Cobble v. Benson et al

Filing 26

Order of Dismissal granting Defendant Joseph Benson's Motion to Dismiss, each party to bear their own costs and expenses., Joseph Benson terminated. Signed on 9/28/18 by District Judge M. Douglas Harpool. (View, Pat)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
SOUTHWESTERN DIVISION

GREGORY COBBLE,

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Plaintiff,
vs.
JOSEPH BENSON, and
SAFECO INSURANCE
COMPANY OF ILLINOIS,
Defendants.

Case No. 3:17-cv-05040-MDH

ORDER
Before the Court is Defendant Joseph Benson’s Motion to Dismiss. The motion has been
briefed and is ripe for review.
BACKGROUND
On June 2, 2017, this case was removed from Newton County, Missouri state court
pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. At the time the case was removed, defendant
Benson had filed a Motion to Dismiss and Plaintiff had filed a response in the state court
proceeding. (Doc. 1-2). The motion and response were filed as exhibits to the notice of removal
and were not filed as motions in federal court. However, the Court has now reviewed the motion
and opposition and finds it is ripe for review.
Plaintiff’s Petition arises out of a motor vehicle collision with an uninsured motorist.
Plaintiff claims to have been injured in the collision and is seeking underinsured motorist benefits
pursuant to a policy of insurance issued by Safeco Insurance Company of Illinois. Plaintiff alleges
defendant Benson was Safeco’s employee and was involved in adjusting his claim. Plaintiff
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further alleges both Safeco and Benson are liable for vexatious refusal of benefits based on the
amount of money he was offered for his claim.
Defendant Benson moves to be dismissed from the lawsuit because this claim can only be
made against insurance companies, not individuals, under Missouri law. Plaintiff argues Benson
is an employee and agent of Safeco and is therefore a person engaged in the business of insurance
for purposes of the vexatious refusal statute.
STANDARD
“To survive a motion to dismiss [under 12(b)(6)], a complaint must contain sufficient
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). A complaint is facially plausible where its factual content “allows
the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Id. The plaintiff must plead facts that show more than a mere speculation or possibility that the
defendant acted unlawfully. Id.; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While the
Court accepts the complaint’s factual allegations as true, it is not required to accept the plaintiff’s
legal conclusions. Ashcroft, 556 U.S. at 678. “Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice.” Id.
The court’s assessment of whether the complaint states a plausible claim for relief is a
“context-specific task that requires the reviewing court to draw on its judicial experience and
common sense.” Ashcroft, 556 U.S. at 679. The reviewing court must read the complaint as a
whole rather than analyzing each allegation in isolation. Braden v. Wal-Mart Stores, Inc., 588
F.3d 585, 594 (8th Cir. 2009).

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ANALYSIS
The Court finds no basis for individual liability for a vexatious refusal to pay claim under
Missouri law. Under Missouri law, an action against an insurance company for vexatious refusal
to pay is governed by the following statutes that state:
In any action against any insurance company to recover the amount of any loss
under a policy of automobile, fire, cyclone, lightning, life, health, accident,
employers' liability, burglary, theft, embezzlement, fidelity, indemnity, marine or
other insurance except automobile liability insurance, if it appears from the
evidence that such company has refused to pay such loss without reasonable cause
or excuse, the court or jury may, in addition to the amount thereof and interest,
allow the plaintiff damages not to exceed twenty percent of the first fifteen hundred
dollars of the loss, and ten percent of the amount of the loss in excess of fifteen
hundred dollars and a reasonable attorney's fee; and the court shall enter judgment
for the aggregate sum found in the verdict.
Mo. Ann. Stat. § 375.420 (emphasis added).
In any action, suit or other proceeding instituted against any insurance company,
association or other insurer upon any contract of insurance issued or delivered in
this state to a resident of this state, or to a corporation incorporated in or authorized
to do business in this state, if the insurer has failed or refused for a period of thirty
days after due demand therefor prior to the institution of the action, suit or
proceeding, to make payment under and in accordance with the terms and
provisions of the contract of insurance, and it shall appear from the evidence that
the refusal was vexatious and without reasonable cause, the court or jury may, in
addition to the amount due under the provisions of the contract of insurance and
interest thereon, allow the plaintiff damages for vexatious refusal to pay and
attorney's fees as provided in section 375.420. Failure of an insurer to appear and
defend any action, suit or other proceeding shall be deemed prima facie evidence
that its failure to make payment was vexatious without reasonable cause.
Mo. Ann. Stat. § 375.296 (emphasis added).
Under Missouri law, “a vexatious refusal to pay claim may only be brought against an
insurance company or other insurer.” Starman v. Peoples Ben. Life Ins. Co., No. 2:05CV18JCH,
2005 WL 2123727, at *3 (E.D. Mo. Sept. 1, 2005); citing, Mo. Rev. St. §§ 375.296, 375.420; and
Schwartz v. State Farm Mut. Auto. Ins. Co., 174 F.3d 875, 878–79 (7th Cir.1999) (court fails to
find a single case from any jurisdiction recognizing individual liability for bad faith denial of an
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insurance claim, as the employee owes no special duty to the insured on which the bad faith tort
could be based).
Plaintiff argues Benson, as an employee and agent of Safeco, is a person “engaged in the
business of insurance.” However, Plaintiff offers no case that has found individual liability for an
employee of an insurance company for purposes of a vexatious refusal to pay claim. Plaintiff
argues “agency law” should bind Benson as he should be substituted for the principal, Safeco.
This Court disagrees and finds Benson should be dismissed as a defendant in this case.
CONCLUSION
Wherefore, for the reasons set forth herein, the Court GRANTS defendant Benson’s
Motion to Dismiss and dismisses Benson from this lawsuit, each party to bear their own costs and
expenses.
IT IS SO ORDERED.
DATED:

September 28, 2018
/s/ Douglas Harpool_______________
DOUGLAS HARPOOL
UNITED STATES DISTRICT JUDGE

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