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Gladney v. American Western Home Insurance Co.

United States District Court, D. Maryland

April 6, 2016

JOE GLADNEY Plaintiff,


Ellen Lipton Hollander United States District Judge

In February 2015, Joe Gladney, plaintiff, filed suit in the Circuit Court for Baltimore City against American Western Home Insurance Company (“American Western”), defendant.[1] An Amended Complaint was filed in April 2015 (ECF 2, “Amended Complaint”), based on a general liability insurance policy issued by defendant for plaintiff’s commercial property. ECF 2, ¶ 4. In particular, Count I contains a claim for “Bad Faith.” ECF 2 at 2. Count II alleges breach of contract. Id. at 3. And, Count III alleges a violation of the Maryland Consumer Protection Act.[2] Plaintiff requests $300, 000 in compensatory damages per count, “with interests and costs, ” in addition to $50, 000 in punitive damages, plus attorneys’ fees. ECF 2, ¶¶ 10, 13, 20.

On May 28, 2015, defendant removed the case to federal court based on diversity jurisdiction. ECF 1, “Notice of Removal”; see 28 U.S.C. § 1332. On August 20, 2015, this Court issued a Memorandum Opinion and Order denying, inter alia, plaintiff’s motion to remand.[3] ECF 14; ECF 15.

Defendant subsequently filed a “Motion For Partial Dismissal For Failure To State A Claim.” ECF 16 (“Motion” or “Motion to Dismiss”). In particular, defendant has moved to dismiss Count I and Count III of the Amended Complaint. Id. at 1. Plaintiff opposes the Motion. ECF 18 (“Opposition”). And, on October 8, 2015, defendant filed a reply. ECF 21 (“Reply”).

No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I will grant defendant’s Motion to Dismiss.

I. Factual Background[4]

On or about July 31, 2010, plaintiff purchased a “policy of commercial property and general liability insurance from an agent for American Western and paid a premium which would keep the policy in force for a period of twelve months.” ECF 2, ¶ 4, Amended Complaint. The policy provided for a maximum coverage of $1, 000, 000 “per occurrence.” Id. Plaintiff alleges that on February 1, 2011, “the building(s) located at 2301 Sinclair La. suffered a windstorm, the roof was damaged causing water damage, damage to the interior and personal property inside of the building(s).” Id. ¶ 5. As a result of this damage, plaintiff “contacted Defendant for payment on the policy for the personal property and building damage.” Id. ¶ 6.

Plaintiff avers that defendant denied coverage under the policy, claiming “the damage to the roof of the Metal Warehouse was due to defective manufacturing and installation of metal brackets attached to the roof of the Metal Warehouse, and not wind.” Id. ¶ 7. In the Amended Complaint, plaintiff does not offer further explanation or description of the “Metal Warehouse” structure or its location. According to plaintiff, upon being notified of the denial of coverage under the policy, plaintiff “retained an independent consultant to evaluate the damage to the Metal Warehouse and it was determined that damages were due to wind storm damage and not a manufacturer’s or installation defect.” Id. ¶ 8.

As noted, the Amended Complaint contains three counts. Count I, titled “Bad Faith, ” alleges that “American Western breached the duty it owed to its insured, Plaintiff Gladney, in failing to pay the insurance benefits set out in his insurance policy.” ECF 2, ¶ 9. Further, Count I states that “American Western was negligent in evaluating the claim and failed to exercise good faith and due care in protecting the interests of its insured and settling claims in a timely matter.” Id. Plaintiff adds: “American Western [a]cted in bad faith by failing to adequately consider the severity of Plaintiff’s claims, by failing to properly investigate the Plaintiff’s claims and evaluate accordingly, and by unduly delaying the resolution of the Plaintiff's claims without justification.” Id. ¶ 10.

Count II alleges breach of contract. ECF 2 at 3. Plaintiff avers that American Western “breached its duty to Plaintiff by failing to cover wind damage and water damage suffered by Plaintiff unto his building(s) and personal property.” Id. ¶ 12. Because defendant failed to provide coverage for the damage, as provided for under the policy, plaintiff asserts breach of contract. Id. ¶ 13.

In Count III, plaintiff asserts a violation of the Maryland Consumer Protection Act (“MCPA”), Md. Code (2013 Repl. Vol., 2015 Supp.), §§ 13-101 et seq. of the Commercial Law Article (“C.L.”). In particular, plaintiff contends that defendant violated C.L. §§ 13-301 and 13- 303, prohibiting “unfair or deceptive trade practices.” Id. ¶ 14. He asserts that American Western “market[ed] itself to the public at large as an insurance company” and that defendant “impliedly represented” that its policy “covered loss due to windstorm and winter damage . . . .” Id. ¶ 16. According to plaintiff, defendant represented that its “services [have] a characteristic, use or benefit that [they] do not have, ” which constitutes an “unfair or deceptive trade practice.” Id. ¶ 15.[5]

II. Standard of Review

A motion to dismiss under Fed.R.Civ.P. 12(b)(6) tests the adequacy of a complaint. McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010). To survive a Rule 12(b)(6) motion, a complaint must satisfy the pleading standard articulated in Fed.R.Civ.P. 8(a)(2), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the rule is to provide the defendant with “fair notice” of the claim and the “grounds” for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 & n.3 (2007). That showing must consist of more than “a formulaic recitation of the elements of a cause of action” or “naked assertion[s] devoid of further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted); see Painter’s Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013).

To defeat a motion under Rule 12(b)(6), a complaint “must plead facts sufficient to show that [the] claim has substantive plausibility.” Johnson v. City of Shelby, Miss., ___U.S.___, 135 S.Ct. 346, 347 (2014); see Iqbal, 556 U.S. at 684 (“Our decision in Twombly expounded the pleading standard for ‘all civil actions’. . . . ”) (citation omitted); Twombly, 550 U.S. at 570; see also Epps v. JP Morgan Chase Bank, N.A., 675 F.3d 315, 320 (4th Cir. 2012); Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 768 (4th Cir. 2011). Dismissal “is inappropriate unless, accepting as true the well-pled facts in the complaint and viewing them in the light most favorable to the plaintiff, the plaintiff is unable to ‘state a claim to relief . . . .’” Brockington v. Boykins, 637 F.3d 503, 505-06 (4th Cir. 2011) (citation omitted).

In reviewing a Rule 12(b)(6) motion, a court “‘must accept as true all of the factual allegations contained in the complaint, ’” and must “‘draw all reasonable inferences [from those facts] in favor of the plaintiff.’” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert. denied, ___U.S. ___, 132 S.Ct. 402 (2011). But, the court need not accept unsupported or conclusory factual allegations devoid of any reference to actual events. United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979); see also Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009). Nor must it accept legal conclusions couched as factual allegations, Iqbal, 556 U.S. at 678, or legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986); Monroe v. City of Charlottesville, 579 F.3d 380, 385-86 (4th Cir. 2009), cert. denied, 559 U.S. 992 (2010).

The complaint must contain sufficient factual detail to “nudge[ ] [the plaintiff’s] claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 570. If the “well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, ” the complaint has not shown that ...

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