Opinion
CASE NO. 2:07-cv-823-MEF (WO).
February 19, 2008
MEMORANDUM OPINION AND ORDER
This cause is before the Court on Defendant State Farm's Motion to Dismiss (Doc. # 2), filed September 13, 2007. Plaintiff Malcolm Herring ("Herring") has sued State Farm for breach of contract and bad faith in failing to pay benefits on an underinsured motorist claim Herring filed. State Farm has moved to dismiss the Complaint on the ground that Herring's claims are not ripe for adjudication. After careful review of the submissions made by the parties, this Court finds that State Farm's Motion to Dismiss is due to be DENIED.
II. RULE 12(B)(6) STANDARD
A Rule 12(b)(6) motion tests the legal sufficiency of the complaint. Prior to the Supreme Court's recent decision in Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955 (2007), a motion to dismiss could only be granted if a plaintiff could prove "no set of facts . . . which would entitle him to relief." See Conley v. Gibson, 355 U.S. 41, 45-46 (1957); see also Hishon v. King Spalding, 467 U.S. 69, 73 (1984); Wright v. Newsome, 795 F.2d 964, 967 (11th Cir. 1986). Now, in order to survive a motion to dismiss for failure to state a claim, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Twombly, 127 S. Ct. at 1974. Plaintiff's "[f]actual allegations must be enough to raise a right to relief above a speculative level on the assumption that the allegations in the complaint are true." Id. at 1965. It is not sufficient that the pleadings merely "le[ave] open the possibility that the plaintiff might later establish some set of undisclosed facts to support recovery." Id. at 1968 (internal quotation and alteration omitted). In considering a defendant's motion to dismiss, a district court will accept as true all well-pleaded factual allegations and view them in a light most favorable to the plaintiff. See Am. United Life Ins. Co. v. Martinez, 480 F.3d 1043, 1057 (11th Cir. 2007). Accord Nelson v. Campbell, 541 U.S. 637, 640 (2004) (where a court is considering dismissal of a complaint at the pleading stage, it must assume the allegations of the complaint are true). Furthermore, the threshold is "exceedingly low" for a complaint to survive a motion to dismiss for failure to state a claim. See Ancata v. Prison Health Servs., Inc., 769 F.2d 700, 703 (11th Cir. 1985).
III. FACTS AND PROCEDURAL HISTORY
The allegations in the complaint establish the following facts. On August 2, 2005, Herring was driving a 1995 Chevrolet Suburban south on Perry Hill Road. At this time, David Hooks ("Hooks"), negligently and/or wantonly drove his vehicle such that it collided with a vehicle being driven by Nancy Beeman ("Beeman"). This collision caused Beeman's vehicle to collide with Herring's vehicle. As a result of this collision, Herring suffered several severe injuries and medical expenses.
Hooks insurance coverage was limited to $20,000, which Hook offered as a settlement for Herring's claims against him. This amount was not sufficient to cover all of Herring's damages, so Herring notified his insurance provider, State Farm, of the settlement offer and provided all medical records and other documentation related to the accident. Herring also notified State Farm that if it approved the settlement, he would file a claim with State Farm under his underinsured motorist insurance coverage.
On April 10, 2007, State Farm approved Hooks' settlement offer and waived its subrogation rights. However, State Farm ultimately rejected Herring's underinsured motorist claim.
This claim was originally filed in the Circuit Court of Montgomery County on July 30, 2007. On September 13, 2007, State Farm filed Notice of Removal in this Court basing jurisdiction on 28 U.S.C. § 1332 (diversity).
IV. DISCUSSION
State Farm argues that Herring's claims are not ripe and are due to be dismissed. State Farm bases its argument on the Alabama Supreme Court rulings in Pontius v. State Farm Mut. Auto. Ins. Co., 915 So. 2d 557 (Ala. 2005), and LeFevre v. Westberry, 590 So. 2d 154 (Ala. 1991). In an underinsured motorist claim, the insured is not entitled to payment on a claim unless he can show that he is "legally entitled" to collect from the underinsured motorist. See LeFevre, 590 So. 2d at 159. In other words, the insured must be able to show fault on the part of the underinsured motorist and the extent of the damages to which he is entitled. See id. Moreover, the State of Alabama recognizes the doctrine of bad faith in underinsured motorist claims. See id. at 160. A delay in payment on an underinsured motorist claim does not rise to the level of bad faith if there is a "bona fide dispute" on the issue of liability of the underinsured motorist, or damages. See id. at 161. If the insurer refuses to settle with the insured, such refusal must be reasonable. See id.
This Court finds that dismissal of the Complaint against State Farm is not warranted at this early stage in the litigation. Because the Court is ruling on a motion to dismiss, it must assume all well-pleaded facts in the Complaint are true and view them in the light most favorable to the plaintiff. See Am. United Life Ins. Co., 480 F.3d at 1057. Here, Herring has pled sufficient facts to survive a motion to dismiss. Herring's factual allegations are sufficient to raise a right to relief above a speculative level. Twombly, 127 S. Ct. at 1965.
In LeFevre, a case relied upon by State Farm, the Alabama Supreme Court affirmed the trial court's entry of summary judgment on a claim for bad faith in favor of an insurer because the Court found that there was a "legitimate dispute" concerning the amount of damages the plaintiff was entitled to under the claim. See id. at 162. However, the fact that the procedural posture of LeFevre was a summary judgment ruling is enough to distinguish it from this case. State Farm also cites Pontius, which affirmed a dismissal of an insured's breach of contract and bad faith claims on ripeness grounds. See Pontius, 915 So. 2d at 564-65. However, in Pontius, when the trial court dismissed for lack of jurisdiction, the plaintiff was, at that time, still involved in active litigation with the uninsured motorist on the issue of liability. This case is therefore distinguishable because the conduct giving rise to Herring's claims against State Farm occurred after Herring settled his dispute with the underinsured motorist. See id. at 565 ("We recognize that Pontious has now resolved her underlying lawsuit against the [uninsured motorist]. . . . [A]ny claims alleging bad-faith failure to pay an insurance claim or breach of contract based on State Farm's failure to pay UIM benefits must be based on conduct arising after . . . liability was established and damages fixed." (emphasis added)).
V. CONCLUSION
For the reasons set forth above, it is hereby ORDERED that Defendant's Motion to Dismiss (Doc # 2) is DENIED.
A copy of this checklist is available at the website for the USCA, 11th Circuit at www.ca11.uscourts.gov Effective on April 9, 2006, the new fee to file an appeal will increase from $255.00 to $455.00. CIVIL APPEALS JURISDICTION CHECKLIST 1. Appealable Orders : Appeals from final orders pursuant to 28 U.S.C. § 1291: 28 U.S.C. § 158Pitney Bowes, Inc. v. Mestre 701 F.2d 1365 1368 28 U.S.C. § 636 In cases involving multiple parties or multiple claims, 54Williams v. Bishop 732 F.2d 885 885-86 Budinich v. Becton Dickinson Co. 486 U.S. 196 201 108 S.Ct. 1717 1721-22 100 L.Ed.2d 178LaChance v. Duffy's Draft House, Inc. 146 F.3d 832 837 Appeals pursuant to 28 U.S.C. § 1292(a): Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5 28 U.S.C. § 1292 Appeals pursuant to judicially created exceptions to the finality rule: Cohen v. Beneficial Indus. Loan Corp. 337 U.S. 541 546 93 L.Ed. 1528Atlantic Fed. Sav. Loan Ass'n v. Blythe Eastman Paine Webber, Inc. 890 F.2d 371 376 Gillespie v. 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