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Arashteh v. Mount Vernon Fire Insurance Co.

United States District Court, D. Maryland, Northern Division

August 12, 2014

MICHAEL ARASHTEH, et al., Plaintiffs,
v.
MOUNT VERNON FIRE INSURANCE CO., Defendants.

MEMORANDUM OPINION

WILLIAM D. QUARLES, Jr., District Judge.

Michael Arashteh and Aria, LLC (collectively "the Plaintiffs"), sued Mount Vernon Fire Insurance Company ("the Defendant"), for breach of contract and related claims in the Circuit Court for Baltimore City, Maryland. The Defendant removed the case to this Court. Pending is the Defendant's motion to dismiss, or in the alternative, motion for summary judgment. No hearing is necessary. See Local Rule 105.6. For the following reasons, the Defendant's motion to dismiss will be granted in part and denied in part.

I. Background[1]

Arashteh is a citizen of Maryland, [2] and the sole owner of Aria, LLC.[3] See ECF No. 2 ¶¶ 1-2. The Defendant is an insurance company incorporated in Pennsylvania, with its principal place of business in Wayne, Pennsylvania. See id. ¶ 3. Aria, LLC owns and maintains a property at 6826 Harford Road, Baltimore, Maryland 21158 ("the Property"), primarily as a rental property. See id. ¶¶ 2, 7.[4] In 2005, the Plaintiffs purchased from the Defendant, a homeowner's insurance policy ("the Policy") to insure the Property. See id. ¶ 8. The Policy was renewed annually subject to an annual inspection. Id. ¶ 9. The Plaintiffs "consistently, and timely" paid all premiums owed to the Defendant under the Policy. Id. ¶ 10.

On August 18, 2011, there was a "bout of extreme weather" in the area, "which included significant rain, wind and hail." ECF No. 2 ¶ 11. The extreme weather "lifted parts of the roof and blocked the drainage, " allowing water to infiltrate through the Property's roof. Id. ¶ 12. Portions of the roof collapsed and leaked, resulting in significant exterior damage and loss to the building's interior. Id. ¶ 13. The Plaintiffs had previously replaced the entire roof and routinely performed preventive maintenance on the roof. See id. ¶¶ 12, 14. The Plaintiffs were not aware of any signs of water damage or other issues on the Property before this damage. Id. ¶ 13.

As a result of the damage to the Property, the Plaintiffs filed a claim with the Defendant. See ECF No. 2 ¶ 16. The Defendant sent Jim Hardy, its employee, to the Property to inspect the damage and assess the Plaintiffs' claim. Id. ¶ 17. Hardy assessed the damage to the Property and spoke to Arashteh about the claim. Id. ¶ 18. Hardy "represented to Plaintiff that the entire claim would be considered and that the damages were substantially more than one thousand dollars." Id. ¶ 19. Several months later, the Defendant informed the Plaintiffs that the claim was being denied under the terms of the Policy, "stating that the damage to the roof was the result of wear and tear and deterioration." Id. ¶ 20. The Plaintiffs retained Metro Public Adjustment, which estimated the damage as $34, 689.24. Id. ¶ 21. The Defendant failed to timely respond to the Plaintiffs' claim, and "misrepresented to the Plaintiff several times that his Claim would be covered." ECF No. 2 ¶ 23. The Defendant has forced Arashteh to attend numerous inspections of the Property and examinations under oath. Id. ¶ 24.

On August 27, 2013, the Plaintiffs sued the Defendant in the Circuit Court for Baltimore City, Maryland for breach of contract (Count I), intentional breach of the implied covenant of good faith and fair dealing (Count II), breach of the implied covenant of good faith and fair dealing (Count III), and tort arising from breach of contract - actual malice (Count IV). See ECF No. 2. On September 26, 2013, the Defendant removed the case to this Court on the basis of diversity. ECF No. 1. On October 3, 2013, the Defendant moved to dismiss for failure to state a claim, or in the alternative, for summary judgment. ECF No. 9. On October 21, 2013, the Plaintiffs opposed the motion. ECF No. 12. On November 7, 2013, the Defendant replied. ECF No. 14.

II. Analysis

A. Legal Standard

Under Fed.R.Civ.P. 12(b)(6), an action may be dismissed for failure to state a claim upon which relief can be granted. Rule 12(b) (6) tests the legal sufficiency of a complaint, but does not "resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006).

The Court bears in mind that Rule 8(a) (2) requires only a "short and plain statement of the claim showing that the pleader is entitled to relief." Migdal v. Rowe Price-Fleming Int'l Inc., 248 F.3d 321, 325-26 (4th Cir. 2001). Although Rule 8's notice-pleading requirements are "not onerous, " the plaintiff must allege facts that support each element of the claim advanced. Bass v. E.I. Dupont de Nemours & Co., 324 F.3d 761, 764-65 (4th Cir. 2003). These facts must be sufficient to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

This requires that the plaintiff do more than "plead[] facts that are merely consistent with a defendant's liability'"; the facts pled must "allow[] 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 557). The complaint must not only allege but also "show" that the plaintiff is entitled to relief. Id. at 679 (internal quotation marks omitted). "Whe[n] the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief." Id. (internal quotation marks and alteration omitted).

B. The Defendant's Motion ...


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