United States District Court, W.D. Oklahoma
ORDER
TIMOTHY D. DeGIUSTI, CHIEF UNITED STATES DISTRICT JUDGE
Before
the Court is Defendant's Motion to Dismiss [Doc. No. 18],
filed pursuant to Fed.R.Civ.P. 12(b)(6). Defendant seeks only
a partial dismissal of the Second Amended Complaint [Doc. No.
12], asserting that Plaintiff fails to state a tort claim
under Oklahoma law for bad faith conduct by Defendant in
handling Plaintiff's insurance claim.[1]
Plaintiff
has responded [Doc. No. 21] in opposition to the Motion, and
Defendant has replied [Doc. No. 22]. Thus, the Motion is
fully briefed and ripe for decision.
Factual
and Procedural Background
Plaintiff
brings this action to recover damages for breach of contract
and bad faith based on allegations that Defendant, as its
property insurer, unreasonably failed to timely investigate,
adjust, and pay an insurance claim for covered hail damage to
Plaintiff's property. By its Motion, Defendant asserts
that the Second Amended Complaint fails to state a plausible
claim of insurer's bad faith under federal pleading
standards. Plaintiff contends the factual allegations of the
Second Amended Complaint are sufficient but, alternatively,
requests leave to amend its pleading if the Court finds a
deficiency.[2]
Standard
of Decision
“To
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).
Plaintiff's
Allegations
Accepting
the allegations of the Second Amended Complaint as true,
Defendant issued an insurance policy to Plaintiff for a
commercial property in Norman, Oklahoma, that sustained hail
damage on June 7, 2018. The damage was a covered loss under
the policy, and Plaintiff timely submitted a claim to
Defendant for the loss. However, Defendant failed to properly
investigate and evaluate the claim, and breached the
insurance contract by offering to pay for only a partial roof
repair. “Defendant's own investigation demonstrated
that such a repair could not be completed and that a complete
roof replacement was necessary.” See Second
Am. Compl. ¶¶ 15, 17. Plaintiff explains more
specifically as follows:
[T]he evidence gathered during the claim investigation
demonstrated that Defendant's proposed partial parapet
wall repair could not be done due to the age and condition of
the roof. In the face of this evidence, Defendant took the
unreasonable position that it didn't matter, and stated
that Plaintiff should just find a different roofer that was
willing to make the improper repair anyway.
Id. Further, Defendant “refus[ed] to consider
additional information provided by Plaintiff's roofing
contractor regarding the infeasibility and unreasonableness
of Defendant's proposed parapet wall repair.”
Id.
Discussion
Defendant
contends Plaintiff's allegations are conclusory and
provide insufficient facts to state a claim of insurer's
bad faith. Defendant argues that the Second Amended Complaint
merely “demonstrate[s] a difference of opinion where
[Plaintiff's] roofer and [Defendant] disagreed on the
repairs necessary[;] simply making a conclusory statement
that Defendant's position is unreasonable does not
establish bad faith.” See Def.'s Mot.
Dismiss [Doc. No. 18] at 5.[3]
To
establish a breach of Defendant's duty of good faith and
fair dealing with its insured, Plaintiff must 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); Badillo v.
Mid Century Ins. Co., 121 P.3d 1080, 1093 (Okla. 2005).
Although an insurer may reasonably refuse to pay a disputed
claim, “a legitimate dispute as to coverage will not
act as an impenetrable shield against a valid claim of bad
faith;” for example, an inadequate investigation of a
claim may permit a finding that the insurer acted
unreasonably and in bad faith. See Timberlake ...