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Quintero v. Allstate Vehicle and Property Insurance Co.

United States District Court, W.D. Texas, San Antonio Division

November 12, 2019




         To the Honorable United States District Judge Fred Biery:

         This Report and Recommendation concerns Defendant Allstate Vehicle and Property Insurance Company's First Amended Motion for Partial Dismissal Under Rule 9(b) and 12(b)(6) [#25]. All dispositive pretrial matters in this case have been referred to the undersigned for disposition pursuant to Western District of Texas Local Rule CV-72 and Appendix C [#8]. The undersigned has authority to enter this recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). For the reasons set forth below, it is recommended that Defendant's motion be GRANTED.

         I. Background

         This insurance dispute arises from a hail and windstorm that allegedly caused property damage to Plaintiff's property located at 725 Cimarron Square, Poteet, Texas 78065. Plaintiff's Amended Complaint [#24][1] contends that Defendant Allstate Vehicle and Property Insurance Company insured her property against losses from wind damage but Defendant's estimate undervalued the damage. Plaintiff asserts causes of action against Defendant for breach of contract, violations of the Texas Insurance Code, violations of the Texas Deceptive Trade Practices-Consumer Protection Act (“DTPA”), and breach of the duty of good faith and fair dealing, and she seeks attorney's fees.

         Shortly after Plaintiff filed her Amended Complaint, Defendant filed the motion to dismiss that is the subject of this report and recommendation. By its motion, Defendant seeks partial dismissal of Plaintiff's Amended Complaint, arguing that Plaintiff's claims based on misrepresentation and fraud arising under the Texas Insurance Code and DTPA should be dismissed for failure to satisfy the heightened pleadings standards under Rule 9(b) and the general pleading standards under Rule 8.

         Defendant's motion was filed on September 19, 2019. According to this Court's Local Rules, Plaintiff's response to the motion was due within 14 days of the motion's filing, on or before October 3, 2019. See Loc. R. CV-7(e) (responses to dispositive motions due within 14 days of motion's filing). To date, Plaintiff has not filed a response to the motion. Pursuant to Local Rule CV-7(e), if there is no response filed within the time period prescribed by the rules, the court may grant the motion as unopposed. Nevertheless, because this is a dispositive motion, the Court will evaluate its merits as well.

         II. Legal Standard

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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.” Id. “Although a complaint “does not need detailed factual allegations, ” the “allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The allegations pleaded must show “more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678.

         In reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court “accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.” Martin K. Eby Const. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004) (internal quotation omitted). However, a Court need not credit conclusory allegations or allegations that merely restate the legal elements of a claim. Chhim v. Univ. of Tex. at Austin, 836 F.3d 467, 469 (5th Cir. 2016) (citing Iqbal, 556 U.S. at 678). In short, a claim should not be dismissed unless the court determines that it is beyond doubt that the plaintiff cannot prove a plausible set of facts that support the claim and would justify relief. See Twombly, 550 U.S. at 570.

         Rule 9(b) imposes a heightened pleading standard for claims sounding in fraud. See Fed.R.Civ.P. 9(b) (“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”). The Fifth Circuit has clarified that Rule 9 requires the plaintiff to plead the “who, what, when, where, and how” of the alleged fraud. Williams v. WMX Techs., Inc., 112 F.3d 175, 179 (5th Cir. 1997) (quoting Melder v. Morris, 27 F.3d 1097, 1100 n.5 (5th Cir. 1994)).

         III. Analysis

         Defendant's partial motion to dismiss should be granted. Defendant challenges the sufficiency of Plaintiff's allegations as to her misrepresentation and fraud claims arising under the Texas Insurance Code and DTPA. The requirements of Rule 9(b) “apply to all cases where the gravamen of the claim is fraud even though the theory supporting the claim is not technically termed fraud.” Partain v. Mid-Continent Specialty Ins. Servs., Inc., 838 F.Supp.2d 547, 557 (S.D. Tex. 2012), aff'd sub nom. Graper v. Mid-Continent Cas. Co., 756 F.3d 388 (5th Cir. 2014) (internal quotation omitted). Texas district courts apply the heightened pleading requirements of Rule 9(b) to claims under the Texas Insurance Code and the DTPA, where such claims are “substantively identical” to a claim of fraud. Id.; see also Jaime v. Allstate Texas Lloyds, No. 4:17-CV-00253-O-BP, 2017 WL 4676631, at *2 (N.D. Tex. Sept. 29, 2017), report and recommendation adopted sub nom. Jaime v. Lloyds, No. 4:17-CV-00253-O-BP, 2017 WL 4620902 (N.D. Tex. Oct. 16, 2017) (collecting cases); Berry v. Indianapolis Life Ins. Co., 608 F.Supp.2d 785, 800 (N.D. Tex. 2009).

         The factual allegations in Plaintiff's Amended Complaint are insufficient to state claims under the Texas Insurance Code or DTPA based on misrepresentation or fraud and do not satisfy federal pleading standards. Plaintiff alleges Defendant violated Section 541.060(a) of the Texas Insurance Code by engaging in unfair settlement practices. Section 541.060(a)(1) prohibits “misrepresenting to a claimant a material fact or policy provision relating to coverage at issue.” The only factual allegation regarding any misrepresentation contained in Plaintiff's Amended Complaint is that Defendant sent Plaintiff two letters (dated August 6, 2018 and March 26, 2019) misrepresenting the extent of damage to Plaintiff's property and that the policy at issue provided coverage for some but not all of the damage. (Am. Compl. [#24] at ¶¶ 13, 15, 19.) Plaintiff contends that this conduct constituted knowing and reckless false representations in violation of Section 541.060(a) of the Texas Insurance Code. (Id. at ΒΆΒΆ 27, 36.) Although Plaintiff identifies the date of the ...

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