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Jose Canales v. American Security Insurance Co

November 7, 2011



This matter comes before the Court pursuant to Defendant's Motion to Dismiss Amended Complaint (Doc. # 11), filed on June 23, 2011. Plaintiff filed a response in opposition to the Motion on July 7, 2011 (Doc. # 12). For the reasons that follow, the Court grants the Motion in part and denies it in part.

I. Background

Plaintiff Jose Canales filed suit in state court on February 28, 2011, alleging bad faith, unfair claims practices, and unfair and deceptive trade practices pursuant to Fla. Stat. §§ 624.155 and 626.9541 against Defendant American Security Insurance Co. (ASIC). (Doc. # 2 at ¶ 16). ASIC removed the case to this Court on April 11, 2011 (Doc. # 1) and filed a motion to dismiss on April 19, 2011 (Doc. # 4). This Court granted Canales's unopposed motion for leave to file an amended complaint on May 16, 2011 (Doc. # 8) and, on May 18, 2011, denied without prejudice as moot ASIC's motion to dismiss (Doc. # 9). Canales duly filed his Amended Complaint on June 13, 2011 (Doc. # 10).

Canales states that he was named insured on ASIC Policy No. ALR15032259117 (the "Policy"), covering his residential property. (Id. at ¶ 4). On or about February 13, 2009, while the Policy was in effect, Canales discovered sinkhole damage at his property and made a demand on ASIC for coverage. (Id. at ¶¶ 6-7). He alleges that ASIC investigated the damage and knew that the cost to repair exceeded policy limits. (Id. at ¶ 8). However, "ASIC pursued dilatory litigation tactics in order to delay proper payment and subject its policyholder to ongoing and potentially dangerous property damage. In short, ASIC acted in bad faith." (Id. at ¶¶ 9-10).

Attached to the Amended Complaint are a copy of the Policy (Exhibit A), a Civil Remedy Notice (CRN) filed with the Florida Department of Financial Services (DFS) (Exhibit B), and two checks totaling $92,783 tendered in payment of the claim (Exhibit C). Canales alleges that payment was made after the 60-day "cure period" provided in Fla. Stat. § 624.155(d), and that the underlying contract claims have been resolved in his favor as to liability and damages. (Id. at ¶¶ 15-16).

ASIC filed its Motion to Dismiss Amended Complaint on June 23, 2011 (Doc. # 11). ASIC argues that the Amended Complaint merely recites the Florida Statutes at issue without any facts describing how they were allegedly violated. (Id. at ¶ 3). Furthermore, ASIC asserts that the Amended Complaint fails to identify the basis of the bad faith claim, "depriving American Security of any reasonable opportunity to respond, or provide any meaningful defense." (Id. at ¶ 4). Therefore, ASIC argues, the Amended Complaint does not satisfy the pleading requirements of Federal Rule of Civil Procedure 8. (Id.).

ASIC asserts that the CRN does provide a factual basis for the claim, but those facts contradict the allegations on which the bad faith claim is predicated. (Id. at ¶ 5). ASIC argues that the facts outlined in the CRN affirm that ASIC complied with the standards set forth in Fla. Stat. § 627.707. (Id. at ¶ 7). Furthermore, ASIC contends that the Loss Settlement provision Canales relies upon in the CRN is superseded by the Loss Settlement provision of the Sinkhole Endorsement, which specifies that sinkhole losses will not be settled until the insured has entered into a contract for repairs. (Id. at ¶¶ 7-8). ASIC alleges that Canales did not execute such a contract. (Id. at ¶¶ 7, 9-10).

Canales filed his Response in Opposition to the Motion on July 7, 2011 (Doc. # 12). He argues that the Amended Complaint and attached exhibits state a cause of action pursuant to Fla. Stat. § 624.155. (Id. at ¶ 3). Canales further argues that it is premature to characterize the facts set forth in the CRN and, in any event, the CRN met the statutory requirements and was accepted by the Florida DFS. (Id. at 7-11). In addition, Canales asserts that the Amended Complaint and CRN put ASIC on fair notice of the basis for his claim. (Id. at 11).

Canales also argues that ASIC misrepresents the Loss Settlement provision of the Sinkhole Endorsement by quoting only a portion of it. (Id. at 13). Finally, Canales asserts that, contrary to ASIC's allegations, he did in fact have a contract to have work performed. (Id. at 14).

II. Legal Standard

On a motion to dismiss, this Court accepts as true all the allegations in the complaint and construes them in the light most favorable to the plaintiff. Jackson v. Bellsouth Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004). Further, this Court favors the plaintiff with all reasonable inferences from the allegations in the complaint. Stephens v. Dep't of Health & Human Servs., 901 F.2d 1571, 1573 (11th Cir. 1990).

However, the Supreme Court explains that:

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.

Bell Atl. Corp v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations and citations omitted). A plausible claim for relief must include "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). Courts are not "bound to accept as true a ...

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