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Johnson v. State Farm Fire and Casualty Co.

United States District Court, D. New Jersey

May 29, 2019

YOLANDA JOHNSON, Plaintiff,
v.
STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

          OPINION

          ROBERT B. KUGLER UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Defendant State Farm Fire and Casualty's motion to dismiss Plaintiff Yolanda Johnson's Complaint. (Doc. No. 5.) Defendant seeks to dismiss Plaintiff's bad faith insurance claim and Plaintiff's request for punitive damages, consequential damages, and attorneys' fees. For the reasons below, Defendant's motion is GRANTED IN PART.

         I. BACKGROUND [1]

         This case involves an insurance dispute between Plaintiff and her insurance company. The Complaint is scant at best. (Doc. No. 1, Ex. A (“Compl.”).) According to its seven paragraph facts section, Defendant sold Plaintiff a homeowner's insurance policy, and after a pipe ruptured and damaged Plaintiff's property, Plaintiff sought insurance coverage. (Id. at ¶¶ 3-7.) Although Defendant paid some of Plaintiff's claims, Defendant did not pay the full amount, delaying Plaintiff's repairs and leaving portions of her home unlivable. (Id. at ¶¶ 8-9.)

         Plaintiff then sued Defendant in state court for breach of contract (Count I) and bad faith (Count II). (Id. at ¶¶ 10-19.) Plaintiff alleged that Defendant breached its contract with Plaintiff by “failing to pay all amounts due to Plaintiff” under the policy. (Id. at ¶ 11.) Plaintiff similarly alleged that Defendant acted in bad faith in several ways. Specifically, Plaintiff claimed that Defendant (1) failed to properly and promptly investigate Plaintiff's claims; (2) denied and delayed her coverage with no debatable reason to do so; (3) violated the Unfair Claims Settlement Practices Act; and (4) unreasonably denied adjusting and paying Plaintiff's claim. (Id. at ¶¶ 13-14.) Plaintiff demanded consequential damages, punitive damages, and attorneys' fees and costs. (Id. at ¶¶ 12, 18.)

         Defendant removed the matter to this Court based on its diversity jurisdiction. (Doc. No. 1 at ¶ 6.) Although Defendant does not challenge Plaintiff's breach of contract claim, Defendant now moves to dismiss Plaintiff's bad faith claim and her requests for punitive damages, consequential damages, and attorneys' fees. (Doc. No. 5 (“Def.'s Br.”) at 9.)

         II. LEGAL STANDARD

         Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss an action for failure to state a claim upon which relief can be granted. When evaluating a motion to dismiss, “courts accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Phillips, 515 F.3d at 233). A complaint survives a motion to dismiss if it contains enough factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

         In making this determination, the court conducts a three-part analysis. Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010). First, the court must “tak[e] note of the elements a plaintiff must plead to state a claim.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675- 79 (2009)). Second, the court should identify allegations that, “because they are no more than conclusions, are not entitled to the assumption of truth.” Id. (quoting Iqbal, 556 U.S. at 679). Finally, “where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.” Id. (quoting Iqbal, 556 U.S. at 679). This plausibility determination is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. A complaint cannot survive a motion to dismiss when a court can only infer that a claim is merely possible rather than plausible. Id.

         III. DISCUSSION

         A. Bad faith (Count II)

         Plaintiff alleges no facts to plausibly support a claim of a bad faith. To allege bad faith in the insurance context under New Jersey law, a plaintiff must allege facts to plausibly suggest that the insurer (1) did not have a “fairly debatable” reason for its failure to pay the claim, and (2) that the insurer knew or recklessly disregarded the lack of a reasonable basis for denying the claim. See Ketzner v. John Hancock Mut. Life Ins. Co., 118 Fed. App'x. 594, 599 (3rd Cir. 2004) (citing Pickett v. Lloyds, 131 N.J. 457, 474 (1993)). Here, Plaintiff alleges no facts to plausibly suggest that Defendant lacked a fairly debatable reason for denying the claim or that it knew or recklessly disregarded the lack of a reasonable basis for doing so. Plaintiff simply provides bald legal conclusions in claiming that Defendant's failure to pay amounted to bad faith. Because conclusory allegations are not sufficient, Count II is dismissed.

         B. Punitive Damages, Consequential Damages, and Attorneys' Fees

         Next, Defendant requests that the Court dismiss “all claims” for punitive damages, attorneys' fees, and consequential damages. (Def.'s Br. at 9.) These, however, are not independent “claims” but simply forms of damages and related costs that may be available if Plaintiff ultimately recovers on an underlying theory of liability. See New Skies Satellites, B.V. v. Home2US Commc'ns, Inc., 9 F.Supp.3d 459, 469-70 (D.N.J. ...


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