First Tower Loan, LLC v. Great Lakes Reinsurance (U.K.) PLC et al

Filing 154

ORDER denying 89 Motion to Dismiss for the reasons stated in the order. Signed by District Judge Daniel P. Jordan III on February 19, 2014. (SP)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
FIRST TOWER LOAN, LLC

PLAINTIFF

V.

CIVIL ACTION NO. 3:13CV12 DPJ-FKB

GREAT LAKES REINSURANCE (U.K.) PLC
AND JOHNSON & JOHNSON, INC.

DEFENDANTS

ORDER

This insurance-contract dispute is before the Court on motion of Defendants Great Lakes
Reinsurance and Johnson & Johnson, Inc. to dismiss [89] Plaintiff’s Amended Complaint [84]
pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff First Tower Loan, LLC has
responded in opposition. The Court, having considered the memoranda of the parties, along with
the pertinent authorities, finds that Defendants’ motion should be denied.
I.

Facts and Procedural History
This suit involves a homeowner’s insurance policy issued by Defendants to Gregory and

Edna Phillips. The property was damaged by fire in 2011, prompting the Phillips’ claim. But
Defendants denied the claim based on false representations on the Phillips’ application as to their
bankruptcy history. Plaintiff First Tower Loan, LLC then sought payment under the policy as
mortgagee pursuant to Mississippi Code Section 83-13-9.
At the heart of this suit is the name used to identify the mortgagee on the declarations
page of the policy. That section of the contract merely lists “Tower Loan” as mortgagee.
Amended Complaint, Ex. C [84-3] at 2. But once the Phillips were out of the picture, First
Tower Loan, LLC d/b/a Tower Loan of Prentiss stepped forward and presented a demand as

mortgagee. Pl.’s Amd. Compl., Ex. F [84-6] at 1. Defendants declined, citing the discrepancy in
the name.
Having been denied, First Tower Loan, LLC filed this suit alleging breach of contract and
bad faith denial of insurance coverage. In its Amended Complaint, Plaintiff explains that First
Tower Loan, LLC was formerly First Tower Loan, Inc., and both “are widely know by, and do
business as, the trade name and/or abbreviation ‘Tower Loan.’” Pl.’s Amd. Compl. [84] at ¶ 1.1
Defendants have now moved to dismiss the Amended Complaint, hanging their hat on the theory
that First Tower Loan, LLC is not a party to the contract.
II.

Standard
In considering a motion under Rule 12(b)(6), the “court accepts ‘all well-pleaded facts as

true, viewing them in the light most favorable to the plaintiff.’” Martin K. Eby Constr. Co. v.
Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004) (quoting Jones v. Greninger, 188
F.3d 322, 324 (5th Cir. 1999)). To overcome a Rule 12(b)(6) motion, Plaintiff must plead
“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). “Factual allegations must be enough to raise a right to relief above the
speculative level, on the assumption that all the allegations in the complaint are true (even if
doubtful in fact).” Id. at 555 (citations and footnote omitted). “A 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.” Ashcroft v. Iqbal, 556 U.S. 662, 663

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The Deed of Trust names “First Tower Loan Inc. d/b/a Tower Loan of Prentiss” as the
lender, and the Disclosure Statement lists “First Tower Loan Inc., Tower Loan of Prentiss” as the
lender. Both of these documents are attached to the Amended Complaint. Pl.’s Amd. Compl.,
Ex. A [84-1] and Ex. B [84-2].
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(2009) (citing Twombly, 550 U.S. at 556). It follows that “where the well-pleaded facts do not
permit the court to infer more than the mere possibility of misconduct, the complaint has
alleged–but it has not ‘show[n]’–‘that the pleader is entitled to relief.’” Id. at 679 (quoting Fed.
R. Civ. P. 8(a)(2)). “This standard ‘simply calls for enough fact to raise a reasonable expectation
that discovery will reveal evidence of’ the necessary claims or elements.” In re S. Scrap
Material Co., LLC, 541 F.3d 584, 587 (5th Cir. 2008) (citing Twombly, 550 U.S. at 556).
III.

Analysis
Defendants insist that because First Tower Loan, LLC is not a named mortgagee under

the policy, it is not a party to the contract and, therefore, cannot maintain a breach of contract
claim. And without a contract, the claim for bad faith also fails. First Tower Loan counters that
a business can enter a contract using its trade name or abbreviation—a fact Defendants somewhat
concede in reply. See Defs.’ Reply [97] at 2 (“Defendants do not contest that identity of a
business by its trade name is permissible in some instances.”); see also Couch on Insurance 3d,
Vol. 3 §40:4 (2011 ed.) (“An insured may use any name when contracting with an insurer as long
as the identity is clearly established and the choice of a name is not an attempt at fraud.”).
Despite this concession, Defendants maintain that “this particular use of a trade name is
‘seriously misleading.’” Defs.’ Reply [97] at 3 (citing West Implement Co. v. First S. Prod.
Credit Ass’n, 815 So. 2d 1164 (Miss. 2002)). Such a finding might prove Defendant’s point, but
as their authority states, “whether there is an error in a financing statement is a question of law,
and whether that error is seriously misleading is a question of fact.” West Implement Co., 815
So. 2d at 1166 (citing In re Strickland, 94 B.R. 898, 902 Bankr. N.D. Miss. 1988) (holding that

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“[t]he determination of whether an error in a financing statement is seriously misleading must
turn on the facts of the particular case”)).
Defendants offer a number of arguments to carry this factual dispute, but they are
misplaced at the 12(b)(6) stage. See E.H. v. Miss. Dep’t of Educ., No.
3:12–cv–00474–DPJ–FKB, 2013 WL 4787354, at *1 (S.D. Miss. Sept. 6, 2013) (“Ordinarily, a
court decides a motion to dismiss for failure to state a claim looking only at the face of the
complaint.” (citing Fed. R. Civ. P. 12(d)). As stated, Plaintiff alleged in its Complaint that
Tower Loan is the trade name of First Tower Loan, LLC, and the Court must accept the truth of
the factual averments under Rule 12(b)(6). Pl.’s Amd. Compl. [84] at ¶ 1. Defendants’ motion
to dismiss is denied.
IV.

Conclusion
Those arguments not addressed would not change the outcome. Based on the foregoing,

the Court finds Defendants’ motion to dismiss [89] should be denied.
SO ORDERED AND ADJUDGED this the 19th day of February, 2014.
s/ Daniel P. Jordan III
UNITED STATES DISTRICT JUDGE

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