintiffs asked Defendants for permission to accept the settlement offer, stating that this was the maximum amountof Spencer's insurance coverage. State Farm allowed Plaintiffs to accept the settlement.
After accepting the settlement, Plaintiffs sought payment from State Farm and Metropolitan, as they contend that the settlement was insufficient to cover their expenses from the accident. Plaintiffs had underinsured motorist coverage with both companies. Metropolitan denied coverage outright, while Plaintiffs entered into negotiations with State Farm to settle their underinsured motorist claims, which were unsuccessful.
Plaintiffs filed their Complaint against Defendants on September 25, 2020, seeking compensatory and punitive damages for breach of contract, bad faith, and underinsured motorist coverage. (Doc. 1.) Metropolitan filed a Motion to Dismiss on December 17, 2020. (Doc. 13.) State Farm filed a Motion to Dismiss on December 29, 2020. (Doc. 14.) Plaintiffs filed a response in opposition to Defendants' motions. (Doc. 17.) Defendants filed replies in support of their motions. (Docs. 20 & 21.)
In a Rule 12(b)(2) motion to dismiss, the plaintiff generally "bears the burden of establishing a prima facie case of jurisdiction over the movant, non-resident defendant." PVC Windoors, Inc. v. Babbitbay Beach Constr., N.V., 598 F.3d 802, 810(11th Cir. 2010) (quoting Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir. 1988)). "A prima facie case is established if the plaintiff presents enough evidence to withstand a motion for directed verdict." Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990). The court must treat facts alleged in the complaint as true if they are not controverted by affidavits submitted by the defendant. Id. Further, "where a defendant who purposefully has directed [its] activities at forum residents seeks to defeat jurisdiction," the defendant must then "present a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985).
In general, a pleading must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). However, in order to withstand a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), a complaint "must plead enough facts to state a claim to relief that is plausible on its face." Ray v. Spirit Airlines, Inc., 836 F.3d 1340, 1347-48 (11th Cir. 2016) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)) (internal quotation marks omitted). "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 (2009). Stated anotherway, the factual allegations in the complaint must be sufficient to "raise a right to relief above the speculative level." Edwards v. Prime, Inc., 602 F.3d 1276, 1296 (11th Cir. 2010) (quoting Rivell v. Priv. Health Care Sys, Inc., 520 F.3d 1308, 1309 (11th Cir. 2008) (internal quotation marks omitted). A complaint that "succeeds in identifying facts that are suggestive enough to render [the necessary elements of a claim] plausible" will survive a motion to dismiss. Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1296 (11th Cir. 2007) (quoting Twombly, 550 U.S. at 556) (internal quotation marks omitted).
In evaluating the sufficiency of a complaint, this Court first "identif[ies] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Iqbal, 556 U.S. at 679. This Court then "assume[s] the[] veracity" of the complaint's "well-pleaded factual allegations" and "determine[s] whether they plausibly give rise to an entitlement to relief." Id. Review of the complaint is "a context-specific task that requires [this Court] to draw on its judicial experience and common sense." Id. If the pleading "contain[s] enough information regarding the material elements of a cause of action to support recovery under some 'viable legal theory,'" it satisfies the notice pleading standard. Am. Fed'n of Lab. & Cong. of Indus. Orgs. v. City of Miami, 637 F.3d 1178, 1186 (11th Cir. 2011) (quoting Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683-84 (11th Cir. 2001)).
"In general, if it considers materials outside of the complaint, a district court must convert the motion to dismiss into a summary judgment motion." SFM Holdings, Ltd. v. Banc of Am. Sec., LLC, 600 F.3d 1334, 1337 (11th Cir. 2010). However, a "district court may consider an extrinsic document if it is (1) central to the plaintiff's claim, and (2) its authenticity is not challenged." See id. (citing Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005)). Defendants attached their respective insurance policies to their motions, and Plaintiffs referred to these policies in their Complaint. As the Court finds the insurance policies central to Plaintiffs' claims and their authenticity is not in dispute, the Court may take the insurance policies into consideration in this Opinion without converting Defendants' motions into ones for summary judgment. See id.
Defendants seek to dismiss Plaintiffs' Complaint, arguing that the Court lacks personal jurisdiction over Defendants. Defendants also argue that, under New York law, Plaintiffs have failed to state a claim upon which relief may be granted. Alternatively, Defendants request that the Court transfer this case to the Northern District of New York as that is a more appropriate venue. The Court will address each argument.
A federal district court "may exercise personal jurisdiction to the extent authorized by the law of the state in which it sits and to the extent allowed under the Constitution." Meier ex rel. Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002); see also Daimler AG v. Bauman, 571 U.S. 117, 125 (2014). Personal jurisdiction is generally a two-step inquiry, as the court must consider whether exercising personal jurisdiction is consistent with both the forum state's long-arm statute and the Due Process Clause of the Fourteenth Amendment. Mut. Serv. Ins. Co. v. Frit Indus., Inc., 358 F.3d 1312, 1319 (11th Cir. 2004). However, for federal courts in Alabama, "the two inquiries merge, because Alabama's long-arm statute permits the exercise of personal jurisdiction to the fullest extent constitutionally permissible." Sloss Indus. Corp. v. Eurisol, 488 F.3d 922, 925 (11th Cir. 2007) (citing Ala. R. Civ. P. 4.2(b)); see also Ex parte Edgetech I.G., Inc., 159 So. 3d 629, 633 (Ala. 2014). Thus, this Court need only consider the limits of the Due Process Clause. Mut. Serv. Ins. Co., 358 F.3d at 1319.
To subject a nonresident defendant to personal jurisdiction, due process requires that the defendant "have certain minimum contacts with [the forum] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quotingMilliken v. Meyer, 311 U.S. 457, 463 (1940)). There are two types of personal jurisdiction—general jurisdiction and specific jurisdiction—but both are based on the defendant's contacts with the forum state. See, e.g., Waite v. All Acquisition Corp., 901 F.3d 1307, 1312 (11th Cir. 2018).
Plaintiffs assert that the Court has general personal jurisdiction over Defendants. General personal jurisdiction exists over defendants "when their affiliations with the State are so continuous and systematic as to render them essentially at home in the forum State." Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). The contacts must be so great that any suit in the forum state is justified, even on matters unrelated to the defendant's contacts with the forum state. See Int'l Shoe Co., 326 U.S. at 318. A corporate defendant is subject to general personal jurisdiction in forums where it has its place of incorporation and principal place of business. See Daimler, 571 U.S....
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