Emmanuel Tabernacle v. Church Mutual Insurance Co Inc
Filing
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ORDER granting 7 defendant's Motion to Dismiss and granting plaintiff leave to amend as to cure the deficiencies in plaintiff's Petition on or before September 7, 2011 (as more fully set out in the Order). Signed by Honorable Vicki Miles-LaGrange on 8/19/2011. (ks)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
EMMANUEL TABERNACLE,
Plaintiff,
vs.
CHURCH MUTUAL INSURANCE CO.,
INC.,
Defendant.
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Case No. CIV-11-515-M
ORDER
Before the Court is defendant Church Mutual Insurance Company, Inc.’s (“Church Mutual”)
Motion to Dismiss, filed July 12, 2011. On July 29, 2011, plaintiff filed his response.1 Church
Mutual’s reply was due August 5, 2011. To date, Church Mutual has not submitted a reply to the
Court. Based upon the parties’ submissions, the Court makes its determination.
I.
Background
Plaintiff owns property located at 9700 North Western Avenue, Oklahoma City, Oklahoma
73114. Church Mutual was the insurer of plaintiff’s property.
On May 16, 2010, plaintiff’s property suffered damages due to a storm. On May 18, 2010,
plaintiff reported his property damage to Church Mutual. As a result, on May 20, 2010, Rebecca
Bilbrey and Keith Bilbrey, adjusters with Insurance Claims Adjusters, inspected plaintiff’s property
on behalf of Church Mutual.
According to Church Mutual, on June 15, 2010,2 Rebecca Bilbrey’s final report provided that
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In plaintiff’s response, plaintiff has requested leave to amend his Petition should the
Court find that plaintiff has not pled sufficient facts to state a claim. The Court considers
plaintiff’s additional request as a motion to amend his Petition.
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In plaintiff’s Opposition to Church Mutual’s Motion to Dismiss, plaintiff contends that
Insurance Claims Adjusters reported damage in the amount of $226,128.46.
plaintiff suffered $161,485.28 in actual cash value damages after depreciation. On October 2, 2010,
plaintiff had an independent estimate of the property damages performed, which found damage in
the amount of $647,392.32. On October 13, 2010, plaintiff’s counsel sent a copy of the independent
estimate to Church Mutual.
Church Mutual requested a re-inspection of plaintiff’s damaged property. According to
plaintiff, in November, Insurance Claim Adjusters found plaintiff’s property damage in the amount
of $257,821.81.
Church Mutual has issued actual value payments to plaintiff that totaled to $163,615.84. On
April 13, 2011, plaintiff filed his petition in the District Court of Oklahoma County, State of
Oklahoma. On May 11, 2011, Church Mutual removed the case to this Court pursuant to 28 U.S.C.
§§ 1332 and 1441, et seq. Church Mutual now moves to dismiss the Petition for failure to state a
claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).
II.
Standard of Review
The Court addresses both Church Mutual’s Motion to Dismiss and plaintiff’s request to
amend his complaint.
A.
Motion to Dismiss
Regarding the standard for determining whether to dismiss a claim pursuant to Rule 12(b)(6),
the United States Supreme Court has held:
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. 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. The
plausibility standard is not akin to a “probability requirement,” but it
asks for more than a sheer possibility that a defendant has acted
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unlawfully. 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.
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (internal quotations and citations omitted). Further,
“where the well-pleaded facts do not permit the court to infer more than the mere possibility of
misconduct, the complaint has alleged - but it has not shown - that the pleader is entitled to relief.”
Id. (internal quotations and citations omitted). Additionally, “[a] pleading that offers labels and
conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a
complaint suffice if it tenders naked assertion[s] devoid of further factual enhancement.” Id. at 1949
(internal quotations and citations omitted).
B.
Motion to Amend
The district court has discretion in deciding whether to grant leave to amend a complaint.
Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330 (1971); Foman v. Davis, 371 U.S.
178, 182 (1963). However, a district court should grant leave to amend “when justice so requires.”
Fed. R. Civ. P. 15(a)(2). Thus, “district courts may withhold leave to amend only for reasons such
as ‘undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of
allowance of the amendment, or futility of the amendment.’” United States ex rel. Ritchie v.
Lockheed Martin Corp., 558 F.3d 1161, 1166 (10th Cir.2009) (quoting Foman, 371 U.S. at 182).
III.
Discussion
Church Mutual asserts that plaintiff’s Petition should be dismissed because plaintiff’s claims
for bad faith and breach of contract fail as a matter of law. The Court address each matter in turn.
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A.
Bad Faith
“An insurer owes to its insured an implied-in-law duty of good faith and fair dealing that it
will do nothing to deprive the insured of the benefits of the policy.” Christian v. American Home
Assurance Co., 577 P.2d 899, 901 (Okla. 1977). “Tort liability for breach of that duty arises where
there is a clear showing that the insurance company unreasonably and in bad faith withheld payment
of the claim of the insured.” Hale v. A.G. Ins. Co., 138 P.3d 567, 572 (Okla. 2006), citing Christian,
577 P.2d at 901. The central question in a claim for bad faith failure to investigate an insurance
claim is “whether the insurer had a justifiable, reasonable basis to withhold payment when the
insured requested the carrier to perform its contractual obligation.” Id. at 572-573.
Having carefully reviewed plaintiff’s Petition, the Court finds plaintiff has not alleged
sufficient facts to demonstrate that Church Mutual was unreasonable to withhold payment to
plaintiff. Plaintiff’s Petition alleges that “[Church Mutual’s] liability to pay the claim in accordance
with the terms of the insurance policy was reasonably clear.” [plaintiff’s Petition, docket no. 9, ex.
A]. However, plaintiff first asserts facts pertaining to reports that detailed the amount of the damage
to his property in his Opposition to Church Mutual’s Motion to Dismiss. Absent such facts in
plaintiff’s Petition, plaintiff’s claim of bad faith is a naked assertion devoid of further factual
enhancement. Accordingly, the Court finds that plaintiff has not alleged sufficient facts to state a
claim of bad faith because it has not set forth sufficient facts to plausibly show that Church Mutual
was unreasonable in withholding payment.
Therefore, the Court grants Church Mutual’s motion to dismiss plaintiff’s bad faith claim.
Additionally, the Court does not find any undue delay, bad faith, or dilatory motive in relation to
plaintiff’s request to amend. Thus, the Court grants leave to amend as to cure the discussed
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deficiencies in plaintiff’s Petition.
B.
Breach of Contract
Church Mutual contends that plaintiff’s claim for breach of contract should be dismissed
because Church Mutual satisfied its duty to act in good faith and deal fairly with plaintiff. Plaintiff
contends that Church Mutual did not satisfy this duty because Church Mutual did not perform a
reasonable investigation of plaintiff’s claim and it refused to pay the full amount owed under the
policy.
“A breach of contract is a material failure of performance of a duty arising under or imposed
by agreement.” Milroy v. Allstate Ins. Co., 151 P.3d 922, 926 (Okla. 2009), citing Lewis v. Farmers
Ins. Co., Inc., 681 P.2d 67, 69 (Okla. 1983). “If the contract is merely the inducement which creates
the occasion for the tort, the tort, not the contract, is the basis of the action.” Id.
Here, the gravamen of plaintiff’s breach of contract claim against Church Mutual is based
on plaintiff’s bad faith claim. Specifically, plaintiff asserts that Church Mutual refused to pay the
full amount under the contract because “[Church Mutual] failed to perform a reasonable
investigation of plaintiff’s claim and that [Church Mutual] ignored facts and evidence that tended
to prove Plaintiff’s claim.” Moreover, plaintiff’s Opposition to Church Mutual’s Motion to Dismiss
is silent as to Church Mutual’s motion to dismiss plaintiff’s breach of contract claim; plaintiff’s
Opposition only addresses Church Mutual’s motion to dismiss plaintiff’s bad faith claim. To that
end, the crux of plaintiff’s breach of contract claim is that Church Mutual did not pay the amount
owed under the contract due to the alleged failure to satisfy the implied-in-law duty of good faith and
fair dealing. Accordingly, plaintiff’s bad faith claim is the basis of plaintiff’s action.
Therefore, for the reasons set forth in Part II.A, the Court grants Church Mutual’s motion to
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dismiss plaintiff’s breach of contract claim. Additionally, the Court does not find any undue delay,
bad faith, or dilatory motive in relation to plaintiff’s request to amend. Thus, the Court grants leave
to amend as to cure the discussed deficiencies in plaintiff’s Petition.
IV.
Conclusion
Accordingly, for the reasons set forth above, the Court GRANTS Church Mutual’s Motion
to Dismiss [docket no. 7]. Additionally, the Court GRANTS plaintiff leave to amend as to cure the
deficiencies in plaintiff’s Petition on or before September 7, 2011.
IT IS SO ORDERED this 19th day of August, 2011.
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