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Blue v. Allstate Vehicle and Property Insurance Co.

United States District Court, S.D. Texas, Corpus Christi Division

December 9, 2019

ALVIRA BLUE, Plaintiff,



         Plaintiff Alvira Blue filed this action against Defendant Allstate Vehicle and Property Insurance Company (Allstate) in state court. D.E. 1-2. She alleges that Allstate insured her home, which was damaged by Hurricane Harvey, and she seeks policy benefits. Allstate removed the case to this Court pursuant to diversity jurisdiction, 28 U.S.C. § 1332, which Blue has not contested.

         Before the Court are Allstate's Motion for Partial Dismissal (D.E. 5) and Motion for Protection from Plaintiff's Demand for Appraisal (D.E. 8). Plaintiff has filed responses to each. D.E. 10, 11. After due consideration, the Court GRANTS the motion for partial dismissal (D.E. 5), DISMISSES Plaintiff's claims for misrepresentation under Texas Insurance Code § 541.060(a)(1), and GRANTS LEAVE to Plaintiff to file an amended complaint that conforms with federal pleading standards on all claims. The Court further DENIES the motion for protection (D.E. 8), ORDERS the parties to submit damages to the appraisal process, and STAYS this matter pending completion of the appraisal.

         A. Motion for Partial Dismissal

         1. Standard of Review

         Allstate's motion to dismiss invokes Federal Rules of Civil Procedure 9(b) and 12(b)(6).

Rule 9(b) of the Federal Rules of Civil Procedure requires that a plaintiff state an alleged fraud with particularity. “A dismissal for failure to plead fraud with particularity under Rule 9(b) is treated as a dismissal for failure to state a claim under Rule 12(b)(6).” Rule 9(b) requires that a plaintiff state the who, what, when, where, and how of the alleged fraud. “The frequently stated, judicially-created standard for a sufficient fraud complaint . . . instructs a plaintiff to plead the time, place and contents of the false representation, as well as the identity of the person making the misrepresentation and what that person obtained thereby.”

Musket Corp. v. Suncor Energy (U.S.A.) Mktg., Inc., 759 Fed.Appx. 280, 286-87 (5th Cir. 2019) (citations omitted). These pleading standards, while referencing fraud and mistake, apply equally to claims for misrepresentation under the Texas Insurance Code. Waste Mgmt., Inc. v. AIG Specialty Ins. Co., No. CV H-16-3676, 2017 WL 3431816, at *4 n.7 (S.D. Tex. Aug. 9, 2017).

         The test of pleadings under Rule 12(b)(6) balances a party's right to redress against the interests of all parties and the court in minimizing expenditure of time, money, and resources devoted to meritless claims. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 558 (2007). Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Furthermore, “[p]leadings must be construed so as to do justice.” Fed.R.Civ.P. 8(e). The requirement that the pleader show that she is entitled to relief requires “more than labels and conclusions[;] a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)).

         Factual allegations are required, sufficient to raise the entitlement to relief above the level of mere speculation. Twombly, 550 U.S. at 555. Those factual allegations must then be taken as true, even if doubtful. Id. In other words, the pleader must make allegations that take the claim from conclusory to factual and beyond possible to plausible. Id., 550 U.S. at 557. The Twombly court stated, “[W]e do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face.” 550 U.S. at 570.

         2. Discussion

         Allstate complains that Plaintiff's allegations regarding misrepresentations in violation of Texas Insurance Code § 541.060(a)(1) are devoid of factual assertions in violation of the heightened pleading standards of Rule 9(b) and fail the standard of review under Rule 12(b)(6). Plaintiff's response stands on the sufficiency of the existing petition, suggesting that the particularity requirements of Rule 9(b) apply only to the allegations of the insured loss: that Allstate issued a policy that covered Plaintiff's home, which was damaged on or about August 25, 2017, as a result of Hurricane Harvey.

         Contrary to Plaintiff's argument, the heightened pleading standard applies to the substance of the allegations of misrepresentation. And while Plaintiff generally alleges improprieties in the adjuster's inspection and appraisal of the damage, the pleading offers no factual details regarding exactly how the inspection was substandard, what damages were not included in the report, what damages were undervalued, and what the adjuster or insurance company stood to gain by such improprieties. The complaints of misrepresentations are thus formulaic and conclusory. The Court rejects Plaintiff's argument that further detail is not required.

         3. The Motion to ...

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