BVM Merriam, LLC v. American Family Mutual Insurance Company
Filing
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MEMORANDUM AND ORDER granting 5 Defendant's Motion to Dismiss Count II of plaintiff's complaint and Count II is hereby dismissed. Plaintiff is granted leave to amend its compliant, on or before January 2, 2018, to assert an alternative cause of action. Signed by District Judge John W. Lungstrum on 12/15/2017. (ses)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
BVM MERRIAM, LLC,
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)
Plaintiff,
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v.
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AMERICAN FAMILY MUTUAL
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INSURANCE COMPANY,
)
)
Defendant.
)
)
_______________________________________)
Case No. 17-2563-JWL
MEMORANDUM AND ORDER
This matter comes before the Court on defendant’s motion to dismiss Count II of
plaintiff’s complaint (Doc. # 5). For the reasons set forth below, the Court grants the
motion, and Count II is dismissed. Plaintiff is granted leave, however, to amend its
complaint, on or before January 2, 2018, to assert an alternative cause of action.
In its complaint, plaintiff insured has asserted against defendant insurer a claim
for breach of contract for failing to pay insurance benefits (Count I) and a claim for “bad
faith” with respect to defendant’s handling of the insurance claim (Count II). Defendant
moves to dismiss the claim for bad faith on the basis that Kansas does not recognize such
a cause of action in the first-party insurance context. See Spencer v. Aetna Life & Cas.
Ins. Co., 227 Kan. 914 (1980) (declining to recognize such a cause of action). Defendant
does not argue that Spencer does not apply or is no longer good law. Accordingly, the
Court grants defendant’s motion to dismiss plaintiff’s bad faith claim under Kansas law.1
Plaintiff argues that, in light of his inability to assert a bad faith claim, his
complaint should be construed to assert an alternative claim of outrage or a breach of the
implied covenant of good faith and fair dealing. The Court declines that invitation, as
the complaint does not indicate how either cause of action might apply here.2
In the alternative, plaintiff seeks leave to amend its complaint to add a claim of
outrage or a breach of the implied covenant of good faith and fair dealing. Defendant
did not file a reply brief and thus has not opposed that request. The Court notes that this
litigation is in an early stage, with the scheduling conference set for next month.
Accordingly, the Court grants plaintiff leave to amend, on or before January 2, 2018,
to assert an alternative cause of action.
IT IS THEREFORE ORDERED BY THE COURT THAT defendant’s motion
to dismiss Count II of plaintiff’s complaint (Doc. # 5) is hereby granted, and Count II
1
The parties agree that Kansas law governs these claims by a Kansas insured. See
Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941) (in diversity action, court
applies the forum state’s choice-of-law rules); Safeco Ins. Co. of Am. v. Allen, 262 Kan.
811, 822 (1997) (“Kansas follows the general rule that the law of the state where the
insurance contract is made controls.”).
2
For instance, courts in this district have held that to assert a claim for breach of
a duty of good faith and fair dealing under Kansas law, a plaintiff must plead a claim for
breach of contract and point to a term in the contract that the defendant allegedly
violated by failing to act in good faith. See, e.g., Moore v. The Climate Corp., 2016 WL
4527991, at *8 (D. Kan. Aug. 30, 2016) (citing cases).
2
is hereby dismissed. Plaintiff is granted leave to amend its complaint, on or before
January 2, 2018, to assert an alternative cause of action.
IT IS SO ORDERED.
Dated this 15th day of December, 2017, in Kansas City, Kansas.
s/ John W. Lungstrum
John W. Lungstrum
United States District Judge
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