McKinnon v. Hartford Ins. Co. of the Midwest
| Decision Date | 11 March 2013 |
| Docket Number | 2:12-cv-1809-RCJ-CWH |
| Parties | GERI LYN MCKINNON, Plaintiff, v. HARTFORD INSURANCE COMPANY OF THE MIDWEST, DOES 1 through 10, and DOE AGENCIES 1 through 10; ROE CORPORATIONS 1 through 10, inclusive, Defendants. |
| Court | U.S. District Court — District of Nevada |
Currently before the Court is Defendant Hartford Insurance Company of the Midwest's Motion to Dismiss Plaintiff's Extra-Contractual Claims (#4).
In October 2012, Defendant Hartford Insurance Company of the Midwest filed a petition for removal based on diversity jurisdiction and attached the complaint from the Eighth Judicial District in Clark County, Nevada. (Pet. for Removal (#1) at 1-2; Compl. (#1-3) at 3-12). In the complaint, Plaintiff Geri Lyn McKinnon sued Defendant Hartford Insurance Company of the Midwest ("Defendant"). .
The complaint alleged the following. (Id.). On April 15, 2010, Plaintiff was involved in a collision of which she was the fault-free driver. (Id. at 5). Specifically, while on Decatur Boulevard in Las Vegas, Marcey Lynn Olivas collided with Linda Joyce Giesler's vehicle and the force of the impact from that collision caused Olivas's vehicle to violently strike the front of Plaintiff's vehicle while Plaintiff was stopped at an exit of a private driveway on Decatur Boulevard. (Id. at 5-6). The force of the collision caused property damage to Plaintiff's vehicleand bodily injury to Plaintiff. (Id. at 6). Prior to the collision, Plaintiff had purchased and paid premiums for a policy of automobile insurance from Defendant which included $100,000/$300,000 of underinsured/uninsured coverage ("UIM policy"). (Id.). Plaintiff was treated for injuries arising from the collision and incurred "in excess of $29,296.23 in past medical expenses, which included treatment for a traumatic spine injury, which [did] not include future medical expenses recommended by her medical providers and related to the incident, past or future pain, suffering, and loss of enjoyment of life damages, or loss of household service and wage loss, past and future." (Id.).
The complaint alleged that, at Plaintiff's request, Olivas's insurer, National Guaranty Insurance Co., paid the entire liability policy limit for adverse driver to Plaintiff in the amount of $15,000. (Id.). At Plaintiff's request, Giesler's insurer, Liberty Mutual Fire Insurance Co., paid the entire liability policy limit for adverse driver to Plaintiff in the amount of $100,000. (Id.). Plaintiff made a claim for her $100,000 limit under her UIM policy but Defendant denied her claim on January 4, 2012. (Id.).
Plaintiff alleged six causes of action. (Id. at 7-11). In the first cause of action, Plaintiff alleged a breach of contract based on Defendant's failure to pay Plaintiff her benefits due under the UIM policy. (Id. at 7). Plaintiff alleged that Defendant's failure to pay her benefits was a material breach of the insurance contract. (Id.).
In the second cause of action, Plaintiff alleged a violation of the Unfair Claims Practices Act. (Id.). Plaintiff alleged that Defendant's "actions were in violation of provisions of the Unfair Claims Practices Act (NRS 686A.310 et seq.), violation of which was done with [Defendant's] actual and/or implied knowledge." (Id. at 8). Plaintiff alleged that Defendant denied her insurance benefits "with a conscious disregard for the rights of the Plaintiff, that [rose] to the level of oppression, fraud, or malice." (Id.).
In the third cause of action, Plaintiff alleged a breach of the covenant of good faith and fair dealing-bad faith. (Id.). Plaintiff alleged that "[i]nherent in every contract [was] an implied covenant of good faith and fair dealing" and that Defendant "failed to deal fairly and in good faith with Plaintiff by denying, without a reasonable basis or proper cause, Plaintiff'sunderinsured/uninsured motorist benefits due under her insurance policy." (Id.).
In the fourth cause of action, Plaintiff alleged a breach of fiduciary duty. (Id. at 9). Plaintiff alleged that Defendant held itself out as a fiduciary by selling insurance policies to the public, issuing a motor vehicle insurance policy to Plaintiff, and by accepting premiums. (Id.). Defendant owed Plaintiff a fiduciary duty and breached that duty by Defendant's "unreasonable and unjustifiable failure to pay" Plaintiff's UIM policy. (Id.).
In the fifth cause of action, Plaintiff alleged misrepresentation. (Id. at 10). Plaintiff alleged that Defendant was engaged in the business of selling and providing insurance products to the public and that Defendant, through its agents, "made written promises to Plaintiff contained in the written policies of insurance stating that in the event Plaintiff was injured by an underinsured and/or uninsured motorist" Defendant would provide benefits to Plaintiff. (Id.). Defendant made the promise to pay underinsured and uninsured benefits for the purpose of inducing Plaintiff to enter into the insurance policy and to pay additional premiums. (Id.). Defendant, "despite [its] representations, never at any time intended to comply with those representations and in fact, constantly refused to do so, and thereby made these representations with the intent to defraud Plaintiff." (Id.). Defendant "made to the Plaintiff certain misrepresentations of material facts concerning the underinsured and uninsured policy" and Plaintiff "justifiably relied on such misrepresentation." (Id.).
In the sixth cause of action, Plaintiff alleged punitive damages. (Id. at 11). Plaintiff alleged that Defendant had actual knowledge that it would not pay Plaintiff's benefits and that Defendant's conduct amounted to "fraud, malice, or oppression, and establishe[d] a willingness on the part of [Defendant] to create the risk of injury to foreseeable users of [its] products, including Plaintiff." (Id.). The conduct "should be punished." (Id.).
Plaintiff sought compensatory and/or expectation damages for the denied policy benefits; consequential and/or incidental damages, including attorney fees and emotional distress; general, special, and punitive damages in excess of $10,000; interest from the time of service of the complaint; reasonable attorneys' fees; taxable costs, and further relief as the Court deemed appropriate. (Id. at 12).
When considering a Rule 12(b)(6) motion to dismiss for failure to state a claim, the court must accept as true all factual allegations in the complaint as well as all reasonable inferences that may be drawn from such allegations. LSO, Ltd. v. Stroh, 205 F.3d 1146, 1150 n.2 (9th Cir. 2000). Such allegations must be construed in the light most favorable to the nonmoving party. Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000). In general, the court should only look to the contents of the complaint during its review of a Rule 12(b)(6) motion to dismiss. However, the court may consider documents attached to the complaint or referred to in the complaint whose authenticity no party questions. Id.; see Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987).
The analysis and purpose of a Rule 12(b)(6) motion to dismiss for failure to state a claim is to test the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims. Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (quotations omitted). To avoid a Rule 12(b)(6) dismissal, a complaint does not need detailed factual allegations; rather, it must plead "enough facts to state a claim to relief that is plausible on its face." Clemens v. Daimler Chrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007)); Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (). Even though a complaint does not need "detailed factual allegations" to pass muster under 12(b)(6) consideration, the factual allegations "must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly, 550 U.S. at 555, 127 S.Ct. at 1965. "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do." Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949. "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factualenhancements.'" Id. (quoting Twombly, 550 U.S. at 557, 127 S.Ct. at 1966).
If the court grants a motion to dismiss a complaint, it must then decide whether to grant leave to amend. The court should "freely give" leave to amend when there is no "undue delay, bad faith or dilatory motive on the part of the movant . . . undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment." Fed. R. Civ. P. 15(a)(2); Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962). Generally, leave to amend is only denied when it is clear that the deficiencies of the complaint cannot be cured by amendment. See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).
Defendant files a motion to dismiss Plaintiff's extra-contractual claims, specifically claims for (a) breach of the Unfair Claims Practices Act, (b) breach of the covenant of good faith and fair dealing-bad faith, (c) breach of fiduciary duty, (d) misrepresentation, and (e) punitive damages. (Mot. to Dismiss (#4) at 1). Defendant moves to dismiss the Unfair Claims Practices Act claim because Plaintiff fails to plead any facts to support such a claim. (Id. at 4). Defen...
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