Rainey v. Standard Guar. Ins. Co.
| Decision Date | 15 September 2020 |
| Docket Number | Case No. 20-CV-03112-SRB |
| Parties | BARBARA RAINEY, Plaintiff, v. STANDARD GUARANTY INSURANCE COMPANY, d/b/a ASSURANT, and NATIONSTAR MORTGAGE, LLC, d/b/a MR. COOPER, Defendants. |
| Court | U.S. District Court — Western District of Missouri |
Before the Court is Defendant Standard Guaranty Insurance Company's ("Standard") Motion to Dismiss (Doc. #15), Defendant Nationstar Mortgage, LLC's ("Nationstar") Motion to Dismiss Plaintiff's First Amended Complaint (Doc. #17), and Plaintiff Barbara Rainey's ("Plaintiff") Motion to Strike Exhibit A to Nationstar's Reply in Support of Its Motion to Dismiss (Doc. #45). For the reasons stated below, Defendants' motions to dismiss are GRANTED and Plaintiff's motion to strike is DENIED.
This suit arises from the total fire loss of a residential property located in Greene County, Missouri, at 6058 E. Primrose Lane, Springfield, Missouri, 65809 (the "Property"), and a dispute over insurance coverage of that real property. The complicated factual background of this case is briefly summarized below. Since this matter is before the Court on a motion to dismiss, the fact allegations set forth in Plaintiff's complaint are taken as true. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations and quotation marks omitted) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Plaintiff Barbara Rainey was previously married to Earl Daniel Rainey, Jr., who is now deceased ("Decedent"). At some point during their marriage, Plaintiff and Decedent purchased the Property and executed a promissory note secured by a deed of trust in favor of First Horizon Home Loan Corporation. Nationstar was the ultimate successor in interest to the promissory note and deed of trust via assignment. Plaintiff's marriage to Decedent ended by divorce on February 28, 2003. The divorce decree ending their marriage required Decedent to draft a quit-claim deed for Plaintiff to execute, which would convey her interest in the Property to Decedent. However, Decedent never provided Plaintiff with the quit-claim deed, and Plaintiff contends she retained an interest in the Property post-divorce as a tenant in common with Decedent due to her continued liability for the home loan under the promissory note and deed of trust. At some point, Plaintiff remarried her current spouse, David Pulkrabek ("Pulkrabek").
During the course of 2016, Decedent allowed the hazard insurance on the Property to lapse. Nationstar secured a lender-placed insurance policy through Standard (d/b/a Assurant) on the Property with an effective date of November 6, 2016 to November 6, 2017 (the "Standard Policy"). Decedent passed away on August 30, 2017. Following Decedent's death, Plaintiff and Pulkrabek purchased an insurance policy for the Property from USAA Insurance Agency, Inc. ("USAA") to protect her claimed interest in the Property. USAA issued an insurance policy effective from September 6, 2017 to September 6, 2018 ("the USAA Policy") which named Nationstar as a loss payee up to the amount of its interest in the Property. On September 18, 2017, a fire destroyed the Property. Decedent's Estate, represented by Pulkrabek, and Plaintiff filed a claim with Standard demanding payment under the Standard Policy, which Standardsubsequently denied, stating that the fire loss had been addressed by a claim filed by Plaintiff and Pulkrabek under the USAA Policy.
Prior to filing the instant lawsuit in federal court, Plaintiff and Pulkrabek filed suit against Defendants and USAA in Missouri state court in 2018. While the Court lacks a complete picture of those state court proceedings, it is apparent that some of the matters raised in instant case have been litigated extensively. In particular, Standard notes the Greene County Circuit Court issued an interlocutory judgment on May 28, 2019, determining that Plaintiff's interest in the Property was transferred to Decedent by operation of their divorce decree and thereby divested her of all right, title, and interest she may have otherwise had in the Property. (Doc. #16-2.) Standard also states that following the issuance of that interlocutory judgment, Plaintiff subsequently dismissed her claims against Standard and Nationstar in the state court action on November 19, 2019, and contends that she now seeks to reassert those claims, along with others, in the instant case.
Plaintiff initiated her instant suit against Defendants in this Court on April 16, 2020, asserting the following causes of action: (1) Count I: Declaratory Judgment [under] 28 U.S.C. § 2201 (against Standard and Nationstar); (2) Count II: Breach of Contract (against Standard); (3) Count III: Vexatious Refusal (against Standard); (4) Count IV: Breach of Contract (against Nationstar); (5) Count V: Breach of Implied Covenant of Good Faith and Fair Dealing (against Nationstar); (6) Count VI: Unjust Enrichment (against Nationstar); (7) Count VII: Violation of the Missouri Merchandising Practices Act ("MMPA") (against Nationstar); (8) Count VIII: Violation of the MMPA (against Standard); and (9) Count IX: Breach of Fiduciary Duty (against Nationstar). Defendants separately moved for dismissal of all claims against them pursuant to Federal Rule of Civil Procedure 12(b)(6). After briefing on the motions to dismiss concluded,Plaintiff filed a Motion to Strike Exhibit A to Nationstar's Reply in Support of its Motion to Dismiss (Doc. #45).
Pursuant to Rule 12(b)(6), a claim may be dismissed for "failure to state a claim upon which relief can be granted." "To survive a motion to dismiss [for failure to state a claim], a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570) (internal 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." Ash v. Anderson Merchs., LLC, 799 F.3d 957, 960 (8th Cir. 2015) (quoting Iqbal, 556 U.S. at 678) (quotation marks omitted). "The factual allegations of a complaint are assumed true and construed in favor of the plaintiff, even if it strikes a savvy judge that actual proof of those facts is improbable." Data Mfg., Inc. v. United Parcel Service, Inc., 557 F.3d 849, 851 (8th Cir. 2009). "In addressing a motion to dismiss, the court may consider the pleadings themselves, materials embraced by the pleadings, exhibits attached to the pleadings, and matters of public record." Illig v. Union Elec. Co., 652 F.3d 971, 976 (8th Cir. 2011) (citations omitted).
Following Defendants' filing of the instant motions to dismiss, Plaintiff moved to dismiss without prejudice Counts VII, VIII, and IX of her First Amended Complaint (Doc. #26), which the Court granted. (Doc. #39.) Accordingly, the Court considers if dismissal of the remaining Counts I-VI is warranted and addresses each Count in turn below. All parties cite to Missouri caselaw in their briefing and do not dispute that Missouri substantive law controls.
Rule 57, which operates in conjunction with the Declaratory Judgment Act, permits parties to obtain a declaratory judgment to determine their respective rights and obligations in cases involving actual controversies. See 28 U.S.C. § 2201(a); Fed. R. Civ. P. 57; see also, e.g., W. Heritage Ins. Co. v. Love, 24 F. Supp. 3d 866, 875-76 (W.D. Mo. 2014), aff'd sub nom. W. Heritage Ins. Co. v. Asphalt Wizards, 795 F.3d 832 (8th Cir. 2015) (). Declaratory judgments are a procedural remedy, not a substantive right to litigate in federal court, and district courts generally have "unique and substantial" discretion to decide whether to entertain an action under the Declaratory Judgment Act. Lexington Ins. Co. v. Integrity Land Title Co., 721 F.3d 958, 967 (8th Cir. 2013) (quoting Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995)).
Under Count I, Plaintiff seeks a declaration regarding her rights and the legal obligations of Defendants under the Standard Policy secured by Nationstar. Plaintiff seeks a declaration that she has an insurable interest in the Property, she is a "borrower" under the Standard Policy, and she is either entitled to her share of proceeds or the policy limits under that Policy, the amount of which would be determined at trial. Both Standard and Nationstar seek dismissal of Count I, but they advance different legal reasons for why dismissal is appropriate.1 Each is addressed below.
Standard argues that Count I should be dismissed because it is duplicative of the breach of contract claim asserted by Plaintiff in Court II, citing for support Amerisure Mut. Ins. Co. v. Maschmeyer Landscapers, Inc., No. 06-CV-1308, 2007 WL 2811080, at *2 (E.D. Mo. Sept. 24, 2007). Plaintiff, relying on City of Grandview v. Missouri Gas Energy, No. 11-00822, 2012 WL 12897092, at *3 (W.D. Mo. Aug. 8, 2012), argues that she asks the Court to construe and enforce the terms of the Standard Policy, not declare whether Standard breached the terms of its contract. In its reply, Standard contends Count I would be rendered moot by the adjudication of Plaintiff's breach of contract claim because all the relief requested by Plaintiff in Count I is necessarily or expressly encompassed by her breach of contract claim.
In general, "[t]he existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is otherwise appropriate." Fed. R. Civ. P. 57; see also Fed. R. Civ. P. 8(a)(3), 8(d)(3) (...
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