C&S Roofing and Fencing LLC v. State Farm Fire and Casualty Company
Filing
21
ORDER granting in part and denying in part 7 Defendant State Farm Fire and Casualty Company's Motion to Dismiss for Failure to State a Claim Upon Which Relief Can Be Granted (as more fully set out). Signed by Honorable Vicki Miles-LaGrange on 8/13/2015. (ks)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
C&S ROOFING AND FENCING, LLC
d/b/a C&S CONSTRUCTION,
Plaintiff,
v.
STATE FARM FIRE AND CASUALTY
COMPANY,
Defendant.
)
)
)
)
)
)
)
)
)
)
)
Case No. CIV-15-527-M
ORDER
Before the Court is Defendant State Farm Fire and Casualty Company’s (“State Farm”)
Motion to Dismiss for Failure to State a Claim Upon Which Relief Can Be Granted and Brief in
Support, filed May 20, 2015. On June 10, 2015, plaintiff responded. Based on the parties’
submissions, the Court makes its determination.
I.
Background
On April 22, 2015, plaintiff filed this action in the District Court of Oklahoma County,
State of Oklahoma. On May 15, 2015, State Farm removed this action to this Court. In its
Complaint,1 plaintiff alleges that it was contacted by property owners to repair damage to their
property after the property was damaged on or about May 20, 2013, by a tornado. Plaintiff
alleges that it initially contacted State Farm to confirm the availability of funds under the
property owners’ insurance policy, issued by State Farm. Plaintiff further alleges that State Farm
represented to plaintiff that there was $165,208.43 of policy funds available to repair the
property damage. Plaintiff repaired the damage and removed the debris from the property and
1
Plaintiff originally filed a Petition [docket no. 1-1] in the District Court of Oklahoma
County, State of Oklahoma. For purposes of this Order, the Court will refer to plaintiff’s Petition
as Complaint.
alleges it sent all invoices and expenses incurred, which totaled $185,185.71, to State Farm.
Plaintiff further alleges that State Farm has only paid approximately $120,000 of the policy
funds for plaintiff’s services in repairing the property damage and removing the debris. On
March 13, 2015, plaintiff alleges it sent a demand letter to State Farm demanding the release of
the remaining $45,208.43 of the policy funds available, and on March 20, 2015, plaintiff further
alleges that State Farm informed plaintiff that all monies had been paid under the policy.
Plaintiff alleges the following causes of action against State Farm: (1) promissory
estoppel; (2) false representation; (3) bad faith; and (4) violation of the Oklahoma Unfair Claims
Settlement Practice Act. State Farm now moves this Court, pursuant to Federal Rule of Civil
Procedure 12(b)(6), to dismiss plaintiff’s Complaint for failure to state a claim upon which relief
can be granted.2
II.
Standard of Dismissal
Regarding the standard for determining whether to dismiss a claim pursuant to Federal
Rule of Civil Procedure 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 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.
2
State Farm asserts, and plaintiff concedes, that the Oklahoma Unfair Claims Settlement
Practices Act does not give plaintiff a private right of action under the statute; therefore, the
Court dismisses plaintiff’s claim for violation of the Oklahoma Unfair Claims Settlement
Practices Act.
2
Ashcroft v. Iqbal, 556 U.S. 662, 678 (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. at 679 (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 678 (internal quotations and citations omitted). “While the 12(b)(6)
standard does not require that Plaintiff establish a prima facie case in her complaint, the elements
of each alleged cause of action help to determine whether Plaintiff has set forth a plausible
claim.” Khalik v. United Air Lines, 671 F.3d 1188, 1192 (10th Cir. 2012). Finally, “[a] court
reviewing the sufficiency of a complaint presumes all of plaintiff’s factual allegations are true
and construes them in the light most favorable to the plaintiff.” Hall v. Bellmon, 935 F.2d 1106,
1109 (10th Cir. 1991).
III.
Discussion
A.
Promissory Estoppel
In order to allege a claim for promissory estoppel, plaintiff must allege:
1.
2.
3.
4.
a clear and unambiguous promise;
foreseeability by the promisor that the promisee would rely
upon it;
reasonable reliance upon the promise to the promisee's
detriment;
hardship or unfairness can be avoided only by the promise's
enforcement.
Barber v. Barber, 77 P.3d 576, 579 (Okla. 2003). State Farm contends that plaintiff failed to
allege any promise made by State Farm that plaintiff would be paid the funds available under the
property owners’ insurance policy. Plaintiff asserts that it has alleged sufficient facts to make a
plausible claim for promissory estoppel against State Farm.
3
Having carefully reviewed plaintiff’s Complaint, and presuming all of plaintiff’s factual
allegations are true and construing them in the light most favorable to plaintiff, the Court finds
that plaintiff has set forth sufficient facts to make a plausible claim for promissory estoppel
against State Farm. Specifically, plaintiff alleges that:
20.
Defendant State Farm, . . . made definite and unambiguous
promises to C&S, including but not limited to, the amount of funds
available under the Policy to repair the Property.
21.
It was reasonable and foreseeable for C&S to rely upon the
promises of Defendant State Farm [sic] its agents, managers and
employees due to the fact that Defendant State Farm was in the
best position to understand the available limits under the Policy.
22.
C&S reasonably relied on the promises of Defendant State
Farm [sic] its agents, managers and employees to its detriment.
23.
The hardship and unfairness that C&S suffered can only be
avoided by enforcement of Defendant State Farm’s promises.
Compl. [docket no. 1-1] ¶¶ 20-23. Further, plaintiff alleges that prior to agreeing to repair the
property, it contacted State Farm regarding the availability of funds under the property owners’
policy to repair the property and was told by State Farm that $165,208.43 of policy funds were
available to repair the property and remove the debris. See id. ¶ 9-10. The Court finds that these
alleged facts allow the Court to draw the reasonable inference that State Farm made certain
promises to plaintiff regarding the policy funds available and, in turn, plaintiff reasonably relied
on State Farm’s promise to its detriment. Accordingly, the Court finds that plaintiff’s promissory
estoppel claim should not be dismissed.
B.
False Representation
Federal Rule of Civil Procedure 9(b) provides, in pertinent part: “In alleging fraud
or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”
Fed. R. Civ. P. 9(b). “At a minimum, Rule 9(b) requires that a plaintiff set forth the ‘who, what,
4
when, where, and how’ of the alleged fraud . . . and must set forth the time, place, and contents
of the false representation, the identity of the party making the false statements and the
consequences thereof.” U.S. ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah, 472 F.3d
702, 726-27 (10th Cir. 2006) (internal quotations and citations omitted). Further,
Rule 9(b) does not . . . require the pleading of detailed evidentiary
matter, nor does it require any particularity in connection with an
averment of intent, knowledge, or condition of mind. It only
requires identification of the circumstances constituting fraud or
mistake. That requirement means . . . that individual plaintiffs
should identify particular defendants with whom they dealt directly
. . . ; that individual plaintiffs should designate the occasions on
which affirmative statements were allegedly made to them - and by
whom; and that individual plaintiffs should designate what
affirmative misstatements or half-truths were directed to them –
and how.
Seattle-First Nat’l Bank v. Carlstedt, 800 F.2d 1008, 1011 (10th Cir. 1986). In Oklahoma, “[t]he
elements of fraud are: 1) a false material misrepresentation, 2) made as a positive assertion which
is either known to be false, or made recklessly without knowledge of the truth, 3) with the
intention that it be acted upon, and 4) which is relied on by the other party to his/her own
detriment.” Rogers v. Meiser, 68 P.3d 967, 977 (Okla. 2003) (citing Gay v. Akin, 766 P.2d 985,
989 (Okla. 1988)).
State Farm contends that plaintiff has failed to state with particularity the circumstances
surrounding its fraud claim. Having carefully reviewed plaintiff’s Complaint, and presuming all
of plaintiff’s factual allegations are true and construing them in the light most favorable to
plaintiff, the Court finds that plaintiff has set forth sufficient facts to meet the heighted pleading
standard required by Rule 9(b). Plaintiff alleges that it contacted State Farm after the property
owners’ property was damaged by a tornado on May 20, 2013, to find out if there were funds
under the policy issued by State Farm to the property owners to repair the property. Further,
5
plaintiff alleges that State Farm represented to plaintiff that $165,208.43 of policy funds were
available to repair the property and remove debris, and based on those representations, plaintiff
commenced repairing the property and sent State Farm all invoices and expenses incurred.
Plaintiff alleges that State Farm only paid approximately $120,000 of the policy funds, leaving
plaintiff with a deficit of $45,208.43, an amount State Farm represented it would pay.
Plaintiff specifically alleges that:
28.
Defendant State Farm, . . . made material representations to
C&S, including but not limited to, the amount of funds available
under the Policy to repair the Property.
29.
Defendant State Farm, . . . knew that the material
representations made were false, or made the material
representations as a positive assertion recklessly, without any
knowledge of the truth of the material statements.
30.
Defendant State Farm, . . . made the material statements
with the intention that the statements would be acted upon by C&S
31.
C&S acted in reliance on the material misrepresentations
made by State Farm, . . . by agreeing to repair the Property and
incurring expenses in the repair of the Property.
32.
As a result of C&S’s reliance on the material statements
made by Defendant State Farm, C&S suffered injury incurring
expenses that would not have been incurred but for the fact that
State Farm indicated that Policy funds were available.
Compl. at ¶¶ 28-32. Based on plaintiff’s allegations in its Complaint, the Court finds that
plaintiff has sufficiently pled the circumstances surrounding its fraud claim against State Farm.
Accordingly, the Court finds that plaintiff’s false representation claim should not be dismissed.
C.
Bad Faith
“[T]the insurer’s duty to deal fairly and act in good faith is limited. It does not extend to
every party entitled to payment from insurance proceeds. There must be either a contractual or
statutory relationship between the insurer and the party asserting the bad faith claim before the
6
duty arises.” Rednour v. JC & P P'ship, 996 P.2d 487, 488 (Oka. Civ. App. 1999) (citing Roach
v. Atlas Life Ins. Co., 769 P.2d 158, 161 (Okla. 1989)). State Farm contends that plaintiff is a
third party to the insurance contract between the property owners and State Farm and, therefore,
has no standing to bring a bad faith claim against State Farm. Plaintiff contends that while it may
not have contractual standing to bring a bad faith claim against State Farm, the Oklahoma Unfair
Claims Settlement Practices Act requires insurance companies to act “in good faith to effectuate
prompt, fair and equitable settlement of claims submitted in which liability has become
reasonably clear.” Okla. Stat. tit. 36, § 1250.5(4).
Having carefully reviewed plaintiff’s Complaint, and presuming all of plaintiff’s factual
allegations are true and construing them in the light most favorable to plaintiff, the Court finds
that plaintiff has not sufficiently set forth facts to make a plausible bad faith claim against State
Farm. Plaintiff contends that under the Oklahoma Unfair Claims Settlement Practices Act it can
bring a bad faith claim against State Farm; however, plaintiff cites to no authority in Oklahoma
that would allow plaintiff to do so, and, further, as previously stated, the Oklahoma Unfair
Claims Settlement Practices Act provides no private right of action for violating the statute. The
Court finds that State Farm did not have a statutory duty to act in good faith and fair dealing with
plaintiff, and, therefore, plaintiff’s bad faith claim should be dismissed.
IV.
Conclusion
Accordingly, for the reasons set forth above, the Court GRANTS IN PART AND
DENIES IN PART State Farm’s Motion to Dismiss for Failure to State a Claim Upon Which
Relief Can Be Granted and Brief in Support [docket no. 7] as follows: (1) the Court GRANTS
State Farm’s motion to dismiss as to plaintiff’s claims of bad faith and violation of the Oklahoma
7
Unfair Claims Settlement Practices Act; and (2) DENIES State Farm’s motion to dismiss as to
plaintiff’s claims of promissory estoppel and false representation.
IT IS SO ORDERED this 13th day of August, 2015.
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?