Tomkiel v. Hartford Casualty Insurance Company

Filing 19

ORDER Granting 7 Defendant's Partial Motion to Dismiss. IT IS FURTHER ORDERED that claims two, three, and four of Plaintiff's complaint are DISMISSED without prejudice. Signed by Judge James C. Mahan on 04/14/2014. (Copies have been distributed pursuant to the NEF - AC)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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HENRY TOMKIEL,

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2:13-CV-1888 JCM (PAL)

Plaintiff(s),

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v.

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HARTFORD CASUALTY
INSURANCE COMPANY,

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Defendant(s).

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ORDER

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Presently before the court is defendant Hartford Casualty Insurance Company’s (“defendant”)

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partial motion to dismiss plaintiff Henry Tomkiel’s complaint. (Doc. # 7). Plaintiff has responded

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(doc. # 10), and defendant has replied (doc. # 12).

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I.

Background Facts

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The instant dispute arises out of an insurance contract. (Doc. # 7 at 1). On July 21, 2011 an

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under-insured motorist struck plaintiff’s automobile. (Doc. # 1-5 at 8-9). As a result of the accident,

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plaintiff sustained injuries to his body. (Doc. #1-5 at 9).

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Plaintiff was insured under a policy issued by defendant at the time of the accident. (Doc. #

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7 at 1). The policy provided for, inter alia, an under-insured motorist benefit. (Doc. # 7 at 1-2). A

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dispute arose between plaintiff and defendant as to plaintiff's entitlement to under-insured motorist

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benefits. Accordingly, plaintiff initiated the instant suit alleging four causes of action: (1) breach of

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contract; (2) contractual breach of the implied covenant of good faith and fair dealing; (3) tortious

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James C. Mahan
U.S. District Judge

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breach of the implied covenant of good faith and fair dealing; and (4) unfair trade practices. (Doc.

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# 7 at 2). Defendant now moves to dismiss plaintiff’s extra-contractual claims: plaintiff’s second,

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third, and fourth causes of action.

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II.

Legal Standard

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A court may dismiss a plaintiff's complaint for “failure to state a claim upon which relief can

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be granted.” Fed. R. Civ. P. 12(b)(6). A properly pled complaint must provide “[a] short and plain

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statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2); Bell

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Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual

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allegations, it demands “more than labels and conclusions” or a “formulaic recitation of the elements

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of a cause of action.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citation omitted). “Factual

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allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to

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survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to

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relief that is plausible on its face.” Iqbal, 129 S.Ct. at 1949 (citation omitted).

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In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when

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considering motions to dismiss. First, the court must accept as true all well-pled factual allegations

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in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 1950.

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Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not

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suffice. Id. at 1949. Second, the court must consider whether the factual allegations in the complaint

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allege a plausible claim for relief. Id. at 1950. A claim is facially plausible when the plaintiff's

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complaint alleges facts that allows the court to draw a reasonable inference that the defendant is

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liable for the alleged misconduct. Id. at 1949.

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Where the complaint does not permit the court to infer more than the mere possibility of

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misconduct, the complaint has “alleged – but not shown – that the pleader is entitled to relief.” Id.

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(internal quotations omitted). When the allegations in a complaint have not crossed the line from

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conceivable to plausible, plaintiff's claim must be dismissed. Twombly, 550 U.S. at 570.

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...

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...

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James C. Mahan
U.S. District Judge

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III.

Discussion

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(1)

Contractual breach of the implied covenant of good faith and fair dealing

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The contractual covenant of good faith is an obligation independent of consensual

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contractual covenants. Morris v. Bank of Am. Nev., 886 P.2d 454, 457 n.2 (Nev. 1994). A contractual

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breach of covenant arises where a party to the contract honors the express terms, but deliberately

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contravenes the intent and spirit of the contract. Hilton Hotels Corp. v. Butch Lewis Prods., 808 P.2d

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919, 922-23 (Nev. 1991).

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Plaintiff argues under his breach of contract claim that defendant did not comply with the

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express terms of the insurance policy by denying plaintiff benefits due under the under-insured

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motorist provision. Plaintiff asserts he is owed the policy limit under the insurance contract between

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him and defendant. Therefore, plaintiff alleges facts establishing a violation of the express terms of

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the policy, thereby negating the possibility of a valid claim for breach of the contractual covenant

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of good faith. See Kennedy v. Carriage Cemetery Servs., 727 F. Supp. 2d 925, 931 (D. Nev. 2010).

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Plaintiff does not argue in any manner that defendant executed its contractual obligations under the

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insurance policy.

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Accordingly, a breach of contract cause of action is appropriate in the instant matter and

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contractual breach of the implied covenant of good faith and fair dealing claim will be dismissed.

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(2)

Tortious breach of the implied covenant of good faith and fair dealing

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In order to establish a cause of action for tortious breach of the implied covenant of good

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faith and fair dealing in the insurance context, the plaintiff must demonstrate: (1) an insurer’s denial

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of an insured’s claim; (2) without any reasonable basis; and (3) the insurer’s actual or implied

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awareness of the lack of a reasonable basis for its claim denial. Pioneer Chlor Alkali Co. v. Nat’l

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Union Fire Ins. Co., 863 F. Supp. 1237, 1242 (D. Nev. 1994).

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To support his tortious breach of the implied covenant of good faith and fair dealing, plaintiff
alleges in his complaint:
Defendant’s refusal to make adequate payment to Plaintiff was made
without a reasonable basis in fact or law.

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Defendant’s refusal to make adequate payment to Plaintiff was made
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James C. Mahan
U.S. District Judge

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in bad faith and for the purpose of denying the benefits of contract for
underinsured motorist coverage to Plaintiff.

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Defendant’s refusal to make adequate payment to Plaintiff was an
unlawful attempt to force Plaintiff to accept less money than the
amount due under the Policy.

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(Doc. # 1-5 at 9).

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However, a "formulaic recitation of the elements of a cause of action" does not satisfy the

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pleading requirements. Iqbal, 129 S. Ct. 1937, 1949 (2009). Plaintiff fails to allege with anything

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more than conclusory allegations that defendant had knowledge of or reckless disregard for the

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alleged lack of a reasonable basis when it denied the claim. See Guar. Nat'l Ins. Co. v. Potter, 912

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P.2d 267, 272 (Nev. 1996) ("Bad faith is established where the insurer acts unreasonably and with

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knowledge that there is no reasonable basis for its conduct").

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Accordingly, plaintiff has failed to state a claim that is plausible on its face and defendant’s

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motion to dismiss will be granted as to this claim.

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(3)

Unfair trade practices

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Plaintiff alleges in his complaint that defendant "has engaged in unfair trade practices

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pursuant to Nev. Rev. Stat. 686A.310, including defendant’s failure to properly settle plaintiff's

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claim." (Doc. # 1-5 at 11). In his complaint, plaintiff did not address with sufficient particularity

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which provision of Nevada’s unfair trade practice act defendant violated. In his opposition, plaintiff

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does point to three subsections of the act that defendant allegedly violated. However, the allegations

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related to these subsections are not contained in the complaint, and are not properly before the court.

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Plaintiff cannot rely on facts that he neglected to include in his complaint by referring to them

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in his opposition. See Schneider v. Cal. Dep't of Corr., 151 F.3d 1194, 1197 n.1 (9th Cir. 1998) (“In

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determining the propriety of a Rule 12(b)(6) dismissal, a court may not look beyond the complaint

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to a plaintiff's moving papers, such as a memorandum in opposition to a defendant's motion to

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dismiss.”) (citing Harrell v. United States, 13 F.3d 232, 236 (7th Cir. 1993) (emphasis in original));

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see also Winkler v. Hartford Financial Services Group Inc., 2011 WL 1705559 (D. Nev. 2011)

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(dismissing claim where plaintiffs “do not allege any facts supporting claim under Nevada’s Unfair

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James C. Mahan
U.S. District Judge

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Claims Practices Act and do not even specify which portion of the act they allege defendant

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violated.”). Accordingly, defendant’s motion to dismiss is granted as to plaintiff’s claim for violation

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of Nev. Rev. Stat. 686A.310.

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(4)

Punitive damages

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To support a claim for punitive damages, a plaintiff must show the defendant's conduct was

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oppressive, fraudulent, or malicious. Nev. Rev. Stat. 42.005. While defendant acknowledges plaintiff

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sufficiently alleges breach of contract, punitive damages are not available when a defendant can be

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held liable only for a breach of contract. Ins. Co. of the W. v. Gibson Tile Co., Inc., 134 P.3d 698,

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699 (Nev. 2006). Even a finding of bad faith will not, in and of itself, support a claim for punitive

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damages. United Fire Ins. Co. v. McClelland, 780 P.2d 193, 199 (Nev. 1989).

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Because plaintiff has not alleged conduct that supports an extra-contractual claim in his

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complaint, plaintiff’s request for punitive damages must be denied.

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IV.

Conclusion

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While plaintiff’s complaint is deficient, “a district court shall grant leave to amend freely

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when justice so requires.” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir.

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2001) (internal quotations omitted). “Dismissal without leave to amend is improper unless it is clear,

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upon de novo review, that the complaint could not be saved by any amendment.” Griggs v. Pace Am.

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Group, Inc., 170 F.3d 877, 879 (9th Cir. 1999).

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendant’s motion to

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dismiss (doc. # 7) be, and the same hereby is, GRANTED.
IT IS FURTHER ORDERED that claims two, three, and four of plaintiff’s complaint are
dismissed without prejudice.
DATED April 14, 2014.

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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge

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