Juarez et al v. Nationwide Property And Casualty Insurance Company et al

Filing 14

MEMORANDUM AND ORDER granting 3 MOTION to Dismiss (Partial).(Signed by Judge Ewing Werlein, Jr) Parties notified.(kstrouse, )

IN THE UNITED STATES D ISTR ICT COURT FOR THE SOUTHERN D ISTR ICT OF TEXAS HOU STON D IV ISION

JO SE DE JESUS JUAR EZ and MA R IA RAMOS, Pla in tif fs ,
C IV IL ACTION NO . H-10-2726 NA T IONW IDE PROPERTY AND CA SUAL TY INSURANCE COMPANY , CU STARD INSURANCE ADJUSTERS, IN C ., KENT LEE STRICKLXND , and M EL INDA MOLLY SEIGLER ,

D e fen dan ts .
M EMOR AN DUM AND ORDER

Pen ding

is

Defendants

Nationw ide

Property

and

Casualty

Insurance Company's, Custard Insurance Adjusters, Inc.rs, Kent Lee
S trick land 's , and Melinda Molly
D ism i ssal Under Rule

Seigler 's Motion

for

Partial

o f the Federal Rules of Civil Procedure ,

( ocument No. D

A fter having reviewed the motion , responses ,

an d the applicable law , the Court concludes as follows . 1 . Backqround Th is is a Hurricane Ike insurance dispute . Plaintiffs Jose de
Juarez et al v. Nationwide Property And Casualty Insurance Company et al

Jesus Juarez and Maria Ramos ( plaintiffs') allege that their home u '
Doc. 14

w as severely damaged by the hurricane , including partial roof

co llap se and loss of several shingles x

Additionally , they allege

Document No.

ex. 1 at

( laintiffs' Orig. Pet.). P

Dockets.Justia.com

that water seeping from the damaged roof caused significant damage
to the walls, insulation , flooring , electronics and app lian ce s .

Pla in tif fs are the named insureds on their homeowner's insurance
p ol icy , issued by Defendant Nationw ide Property and Casualty

Insurance Company ( Nationwider) n '

Plaintiffs filed a claim with

N at io nw id e , and Nationw ide assigned Defendant Custard Insurance

Adjusters ( custard') to adjust the claim. Defendants Melinda u ' 3
Molly Seigler l' eigler'l and Kent Lee Strickland ( strickland') 's ' n

were the individual adjusters who cam e to the property to inspect the damage and adjust the c1aim . Plaintiffs allege that Seigler 4
an d Strickland performed perfunctory inspections of their property ,

sp end in g only 10 or 15 minutes each, and did not climb up on the
p art ial ly collapsed roof to assess the damage .s

Pla in ti ffs bring

this action

against

a11 Defendants

for

v io lation s of the Texas Insurance Code , common law fraud, and

con sp iracy to commit fraud . Additionally , Plaintiffs assert that
N at io nw id e breached the insurance contract and its duty good

fa ith and fair dealing .6

Defendants move

dismiss

non-

con trac tu a l claims, including consp ira cy

commit fraud , and

2 Id . Id . at 5 .
Id .

Id . at 5. 6 Id . at 13-16 .
2

claims under the Texas Insurance Code , against all Defendants,

under Federal Rule of Civil Procedure 9( ) . Plaintiffs argue that b7
they have met the standard set forth Rule 9 ( ) for the fraud b

cla im s , and that the other claims need not meet the exacting

standard of Rule 9 ( ) b amend their pleadings

Alternatively, Plaintiffs request leave to order to comply with Rule 9( ). b
Ru le 9 ( ) Standard b

A motion to dismiss for failure to plead with particularity as

required by Rule 9 ( ) is treated as a Rule 12 ( ) ( ) motion to b b6
d ism i ss for failure to state a claim . Lovelace v . Software

Soectrum , Inc w

78 F. d 1015, 1017 ( th Cir . 1996); Camoa v. 3 5
No . 10-2707, 2010 WL

N ationw ide Prop . and Cas . Ins . Co ., Civ .

3733469, at *1 ( . . Tex . Sept. SD
Rule

2010).

requires that nE ln alleging fraud or mistake, a i

p arty must state w ith particularity the circumstances constituting

fraud or mistake.' '

FED.

9 ( ). b

Although the exact

pleading requirements for Rule 9( ) are case-specific, see Guidrv b v . Bank of Laplace, 954 F.2d 288 ( th Cir . 1992), the Fifth 5

Circu it 're qu ire s that the plaintiff allege 'the particulars of ' time , place , and contents of the false representations,' as well as the identity of the person making the misrepresentation and what
that person obtained thereby , otherwise referred to as the %who ,

Do cum en t N o .

at

what , when , where, and how ' of the alleged fraud .' '

U .S . ex rel.

Willard v . Humana Health Plan of Tex ., Incw 336 F.3d 375, 384 ( th 5

2003) ( itations omitted). c
111 . Discussion Fraud and Consoiracv to Comm it Fraud

In their common law fraud claim , Plaintiffs allege :

! 9: Eac and e ery one of the representati ns, as 4 h v o
de scr ib ed above, concerned material facts for th e reason that absent such representations, P laint iffs would not have acted as they did , an d which Defendants Nationw id e , Custard , Strick land , and Seidler knew were false or m ade recklessly without any knowledge of their truth as a positive assertion .

!50: T he statements were made with the intention
that they should be acted upon by Plaintiffs, w ho in turn acted in reliance upon the statem ent s , thereby causing Plaintiffs to

suffer injury and constituting common law
fraud .8

Pla in t iffs ' pleading , however, specifies no representation or a lleg ed misrepresentation that Plaintiffs claim to have relied upon

or that caused them to 'act E as they did.' The petition fails to ' ) '
stat e the substance of any alleged misrepresentations constituting the alleged fraud , much less exactly NAo made them , Aow they were

8 D o c u m e n t No

.

ex . 1 at 12 .
4

made , ehen they were made , to wAom they were made , and wAere they
w ere made . See Willard, 336 F .3d at 384 .

L ikew ise , Plaintiffs ' cla im of consp ir acy to commit fraud is pu re ly formulaic and conclusory , also failing to meet the require-

ments of Rule 9( ) b

The motion to dismiss al1 allegations of fraud

and conspiracy to commit fraud for failure to comply with Rule 9( ) b
i s meritorious .

B.

Tex as Insurance Code Claims

Normally , ' E lule 9( )'s stringent pleading requirements 'r b
sh ou ld not be extended to causes of action not enumerated therein .' '
Am . Realtv Trust , Inc . v . Hamilton Lane Advisors, Inc ., 115

App ' 662, 668 ( th Cir. 2004) x 5

see also Kennard v . IndianaDolis

Life Ins. Co., 420 F. Supp . d 601, 609 ( . . Tex. 2006) ( ish , z ND F ( itations omitted) ( olding that Rule 9( ) did not apply to c h b
p lea ding s for Texas Insurance Code claims when no separate fraud

claims were alleged). However, when the fraud and misrepresentat ion claims are based on the same set of alleged facts , and no d istinc tion is made between the claims, the Fifth Circu it has

applied the heightened pleading requirements of Rule 9( ). b

See

Benchmark Elec., Inc., v . J . . Huber Corpw 343 F.3d 719, 723 ( th M 5 Cir . 2003)7 Williams v. WMX Techs., Incw F.3d 175, ( th 5

Cir . 1997); see also Berrv v . Indianarolis Life Ins. Co ., 6O8

Supp . d 785, 800 ( . . Tex . 2009) ( olding that the heightened z ND h
5

pleading standard of Rule 9 ( ) applied to Texas Insurance Code b
c la im s where the allegations of m isrep re sen ta tion s were based on

the same facts as the fraud claims). The question is whether the
n on -fraud claims are M so intertwined ' w ith the fraud averments that it is not possible to describe a simp le redaction to separate
the two .' Kennard , 42O F . Supp .zd at 609 . '

H er e , Plaintiffs ' Texas Insurance Code claims are a11 'in ter ' tw in ed ' with the general allegations of fraud and conspiracy ' comm it fraud claims, all of which are found in the same conclusory nFact s' section of the petition . ' Plaintiffs' structure of its

p etit ion therefore precludes any nsimp le redaction to separate the tw o .' See Kennard , 420 F . Supp .zd at 609 . Accordingly , the motion ' to dismiss has merit , although Plaintiffs will be given an

oppo rtun ity to replead their claims under the Texas Insurance Code and , as well , their claims fraud such claims can be made

consistent with the requirements of Rules 11( ) and 9( ) . b b
IV . Order Fo r the foregoing reasons, it is ORD ERED that Defendants Nationwide Prop erty and Casualty

Insurance Company, Custard Insurance Adjusters, Inc., Kent Lee
Str ick land , and Melinda Molly Seigler 's Motion for Partial

D ism issa l Under Rule

of the Federal Rules of Civ il Procedure ,

( ocument No. D

GRANTED, and

non-contractual claims shall

6

be DISM ISSED without further Order of the Court unless Plaintiffs, w ith in 14 days after the date of this Order, file a more definite

sta tem en t in the form of an Amended Complaint that fully complies

with Rules

9 ( ), and 11 ( ) . b b9

Th e Clerk will enter this Order , providing a correct copy to
al l parties of record . S IGN ED at Houston , Texas, on this ay of December, 2010.

<

*

*

EW I UN ITED S

WERLEIN , JR . TES DISTRICT JUDGE

9 The Court observes that the attorneys for Plaintiffs in this case appear routinely and with no specificity to have alleged nfrau d' and 'con sp iracy to commit fraud' in case after case that ' ' ' the Court has now had opportunity to examine . The requirements of

Rule 9 ( ) have been stated above and need not be repeated . b

The

Cour t cautions Plaintiffs , however , that when siqninq a pleadinq in th is Court, counsel also is makinq al1 of the reoresentations to the Court that are set out in Rule 11 ( ) . b