Lucero v. Travelers Commercial Ins. Co.
| Decision Date | 16 December 2022 |
| Docket Number | 20-cv-1238 MV/JHR |
| Parties | LEONARD LUCERO, Plaintiff, v. TRAVELERS COMMERCIAL INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of New Mexico |
THIS MATTER comes before the Court on Travelers Commercial Insurance Company's Motion to Dismiss Plaintiff's Complaint Pursuant to Fed.R.Civ.P. 12(b)(6) [Doc. 11]. The Court, having considered the Motion and relevant law, finds that the Motion is well-taken and will be granted, although Mr. Lucero will be given an opportunity to file a motion seeking leave to amend.
Plaintiff Leonard Lucero purchased homeowner's insurance coverage from Defendant Travelers Commercial Insurance Company (“Travelers”). Doc. 1-1 ¶ 5. Travelers issued and delivered to Mr. Lucero an insurance policy (the “Policy”), which remained in effect through the relevant period. Id. ¶ 7. The Policy contained a notice provision that “stipulate[d] that all wind and hail claims must be submitted within one year of the date of loss.” Id. ¶ 16. The Policy also contained the following “time-to-sue provision” Doc. 11 Ex. 1 ¶ 9; Doc 11 Ex. 2 ¶ 9.
On or about July 30, 2018, the roof of Mr. Lucero's home was damaged by a hailstorm. Doc. 1-1 ¶ 9. Mr. Lucero, who is disabled and restricted to a wheelchair, did not know about the hailstorm damage until early July 2019, when a friend serviced his air conditioners and observed the roof damage. Id. ¶ 11. By early July 2019, Mr. Lucero notified Travelers of the roof damage and made a claim under the Policy. Id. ¶ 13. On July 24 2019, Travelers inspected the roof and confirmed that there was extensive damage caused by hail. Id. ¶ 14.
On July 26, 2019, Travelers communicated to Mr. Lucero in writing and orally that they would provide no coverage for his claim. Doc 1-1 Ex. 2. Thereafter, in a letter dated September 17, 2019, Travelers explained that “while hail was present on July 30, 2018, it was three miles from the insured location, and hail large enough to register on the report did not fall at the loss location.” Id. Based on this information, in conjunction with its “physical inspection of the property,” Travelers determined that the hail damage to Mr. Lucero's home “was older, and in line with” a storm that occurred on May 24, 2018. Id. Accordingly, Travelers “changed the date of loss on the claim and paperwork” to reflect that the hail damage to Mr. Lucero's home occurred on May 24, 2018, rather than on July 30, 2018. Doc. 1-1 ¶ 16. And because Mr. Lucero filed his claim more than one year after May 24, 2018, Travelers denied his claim as untimely under the Policy's one-year notice provision. Id. ¶ 18.
As a result of Travelers' denial of his claim, Mr. Lucero commenced the instant action in state court on August 27, 2020. Travelers removed the action to this Court on November 27, 2020. Doc. 1. In his Complaint for Declaratory Judgment and Damages for Breach of Contract, Insurance Bad Faith, Negligence and Unfair Trade and Insurance Practices, Mr. Lucero asserts claims for declaratory judgment (Count I), breach of contract (Count II), bad faith, violation of New Mexico Insurance Code and Unfair Practices Act (Count III), and negligence (Count IV). Doc. 1-1. Travelers has filed a motion to dismiss the Complaint in its entirety, which is now before the Court.
Under Rule 12(b)(6), the Court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). When considering a Rule 12(b)(6) motion, the Court must accept as true all well-pleaded factual allegations in the complaint, view those allegations in the light most favorable to the plaintiff, and draw all reasonable inferences in the plaintiff's favor. Smith v. United States, 561 F.3d 1090, 1097 (10th Cir. 2009), cert. denied, 130 S.Ct. 1142 (2010).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations 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.” Id. “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007)).
The Court in Iqbal identified “two working principles” in the context of a motion to dismiss. Id. First, Id. Accordingly, Rule 8 “does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678-79. “Second, only a complaint that states a plausible claim for relief survives a motion to dismiss.” Id. at 679; see Twombly, 550 U.S. at 570 (). Accordingly, “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not shown - that the pleader is entitled to relief.” Id. (citation omitted).
On the instant motion to dismiss, Travelers argues that Mr Lucero's breach of contract claim, first raised when he commenced the instant action on August 27, 2020, is prohibited by the time-to-sue provision in the Policy, as it required him to bring any suit against Travelers within two years of the date of loss, or no later than July 30, 2020. Travelers further argues that the remainder of Mr. Lucero's claims must also be dismissed, because they are predicated on the alleged breach and because they fail to adequately state a claim upon which relief can be granted.
In the Complaint, Mr. Lucero argues that Travelers breached the Policy by “failing and refusing to pay for the damage to [his] home, including the roof damage, caused by the hailstorm.” Doc. 1 ¶¶ 33-34. Invoking the time-to-sue provision of the Policy, which requires that an action be brought within two years after the date of loss, Travelers argues that Mr. Lucero's breach of contract claim is time-barred, and thus subject to dismissal, because he filed it more than two years after the alleged date of the hail damage to his home. Doc. 11 at 4-6. Mr. Lucero acknowledges that his claim is untimely under the time-to-sue provision. He contends, however, that his claim is not subject to dismissal because, by running from the date of loss rather than from the date of the alleged breach of contract, the time-to-sue provision is “unreasonable and unenforceable as a matter of [New Mexico] law.” Doc. 15 at 3. And because the time-to-sue provision is unenforceable, Mr. Lucero's argument continues, the six-year statute of limitations applicable to breach of contract actions controls, under which his claim is timely. Id.
In support of his contention, Mr. Lucero cites to Whelan v. State Farm Mut. Auto. Ins. Co., 329 P.3d 646 (N.M. 2014), in which the New Mexico Supreme Court addressed the validity of an automobile insurance contract time-to-sue provision that required an uninsured motorist/underinsured motorist (“UM/UIM”) claim to be made within six years from the date of the accident. The Court explained that “[w]hile the lengthy six-year period” was “itself unobjectionable, it is the triggering event, the date of the accident instead of the date of the accrual of the cause of action, that concerns us.” Id. at 650. The Court ultimately held that the time-to-sue provision ran counter to the public policy behind the UM/UIM statute, stating: “[a]ddressing only the issue that is before us, we must conclude that a time-to-sue provision in a UM/UIM contract that is triggered solely by the date of an accident is unreasonable and unenforceable.” Id. at 651.
In Whelan, the Court was ruling on the enforceability of a time-to-sue provision in the specific context of a UM/UIM insurance policy. Accordingly, Whelan “is not automatically dispositive of the issue before this Court,” namely, whether a time-to-sue provision in a homeowner's insurance policy is unreasonable and enforceable when the triggering event is the date of loss to property. Miller v. Cincinnati Ins. Co., 323 F.Supp.3d 1253, 1261 (D.N.M. 2018).
As this case arises under diversity jurisdiction, “the Court's task is not to reach its own judgment regarding the state law at issue, but simply to ‘ascertain and apply the state law.”' Id. at 1259 (quoting Wade v. EMACASCO Ins. Co., 483 F.3d 657 665-66 (10th Cir. 2007)). Where, as here, “no...
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