United States District Court, W.D. Oklahoma
DANIEL E. LANG, et al., Plaintiffs,
FARMERS INSURANCE COMPANY, INC., Defendant.
TIMOTHY D. DeGIUSTI UNITED STATES DISTRICT JUDGE.
the Court is Defendant Farmers Insurance Company, Inc.'s
Motion to Dismiss Plaintiffs' Bad Faith Claim [Doc. No.
8], filed pursuant to Fed.R.Civ.P. 12(b)(6). Plaintiffs have
timely opposed the Motion, and the deadline for filing a
reply brief has expired.
bring this action to recover damages for breach of contract
and a tort claim of bad faith based on allegations that their
property insurer improperly denied an insurance claim and
failed to pay them for an insured loss covered by the
insurance policy. By its Motion, Defendant asserts that the
Complaint fails to state a bad faith claim under federal
pleading standards. Plaintiffs contend the factual
allegations of the Complaint are sufficient but,
alternatively, request leave to amend their pleading.
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)); see Robbins v.
Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008). “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. Determining
whether a complaint states a plausible claim for relief is a
“context-specific task that requires the reviewing
court to draw on its judicial experience and common
sense.” See id. at 679. Thus, for example,
“[a] simple negligence action based on an automobile
accident may require little more than the allegation that the
defendant negligently struck the plaintiff with his car while
crossing a particular highway on a specified date and
time.” Robbins, 519 F.3d at 1248. The question
to be decided is “whether the complaint sufficiently
alleges facts supporting all the elements necessary to
establish an entitlement to relief under the legal theory
proposed.” Lane v. Simon, 495 F.3d 1182, 1186
(10th Cir. 2007) (internal quotation omitted).
the allegations of the Complaint as true, Plaintiffs owned a
home in Guthrie, Oklahoma, that was damaged by a wind and
hail storm on April 28, 2017, and the loss was covered under
an insurance policy issued by Defendant. Plaintiffs timely
submitted a claim to Defendant for the loss in compliance
with the policy, but Defendant denied the claim and failed to
pay for covered damage to their home. Plaintiffs claim
Defendant improperly denied payment for an “obviously
hail damaged roofing system” as required by the policy.
See Compl. [Doc. No. 1], ¶ 15. Plaintiffs also
claim Defendant “conducted an improper and unreasonable
claim investigation, evaluation, and adjustment which
resulted in an unreasonable denial of coverage for
Plaintiff's covered loss.” Id. ¶ 16.
In support of this claim, Plaintiffs allege: “During
its inspection, Defendant disregarded obvious hail damage to
Plaintiffs' roofing system and failed to consider the
hail damage to Plaintiffs' roof as a whole.”
contends Plaintiff's allegations are conclusory and
provide insufficient facts to state a claim of insurer's
bad faith. In Defendant's view, the Complaint merely
alleges a “legitimate dispute concerning coverage for
which a bad faith action will not lie.” See
Def.'s Mot. Dismiss [Doc. No. 8] at 4 (internal quotation
establish a breach of Defendant's duty of good faith and
fair dealing with its insured, Plaintiffs need only show that
Defendant breached the insurance contract and, in so doing,
acted in a manner constituting bad faith. See Brown v.
Patel, 157 P.3d 117, 121 (Okla. 2007); see also
Badillo v. Mid Century Ins. Co., 121 P.3d 1080, 1093
(Okla. 2005). “[A] legitimate dispute as to coverage
will not act as an impenetrable shield against a valid claim
of bad faith, ” for example, an inadequate or one-sided
investigation of a claim may permit a finding that the
insurer acted unreasonably and in bad faith. See
Timberlake Const. Co. v. U.S. Fidelity & Guar. Co.,
71 F.3d 335, 343, 345 (10th Cir. 1995); see also
Bannister v. State Farm Mut. Auto. Ins. Co., 692 F.3d
1117, 1127-28 (10th Cir. 2012).
examination of the Complaint, the Court finds the sufficiency
of Plaintiffs' allegations to state a claim of
insurer's bad faith presents a close question. However,
the Complaint contains factual allegations that amount to
more than an assertion that Defendant underpaid
Plaintiffs' insurance claim. Plaintiffs also assert that
Defendant inadequately and unreasonably investigated and
withheld payment clearly owed. These allegations may be
enough, if proven, to establish a breach of Defendant's
duty to deal fairly and in good faith with its insureds.
Under the current application of Rule 12(b)(6), the notice
pleading standard of “Rule 8(a)(2) still lives.”
Khalik v. United Air Lines, 671 F.3d 1188, 1191
(10th Cir. 2012). “Specific facts are not necessary;
the statement need only ‘give the defendant fair notice
of what the . . . claim is and the grounds upon which it
rests.'” Erickson v. Pardus, 551 U.S. 89,
93 (quoting Twombly, 550 U.S. at 555). In this case,
the Court finds minimally sufficient factual allegations to
state a bad faith claim and, therefore, dismissal of
Plaintiffs' tort claim is not warranted.
THEREFORE ORDERED that Defendant's Motion to Dismiss
Plaintiffs' Bad ...