Jackson v. Allstate Insurance Company
ORDER granting 60 Motion for Partial Summary Judgment. Plaintiff's claims for unjust enrichment, violation of the Arkansas Insurance Code, outrage, bad faith, and promissory and equitable estoppel are dismissed with prejudice. Plaintiff's breach-of-contract claim remains. Signed by Judge Billy Roy Wilson on 12/27/2013. (jak)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
ALLSTATE INSURANCE COMPANY
Pending is Defendant’s Motion for Partial Summary Judgment (Doc. No. 60). Plaintiff
has responded.1 Defendant has replied.2 For reasons set out below, the Motion is GRANTED.
Plaintiff’s home was damaged by fire on February 22, 2012. At the time of the fire, the
home was insured by a policy issued by Defendant. Plaintiff filed a proof of loss seeking
coverage for her loss under the policy, but Defendant denied her claim, asserting that no
coverage was owed under the policy.
Plaintiff sued Defendant alleging breach of contract, unjust enrichment, violation of the
Arkansas Insurance Code, outrage, bad faith, and estoppel. Defendant seeks summary judgment
on all of Plaintiff’s claims save the breach-of-contract claim.
SUMMARY JUDGEMENT STANDARD
Summary judgment is appropriate only when there is no genuine issue of material fact, so
that the dispute may be decided on purely legal grounds.3 The Supreme Court has established
guidelines to assist trial courts in determining whether this standard has been met:
Doc. No. 90.
Doc. No. 101.
Holloway v. Lockhart, 813 F.2d 874 (8th Cir. 1987); Fed. R. Civ. P. 56.
The inquiry performed is the threshold inquiry of determining whether there is the
need for a trial -- whether, in other words, there are any genuine factual issues that
properly can be resolved only by a finder of fact because they may reasonably be
resolved in favor of either party.4
The Court of Appeals for the Eighth Circuit has cautioned that summary judgment is an
extreme remedy that should be granted only when the movant has established a right to the
judgment beyond controversy.5 Nevertheless, summary judgment promotes judicial economy by
preventing trial when no genuine issue of fact remains.6 I must view the facts in the light most
favorable to the party opposing the motion.7 The Eighth Circuit has also set out the burden of
the parties in connection with a summary judgment motion:
[T]he burden on the party moving for summary judgment is only to demonstrate,
i.e.,“[to point] out to the District Court,” that the record does not disclose a genuine
dispute on a material fact. It is enough for the movant to bring up the fact that the
record does not contain such an issue and to identify that part of the record which
bears out his assertion. Once this is done, his burden is discharged, and, if the record
in fact bears out the claim that no genuine dispute exists on any material fact, it is
then the respondent’s burden to set forth affirmative evidence, specific facts,
showing that there is a genuine dispute on that issue. If the respondent fails to carry
that burden, summary judgment should be granted.8
Only disputes over facts that may affect the outcome of the suit under governing law will
properly preclude the entry of summary judgment.9
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).
Inland Oil & Transp. Co. v. United States, 600 F.2d 725, 727 (8th Cir. 1979).
Id. at 728.
Id. at 727-28.
Counts v. MK-Ferguson Co., 862 F.2d 1338, 1339 (8th Cir. 1988) (quoting City of Mt.
Pleasant v. Assoc’d Elec. Coop., 838 F.2d 268, 273-74 (8th Cir. 1988) (citations omitted)).
Anderson, 477 U.S. at 248.
Quasi Contract Theories
Plaintiff asserts three contractual causes of action: breach of contract, unjust enrichment,
and estoppel. Under Arkansas law, no claim for unjust enrichment or estoppel will lie if there is
an express contract between the parties addressing the same subject matter.10 While there are
several exceptions to this rule,11 none apply here.
The parties’ dispute is centered on their express agreement embodied in the written
insurance policy issued by Defendant. Defendant denied Plaintiff’s claim, citing two provisions
in the policy. The first states that Defendant will not “cover any loss or occurrence in which any
insured person has concealed or misrepresented any material fact or circumstance.”12 The second
states that coverage is excluded for property loss caused by “intentional or criminal acts of or at
the direction of any insured person, if the loss that occurs: a) may be reasonably expected to
result from such acts; or b) is the intended result of such acts.”13 Plaintiff denies that either
provision applies. If Plaintiff prevails, Defendant will be obligated to insure her loss according
to the terms of the policy. If Plaintiff falls short, Defendant will have no obligation to cover her
loss as set forth in the exclusions of the policy.
See Servewell Plumbing, LLC v. Summit Contractors, Inc., 362 Ark. 598, 612 (2005);
Cmty. Bank of N. Ark. v. Tri-State Propane, 89 Ark. App. 272, 278 (2005); MDH Builders, Inc.
v. Nabholz Const. Corp., 70 Ark. App. 284, 290 (2000); Coleman’s Serv. Ctr., Inv. v. F.D.I.C.,
55 Ark. App. 275, 299 (1996).
See Campbell v. Asbury Auto., Inc., 2011 Ark. 157, at 22-23.
See Doc. No. 93-2.
Arkansas Insurance Code
Plaintiff alleges that Defendant violated the Arkansas Insurance Code’s Trade Practices
Act by denying her insurance claim.
As Defendant points out, however, there is no private cause of action for violations of the
Trade Practices Act.14 Accordingly, summary judgment is granted on Plaintiff’s claim for
violation of the Trade Practices Act.
Tort of Outrage
To prevail on a claim for outrage, a plaintiff must show that the defendant’s conduct
“was extreme and outrageous, beyond all possible bounds of decency, and was utterly intolerable
in a civilized community.”15
After reviewing the record, I am satisfied that Plaintiff has failed to show any conduct by
Defendant that would allow a jury to find that it went beyond all possible bounds of decency. It
is undisputed that Defendant investigated Plaintiff’s claim and denied coverage because it
believed, based on the evidence obtained during its investigation, that she, or someone under her
direction, intentionally started the fire -- a material fact that Defendant believes she concealed or
misrepresented.16 While Plaintiff disagrees with Defendant’s determination, and may ultimately
prove it to be wrong, she has presented no evidence showing that Defendant’s conduct was
See Ark. Code Ann. § 23-66-202(b); see also RM Dean Farms v. Helena Chem. Co.,
847 F. Supp. 2d 1125, 1127 (E.D. Ark. 2012); Williams v. State Farm Mut. Auto. Ins. Co., No.
5:10-CV-00032-JLH, 2010 WL 2573196, at *4 (E.D. Ark. June 22, 2010); Paine v. Jefferson
Nat’l Life Ins. Co., No. 2:07-CV-00124-JLH, 2008 WL 4809824, at *8 (E.D. Ark. Oct. 28,
2008); Col. Mut. Ins. Co. v. Home Mut. Fire Ins. Co., 74 Ark. App. 166, 174 (2001).
Rees v. Smith, 2009 Ark. 169, at 5 (citing Faulkner v. Ark. Children’s Hosp., 347 Ark.
Doc. Nos. 62, 92.
intentionally extreme and outrageous or defied all possible bounds of decency. Thus, summary
judgment is granted on Plaintiff’s outrage claim.
The standard for establishing bad faith is onerous.17 A plaintiff must show that the
defendant “engaged in affirmative misconduct that was dishonest, malicious, or oppressive.”18
The Arkansas Supreme Court defines “bad faith” as misconduct “carried out with a state of mind
characterized by hatred, ill will, or a spirit of revenge.”19 Negligence or bad judgment is
insufficient to establish bad faith.20
Here, Plaintiff has failed to produce any evidence showing that Defendant acted with
such hatred, ill will, or with a spirit of revenge in denying her claim that a jury could find for her
on this point. As noted above, it is undisputed that Defendant investigated Plaintiff’s claim and
denied coverage because it believed, based on the evidence obtained during its investigation, that
she intentionally caused the fire -- a material fact that Defendant believes she concealed or
misrepresented. Nothing in the record indicates Defendant’s actions were dishonest, malicious,
or oppressive. According, summary judgment is granted on Plaintiff’s bad-faith claim.
Based on the above findings of fact and conclusions of law, Defendant’s Motion for
Partial Summary Judgment (Doc. No. 60) is GRANTED. Plaintiff’s claims for unjust
Unum Life Ins. Co. of Am. v. Edwards, 362 Ark. 624, 627 (2005).
Id. (citing State Auto Prop. & Cas. Ins. Co. v. Swaim, 338 Ark. 49 (1999)).
Col. Nat’l Ins. Co. v. Freeman, 347 Ark. 423, 429 (2002).
enrichment, violation of the Arkansas Insurance Code, outrage, bad faith, and promissory and
equitable estoppel are DISMISSED with prejudice. Plaintiff’s breach-of-contract claim remains.
IT IS SO ORDERED this 27th day of December, 2013.
/s/ Billy Roy Wilson
UNITED STATES DISTRICT JUDGE
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