Zatarain v. Acceptance Insurance Company
MEMORANDUM OPINION AND ORDER GRANTING 8 MOTION to Dismiss and this action is hereby DISMISSED WITH PREJUDICE. Signed by Judge Virginia Emerson Hopkins on 2/2/2016. (JLC)
2016 Feb-02 PM 01:27
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
) Case No.: 4:15-CV-1148-VEH
INSURANCE COMPANY, a foreign )
MEMORANDUM OPINION AND ORDER
About seven years ago,1 Carlos Zatarain (“Carlos”), a Texan, came to
Alabama with his truck, but he did not leave with it. This is because David Smith,
employed by Rickey and Sheila Brown (“Rickey and Sheila”), drove the truck to
Rickey and Sheila’s “Truck Farm Salvage” in Rainsville, Alabama without
Carlos’s permission, where it sat until Rickey and Sheila sold the truck to Dana
Davis for $15,000.
Like Texas, one should not mess with Carlos. He filed suit against Rickey,
Sheila, and Dana Davis, asserting a salmagundi of claims under Alabama law. In
The predecessor case was Zatarain v. Brown et al., No. 4:11-CV-03508-KOB (N.D.
Ala. Sept. 29, 2011). According to the complaint there, David Smith took the truck in May 2009.
total, Carlos sought one million dollars as recompense. From 2011, when the
complaint was filed, until June 2015, Carlos and his attorneys endured threats from
Rickey and Sheila, numerous cancelled and/or skipped hearings, and multiple
attempts to “settle” the case before a final judgment ultimately was entered against
Rickey and Sheila in the amount of $156,841.50.
During one of the settlement discussions, Rickey and Sheila offered to
assign Carlos the rights and benefits of an insurance policy they purchased for
Truck Farm Salvage, as its proprietors. Carlos accepted their offer, and Rickey and
Sheila contacted the insurance company, requesting that the company pay off
Carlos’s judgment. The company declined, and—still not one to be messed
with—Carlos filed this action against Acceptance Insurance Company, alleging
breach of contract, negligence, and bad faith. (See Doc. 1).
Acceptance Indemnity Insurance Company (“AIIC”), upon being served
with Carlos’s complaint, moved to dismiss it under Rule 12(b)(6). AIIC offered
five grounds for dismissal: 1) that Acceptance Insurance Company, the named
defendant, did not issue the policy;2 2) that the policy did not insure the parties to
the judgment; 3) that the assignment was ineffective to transfer rights in the
Carlos amended the complaint after AIID filed its motion, mooting this ground for
dismissal. (See doc. 18.).
property; 4) that personal and tort claims cannot be assigned under Alabama law;
and 5) that the proper claim for relief is one against AIIC for garnishment of the
policy under ALA. CODE § 27-23-2. The court is persuaded that the assignment to
Carlos was ineffective, so the action will be DISMISSED.
Generally, the Federal Rules of Civil Procedure require only that the complaint
provide “a short and plain statement of the claim showing that the pleader is entitled
to relief.” Fed. R. Civ. P. 8(a)(2). However, to survive a motion to dismiss brought
under Rule 12(b)(6), a complaint must “state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly (Twombly), 550 U.S. 544, 570 (2007).
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.” Ashcroft v. Iqbal (Iqbal), 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 556). That is, the complaint must include enough facts “to raise
a right to relief above the speculative level.” Twombly, 550 U.S. at 555 (citation and
footnote omitted). Pleadings that contain nothing more than “a formulaic recitation
of the elements of a cause of action” do not meet Rule 8 standards, nor do pleadings
suffice that are based merely upon “labels or conclusions” or “naked assertion[s]”
without supporting factual allegations. Id. at 555, 557 (citation omitted).
Once a claim has been stated adequately, however, “it may be supported by
showing any set of facts consistent with the allegations in the complaint.” Id. at 563
(citation omitted). Further, when ruling on a motion to dismiss, a court must “take the
factual allegations in the complaint as true and construe them in the light most
favorable to the plaintiff.” Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir.
2008) (citing Glover v. Liggett Group, Inc., 459 F.3d 1304, 1308 (11th Cir. 2006)).
Breach of Contract
In Alabama, an insurance “policy may be assignable or not assignable, as
provided by its terms.” ALA. CODE. §27-14-21. The policy insuring Rickey and
Sheila’s business provided that the “rights and duties under this policy may not be
transferred without [AIIC’s] written consent except in the case of death of an
individual named insured.” (Doc. 8-4 at 9). Because the policy requires AIIC’s
consent to assign it, and Carlos did not plead AIIC’s consent, AIIC reasons Carlos
Carlos responds that AIIC is improperly using its motion to dismiss as a motion
for summary judgment because AIIC has attached the policy to its motion as an
exhibit. Further, the policy—the one on which Carlos premises this lawsuit—is not
within Carlos’s possession,3 so Carlos asks the court to deny the motion so the case
may proceed to discovery. The court declines to do so.
“[A] document attached to a motion to dismiss may be considered by the court
without converting the motion into one for summary judgment only if the attached
document is: (1) central to the plaintiff's claim; and (2) undisputed.” Horsley v. Feldt,
304 F.3d 1125, 1134 (11th Cir. 2002). A document is “undisputed” if its authenticity
is not challenged. Id. Since the policy forms the entire basis for Carlos’s breach of
contract count, it is central to his claim. Cf. Day v. Taylor, 400 F.3d 1272, 1276 (11th
Cir. 2005) (permitting the district court to consider form contracts in motion to
dismiss complaint under § 1 of the Sherman Act). Here, the policy contains a
notarized statement that it is, in fact, a true and correct copy, and Carlos does not
dispute its authenticity. Thus, both requirements are satisfied, and the court may
consider the policy.
Because the policy prohibits assignment without AIIC’s consent, and because
neither Carlos nor AIIC allege AIIC’s consent, the assignment is null and void. The
contract claim must be DISMISSED.
To the extent Carlos’s response can be construed as a motion to request that this court
defer consideration of this motion pursuant to Rule 56(d), the court declines to wait. Among
other reasons, the policy became available to Carlos once AIIC filed its motion to dismiss.
Certain torts, such as bad faith, are personal and may not be assigned in
Alabama. Cash v. State Farm Fire & Cas. Co., 125 F. Supp. 2d 474, 477 (M.D. Ala.
2000). There is no right to recover under Alabama law for negligent claim handling.
Kervin v. So. Guar. Ins. Co., 667 So.2d 704, 706 (Ala. 1995). Carlos does not appear
to dispute this. (See doc. 14 at 4). Counts two and three of the complaint are
DISMISSED as well.4
It is usually not a good idea to sue for breach of contract without first
examining the document, all the more when the assignment came from two people
with whom you spent four years in federal litigation over a $15,000 truck. The
motion to dismiss is GRANTED. The action is DISMISSED WITH PREJUDICE.
DONE and ORDERED this 2nd day of February, 2016.
VIRGINIA EMERSON HOPKINS
United States District Judge
Carlos offers a few citations to Alabama cases discussing the favored status of the right
to assign contracts. But the issue is not whether Alabama permits the practice; it is whether this
contract permits it. The answer to that question is no—at least not without AIIC’s consent.
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