American Modern Home Insurance Company v. Thomas et al

Filing 103

MEMORANDUM AND ORDER. (See Full Order.) IT IS HEREBY ORDERED that plaintiff American Modern Home Insurance Company's Motion to Dismiss Counts II and III of Defendants' Counterclaim 80 is GRANTED in part and DENIED in part as set out ab ove. Defendants Aaron and Aimee Thomas are permitted to proceed on the claims raised in their counterclaim, with Count II being limited to a claim of vexatious refusal to pay under Mo. Rev. Stat. § 375.420. Signed by District Judge Catherine D. Perry on 5/22/2017. (CBL)

Case: 4:16-cv-00215-CDP Doc. #: 103 Filed: 05/22/17 Page: 1 of 5 PageID #: 891

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
AMERICAN MODERN HOME
INSURANCE COMPANY,
Plaintiff,
v.
AARON THOMAS, et al.,
Defendants.

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Case No. 4:16 CV 215 CDP

MEMORANDUM AND ORDER
Plaintiff American Modern Home Insurance Company brings this
declaratory judgment action seeking a declaration that there is no coverage under a
renters’ insurance policy issued to defendants Aaron and Aimee Thomas on their
claim for property damage caused by fire. In their counterclaim, the Thomases
raise claims of vexatious refusal to pay and intentional infliction of emotional
distress, which American Modern Home now moves to dismiss for failure to state
a claim.1 For the following reasons, I will permit these claims to proceed.
Legal Standard
American Modern Home moves to dismiss the Thomases’ claims under Fed.
R. Civ. P. 12(b)(6) for failure to state a claim. When reviewing a Rule 12(b)(6)
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The counterclaim also seeks a declaration that American Modern Home must pay all amounts
due under the policy. This claim is not a subject of the motion to dismiss.

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motion to dismiss, I assume the allegations in the complaint to be true and construe
the complaint in favor of the complaining party. See Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555-56 (2007); Huggins v. FedEx Ground Package Sys., Inc., 592
F.3d 853, 862 (8th Cir. 2010); Anzaldua v. Northeast Ambulance & Fire Prot.
Dist., 978 F. Supp. 2d 1016, 1021 (E.D. Mo. 2013). To survive a motion to
dismiss, the complaint need not contain “detailed factual allegations,” but it must
contain facts with enough specificity “to raise a right to relief above the speculative
level.” Twombly, 550 U.S. at 555. The issue in determining a Rule 12(b)(6)
motion is not whether the complaining party will ultimately prevail, but whether he
is entitled to present evidence in support of his claim. See Skinner v. Switzer, 562
U.S. 521, 529-30 (2011) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
Discussion
A.

Vexatious Refusal to Pay
In Count II of their counterclaim, the Thomases invoke Mo. Rev. Stat. §§

375.296 and 375.420 to allege that American Modern Home’s failure and refusal
to pay on their insurance claim amounts to vexatious refusal to pay under Missouri
law.
To the extent the Thomases invoke § 375.296 as a basis for recovery, I will
grant the motion to dismiss. The present state of Missouri law supports American
Modern Home’s argument that § 375.296 applies only to insurance companies not
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authorized to transact business in the State of Missouri. See Irish v. Allied Prop. &
Cas. Ins. Co., No. 13-05015-CV-SW-JTM, 2013 WL 3773982, at *2 (W.D. Mo.
July 18, 2013) (citing Missouri cases). Because American Modern Home is
authorized to do business in Missouri, the Thomases cannot recover against it on a
claim of vexatious refusal to pay brought under § 375.296. Accordingly, to the
extent Count II seeks recovery under § 375.296, it will be dismissed for failure to
state a claim. The claim survives, however, under § 375.420 and will be permitted
to go forward. Irish, 2013 WL 3773982, at *2.
I will also grant American Modern Home’s motion to the extent it seeks to
dismiss the Thomases’ claim that American Modern Home’s conduct giving rise to
their claim of vexatious refusal to pay also violated Mo. Rev. Stat. § 375.1000 and
constituted a breach of its fiduciary duty of good faith and fair dealing. The
Thomases concede that they cannot bring a private cause of action under §
375.1000 and, further, aver that they intended to assert only a statutory claim of
vexatious refusal to pay and not a common law claim of breach of fiduciary duty.
Finally, to the extent American Modern Home argues that Count II fails to
state a claim generally because an insurer may seek a judicial determination of a
factual question without being penalized for vexatious refusal to pay, I will deny
the motion. American Modern Home’s averments in support of this argument rely
on matters outside the pleadings, which I may not consider on a Rule 12(b)(6)
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motion to dismiss. Enervations, Inc. v. Minnesota Mining & Mfg. Co., 380 F.3d
1066, 1069 (8th Cir. 2004).
B.

Intentional Infliction of Emotional Distress
In Count III of their counterclaim, the Thomases sufficiently allege that

American Modern Home engaged in tortious conduct independent and “quite
distinct” from conduct merely constituting breach of an insurance contract. That
this conduct is alleged to have occurred during the course of American Modern
Home’s investigation into the Thomases’ insurance claim does not immunize the
insurer against this tort claim. Overcast v. Billings Mut. Ins. Co., 11 S.W.3d 62,
68-69 (Mo. banc 2000).
Further, contrary to American Modern Home’s assertion, it is not apparent
from the face of the counterclaim that the alleged tortfeasor was an independent
contractor for whom American Modern Home cannot be held vicariously liable.
Cf. C.H. Robinson Worldwide, Inc. v. Lobrano, 695 F.3d 758, 764 (8th Cir. 2012)
(affirmative defense can provide basis for dismissal under Rule 12(b)(6) if defense
is apparent on face of complaint). Nor are the Thomases required to plead facts
disproving this affirmative defense in order to state a claim for relief. See
Enervations, Inc., 380 F.3d at 1069.
I will therefore deny the motion to dismiss directed to Count III of the
counterclaim.
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Accordingly,
IT IS HEREBY ORDERED that plaintiff American Modern Home
Insurance Company’s Motion to Dismiss Counts II and III of Defendants’
Counterclaim [80] is GRANTED in part and DENIED in part as set out above.
Defendants Aaron and Aimee Thomas are permitted to proceed on the claims
raised their counterclaim, with Count II being limited to a claim of vexatious
refusal to pay under Mo. Rev. Stat. § 375.420.

CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE

Dated this 22nd day of May, 2017.

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