United States District Court, D. New Jersey
Fischer and Randi Fischer ("the Fischers") sue
based on the denial of a claim under their homeowners'
insurance policy for damage resulting from a burst water
pipe. The complaint alleges that National Surety Corporation
("National Surety") issued the policy, and that ACE
American Insurance Company ("ACE American")
"serviced" the claim. Now before the Court is the
motion of ACE American to dismiss the Amended Complaint for
failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6).
(ECF no. 26.) ACE American argues (1) that the Fischers have
failed to allege the existence of a valid contract between
themselves and ACE American, and (2) that, even if a valid
contract has been alleged, the Fischers still have failed to
allege a bad faith claim. In other words, ACE argues that
this dispute is really between the Fischers and National
Surety, the insurer. For the reasons stated herein, I will
deny the motion and allow the parties to proceed to discovery
in order to better determine the relationships among ACE
American, National Surety, and the Fischers.
January 9, 2015, a frozen water pipe burst in the lower level
of the Fischers' home in Short Hills, New Jersey, causing
much damage to both their home and their personal
property. (AC ¶ 12.) They were insured under a
Prestige Home Premier Policy, issued by Fireman's Fund,
underwritten by National Surety, and serviced by ACE
American. (Id. ¶ 7.) The policy
insured their dwelling for $1.8M and their personal
property/valuables for $1.1M. [Id. ¶ 8.) They
reported their claim the same day as the accident.
(Id. ¶ 13.)
Fischers allege that they have not received full payment of
their claim, despite their prompt initial report and several
interactions with representatives of the defendants over the
course of twenty months. (See id.)
they say, the experience has exacerbated the health issues
facing them, evidenced in part by Annette Fischer's heart
failure, insomnia, and twelve mini-strokes since the first
denial. (Id. ¶ 137.)
October 4, 2016, the Fischers (then appearing pro
se) filed a complaint seeking $490, 000 in damages in
New Jersey Superior Court. On November 3, 2016, the
defendants removed the case based on this Court's
diversity jurisdiction under 28 U.S.C. § 1332.
(See Notice of Removal, ECF no. 1.) The Fischers
contested the removal. (See Motion for Remand, ECF
no. 5.) In a December 9, 2016 Order and Opinion, I denied
their motion to remand, finding that there was diversity
jurisdiction. (ECF no. 12.) The Fischers then obtained
counsel and amended their complaint. (ECF no. 25.)
Amended Complaint contains two counts. Count 1 alleges breach
of contract, and Count 2 alleges bad faith denial of an
insurance claim. Now before me is ACE American's Rule
12(b)(6) motion to dismiss both Counts of the Complaint.
Standard of Review
Fed.R.Civ.P. 12(b)(6), a complaint may be dismissed, in whole
or in part, if it fails to state a claim upon which relief
can be granted. When deciding such a motion, all allegations
in the complaint are taken as true and viewed in the light
most favorable to the plaintiff. See Warth v.
Seldin, 422 U.S. 490, 501 (1975); Trump Hotels &
Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d
478, 483 (3d Cir. 1998); see also Phillips v. Cty. Of
Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (noting that
the "reasonable inferences" principle was not
undermined by Twombly, infra). However, the
formulaic recitation of the elements of a cause of action
won't do. BellAtl. Corp. v. Twombly, 550 U.S.
544, 555 (2007). The factual allegations of a complaint must
be sufficient to raise a plaintiffs right to relief above a
speculative level, such that it is "plausible on its
face." See Id. at 570; see also Umland v.
PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir, 2008).
Therefore, 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." Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S.
at 556). While "[t]he plausibility standard is not akin
to a 'probability requirement'... it asks for more
than a sheer possibility." Iqbal, 556 U.S. at
Breach of Contract (Count 1)
American moves to dismiss Count 1 (breach of contract),
arguing that the Fischers have failed to allege the existence
of a valid contract between themselves and ACE. (Def. Br. 4.)
ACE points to the Amended Complaint, where the Fischers
allege that National Surety issued the policy under which the
Fischers make their claim. (Id.) It follows, says
ACE American, that National Surety is the sole party against
whom a breach-of-contract claim can be asserted.
true that the existence of a valid contract is an essential
element of a breach of contract action. EnviroFinance
Grp., LLC v. Envt'l Barrier Co., LLC, 440 N.J.Super.
325, 345 (App. Div. 2015) (listing the opposing party's
failure to perform a contractual duty and damages as two
other elements). An insurance policy is a contract. See
Finnegan v. Inductotherm Corp., No. A-4267-15T1, 2017 WL
3597032, at *4 (App. Div. Aug. 22, 2017) ("As Judge
Skillman noted, '[a]n insurance policy is a contract
between the insurer and the insured." (quoting
Jeffrey M. Brown Assocs., Inc. v. Interstate Fire &
Cas. Co.,414 N.J.Super. 160, ...