Moore v. State Farm Mutual Automobile Insurance

439 F. Supp. 2d 615, 65 Fed. R. Serv. 3d 857, 2006 U.S. Dist. LEXIS 51147, 2006 WL 1984701
CourtDistrict Court, E.D. Louisiana
DecidedJune 7, 2006
DocketCivil Action 03-2390
StatusPublished
Cited by1 cases

This text of 439 F. Supp. 2d 615 (Moore v. State Farm Mutual Automobile Insurance) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moore v. State Farm Mutual Automobile Insurance, 439 F. Supp. 2d 615, 65 Fed. R. Serv. 3d 857, 2006 U.S. Dist. LEXIS 51147, 2006 WL 1984701 (E.D. La. 2006).

Opinion

ORDER AND REASONS

LIYAUDAIS, District Judge.

Two motions filed by the State Farm defendants (“State Farm”) are before the Court: 1) a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) or, in the alternative, to stay (r.d. # 155); and 2) a motion to vacate the Court’s Order entered at r.d. # 128, or in the alternative, to stay injunction pending the appeal by State' Farm (r.d. # 171). Oral argument was heard on both motions on April 12, 2006. At the close of oral argument, the Court granted State Farm’s motion to dismiss in part, dismissing plaintiffs’ (collectively “Moore”) Second Amended Complaint. See r.d. # 250. The motion to dismiss Moore’s Third Aménded Complaint, or in the alternative to stay, and the motion to vacate the Court’s Order granting in part a preliminary injunction, (r.d. # 123), were taken under advisement. Having considered the motions, the parties’ memoranda, the pleadings, and the law, the Court is now prepared to rule on the motions.

I.

Dismissal of a complaint pursuant to F.R.Civ.P. 12(b)(6) is proper only if the pleadings on their face reveal beyond a doubt that the plaintiff can prove no set of facts that would entitle him to relief, or if an affirmative defense or other bar to relief appears on the face of the complaint. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Garrett v. Commonwealth Mortg. Corp. of America, 938 F.2d 591, 594 (5th Cir.1991). Moreover, the Court must assume that the allegations in plaintiffs complaint are true, and must resolve any doubt regarding .the sufficiency of plaintiffs claims in his favor. Fernandez-Montes v. Allied Pilots Ass’n., 987 F.2d 278 (5th Cir.1993). Nevertheless, a plaintiff must plead specific facts, not mere conclusional allegations, to avoid dismissal for failure to state a claim. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir.2000).

In the Third Amended Complaint, Moore added 28 new factual allegations (and incorporates all allegations and counts stated it all prior complaints) in support of eight new counts brought against- State Farm' and Mary Bitzer, a State Farm corporate officer. State Farm argues that all claims brought against Mary Bitzer in her individual capacity should be dismissed, along with claims brought against State Farm specifically for *618 (1) whistle blower damages, (2) tortious interference with a contract, (3) damages arising out of the implementation of its marketing plans in 1994 and alleged redlining beginning in 2004, and (4) damages for alleged breaches of obligations owed by State Farm under Louisiana insurance law to disclose for approval its plans to electively write insurance in certain parishes in the State, should be dismissed. In its memorandum in support of its motion to dismiss, State Farm argues that all claims against it in the Third Amended Complaint should be dismissed.

A.

Some procedural information is appropriate here. On June 22, 2005, the Court held an evidentiary hearing on Moore’s motion for a preliminary injunction (r.d. # 72), and heard oral argument on State Farm’s motion for a more definite statement (r.d. # 62). At that time, the Court struck Count 15 of Moore’s Second Amended Complaint and a portion of paragraph 1 of his Third Amended Complaint, both regarding Moore’s claimed damages from State Farm’s conversion to its HO-W (homeowners) policies. R.d. # 122. The remaining counts of the Second Amended Complaint alleged that State Farm’s 2004 Strategic Marketing Plan (“SMP”), which restricted the sale of new homeowner’s policies in certain parishes in Louisiana, constituted illegal redlining and a breach of its Agency Agreements with Moore, resulting in a reduction in Moore’s income. At the close of oral argument on April 12, 2006, on State Farm’s the motion to dismiss at issue here, the Court dismissed the remainder of Moore’s Second Amended Complaint, Counts 12 through 14, which claimed damages arising from State Farm’s implementation of its 2004 SMP. R.d. # 250.

Moore’s Third Amended Complaint added new factual allegations, QQ-2 through QQ-7, which appear to enlarge the factual allegations made in the Second Amended Complaint regarding State Farm’s implementation of its 2004 SMP retrospectively to cover the implementation of its 1994 SMP. Counts 17 and 19 of the Third Amended Complaint claim that State Farm and Mary Bitzer individually are liable damages for “reduction of policies in force and premiums which would have arisen out of the sale of policies of insurance but for the implementation of the SMP in 1994 forward, including also the SMP of 2004 forward.... ” Count 19 also claims damages “for the redlining associated therewith from 2004 forward; and for breaches of obligations owed by State Farm under the regulated insurance laws of the State of Louisiana ... in selectively refusing to write insurance in the state in only certain designated parishes.” Both of these counts arise from the acts complained of in the Second Amended Complaint, simply enlarged to cover damages allegedly suffered by Moore from the implementation of the 1994 SMP forward. They are here dismissed for the same reasons that all counts in his Second Amended Complaint were dismissed, as now briefly discussed.

State Farm’s 1994 and 2004 SMPs are risk management plans that are allowed by the AA4 agreement. Their implementation is not a breach of that contract. Paragraph L of the AA4 provides:

The Companies retain the right to prescribe all policy forms and provisions; premiums, fees, and charges for insurance; and rules governing binding, acceptance, renewal, rejection, or cancellation of risks, and adjustment and payment of losses.

*619 The AA4 contract language, and common business sense, give State Farm the right to manage its risk exposure. Regarding the illegal “redlining” claim, La.R.S. 51:1406(1) (LUTPA), provides that the provisions of that chapter shall not apply to:

Actions or transactions subject to the jurisdiction of the Louisiana Public Service Commission or other public utility regulatory body, the commissioner of financial institutions, the insurance commissioner, the financial institutions and insurance regulators of other states, or federal banking regulators who possess authority to regulate unfair or deceptive trade practices.

Emphasis supplied.

Moore further argues that State Farm’s actions with respect to the SMPs amount to restraints of the insurance trade, and that in Edwards v. Your Credit, Inc., 148 F.3d 427, 435 (5th Cir.1998), the Fifth Circuit recognized a private right of action for suits based on fraud or misrepresentations by insurance companies.

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Related

Moore v. State Farm Mutual Automobile Insurance
520 F. Supp. 2d 815 (E.D. Louisiana, 2007)

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Bluebook (online)
439 F. Supp. 2d 615, 65 Fed. R. Serv. 3d 857, 2006 U.S. Dist. LEXIS 51147, 2006 WL 1984701, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moore-v-state-farm-mutual-automobile-insurance-laed-2006.