Breach of Contract Required to Sue for Bad Faith
Post 4975
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Foremost Insurance Company Grand Rapids, Michigan (“Foremost”) moved the court to dismiss in C & S Properties – I, LLC v. Foremost Insurance Company Grand Rapids, Michigan, Civil Action No. 24-462, United States District Court, E.D. Louisiana (January 10, 2025)
FACTUAL BACKGROUND
Damages from Hurricane Ida caused insurance claims concerning three properties owned by Plaintiff. The properties were each covered by separate insurance policies issued by Foremost when they were damaged by Hurricane Ida in August 2021.
Plaintiff alleged that, while Foremost has been in possession of sufficient evidence of the losses or had the opportunity to fully apprise itself of the actual losses and damages, it has failed to pay the amount due under the policies required by Louisiana law.
Plaintiff sued Foremost in Louisiana state court asserting claims under Louisiana law for breach of contract and bad faith damages. Foremost removed the matter to the USDC on the basis of diversity jurisdiction.
Foremost moved to Dismiss Plaintiff’s claims based upon the improper cumulation of claims and because the suit did not state a claim for which relief can be granted.
LEGAL STANDARD
Joining Claims
Federal Rule of Civil Procedure 18 provides that, “[a] party asserting a claim . . . may join, as independent or alternative claims, as many claims as it has against an opposing party.”
Under Federal Rule of Civil Procedure 12(b)(6), a defendant can seek dismissal of a complaint, or any part of it, for failure to state a claim upon which relief may be granted. To survive a Rule 12(b)(6) 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.’”
Dismissal is appropriate when the complaint on its face shows a bar to relief.
ANALYSIS
Regarding the insurance policies attached by Foremost, the Court found that those are referenced in Plaintiff’s state court Petition and are central to Plaintiff’s claims and thus may be rightfully considered by the Court.
Cumulation of Claims
The Court found that Plaintiff properly included its claims concerning each of the three properties in one lawsuit pursuant to Fed.R.Civ.P. 18(a).
Failure to State a Claim
The allegations in the Petition are insufficient to support a breach of contract claim. The Petition contains only vague and conclusory allegations and does not refer to specific actions or omissions by Foremost.
Plaintiff alleged that Hurricane Ida caused substantial amounts of damage to the exterior, interior, roof, and other structures of the Insured Properties, that Plaintiff provided timely notice of the loss event to Defendant. The Court found that Plaintiff’s Petition failed to state a breach of contract claim against Foremost.
The Court reached the same conclusion with respect to Plaintiff’s bad faith claim. The Petition merely sets forth the legal standard applicable to Louisiana bad faith claims, without providing factual support for Plaintiff’s allegations that Foremost acted in bad faith.
Leave to Amend
In its Opposition brief, Plaintiff requested leave to amend its Petition if the Court agrees with Foremost that the Petition is deficient.
While Plaintiff has failed to explain how it would amend its Petition Plaintiff shall have fourteen (14) days to file an amended petition addressing the deficiencies raised as to the sufficiency of its breach of contract and bad faith claims.
The Motion to Dismiss Pursuant to Federal Rule 12 was granted.
Plaintiff was granted fourteen (14) days from the date of this Order to file an amended pleading that addresses the deficiencies raised in the Motion to Dismiss regarding the sufficiency of its breach of contract and bad faith claims. Failure to amend will result in dismissal.
ZALMA OPINION
The USDC requires proper, detailed and effective pleading when suing for breach of contract or the tort of bad faith, not just a parade of horribles alleged against the defendant with the statutory requirements without supportive facts. The USDC spend much of its opinion explaining to the Plaintiff what is required to plead a viable complaint against Foremost if the facts exist.
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Southern Insurance Company Of Virginia v. Justin D. Mitchell, et al., No. 3:24-cv-00198, United States District Court, M.D. Tennessee, Nashville Division (October 10, 2024) Southern Insurance Company of Virginia sought a declaratory judgment regarding its duty to defend William Mitchell in a wrongful death case pending in California state court.
KEY POINTS
1. Motion for Judgment on the Pleadings: The Plaintiff moved for judgment on the pleadings, which was granted in part and denied in part.
2. Duty to Defend: The court found that the Plaintiff has no duty to defend William Mitchell in the California case due to a specific exclusion in the insurance policy.
3. Duty to Indemnify: The court could not determine at this stage whether the Plaintiff had a duty to ...
GEICO Sued Fraudulent Health Care Providers Under RICO and Settled with the Defendants Who Failed to Pay Settlement
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Post 5119
Default of Settlement Agreement Reduced to Judgment
In Government Employees Insurance Company, Geico Indemnity Company, Geico General Insurance Company, and Geico Casualty Company v. Dominic Emeka Onyema, M.D., DEO Medical Services, P.C., and Healthwise Medical Associates, P.C., No. 24-CV-5287 (PKC) (JAM), United States District Court, E.D. New York (July 9, 2025)
Plaintiffs Government Employees Insurance Company and other GEICO companies (“GEICO”) sued Defendants Dominic Emeka Onyema, M.D. (“Onyema”), et al (collectively, “Defendants”) alleging breach of a settlement agreement entered into by the parties to resolve a previous, fraud-related lawsuit (the “Settlement Agreement”). GEICO moved the court for default judgment against ...
ZIFL – Volume 29, Issue 14
Post 5118
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You can read the full 20 page issue of the July 15, 2025 issue at https://lnkd.in/giaSdH29
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
This issue contains the following articles about insurance fraud:
The Historical Basis of Punitive Damages
It is axiomatic that when a claim is denied for fraud that the fraudster will sue for breach of contract and the tort of bad faith and seek punitive damages.
The award of punitive-type damages was common in early legal systems and was mentioned in religious law as early as the Book of Exodus. Punitive-type damages were provided for in Babylonian law nearly 4000 years ago in the Code of Hammurabi.
You can read this article and the full 20 page issue of the July 15, 2025 issue at https://zalma.com/blog/wp-content/uploads/2025/07/ZIFL-07-15-2025.pdf
Insurer Refuses to Submit to No Fault Insurance Fraud
...
Rulings on Motions Reduced the Issues to be Presented at Trial
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CASE OVERVIEW
In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.
FACTS
Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.
Prior to trial Bernier had three remaining claims against State Farm:
1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.
Both Bernier and State Farm dispositive motions before ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
