Snyder v. Acord Corp.
| Decision Date | 15 January 2016 |
| Docket Number | Civil Action No. 1:14-cv-01736-JLK |
| Parties | DALE SNYDER, et al., Plaintiffs, v. ACORD CORPORATION, et al., Defendants. |
| Court | U.S. District Court — District of Colorado |
The Plaintiffs in this action are a handful of insured homeowners who lost their homes and have brought a class action including RICO, antitrust, and a raft of state law claims against their insurance companies, as well as scores of other insurers and related organizations, related to those losses. The parties have now fully briefed several motions to dismiss on various grounds. This opinion addresses the Defendants' main motion to dismiss (joined in by all defendants), which argues that each of Plaintiffs' 23 claims for relief should be dismissed under Rule 8 and Rule 12(b)(6). Doc. 390. For the reasons that follow, the Defendants' motion is GRANTED.1
Plaintiffs are 17 homeowners (and one estate of a deceased homeowner) whose Colorado homes were destroyed by fires in February and June of 2012, and one plaintiff whose home was destroyed by flood damage in September of 2013. See Third Amended Complaint ("TAC") (Doc. 380) ¶¶ 10-27, 637, 666, 700, 726, 747, 767, 792, 817, 835, 859, 907. The named Plaintiffs had homeowner's insurance policies issued by ten defendants Shelter Mutual Insurance Company, American Family Mutual Insurance Company, United Services Automobile Insurance, State Farm Fire and Casualty Company, Liberty Mutual, Country Mutual Insurance Company, Allstate Insurance Company, Colorado Farm Bureau, Nationwide Mutual Insurance Company, and United Fire & Casualty Company ("Selling Defendants") at the time of their losses. See TAC ¶¶ 626, 658, 685, 722, 736-37, 759, 785, 811, 827-28, 852, 878-79.
Plaintiffs allege that their claims were mishandled in various ways and that they were misled regarding the terms of their insurance policies and how those terms would be applied. See generally TAC ¶¶ 621-972. In general, Plaintiffs allege that they were systematically and purposefully underinsured, see, e.g., TAC ¶¶ 653, 709-10, 726, 756-57, 776, 791, 808, 822, 837, and unaware that they would have to repair or replace their homes within a short time frame in order to receive the "Actual Cash Value" of their property, see, e.g., TAC ¶¶ 640, 668, 819, 844. Plaintiffs also complain that they did not know that "Actual Cash Value" would be defined as the cost of repair or replacement less applicable depreciation. See, e.g., TAC ¶¶ 392, 395, 459, 802, 842, 898, 910, 917-18, 920. Plaintiffs have numerous other complaints about how their claims were processed and handled. See, e.g., TAC ¶¶ 643, 677-78, 694, 709, 725, 775, 801, 873.
In addition to the named Plaintiffs' claims against their insurers, Plaintiffs also bring their claims against 103 other defendants, including insurance companies, holding companies, a consulting firm, and a standard setting organization for the insurance industry known as ACORD (the "Non-Selling Defendants"). See TAC ¶¶ 28-140. Plaintiffs allege a "monumental" conspiracy centered around the ACORD organization, with the scores of Non-Selling Defendants "involved in an enterprise with ACORD as either members, strategic partners, associates, or non- member associates, and [as] stakeholders in the enterprise." TAC ¶ 151; see id. at ¶ 1179. Although Plaintiffs do not directly allege that ACORD defines the terms or sets any standards in insurance contracts about which the named Plaintiffs complain, see TAC ¶¶ 184-223, they allege that the ACORD organization served as a vehicle for a conspiracy to define and establish those standards. See Doc. 447-1 at 27.
Plaintiffs filed their Complaint in this action on June 21, 2014, and a First Amended Complaint on July 11, 2014. Docs. 1 & 18. On August 19, 2014, Defendants United Services Automobile Association and USAA Casualty Insurance Company moved to dismiss the First Amended Complaint on the grounds that it failed to comply with Rule 8. See Doc. 223. On September 4, 2014, Plaintiffs filed a response to this motion offering to redraft the First Amended Complaint in order to make it "more streamlined," and so that the "facts of the background allegations can be tied more clearly to the different claims for relief." Doc. 291 at 30-31. In light of these representations, the Court ordered the First Amended Complaint stricken and granted leave for Plaintiffs to file a Second Amended Complaint. Doc. 304. On October 14, 2014, Plaintiffs filed their Second Amended Complaint, see Doc. 339, and on November 24, 2014 Plaintiffs filed a stipulated motion to file a Third Amended Complaint in order to make numerous corrections. See Docs. 376, 377. This motion was granted and Plaintiffs' Third Amended Complaint ("TAC") was filed on November 25, 2014. Doc. 380.
On December 4 and 5, 2014, certain defendants filed numerous motions to dismiss the Third Amended Complaint on various bases. See Docs. 389-392, 394-98, 400, 402, 406, 410-12; see generally Doc. 419. In particular, certain defendants who do not sell insurance in Colorado moved to dismiss for lack of personal jurisdiction. See Doc. 389. Defendant State Farm filed a motion to dismiss on behalf of all Defendants (see Doc. 419 at 1), arguing that the TAC fails to comply with Rule 8 and fails to state any claim for relief. See Doc. 390. Certain defendants filed a motion to dismiss arguing that the Plaintiffs have failed to state any claim for relief against them because they had no contract, transaction, or relationship with the named plaintiffs at all. See Doc. 392. Plaintiffs filed an omnibus response to the various motions to dismiss on June 2, 2015, see Doc. 445, and Defendants filed their replies on June 15, 2015. See Docs. 458-462, 464-65. This opinion addresses State Farm's motion to dismiss, which argues that each of Plaintiffs' 23 claims for relief should be dismissed under Rule 8 and Rule 12(b)(6). Doc. 390.
Rule 8 requires that Plaintiffs' complaint provide "a short and plain statement of the claim showing that the pleader is entitled to relief," with allegations that are "simple, concise, and direct." Fed. R. Civ. P. 8(a)(2), (d)(1). I find that Plaintiffs' 260 page, 1,363 paragraph TAC fails to meet this standard.
In the first place, the sheer length of Plaintiffs' complaint (260 pages and 1,363 numbered paragraphs) suggests that Plaintiffs have failed to comply with Rule 8. See Mann v. Boatright, 477 F.3d 1140, 1148 (10th Cir. 2007) (); Schupper v. Edie, 193 F. App'x 744, 745-46 (10th Cir. 2006) (unpublished) (); Luciano v. Perez, No. 06-cv-01284, 2007 WL 1306476, at *2 (D. Colo. May 3, 2007). While it is true that "in complex cases, the complaint will be more extended and may require greater particularity," In re: Williams Sec. Litig., 339 F. Supp. 2d 1242, 1268 (N.D. Okla. 2003), as Defendants point out, there are numerous sections of the TAC which are of questionable relevance to any of the claims asserted. See, e.g., TAC ¶¶ 235-42, 352, 385, 599-600 (); id. at ¶¶ 577-78 (); id. at ¶¶ 525-564 (); id. at ¶¶ 604-620 (). In addition, there is critical information missing from the TAC - although Plaintiffs bring breach of contract claims, see TAC ¶¶ 1249-1302, and allege that certain terms of their policies were unclear, see TAC ¶¶ 1218, 1240, they nowhere attach or quote their insurance contracts themselves, which are central to their claims against the Selling Defendants.
More importantly, the TAC fails to satisfy Rule 8 because of its repeated reference to all 113 "Defendants" as a group. The 113 Defendants include not only the 10 Selling Defendants who sold insurance policies to the named Plaintiffs, but also a consulting firm, see TAC ¶ 87, scores of other insurance companies, holding companies, and the ACORD organization itself. See TAC ¶ 28-140. Rather than "explain what each defendant did to [each plaintiff]; when the defendant did it; [and] how the defendant's action harmed [each plaintiff]," Nasious v. Two Unknown B.I.C.E. Agents, 492 F.3d 1158, 1163 (10th Cir. 2007), Plaintiffs repeatedly bring their claims against "Defendants" as an undifferentiated group. See, e.g., TAC ¶¶ 1178, 1196, 1218. For example, although only a small minority (10 out of 113) of the Defendants are alleged to have sold one of the named Plaintiffs an insurance policy, Plaintiffs repeatedly state allegations that do not make sense for the Non-Selling Defendants. See, e.g., TAC ¶ 1252 ();¶ 1285 (); ¶ 1309 (). This type of group pleading violates Rule 8. See Robbins v. Oklahoma, 519 F.3d 1242, 1250 (10th Cir. 2008); Chambers v. Cooper, No. 13-cv-00393, 2014 WL 561371, at *1 (D. Colo. Feb. 12, 2014).
In addition, Plaintiffs' TAC violates Rule 8 through repeated use of impermissible shotgun pleading. Each of Plaintiffs' claims for relief incorporates by reference the...
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