Munger v. Infinity Insurance Company

Filing 21

ORDER: Infinity Insurance Company's Motion to Dismiss 4 is DENIED. The Court authorizes Munger to file an amended complaint, on or before June 23, 2014, if Munger elects to do so. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 6/18/2014. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
CRAIG MUNGER,
Plaintiff,
v.

Case No.: 8:14-cv-914-T-33MAP

INFINITY INSURANCE CO.,
Defendant.
___________________________/
ORDER
This matter comes before the Court pursuant to Defendant
Infinity Insurance Company’s Motion to Dismiss (Doc. # 4),
filed in state court on April 16, 2014. After the case’s
removal

to

federal

court,

Infinity

filed

a

Supplemental

Memorandum of Law in Support of the Motion (Doc. # 10) on
April 30, 2014. Plaintiff Craig Munger filed a Response (Doc.
# 9) on April 29, 2014. The Court held a hearing on this
matter on June 13, 2014, and for the reasons articulated
below, the Court denies the Motion.
I.

Background
Infinity Insurance Company issued an automobile policy

with the policy limit of $100,000 to Munger on August 21,
2012, to continue through to August 21, 2013. (Doc. # 2 at ¶
7).

Within

the

policy,

the

Cancellation

and

Automatic

Termination provisions establish the procedures by which the

policy could terminate. (Doc. # 2 Ex. A). The Cancellation
provision provides that if Infinity wished to cancel the
policy, it would send a cancellation notice by mail at least
ten days before the cancellation date. (Id.). The Automatic
Termination provision provides that if Infinity wishes to
renew the policy after its expiration date, Infinity will
send an offer to renew. (Id.) According to this provision, if
the

insured

fails

to

pay

the

required

renewal

premium

following the offer to renew, Infinity will interpret that
failure to pay as a rejection of the offer to renew and the
policy will automatically terminate on its expiration date.
(Id.).
Additionally, the policy includes an “Other Termination
Provisions” section in which Infinity asserts, “Proof of
mailing of any notice shall be sufficient proof of notice.”
(Id.).
Infinity alleged it mailed a Renewal Notice on July 5,
2013, to Munger offering to renew the policy if Munger sent
in the necessary renewal premium before the expiration date
of the policy. (Id. Ex. B). On August 7, 2013, Infinity
alleges it sent a Nonpayment Notice to Munger, reiterating
that his policy coverage would expire unless he paid the
renewal premium. (Id. Ex. C). Munger alleges that he did not

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receive these notices and, as a result, failed to pay the
premium to renew. (Id. at ¶ 15).
On

November

23,

2013,

Munger

was

involved

in

an

automobile accident, resulting in a total loss of his vehicle.
(Id. at ¶ 12). When Munger submitted a claim to Infinity for
coverage under the policy, Infinity denied it on the grounds
that the policy had lapsed because of Munger’s failure to pay
the renewal premium. (Id. at ¶ 13-14).
Munger informed Infinity that he had not received the
Renewal or Nonpayment Notices and requested proof of mailing
for the notices. (Id. at ¶ 15). In reply, Infinity provided
a Certificate of Mailing with Munger’s name and address on a
list

of

multiple

policyholders

and

Certificates

of

Bulk

Mailing from the U.S. Postal Service, all dated August 7,
2013. (Id. Ex. D). However, Munger emphasizes that these bulk
mailing

certificates

do

not

specify

that

the

Nonpayment

Notice addressed to him was one of the letters given over to
the Post Office. (Id. at ¶ 15).
Under

Florida

law,

an

insurer

must

give

notice

of

cancellation of a policy for nonpayment of premium at least
ten days prior to the effective date of cancellation. See
Fla. Stat. § 627.728(3)(a). The sufficient forms of proof of
notice are certified or registered mailing or United States
postal proof of mailing of notice of cancellations, intention

3

not to renew, or of reasons for cancellation when sent to the
first-named insured at the address shown in the policy. Fla.
Stat. § 627.728(5). Munger alleges that he did not receive
such notice from Infinity prior to the expiration date of the
policy.
Additionally, under Fla. Stat. § 324.0221(1)(a), an
insurance provider is required to report to the Florida
Department of Highway Safety and Motor Vehicles (“DMV”) the
“cancellation or nonrenewal” of a policy within 10 days after
each cancellation or nonrenewal. After the November 23, 2013,
accident, Munger claims he contacted the DMV and confirmed
that, according to their records, the DMV had not received a
notice of cancellation from Infinity. (Id. Ex. E).
Munger initiated this action against Infinity for breach
of contract on March 31, 2014, in the Thirteenth Judicial
Circuit, in and for Hillsborough County, Florida, alleging
that Infinity breached the policy by cancelling it without
providing proper notice of cancellation. (Id. at ¶ 24).
Infinity removed the case to this Court on April 17, 2014, in
accordance with 28 U.S.C. § 1441(b) and 28 U.S.C. § 1332(a)
based on the Court’s diversity jurisdiction. (Id. at ¶ 6).
Munger is claiming damages of $100,000 to the limits of the
policy, which exceeds the $75,000 diversity jurisdictional
amount. (Id. at ¶ 2). Munger is a resident and citizen of

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Hillsborough County, Florida and Infinity is incorporated in
Indiana with its principal place of business in Alabama. (Id.
¶

3-4).

Accordingly,

the

Court

determines

that

the

requirements for complete diversity of citizenship have been
established.
On April 16, 2013, prior to the removal of the case to
this Court, Infinity filed this Motion to Dismiss for failure
to state a claim. (Doc. # 4). After the case’s removal,
Infinity filed a Supplemental Memorandum of Law in support of
its Motion. (Doc. # 10). Munger filed his Response on April
29, 2013. (Doc. # 9).

The Court held a hearing on this matter

on June 13, 2014, and is otherwise fully advised in the
premises.
II.

Rule 12(b)(6)— Failure to State a Claim
On a motion to dismiss, this Court accepts as true all

the allegations in the complaint and construes them in the
light most favorable to the plaintiff.

Jackson v. Bellsouth

Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004).
this

Court

favors

the

plaintiff

with

all

inferences from the allegations in the complaint.

Further,
reasonable
Stephens

v. Dep’t of Health & Human Servs., 901 F.2d 1571, 1573 (11th
Cir. 1990) (“On a motion to dismiss, the facts stated in [the]
complaint and all reasonable inferences therefrom are taken
as true.”). However, in Twombly, the Supreme Court cautioned:

5

While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide
the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action
will not do. Factual allegations must be enough to
raise a right to relief above the speculative
level.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal
citations omitted).

Further, courts are not “bound to accept

as true a legal conclusion couched as a factual allegation.”
Papasan v. Allain, 478 U.S. 265, 286 (1986).
This Court’s analysis is confined to the four corners of
the complaint and the exhibits attached thereto. Under Fed.
R. Civ. P. R. 10(c), a party may attach a copy of a written
instrument as an exhibit to a pleading and that exhibit is a
part of the pleading for all purposes. See Fed. R. Civ. P.
10(c). Specifically, the Court may consider the attachments
to the Complaint for the purposes of a Motion to Dismiss. See
FSC Franchise Co., LLC v. Express Corporate Apparel, LLC, No.
8:09-cv-454-T-23TGW, 2009 WL 3200656, at *1 n.1 (M.D. Fla.
Oct. 2, 2009) (citing Collins v. Morgan Stanley Dean Witter,
224 F.3d 496, 498-99 (5th Cir. 2000)(“In considering a motion
to dismiss for failure to state a claim, a district court
must limit itself to the contents of the pleadings, including
attachments thereto.”)).

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The

attachments

to

the

Complaint

include:

A)

Automobile Insurance Policy between Infinity and Munger;
the Renewal Notice from Infinity addressed to Munger;

the
B)

C) the

Nonpayment Notice from Infinity addressed to Munger; D) an
email communication from an insurance broker to Munger’s
counsel

with

attached

copies

of

the

Nonpayment

Notice,

Certificate of Mailing from Infinity, and Certificates of
Bulk Mailing from the U.S. Postal service; and E) an email
communication from Munger’s counsel to Infinity stating that
the DMV had not been notified of the policy cancellation.
III. Analysis
In order to state a claim for breach of contract, a
plaintiff must allege (1) the existence of a contract, (2) a
breach of the contract’s terms by the other party, and (3)
damages resulting from the alleged breach. See Rollins, Inc.
v. Butland, 951 So. 2d 860, 876 (Fla. 2d DCA 2006)(citing
Knowles v. C.I.T. Corp., 346 So. 2d 1042, 1043 (Fla. 1st DCA
1977)).
A.

Existence of a Contract

In its Motion, Infinity asserts that the first element
of the breach of contract claim is not met. Although both
Munger and Infinity agree that there was a contract in place
for the policy term of August 21, 2012, to August 21, 2013,
Infinity emphasizes that there was no contract in existence

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on November 23, 2013, the date of the automobile accident for
which coverage was denied, because Munger failed to pay the
renewal premium and the policy lapsed. In fact, Munger does
not allege in his Complaint that the policy’s coverage was
still in place at the time of the accident. Thus, Infinity
argues, Munger’s reliance on an expired policy, which he fails
to allege existed at the time of the accident, for the
recovery of damages created during the accident, constitutes
a failure to state a claim for breach of contract.
But Munger alleges that the improper termination of the
policy did occur during the original policy term when Infinity
failed to give notice of the policy’s cancellation or the
offer to renew, as required by the policy. Thus, Munger
alleges that the policy was in existence at the time of the
breach of contract -— the failure to give notice of the
policy’s imminent end -— even if Munger has failed to allege
that the policy existed at the time of the accident in
November

of

2013.

By

alleging

that

the

policy

was

in

existence at the time of the purported breach, Munger has
sufficiently pled the first element of his breach of contract
claim.
B.

Breach of the Contract’s Terms

As to the second element of breach of contract, Infinity
contends that it did not breach the terms of the policy.

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Infinity alleges it gave proper notice of its offer to renew
by mailing the Renewal and Nonpayment Notices to Munger. Thus,
by the terms of the policy, Infinity properly gave notice of
the

policy’s

imminent

termination

and

accepted

Munger’s

failure to renew as a rejection of its offer, allowing the
policy to lapse on the specified expiration date.
According

to

Infinity,

because

the

policy

lapsed,

Infinity was not bound by Fla. Stat. § 627.728 to provide
notice of cancellation.

Infinity cites a plethora of cases,

including Allstate Indem. Co. v. Mohan, 764 So. 2d 901, 903
(Fla. 5th DCA 2000), which stand for the proposition that the
procedures in section § 627.728 are “to be followed when the
insurer seeks to cancel an existing policy or gives notice of
non-renewal” but “are inapplicable to instances where the
insurer offers to renew and the insured does not timely pay
the required premium in order to accept the offer.” Id.; see
also Travelers Indem. Co. of R.I. v. Mirlenbrink, 345 So. 2d
417,

418-19

(Fla.

2d

DCA

1977)(finding

that

the

notice

requirements of Fla. Stat. § 627.728 did not apply because
the policy was not cancelled; “it lapsed for nonpayment of
the premium”); Williams v. Sec. Mut. Cas. Co., 377 So. 2d
733, 734 (Fla. 3d DCA 1979)(determining that the insurance
policy lapsed automatically when the insured failed to pay
the renewal premium on or before the policy’s expiration date

9

so no notice of cancellation was required by Fla. Stat. §
627.728). However, during the hearing, Infinity conceded that
these cases were decided at the summary judgment stage or
pursuant to a bench trial, upon a fully developed record, and
are inapposite to the present Motion to Dismiss, which is to
be decided in accordance with Rule 12(b)(6), Fed. R. Civ. P.
Furthermore, accepting Munger’s factual allegations as
true and construing the factual allegations in the light most
favorable to Munger as the Court is required to do at this
juncture, the Court finds that Munger sufficiently alleges a
breach of the policy’s terms. In the Complaint, Munger alleges
that he never received from Infinity a notice offering renewal
and

stating

the

required

premium.

Additionally,

Munger

argues that the Certificate of Mailing and the U.S. Postal
Service

Certificates

of

Bulk

Mailing

do

not

provide

sufficient “proof of mailing” as required by the policy to
show that an offer of renewal was made.

Munger relies upon

Boman v. State Farm Mutual Automobile Insurance Co., 505 So.
2d 445, 448-49 (Fla. 1st DCA 1987), which held that insurance
companies have an implied duty to give notice of a renewal
offer before allowing a policy to lapse.

By contending that

Infinity failed to send the Renewal and Nonpayment Notices to
him before the policy’s termination, Munger sufficiently
alleged that Infinity breached the insurance contract.

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C.

Damages

Munger alleges that his damages reach the limits of the
policy, $100,000, as a result of the November 23, 2013,
automobile accident for which Infinity denied the claim.
Munger argues that had Infinity not breached the policy by
improperly terminating it, Munger would have had insurance
coverage at the time of the accident to cover his damages.
Therefore, the third element for Munger’s breach of contract
claim is met.
IV.

Conclusion
Upon due consideration of the well-pled allegations of

Munger’s Complaint, taken as true, the Court determines that
Munger

has

alleged

sufficient

factual

allegations

to

demonstrate that a breach of the policy’s terms occurred
during the original policy period, resulting in damages.
Accordingly, this Court denies Infinity’s Motion to Dismiss.
However, the Court notes that, during the hearing, Munger
indicated -— without conceding the propriety of Infinity’s
arguments —- that it may be appropriate to amend the Complaint
to streamline the allegations.

Although the Court denies the

Motion to Dismiss, the Court nevertheless authorizes Munger
to file an amended complaint pursuant to Rule 15(a)(2), Fed.
R. Civ. P., by June 23, 2014, if Munger elects to do so.
Accordingly, it is

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ORDERED, ADJUDGED, and DECREED:
(1)

Infinity Insurance Company’s Motion to Dismiss (Doc # 4)
is DENIED.

(2)

The

Court

authorizes

Munger

to

file

an

amended

complaint, on or before June 23, 2014, if Munger elects
to do so.
DONE and ORDERED in Chambers, in Tampa, Florida, this
18th day of June, 2014.

Copies: All Counsel of Record

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