United States District Court, W.D. Texas, San Antonio Division
AMANDA MONTOYA AND DEANDRA MONTOYA, Individually and as Assignees and Successors in Interest of Araceli Lianas Acosta as Representative of the Estate of Andrew Acosta, Deceased Plaintiffs,
STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Defendant.
C. Lamberth, United States District Judge
a lawsuit arising out of a car accident between Andrew
Acosta, who was insured by State Farm Mutual Automobile
Insurance Company, and a car driven by Amanda Montoya.
Plaintiffs, the Montoyas, sued State Farm on behalf of
Acosta's estate for breach of contract, breach of the
duty of good faith and fair dealing, violations of the Texas
Insurance Code, and violations of the Deceptive Trade
Practices Act. Before the Court is defendant State Farm
Mutual Automobile Insurance Company's motion for judgment
on the pleadings, ECF No. 16. Having considered the motion,
plaintiffs' response, ECF No. 17, defendant's reply,
ECF No. 18, and in light of this Court's previous
memorandum opinion that the Montoyas' lack standing to
bring DTPA and Insurance Code claims, ECF No. 14, this Court
will grant the motion and issue judgment on the pleadings.
case arises out of a straightforward car accident, but it
presents a deceptively complicated posture that is set out in
more detail in this Court's October 12, 2016 Memorandum
Opinion, ECF No. 14. However, the Court will recite the basic
facts here. On December 8, 2007, the Montoyas were injured
when a car driven by Andrew Acosta, who apparently was
intoxicated, collided with theirs. Mr. Acosta died. State
Farm settled the claims of all victims of the accident except
the Montoyas: $25, 000.00 to Kristopher Ramirez, a passenger
in Acosta's vehicle who also died, and amounts totaling
$6, 530.00 and $3, 545.00 to two other victims respectively.
The Montoyas refused to accept a $14, 925.00 settlement
offer, which was the remaining amount available within the
$25, 000 per person, $50, 000 per occurrence limit in
Acosta's policy. The Montoyas sued the Acosta estate and
obtained a judgment for $542, 933.67. Later, the Montoyas
entered a covenant not to execute on that judgment with the
Acosta estate. As part of the covenant not to execute, the
Acosta estate assigned its rights against State Farm for
contractual or extra-contractual claims arising out of the
handling of the accident to the Montoyas.
Montoyas then sued State Farm and Jeff Frey, the attorney
representing the Acosta estate in the claim. Standing in the
shoes of Andrew Acosta, the Montoyas sued State Farm and Mr.
Frey for breach of contract, breach of the duty of good faith
and fair dealing, violations of the Texas Insurance Code, and
violations of the Deceptive Trade Practices Act. The Montoyas
seek to recover for themselves actual damages and mental
anguish damages suffered by Acosta, as well as additional
exemplary damages based on State Farm's failure to settle
the Montoyas' lawsuit against Acosta within the policy
limits, which supposedly exposed the Acosta estate to a trial
and judgment beyond the policy limits.
originally filed this suit in state court, and State Farm
removed the case to federal court based on diversity
jurisdiction. State Farm argued that Mr. Frey, who was a
citizen of Texas like the Montoyas, should not be considered
in the diversity analysis because he was improperly joined.
This Court previously determined that Frey was improperly
joined because he could not be held liable as a claims
adjuster, and because the Montoyas lacked standing to sue for
violations of the DTPA or Insurance Code. ECF No. 14.
Specifically, this Court found that Texas law does not allow
the assignment of claims for violations of the Texas
Insurance Code or the DTPA. Thus, this Court found that the
Montoyas lacked standing to assert claims against Frey
because their standing was based on an invalid assignment of
those causes of action. Id. This Court dismissed
Frey from the case, but did not address the claims against
State Farm now moves for judgment on the pleadings, seeking
dismissal of the claims for breach of the duty of good faith
and fair dealing, violations of the DTPA, and violations of
the Insurance Code. Regarding the claim for breach of the
duty of good faith and fair dealing, State Farm argues that
that as a matter of law plaintiffs have failed to even allege
a critical element of the Stowers duty: a demand for
a settlement within policy limits. Mot. 6, ECF No. 16.
Further, State Farm argues that the Insurance Code and DTPA
claims should be dismissed because those causes of action are
not assignable, citing this Court's prior memorandum
opinion. Mot. 7.
Rule of Civil Procedure 12(c) states that "[a]fter the
pleadings are closed but within such time as not to delay the
trial, any party may move for judgment on the
pleadings." Fed.R.Civ.P. 12(c). "A motion brought
pursuant to Rule 12(c) is designed to dispose of cases where
the material facts are not in dispute and a judgment on the
merits can be rendered by looking to the substance of the
pleadings and any judicially noticed facts." Great
Plains Trust Co. v. Morgan Stanley Dean Witter &
Co., 313 F.3d 305, 312 (5th Cir. 2002). The central
issue is very similar to that of a 12(b)(6) motion: whether,
in the light most favorable to plaintiff, the complaint
states a valid claim for relief. Id.
complaint must allege sufficient facts that, accepted as
true, state a claim to relief that is plausible on its face.
Bell Ail. v. Twombly, 550 U.S. 544, 570 (2007);
Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009).
Similarly, under a Rule 12(c) motion, a court must accept the
nonmovant's allegations as true and must view the facts
alleged, and any reasonable inferences therefrom, in the
light most favorable to the nonmoving party. Great
Plains, 313 F.3d at 312; see also Cash v. C I.
R., 580 F.2d 152, 154 (5th Cir. 1978). Pleadings are
therefore construed liberally, and judgment is only
appropriate if the material facts are undisputed and only
questions of law as to whether relief is plausible remain.
Farm seeks dismissal of the plaintiffs' claim for breach
of the duty of good faith and fair dealing, as well as the
claims for violation of the Texas Insurance Code and DTP A.
The Court will analyze them separately.
Breach of Good ...