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McCullough v. Travelers Insurance Company of Hartford

United States District Court, D. Maryland

June 20, 2018

DANIEL MCCULLOUGH, Plaintiff
v.
THE AUTOMOBILE INSURANCE COMPANY OF HARTFORD, CONNECTICUT, Defendant

          MEMORANDUM AND ORDER

          Marvin J. Garbis United States District Judge.

         The Court has before it Defendant The Automobile Insurance Company of Hartford, Connecticut's Motion to Dismiss, Or In the Alternative, Motion for Summary Judgment [ECF No. 11] and the materials submitted relating thereto. The Court finds that a hearing is not necessary.

         I. BACKGROUND[1]

         Plaintiff Daniel McCullough (“McCullough” or “Plaintiff”) filed a Complaint against Defendant The Automobile Insurance Company of Hartford (“Travelers” or “Defendant”), seeking monetary damages for (1) “insurance procurement fraud (deceit)”, (2) breach of contract, and (3) failure to act in good faith. Compl. ¶ 2.

         In August 2015, Plaintiff's property at 1663 Cliftview Avenue, Baltimore, MD (the “Property”) suffered severe damage due to a water leak that flooded the home. Id. ¶¶ 1, 11, 17. Plaintiff reported the water damage to Defendant on September 25, 2015.[2] Id. ¶ 18. Defendant initially assigned the claim to Scott Small (“Mr. Small”), a Travelers claim representative who conducted an inspection of the Property on September 30, 2015 with Plaintiff present. Id. ¶ 17. Mr. Small and Plaintiff agreed that the source of the water damage was a fractured water pipe or water supply line. Id. Mr. Small then resigned from Travelers before further action could be taken on Plaintiff's claim. Id. ¶ 18. Plaintiff alleges that his claim “sat dormant for weeks, ” which allowed the Property damage to worsen. Id. During this time, water was still running through the Property. Id. ¶ 19.

         After a “long period of delay, ” the Defendant's new claim representative “hired an engineer who then issed [sic] a report” stating that the water had been “shut off” at some point in August 2015, without acknowledging that water had continued to run as of September 30, 2017. Id. ¶ 20. This report and the statement that the water had been shut off in August 2015 was used to deny Plaintiff's claim as untimely (i.e., as having missed the Policy's reporting deadline). Plaintiff also challenges the engineer's report as unreliable and inaccurate. Id. ¶ 22.

         Additionally, Plaintiff alleges that during the initial procurement process and subsequent yearly renewal processes, Travelers would misrepresent to them that the Policy would cover this type of damage. Id. ¶¶ 23-27. He also claims that he suffered emotionally from the strain and stress associated with his efforts to recover under the Policy. Id. ¶ 14.

         The Court finds it premature to proceed on a motion for summary judgment prior to any discovery and will treat the motion solely as a motion to dismiss. In doing so, the Court shall consider only non-conclusory factual allegations in the Complaint, and not any materials or exhibits presented that are not included in the Complaint.

         II. DISMISSAL STANDARD

         A motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint. A complaint need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(citations omitted). When evaluating a 12(b)(6) motion to dismiss, a plaintiff's well-pleaded allegations are accepted as true and the complaint is viewed in the light most favorable to the plaintiff. However, conclusory statements or a “formulaic recitation of the elements of a cause of action” will not suffice. Id. A complaint must allege sufficient facts to “cross ‘the line between possibility and plausibility of entitlement to relief.'” Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009)(quoting Twombly, 550 U.S. at 557).

         Inquiry into whether a complaint states a plausible claim is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. Thus, if the well-pleaded facts contained within a complaint “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. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)).

         III. DISCUSSION

         The Court appears to have diversity jurisdiction over this matter. McCullough is a citizen of Maryland and Travelers is an insurance company organized under the laws of the State of Connecticut, with its principal place of business in Hartford, Connecticut, and the parties have not disputed that the amount in controversy requirement is met. See Def.'s Statement Concerning Removal, ECF No. 13.

         1. Insurance Procurement Fraud / Fraudulent Inducement

         In Count One, Plaintiff alleges that Defendant fraudulently induced him into buying the initial Policy and then renewing that Policy each subsequent year, when the Policy did not cover “the extent of benefits” that he had thought it covered. Id. ΒΆ 23. Defendant contends that Plaintiff is not entitled to recover under a ...


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