United States District Court, W.D. Oklahoma
TIMOTHY D. DeGIUSTI, CHIEF UNITED STATES DISTRICT JUDGE
Federal Insurance Company (“Federal”) has filed a
Motion to Dismiss [Doc. No. 197] seeking the partial
dismissal of Indeck Power Equipment Company’s Second
Amended Counterclaim [Doc No. 195]. Counter-Plaintiff Indeck
Power Equipment Company (“Indeck”) has filed a
response in opposition [Doc. No. 207], to which Federal has
replied [Doc. No. 216]. The matter has been fully briefed and
is at issue.
October 2003, Indeck contracted with the City of Altus and
the Altus Municipal Authority (collectively,
“Altus Plaintiffs”). Under the terms of
that agreement, Indeck was to install portions of a water
treatment system. Federal’s Original Complaint [Doc.
No. 1] at 2–3, ¶ 11. Disputes arose, and, pursuant
to that contract, Altus Plaintiffs filed a lawsuit
(“Altus”) against Indeck on November 5,
2013. By that time, Federal had issued thirteen insurance
policies to Indeck, all effective continuously from December
1, 2002 to December 1, 2015 (“Federal Policies”).
Indeck’s Second Amended Counterclaim at 3, ¶ 4. In
the Federal Policies, Federal allegedly agreed to defend
Indeck in Altus, subject to a reservation of rights,
and agreed that Indeck could rely on independent counsel at
Federal’s expense. Id. at 4, ¶ 20.
of certain developments surrounding Indeck’s use of
independent counsel in Altus, Federal now brings the
present action. Federal originally claimed to have no duty to
defend or indemnify Indeck and sought to withdraw from
Indeck’s defense in Altus, claiming that
Altus Plaintiffs do not seek any damages covered by
the Federal Policies. Id. at 7, ¶¶
34–36. Indeck has since filed and twice amended a
counterclaim. Second Amended Counterclaim, Doc. No. 195.
issue here are Counts I–VI of Indeck’s Second
Amended Counterclaim. Count I alleges a breach of contract.
Id. at 25. Count II is a voluntary undertaking
claim. Id. at 27. Count III alleges violations of
§ 155 of the Illinois Insurance Code. Id. at
29. Count IV alleges breach of the duty of good faith and
fair dealing, under Oklahoma law. Id. at 33. Count V
is a claim for violations of the Illinois Consumer Fraud and
Deceptive Business Practices Act (“Consumer Fraud
Act”). Id. at 34. Count VI is a claim for
prejudgment interest. Id. at 39. Facts relevant to
each count will be detailed in corresponding sections below.
survive a motion to dismiss under Rule 12(b)(6), “a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.’” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). “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.”
Iqbal, 556 U.S. at 678. The “plausibility
standard” announced in Twombly and
Iqbal is not a “heightened standard” of
pleading, but rather a “refined standard.”
Khalik v. United Air Lines, 671 F.3d 1188, 1191
(10th Cir. 2012) (citing Kansas Penn Gaming, LLC v.
Collins, 656 F.3d 1210, 1214 (10th Cir. 2011)). Under
the “refined standard, ” plausibility refers
“to the scope of the allegations in the complaint: if
they are so general that they encompass a wide swath of
conduct, much of it innocent, then the plaintiffs have not
nudged their claims across the line from conceivable to
plausible.” Khalik, 671 F.3d at 1191; see
also Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir.
2008). Further, the Tenth Circuit has noted that “[t]he
nature and specificity of the allegations required to state a
plausible claim will vary based on context.”
Khalik, 671 F.3d at 1191.
A ruling on choice-of-law issues at this stage of the
litigation remains premature.
is alleged to have tortiously breached the duty of good faith
and fair dealing. Second Amended Counterclaim at 33. While
Indeck brings these claims in Count IV under Oklahoma law,
Federal maintains that Illinois law should govern any bad
faith allegations. Motion at 4. Under Illinois law-Federal
asserts-Indeck has failed to state a claim. Id.
Federal once before made this argument to the Court in a
motion to dismiss. See Federal’s Motion to
Dismiss Count III of Indeck’s First Amended
Counterclaim, Doc. No. 88. In denying Federal’s earlier
Motion, the Court concluded that “at this stage of
litigation, it would be inappropriate to issue a ruling . . .
because doing so would require what applicable precedent
prohibits, which is to weigh the choice-of-law evidence
submitted by the parties.” Order, Doc. No. 107. The
Court explicitly stated that such a ruling would be
“improper on a motion brought under Rule 12(b), and the
issue would be better resolved through summary
judgment.” Id. at 3 (citing Jones v.
Lattimer, 29 F.Supp.3d 5, 10 n.3 (D.D.C. 2014)).
Court adheres to its previous ruling. While certainly the
litigation has progressed, discovery is still ongoing.
See Scheduling Order, Doc. No. 222. And applicable
precedent influencing the Court’s logic in its previous
Order holds true. Any choice-of-law issues will be better
resolved at the summary judgment stage.
Court declines to reconsider its previous Order and decide
any choice-of-law issues prematurely. All parties agree
Illinois substantive law controls the analysis of the
remaining claims. Second Amended Counterclaim at 4.
Indeck’s voluntary undertaking claim is dismissed
without prejudice, given that Federal had a duty to
moves the Court to dismiss Count II of Indeck’s Second
Amended Counterclaim, a voluntary undertaking claim. Indeck
agrees dismissal of Count II is proper on different grounds.
Indeck’s Response, Doc. No. 207, at 28. Indeck pleaded
the voluntary undertaking claim in the alternative, should
the Court find Federal owed no duty to defend. See
Indeck’s Response, Doc. No. 207 at 28. The Court, in a
previous Order- issued after Indeck filed its Second Amended
Counterclaim-determined Federal’s duty to defend was
triggered. Order, Doc. No. 190, at 12.
both parties submit that the voluntary undertaking claim
should be dismissed. Federal’s Reply at 3 n.3. The