Lindsey v. Allstate Ins. Co.

Decision Date13 January 1999
Docket NumberNo. 98-2439 DV.,98-2439 DV.
Citation34 F.Supp.2d 636
PartiesEdmund LINDSEY and Mattie Lindsey, Plaintiffs, v. ALLSTATE INSURANCE COMPANY, Josie H. Fant, and Harry B. Howard, Defendants.
CourtU.S. District Court — Western District of Tennessee

Wanda Abioto, Law Office of Wanda Abioto, Southaven, MS, for Edmund Lindsey, Mattie Lindsey.

Charles Jeffrey Barnett, McNabb Holley & Waldrop, Memphis, TN, Timothy A. Wolfe, Bates Meckler Bulger & Tilson, Chicago, IL, for Allstate Insurance Company, Josie H. Fant, Harry B. Howard.


DONALD, District Judge.

Before this court is the motion of Defendant, Allstate Insurance Company, to dismiss Plaintiffs', Edmund Lindsey and Mattie Lindsey, complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6). Plaintiffs allege that Defendants violated their rights under the Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601-3619, and 42 U.S.C. §§ 1981 and 1982 by discriminating against them on the basis of race in premiums, claims handling procedures and policy renewal. Plaintiffs further allege that Defendant conspired with its agents, Josie H. Fant ("Fant") and Harry B. Howard ("Howard"), to deprive them of the equal protection of the laws in violation of 42 U.S.C. § 1985. Alternatively, Plaintiffs allege that Defendant neglected to prevent its agents and adjusters from conspiring to discriminate against them in violation of 42 U.S.C. § 1986. Plaintiffs contend that Defendant devised a scheme to defraud African-Americans policyholders, committed extortion and mail fraud in furtherance of this scheme, and derived income from this alleged pattern of racketeering in violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq. Plaintiffs also contend that Defendant violated the Tennessee Insurance Trade Practices Act, Tenn.Code Ann. §§ 56-8-101-118 ("TITPA"), and the Tennessee Consumer Protection Act, Tenn. Code Ann. §§ 47-18-101-121 ("TCPA"), by engaging in false advertising and misleading Plaintiffs concerning the benefits and conditions of policies offered to African-American policyholders. Plaintiffs further contend that Defendant's discriminatory insurance practices violated the Tennessee Human Rights Act, Tenn.Code Ann. § 4-21-101 et seq. ("THRA"). Finally, Plaintiffs assert a common law contract claim based on their allegations that Defendant's discriminatory insurance practices deprived them of the benefit of the bargain struck at the time the insurance contracts were formed.

In support of its motion to dismiss, Defendant contends that 1) the FHA does not apply to Plaintiffs' claims-handling allegations (Def.'s Mot. to Dismiss ¶ 2), 2) Plaintiffs' §§ 1981 and 1982 claims are barred by the statute of limitations and that Plaintiffs have failed to plead intentional discrimination (Def.'s Mot. to Dismiss ¶ 3), 3) Plaintiffs' §§ 1985 and 1986 must fail because Plaintiffs have failed to allege a conspiracy (Def.'s Mot. to Dismiss ¶ 4), 4) § 1988 does not create a cause of action (Def.'s Mot. to Dismiss ¶ 5), 5) any RICO action is preempted by the TITPA under the McCarran-Ferguson Act, 15 U.S.C. § 1012 and Plaintiffs have failed to allege the appropriate injury or any type of "enterprise" required by RICO (Def.'s Mot. to Dismiss ¶ 6), 6) Plaintiffs lack standing under TITPA and fail to allege facts showing a violation of the statute (Def.'s Mot. to Dismiss ¶ 7), 7) Plaintiffs' claims under the TCPA are barred by the statute of limitations and Defendant's claims handling procedures are not actionable under the statute (Def.'s Mot. to Dismiss ¶ 8), 8) Plaintiffs fail to allege facts showing that Defendant denied them access to one of their offices in violation of the THRA (Def.'s Mot. to Dismiss ¶ 9), 9) Plaintiffs' common law contract claims are barred by the statute of limitations (Def.'s Mot. to Dismiss ¶ 10).

For the following reasons, the court grants Defendant's motion to dismiss Plaintiffs' claims under §§ 1985 and 1986, § 1988, RICO, TIPA, TCPA and § 4-21-501 of the THRA and denies Defendant's motion to dismiss Plaintiffs' claims under the FHA, §§ 1981 and 1982, § 4-21-601 of the THRA and Plaintiffs' common law contract claims.


Plaintiffs own a home at 4835 Airways Boulevard in Memphis, Tennessee, where they have resided for the past twenty-two years. (Pls.' Compl. ¶ 11). In 1976, Plaintiffs obtained property insurance with Defendant for their home at 4835 Airways Blvd. (Pls.' Compl. ¶ 12). Plaintiffs have also possessed two other insurance policies with Defendant on properties located in Memphis on Weston Drive and in Mississippi. (Pls.' Compl. ¶¶ 13, 14). Plaintiffs purchased an insurance policy for the property in Memphis in 1971 and maintained that policy until October 1995 when they sold the property to a third party. (Pls.' Compl. ¶ 13). Plaintiffs purchased an insurance policy for the Mississippi property in 1987 which continues to cover that property to the present. (Pls.' Compl. ¶¶ 14, 30).

During the twenty-one years the Plaintiffs have maintained property insurance with Defendant on the Airways Blvd. property, Plaintiffs have submitted four claims: one in 1987 for property damage resulting from hail and three claims for burglaries occurring in 1990, 1994 and 1996. (Pls.' Compl. ¶ 19). In 1995, Plaintiffs submitted a claim on the Weston Drive property arising from a burglary. (Pls.' Compl. ¶ 20). Plaintiffs have never submitted any claims on the property located in Mississippi. (Pls.' Compl. ¶ 21).

In 1994, after Plaintiffs notified Defendant of the burglary at Airways Blvd., Defendant's insurance agent, Fant, provided Plaintiff Mattie Lindsey with an authorization form giving Defendant broad access to Plaintiffs' records. (Pls.' Compl. ¶ 22). Plaintiff Mattie Lindsey signed this form without the consent of her husband Plaintiff Edmund Lindsey. (Pls.' Compl. ¶ 22). Later, Plaintiff Mattie Lindsey discussed the authorization form with her husband and they subsequently decided that the form authorized excessive intrusion into their privacy and personal affairs. (Pls.' Compl. ¶ 22). Accordingly, Plaintiffs requested that Defendant return the authorization form. (Pls.' Compl. ¶ 22). Plaintiffs allege that, as a result of this request, Defendant's agents Fant and Howard refused to communicate further with Plaintiffs and took no additional actions to negotiate their claim. (Pls.' Compl. ¶ 24).

On May 20, 1996, Plaintiffs experienced another burglary at the Airways Blvd. property. (Pls.' Compl. ¶ 25). During the investigation of this claim, Plaintiffs signed an authorization form with limitations. (Pls.' Compl. ¶ 25). After receiving the authorization forms, Defendant agreed to consider both the 1994 and 1996 burglary claims on the Airways Blvd. property. (Pls.' Compl. ¶ 25). As part of Defendant's investigation of Plaintiffs' claims, Plaintiffs appeared for a deposition and completed additional informational forms. (Pls.' Compl. ¶ 26). Plaintiffs aver that Defendant's legal counsel canceled the deposition due to scheduling difficulties and refused to accept the completed forms. (Pls.' Compl. ¶ 26).

On February 4, 1997, Plaintiffs received a letter from Defendant denying their claims on the basis that Plaintiffs had not cooperated with Defendant's attorney, failed to cooperate with Defendant's investigation, refused to submit to an examination under oath, and failed to complete a sworn proof of loss within sixty days. (Pls.' Compl. ¶ 27). On May 20, 1997, Defendant denied renewal of Plaintiffs' insurance policy on the Airways Blvd. property. (Pls.' Compl. ¶ 28). Plaintiffs aver that Defendant stated its refusal to renew the policy was based upon Plaintiffs' submission of three claims in the past three years. (Pls.' Compl. ¶ 28). Plaintiffs further aver that they have only submitted two claims in the past three years on the Airways Blvd. property. (Pls.' Compl. ¶ 29).


Rule 12(b)(6) of the Federal Rules of Civil Procedure enables a defendant to file a motion to dismiss for a plaintiff's failure to state a claim upon which relief can be granted. Motions to dismiss under Rule 12(b)(6) are designed to test "whether a cognizable claim has been pleaded in the complaint." Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir.1988). Dismissal of a complaint for failure to state a claim streamlines litigation by "dispensing with needless discovery and factfinding." Nietzke v. Williams, 490 U.S. 319, 326-27, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989).

Dismissal under Rule 12(b)(6) is appropriate where there is no set of facts which would entitle the plaintiff to recover. Hammond v. Baldwin, 866 F.2d 172, 175 (6th Cir.1989). In reviewing a defendant's Rule 12(b)(6) motion to dismiss, a district court should construe the complaint in the light most favorable to the plaintiff, and determine whether the plaintiff undoubtedly can prove no set of facts in support of his claims that would entitle him to relief. Meador v. Cabinet for Human Resources, 902 F.2d 474, 475 (6th Cir.1990), cert. denied, 498 U.S. 867, 111 S.Ct. 182, 112 L.Ed.2d 145 (1990). If an allegation is capable of more than one inference, it must be construed in the plaintiff's favor. Sinay v. Lamson & Sessions Co., 948 F.2d 1037, 1039-40 (6th Cir.1991). As the Supreme Court said in Hishon v. King & Spalding, 467 U.S. 69, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984), "[a] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon at 73, 104 S.Ct. 2229.

A district court may not grant a defendant's Rule 12(b)(6) motion to dismiss based on its disbelief of the plaintiff's factual allegations. In Re Sofamor Danek Group, Inc., 123 F.3d 394 (6th Cir.1997), cert. denied., Murphy v. Sofamor Danek Group, ___ U.S. ___, 118 S.Ct....

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