Opinion
No. 03 Civ. 5037 (JFK).
March 25, 2004
MAX D. LEIFER, P.C., Max D. Leifer, Esq., New York, New York, for Plaintiff Jerry L. Noury, Jr.
ROPERS, MAJESKI, KOHN BENTLEY, Ralph Tortorella III, Esq., Erick Durlach, Esq., New York, New York, for Defendants St. Paul Fire and Marine Insurance Company and The St. Paul Insurance Companies, Inc.
ORDER
I. INTRODUCTION
Plaintiff Jerry L. Noury, Jr., a resident of New York, sues defendants St. Paul Fire and Marine Insurance Company and The St. Paul Companies, Inc. (erroneously sued herein as "St. Paul Insurance Companies and hereinafter referred to as "defendants" or "St. Paul"), a corporation organized under the laws of Minnesota with its principal place of business in Minnesota, for bad faith denial of insurance benefits under an automobile insurance policy, or, alternatively, for breach of contract. Plaintiff seeks punitive damages, costs and attorney's fees. Defendants move, pursuant to Federal Rule of Civil Procedure 12(b)(6), to dismiss the complaint for failure to state a claim on which relief may be granted, and, pursuant to Rule 12(f), to strike portions of the complaint. For the reasons given below, defendants' motions are denied.
II. FACTS
Mr. Noury contends that, in February 1997, he was involved in two incidents that led him to make claims under his insurance policy. The first incident occurred when Mr. Noury took his automobile, a 1960 Bentley, to a garage for repairs. Complaint ¶ 23. When he picked up his car, certain parts were missing. Id. Mr. Noury made claims under his insurance policy, which St. Paul denied. Id. ¶ 24.
The second incident involved an automobile accident in which Mr. Noury sustained personal injuries requiring diagnosis, treatment, therapy, and time off from work. Id. ¶ 12, 13, 15. In addition, plaintiff's automobile sustained damages. Id. ¶ 14. St. Paul denied all claims based on this incident. Id. ¶ 17.
Mr. Noury alleges that the denial of his claims was in bad faith and was the result of an "examination under oath" by a representative of St. Paul, Franklin Tell, with whom plaintiff claims to have had "lengthy and acrimonious" dealings by which an earlier claim with another insurance company was settled. Id. ¶ 18. At this examination, Mr. Noury says, senior claim representative Andy Strauss brandished a knife:
The parties have not defined the term "examination under oath."
During the examination, [p]laintiff perceived that Andy Strauss, the senior claim representative present during the Examination Under Oath, who was wearing a leather jacket, was brandishing a knife and displaying it for plaintiff to see while plaintiff was being questioned by Mr. Tell. Plaintiff refers to the knife at one point during the hearing, stating, "The man on the side of me, he is carving. He has a knife in his hand," to which Mr. Strauss responded, "It's a beautiful piece of wood, artifact." Plaintiff stated during the hearing that he wanted the police to come, and Mr. Tell stated that he wanted the police to come because he felt threatened by plaintiff. The hearing was concluded, police arrived at the scene and no arrests were made. The police arrived and took no action towards either party. . . . Plaintiff subsequently suffered emotional distress due to the trauma of his experience during the Examination Under Oath and was briefly hospitalized in September, 1997. Id. ¶ 18. Because of the trauma plaintiff experienced, he was unable to participate in any further examinations under oath. Id. Consequently, plaintiff alleges, St. Paul considered plaintiff in breach of the insurance agreement for failure to cooperate with the investigation. Id. This determination, plaintiff says, was in retaliation for the confrontation between plaintiff, Mr. Tell and Mr. Strauss. Id.
III. MOTION TO DISMISS
"Given the Federal Rules' simplified standard for pleading, '[a] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'" Swierkiewicz v. Sorema N.A., 534 U.S. 506, 516, 122 S. Ct. 992, 998, 152 L. Ed. 2d 1 (2002) (quoting Hishon v. King Spalding, 467 U.S. 69, 73, 104 S. Ct. 2229, 81 L. Ed. 2d 59 (1984)). The "extremely permissive" standards, Wynder v. McMahon, No. 02-9101, 2004 WL 370665 at *3 (2d Cir. Mar. 1, 2004), apply to all civil actions,Swierkiewicz, 534 U.S. at 513, 122 S. Ct. at 998. All that is required is that the complaint include "'a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99, 103, 2 L. Ed. 2d 80 (1957) (quoting Fed.R.Civ.P. 8(a)(2)). Under such a notice pleading system, "it is not appropriate to require a plaintiff to plead facts establishing a prima facie case."Swierkiewicz, 534 U.S. at 511, 122 S. Ct. at 997. Indeed, the plaintiff need not plead the elements of the claim. Eastside Food Plaza, Inc. v. "R" Best Produce, Inc., No. 03 Civ. 106 (SAS), 2003 WL 21727788 at *3 (S.D.N.Y. July 23, 2003).
Whether plaintiff is likely to prevail is not the issue at this stage of a case. Eastside Food, 2003 WL 21727788 at *3. Recovery may even be unlikely. Id. Instead, the simplified notice pleading standard "relies on . . . summary judgment motions . . . to dispose of unmeritorious claims."Swierkiewicz, 534 U.S. at 512, 122 S. Ct. at 998. Claims that lack merit thus "may be dealt with through summary judgment under Rule 56." Id. at 514, 122 S. Ct. at 998-99. In the end, legal feasibility is all that is required, accepting all factual allegations in the complaint as true and drawing all reasonable inferences in plaintiff's favor. Eastside Food, 2003 WL 21727788 at * 3.
Only under very limited circumstances may a plaintiff successfully assert a claim for bad faith refusal to pay insurance benefits. Manning v. Utils. Mut. Ins. Co., No. 98 Civ. 4790 (RCC), 2004 WL 235256 at *3; see N.Y. Univ. v. Cont'l Ins. Co., 87 N.Y.2d 308, 639 N.Y.S.2d 283, 662 N.E.2d 763 (1995); Rocanova v. Equitable Life Assurance Soc'y of the United States, 83 N.Y.2d 603, 612 N.Y.S.2d 339, 634 N.E.2d 940 (1994). A plaintiff may recover punitive damages on a tort action that arises from a breach of an insurance contract under the following circumstances:
(1) defendant's conduct must be actionable as an independent tort; (2) the tortious conduct must be of the egregious nature set forth in Walker v. Sheldon, 10 N.Y.2d 401, 404-405, 223 N.Y.S.2d 488, 179 N.E.2d 497 ; (3) the egregious conduct must be directed to plaintiff; and (4) it must be part of a pattern directed at the public generally.N.Y. Univ., 87 N.Y.2d at 316, 639 N.Y.S.2d at 287. The standard for such claims is strict, and recovery is rarely available.Manning, 2004 WL 235256 at *4. Thus, "the threshold task for a court considering defendant's motion to dismiss a cause of action for punitive damages is to identify a tort independent of the contract." N.Y. Univ., 87 N.Y.2d at 316, 639 N.Y.S.2d at 287.
Accepting all the rather incredible factual allegations of the complaint as true, plaintiff's claim for bad faith denial of insurance benefits and the corresponding claim for punitive damages meet the extremely permissive standards of the Federal Rules of Civil Procedure. Plaintiff, however awkwardly, has alleged the independent tort of assault which, in the context of an insurance claim investigation, qualifies as egregious. While plaintiff has, admittedly, failed to allege a pattern of egregious conduct directed at the public generally, the pleading of every element of a claim is not required. The complaint contains enough information to give defendants fair notice of the claim. Any early disposition of the claim must, as expected under the simplified notice pleading standards of the Federal Rules, be left to the summary judgment stage. Defendants' motion to dismiss the claims for bad faith denial of insurance coverage and for punitive damages is, therefore, denied.
Although not a model of clarity, plaintiff's alternative claim for breach of contract, which plaintiff emphasizes in his memorandum in opposition to defendants' motion to dismiss, also meets the liberal pleading requirements of the Federal Rules. Again, plaintiff need not plead all elements of a claim, as long as defendants have notice of the nature of the claim. See generally Marino v. N.W. Mut. Life Ins. Co., No. 00 Civ. 3212 (MBM), 2001 WL 262574 (S.D.N.Y. Mar. 14, 2001) (denying defendant's motion to dismiss plaintiff's claims because complaint supported a breach of contract theory). Plaintiff's reliance on the contract claim does not weaken plaintiff's position in opposing defendants' motion to dismiss, because the theory which saves a complaint from dismissal need not be the theory suggested by the pleader. 5 Charles Alan Wright Arthur R. Miller, Federal Practice and Procedure § 1216 (2d ed. 2004).
IV. MOTION TO STRIKE
Defendants also move, pursuant to Rule 12(f), to strike plaintiff's claim for attorney's fees and costs. Generally, an insured may not recover attorney's fees or costs in an action against its insurer to settle plaintiff's rights under the policy. Globecon Group, LLC v. Hartford Fire Ins. Co., No. 03 Civ. 23 (NRB), 2003 WL 22144316 at *5 (S.D.N.Y. Sept. 17, 2003). However, courts in this circuit have denied a defendant's motion to strike or to dismiss claims for attorney's fees even though the likelihood that plaintiff would be able to recover attorney's fees is small, because dismissal of such claims at the pleading stage would be premature. Marino v. N.W. Mut. Life Ins. Co., No. 00 Civ. 3212 (MBM), 2001 WL 262574 at *3 (S.D.N.Y. Mar. 14, 2001) (citing, inter alia, Fort Howard Paper Co. v. William D. Witter, Inc., 787 F.2d 784, 794 (2d Cir. 1986)). Furthermore, "Rule 12(f) motions are viewed by courts with disfavor and are granted infrequently" unless the portions that a defendant wishes to strike would be prejudicial to the defendant. Globecon, 2003 WL 22144316 at *5.
Technically, a motion to strike is not a proper method of disposing of part of a complaint. Wray v. Edward Blank Assocs., 924 F. Supp. 498, 501 (S.D.N.Y. 1996). However, in light of the simplified standards embraced by the Federal Rules of Civil Procedure, the name of a motion is of little importance. 5 Charles Alan Wright Arthur R. Miller, Federal Practice and Procedure § 1380 (2d ed. 2004).
Even though plaintiff is unlikely to meet with much success in his claims for attorney's fees and costs, this Court finds that striking the claims at this time would not be appropriate. Defendants' motion to strike the claims for attorney's fees and costs is denied.
To the extent that defendants have moved to dismiss and to strike plaintiff's claims for punitive damages, such motion to strike is similarly denied.
V. CONCLUSION
Were it not for the simplified pleading standards of the Federal Rules of Civil Procedure, plaintiff's bizarre claims likely would not have stated a cause of action. As it is, the complaint meets the requirements of the Federal Rules by only a slim margin. Discovery will likely lead to a speedy resolution of this matter. Should either party wish to bring another motion after discovery has proceeded, that party should notify the Court by letter.
Defendants' motion to dismiss the complaint for failure to state a claim upon which relief can be granted is hereby denied, and defendants' motion to strike the claims for punitive damages and attorney's fees is likewise denied.