Wendy's of Bowling Green, Inc. v. Marsh USA, Inc.

Filing 24

MEMORANDUM signed by Chief Judge Todd J. Campbell on 4/13/2011. (hb)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
WENDY’S OF BOWLING GREEN,
INC., et al.

)
)
) NO. 3-10-1043
) JUDGE CAMPBELL
)
)

v.
MARSH USA, INC.

MEMORANDUM
Pending before the Court is Defendant’s Motion to Dismiss (Docket No. 17) the Intervening
Complaint filed by Shirley Malchow (Docket No. 13). For the reasons stated herein, Defendant’s
Motion is GRANTED, and the Intervening Plaintiff’s claims against Defendant are DISMISSED.
FACTS
This action was filed by Plaintiff Wendy’s of Bowling Green, Inc. against Defendant Marsh
USA, Inc. for breach of an insurance contract, breach of fiduciary duty, negligence and alleged
violations of the Tennessee Consumer Protection Act. Docket No. 1. The Complaint alleges that
Plaintiff contracted with Defendant to be Plaintiff’s insurance broker for all insurance policies on
Plaintiff’s properties. Plaintiff asserts that it relied upon Defendant to procure, among other things,
flood insurance for its Riverside Wendy’s location in Clarksville, Tennessee.
Plaintiff’s Complaint avers that in May of 2010, the Riverside Wendy’s was destroyed in the
record floods in Middle Tennessee. Plaintiff asserts that its claim for insurance coverage was denied
for failure to pay the flood insurance premium, and Plaintiff has received no payment for its loss.
Plaintiff asserts that Defendant is responsible for the failure to procure flood insurance and alleges
the specific causes of action set forth above.
On January 19, 2011, Plaintiff’s landlord at the Riverside Wendy’s property, Shirley
Malchow, filed an Intervening Complaint (Docket No. 13) herein. Malchow asserts that Defendant

Marsh knew or should have known of her insurable interest in the property and failed to protect that
interest. Malchow alleges the same causes of action as Wendy’s does - - breach of contract, breach
of fiduciary duty, negligence and violations of the Tennessee Consumer Protection Act - - against
Defendant.
Defendant has moved to dismiss Malchow’s Intervening Complaint, arguing that Malchow
is neither a party to nor a third party beneficiary of any contract with Defendant, thereby precluding
her breach of contract claim. Defendant also asserts that Plaintiff has not pled facts to show that
Defendant had any duty whatsoever to Malchow, thereby precluding her breach of fiduciary duty
and negligence claims. Finally, Defendant maintains that Malchow has failed to sufficiently plead
her claim for violations of the Tennessee Consumer Protection Act.
MOTIONS TO DISMISS
For purposes of a motion to dismiss, the Court must take all of the factual allegations in the
complaint as true. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). 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. Id. 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. Threadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice. Id. When there are well-pleaded factual allegations, a court should
assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.
Id. at 1950. A legal conclusion couched as a factual allegation need not be accepted as true on a
motion to dismiss, nor are recitations of the elements of a cause of action sufficient. Fritz v. Charter
Township of Comstock, 592 F.3d 718, 722 (6th Cir. 2010).

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DISCUSSION
Malchow contends, with no citation to authority, that Wendy’s insurable interests would
include the interests of Wendy’s landlord. Docket No. 20. Yet Wendy’s was the insured, and
Wendy’s was the customer of Defendant, not Malchow. The question before the Court on this
Motion is not whether Defendant had a contract with or owed a duty to Wendy’s. The issue is
whether Malchow has sufficiently alleged in her Intervening Complaint that Defendant had a
contract with or owed a duty to Malchow.
Although Malchow alleges in her Complaint that she is a third party beneficiary of the
contract between Plaintiff and Defendant, she has cited no document or writing to support that
conclusion. As noted above, on a motion to dismiss, a legal conclusion couched as a factual
allegation need not be accepted as true. She avers that she was a third party beneficiary of the
insurance broker agreement between Plaintiff and Defendant, but she has cited no provision of that
agreement (which is attached to the original Complaint) which states that she is such a beneficiary.
Malchow contends that Plaintiff was required by the terms of its lease agreement with her
to list Malchow as an additional insured under the terms of any insurance policy covering the
Riverside Wendy’s property, but that is a duty of Plaintiff to her, not of Defendant to her. She does
not allege that there is any insurance policy naming her as an additional insured.
Malchow argues that Defendant recognized her as an “additional insured” by issuing
Certificates of Insurance with her name as “certificate holder.” The Certificates of Insurance (which
are attached to the Intervening Complaint) do not name Malchow as an additional insured. They
both state: “This certificate is issued as a matter of information only and confers no rights upon the
certificate holder. This certificate does not amend, extend or alter the coverage afforded by the

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policies below.” Id. Furthermore, the Certificate of Insurance states: “Should any of the above
described policies be cancelled before the expiration date thereof, the issuing insurer will endeavor
to mail 30 days written notice to the certificate holder named to the left, but failure to do so shall
impose no obligation or liability of any kind upon the insurer, its agents or representatives.” Id.
The Intervening Complaint alleges that Defendant “had a duty” to notify Malchow that the
flood insurance premiums had not been paid. Again, a legal conclusion couched as a factual
allegation need not be accepted as true. Malchow has not alleged any document or agreement
between herself and Defendant from which that duty would have arisen. The Intervening Complaint
claims that Malchow “had the right” to be notified of any potential cancellation of insurance; yet she
does not explain how that right in fact arose. The Intervening Complaint contends that Defendant
owed Malchow a fiduciary duty; yet, she has not alleged any document, agreement or relationship
between herself and Defendant from which such a duty would have arisen. The Intervening
Complaint also asserts that Defendant owed Malchow a duty of reasonable care in procuring the
insurance for Plaintiff. Again, Malchow has failed to show the basis for such a duty to her, as
opposed to an alleged duty from Defendant to Plaintiff.
In her Response to the pending Motion, Malchow contends that the Certificates of Insurance
attached to her Intervening Complaint identify her as an additional insured, but the documents make
no such identification. Docket No. 13, Ex. 3. In her Response, Malchow also argues that Plaintiff’s
insurable interests include Malchow; but she cites nothing in fact or law to support that assertion.
Malchow asserts that a broker owes certain duties to its customer, but nowhere in the Intervening
Complaint or her Response brief does she contend that she was a customer of Defendant or had any

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broker/client relationship with Defendant. Malchow alleges that a broker owes certain duties to its
principal, but she never asserts that she was Defendant’s principal.
Finally, the Intervening Complaint asserts that Defendant violated the Tennessee Consumer
Protection Act (“TCPA”) “in committing the acts complained of herein.” Docket No. 13, ¶ 38. As
set forth herein, Malchow has failed to state an actionable claim for “the acts complained of” in her
Intervening Complaint. In any event, Count 4 of her Intervening Complaint merely recites portions
of the prohibited acts under the TCPA, without facts to support the allegations. Id. Once again, the
Court is not required to accept legal conclusions in the Complaint as true.
CONCLUSION
For all these reasons, Defendant’s Motion to Dismiss the Intervening Complaint (Docket No.
17) is GRANTED, and the Intervening Plaintiff’s claims against Defendant are DISMISSED.
IT IS SO ORDERED.
___________________________________
TODD J. CAMPBELL
UNITED STATES DISTRICT JUDGE

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