Salvador v. Allstate Prop. & Cas. Ins. Co.
| Decision Date | 19 November 2020 |
| Docket Number | Civil Case No. 19-2754 (RJL) |
| Parties | FRANKLIN SALVADOR, SR. and FRANKLIN SALVADOR, JR., Plaintiffs, v. ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, ALLSTATE INSURANCE COMPANY, and ALLSTATE INDEMNITY COMPANY, Defendants. |
| Court | U.S. District Court — District of Columbia |
[Dkt. #8]
On August 13, 2019, plaintiffs Franklin Salvador Sr. and Franklin Salvador Jr. (collectively, "plaintiffs") brought suit on behalf of themselves and a putative class in the D.C. Superior Court against defendants Allstate Property and Casualty Insurance Company, Allstate Insurance Company, and Allstate Indemnity Company (collectively, "defendants"). See Compl. [Dkt. #1-1]. Plaintiffs allege that defendants failed to reasonably compensate plaintiff Franklin Salvador Jr. for his serious and multiple injuries under the uninsured motorist coverage in his Allstate insurance policy and failed to warn consumers who purchased their insurance that Allstate would take actions aimed at denying or delaying their receipt of full uninsured motorist benefits. The defendants move to dismiss, contending that Count II of the complaint fails to state a claim; that plaintiffs' class action allegations should be stricken or dismissed; and that the entire Complaint should be dismissed against defendants Allstate Indemnity Company and Allstate Insurance Company. Upon consideration of the briefing, the relevant law, the entire record, and for the reasons stated below, defendants' motion is GRANTED.
Under District of Columbia law, any motor vehicle liability insurance policy sold in the District of Columbia must include uninsured motorist coverage of at least $25,000 per person injured in an accident or $50,000 total for all persons injured in an accident. D.C. Code § 31-2406. The purpose of this uninsured motorist coverage is to protect an individual who is involved in a car accident with an at-fault individual who either lacks car insurance altogether or lacks insurance sufficient to cover to full cost of injuries for which the at-fault individual is responsible. See D.C. Code § 31-2401(a)(2)(D).
On August 15, 2016, plaintiff Franklin Salvador Jr. was a passenger in a vehicle driven by Javier Vivar. Compl. ¶¶ 6, 10. Plaintiffs allege that on that evening, Javier Vivar operated the vehicle in a negligent manner and caused a collision between his vehicle and a fire truck. Compl. ¶ 12. As a result of the collision, plaintiff Franklin Salvador Jr. sustained serious injuries to his chest and back. Compl. ¶ 13. At the time of the collision, Javier Vivar had inadequate automobile insurance to pay all the damages for injuries as a result of this collision, including plaintiff Franklin Salvador Jr.'s injuries. Compl. ¶ 15.However, plaintiff Franklin Salvador Jr. was the beneficiary of an automobile policy issued by Allstate Property and Casualty Insurance Company to his father, plaintiff Franklin Salvador, Sr. Compl. ¶ 6. Plaintiffs therefore sought uninsured motorist benefits under their Allstate policy. Compl. ¶ 6. While Allstate accepted coverage of the accident, they denied plaintiffs the full benefits that they requested. Compl. ¶ 7.
Plaintiffs allege in Count I of their Complaint that defendants "failed and refused to reasonably compensate plaintiff for his serious and multiple injuries" under D.C. Code § 31-2406. Compl. ¶ 21. Plaintiffs also allege in Count II of their Complaint that defendants have failed to warn the purchasers of their insurance policies that "Allstate engages in a course of action designed to specifically deny and/or delay timely and full uninsured motorist benefits." Compl. ¶ 24. Plaintiffs allege that defendants failed to advise purchasers of their insurance policies, including plaintiffs, that their uninsured motorist claims "would be submitted to a computer, known as 'Colossus,' which would produce an evaluation of plaintiffs' claim to such a low value as to essentially required plaintiffs to face the vagaries of a jury trial" to obtain the full benefits. Compl. ¶ 28. Plaintiffs brought this case on behalf a putative class consisting of "[a]ll District of Columbia Allstate policyholders or their beneficiaries who: (1) since August 13, 2016; (2) made a claim for uninsured motorist benefits with Allstate which was not paid in full; and (3) that included a claim for bodily injury." Compl. ¶ 9.
On September 16, 2019, defendants removed this case to the U.S. District Court for the District of Columbia pursuant to 28 U.S.C. § 1332(a) and 28 U.S.C. §§ 1332(d), 1441(a) and (b), and 1453. See Notice of Removal [Dkt. #1]. On September 23, 2019,defendants then moved to dismiss Count II of the Complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), moved to dismiss the Complaint against defendants Allstate Insurance Company and Allstate Indemnity Company, and moved to dismiss or strike plaintiffs' class action allegations. See Defs.' Mot. to Dismiss [Dkt. #8].
In Count II, plaintiffs allege that defendants failed to advise plaintiffs and the putative class that, inter alia: (a) their claims would be submitted to a computer system known as "Colossus," which would result in underpayment of claims; (b) defendants would extend low offers and thus require plaintiffs and putative class members to engage in litigation of their claims; and (c) defendants would fail to engage in meaningful alternative dispute resolution. Compl. ¶¶ 27-32. Plaintiffs also allege that defendants have engaged in "misleading advertising campaigns" designed to encourage plaintiffs and others to purchase uninsured motorist coverage knowing they would unfairly discourage or delay prompt resolution of the claims. Compl. ¶¶ 24-26. Defendants move to dismiss plaintiffs' CPPA claim, asserting that plaintiffs fail to state a claim upon which relief could be granted.
Under Federal Rule of Civil Procedure 12(b)(6), a federal district court must dismiss a Complaint if it does not "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). "Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "Threadbare recitals of theelements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. Courts must accept as true all factual allegations in the complaint and draw all reasonable inferences in favor of the plaintiffs, but need not "accept inferences unsupported by facts or legal conclusions cast in the form of factual allegations." See City of Harper Woods Emps.' Ret. Sys. v. Olver, 589 F.3d 1292, 1298 (D.C. Cir. 2009).1
The District of Columbia's CPPA makes it a violation to either "misrepresent as to a material fact which has a tendency to mislead," or "fail to state a material fact if such failure tends to mislead." D.C.Code § 28-3904(e), (f). This prohibition applies "whether or not any consumer is in fact misled, deceived or damaged thereby[.]" Id. at § 28-3904(a). "A person bringing suit under these sections need not allege or prove intentional misrepresentation or failure to disclose to prevail on a claimed violation," but "must allege a material fact that tends to mislead." Grayson v. AT & T Corp., 15 A.3d 219, 251 (D.C.2011) (internal quotation marks omitted). "[A] claim of an unfair trade practice [under the CPPA] is properly considered in terms of how the practice would be viewed and understood by a reasonable consumer." Pearson v. Chung, 961 A.2d 1067, 1075 (D.C. 2008).
I agree with defendants that Count II should be dismissed. First, the Complaint merely sets forth vague and conclusory allegations regarding defendants' claim handlingprocesses and policies which defendants supposedly failed to disclose. See Compl. ¶¶ 27-32. Under Section 28-3904(f), a plaintiff "must prove only that defendant failed to disclose a material fact," where the omission "had the tendency to mislead" Beck v. Test Masters Educ. Serv's Inc., 994 F.Supp.2d 90, 96 (D.D.C. 2013) (emphasis in original). As in Cannon v. Wells Fargo Bank, N.A., 926 F. Supp. 2d 152 (D.D.C. 2013), there are no allegations about how plaintiffs responded to these purported omissions or what they would have done absent the alleged omissions. The Complaint merely sets out conclusory allegations of certain purported deficiencies in defendants' claims handling processes, without factual allegations to support how such failures tend to mislead consumers. In the absence of any allegations as to how plaintiffs would have responded absent the purportedly misleading omissions, "there are no allegations in the Complaint that the alleged omissions were in fact misleading to anyone, much less a reasonable consumer." Id. at 174.
Second, several of plaintiffs' allegations reflect legal assessments masquerading as purportedly omitted facts. See Compl. ¶ 28 (); Compl. ¶ 30 (); Compl; ¶ 31 (); Compl. ¶ 32 (). Plaintiffs' several...
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