Quick Response Commercial Division, LLC v. Aon Risk Services of Illinois, Inc.
DECISION AND ORDER granting Deft's 9 Motion to Dismiss Pltf's second cause of action and the claim for atty's fees and costs. Signed by Senior Judge Thomas J. McAvoy on 12/4/12. (sfp, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
-------------------------------QUICK RESPONSE COMMERCIAL DIVISION, LLC.,
AN ASSIGNEE OF COLONIE, NEW YORK, LODGE
NO. 2192 BENEVOLENT AND PROTECTIVE ORDER
OF ELKS OF THE UNITED STATES OF AMERICA
AON RISK SERVICES OF ILLINOIS, INC., aka
AON RISK SERVICES CENTRAL, INC.,
LEXINGTON INSURANCE COMPANY,
-------------------------------THOMAS J. McAVOY
Senior United States District Judge
DECISION and ORDER
Plaintiff, Quick Response Commercial Division, LLC, commenced the instant
action claiming that Defendant, Lexington Insurance Company, breached the insurance
contract (First Cause of Action) and breached the implied covenant of good faith and
fair dealing (Second Cause of Action). Presently before the Court is Defendant’s
Motion to Dismiss Plaintiff’s Second Cause of Action and its claim for attorneys’ fees
and costs pursuant to Fed. R. Civ. P. 12(b)(6).
Elks Lodge 2192 (“the Lodge”) was issued an insurance policy from Defendant
Lexington Insurance Company (“the Policy”). Defendant AON is an agent and
administrator of the Policy. The Policy was in place on October 5, 2011 when the
Lodge sustained fire and water damage. Defendants accepted the claim as a covered
loss under the Lodge’s insurance policy. The Lodge hired Plaintiff Quick Response to
inspect and repair the damages from the covered loss. Quick Response invoiced the
Lodge for approximately $342,136.48, of which the Lodge has paid $134,973.46. The
Lodge was reimbursed the $134,973.47 by Defendants.
The Lodge assigned its rights under the Policy to Quick Response. Quick
Response commenced the instant action against Defendants seeking the remaining
amount left on the invoice plus interest, attorneys’ fees, and costs associated with this
litigation. Presently before the Court is Defendant’s motion pursuant to Fed. R. Civ. P.
12(b)(6) seeking dismissal of Plaintiff’s Second Cause of Action (breach of the
covenant of good faith and fair dealing) and their claim for attorneys’ fees.
STANDARD OF REVIEW
“Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain
statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the
defendant fair notice of what the ... claim is and the grounds upon which it rests.’” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007)
(quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). “While a
complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual
allegations ... a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief’
requires more than labels and conclusions, and a formulaic recitation of the elements of
a cause of action will not do.” Id. at 1964–65. “Factual allegations must be enough to
raise a right to relief above the speculative level ... on the assumption that all the
allegations in the complaint are true (even if doubtful in fact).” Id. at 1965. “‘[T]he
pleading must contain something more ... than ... a statement of facts that merely
creates a suspicion [of] a legally cognizable right of action.’” Id. at 1965 (quoting 5 C.
Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235–236 (3d ed.2004)).
“To survive a motion to dismiss, 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, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting
Twombly, 550 U.S. at 570). A complaint does not suffice “if it tenders naked assertions
devoid of further factual enhancement.” Ashcroft, 556 U.S. at 678. Legal conclusions
must be supported by factual allegations. Iqbal, at 1950. “Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not
suffice.” Id. at 1949. “A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. “Where a complaint pleads facts that are ‘merely
consistent with’ a defendant's liability, it stops short of the line between possibility and
plausibility of entitlement to relief.” Id. (quoting Twombly, 550 U.S. 557) (internal
Breach of the Implied Covenant of Good Faith and Fair Dealing
Defendant argues that Plaintiff’s Second Cause of Action of a breach of the
implied covenant of good faith and fair dealing should be dismissed because Plaintiff
failed to plead a ground upon which relief can be granted. The covenant of good faith
and fair dealing is implied in every contract and, therefore, the claim is duplicative of a
breach of contract claim. R.I. Island House, LLC v. North Town Phase II Houses, Inc.,
51 A.D.3d 890, 896, 858 N.Y.S.2d 372 (2d Dep’t 2008); Grazioli v. Encompass Ins. Co.,
40 A.D.3d 696, 697, 835 N.Y.S.2d 682 (3d Dep’t 2007); see also Paterra v. Nationwide
Mut. Fire Ins. Co., 38 A.D.3d 511, 512-13, 831 N.Y.S.2d 468 (2d Dep’t 2007) (claim
predicated on alleged breach of implied duty of good faith is duplicative of breach of
contract).1 However, an independent claim that an insurer breached the implied
covenant of good faith and fair dealing may be sustained if there is an underlying,
independent tort sufficient to support a claim that the insurer engaged in egregious
conduct directed to Plaintiff and which was a pattern directed to the public generally.
See New York Univ. v. Continental Ins. Co., 87 N.Y.2d 308, 319-20, 639 N.Y.S.2d 283,
662 N.E.2d 763 (1995); Fabrizio v. Erie Ins. Co.,No. 08-CV-816, 2009 WL 427102, at *4
(N.D.N.Y. Feb. 20, 2009). Upon reviewing the Amended Complaint, the Court finds that
Plaintiff has not alleged sufficient facts that plausibly indicate tortious activity, let alone
the egregious conduct necessary to satisfy an implied covenant claim. Rather, the
allegations in the Second Cause of Action merely restate a breach of the insurance
contract. The motion to dismiss the Second Cause of Action is, therefore, granted.
Attorneys’ Fees and Costs
Defendant also argues that Plaintiff’s claim for fees and costs should be
dismissed because New York courts hold that attorney’s fees are not recoverable for an
alleged breach of an insurance policy. There is abundant authority from New York
courts that the general rule is that “an insured may not recover the expenses incurred
Both parties rely on New York law. The Court agrees that New York law is applicable
in bringing an affirmative action against an insurer to settle its rights under the policy.”
Globecon Group, LLC v. Hartford Fire Ins. Co., 434 F.3d 165, 177 (2d Cir. 2006) (citing
New York Univ., 87 N.Y.2d at 324)). The Court agrees that the this is the current state
of the law. Woodworth v. Erie Ins. Co., No. 05-CV-6344CJS, 2009 WL 16652258, at *5
(W.D.N.Y. June 12, 2009).
Plaintiff contends that attorneys’ fees and costs are recoverable as a
consequential damage of a bad faith breach of an insurance policy. Indeed, “ . . . such
fees could be recovered where there is ‘more than an arguable difference of opinion
between carrier and insured over coverage’ and there is a showing of ‘bad faith in
denying the coverage that no reasonable carrier would, under the given facts, be
expected to assert it.’” Liberty Surplus Ins. Corp. v. Segal Co., 420 F.3d, 65, 70 (2d Cir.
2005) (quoting Sukup v. State, 19 N.Y.2d 519, 522 (N.Y. 1967)). As noted, however,
the Amended Complaint does not sufficiently plead facts necessary to satisfy an
independent claim for breach of the implied covenant claim or plausibly plead bad faith.
Accordingly, the Defendant’s motion to dismiss is GRANTED as to Plaintiff’s claim of
Plaintiff argues that, “[t]o the extent that Quick Response’s properly pled
claims are duplicative, they should be considered as alternative pleadings.” Pl. Mem. of
Law at 15. Because breach of the implied covenant of good faith and fair dealing is
“merely a breach of the underlying contract,” Harris v. Provident Life and Acc. Ins. Co.,
310 F.3d 73, 80 (2d Cir. 2002), the Court finds that the Second Cause of Action is not
an alternative pleading, but a duplication of the First Cause of Action.
For the foregoing reasons, Defendant’s Motion to Dismiss Plaintiff’s Second
Cause of Action and the claim for attorneys’ fees and costs is GRANTED.
IT IS SO ORDERED.
Dated: December 4, 2012
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