Shelby, et al. v. Northfield Insurance Company, et al.

Filing 24

ORDER granting 14 Motion to Dismiss Plaintiffs' Bad Faith Claim; adopting 23 Report and Recommendations. Signed by Judge Samuel H. Mays, Jr on 12-28-2017. (Mays, Samuel)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

ANTHONY SHELBY, SHELBY & SHELBY
PROPERTIES, LLC, and SHELBY,
ARNOLD & SHELBY PROPERTY
MANAGEMENT, LLC,
Plaintiffs,
v.
NORTHFIELD INSURANCE COMPANY,
Defendant.

)
)
)
)
)
)
)
)
)
)
)
)

No. 2:17-cv-02418-SHM-CGC

ORDER

Before the Court is the Magistrate Judge’s Report and Recommendation, dated November 29, 2017 (the “Report”).
23.)

The

Report

recommends

that

the

Court

grant

(ECF No.
Defendant

Northfield Insurance Company’s Motion to Dismiss Plaintiffs’ Bad
Faith Claim (“Motion to Dismiss”) (ECF No. 14).

Plaintiffs An-

thony Shelby, Shelby & Shelby Properties, LLC, and Shelby, Arnold, and Shelby Property Management, LLC (“Plaintiffs”) have
not objected to the Report.
For the following reasons, the Report is ADOPTED and Defendant’s Motion to Dismiss is GRANTED.
I.

Background
On April 28, 2017, Plaintiffs filed their Complaint in the

Circuit Court of Tennessee for the Thirtieth Judicial District

at Memphis.

(ECF No. 1-2.)

The Complaint alleges that, on or

about June 20, 2016, Plaintiffs and Defendant entered into an
insurance policy agreement (the “Policy”), under which Defendant
“would provide liability insurance coverage for Plaintiffs[’]
commercial rental properties.”

(Id. at 8.)

On or about September 25, 2016, one of Plaintiffs’ rental
properties,
(the

“Faxon

(Id.)

located

at

940

Faxton

Avenue,

Property”)

was

significantly

Memphis,
damaged

Tennessee

by

a

fire.

Plaintiffs allege that they “made a timely claim for

property damage, and loss of rental income and other related
damages as a result of the September 25, 2016 fire.”

(Id.)

They allege that Defendant “[has] not paid the claim despite
conducting a thorough investigation, in violation of the sixty
(60) day requirement set forth in T.C.A. § 56-7-105.”

(Id.)

Plaintiffs also allege that Defendant denied their claim because
Plaintiffs failed to have operable smoke detectors at the Faxton
Property, although smoke detectors had been installed “well before” the September 25, 2016 fire.

(Id. at 9-10.)

Plaintiffs

allege three causes of action: breach of contract, bad faith refusal to pay pursuant to Tennessee Code Annotated § 56-7-105,
and violation of the Tennessee Consumer Protection Act (“TCPA”)
pursuant

to

Tennessee

Code

Annotated

(Id. at 11-14.)

2

§§

47-18-101,

et

seq..

On June 16, 2017, Defendant filed a Notice of Removal to
this Court.

(ECF No. 1.)

and 28 U.S.C. § 1446.

Removal was based on 28 U.S.C. § 1441

(Id. at 1.)

On July 28, 2017, Defendant filed its Motion to Dismiss.
(ECF No. 14; see also ECF No. 14-1.)

Defendant argues that

“Plaintiffs’ Complaint fails to state a claim for damages under
T.C.A. § 56-7-105.”

(ECF No. 14-1 at 47.)

Defendant contends

that Plaintiffs have not pled sufficient facts to show that they
made a formal demand for payment of their claim to Defendant,
and have not pled sufficient facts to show that they waited the
required sixty days after submitting a formal demand before filing their Complaint.

(Id. at 47-51.)

Plaintiffs responded to Defendant’s Motion to Dismiss on
August 10, 2017.
2017.

(ECF No. 18.)

Defendant replied on August 24,

(ECF No. 19.)

On November 29, 2017, the Magistrate Judge entered the Report.
tion

(ECF No. 23.)
to

Dismiss

be

The Report recommends that Defendant’s Mogranted.

(Id.

at

98-99.)

The

Report

recommends that Plaintiffs’ claims for breach of contract and
violations of the TCPA remain before the Court because Defendant
did not seek dismissal of those claims.
II.

(Id. at 99.)

Analysis

Congress enacted 28 U.S.C. § 636 to relieve the burden on
the federal judiciary by permitting the assignment of district-

3

court duties to magistrate judges.
237

F.3d

598,

602

(6th

Cir.

See United States v. Curtis,

2001)

(citing

Gomez

v.

United

States, 490 U.S. 858, 869-70 (1989)); see also Baker v. Peterson, 67 F. App’x 308, 310 (6th Cir. 2003).

A district court has

the authority to “designate a magistrate judge to conduct hearings, including evidentiary hearings, and to submit to a judge
of the court proposed findings of fact and recommendations for
the disposition, by a judge of the court, of any motion.”

28

U.S.C. § 636(b)(1)(B).
The district court has appellate jurisdiction over any decisions the magistrate judge issues pursuant to a referral.
U.S.C. § 636(b); Fed. R. Civ. P. 72.

28

“A district judge must de-

termine de novo any part of a Magistrate Judge’s disposition
that has been properly objected to.”
U.S.C. § 636(b)(1)(C).

Fed. R. Civ. P. 72(b); 28

The district court is not required to

review -- under a de novo or any other standard -- “any issue
that is not the subject of an objection.”
U.S. 140, 150 (1985).

Thomas v. Arn, 474

The district court should adopt the find-

ings and rulings of the Magistrate Judge to which no specific
objection is filed.

Id.; United States v. Walters, 638 F.2d

947, 950 (6th Cir. 1981.)
Plaintiffs have not objected to the Report, and the deadline to do so under Local Rule 72.1 has passed.

4

See also 28

U.S.C. § 636(b)(1)(C).
is warranted.

Adoption of the Report’s recommendations

See Arn, 474 U.S. at 150-51.

For the foregoing reasons, the Report is ADOPTED and Defendant’s

Motion

to

Dismiss

Plaintiffs’

Bad

Faith

Claim

GRANTED.

So ordered this 28th day of December, 2017.

/s/ Samuel H. Mays, Jr. ___
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE

5

is