United States District Court, W.D. Oklahoma
KAREN ANNETTE FOSTER-BLACKWOOD, JEAN RENEE BLACKWOOD-FOSTER, PATRICIA KAY FOSTER, Plaintiff,
LIBERY INSURANCE CORPORATION, Defendant.
L. RUSSELL, UNITED STATES DISTRICT JUDGE.
filed a Motion to Dismiss (Doc. No. 10), seeking dismissal of
the claims of Plaintiffs Karen Annette Foster-Blackwood and
Jean Renee Blackwood-Foster, because neither was a named
insured under the homeowners policy at issue herein.
Plaintiffs responded in opposition to the motion and
Defendant filed a reply in support of its position. Having
considered the parties' submissions, the Court finds as
Amended Complaint herein alleges that Plaintiff Kay Foster is
a citizen of Iowa City, Iowa and Plaintiffs Karen Annette
Foster-Blackwood and Jean Renee Blackwood-Foster are citizens
of Oklahoma. Plaintiffs allege they owned a home located at
10005 South Blackwelder in Oklahoma City that was damaged by
a water leak on March 8, 2017. They assert Defendant issued a
policy covering the premises, and in accordance therewith the
Plaintiffs timely submitted a claim to Defendant. Despite the
timely claim, Defendant has wrongfully withheld payment for
all of the damaged building components as a result of their
unreasonable investigation that led to additional damage from
mold, thereby breaching the contract and acting in bad faith.
Plaintiffs seeks compensatory and punitive damages.
12(b)(6) of the Federal Rules of Civil Procedure provides
that a defense of “failure to state a claim upon which
relief can be granted” may be raised by motion to
dismiss. To withstand a motion to dismiss, a complaint must
contain sufficient allegations of fact “to state a
claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547
(2007). “The court's function on a Rule 12(b)(6)
motion is not to weigh potential evidence that the parties
might present at trial, but to assess whether the
plaintiffs' amended complaint alone is legally sufficient
to state a claim for which relief may be granted.”
Brokers' Choice of Am., Inc. v. NBC Universal,
757 F.3d 1125, 1135-36 (10th Cir. 2014); Peterson v.
Grisham, 594 F.3d 723, 727 (10th Cir. 2010). Plaintiffs
must plead “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) (quoting Twombly, 550
U.S. at 570). In deciding a motion under Rule 12(b)(6), the
Court assumes that all of the plaintiffs' well-pleaded
factual allegations are true and views them in the light most
favorable to the plaintiffs. Iqbal, 556 U.S. at 679;
Schwartz v. Booker, 702 F.3d 573, 579 (10th Cir.
2012). In support of its motion, Defendant attaches a copy of
the Policy, asserting that conversion of the instant motion
to a motion for summary judgment is not necessary because the
Plaintiffs refer to the policy in the Complaint and the copy
is indisputably authentic. “[I]f a plaintiff does not
incorporate by reference or attach a document to its
complaint, but the document is referred to in the complaint
and is central to the plaintiff's claim, a defendant may
submit an indisputably authentic copy to the court to be
considered on a motion to dismiss” without converting
the motion to dismiss into a motion for summary judgment.
GFF Corp. v. Associated Wholesale Grocers, Inc., 130
F.3d 1381, 1384 (10th Cir. 1997). In response, Plaintiffs do
not dispute the authenticity of the Policy submitted by
Liberty, and accordingly, the Court will consider the Policy
pursuant to the 12(b)(6) standard.
alleged breach of contract by Defendant is identified in the
Amended Complaint as follows:
[I]mproper denial of Plaintiffs' claim and the failure to
pay for covered damages to Plaintiffs' home, including
water damage to Plaintiffs' drywall and insulation.
Defendant, Liberty Insurance Corporation, further breached
its contractual and good faith contractual obligations by
conducting an unreasonable inspection which failed to account
for all damaged building components including paint, drywall,
and insulation. Defendant further breached its contract and
its good faith contractual duties by failing to timely
implement any qualified dry out/restoration vendors to
properly dry out Plaintiffs' home to prevent the
development, growth and distribution of mold and other fungal
hazards throughout Plaintiffs' home. As a result of the
Defendant's unreasonable delay, Plaintiffs' home has
been contaminated by mold and other hazardous toxins.
Defendant further breached its contractual and good faith
contractual duties by failing to communicate with its dry
out/restoration contractor regarding the damages to
Plaintiffs' home, necessary testing protocols and
development of a restoration/remediation scope of work.
Defendant further breached its contractual and good faith
contractual duties by failing to communicate timely with
Plaintiffs about their claim, scope of work, mold remediation
and additional living expenses. Defendant has unreasonably
failed to consider, evaluate, respond to or pay to repair
estimates submitted by Plaintiffs.
Complaint, ¶ 15.
Oklahoma law, “[a]n insurance policy is to be treated
as a contract” and is “enforced according to its
terms.” Equity Mut. Ins. Co. v. Spring Valley
Wholesale Nursery, Inc., 747 P.2d 947, 953
(Okla. 1987). “The whole of a contract is to be taken
together, so as to give effect to every part, if reasonably
practicable, each clause helping to interpret the
others.” Okla. Stat. tit. 15 § 157 (2016).
“The terms of the parties' contract, if
unambiguous, clear, and consistent, are accepted in their
plain and ordinary sense, and the contract will be enforced
to carry out the intention of the parties....”
Dodson v. St. Paul Ins. Co., 812 P.2d 372, 376
(Okla. 1991). “The interpretation of an insurance
contract and whether it is ambiguous is a matter of law for
the Court to determine and resolve accordingly.”
Id. Finally, as noted by Defendant, generally, a
stranger to a contract may not seek relief under theories of
breach of contract or the affiliated tort for violation of
the duty of good faith and fair dealing. “Third parties
may have standing to bring contractual or bad-faith claims
against an insurer, however, where there is ‘a
contractual or statutory relationship between the insurer and
the third party.'” Colony Ins. Co. v.
Burke, 698 F.3d 1222, 1229 (10th Cir.
2012)(quoting McWhitier v. Fire Ins. Exch., 878 P.2d
1056, 1059 (Okla. 1994)).
Declarations Policy at issue herein indicates that Patricia
K. Foster is the “Named Insured, ” and there is
no indication therein that either Karen Foster-Blackwood or
Jean Blackwood-Foster is a party to the contract. Thus, if
either is to continue as a party to this action, the Amended
Complaint must contain allegations sufficient to plead third
party beneficiary status thereunder. Plaintiffs Karen
Foster-Blackwood and Jean Blackwood-Foster argue they can
proceed under the contract because they fall within the
Policy's definition of “Insured, ” meaning
“you and residents of your household who are . . . Your
relatives.” “[Y]ou” and
“”your” refer to the “named
insured” shown in the Declaration and the spouse if a
resident of the same household.” Doc. No. 10-1, Policy
00 03 04 91, p. 1. Plaintiffs rely on the definition of
“Insured” and a recent case involving third party
beneficiaries in support of their contention that the claims
of all three may proceed. See Hensley v. State Farm Fire
and Casualty Co., 396 P.3d 11 (Okla. 2017)(remanding for
a jury determination as to third party beneficiary status by
the jury in light of facts established by summary judgment
third party beneficiary's rights depend upon, and are
measured by, the terms of the contract between the promissor
and promisee.” May v. Mid-Century Ins. Co.,
151 P.3d 132, 141 (Okla. 2006). From review of the Policy,
the term “Insured” is not used coextensively with
the terms “you” and “your.” Rather,
the coverage inures primarily to the benefit of the named
insured, with certain provisions extending to
“Insured.” “Section I - Property Coverages,
Coverage A Dwelling, ” there is no reference to
“insured” and the coverage is directed to the
“residence premises” defined as “”the
one family dwelling, other structures and grounds. . . where
you reside.” Additionally, the “Loss
Payment” provision of the Policy provides “[w]e
will pay you unless some other person is named in the policy
or is legally entitled to receive payment.” Although an
“insured” beyond Ms. Foster may legally be
entitled to recover for Personal Property damaged within the
confines of the Policy, there is no such entitlement for
damage to the Insured Premises under the Dwelling Coverage,
the only coverage under the Policy implicated by
Plaintiffs' current allegations.
the non-conclusory allegations in favor of the Plaintiffs
Blackwood-Foster and Foster-Blackwood, the Court finds that
Defendant Liberty Insurance Company is entitled to dismissal
of their claims as they have failed to allege they were
either parties to or intended third party beneficiaries of
the contract of insurance. Accordingly, Defendant's
Partial Motion to Dismiss (Doc. No. 10) is hereby GRANTED.