Armstead v. Allstate Property & Casualty Insurance Company

Filing 39

OPINION AND ORDER that Allstate's Motion for Leave 16 is GRANTED NUNC PRO TUNC. IT IS FURTHER ORDERED that Plaintiff's Motion to Remand 13 is DENIED. IT IS FURTHER ORDERED that Allstate's Motion to Dismiss 4 is GRANTED IN PART. A llstate's Motion to Dismiss Plaintiff's claims for negligent hiring, supervision, training and retention (Count VII), fraud (Count VIII), Georgia RICO (Count IX), punitive damages (Count X), and attorney's fees (Count XI) is GRANTED an d those claims are DISMISSED WITH PREJUDICE. Allstate's Motion to Dismiss Plaintiff's claims for breach of the covenant of good faith and fair dealing (Count II) and unfair claims settlement procedures (Counts V and VI) is DENIED AS MOOT, those claims having been dismissed in the Court's July 18, 2014, Order. Signed by Judge William S. Duffey, Jr on 12/3/2014. (anc)

I.

BACKGROUND
This is an insurance coverage dispute in which Plaintiff seeks coverage,

under a homeowner’s insurance policy issued by Allstate (the “Policy”), for
damage caused to her home by a fire in her kitchen. Plaintiff asserts claims for
breach of contract, promissory estoppel and bad faith against Allstate for refusing
to pay the full amount of her damages claimed under the Policy. Plaintiff also
asserts several claims based on the manner in which Allstate processed Plaintiff’s
claim for coverage under the Policy. Allstate contends that most of the claims in
Plaintiff’s Complaint must be dismissed because they are precluded, as a matter of
law, in an action based on an alleged breach of contract.
A.

Facts

On December 7, 2011, Plaintiff’s home was damaged by an accidental
grease fire. (Compl. [1.1] at 3). Plaintiff asserts that the fire caused damage to her
kitchen cabinets, countertop, stove and parquet floor, and caused smoke to go
throughout the home. (Id.). Plaintiff also asserts that the “lights in her kitchen
were flickering on and off.” (Id.).
made electronically, add 3 days to response deadline); Fed. R. Civ. P. 6(a)(1)(C)
(time limit to act extended to first accessible day after a Saturday, Sunday, or legal
holiday, if last day of period falls on one of those days). Because Allstate’s
Motion for Leave, and its Response in Opposition to Plaintiff’s Motion to Remand,
were filed on May 28, 2014—just one (1) day after the response due date—and
there is no prejudice to Plaintiff because Allstate relies only on the allegations in
Plaintiff’s Complaint, Allstate’s Motion for Leave is granted nunc pro tunc.
2

Plaintiff reported the fire to Allstate. (Id.). She requested “emergency
services and Allstate dispatched a company called Steamatic to clean the house.”
(Id.). Allstate also recommended that Plaintiff stay in a hotel while her home was
being cleaning and repaired. (Id.).
On December 13, 2011, Erin Verville (“Verville”), an Allstate adjuster,
inspected the damage to Plaintiff’s home. (Id.). Aubrey Brown (“Brown”),
Plaintiff’s contractor, and Breinard Miller (“Miller”), Plaintiff’s nephew, were also
present during Verville’s inspection. (Id. at 4). Verville estimated the cost to
repair the damage caused by the fire would be $2,771.50. (Id.). Based on
Verville’s estimate, Allstate issued a check to Plaintiff in the amount of $1,467.35.
(Id.). Plaintiff did not cash or deposit the check. (Id.).
Plaintiff claims that Verville’s estimate was not complete, including because
it “did not address the electrical damages and did not provide for complete
replacement of burned cabinets, burned countertop, damaged parquet floor,
damaged carpet and did not provide for any cleaning of the home. It also failed to
provide for cleaning and replacement of damaged contents.” (Id.). Plaintiff
contends that Verville’s estimate “was not enough to restore Plaintiff’s home to its
pre-fire condition,” because “Allstate wanted to pay for patchwork that would not
match the existing structures, leaving the home asthetically [sic] less attractive than

3

it was” before the fire. (Id.). Plaintiff attempted to contact Verville to discuss her
disagreement with Verville’s estimate, but Verville did not return Plaintiff’s
telephone calls and messages. (Id.).
On December 21, 2011, Plaintiff spoke to another Allstate representative
regarding the damage to Plaintiff’s home, including the damage she claims
Verville’s estimate did not include and the “lack of compensation for food and
lodging.” (Id. at 5).
Allstate retained Paul Davis Restoration, a third-party contractor, to conduct
another inspection of the damage to Plaintiff’s home. (Id.). On December 21,
2011, Paul Davis Restoration inspected Plaintiff’s home and prepared an estimate,
totaling $5,398.76. (Id.). Plaintiff claims that Paul Davis Restoration’s estimate
was not complete, including because “Paul Davis [sic] was not willing to replace
the kitchen cabinets, floor, or carpet and was not going to address the living room
and attic insulation repairs, etc.,” and it did not include repair and replacement of
contents. (Id.). Miller, Plaintiff’s nephew, also told Verville that Paul Davis
Restoration’s estimate failed to include damage to wallpaper, carpet, countertop
and floor, and smoke damage, including in the attic. (Id. at 6-7).
On December 23, 2011,3 Plaintiff contacted Steamatic to re-clean the carpet
3

That Plaintiff’s Complaint states “December 23, 2013,” appears to be a
typographical error. (Compl. at 5).
4

and some of the personal contents damaged by smoke. (Id. at 5).
On December 29, 2011, Allstate sent to Plaintiff a letter stating that Allstate
was “in the ‘process of concluding the claim’ that [it would] ‘continue to update
[her] on the status of the claim until it is resolved’ and that [it] ‘expect[s] this will
be resolved in 30 days or sooner.’” (Id. at 6) (second alteration in original).
On December 30, 2011, Plaintiff sent to Allstate an estimate prepared by
Brown, Plaintiff’s contractor. (Id. at 6 & Ex. B [1.1 at 46-49]). Brown estimated
the cost to repair the damage caused by the December 7, 2011, fire would be
$8,934.42. (Id.).
On January 6, 2012, Plaintiff had Steamatic re-clean the carpet to address
the spots which had not been on the carpet prior to the fire. (Id. at 6). Plaintiff
asserts that “[t]he spots got worse.” (Id.).
On January 7, 2012, Plaintiff sent to Allstate copies of “receipts for food as
additional living expenses.” (Id.).
On January 17, 2012, Allstate issued payment to Plaintiff, in the amount of
$921.34, to replace her stove. (Id. at 7). Plaintiff deposited the check and “was
informed that the check . . . bounced causing her account to be overdrawn.” (Id.).
On January 24, 2012, Paul Davis Restoration told Plaintiff that Verville “had
communicated on Allstate’s behalf that Plaintiff was going to use her own

5

contractor.” (Id. at 6). Plaintiff asserts that she “specifically informed Allstate to
use [its] own contractors as long as all repairs were made and her property restored
to its pre-fire condition.” (Id.). At some point, Plaintiff “decided she did not want
to use Allstate’s contractor because his estimates were inadequate and left off
obvious damages.” (Id. at 7).
On January 26, 2012, Plaintiff spent an evening at her home instead of a
hotel, and “felt sick and experienced difficulty breathing due to mold that had
developed in the carpet as a result of inadequate and delayed cleaning.” (Id.).
Plaintiff returned to the hotel and stayed there until January 31, 2012. (Id.).
On January 30, 2012, Plaintiff again sent to Allstate receipts for additional
living expenses in response to Allstate’s claim that it did not receive her prior
submission. (Id.).
In response to Plaintiff’s complaints that the carpet was “discolored” and
“moldy” after Steamatic cleaned it, Steamatic again inspected Plaintiff’s carpet on
January 31, 2012. (Id.). Steamatic stated that they are “not wasting time and
money cleaning the carpet.” (Id.). Steamatic sent photographs of the carpet to
Verville, but Verville claims she did not received them. (Id. at 7-8).
On January 31, 2012, Paul Davis Restoration “revised” the total amount of
its estimate to $6,857.51, which is $1,458.75 more than its original estimate of

6

$5,398.76. (Id. at 7). Plaintiff claims that this was “still not a complete estimate,”
and Plaintiff again disputed the amount of the estimate. (Id.).
On February 17, 2012, Plaintiff’s counsel “wrote to Allstate and submitted
estimates on Plaintiff’s behalf.” (Id. at 8). On February 24, 2012, in response to
the letter, Verville stated that “Plaintiff had ‘cancelled’ Allstate’s contractor,” and
that “Allstate will issue Payment to Ms. Armstead.” (Id.).
On May 29, 2012, Plaintiff “was hospitalized due to the stress caused by
Allstate’s claims handling practices and not having full use of her home.” (Id.).
In June 2012, Plaintiff submitted to Allstate an estimate for repairs, in the
amount of $14,500.00, prepared by Unique Home Improvement. (Id.).
On July 4, 2012, Allstate issued payment to Plaintiff in the amount of
$1,467.35. (Id.).
On August 3, 2012, Plaintiff retained Bruce Fredrics (“Fredrics”), a “public
adjuster,”4 “to demand an appraisal pursuant to the [Policy].” (Id.).
On August 8, 2012, Allstate issued to Plaintiff a replacement check, in the
amount of $921.34, for damage to Plaintiff’s stove. (Id. at 9).
4

Georgia law defines a “public adjuster” as “any person who solicits, advertises
for, or otherwise agrees to represent only a person who is insured under a policy
covering fire . . . and other physical damage to real and personal property . . . and
who, for compensation on behalf of an insured . . . [a]cts or aids . . . in negotiating
. . . a claim for loss or damage covered by an insurance contract . . . .” See
O.C.G.A. § 33-23-1.
7

On October 29, 2012, Plaintiff “invoked the appraisal clause” of the Policy
and demanded appraisal. (Id.).
On December 12, 2012, Allstate rejected Plaintiff’s demand for appraisal
and requested that Plaintiff submit a sworn proof of loss. (Id.).
On February 3, 2013, Plaintiff submitted to Allstate her sworn proof of loss
(the “Proof of Loss”). (Compl. at 9 & Ex. E [1.1 at 55]). Plaintiff states that the
amount of her “whole loss and damage” is $76,409.43, that she has a $500.00
deductible under the Policy, and that the “amount claimed” under the Policy is
$75,909.43. Plaintiff asserts that the amount claimed in her Proof of Loss is
supported by an estimate prepared by Fredrics. (Compl. at 9).5
On March 4, 2013, Allstate demanded a second inspection of the property,
which it conducted on March 22, 2013. (Id.).
On April 12, 2013, Allstate requested that Plaintiff submit to an examination
under oath. (Id.).
On May 13, 2013, Plaintiff sent to Allstate a letter demanding that Allstate
affirm or deny coverage under the Policy for the December 7, 2011, fire. (Compl.
at 10 & Ex. F [1.1 at 56-58]).
On June 12, 2013, Plaintiff submitted to her examination under oath.
(Compl. at 9). Plaintiff asserts that “she was subjected to several hours of
5

Plaintiff did not submit a copy of Fredrics’s estimate with her Complaint.
8

questioning,” and that “[m]any of the questions asked were directed at information
already provided to Allstate by Plaintiff.” (Id. at 10).
In July 2013, Plaintiff obtained an estimate, in the amount of $48,347.11,
from a second public adjuster, Jeffrey Pellett (“Pellet”). (Compl. at 10 & Ex. G
[1.1 at 59-81]). Plaintiff submitted Pellett’s estimate to Allstate “not long after.”
(Compl. at 10).
On October 4, 2013, Plaintiff sent to Allstate a “Statutory Bad Faith Demand
Letter” pursuant to O.C.G.A. § 33-4-6 (“Demand Letter”), demanding that Allstate
pay to Plaintiff $76,409.43, the total amount of Fredrics’s estimate, for the damage
to Plaintiff’s home as a result of the December 7, 2011, fire. (Compl. at 10
& Ex. H [1.1 at 82-83]). Plaintiff’s Demand Letter states that “Allstate failed to
pay a fair and adequate amount on [Plaintiff’s] claim,” “rejected the appraisal
demand and refused to participate in appraisal, in breach of the [Policy],” and that,
“[i]f Allstate fails to pay the demanded amount or some other mutually agreeable
amount within 60 days, [Plaintiff will] proceed with an immediate lawsuit seeking
all damages permitted by law including bad faith damages and attorney fees.”
(Demand Letter at 1-2).
On December 2, 2013, Allstate rejected Plaintiff’s claim, stating that
“Allstate made significant payments to, and for the benefit of, Ms. Armstead as a

9

result of this claim,” and “Allstate remains firm in its previously communicated
position that no additional payments are due or payable under the [Policy].”
(Compl. at 10 & Ex. I [1.1 at 84]).
B.

Procedural History

On December 6, 2013, Plaintiff filed her Complaint in the State Court of
Fulton County, Georgia,6 asserting claims against Allstate for: breach of contract
(Count I); breach of implied covenant of good faith and fair dealing (Count II); bad
faith (Count III); promissory estoppel (Count IV); unfair claims settlement
practices (Counts V and VI); and negligent hiring, retention, supervision and
training (Count VII). Plaintiff also asserts claims against Allstate and its counsel,
Webb, Zschunke, Neary & Dikeman, LLP (“WZND”), for: violation of the
Georgia Racketeer Influenced and Corrupt Organizations Act (“Georgia RICO”)
(Count IX); punitive damages (Count X); and attorney’s fees (Count XI).
On February 25, 2014, the State Court of Fulton County granted Plaintiff’s
motion to voluntarily dismiss without prejudice her claims against WZND. ([1.4]).
On February 27, 2014, Allstate removed the Fulton County action to this
Court on the basis of diversity of citizenship. (Notice of Removal [1]). Allstate
asserts that that the amount in controversy exceeds $75,000.00, and that complete
diversity now exists among the parties because Plaintiff is a Georgia citizen and
6

No. 13EV018765C.
10

Allstate, the only remaining defendant, is an Illinois corporation with its principal
place of business in Illinois.
On March 26, 2014, Allstate moved to dismiss Plaintiff’s claims for: breach
of the implied covenant of good faith and fair dealing (Count II); unfair claims
settlement practices (Counts V and VI); negligent hiring, retention, supervision and
training (Count VII); fraud (Count VIII); Georgia RICO (Count IX); punitive
damages (Count X); and attorney’s fees (Count XI). Allstate did not move to
dismiss Plaintiff’s claims for breach of contract (Count I), bad faith (Count III), or
promissory estoppel (Count IV).
On April 9, 2014, Plaintiff filed her Brief in Partial Opposition to
Defendant’s Motion to Dismiss [6]. Plaintiff states that she “does not have
sufficient evidence to proceed on her claims for fraud and RICO and hereby seeks
leave of court to have those claims dismissed.” (Pl’s Br. in Opp. at 21).7
On May 9, 2014, Plaintiff filed her Motion to Remand [13]. Plaintiff asserts
that the Court does not have diversity jurisdiction over this matter because
Plaintiff’s Complaint does not demand a specific amount in damages, and in her
most recent offer of judgment, sent to Allstate on May 9, 2014, Plaintiff demands
7

The heading on page 21 of Plaintiff’s Brief in Partial Opposition states that
“Plaintiff seeks dismissal of Counts IV (Promissory Estoppel), VIII (Fraud) and IX
(RICO),” but the following paragraph states only that “Plaintiff does not have
sufficient evidence to proceed on her claims for fraud and RICO and hereby seeks
leave of court to have those claims dismissed.” (Pl’s Br. in Opp. at 21).
11

only $48,347.11. Plaintiff also contends that Allstate waived its right to removal
because, under the terms of the Policy, Allstate “consents to Plaintiff’s choice of
either state or federal court,” and “if removal is permitted, then the clause
providing Georgia law ‘shall’ govern all disputes, is rendered meaningless, with its
purpose defeated.” (Mot. Remand at 9).
On May 28, 2014, Allstate filed its Response in Opposition to Plaintiff’s
Motion to Remand [17]. Allstate argues that the amount in controversy exceeds
$75,000.00 because Plaintiff’s Complaint seeks damages arising from the
December 7, 2011, fire at Plaintiff’s home, and, based on Plaintiff’s Proof of Loss
and her Demand Letter, which were submitted with her Complaint, Plaintiff claims
damages in the amount of at least $75,909.43. Allstate also contends that it did not
waive its right to removal because the plain language of the Policy states that
“[n]othing in this provision, Where Lawsuits May be Brought, shall impair any
party’s right to remove a state court lawsuit to federal court.” (Def’s Resp. at 5).
On July 15, 2014, the parties filed their Proposed Consent Order [23], seeking
to dismiss Plaintiff’s claims for breach of the implied covenant of good faith and fair
dealing (Count II) and unfair claims settlement practices (Counts V and VI). On
July 18, 2014, the Court entered its Order [24] dismissing these claims.
The Court first considers Plaintiff’s Motion to Remand.

12

II.

DISCUSSION
A.

Plaintiff’s Motion to Remand
1.

Legal Standard

“Any civil action brought in a State court of which the district courts of the
United States have original jurisdiction, may be removed by the defendant.”
28 U.S.C. § 1441(a). Defendant removed this action on the ground that the Court
has federal diversity jurisdiction, which extends to “all civil actions where the
amount in controversy exceeds the sum or value of $75,000,” and is between
“citizens of different states.” See 28 U.S.C. § 1332(a)(1), (2). The parties agree
that Plaintiff and Allstate are citizens of different states,8 but they dispute whether
the amount in controversy has been satisfied. It is well-settled that the
jurisdictional amount is determined as of the date of removal. Pretka v. Kolter
City Plaza II, Inc., 608 F.3d 744, 751 (11th Cir. 2010).
8

In her Motion to Remand, Plaintiff states that Allstate is an Illinois
corporation, “but [is] registered to do business in the State of Georgia, and in fact
has offices all over the state of Georgia,” “issues insurance policies of all kinds
. . . to residents of Georgia,” advertises in Georgia, and has claims adjusters in
Georgia. (Mot. Remand at 1-2). To the extent Plaintiff appears to argue that
complete diversity does not exist based on Allstate’s contacts with Georgia, it is
well-settled that “a corporation shall be deemed to be a citizen of every State
. . . by which it has been incorporated and of the State . . . where it has its principal
place of business . . . .” 28 U.S.C. § 1332(c). Plaintiff does not dispute that
Allstate is a corporation organized under Illinois law and that Allstate’s principal
place of business is in Illinois. Allstate is therefore a citizen of Illinois only, and
complete diversity exists between Plaintiff, a Georgia citizen, and Allstate, an
Illinois citizen.
13

When a case is removed to federal court, a removing defendant must file a
notice of removal “containing a short and plain statement of the grounds for
removal.” 28 U.S.C. § 1446. “If a plaintiff makes ‘an unspecified demand for
damages in state court, a removing defendant must prove by a preponderance of
the evidence that the amount in controversy more likely than not exceeds the . . .
jurisdictional requirement.’” Roe v. Michelin N. Am., Inc., 613 F.3d 1058, 1061
(11th Cir. 2010) (quoting Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1357
(11th Cir. 1996) overruled on other grounds by Cohen v. Office Depot, Inc.,
204 F.3d 1069, 1072 (11th Cir. 2000)).
Although the defendant must prove by a preponderance of the evidence that
the amount in controversy is satisfied, it may do so in two ways. In some cases, it
may be “facially apparent” from the complaint that the amount in controversy
exceeds $75,000, even where “the complaint does not claim a specific amount of
damages.” Id. (quoting Williams v. Best Buy Co., Inc., 269 F.3d 1316, 1319
(11th Cir. 2001)). Where a defendant alleges that removability is apparent from
the face of the complaint, the district court may use its “judicial experience and
common sense” to determine if the amount in controversy has been met. Id. at
1062. In evaluating the complaint allegations, the district court is not required to
“suspend reality or shelve common sense in determining whether the face of the

14

complaint establishes the jurisdictional amount.” Pretka, 608 F.3d at 770 (quoting
Roe v. Michelin N. Am., Inc., 637 F. Supp. 2d 995, 999 (M.D. Ala. 2009)). There
must, however, be sufficient allegations in the complaint for a court to conclude
that the jurisdictional amount is met. Although a court may use its common sense
in light of its judicial experience in deciding if the allegations in the complaint, as
well as deductions and inferences from them, support a finding that the amount in
controversy has been alleged sufficiently, such deductions and inferences must be
reasonable and supported in the complaint. Arrington v. State Farm Ins. Co.,
No. 2:14-CV-209, 2014 WL 2961104 at *6 (M.D. Ala. July 1, 2014).
If the jurisdictional amount cannot be determined from the face of the
complaint, the removing defendant may “provid[e] additional evidence
demonstrating that removal is proper.” Roe, 613 F.3d at 1061 (quoting Pretka,
608 F.3d at 753-754). Where a defendant submits other evidence to show the
amount in controversy, a court may rely on the other evidence, as well as
reasonable inferences and deductions drawn from it, to determine if the defendant
has carried its burden to show that the jurisdictional amount exceeds $75,000.
Pretka, 608 F.3d at 754. In the end, a court must use its judgment to determine if
the allegations, coupled with the other evidence submitted, show that the
jurisdictional amount requirement is satisfied. See id.

15

2.

Analysis

Plaintiff’s Complaint does not request a specific amount of damages.
Rather, Plaintiff seeks to recover for, among others, Allstate’s alleged breach of
contract and bad faith in failing to pay the full amount of Plaintiff’s claim for
coverage under the Policy. In her February 1, 2013, Proof of Loss, which is
attached to her Complaint, Plaintiff states that the amount of damage claimed for
the December 7, 2011, fire is $75,909.43. (Proof of Loss at 1). Plaintiff’s October
4, 2013, Demand Letter, which is also attached to her Complaint and is the basis
for her bad faith claim, states: “This letter constitutes formal demand for payment
of Ms. Armstead’s claim in the amount of $76,409.43.” (Demand Letter at 2).
Plaintiff’s Proof of Loss and Demand Letter thus support that, at the time of
removal, the amount in controversy more likely than not exceeded $75,000.00.9
See, e.g., Tuboku-Metzger v. Nat’l Sec. Fire & Cas. Co., No. 5:06-cv-379 CAR,
2007 WL 1576440 (M.D. Ga. May 30, 2007) (although plaintiffs did not specify
9

To the extent Allstate, based on Verville’s estimate, admitted liability for
Plaintiff’s loss in the amount of $2,771.80, the amount-in-controversy requirement
is still satisfied because the difference between Verville’s estimate and the amount
demanded in Plaintiff’s Demand Letter is $73,637.63, and, if successful on her bad
faith claim, Plaintiff would be entitled to recover, at a minimum, an additional
$5,000 plus her reasonable attorney’s fees. See O.C.G.A. § 33-4-6 (penalty for
insurer’s bad faith refusal to pay amount of insured’s loss is, “in addition to the
loss, not more than 50 percent of the liability of the insurer for the loss or
$5,000.00, whichever is greater, and all reasonable attorney’s fees for the
prosecution of the action against the insurer.”).
16

amount of damages, it was “facially apparent” from complaint that jurisdictional
amount in controversy was satisfied where plaintiffs sought damages of
$51,027.54 for their loss, plus bad faith damages, under O.C.G.A. § 33-4-6, of
50% of the loss amount, and attorney’s fees estimated at one-third of their
projected recovery); Southern Ins. Co. of Va. v. Karrer, No. 3:10-cv-84 (CAR),
2011 WL 1100030, at *3-4 (M.D. Ga. Mar. 22, 2011) (amount in controversy
determined by, among others, damages estimated in demand letter).10 Because
Plaintiff and Defendant are citizens of different states and, at the time of removal,
the amount in controversy exceeded $75,000.00, the Court has subject-matter
jurisdiction over this action. Plaintiff’s Motion to Remand is on this basis denied.
Plaintiff next argues that, under the terms of the Policy, Allstate waived its
right to removal. The Court disagrees. The Policy provides, in pertinent part:

10

To the extent Plaintiff appears to argue that the amount-in-controversy
requirement is not satisfied because, on May 9, 2014, Plaintiff sent to Allstate an
offer of judgment demanding $48,347.11 as payment for her claims, it is axiomatic
that the jurisdictional amount in controversy is determined as of the date of
removal, and thus Plaintiff’s post-removal settlement offer cannot be a basis for
remand. See Pretka, 608 F.3d at 751; The Burt Co. v. Clarendon Nat. Ins. Co.,
385 F. App’x 892, 894 (11th Cir. 2010) (“[E]vents occurring after removal, such as
the post-removal amendment of a complaint . . . which may reduce the damages
recoverable below the amount in controversy requirement, do not divest the district
court of jurisdiction.”) (citing Poore v. Am.-Amicable Life Ins. Co. of Tex.,
218 F.3d 1287, 1290-91 (11th Cir. 2000) overruled in part on other grounds by
Alvarez v. Uniroyal Tire Co., 508 F.3d 639, 640-41 (11th Cir. 2007)).
17

What Law Will Apply
. . . [T]he laws of Georgia shall govern any and all claims or disputes
in any way related to this [P]olicy.
...
Where Lawsuits May Be Brought
. . . any and all lawsuits in any way related to this [P]olicy, shall be
brought, heard and decided only in a state or federal court located in
Georgia. . . .
...
Nothing in this provision, Where Lawsuits May Be Brought, shall
impair any party’s right to remove a state court lawsuit to a federal court.
(Policy, Amendatory Endorsement AP3267). The Policy thus plainly and
unambiguously states that the Policy’s choice-of-law provision and forum selection
clause “shall not impair [Allstate’s] right to remove” the Fulton County action to
this Court. See Thercy v. Allstate Prop. & Cas. Ins. Co., No. 1:13-cv-1099-RWS,
Doc. 38 at 1-2 (N.D. Ga. June 17, 2014) (rejecting plaintiff’s argument, based on
same policy language, that defendant waived its right to removal; policy
specifically stated that forum selection clause and choice of law provision do not
impair right to remove state court action to federal court). Allstate has not waived
its right to removal, and Plaintiff’s Motion to Remand is on this basis also denied.
B.

Allstate’s Motion to Dismiss
1.

Legal Standard

The law governing motions to dismiss pursuant to Rule 12(b)(6) is
well-settled. “To survive a motion to dismiss, a complaint must contain sufficient
18

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007)); see also Marshall Cnty. Bd. of Educ.
v. Marshall Cnty. Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993) (dismissal
appropriate “when, on the basis of a dispositive issue of law, no construction of the
factual allegations will support the cause of action”).
In considering a motion to dismiss, the Court must “assume that the factual
allegations in the complaint are true and give the plaintiff[] the benefit of
reasonable factual inferences.” Wooten v. Quicken Loans, Inc., 626 F.3d 1187,
1196 (11th Cir. 2010), cert. denied, 132 S. Ct. 245 (2011). Although reasonable
inferences are made in the plaintiff’s favor, “‘unwarranted deductions of fact’ are
not admitted as true.” Aldana v. Del Monte Fresh Produce, N.A., 416 F.3d 1242,
1248 (11th Cir. 2005) (quoting S. Fla. Water Mgmt. Dist. v. Montalvo, 84 F.3d
402, 408 n.10 (11th Cir. 1996)). Similarly, the Court is not required to accept
conclusory allegations and legal conclusions as true. See Am. Dental Ass’n v.
Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010).
The Complaint ultimately is required to contain “enough facts to state a
claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). Mere “labels and conclusions” are insufficient. Id. at 555. “A

19

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 (citing Twombly, 550 U.S. at 556).
“Plausibility” requires more than a “sheer possibility that a defendant has acted
unlawfully” or the “mere possibility of misconduct,” and a complaint that alleges
facts that are “merely consistent with” liability “stops short of the line between
possibility and plausibility of ‘entitlement to relief.’” Id. at 678-79 (citing
Twombly, 550 U.S. at 557). The well-pled allegations in a complaint must
“‘nudge[] [a party’s] claims across the line from conceivable to plausible.’”
Am. Dental, 605 F.3d at 1289 (quoting Twombly, 550 U.S. at 570). 11
2.

Analysis

Allstate moves to dismiss Plaintiff’s claims for: breach of the implied
covenant of good faith and fair dealing (Count II); unfair claims settlement
practices (Counts V and VI); negligent hiring, retention, supervision and training
(Count VII); fraud (Count VIII); Georgia RICO (Count IX); punitive damages
(Count X); and attorney’s fees (Count XI). Allstate did not move to dismiss
11

Federal Rule of Civil Procedure 8(a)(2) requires the plaintiff to state “a short
and plain statement of the claim showing that the pleader is entitled to relief.”
Fed. R. Civ. P. 8(a)(2). In Twombly, the Supreme Court recognized the liberal
minimal standards imposed by Federal Rule 8(a)(2) but also acknowledged that
“[f]actual allegations must be enough to raise a right to relief above the speculative
level . . . .” Twombly, 550 U.S. at 555.
20

Plaintiff’s claims for breach of contract (Count I), bad faith (Count III), or
promissory estoppel (Count IV).
a.

Breach of the implied covenant of good faith and fair
dealing (Count II), and unfair claims settlement practices
(Counts V and VI)

On July 18, 2014, the Court entered its Order [24] granting the parties’
request to dismiss Plaintiff’s claims for breach of the implied covenant of good
faith and fair dealing (Count II) and unfair claims settlement practices (Counts V
and VI). Defendant’s Motion to Dismiss Counts II, V, and VI, is denied as moot.
b.

Negligent hiring, supervision, training and retention
(Count VII)

To support a claim for negligence in Georgia, a plaintiff must show:
(1) a legal duty to conform to a standard of conduct raised by the law
for the protection of others against unreasonable risks of harm; (2) a
breach of this standard; (3) a legally attributable causal connection
between the conduct and the resulting injury; and (4) some loss or
damage flowing to the plaintiff's legally protected interest as a result
of the alleged breach of the duty.
Bradley Ctr., Inc. v. Wessner, 296 S.E.2d 693, 695 (Ga. 1982). However, “[a]
defendant’s mere negligent performance of a contractual duty does not create a tort
cause of action; rather, a defendant’s breach of a contract may give rise to a tort
cause of action only if the defendant has also breached an independent duty created
by statute or common law.” Fielbon Dev. Co. v. Colony Bank of Houston Cnty.,
660 S.E.2d 801, 808 (Ga. Ct. App. 2008). Georgia law is clear that “[a]bsent a
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legal duty beyond the contract, no action in tort may lie upon an alleged breach of
[a] contractual duty.” Id. (quoting Wallace v. State Farm Fire & Cas. Co.,
539 S.E.2d 509, 512 (Ga. Ct. App. 2000)).
In Tate v. Aetna Cas. & Surety Co., the insured asserted a negligence claim
against his insurer for “violating accepted standards in the industry,” “using an
unlicensed and incompetent adjuster and personnel,” “failing to use due care to
include all of plaintiff's losses under the law,” “failing to properly inspect
plaintiff's losses and property,” and “failing to properly consider plaintiff’s
estimates of his loss.” 253 S.E.2d 775, 776 (Ga. Ct. App. 1979). The plaintiff
alleged that he suffered delay in processing his claim and sought to recover
damages for emotional suffering and his expense and time spent acquiring repair
estimates. Id. The trial court granted the insurer’s motion for summary judgment,
and the Georgia Court of Appeals affirmed. The court found that
[e]ven where it is shown that the defendant’s failure to perform
resulted in great annoyance or hardship to the plaintiff, recovery in
tort is available only if the insurance contract is within those certain
classes of contracts that create a relation from which the law implies
duties a breach of which will constitute a tort . . . . [Although i]t is
well settled that misfeasance in the performance of a contractual duty
may give rise to a tort action . . . in such cases the injury to the
plaintiff has been an independent injury over and above the mere
disappointment of plaintiff's hope to receive his contracted-for benefit.
Id. at 777. The court held that “[i]f the duties in question arose at all, they arose out

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of the contract. All concern the insured’s actions in settling under terms of the
contract . . . [and] at most, there was a breach of contract on the part of the [insurer]
by failing to pay the plaintiff the full amount of damages owed under the terms
thereof.” Id.
Here, Plaintiff asserts that Allstate “failed to hire qualified people to inspect
Plaintiff’s claim,” “failed to supervise its employees in handling Plaintiff’s claim,”
and “failed to provide proper training to its employees who handled Plaintiff’s
claim.” (Compl. at 17). Plaintiff asserts also that “Allstate knew or should have
known that its agent’s interpretation of the [P]olicy was unreasonable,” but “failed
to take corrective action concerning its agent’s interpretation.” (Id.). Plaintiff’s
negligence claims are based on the manner in which Allstate processed Plaintiff’s
claim for coverage under the Policy. Allstate’s alleged duty to Plaintiff arises, if at
all, under the Policy and thus can only support a claim for breach of contract.
Plaintiff does not allege that Allstate breached any duty owed to her independent of
the Policy. See Tate, 253 S.E.2d 775; Camacho v. Nationwide Mut. Ins. Co.,
13 F. Supp. 3d 1343, 1364 (N.D. Ga. 2014) (to extent plaintiff’s negligence claim
was based on “negligently and carelessly adjusting” claim and failing to process it
in accordance with industry regulations and insurer’s own policies, “such relief lies
in contract, not tort,” because “no independent duty to handle the claims with care

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exists in tort under Georgia law”); Arrow Exter., Inc. v. Zurich Am. Ins. Co.,
136 F. Supp. 2d 1340 (N.D. Ga. 2001) (where insured asserted that insurer was
negligent in handling claims, training and employing its adjusters, granting
summary judgment for insurer “based on the general rule precluding tort liability
and the Georgia courts [sic] determination in Tate that the incompetency of
adjusters and processors does not fall within the special exception”). Plaintiff fails
to state a claim for negligent hiring, supervision, training and retention, and this
claim is required to be dismissed.
c.

Fraud (Count VIII) and Georgia RICO (Count IX)

In her Brief in Partial Opposition to Defendant’s Motion to Dismiss, Plaintiff
asserts that “she does not have sufficient evidence to proceed on her claims for
fraud and RICO and hereby seeks leave of court to have those claims dismissed.”
(Pl’s Br. in Opp. at 21). The Court thus finds that Plaintiff has abandoned these
claims. See Bute v. Schuller Int’l, Inc., 998 F. Supp. 1473, 1477 (N.D. Ga. 1998)
(“Because plaintiff has failed to respond to this argument or otherwise address this
claim, the Court deems it abandoned.”); see also LR 7.1(B), NDGa. (“Failure to file
a response shall indicate that there is no opposition to the motion.”). Plaintiff’s
claims for fraud (Count VIII) and Georgia RICO (Count IX) are dismissed.

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d.

Punitive Damages and Attorney’s Fees (Counts X and XI)

O.C.G.A. § 33-4-6 authorizes statutory damages and an award of attorney’s
fees when, “in the event of a loss which is covered by a policy of insurance,” the
insurer refuses in “bad faith” to pay the covered loss “within 60 days after a
demand has been made by the holder of the policy.” O.C.G.A. § 33-4-6. Section
33-4-6 is the exclusive remedy for an insurer’s bad faith refusal to pay its insured’s
claim, and thus punitive damages and attorney’s fees are not available under any
other Georgia statute. See, e.g., Globe Life & Acc. Ins. Co. v. Ogden, 357 S.E.2d
276 (Ga. Ct. App. 1987) (because insured’s action against insurer for refusal to pay
claim was mere breach of contract claim, punitive damages, other than under
O.C.G.A. § 33-4-6, were not available for insurer’s failure to pay); Adams v.
Unum Life Ins. Co. of Am., 508 F. Supp. 2d 1302, 1319 (N.D. Ga. 2007)
(“O.C.G.A. § 33-4-6 is the exclusive remedy for an insurer’s bad faith refusal to
pay insurance proceeds, and . . . claims for attorney’s fees and litigation expenses
under other Georgia statutes are not authorized.”) (citing United Servs. Auto Ass’n
v. Carroll, 486 S.E.2d 613, 617 (Ga. Ct. App. 1997) & Howell v. So. Heritage
Ins. Co., 448 S.E.2d 275, 276 (Ga. Ct. App. 1994)); see also O.C.G.A. §§ 13-6-10,
51-12-5.1 (unless otherwise provided by law, punitive damages not allowed for
breach of contract).

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Here, Plaintiff’s only claims remaining in this action—breach of contract,
bad faith refusal to pay the full amount of Plaintiff’s claim, and promissory
estoppel—are all based on Plaintiff’s assertions that “Allstate failed to make
payment to Plaintiff pursuant to the terms of the insurance contract” and
“Allstate’s failure to pay the fair market value of her claim was in violation of the
promise that existed within the contract of insurance.” (Compl. at 10, 14).12
Because Section 33-4-6 provides the exclusive remedy for Allstate’s alleged bad
faith refusal to pay the full amount of Plaintiff’s claim under the Policy, Plaintiff
cannot recover punitive damages under Section 51-12-5.1, or attorney’s fees under
Section 13-6-11. Plaintiff’s claims for punitive damages (Count X) and attorney’s
fees (Count XI) are required to be dismissed.

12

The promises Plaintiff seeks to enforce arise solely under the Policy. In
support of her claim for promissory estoppel, Plaintiff asserts that “Allstate entered
into a contract with Plaintiff wherein a promise was made such that Plaintiff could
reasonably expect [Allstate] to act and pay the fair market value of damages
covered by the [Policy] and to restore her property to the pre-loss condition,” and
that “Allstate’s failure to pay the fair market value of her claim was in violation of
the promise that existed within the contract of insurance.” (Compl. at 14). The
Court notes that, under Georgia law, “where a plaintiff seeks to enforce an
underlying contract which is reduced to writing, promissory estoppel is not
available as a remedy.” Adkins v. Cagle Foods JV, LLC, 411 F.3d 1320, 1326
(11th Cir. 2005); see also Bouboulis v. Scottsdale Ins. Co., 860 F. Supp. 2d 1364,
1379 (N.D. Ga. 2012) (“Georgia law bars a claim for promissory estoppel in the
face of an enforceable contract. . . . As plaintiff has acknowledged the validity of
the [insurance p]olicy, that policy . . . would trump any promise between the
parties regarding coverage.”).
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III.

CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED that Allstate’s Motion for Leave [16] is

GRANTED NUNC PRO TUNC.
IT IS FURTHER ORDERED that Plaintiff’s Motion to Remand [13] is
DENIED.
IT IS FURTHER ORDERED that Allstate’s Motion to Dismiss [4] is
GRANTED IN PART. Allstate’s Motion to Dismiss Plaintiff’s claims for
negligent hiring, supervision, training and retention (Count VII), fraud (Count
VIII), Georgia RICO (Count IX), punitive damages (Count X), and attorney’s fees
(Count XI) is GRANTED and those claims are DISMISSED WITH
PREJUDICE. Allstate’s Motion to Dismiss Plaintiff’s claims for breach of the
covenant of good faith and fair dealing (Count II) and unfair claims settlement
procedures (Counts V and VI) is DENIED AS MOOT, those claims having been
dismissed in the Court’s July 18, 2014, Order.

SO ORDERED this 3rd day of December, 2014.
____

_______________________________
WILLIAM S. DUFFEY, JR.
UNITED STATES DISTRICT JUDGE

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