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Patel v. American National Property and Casualty Co.

United States District Court, D. Nevada

March 21, 2019

MANISH PATEL, Plaintiff,
v.
AMERICAN NATIONAL PROPERTY AND CASUALTY COMPANY, Defendant.

          ORDER

          Gloria M. Navarro, Chief Judge United States District Court

         Pending before the Court is Defendant American National Property and Casualty Company's (“Defendant”) Motion to Dismiss, (ECF No. 6), or in the alternative, Motion for a More Definite Statement or to Sever/Bifurcate and to Stay Claims for Bad Faith, (ECF No. 7). Plaintiff Manish Patel (“Plaintiff”) filed a single Response, (ECF No. 9), and Defendant filed a single Reply, (ECF No. 10). For the reasons discussed below, Defendant's Motion to Dismiss, (ECF No. 6), is GRANTED. Further, Defendant's Motion for a More Definite Statement or to Sever/Bifurcate and to Stay Claims for Bad Faith, (ECF No. 7), is DENIED as moot.

         I. BACKGROUND

         This case arises from Plaintiff's homeowner's insurance claim against Defendant insurer. (See Compl., ECF No. 1-1). Plaintiff alleges that in January 2017, he contracted for and paid for a homeowner's insurance policy with Defendant. (Id. ¶ 7). Plaintiff further alleges that on or about March 3, 2017, the “septic tank backed up” and flooded Plaintiff's home. (Id. ¶ 8). Three days later, Plaintiff filed an insurance claim with Defendant. (Id. ¶ 9). Plaintiff alleges that he “reported all the loss and damaged items to [Defendant] and provided [it] with accurate costs of replacement.” (Id. ¶ 11). Plaintiff further alleges that Defendant “denied compensation for the property that was damaged . . . and failed to pay for any loss of use, despite due and proper demand.” (Id. ¶ 12).[1]

         On March 1, 2018, Plaintiff filed his Complaint in Clark County District Court alleging the following claims: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) violations of Nevada's Unfair Claims Practices Act; (4) intentional refusal to pay insurance benefits; and (5) declaratory relief. Defendant subsequently removed the action to federal court. Now, Defendant moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) or, in the alternative, for a more definite statement or to sever and stay claims for bad faith, (ECF Nos. 6, 7).

         II. LEGAL STANDARD

         Rule 12(b)(6) of the Federal Rules of Civil Procedure mandates that a court dismiss a cause of action that fails to state a claim upon which relief can be granted. See North Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule 12(b)(6) for failure to state a claim, dismissal is appropriate only when the complaint does not give the defendant fair notice of a legally cognizable claim and the grounds on which it rests. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint is sufficient to state a claim, the Court will take all material allegations as true and construe them in the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).

         The Court, however, is not required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action with conclusory allegations is not sufficient; a plaintiff must plead facts showing that a violation is plausible, not just possible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555) (emphasis added). In order to survive a motion to dismiss, a complaint must allege “sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Id. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         “Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion . . . . However, material which is properly submitted as part of the complaint may be considered on a motion to dismiss.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations omitted). Similarly, “documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6) motion to dismiss” without converting the motion to dismiss into a motion for summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Under Federal Rule of Evidence 201, a court may take judicial notice of “matters of public record.” Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. See Fed. R. Civ. P. 12(d); Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir. 2001). /// If the court grants a motion to dismiss, it must then decide whether to grant leave to amend. Pursuant to Rule 15(a), the court should “freely” give leave to amend “when justice so requires, ” and in the absence of a reason such as “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is clear that the deficiencies of the complaint cannot be cured by amendment. See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).

         III. DISCUSSION

         In the instant Motion, Defendant argues that each of Plaintiff's causes of action should be dismissed for failure to state a claim. (See Mot. to Dismiss (“MTD”) 3:9-10, ECF No. 6). Specifically, Defendant argues that Plaintiff's “allegations, as a matter of law, do not rise to the level necessary to demonstrate unreasonable conduct by [Defendant].” (Id. 3:3-4). The Court addresses the sufficiency of each cause of action in turn.

         A. Breach of Contract

         “An insurance policy is a contract.” Senteney v. Fire Ins. Exch., 707 P.2d 1149, 1150 (Nev. 1988). In Nevada, to succeed on a claim for breach of contract a plaintiff must show: (1) the existence of a valid contract; (2) that the plaintiff performed or was excused from performance; (3) that the defendant breached the terms of the contract; and (4) that the plaintiff was damaged as a result of the breach. See Restatement (Second) of Contracts § 203 (2007); see also Bernard v. Rockhill Dev. Co., 734 P.2d 1238, 1240 (Nev. 1987); Brochu v. Foote Enterprises, Inc., No. 55963, 2012 WL 5991571 at *5 (Nev. 2012) (“To prove a breach of contract, the plaintiff must show an existing valid agreement with the defendant, the defendant's material breach, and damages.”).

         To support this claim, Plaintiff broadly alleges that he and Defendant “entered into a valid contract in which [Plaintiff] would make regular payments and [Defendant] would provide him with home owners' Insurance for the items contained in side [sic] the subject residence.” (Compl. ¶ 15). Plaintiff further alleges that he twice “made demand to [Defendant] for the items which were reported damaged or destroyed.” (Id. ¬∂ 16). Plaintiff then asserts that ‚ÄúDefendant breached the contract by failing to pay ...


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