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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Plaintiff’s Sloth Results in Dismissal
Post 4977
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State Farm Fire & Casualty Company moved the USDC to dismiss under Federal Rule of Civil Procedure 41(b) because the Plaintiff failed to comply with the court’s Case Management Order (“CMO”).
In Hensley Roosevelt v. State Farm Fire & Casualty Co., No. 2:22-CV-05649, United States District Court, W.D. Louisiana, Lake Charles Division (January 10, 2025) the USDC resolved the dispute.
BACKGROUND
After the Plaintiff alleged damage to his home in Hurricane Laura on August 27, 2020, and Hurricane Delta, which impacted the same area on October 9, 2020, Plaintiff, represented by attorney Harry Cantrell, filed suit on October 10, 2022, alleging that his home was insured by State Farm and that State Farm failed to timely or adequately compensate him for covered losses.
Due to ...
Serial Fraudster Loses Request to Shorten Supervised Release
Post 4976
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Defendant Frank Capozzi, acting as his own lawyer, filed a letter-motion requesting early termination of his supervised release approximately 18 months into his 36-month term of supervised release.
In United States Of America v. Frank J. Capozzi, No. 3:16-CR-347, United States District Court, M.D. Pennsylvania (January 13, 2025) the USDC rejected the motion.
ANALYSIS
The primary purpose of supervised release is to facilitate the integration of offenders back into the community rather than to punish them. Congress has provided the sentencing court with the authority to terminate a defendant’s term of supervised release early pursuant to 18 U.S.C. § 3583(e).
The factors the court must consider include:
1. the nature and circumstances of the offense and ...
Allstate Proactively Moves to Take the Profit Out of Insurance Fraud
Post 4974
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THE ISSUES
The New Jersey Superior Court, Appellate Division was faced with a need to resolve whether claims of insurance fraud under the Insurance Fraud Prevention Act (the Fraud Act), N.J.S.A. 17:33A-1 to -30, and the New Jersey Anti-Racketeering Act (RICO), N.J.S.A. 2C:41-1 to -6.2, are subject to arbitration under the Automobile Insurance Cost Reduction Act (AICRA), N.J.S.A. 39:6A-1.1 to -35.
In Allstate New Jersey Insurance Company, et al v. Carteret Comprehensive Medical Care, PC, et al, No. A-0778-23, Superior Court of New Jersey, Appellate Division (January 9, 2025) resolved the issues presented requiring statutory interpretation., The Superior Court Appellate Division held that insurance fraud claims under the Fraud Act and RICO are not subject to PIP ...
What is the Meaning of “Void”
An article For Subscribers to Excellence in Claims Handling You can Subscribe for only $5 a month to Excellence in Claims Handling at https://barryzalma.substack.com/subscribe
“Void” can mean either void or voidable. Void is defined as “of no legal force or effect and so incapable of confirmation or ratification.”
Voidable is defined as “capable of being adjudged void, invalid and of no force (a voidable contract may be set aside usually at the option of one party).”[1] The Restatement 2d of Contracts defines a “voidable contract” as a valid transaction with legal consequences until the power of avoidance is exercised.
Although jurisdictions are split as to the meaning of void in this context the distinction is largely semantic since the actions required of insurers wishing to dispose of a void or voidable insurance contract are ultimately the same.
The full article is available only to subscribers to Excellence in Claims ...
What is the Meaning of “Void”
An article For Subscribers to Excellence in Claims Handling You can Subscribe for only $5 a month to Excellence in Claims Handling at https://barryzalma.substack.com/subscribe
“Void” can mean either void or voidable. Void is defined as “of no legal force or effect and so incapable of confirmation or ratification.”
Voidable is defined as “capable of being adjudged void, invalid and of no force (a voidable contract may be set aside usually at the option of one party).”[1] The Restatement 2d of Contracts defines a “voidable contract” as a valid transaction with legal consequences until the power of avoidance is exercised.
Although jurisdictions are split as to the meaning of void in this context the distinction is largely semantic since the actions required of insurers wishing to dispose of a void or voidable insurance contract are ultimately the same.
The full article is available only to subscribers to Excellence in Claims ...
ZIFL Volume 28 No. 22
Post 4939
Read the full article at Read the full article at https://zalma.com/blog/wp-content/uploads/2024/12/ZIFL-12-01-2024.pdfand at https://zalma.com/blog.
The Source for the Insurance Fraud Professional https://zalma.com/blog/wp-content/uploads/2024/12/ZIFL-12-01-2024.pdf
Zalma’s Insurance Fraud Letter (ZIFL) continues its 28th 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/ This issue contains the following articles about insurance fraud:
The EUO is a Material Condition Precedent
A Key Tool in the Effort to ...
