Tucker v. Am. Int'l Grp., Inc.

• Decision Date: 28 March 2013
• Docket Number: No. 3:09–CV–1499 (CSH).,3:09–CV–1499 (CSH).
• Parties: Teri TUCKER, Plaintiff, v. AMERICAN INTERNATIONAL GROUP, INC.; National Union Fire Insurance Company of Pittsburgh, PA., A Subsidiary of American International Group, Inc., Defendants.
• Court: U.S. District Court — District of Connecticut

936 F.Supp.2d 1

Teri TUCKER, Plaintiff,

v.AMERICAN INTERNATIONAL GROUP, INC.; National Union Fire Insurance Company of Pittsburgh, PA., A Subsidiary of American International Group, Inc., Defendants.

No. 3:09–CV–1499 (CSH).

United States District Court,

D. Connecticut.

March 28, 2013.

Jeffrey S. Bagnell, Scott R. Lucas, Lucas Bagnell Varga LLC, Southport, CT, for Plaintiff.

Dennis O. Brown, Joseph R. Geoghegan, Gordon & Rees LLP, Glastonbury, CT, for Defendants.

RULING ON DEFENDANTS' MOTION TO DISMISS COUNT THREE OF AMENDED COMPLAINT (DOC. # 128), DEFENDANTS' MOTION TO STRIKE CERTAIN PORTIONS OF PLAINTIFF'S AMENDED COMPLAINT (DOC. # 129) & PLAINTIFF'S MOTION FOR SANCTIONS UNDER FED. R. CIV. P. 37(b) & (c) (DOC. # 144)

HAIGHT, Senior District Judge:

I. BACKGROUND

Plaintiff Teri Tucker (“Plaintiff” or “Tucker”) has brought this action to recover damages from her former employer's insurers, American International Group, Inc. (“AIG”) and National Union Fire Insurance Company of Pittsburgh, PA (“National Union”) (collectively “Defendants”), arising from her unlawful discharge in 2003, pursuant to an employment practices liability insurance policy (herein “EPL Policy”). In this action, she seeks to collect from defendant insurers the $4 million judgment in her favor in Tucker v. Journal Register East, Doc. # 3:06–CV–307 (SRU) (herein “ Tucker I ”), the prior action against her former employer, Journal Register East (“JRE”).¹

The factual background of the case has been recounted in detail in a series of prior opinions by the Court, at 728 F.Supp.2d 114 (D.Conn.2010), 745 F.Supp.2d 53 (D.Conn.2010), 2011 WL 6020851 (D.Conn. Dec. 2, 2011), 2012 WL 314866 (D.Conn. Jan. 31, 2012), 2012 WL 685461 (D.Conn. Mar. 2, 2012), and 281 F.R.D. 85 (D.Conn.2012). Familiarity is assumed with those opinions and the facts recounted in them.

In her Amended Complaint (Doc. # 126), Tucker has included the following claims: breach of contract; breach of the implied covenant of good faith and fair dealing; a claim to recover as a subrogee of JRE under Connecticut's direct action statute, Conn. Gen. Stat. § 38a–321; violation of the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. § 42–110a, et seq.; procedural bad faith (in handling Tucker's claim) in violation of Connecticut common law; and equitable estoppel (to prevent Defendants “from denying coverage of [her] claim after waiting 4.3 years after [that] claim was first submitted to deny coverage, and only after a substantial adverse verdict,” Doc. # 126, ¶ 113).

For purposes of the motions considered herein, the Court notes that when Plaintiff amended her Complaint, in compliance with the Court's Order (Doc. # 123), she supplemented the facts to accurately reflect the current state of events following her entry into a stipulated settlement of the underlying action, Tucker I.² Doc. # 126 (Amended Complaint, filed 12/2/2011). In addition to making some minor changes of language and inserting facts regarding AIG letters respectively acknowledging and denying coverage of her claims, Plaintiff has principally supplemented the facts in paragraphs 70 to 73 to describe the settlement she entered with JRE in Tucker I. Id., p. 17 (¶¶ 70–73). In particular, she clarified that on January 5, 2011, her “unsecured claim in Journal Register's bankruptcy was reduced to $3 million in exchange for Journal Register's agreement to waive any objections to her claim in bankruptcy court.” ³Id., p. 17 (¶ 70). She and Journal Register agreed that said compromise “would not affect in any way her rights to pursue collection of the $4 million judgment in the underlying case from the [D]efendants.” Id. In addition, on January 5, 2011, “Journal Register expressly assigned to Tucker all its rights against the [D]efendants regarding Tucker's $4 million judgment in the underlying” action, Tucker I. Id. (¶ 71). “Journal Register withdrew all post-trial motions pending in the underlying action ... with prejudice and agreed ‘to be forever barred from prosecuting said motions or seeking to affect the Judgment in any way, including through appeal.’ ” ⁴Id. (¶ 72); see also Doc. # 128–2, Ex. A (“Stipulation”), p. 5, at ¶ 4. Tucker concludes and alleges that in these circumstances, she “possesses a final judgment in the underlying action in the amount of $4 million and now stands in the shoes of the insured under the policies issued to [t]he Journal Register.” Doc. # 126 (¶ 73).

Pending before the Court are the following motions: (1) Defendants' Motion to Dismiss Count Three (Doc. # 128); (2) Defendants' Motion to Strike Certain Portions of Plaintiff's Amended Complaint (Doc. # 129), and (3) Plaintiff's Motion for Sanctions under Fed.R.Civ.P. 37(b) and (c) (Doc. # 144).⁵ The Court will resolve each motion in turn.

II. DISCUSSION

A. Defendants' Motion to Strike Count Three (Doc. # 128)

1. Standard of Review—Motion to Dismiss under Fed.R.Civ.P. 12(b)(6)

“[T]he purpose of Federal Rule of Civil Procedure 12(b)(6) ‘is to test, in a streamlined fashion, the formal sufficiency of the plaintiff's statement of a claim for relief without resolving a contest regarding its substantive merits.’ ” Halebian v. Berv, 644 F.3d 122, 130 (2d Cir.2011) (quoting Global Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 155 (2d Cir.2006) (emphasis omitted)).⁶ Put simply, in ruling on a Rule 12(b)(6) motion, the court “assesses the legal feasibility of the complaint, but does not weigh the evidence that might be offered to support it.” Global Network Commc'ns, Inc., 458 F.3d at 155.⁷

“To survive a [Rule 12(b)(6) ] motion to dismiss, a complaint must contain sufficientfactual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The Second Circuit has adhered to the United States Supreme Court's seminal “plausibility” standard set forth in Iqbal.See Gibbons v. Malone, 703 F.3d 595, 599 (2d Cir.2013) (“To survive a motion to dismiss [pursuant to Rule 12(b)(6) ], a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.”) (citing and quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937);Absolute Activist Value Master Fund, Ltd. v. Ficeto, 677 F.3d 60, 65 (2d Cir.2012) (same).

In deciding whether to grant a Rule 12(b)(6) dismissal, the court construes the complaint liberally, “accepting all well-pleaded factual allegations in the complaint as true and drawing all inferences in favor of the plaintiff.” See Lopez v. Jet Blue Airways, 662 F.3d 593, 596 (2d Cir.2011) (citing Twombly, 550 U.S. at 555–56, 127 S.Ct. 1955).See also Brod v. Omya, Inc., 653 F.3d 156, 164 (2d Cir.2011); MLSMK Inv. Co. v. JP Morgan Chase & Co., 651 F.3d 268, 273 (2d Cir.2011); Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir.2002). “[W]hether a complaint states a plausible claim for relief will [ultimately] ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 663–64, 129 S.Ct. 1937. When “well-pleaded factual allegations” are present, “a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” 556 U.S. at 664, 679, 129 S.Ct. 1937.Accord Ruston v. Town Bd. for the Town of Skaneateles, 610 F.3d 55, 58–59 (2d Cir.2010). Factual disputes do not factor into a plausibility analysis under Iqbal and its progeny.

“Although all allegations contained in the complaint are assumed to be true, this tenet is ‘inapplicable to legal conclusions.’ ” LaMagna v. Brown, 474 Fed.Appx. 788, 789 (2d Cir.2012) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937).See also Amaker v. New York State Dept. of Corr. Servs., 435 Fed.Appx. 52, 54 (2d Cir.2011) (same). The Court is not “bound to accept conclusory allegations or legal conclusions masquerading as factual conclusions.” Faber v. Metro. Life Ins. Co., 648 F.3d 98, 104 (2d Cir.2011) (quoting Rolon v. Henneman, 517 F.3d 140, 149 (2d Cir.2008) (Sotomayor, J.) (internal quotation marks omitted)). In sum, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955).Rule 8 of the Federal Rules of Civil Procedure simply “does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Iqbal, 556 U.S. at 678–79, 129 S.Ct. 1937.

“In adjudicating a Rule 12(b)(6) motion, a district court must confine its consideration to facts stated on the face of the complaint, in documents appended to the complaint or incorporated in the complaint by reference, and to matters of which judicial notice may be taken.” Leonard F. v. Israel Discount Bank of New York, 199 F.3d 99, 107 (2d Cir.1999) (citation omitted). The court's review is thus “limited to the facts as asserted within the four corners of the complaint, the documents attached to the complaint as exhibits, and any documents incorporated in the complaint by reference.” ⁸McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir.2007).

In sum, 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.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955);accord Gibbons, 703 F.3d at 599. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Moreover, “[w]here a complaint pleads facts that are ‘merely consistent with’ a defendant's liability, it ‘stops short of the line between...