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Harris v. State Auto Insurance Co.

United States District Court, N.D. Texas, Fort Worth Division

October 24, 2019



          Mark T. Pittman, United States District Judge.

         Before the Court is Defendants State Auto Property and Casualty Insurance Company (“State Auto P&C”) and State Automobile Mutual Insurance Company's (“State Auto MIC”) (collectively “Defendants”) Motion to Dismiss (ECF No. 24), Plaintiff Michael Harris's (“Harris”) Response (ECF No. 30), and Defendants' Reply (ECF No. 32). Having considered the motion, related briefing, and applicable law, the Court finds that Defendants' Motion to Dismiss should be and is hereby DENIED as to State Auto MIC and GRANTED without prejudice as to State Auto P&C.

         I. BACKGROUND[1]

         Harris was out of town at his daughter's gymnastics competition when his house was robbed. Am. Compl. 2, ECF No. 10. Stolen from Harris were numerous items of personal property, including jewelry and clothing. Id. Harris alleges that he was insured against these losses by an insurance policy issued by Meridian Security Insurance Company (“Meridian”) and administered by State Auto MIC. Id. Harris identifies State Auto MIC in his Amended Complaint using the name “State Auto.” Id. at 1.

         Upon returning home on November 13, 2017, Harris realized he was the victim of a burglary and notified law enforcement and State Auto MIC. Id. at 2. State Auto MIC opened a claim and assigned the claim number “PR-0000000-191439” to track it. Id. at 3. Harris alleges that he was fully compliant with law enforcement and State Auto MIC in order to “seek justice and to be compensated for his losses, ” but that State Auto MIC embarked on an “unfair, unethical, unprofessional, deceptive, and illegal pursuit” to avoid the legal obligation to compensate Harris for his losses. Id.

         Within 30 days of the incident, Harris filed a claim and submitted the requested documents to State Auto MIC so that his claim could be reviewed and processed. Id. Harris alleges that State Auto MIC delayed the process and waited almost four months to send a reservation of rights letter dated March 13, 2018. In the letter, State Auto MIC indicated that it was still evaluating coverage and investigating the loss and requested an examination of Harris under oath, a sworn proof of loss, copies of Harris's Discover Card and Sam's Club credit card statements, and an authorization for State Auto MIC to obtain other documents. Id. Harris claims he provided the requested proof of loss, submitted to an examination under oath, and provided the requested credit card statements. Id. However, Harris refused the authorization request as he had previously signed and returned an authorization for State Auto MIC to obtain documents and did not wish for State Auto MIC to obtain the medical records and tax returns that it was seeking in this more recent request. Id.

         On February 25, 2019, State Auto MIC sent Harris a letter denying his claim signed by Sherri King, the adjuster who handled the claim. Id. at 4. The letter cited Harris's refusal to provide documentation of his loss and his refusal to sign any authorization to obtain documents that would help substantiate his claim as the reason for the denial of coverage. Id. Harris claims the allegations by State Auto MIC are false and that he complied with the investigation to the extent that the law required. Id. Harris provided over 1, 200 pages of documents and photographs, and signed an authorization for State Auto MIC to obtain other documents as necessary, only refusing to allow for medical records and tax documents to be obtained by State Auto MIC. Id. Harris claims the reasons for denial stated in the letter were either false or illegal and did not pertain to the stolen property but rather were personal matters that should not have been addressed by State Auto MIC and would not help State Auto MIC determine whether the stolen items were covered. Id.

         Harris filed suit in state court against “State Auto Insurance Companies.” See Notice of Removal, ECF No. 1. Upon removal by Meridian, Harris amended his complaint (ECF No. 10). In his amended complaint, Harris brought claims for breach of contract, four violations of the Texas Insurance Code, and three violations of the Texas Deceptive Trade Practices Act (“DTPA”). See Am. Compl., ECF No. 10. All claims are made against State Auto MIC and Harris makes no allegations or claims against State Auto P&C. Id. State Auto MIC, along with State Auto P&C, filed a motion to dismiss claiming that Harris failed to state a claim for which relief may be granted because they did not enter into a contract with Harris. See generally Mot. Dismiss, ECF No. 24. They further argue that because there was no valid contract between Harris and State Auto MIC or State Auto P&C, neither may be held liable for violations of the Texas Insurance Code or DTPA. See Br. Supp. Mot. Dismiss, ECF No. 25. The motion to dismiss is now ripe for review.


         Federal Rule of Civil Procedure 8(a) requires a claim for relief to contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Rule 8 does not require detailed factual allegations, but “it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). If a plaintiff fails to satisfy Rule 8(a), the defendant may file a motion to dismiss the plaintiff's claims under Federal Rule of Civil Procedure 12(b)(6) for “failure to state a claim upon which relief may be granted.” Fed.R.Civ.P. 12(b)(6).

         To defeat a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “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 663 (citing Twombly, 550 U.S. at 556). “The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'” Id. (quoting Twombly, 550 U.S. at 557).

         In reviewing a Rule 12(b)(6) motion, the Court must accept all well-pleaded facts in the complaint as true and view them in the light most favorable to the plaintiff. Sonnier, 509 F.3d at 675. The Court is not bound to accept legal conclusions as true, and only a complaint that states a plausible claim for relief survives a motion to dismiss. Iqbal, 556 U.S. at 678-79. When there are well-pleaded factual allegations, the Court assumes their veracity and then determines whether they plausibly give rise to an entitlement to relief. Id.

         “Generally, a court ruling on a 12(b)(6) motion may rely on the complaint, its proper attachments, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011) (citations omitted); see also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). A court may also consider documents that a defendant attaches to a motion to dismiss if they are referred to in the plaintiff's complaint and are central to the plaintiff's claims. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir. 2000).

         III. ...

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