ADAMS v. ALLSTATE LIFE INSURANCE COMPANY

Filing 49

OPINION. Signed by Judge Robert B. Kugler on 4/4/2018. (dmr)

NOT FOR PUBLICATION
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

Janette K. ADAMS,
Plaintiff,
v.
ALLSTATE LIFE INSURANCE COMPANY,
et al.
Defendants.

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Civil No. 16-9465 (RBK/JS)
OPINION

KUGLER, United States District Judge:
This matter comes before the Court on Defendant Allstate Life Insurance Company’s
Motion to Dismiss Certain Claims. (ECF No. 30.) Defendants seek dismissal of Count II of the
amended complaint, a claim for breach of the covenant of good faith and fair dealing, as well as
Count V, a claim for negligent hiring and supervision. Because Plaintiff’s amended complaint has
not cured the defects that previously led to dismissal of these claims without prejudice,
Defendant’s motion is GRANTED.
I.

THE FACTS
As Plaintiff has not changed the facts of her complaint on amendment, the Court adopts

the facts as stated in its previous opinion. (See Op., ECF No. 24.) In brief, this suit concerns the
alleged illicit draining of funds from Plaintiff’s Allstate annuity account, which she inherited from
her father’s estate. (Id. at 1-2.) It is alleged that Allstate failed to prevent her former husband from
withdrawing funds from her annuity account. (Am. Compl. at 7.)

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On August 18, 2017, this Court granted Defendant’s motion to dismiss (ECF No. 14),
dismissing Plaintiff’s breach of warranty claim with prejudice. This Court also dismissed, without
prejudice, Plaintiff’s claims of (i) breach of the covenant of good faith and fair dealing and (ii)
negligent hiring and supervision. This Court found that Plaintiff had not “allege[d] any facts to
suggest an independent claim for breach of the covenant of good faith and fair dealing.” (Op., ECF
No. 24 at 8.) We also found that Plaintiff had not presented “any suggestion that Defendant knew
or should have known that any employee had some quality that could have foreseeably led to
Plaintiff’s alleged injury.” (Id. at 9.)
Plaintiff amended her complaint after dismissal, though she presents the exact same
Statement of Facts and has only changed the contents of Counts II and V. (ECF No. 27.) But some
changes were forthcoming. With respect to Count II, Plaintiff clarified, that Allstate did not ask
anyone who withdrew funds from the account for a signature card. In so doing, Allstate “allowed
Plaintiff’s husband, Jeffrey Adams, to fraudulently withdraw the $334,932.98 Annuity by forging
Plaintiff’s signature on the Requests for Distribution forms without Plaintiff’s knowledge.” (Am.
Compl. at 7.) Count V has seen some changes as well, although none of them are grounded in fact.
Defendants have again moved for dismissal of these counts, and have asked for the Court
to do so with prejudice. Plaintiff, for her part, failed to timely file a response, but did send a letter
(also untimely) to the Court stating she wished to resubmit her opposition papers to the previous
motion to dismiss. (ECF No. 34.)
II.

THE 12(b)(6) STANDARD
When considering a motion to dismiss a complaint for failure to state a claim, Fed. R. Civ.

P. 12(b)(6), the Court must accept all well-pleaded allegations in the complaint as true and view
them in the light most favorable to the non-moving party. A motion to dismiss may be granted
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only if the plaintiff has failed to set forth fair notice of what the claim is and the grounds upon
which it rests that make such a claim plausible on its face. Bell Atlantic Corp. v. Twombly, 550
U.S. 544 (2007). Although Rule 8 does not require “detailed factual allegations,” it requires “more
than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (citing Twombly, 550 U.S. at 555).
In reviewing the sufficiency of a complaint, this Court must “tak[e] note of the elements
[the] plaintiff must plead to state a claim. Second, it should identify allegations that, because they
are no more than conclusions, are not entitled to the assumption of truth. Finally, [w]hen there are
well-pleaded factual allegations, [the] court should assume their veracity and then determine
whether they plausibly give rise to an entitlement to relief.” Connelly v. Lane Const. Corp., 809
F.3d 780, 787 (3d Cir. 2016) (alterations in original) (internal citations and quotation marks
omitted).
III.

DISCUSSION
Plaintiff’s amended complaint is word-for-word identical to her previous submission save

for seven paragraphs. The law-of-the-case doctrine thus counsels this Court against considering
anything in the complaint previously addressed in this Court’s last opinion on the sufficiency of
the pleadings. See generally Wright & Miller, 18B Federal Practice & Procedure. Juris. § 4478 (2d
ed.) In light of the amendment and the relatively minor changes made to the complaint, we
therefore consider this question: do these new paragraphs add sufficient factual background, taken
together with the remainder of the complaint, to withstand dismissal under 12(b)(6)?
We find that they do not.

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Count II: The Breach of the Covenant of Good Faith and Fair Dealing
“In every contract there is an implied covenant that neither party shall do anything which
will have the effect of destroying or injuring the right of the other party to receive the fruits of the
contract; in other words, in every contract there exists an implied covenant of good faith and fair
dealing.” Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 420 (1997) (quotations and citations
omitted). To state a claim of breach of the covenant of good faith and fair dealing, a plaintiff must
present some facts indicating bad motive. As the Supreme Court of New Jersey has explained, “an
allegation of bad faith or unfair dealing should not be permitted to be advanced in the abstract and
absent improper motive.” Wilson v. Amerada Hess Corp., 168 N.J. 236, 251 (2001). “Without bad
motive or intention, discretionary decisions that happen to result in economic disadvantage to the
other party are of no legal significance.” Id. We previously dismissed this claim for failing to set
forth any facts that established bad faith or an intention to deprive Plaintiff of her expected
contractual benefits.
Plaintiff’s most recent submission does little to correct these deficiencies; indeed, Plaintiff
appears to fundamentally misunderstand the covenant of good faith and fair dealing. Plaintiff
alleges that Allstate or its employees “acted in bad faith” by failing to obtain Plaintiff’s signature
or by failing to authenticate Plaintiff’s signature, thereby letting her former husband abscond with
the funds. However, it is not enough, as Plaintiff does, to infer bad intentions from bad
consequences. Simply intoning the words “bad faith” does establish a breach of this covenant; to
do so is to offer “no more than conclusions,” which “are not entitled to the assumption of truth.”
809 F.3d at 787. This is not the end of the 12(b)(6) analysis, of course, but the Court finds that, on
these facts, it is not plausible that Allstate intentionally, let alone with bad faith or malice,
permitted an unauthorized individual to withdraw funds from Plaintiff’s annuity account.
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However, because some set of facts may exist that could indicate such a finding, we find
that dismissal with prejudice is inappropriate at this time. If Plaintiff seeks to state this claim
against Defendants, she must present facts that could plausibly establish an intent to permit
Plaintiff’s husband (or someone else) to withdraw funds from the annuity with a forged signature.
Count V: Negligent Hiring and Supervision
As this Court noted in its last opinion, to support a claim for negligent hiring, a plaintiff
must show that “the risk of harm from the dangerous employee to a person such as the plaintiff
was reasonably foreseeable as a result of the employment.” Di Cosala v. Kay, 450 A.2d 508, 516
(N.J. 1982). This claim requires a plaintiff to satisfy two elements. First, she must show that an
employer had actual or constructive notice of a dangerous attribute of an employee and “could
reasonably have foreseen that such qualities created a risk of harm to other persons.” Id. Second,
a plaintiff must show that “through the negligence of the employer in hiring the employee, the
latter’s incompetence, unfitness or dangerous characteristics proximately caused the injury.” Id. In
determining what an employer should have known, it is settled doctrine that “[f]oresight, not
hindsight, is the standard by which one’s duty of care is to be judged.” Johnson v. Usdin Louis
Co., 591 A.2d 959, 961 (App. Div. 1991) (quoting Hill v. Yaskin, 380 A.2d 1107, 1109 (N.J.
1977)).
We previously dismissed Plaintiff’s complaint for failing to identify some quality that
could have foreseeably led to Plaintiff’s alleged injury. Plaintiff’s amendment to Count V has done
little to correct this deficiency. Two paragraphs have been added. The first merely adds the word
“supervise” to Defendant’s triple duty to responsibly “hire, train, and supervise,” flatly failing
Twombly’s disdain for “a formulaic recitation of the elements of a cause of action.” 550 U.S. at

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555. The other offers more words, but not more substance. The first1 Paragraph 7 of Count V
reiterates Defendant’s alleged failure to properly hire, train, or supervise its employees and those
employees’ alleged failures to see that the signature presented to them was authentic. It does not
allege any particular and dangerous quality of an employee that could have foreseeably put
Defendant on notice. An allegation must rest on facts, and Plaintiff’s complaint did not even amend
its facts section to shore up these claims. Instead, Plaintiff reimagined a conclusory recital of the
elements that is materially indistinguishable from the claim this Court previously dismissed.
Accordingly, this claim is dismissed as well.
IV.

CONCLUSION
As before, if Plaintiff seeks to amend the pleadings with respect to these claims, she must

present facts sufficient to state a claim and not rely on threadbare assertions and conclusory
allegations to make her point for her. Defendant’s motion is therefore GRANTED and Counts II
and V of Plaintiff’s complaint are dismissed without prejudice. An order follows.

Dated:

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April 4, 2018

/s Robert B. Kugler
ROBERT B. KUGLER
United States District Judge

The first, because there are two Paragraph 7s under Count V.
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