Jim Mazz Auto Inc. v. State Farm Mutual Automobile Insurance Co.

Filing 47

ORDER adopting Report and Recommendation re 37 ; denying 18 Motion to Dismiss. Signed by Hon. Richard J. Arcara on 3/31/2009. (JMB)

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UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF NEW YORK __________________________________________ J IM MAZZ AUTO, INC., P l a i n t if f , v. P R O G R E S S IV E CASUALTY INSURANCE CO., D e fe n d a n t. - - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- J IM MAZZ AUTO, INC., P la i n t i f f , v. N A T IO N W ID E MUTUAL INSURANCE COMPANY, D e fe n d a n t. - - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- J IM MAZZ AUTO, INC., P la i n t i f f , v. S T A T E FARM MUTUAL AUTOMOBILE INSURANCE CO., D e fe n d a n t. - - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -J IM MAZZ AUTO, INC., P la i n t i f f , v. G E IC O CORP., D e fe n d a n t. ___________________________________________ 0 8 - C V - 0 0 5 8 3 ( A )( M ) 0 8 - C V - 0 0 5 6 6 ( A )( M ) 0 8 - C V - 0 0 5 4 1 ( A )( M ) 0 8 - C V - 0 0 4 9 4 ( A )( M ) ORDER T h e s e cases were referred to Magistrate Judge Jeremiah J. McCarthy p u rs u a n t to 28 U.S.C. 636(b)(1). Defendants Progressive (08-cv-494), State F a rm (08-cv-566), GEICO (08-cv-583) and Nationwide (08-cv-541) filed motions to dismiss pursuant to Fed. R. Civ. P. ("Rule") 12(b)(6). On February 5, 2009, M a g is tra te Judge McCarthy filed a Report and Recommendation, recommending th a t defendants' motions be granted in part and denied in part. V a r io u s parties filed objections to the Report and Recommendation. Oral a rg u m e n t on the objections was held on March 13, 2009. P u rs u a n t to 28 U.S.C. 636(b)(1), this Court must make a de novo d e te r m in a tio n of those portions of the Report and Recommendation to which o b je c tio n s have been made. Upon a de novo review of the Report and R e c o m m e n d a tio n , and after reviewing the submissions and hearing argument fro m the parties, the Court adopts the proposed findings of the Report and R e c o m m e n d a tio n as modified below: (1 ) This Court adopts the Report and Recommendation with respect to d is m is s a l of plaintiff's first claim, but notes two additional sources of support for th e reasoning that no private right of action exists under N.Y. Insurance Law 2610. Section 109(d) of the Insurance Law reads, "The superintendent may m a in ta in a civil action in the name of the people of the state to recover a judgment fo r a money penalty imposed by law for the violation of any provision of this c h a p te r." The plain language of Section 109(d) demonstrates the legislative intent -2- to have the Superintendent of Insurance represent the public when insurance c o m p a n ie s violate the Insurance Law. Further, Section 2610 is not the only s e c tio n in the Insurance Law that has been deemed not to contain a private right o f action. See Rocanova v. Equitable Life Assur. Soc., 83 N.Y.2d 603, 614, 612 N .Y .S .2 d 339, 343 (1994) ("[T]he law of this State does not currently recognize a p riva te cause of action under Insurance Law 2601."). Section 109(d) and R o c a n o va , combined with the holdings that Judge McCarthy cited for Sections 2 6 1 0 (no private right of action), 3420(b) (private right of action), and 4226(d) (s a m e ) , establish an unmistakable pattern. The only sections of the Insurance L a w that create a private right of action are those that the legislature selected d e lib e r a te ly . There is no need to read a private right of action into the Insurance L a w when there is abundant evidence that the legislature chose consciously when a n d when not to create one. (2) W ith respect to plaintiff's second claim, this Court adopts that portion o f the Report and Recommendation recommending dismissal of plaintiff's a lle g a tio n s about Jonathan Gerald, Sr. as untimely. This Court modifies the R e p o rt and Recommendation with respect to plaintiff's second claim by otherwise d e n yin g defendants' motions in their entirety. The Court agrees with Judge M c C a r th y that plaintiff must identify the business relationships with which d e fe n d a n ts allegedly interfered. However, some clarification is necessary of J u d g e McCarthy's conclusion that the Amended Complaints fail to state a cause of -3- a c tio n for tortious interference with prospective business relationships "to the e x te n t" that they fail to identify specific potential customers. Details of one such b u s in e s s relationship appear in each of the four Amended Complaints in these c a s e s . The Amended Complaint against Progressive claims that Progressive c o m m itte d at least 100 acts of steering, but then details one of those acts, c o n c e rn in g a Progressive customer named Angel Kelly. The Amended Complaint a g a in s t Nationwide details the case of Heidi Kasper Mazzariello as one example o f at least 100 acts of steering by Nationwide. The Amended Complaint against S ta te Farm, similarly, details the example of Patti Schenk. Finally, the Amended C o m p la in t against GEICO details the example of Pamela Dunn. Each of these e xa m p le s contains details of a specific business relationship that each customer a lre a d y had chosen to establish with plaintiff before defendants intervened. If p ro ve n , these examples indicate more than the "reasonable expectancy" needed to establish a prospective business relationship. See Strapex Corp. v. Metaverpa N .V ., 607 F. Supp. 1047, 1050 (S.D.N.Y. 1985) (citation omitted). T h e Court, however, emphasizes that it is denying defendants' motions a g a in s t plaintiff's second claim because, so far, plaintiff has pled sufficient detail in e a c h Amended Complaint about one prospective business relationship. This m o d ific a tio n of the Report and Recommendation does not affect Judge M c C a r th y's recommendation regarding leave to amend the complaints, and does -4- n o t operate as any comment on any motion for leave to amend that plaintiff might m a k e under FRCP 15(a)(2). T h e s e cases are referred back to Magistrate Judge McCarthy for further p r o c e e d in g s . SO ORDERED. s/ Richard J. Arcara HONORABLE RICHARD J. ARCARA CHIEF JUDGE UNITED STATES DISTRICT COURT DATED: March 31 , 2009 -5-

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