Smith et al v. State Farm Fire and Casualty Company

Filing 10

MEMORANDUM OF OPINION. Signed by Judge L Scott Coogler on 6/6/2016. (PSM)

FILED
2016 Jun-06 AM 11:21
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WESTERN DIVISION
ROTISHA SMITH, et al.,
Plaintiffs,
vs.
STATE FARM FIRE &
CASUALTY CO.,
Defendant.

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7:16-cv-00572-LSC

Memorandum of Opinion
Plaintiffs Rotisha Smith (“Smith”) and Blackbelt Construction, LLC
(“Blackbelt”) (collectively “Plaintiffs”) filed this action against State Farm Fire
and Casualty Company (“State Farm”) alleging breach of contract, bad faith
failure to pay, fraud, negligence, and wantonness. Before the Court is State Farm’s
Fed. R. Civ. P. 12(b)(6) motion to dismiss Plaintiffs’ negligence and wantonness
claims. (Doc. 2.) For the reasons stated below, State Farm’s motion to dismiss
(Doc. 2) is due to be granted in part and denied in part.

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I.

Background1
This case arises out of State Farm’s failure to pay Smith and Blackbelt after

Smith’s home and personal property were damaged. Smith held a homeowner’s
insurance policy with State Farm and she submitted a claim for payment for her
losses. Around that time, Smith began receiving estimates from construction
companies regarding the cost of repairing her home. Blackbelt submitted such an
estimate to both Smith and State Farm. State Farm reached out to Blackbelt
through its claims adjuster, who told Blackbelt that State Farm would pay Blackbelt
the estimate price to repair Smith’s home. Blackbelt proceeded with the repairwork and completed it. Only after Blackbelt had finished the repairs did State Farm
inform it that State Farm was no longer willing to pay for the repairs. Blackbelt
contends that State Farm was negligent and wanton in its dealings with Blackbelt
when representing that it would pay for the repairs and then refusing to do so after
the repairs had been completed.
II.

Standard of Review
A pleading that states a claim for relief must contain “a short and plain

statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ.

For purposes of a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure,
the Court treats facts alleged in the complaint as true and construes them in the Plaintiff’s favor.
Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1215 (11th Cir. 2012).
1

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P. 8(a)(2). However, the facts alleged in the complaint must be specific enough that
the claim raised is “plausible.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“To
survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to state a claim for relief that is plausible on its face.”) (internal
quotations omitted) (emphasis added). “To be plausible on its face, the claim must
contain enough facts that ‘allow[] the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.’” Pouyeh v. Univ. of Ala. Dep’t of
Ophthamology, No. CV-12-BE-4198-S, 2014 WL 2740314, at *3 (N.D. Ala. June 16,
2014) (quoting Iqbal, 556 U.S. at 678) (alteration in original). Conclusory
statements of law may “provide the framework of a complaint,” but the plaintiff is
required to support them with “factual allegations.” Iqbal, 556 U.S. at 679.
The process for evaluating the sufficiency of a complaint has two steps. This
Court “begin[s] by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.” Id. Conclusory
statements and recitations of a claim’s elements are thus disregarded for purposes
of determining whether a plaintiff is entitled to access discovery. See Randall v.
Scott, 610 F.3d 701, 709 (11th Cir. 2010) (citing Iqbal, 556 U.S. at 687). Next, this
Court “assume[s] [the] veracity” of “well-pleaded factual allegations” and
“determine[s] whether they plausibly give rise to an entitlement to relief.” Iqbal,
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556 U.S. at 679. A complaint’s factual matter need not be detailed, but it “must . . .
raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007).
In reviewing the complaint, this Court “draw[s] on its judicial experience
and common sense.” Iqbal, 556 U.S. at 679. Nonetheless, “[a] well-pleaded
complaint may proceed even if it strikes a savvy judge that actual proof of [the facts
alleged] is improbable.” Twombly, 550 U.S. at 556. This Court considers only “the
face of the complaint and attachments thereto” in order to determine whether
Plaintiff states a claim for relief. Starship Enters. of Atlanta, Inc. v. Coweta Cnty.,
Ga., 708 F.3d 1243, 1252 n.13 (11th Cir. 2013). Generally, the complaint should
include “enough information regarding the material elements of a cause of action
to support recovery under some ‘viable legal theory.’” Am. Fed’n of Labor & Cong.
of Indus. Orgs v. City of Miami, Fla., 637 F.3d 1178, 1186 (11th Cir. 2011) (quoting
Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683-84 (11th Cir. 2001)).
III. Discussion
State Farm contends that dismissal of Plaintiffs’ negligence and wantonness
claims is proper because Alabama law does not recognize a claim for negligent or
wanton handling of an insurance claim. Smith acknowledges that State Farm’s
motion to dismiss her negligence and wantonness claims is due to be granted
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because those claims arose out of State Farm’s handling of her insurance claim.
Blackbelt opposes dismissal of its own negligence and wantonness claims against
State Farm. The Alabama Supreme Court “has consistently refused to recognize a
cause of action for the negligent handling of insurance claims” and it does not
“recognize a cause of action for alleged wanton handling of insurance claims.”
Kervin v. S. Guar. Ins. Co., 667 So. 2d 704 (Ala. 1995). However, this does not
mean that one can never assert a negligence claim in the insurance context.
Specifically, “a duty can arise when [a] person volunteers to act on behalf of
another. This principle of law applies to insurance agents and insurance
companies.” Palomar Ins. Corp. v. Guthrie, 583 So. 2d 1304, 1306 (Ala. 1991).
Here, the complaint alleges that State Farm told Blackbelt that it would pay
Blackbelt to repair Smith’s home, thus alleging that State Farm assumed the duty
to pay Blackbelt.2 The complaint goes on to state that State Farm told Blackbelt
that it was not going to pay for the repairs, thus alleging a breach of that duty,
which caused Blackbelt to incur damages. These allegations are sufficient to state a
claim for negligence and wantonness under Fed. R. Civ. P. 8, and Blackbelt’s
claims are thus not subject to dismissal under Fed. R. Civ. P. 12(b)(6).
While State Farm disputes whether it could have paid Blackbelt directly, attaching Smith’s
insurance policy to its reply brief and citing a provision stating that any loss “shall be paid to the
mortgagee and [the insured],” the Court does not construe this provision as precluding State
Farm from assuming a duty to pay Blackbelt directly.
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IV. Conclusion
For the reasons stated above, State Farm’s motion to dismiss (Doc. 2) is due
to be GRANTED as to Smith’s negligence and wantonness claims, and DENIED
as to Blackbelt’s negligence and wantonness claims. A separate Order consistent
with this opinion will be entered.
DONE and ORDERED on June 6, 2016.

_____________________________
L. Scott Coogler
United States District Judge
182184

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