UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
U.S. Bank, National Association, Trustee
v. Civil No. 17-cv-114-JD Opinion No. 2017 DNH 121 Foremost Insurance Company and Douglas C. Colby, Jr.
O R D E R
U.S. Bank, National Association (“U.S. Bank”) as trustee
for the RMAC Trust, Series 2016-CTT trust brings suit against
Foremost Insurance Company (“Foremost”) and Douglas C. Colby
Jr., seeking to recover the proceeds paid under a homeowners
insurance policy that Foremost issued Colby on his property.
Foremost moves to dismiss the claims against it. U.S. Bank did
not file an objection to Foremost’s motion.
Standard of Review
A motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) addresses whether the complaint states a claim on which
relief may be granted. Lister v. Bank of Am., N.A., 790 F.3d
20, 23 (1st Cir. 2015). In reviewing the motion, the court
“accept[s] as true all well–pled facts alleged in the complaint
and draw[s] all reasonable inferences in the plaintiff’s favor.”
Miller v. Town of Wenham, 833 F.3d 46, 51 (1st Cir. 2016)
(internal quotation marks omitted). “A plaintiff's allegations are sufficient to overcome a Rule 12(b)(6) motion if they
contain ‘enough facts to state a claim to relief that is
plausible on its face.’” Yershov v. Gannett Satellite Info.
Network, Inc., 820 F.3d 482, 485 (1st Cir. 2016) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 569 (2007)).
In support of its motion to dismiss, Foremost attached as
an exhibit a copy of an insurance policy, which, it asserts, is
the policy at issue in U.S. Bank’s complaint. See Doc. no. 12-
3. “On a motion to dismiss, a court ordinarily may only
consider facts alleged in the complaint and exhibits attached
thereto, or else convert the motion into one for summary
judgment.” Freeman v. Town of Hudson, 714 F.3d 29, 35–36 (1st
Cir. 2013) (internal citation omitted). The court may consider
some extrinsic documents under “certain narrow exceptions.” Id.
at 36 (internal quotations omitted). One such exception is for
documents that are “central to [the plaintiff’s] claim.” Id.
“When such documents contradict an allegation in the complaint,
the document trumps the allegation.” Nahass v. Harrison, 207 F.
Supp. 3d 96, 100 (D. Mass. 2016) (citing Clorox Co. P.R. v.
Proctor & Gamble Commercial Co., 228 F.3d 24, 32 (1st Cir.
2000)). Because the policy is central to U.S. Bank’s claims and
U.S. Bank does not dispute the exhibit’s authenticity, the court
will consider it here.
2 Background
In November of 2006, Colby obtained a loan secured by a
mortgage on a property located in Danbury, New Hampshire (“the
property”). Although the loan and mortgage were made in favor
of other entities, U.S. Bank was the investor in the loan at all
relevant times. U.S. Bank subsequently obtained the mortgage
via assignment. During the events at issue, Nationstar
Mortgage, LLC was the mortgagee of record and was servicing the
loan on U.S. Bank’s behalf.
After entering into the mortgage, Colby obtained a
homeowners insurance policy (“the policy”) from Foremost
covering the property. In February of 2016, the property caught
fire and suffered severe damage. Colby made a claim on the
policy for the loss associated with that damage. At the time of
the fire, Colby was a debtor in a Chapter 13 bankruptcy case.
Because of his bankruptcy status, Foremost contacted Colby’s
bankruptcy counsel seeking guidance concerning the distribution
of the proceeds under the policy. Colby’s bankruptcy counsel
told Foremost to send the insurance proceeds to him, and
Foremost complied. Colby eventually received the insurance
proceeds and, shortly thereafter, voluntarily dismissed the
bankruptcy case. Neither U.S. Bank nor Nationstar received the
policy proceeds for the fire damage on the property.
3 Discussion
U.S. Bank brings claims for breach of contract, breach of
third-party beneficiary contract, violation of RSA §§ 417:1, et
seq., and a declaratory judgment against Foremost. Each of
these claims is premised on U.S. Bank’s contention that it was a
loss payee under the policy and therefore entitled to the
insurance proceeds that Foremost paid Colby.1
Foremost moves to dismiss, arguing that the policy does not
contain a provision identifying U.S. Bank or Nationstar as a
loss payee. In addition, Foremost argues that U.S. Bank’s
claims under RSA 417:1, et seq., must be dismissed because that
statute does not provide a private right of action under the
circumstances alleged.
I. Breach of Contract
U.S. Bank alleges that Foremost breached the terms of the
policy by failing to pay the insurance proceeds to U.S. Bank or
Nationstar. In support, U.S. Bank alleges that the policy
contained a “Mortgage Clause which requires that a loss payable
under the coverage for Dwellings and Other Structures be paid to
1 “A loss payee is a ‘person or entity named in an insurance policy ... to be paid if the insured property suffers a loss.’” Supermercados Econo, Inc. v. Integrand Assurance Co., 375 F.3d 1, 3 (1st Cir. 2004) (quoting Black's Law Dictionary 958 (7th ed. 1999)).
4 the Mortgagee if one is named in the policy.” Doc. no. 1 at
¶ 10. U.S. Bank further alleges that “[u]pon information and
belief, Nationstar . . . was specifically listed as a loss
payee” on the declarations page of the policy. Id. at ¶ 11-12.
“A breach of contract occurs when there is a failure
without legal excuse to perform any promise which forms the
whole or part of a contract.” Audette v. Cummings, 165 N.H. 763,
767 (2013) (quoting Lassonde v. Stanton, 157 N.H. 582, 588
(2008) (quotation omitted)). Here, the policy does contain a
clause concerning mortgagees, as U.S. Bank alleges. That clause
provides that “[a]n insured loss will be payable to the
mortgagees named on the Declarations Page, to the extent of
their interest and in their order of precedence. All provisions
of this policy apply to these mortgagees.” Insurance Policy,
doc. no. 12-3 at 19 (emphasis added). The policy’s declarations
page does not list a mortgagee, and it does not mention
Nationstar or U.S. Bank. Only Colby is listed as a named
insured. As a result, neither U.S. Bank nor Nationstar were
listed as mortgagees or loss payees under the policy.
Accordingly, the policy does not provide for payment to U.S.
Bank or Nationstar.
Therefore, the breach of contract claim is dismissed.
5 II. Breach of Third-Party Beneficiary Contract
U.S. Bank alleges that it was an intended third-party
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
U.S. Bank, National Association, Trustee
v. Civil No. 17-cv-114-JD Opinion No. 2017 DNH 121 Foremost Insurance Company and Douglas C. Colby, Jr.
O R D E R
U.S. Bank, National Association (“U.S. Bank”) as trustee
for the RMAC Trust, Series 2016-CTT trust brings suit against
Foremost Insurance Company (“Foremost”) and Douglas C. Colby
Jr., seeking to recover the proceeds paid under a homeowners
insurance policy that Foremost issued Colby on his property.
Foremost moves to dismiss the claims against it. U.S. Bank did
not file an objection to Foremost’s motion.
Standard of Review
A motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) addresses whether the complaint states a claim on which
relief may be granted. Lister v. Bank of Am., N.A., 790 F.3d
20, 23 (1st Cir. 2015). In reviewing the motion, the court
“accept[s] as true all well–pled facts alleged in the complaint
and draw[s] all reasonable inferences in the plaintiff’s favor.”
Miller v. Town of Wenham, 833 F.3d 46, 51 (1st Cir. 2016)
(internal quotation marks omitted). “A plaintiff's allegations are sufficient to overcome a Rule 12(b)(6) motion if they
contain ‘enough facts to state a claim to relief that is
plausible on its face.’” Yershov v. Gannett Satellite Info.
Network, Inc., 820 F.3d 482, 485 (1st Cir. 2016) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 569 (2007)).
In support of its motion to dismiss, Foremost attached as
an exhibit a copy of an insurance policy, which, it asserts, is
the policy at issue in U.S. Bank’s complaint. See Doc. no. 12-
3. “On a motion to dismiss, a court ordinarily may only
consider facts alleged in the complaint and exhibits attached
thereto, or else convert the motion into one for summary
judgment.” Freeman v. Town of Hudson, 714 F.3d 29, 35–36 (1st
Cir. 2013) (internal citation omitted). The court may consider
some extrinsic documents under “certain narrow exceptions.” Id.
at 36 (internal quotations omitted). One such exception is for
documents that are “central to [the plaintiff’s] claim.” Id.
“When such documents contradict an allegation in the complaint,
the document trumps the allegation.” Nahass v. Harrison, 207 F.
Supp. 3d 96, 100 (D. Mass. 2016) (citing Clorox Co. P.R. v.
Proctor & Gamble Commercial Co., 228 F.3d 24, 32 (1st Cir.
2000)). Because the policy is central to U.S. Bank’s claims and
U.S. Bank does not dispute the exhibit’s authenticity, the court
will consider it here.
2 Background
In November of 2006, Colby obtained a loan secured by a
mortgage on a property located in Danbury, New Hampshire (“the
property”). Although the loan and mortgage were made in favor
of other entities, U.S. Bank was the investor in the loan at all
relevant times. U.S. Bank subsequently obtained the mortgage
via assignment. During the events at issue, Nationstar
Mortgage, LLC was the mortgagee of record and was servicing the
loan on U.S. Bank’s behalf.
After entering into the mortgage, Colby obtained a
homeowners insurance policy (“the policy”) from Foremost
covering the property. In February of 2016, the property caught
fire and suffered severe damage. Colby made a claim on the
policy for the loss associated with that damage. At the time of
the fire, Colby was a debtor in a Chapter 13 bankruptcy case.
Because of his bankruptcy status, Foremost contacted Colby’s
bankruptcy counsel seeking guidance concerning the distribution
of the proceeds under the policy. Colby’s bankruptcy counsel
told Foremost to send the insurance proceeds to him, and
Foremost complied. Colby eventually received the insurance
proceeds and, shortly thereafter, voluntarily dismissed the
bankruptcy case. Neither U.S. Bank nor Nationstar received the
policy proceeds for the fire damage on the property.
3 Discussion
U.S. Bank brings claims for breach of contract, breach of
third-party beneficiary contract, violation of RSA §§ 417:1, et
seq., and a declaratory judgment against Foremost. Each of
these claims is premised on U.S. Bank’s contention that it was a
loss payee under the policy and therefore entitled to the
insurance proceeds that Foremost paid Colby.1
Foremost moves to dismiss, arguing that the policy does not
contain a provision identifying U.S. Bank or Nationstar as a
loss payee. In addition, Foremost argues that U.S. Bank’s
claims under RSA 417:1, et seq., must be dismissed because that
statute does not provide a private right of action under the
circumstances alleged.
I. Breach of Contract
U.S. Bank alleges that Foremost breached the terms of the
policy by failing to pay the insurance proceeds to U.S. Bank or
Nationstar. In support, U.S. Bank alleges that the policy
contained a “Mortgage Clause which requires that a loss payable
under the coverage for Dwellings and Other Structures be paid to
1 “A loss payee is a ‘person or entity named in an insurance policy ... to be paid if the insured property suffers a loss.’” Supermercados Econo, Inc. v. Integrand Assurance Co., 375 F.3d 1, 3 (1st Cir. 2004) (quoting Black's Law Dictionary 958 (7th ed. 1999)).
4 the Mortgagee if one is named in the policy.” Doc. no. 1 at
¶ 10. U.S. Bank further alleges that “[u]pon information and
belief, Nationstar . . . was specifically listed as a loss
payee” on the declarations page of the policy. Id. at ¶ 11-12.
“A breach of contract occurs when there is a failure
without legal excuse to perform any promise which forms the
whole or part of a contract.” Audette v. Cummings, 165 N.H. 763,
767 (2013) (quoting Lassonde v. Stanton, 157 N.H. 582, 588
(2008) (quotation omitted)). Here, the policy does contain a
clause concerning mortgagees, as U.S. Bank alleges. That clause
provides that “[a]n insured loss will be payable to the
mortgagees named on the Declarations Page, to the extent of
their interest and in their order of precedence. All provisions
of this policy apply to these mortgagees.” Insurance Policy,
doc. no. 12-3 at 19 (emphasis added). The policy’s declarations
page does not list a mortgagee, and it does not mention
Nationstar or U.S. Bank. Only Colby is listed as a named
insured. As a result, neither U.S. Bank nor Nationstar were
listed as mortgagees or loss payees under the policy.
Accordingly, the policy does not provide for payment to U.S.
Bank or Nationstar.
Therefore, the breach of contract claim is dismissed.
5 II. Breach of Third-Party Beneficiary Contract
U.S. Bank alleges that it was an intended third-party
beneficiary under the insurance contract because the “agreement
provided that a loss payable under the [p]olicy for dwellings
and other structures at the [p]roperty shall be paid to the
[m]ortgagee if one is named in the policy.” Doc. no. 1 at ¶ 29.
“A third-party beneficiary relationship exists if: (1) the
contract calls for a performance by the promisor, which will
satisfy some obligation owed by the promisee to the third party;
or (2) the contract is so expressed as to give the promisor
reason to know that a benefit to a third party is contemplated
by the promisee as one of the motivating causes of his making
the contract.” Brooks v. Trustees of Dartmouth Coll., 161 N.H.
685, 697 (2011). “A benefit to a third party is a ‘motivating
cause’ of entering into a contract only where the promisee
intends to give the beneficiary the benefit of the promised
performance.” Id. at 697-98 (internal quotation marks omitted).
As discussed above, the policy does not identify U.S. Bank
or Nationstar as a mortgagee and does not provide for payment to
either entity. U.S. Bank does not identify any other language
in the agreement that would have given Foremost reason to know
that it was an intended beneficiary of the policy. Therefore,
U.S. Bank has failed to state a third-party beneficiary contract
claim.
6 III. Violation of RSA 417:1, et seq.
U.S. Bank brings a claim against Foremost under RSA 417:1,
et seq., which prohibits the use of unfair methods of
competition and unfair and deceptive acts or practices in the
business of insurance. RSA 417:3-4. Foremost contends that
U.S. Bank’s claims against it under RSA 417:1, et seq., must be
dismissed because (1) U.S. Bank has failed to allege any
actionable conduct under the statute and (2) U.S. Bank does not
have a private right of action to bring a claim under the
statute.
A. Private Right of Action
RSA 417:1, et seq., provides for private actions against
suppliers of insurance, such as Foremost, “under limited and
very specific circumstances.” Ben's Auto Body, Inc. v.
Teitelbaum, No. CIV. 08-CV-207-SM, 2008 WL 5244420, at *2
(D.N.H. Dec. 15, 2008).2 RSA 417:19, the provision permitting
such actions, provides that:
When a supplier, in any action or proceeding brought by the insurance commissioner, has been found to be in violation of this chapter or has been ordered to cease and desist, and said finding or order has become final, any consumer claiming to be adversely affected by the act or practice giving rise to such finding or
2 A supplier is “any individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyd's insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including agents, brokers, and adjusters.” RSA 417:18, III.
7 order may bring suit against said supplier to recover any damages or loss suffered because of such action or practice.
RSA 417:19, I. Therefore, a finding by the insurance
commissioner that a supplier has violated chapter 417 is a
prerequisite to bringing a private action. Hunt v. Golden Rule
Ins. Co., 638 F.3d 83, 87–88 (1st Cir. 2011); Lacaillade v.
Loignon Champ–Carr, Inc., No. 10–cv–68–JD, 2010 WL 2902251
(D.N.H. July 22, 2010) (“Under chapter 417, a consumer may bring
a private action against an insurer, but only after the
insurance commissioner has determined that the practice in
question violates the statute.”). Absent such a finding, a
private suit cannot proceed. Hunt, 638 F.3d at 88-89.
U.S. Bank does not allege that the New Hampshire insurance
commissioner has made a finding that Foremost engaged in an act
or practice in violation of RSA 417:1, et seq. Therefore, U.S.
Bank cannot maintain its claim under the statute.3
3 Foremost also contends that U.S. Bank is barred from bringing any action under RSA 417:1, et seq., because it is not a “consumer,” as defined by statute. See RSA 417:18 (defining consumer); Teitelbaum, 2008 WL 5244420, at *2 (dismissing claim under RSA 417:1, et seq., because plaintiff was not a consumer under the statute). Because the court concludes that U.S. Bank has no private right of action under the act on different grounds, it need not decide whether U.S. Bank is a consumer under RSA 417:18.
8 B. Actionable Conduct
Because U.S. Bank has no private right of action to bring
its claim under RSA 417:1, et seq., the court need not decide
whether it has alleged conduct that is actionable under that
IV. Declaratory Judgment
U.S. Bank alleges that it is entitled to a declaration that
“it has a protected interest under the Policy” and that “its
interests as a loss payee under the Policy are unaffected by any
alleged misconduct of the insured.” Doc. no. 1 at ¶¶ 43-44.
U.S. Bank has not alleged facts to show that it has any interest
under the policy. Accordingly, U.S. Bank has not stated a claim
for declaratory relief.
Conclusion
For the foregoing reasons, Foremost’s motion to dismiss
(doc. no. 12) is granted. All claims against Foremost are
dismissed.
SO ORDERED.
__________________________ Joseph A. DiClerico, Jr. United States District Judge June 14, 2017 cc: Joseph A. Farside, Jr., Esq. Dean J. wagner, Esq. Douglas C. Colby, Jr., pro se