Employers Mutual Casualty Company v. W-W Trailer Manufacturers Inc

Filing 22

ORDER granting Employers' partial motion to dismiss 13 ; the bad faith counterclaim is dismissed; plaintiff is granted leave to amend its counterclaim within 14 days. Signed by Honorable Joe Heaton on 12/5/2016. (cla)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
EMPLOYERS MUTUAL

CASUALTY COMPANY,

Plaintiff,
NO. CIV-16-995-HE

V.

W-W TRAILER MANUFACTURERS,
d/b/a W.W. TRAILER
MANUFACTURING
Defendant.
ORDER

Plaintiff Employers Mutual Casualty Company ("Employers") filed this action
seeking a declaratory judgment that it owed no more to its insured, defendant W-W
Trailer Manufacturers, Inc. ("W-W Trailer"), than it had already paid on W-W Trailer's
insurance claim. W-W Trailer answered the complaint and filed a counterclaim asserting

claims for breach of contract and bad faith. Employers has moved to dismiss the bad
faith claim pursuant to Fed.R.Civ.P. 12(b)(6).

When considering whether a claim should be dismissed under Fed.R.Civ.P.
12(b)(6), the court accepts all well-pleaded factual allegations as true and views them in
the light most favorable to the nonmoving party. S.E.C. v. Shields, 744 F.3d 633, 640

(10th Cir. 2014). All that is required is "a short and plain statement of the claim showing

that the pleader is entitled to relief" Fed.R.Civ.P. 8(a)(2). The pleading must, though,
contain "enough facts to state a claim to relief that is plausible on its face" and "raise a
right to relief above the speculative level." Bell Atl. Corp. v. Twomblv, 550 U.S. 544,

570, 555 (2007). '"A claim has facial plausibility when the [party] pleads factual content
that allows the court to draw the reasonable inference that the [opposing party] is liable

for the misconduct alleged.'" Shields, 744 F.3d at 640 (quoting Ashcroft v. Iqbal. 556
U.S. 662, 678 (2009)).

The Twomblv/Iqbal pleading standard "is a middle ground

between heightened fact pleading, which is expressly rejected, and allowing complaints
that are no more than labels and conclusions or a formulaic recitation of the elements of a

cause of action, which the Court stated will not do." Id. at 640-41 (quoting Khalik v.
United Air Lines. 671 F.3d 1188, 1191 (10th Cir. 2012)).

"While the 12(b)(6) standard does not require that [a party] establish a prima facie

case in [its] complaint, the elements of each alleged cause of action help to determine
whether [that party] has set forth a plausible claim." Khalik, 671 F.3d at 1192. To
establish a bad faith counterclaim under Oklahoma law, a party must prove more than a
breach of the insurance contract.

It must also establish that the insurer acted

unreasonably and in bad faith in handling its claim. See Badillo v. Mid Century Ins. Co.,
121 P.3d 1080, 1093 (Okla. 2005) (reciting the elements of a bad faith claim and
identifying "the insurer's unreasonable, bad-faith conduct" as the "essence" of such a
claim).

Here, defendant's counterclaim lacks any specific facts that would give rise to an

inference of bad faith. Rather, it generally alleges that Employers breached its duty of

good faith because it "[f]ailed to pay for a claim which it knew or through reasonable
diligence should have known, is a covered loss" and because Employers "[wjrongfully,
unreasonably, and intentionally failed to make payment to Trailer for covered claims,
although this loss occurred over one year ago." Id. W-W Trailer does not present any

other facts that would suggest that Employers acted in bad faith. The allegations do not
state a basis for concluding that there is anything more here than a disagreement about

the amounts owed under the policy. The counterclaim offers nothing beyond that but
"labels and conclusions, and a formulaic recitation of the elements of a cause of action."
Twomblv, 550 U.S. at 555. That is insufficient.

Accordingly, Employers' partial motion to dismiss [Doc. #13] is GRANTED.
The bad faith counterclaim is DISMISSED.

Plaintiff is granted leave to amend its

counterclaim within fourteen (14) days.

IT IS SO ORDERED

Dated this 6>^day ofDecember, 2016.

JOHHEATON

CHfef U. S. DISTRICT JUDGE