Aziz v. Allstate Insurance Company

Filing 21

MEMORANDUM AND ORDER re: IT IS HEREBY ORDERED that defendants motion to dismiss Counts II, III, and IV [Doc. # 6 ] is granted. Signed by District Judge Carol E. Jackson on 2/27/15. (KKS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
AZIM AZIZ and KINA AZIZ,
Plaintiffs,
vs.
ALLSTATE INSURANCE COMPANY,
Defendant.

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Case No. 4:14-CV-934-CEJ

MEMORANDUM AND ORDER
This matter is before the court on defendant’s motion to dismiss Counts II,
III, and IV of plaintiffs’ complaint for failure to state a claim, pursuant to Fed. R.
Civ. P. 12(b)(6). The plaintiffs have responded, and the issues are fully briefed.
I.

Background

Azim Aziz and Kina Aziz owned a house in St. Louis, Missouri. On May 12,
2006, a fire destroyed the house and its contents.

Plaintiffs had a homeowner’s

insurance policy issued by defendant Allstate Insurance Company that was in effect
at the time of the fire.

They filed a claim under the policy which the defendant

denied.
In the complaint, plaintiffs assert the following state law claims: (Count I)
breach of contract; (Count II) negligent misrepresentation; (Count III) specific
performance; (Count IV) unjust enrichment; and (Count V) vexatious refusal to
pay. The case was removed to this court pursuant to 28 U.S.C. § 1332. Defendant
now moves to dismiss Counts II, III, and IV.
II.

Legal Standard

The purpose of a motion to dismiss under Rule 12(b)(6) of the Federal Rules
of Civil Procedure is to test the legal sufficiency of the complaint.

The factual

allegations of a complaint are assumed true and construed in favor of the plaintiff,
“even if it strikes a savvy judge that actual proof of those facts is improbable.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007) (citing Swierkiewicz v.
Sorema N.A., 534 U.S. 506, 508 n.1 (2002)); Neitzke v. Williams, 490 U.S. 319,
327 (1989) (“Rule 12(b)(6) does not countenance . . . dismissals

based on a

judge’s disbelief of a complaint’s factual allegations”); Scheuer v. Rhodes, 416 U.S.
232, 236 (1974) (a well-pleaded complaint may proceed even if it appears “that a
recovery is very remote and unlikely”). The issue is not whether the plaintiff will
ultimately prevail, but whether the plaintiff is entitled to present evidence in
support of his claim. Id. A viable complaint must include “enough facts to state a
claim to relief that is plausible on its face.” Bell Atlantic Corp., 550 U.S. at 570; see
also id. at 563 (“no set of facts” language in Conley v. Gibson, 355 U.S. 41, 45–46
(1957), “has earned its retirement.”). “Factual allegations must be enough to raise
a right to relief above the speculative level.” Id. at 555.
III.

Discussion
A. Count II: Negligent Misrepresentation

In Count II, plaintiffs allege that Allstate breached the policy “and/or acted
negligently” by failing to pay their claim under the policy, failing to provide
reasonable grounds for denying the claim, and failing to deal with plaintiffs in good
faith.
Negligent misrepresentation is a tort under Missouri law.

Children’s Wish

Found. Int’l, Inc. v. Mayer Hoffman McCann, P.C., 331 S.W.3d 648, 652 (Mo. 2011)
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(en banc). “Missouri’s iteration of the economic loss doctrine ‘prohibit[s] a plaintiff
from seeking to recover in tort for economic losses that are contractual in nature.’”
Elkhart Metal Fabricating, Inc. v. Martin, 14-CV-00705-JCH, 2014 WL 2972709, at
*2 (E.D. Mo. July 1, 2014) (quoting Autry Morlan Chevrolet Cadillac, Inc. v. RJF
Agencies, Inc., 332 S.W.3d 184, 192 (Mo. Ct. App. 2010)). To resolve whether the
economic loss doctrine applies, the Court must determine “both whether the loss is
purely economic and whether the action brought is contractual or tortious in
nature.”

Id.

Where a defendant’s alleged “act breaches a duty that exists only

under [a] contract, the only avenue for recovery is a breach of contract action.” Id.
(citing Khulusi v. Sw. Bell Yellow Pages, Inc., 916 S.W.2d 227, 230 (Mo. Ct. App.
1995)).
Plaintiffs’ claim of negligent misrepresentation is based upon Allstate’s
alleged breach of the insurance contract and plaintiffs’ alleged losses are purely
economic.

Moreover, Allstate’s duties to plaintiffs arise from the contractual

relationship and the claim of negligent misrepresentation is based on a duty that
exists only by reason of the contract.

Thus, Missouri’s economic loss doctrine

applies and plaintiffs cannot maintain a claim for negligent misrepresentation.
Count II will be dismissed.
B. Count III: Specific Performance
Count IV: Unjust Enrichment
Plaintiffs seek specific performance of the policy and also claim that Allstate
has been unjustly enriched by failing to pay on the policy. Specific performance is
an equitable remedy. Metro Motors v. Nissan Motor Corp. in U.S.A., 339 F.3d 746,
753 (8th Cir. 2003); Seabaugh v. Keele, 775 S.W.2d 205, 207 (Mo. Ct. App. 1989)
(citing Hoover v. Wright, 202 S.W.2d 83, 86 (Mo. 1947)). Also, unjust enrichment
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is an equitable claim.

Affordable Communities of Missouri v. Fed. Nat’l Mortgage

Ass'n, 714 F.3d 1069, 1077 (8th Cir. 2013) (citing Reyner v. Crawford, 334 S.W.3d
168, 174 (Mo. Ct. App. 2011)).

“[A] plaintiff may not recover under both an

express contract and unjust enrichment.”

Id. (quotations and citations omitted).

Equitable remedies are only available where the remedy at law, money damages,
would not adequately compensate the plaintiff. Id.; Doe 1631 v. Quest Diagnostics,
Inc., 395 S.W.3d 8, 16 (Mo. 2013) (en banc).
An adequate remedy at law exists where a plaintiff “would be fully
compensated for her alleged injuries through damages on her claims for breach of
contract and vexatious refusal to pay.” Jameson v. State Farm Mut. Auto. Ins. Co.,
871 F. Supp. 2d 862, 871–72 (W.D. Mo. 2012); see also Amerisure Mut. Ins. Co. v.
Maschmeyer Landscapers, Inc., 4:06-CV-1308-CEJ, 2007 WL 2811080 (E.D. Mo.
Sept. 24, 2007).

Here, plaintiffs would be fully compensated for their alleged

injuries through damages on their breach of contract and vexatious refusal to pay
claims.

Therefore, plaintiffs have an adequate remedy at law, and the equitable

remedies of specific performance and unjust enrichment are unavailable.

Counts

III and IV will be dismissed.
Accordingly,
IT IS HEREBY ORDERED that defendant’s motion to dismiss Counts II, III,
and IV [Doc. #6] is granted.

CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 27th day of February, 2015.
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