Shields v. Metro. Prop. & Cas. Ins. Co.
| Decision Date | 14 December 2020 |
| Docket Number | CIVIL ACTION NO. 1:19-CV-00222-GHD-RP |
| Parties | TASHAL SHIELDS, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED PLAINTIFFS v. METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY DEFENDANT |
| Court | U.S. District Court — Northern District of Mississippi |
Presently before the Court in this putative class action insurance dispute is the Defendant's Amended Motion to Dismiss pursuant to Rule 12 (b)(1), 12(b)(2), 12(b)(6), and 12(h)(3) of the Federal Rules of Civil Procedure [15, 26] and the Defendant's motion to strike non-Mississippi class action allegations [28]. Upon due consideration and as set forth below, the Court finds that the motions should be denied. Further, the Court shall lift the stay of proceedings that was previously entered in this matter [20, 25].
The Plaintiff, Tashal Shields, maintains a residence in Corinth, Mississippi. [First Amended Class Action Complaint, Doc. No. 23, at 1]. insured the residence under a Homeowners Policy, No. 0720848000, written by the Defendant Metropolitan Property and Casualty Insurance Company, and paid the requisite annual premiums for the coverage. [Id. at 2-3]. The policy provides, inter alia, that payment for covered loss may be for "Actual Cash Value," ("ACV"), which may include a deduction for depreciation of certain costs. [Id. at 3].
In April 2017, while insured under the policy, Plaintiff's residence suffered direct physical damage by a covered named peril. [Id.] The Plaintiff promptly notified the Defendant of the loss and made a claim under the insurance policy. [Id.] The Defendant inspected the Plaintiff's residence and determined that the loss was covered under the insurance policy. [Id.]
On April 19, 2017, the Defendant notified the Plaintiff that the payment she was receiving was the ACV as calculated by Defendant. [Id. at 3-4]. In calculating the Plaintiff's ACV payment, the Defendant deducted depreciation from the replacement cost value (RCV).1 [Id.] The Plaintiff alleges that Defendant's method of calculating the ACV resulted in a payment amount that is lower than the amount Plaintiff should have received under the Policy. [Id. at 4]. The Plaintiff argues that Defendant, in calculating the ACV, depreciated costs associated with labor; the Plaintiff asserts that labor should not be depreciated because it does not depreciate in value over time and because the policy language is ambiguous regarding the depreciation of labor costs. [Id. at 4-5]. Based on Defendant's alleged practice of depreciating labor costs, the Plaintiff avers that her ACV payment was less than the amount she was entitled to receive under the policy, and that the Defendant thus breached its obligations under the policy.
The Plaintiff filed her Complaint in this matter on December 9, 2019 [1]; she then filed an Amended Complaint on April 1, 2020 [23]. In the Amended Complaint, the Plaintiff alleges that the Defendant breached its contractual duty to pay Plaintiff and members of the proposed class the true ACV of their claims by wrongfully depreciating labor costs (Count I); the Plaintiff also seeks a declaratory judgment decreeing that the policy, as written, prohibits the Defendant from depreciating labor costs when calculating losses and ACV (Count II). Pursuant to Federal Rule of Civil Procedure 12(b)(6), the Defendant now moves to dismiss Plaintiff's entire complaint.
Under Rules 12(b)(1) and 12(h)(3), if the Court lacks subject matter jurisdiction to adjudicate one or more of the Plaintiff's claims because the Plaintiff lacks standing, those claims must be dismissed. Harold H. Huggins Realty, Inc., v. FNC, Inc., 634 F.3d 787, 795, n.2 (5th Cir. 2011). In analyzing a motion to dismiss under Rule 12(b)(1) or 12(h)(3), the court must accept as true the allegations set forth in the complaint. Crane v. Johnson, 783 F.3d 244, 250-51 (5th Cir. 2015).
Under Rule 12(b)(2), when a non-resident defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the Court possesses personal jurisdiction over the defendant. Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985). In determining whether a prima facie case for personal jurisdiction has been established, the allegations of the complaint, unless controverted by opposing affidavits, must be taken as true and all conflicts in the facts must be resolved in favor of the plaintiff. Id.
When deciding a Rule 12(b)(6) motion to dismiss, the Court is limited to the allegations set forth in the complaint and any documents attached to the complaint. Walker v. Webco Indus., Inc., 562 F. App'x 215, 216-17 (5th Cir. 2014) (citing Kennedy v. Chase Manhattan Bank USA, NA, 369 F.3d 833, 839 (5th Cir. 2004)). On a motion to dismiss filed pursuant to Rule 12(b)(6), the Court accepts all well-pleaded facts in the complaint as true and views those facts in the light most favorable to the Plaintiff. Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011). "[A plaintiff's] complaint therefore 'must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Phillips v. City of Dallas, Tex., 781 F.3d 772, 775-76 (5th Cir. 2015) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009)).
A claim is facially plausible when the pleaded factual content "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S. Ct. 1937 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). "[P]laintiffs must allege facts that support the elements of the cause of action in order to make out a valid claim." Webb v. Morella, 522 F. App'x 238, 241 (5th Cir. 2013) (). "[C]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Id. (quoting Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir. 1993) (internal quotation marks omitted)). "Dismissal is appropriate when the plaintiff has not alleged 'enough facts to state a claim to relief that is plausible on its face' and has failed to 'raise a right to relief above the speculative level.'" Emesowum v. Houston Police Dep't, 561 F. App'x 372, 372 (5th Cir. 2014) (quoting Twombly, 550 U.S. at 555, 570, 127 S. Ct. 1955).
The Defendant first moves to dismiss the Plaintiff's complaint on the basis of standing, pursuant to Rules 12(b)(1) and 12(h)(3). In essence, the Defendant argues that the Plaintiff, who is a putative class representative, lacks Article III standing to bring claims as a class representative on behalf of non-Mississippi resident putative class members under the laws of states in which shedoes not reside. This argument has been rejected by district courts in the Fifth Circuit as well as elsewhere. See, e.g., Dragoslavic v. Ace Hardware Corp., 274 F. Supp. 3d 578, 585 (E.D. Tex. 2017) (); Broquet v. Microsoft Corp., No. 08-094, 2008 WL 2965074, at *2 (S.D. Tex. July 30, 2008). In short, the Defendant's reliance on Article III standing to challenge whether the Plaintiff can represent putative class members from other states is misplaced - the Plaintiff alleges injury and seeks to bring claims on behalf of herself and other purported similarly situated individuals who allegedly suffered a similar injury at the hands of the Defendant, and the Defendant does not aver that the Plaintiff fails to possess standing to bring her claims or claims on behalf of Mississippi resident class members. As other courts have made clear, this situation clearly presents a case or controversy between the Plaintiff, the putative class members, and the Defendant such that the Plaintiff possesses standing to bring these claims on a representative basis and the Court possesses subject matter jurisdiction to adjudicate this dispute. Langan v. Johnson & Johnson Consumer Cos., Inc., 897 F.3d 88, 96 (2nd Cir. 2018); Morrison v. YTB Int'l, Inc., 649 F.3d 533, 536 (7th Cir. 2011); Dragoslavic, 274 F. Supp. 3d at 585. The Court expresses no opinion today on whether these claims are proper for class certification as that determination will occur at a later date, but rather simply that the Plaintiff possesses standing to bring the claims at this juncture. The Defendant's motion to dismiss the claims on this basis pursuant to Rules 12(b)(1) and 12(h)(3) is therefore denied.
Next, the Defendant argues that the Court does not possess personal jurisdiction over the Defendant relative to the claims of the putative out-of-state class members, and that those claims should be dismissed pursuant to Rule 12(b)(2). As with the Defendant's argument regardingstanding, this argument for dismissal likewise fails. The primary case upon which the Defendant relies, Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty., 137 S. Ct. 1773 (2017) dealt with the issue of a state court's power to exercise personal jurisdiction over a defendant relative to out-of-state plaintiffs' claims in a single mass tort action, not a class action, when those plaintiffs resided in other states and their claims had no connection to California. Id. at 1783-84. The Supreme Court specifically noted in Bristol-Myers that its decision did not...
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