Great American Insurance Company v. Chapman et al
Filing
29
MEMORANDUM OPINION AND ORDER granting Great American's 9 MOTION to Dismiss Counterclaim. Signed by Judge Robert C. Chambers on 6/5/2014. (cc: attys; any unrepresented party) (skm)
IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF WEST VIRGINIA
HUNTINGTON DIVISION
GREAT AMERICAN INSURANCE COMPANY,
Plaintiff,
v.
CIVIL ACTION NO. 3:13-27225
ALETTA K. CHAPMAN, RICHARD A. CHAPMAN,
J. BRIAN HINKLE, and ANGELA R. HINKLE,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiff Great American Insurance Company’s (Great
American’s) Motion to Dismiss Defendants Aletta K. Chapman and Richard A. Chapman’s
Counterclaim. ECF No. 9. For the following reasons, the Court GRANTS the motion.
I.
FACTUAL AND PROCEDURAL HISTORY
On October 29, 2013, Great American filed a Complaint in this Court regarding the
execution of surety bonds by Great American on behalf of Chapman-Martin Excavation &
Grading, Inc. (Chapman-Martin). In the Complaint, Great American states it received notice of
various claims by and demands for payment by obligees, subcontractors, suppliers, and laborers
who worked on projects on behalf of Chapman-Martin, as principal. Great American asserts that,
thus far, it has paid $841,059.95 in claims and has recovered $160,933.44. In addition, Great
American states it has incurred $291,201.06 in investigating and settling the claims.
Great American alleges that the Chapmans entered into an Indemnity Agreement
with it, in which the Chapmans agreed, in part, to “hold harmless and keep the Surety indemnified
from and against any and all liability for losses, costs, and/or expenses of whatsoever kind or
nature . . . and from and against any and all such losses and/or expenses which the Surety may
sustain and incur[.]” Complaint, at 2, in part (quoting Agreement of Indemnity, at 1 (July 9, 2009)).
Great American claim that it demanded the Chapmans perform under the agreement and
reimburse, exonerate, and indemnify it for its losses, potential losses, and expenses, but the
Chapmans have failed to comply with the agreement. 1 The Chapmans answered the Complaint
and filed a counterclaim on December 2, 2013. In turn, Great American has filed the present
motion to dismiss the counterclaim for failure to state a cause of action under Rule 12(b)(6).
II.
STANDARD OF REVIEW
In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the United States Supreme
Court disavowed the “no set of facts” language found in Conley v. Gibson, 355 U.S. 41 (1957),
which was long used to evaluate complaints subject to 12(b)(6) motions. 550 U.S. at 563. In its
place, courts must now look for “plausibility” in the complaint, or in this case, the counterclaim.
This standard requires the counterclaimant to set forth the “grounds” for an “entitle[ment] to
relief” that is more than mere “labels and conclusions, and a formulaic recitation of the elements of
a cause of action will not do.” Id. at 555 (internal quotation marks and citations omitted).
Accepting the factual allegations in the counterclaim as true (even when doubtful), the allegations
“must be enough to raise a right to relief above the speculative level . . . .” Id. (citations omitted).
If the allegations in the counterclaim, assuming their truth, do “not raise a claim of entitlement to
1
Great American filed an Amended Complaint, without seeking or receiving leave by the
Court, on February 28, 2014.
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relief, this basic deficiency should . . . be exposed at the point of minimum expenditure of time and
money by the parties and the court.” Id. at 558 (internal quotation marks and citations omitted).
In Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme Court explained the
requirements of Rule 8 and the “plausibility standard” in more detail. In Iqbal, the Supreme
Court reiterated that Rule 8 does not demand “detailed factual allegations[.]” 556 U.S. at 678
(internal quotation marks and citations omitted).
However, a mere “unadorned,
the-defendant-unlawfully-harmed-me accusation” is insufficient. Id. “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. (quoting Twombly, 550 U.S. at 570). Facial plausibility
exists when a claim contains “factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Id. (citation omitted). The Supreme Court
continued by explaining that, although factual allegations in a complaint must be accepted as true
for purposes of a motion to dismiss, this tenet does not apply to legal conclusions. Id.
“Threadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id. (citation omitted). Whether a plausible claim is stated in a
complaint requires a court to conduct a context-specific analysis, drawing upon the court’s own
judicial experience and common sense. Id. at 679. If the court finds from its analysis that “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 ‘show[n]’-‘that the pleader is entitled to relief.’” Id.
(quoting, in part, Fed. R. Civ. P. 8(a)(2)). The Supreme Court further articulated that “a court
considering a motion to dismiss can choose to begin by identifying pleadings that, because they are
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no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.” Id.
III.
DISCUSSION
In this case, the counterclaim made by the Chapmans provides, in full:
Defendants jointly assert a counterclaim
against plaintiff arising from its breach of contract
and breach of its fiduciary duties arising from
payment of frivolous and otherwise non-meritorious
claims for which it seeks reimbursement, and
otherwise asserts claims against plaintiff.
Defendants seek a sum of money which shall
serve to fairly compensate them.
Answer of Aletta Chapman and Richard Chapman with Counterclaim, at 2. The Court finds this
counterclaim is nothing more than a mere conclusory statement that fails to allege sufficient facts
to survive a motion under Rule 12(b)(6). Although detailed factual allegations are not required
under Rule 8, the Chapmans have alleged no facts to support this statement. Thus, it is subject to
dismissal under Rule 12.
IV.
CONCLUSION
Accordingly, for the foregoing reasons, the Court GRANTS Great American’s
Motion to Dismiss Counterclaim. ECF No. 9.
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The Court DIRECTS the Clerk to send a copy of this Order to counsel of record
and any unrepresented parties.
ENTER:
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June 5, 2014
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