HAKIM INTERNATIONAL TRADING et al v. THE STANDARD FIRE INSURANCE COMPANY et al
Filing
62
OPINION. Signed by Judge Claire C. Cecchi on 11/30/2021. (jr)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
HAKIM INTERNATIONAL TRADING,
Civil Action No.; 17-cv-02874
ETAL.,
Plaintiffs,
OPINION
V.
THE STANDARD FIRE INSURANCE
CO., TRAVELERS, OSHIN GROUP,
LLC, LAWRENCE F. OSHINSKY, AND
ABC CORP.,
Defendants;
CECCHI, District Judge.
I. INTRODUCTION
This matter comes before the Court on the motions to dismiss plaintiffs Hakim
International Trading and Hakim Internatiortal Enterprises' ("Plaintiffs") First Amended
Complaint (ECF No. 35, "FAC") filed by defendants Oshm Group, LLC and Lawrence F.
Oshinsky ("Oshinsky Defendants") (ECF No. 39) and The Standard Fire Insurance Company
("Standard Fire") (ECF No. 40)l (collectively, "Defendants") pursuant to Federal Rule of Civil
Procedure 12(b)(6). Plaintiffs opposed Defendants' motions (ECF Nos. 41, 43), and Defendants
replied (ECF Nos. 42, 44). The Court has considered the submissions made in support of and in
Should the Court determine that it cannot consider the documents attached to and cited in the
FAC, Standard Fire requests that the Court treat its motion as a motion for summary judgment
pursuant to Federal Rule of Civil Procedure 56. ECF No. 40-9 at 9-10. However, as the
documents attached to and cited in the FAC are "integral to or explicitly relied upon in the
complaint . . . [they] may be considered without converting the motion to dismiss into one for
summary judgment." Boisvertv. State Farm Fire & Cas. Cft,No. 14-5760, 2015 WL 5771797, at
*2 (D.N.J. Sept. 29, 2015) (citations omitted).
opposition to the motions and decides this matter without oral argument pursuant to Federal Rule
of Civil Procedure 78(b). For the reasons set forth below, Standard Fire's motion to dismiss (ECF
No. 40) is granted and the Court dismisses the Oshinsky Defendants from this case due a lack of
subject matter jurisdiction.
II. BACKGROUND
a. Factual Background
Plaintiffs' claims arise out of allegations that Standard Fire, Plaintiffs' insurer, wrongfully
denied Plaintiffs' claims under its Standard Flood Insurance Policy (the "SFJP") in connection
with flood damage incurred at Plaintiffs' property. Plaintiffs farther claim that the Oshinsky
Defendants, Plaintiffs' independent adjusters, breached their duties owed to Plaintiffs concerning
their attempt to aid Plaintiffs in recovering such insurance funds under the SFIP.
Standard Fire issued the SFIP to Plaintiffs on October 13, 2013, for the property located at
533 Whiteheads Road, Hamilton, New Jersey (the "Property"). FAC at ^ 11. The SFIP provides
contents coverage of $500,000 per loss and $500,000 building damage per loss, with a $25,000
deductible. Id, at \ 12. The SFIP also provides that any claims brought by Plaintiff against
Standard Fire concerning a disputed denial of coverage under the SFIP must be filed within one
year of the date that Standard Fire issues the denial of coverage at issue. Id. at ^ 14. As SFIPs are
regulated by the Federal Emergency Management Agency ("FEMA"), only FEMA, and not
Plaintiffs or Standard Fire, may waive any provision within the SFIP, including this statute of
limitations provision. See Suopys v. Omaha Prop. & Cas., 404 F.3d 805, 807 (3d Cir. 2005) (citing
44 C.F.R. Pt. 61, App. (A)(l), Art. VII(D)).
On May 1, 2014, while the SFIP was in effect, the Property was flooded by overflow from
an adjacent creek. FAC at ^ 16. The next day, Plaintiffs allege that they notified Standard Fire of
the flood and the consequent damage to the Property. Id. at \ 19. Plaintiffs estimate that the
Property sustained building damages of over $250,000 and contents damage of over
$4,000,0000—in excess of the SFIP's $500,000 limit. M at ^ 20-21.
Two weeks later, Plaintiffs retained the services of the Oshinsky Defendants under a
written contract (the "Services Contract")—wholly separate from the SFIP contract—in which the
Oshinsky Defendants agreed to act as Plaintiffs' adjuster in connection with any insurance claims
made under the SFIP. Id at ^ 22-24. (citing ECF No. 30-2, Ex. B (Plaintiffs' contract with the
Oshinsky Defendants)). Under the Services Contract, for example, the Oshinsky Defendants
agreed to review Plaintiffs^ insurance coverage and assist Plaintiffs in complying with the SFIP's
terms and conditions. Id.
Thereafter, following Plaintiffs' submission of claims under the SFIP, Standard Fire
submitted a partial building damage payment to Plaintiffs in the amount of $79,964.57 on October
20, 2015. Id at Tf 34. In this same correspondence, however, as well as in a previous June 23,
2014 correspondence. Standard Fire denied Plaintiffs' other claims for flood damage on the
grounds that Plaintiffs "have not cooperated in [Standard Fire's] investigation of the claim." Id at
K 35 (citing ECF No. 30-2, Ex. C (Standard Fire's "denial letter" issued to Plaintiffs on October
20, 2015)). Plaintiffs allege that the Oshinsky Defendants' carelessness in assisting with their
claims submissions contributed to these denials. Id at ^ 66.
In the subsequent months, as Plaintiffs appealed Standard Fire's denials of their claims,
further negotiations ensued between the parties. Id. at ^ 37-48. For instance. Plaintiffs allege
that, following a re-inspection of the Property by Standard Fire's independent adjuster, Plaintiffs
submitted a proof of loss with Standard Fire regarding its "contents claim" on March 11, 2016. M.
Nevertheless, Plaintiffs allege that on May 6, 2016, Standard Fire rejected Plaintiffs' proof of loss
pending further review "of the current damages, prior loss damages and documentation
submitted." M (citing ECFNo. 30-2, Ex. E (Standard Fire letter to Plaintiffs)).
Then, on May 11, 2016, FEMA wrote a letter to Plaintiffs' representative in which FEMA
acknowledged that Standard Fire continued to review its previous denials of coverage under the
SFIP. ECF No 30, Ex. I. Specifically, in this letter, while FEMA did not expressly set aside
Standard Fire's previous denials of coverage or waive any of the SFIP's terms and conditions,
FEMA nonetheless recommended that Standard Fire pay Plaintiffs "all undisputed amounts of the
loss" and invited Plaintiffs to submit a written appeal to FEMA in the event that Standard Fire
refused to reverse course. Id.
Ultimately, on June 27, 2016, Standard Fire issued a letter to Plaintiffs "re-affirming" its
previous denials of coverage under the SFIP concerning the flood damage. Id. at \ 46 (citing ECF
No. 30-2, Ex. J (Standard Fire letter to Plaintiffs)). Plaintiffs then appealed this decision to FEMA,
which FEMA denied on January 17, 2017, finding that Plaintiffs' submissions to Standard Fire in
connection with its claims under the SFIP were "less than professional" and contained "inadequate
documentation." Id at ^ 48 (citing ECF No. 30-2, Ex. F (FEMA appeal denial)). Plaintiffs allege
that FEMA's findings indicate that the Oshinsky Defendants failed to adhere to its obligations
under the Services Contract. Id at ^ 59-81.
b. Procedural Background
Plaintiffs filed this action against Defendants in New Jersey Superior Court, Bergen
County, on February 27, 2017—more than one year following Standard Fire^s initial denials of
Plaintiffs' claims under the SFIP. ECF No. 1. Defendants then removed this action to this Court
pursuant to 28 U.S.C. § 1441, alleging that jurisdiction was proper under 42 U.S.C. §4072 and 28
U.S.C. § 1331. ECFNo. 1 at4 (citing Van Holt v. Liberty Mutual Fire Insurance Company^ 163
F.3d 161, 167 (3rd Cir. 1998) ("42 U.S.C. § 4072 [and thus 28 U.S.C. § 1331] vests district courts
with original exclusive jurisdiction over suits by claimants against [insurance] companies based
on partial or total disallowance of claims for insurance arising out of [SFIPs].")). Defendants
further asserted that the Court has supplemental jurisdiction over Plaintiffs' state law claims,
including those claims asserted against the Oshinsky Defendants, under 28 U.S.C. § 1367 as the
complaint derived from a "common nucleus of operative fact[j." Id, at 5.
On September 6, 2018, Plaintiffs filed the six count FAC in this Court against Defendants,
asserting a breach of contract claim against Standard Fire and also asserting a breach of contract,
a breach of fiduciary duty, and professional negligence claims against the Oshinsky Defendants.
See generally FAC.
III. LEGAL STANDARD
a. Federal Rule of Civil Procedure 12(b)(6)
To survive dismissal under Rule 12(b)(6), a complaint must meet the pleading requirements
of Rule 8(a)(2) and "contain sufficient factual matter, accepted as true, to
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