Dahmen v. LM General Insurance
MEMORANDUM DECISION AND ORDER GRANTING DEFENDANT'S MOTION TO DISMISS - granting as set forth in this Order #9 Motion to Dismiss ; Motions terminated: #9 MOTION to Dismiss filed by LM General Insurance. Plaintiff is permitted to file an Amended Complaint within thirty (30) days of this Order. See Order for further details. Signed by Judge Ted Stewart on 1/6/21. (jrj)
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
MEMORANDUM DECISION AND
ORDER GRANTING DEFENDANT'S
MOTION TO DISMISS
LM GENERAL INSURANCE COMPANY,
Case No. 2:20-CV-815 TS
District Judge Ted Stewart
This matter is before the Court on Defendant LM General Insurance Company’s Motion
to Dismiss. For the reasons discussed below, the Court will grant the Motion but will allow
Plaintiff to file an Amended Complaint.
Plaintiff was involved in a motor vehicle collision in May 2020. Plaintiff was injured in
the accident and has incurred medical expenses. At the time of the accident, Plaintiff and the
vehicle she was driving were insured by Defendant. Plaintiff issued a demand for Defendant to
tender the policy limits of $25,000. Defendant has refused. Plaintiff brings claims for breach of
contract, breach of the implied covenant of good faith and fair dealing, and bad faith.
II. MOTION TO DISMISS STANDARD
In considering a motion to dismiss for failure to state a claim upon which relief can be
granted under Rule 12(b)(6), all well-pleaded factual allegations, as distinguished from
conclusory allegations, are accepted as true and viewed in the light most favorable to Plaintiff as
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the nonmoving party. 1 Plaintiff must provide “enough facts to state a claim to relief that is
plausible on its face,” 2 which requires “more than an unadorned, the-defendant-unlawfullyharmed-me accusation.” 3 “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.’” 4
“The court’s function on a Rule 12(b)(6) motion is not to weigh potential evidence that
the parties might present at trial, but to assess whether the plaintiff’s complaint alone is legally
sufficient to state a claim for which relief may be granted.” 5 As the Court in Iqbal stated,
[o]nly a complaint that states a plausible claim for relief survives a motion to
dismiss. Determining whether a complaint states a plausible claim for relief will
. . . be a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense. But 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. 6
Plaintiff asserts three cause of action against Defendant: breach of contract, breach of the
implied covenant of good faith and fair dealing, and bad faith. Defendant seeks dismissal of the
second and third causes of action.
GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Id. (quoting Twombly, 550 U.S. at 555, 557) (alteration in original).
Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).
Iqbal, 556 U.S. at 679 (internal citations and quotation marks omitted).
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GOOD FAITH AND FAIR DEALING
Plaintiff’s second cause of action asserts a breach of the covenant of good faith and fair
dealing. “In Utah, a plaintiff may sue on a contract for: (1) breach of the contract’s express
terms; and/or (2) breach of the covenant of good faith and fair dealing, which is an implied duty
that inheres in every contractual relationship.” 7 The Utah Supreme Court has held that “the
implied obligation of good faith performance contemplates, at the very least, that the insurer will
diligently investigate the facts to enable it to determine whether a claim is valid, will fairly
evaluate the claim, and will thereafter act promptly and reasonably in rejecting or settling the
Here, Plaintiff’s Complaint contains a single paragraph setting out her claim for breach of
the covenant of good faith and fair dealing. Plaintiff alleges that “Defendant breached the
implied covenant of good faith and fair dealing by, among other things, failing to investigate,
evaluate, and pay Plaintiff’s full claims among other wrongful and illegal conduct.” 9 This
allegation is completely conclusory, which is insufficient under Twombly and Iqbal. 10
Therefore, dismissal is required. However, the Court will allow Plaintiff an opportunity to
amend her Complaint to provide additional allegations to shore up her claim.
Blakely v. USAA Cas. Inc. Co., 633 F.3d 944, 947 (10th Cir. 2011).
Beck v. Farmers Ins. Exch., 701 P.2d 795, 801 (Utah 1985).
Docket No. 2-1 ¶ 36.
See City of Orem v. Evanston Ins. Co., Case No. 2:16-cv-425-JNP-PMW, 2017 WL
1843101, at *3 (D. Utah May 5, 2017) (finding similar allegations deficient).
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Plaintiff’s third cause of action purports to assert a claim of bad faith. “Bad faith is
merely the inverse of the implied covenant of good faith and fair dealing that inheres in all
insurance contracts.” 11 Therefore, to the extent that Plaintiff seeks to assert a bad faith claim, it
should be brought as part of her claim for breach of the implied covenant of good faith and fair
dealing. No separate cause of action is required. Therefore, Plaintiff’s third cause of action will
be dismissed, but the Court will permit Plaintiff to include the allegations in that claim as part of
her claim for breach of the implied covenant of good faith and fair dealing.
It is therefore
ORDERED that Defendant’s Motion to Dismiss (Docket No. 9) is GRANTED as set
forth above. Plaintiff is permitted to file an Amended Complaint within thirty (30) days of this
DATED this 6th day of January, 2021.
BY THE COURT:
United States District Judge
U.S. Fid. v. U.S. Sports Specialty, 270 P.3d 464, 470 (Utah 2012).
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