The opinion of the court was delivered by: Samuel H. Mays, Jr. United States District Judge
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
Before the Court is the July 2, 2010 Motion to Dismiss filed by Defendant Mutual of Omaha Insurance Company ("Mutual"). (Def.'s Mot. to Dismiss Pls.' Compl., ECF No 4.) ("Def.'s Mot.") Plaintiffs Pearlie M. Green ("Green") and Gregory A. Burks (collectively, "Plaintiffs") responded jointly on July 29, 2010. (Pls.' Resp. to Def.'s Mot. to Dismiss, ECF No. 8.) ("Pls.' Resp.") Mutual replied on August 20, 2010. (Def.'s Reply in Supp. of Its Mot. to Dismiss Pls.' Compl., ECF No. 12.) ("Def.'s Reply")
Plaintiffs allege that Mutual has refused to pay insurance benefits for the death of Robert Billups ("Billups") and that Mutual is liable for (1) breach of contract, (2) violating the Tennessee Consumer Protection Act ("TCPA"), Tenn. Code Ann. §§ 47-18-101 et seq., (3) bad faith refusal to pay their claim, in violation of Tenn. Code Ann. § 56-7-105, (4) negligence, (5) unjust enrichment, (6) an unlawful insurance act, in violation of Tenn. Code Ann. § 56-53-103, and (7) fraud. (See Compl. ¶¶ 26, 33, 42, 85-86, 91-93, 99-101, 103-05, 117, 121-29, ECF No. 1-1.) For the reasons below, Mutual's Motion to Dismiss is GRANTED.
Around January 2007, Green, a Tennessee resident, received a prescreened application for accidental death insurance from Mutual providing three levels of coverage ($1 million, $750,000, or $500,000) and two plan options (an individual plan or a family plan). (See Compl. ¶¶ 7, 9-11.) Green chose a family plan with $1 million coverage and agreed to have the premium amount automatically deducted from her checking account each month. (See id. ¶ 13; Ex. A, at 29, ECF No. 1-1.)
The accidental death insurance application provided boxes to list individuals to be insured under the family plan directly following preprinted designations for the applicant, his or her spouse, and two children. (See Compl. ¶ 14; Ex. A, at 29.) It stated: "Please fill in the information requested above [in the boxes] for each person to be insured. If you need more space to list your dependents, list them on a separate sheet of paper and include when mailing this application." (See Ex. A, at 29.) Within the boxes, Green listed her name next to the preprinted designation for the applicant, Billups' name next to the preprinted designation for the spouse, and Roman Burks and Kimeka L. Galloway next to the preprinted designation for children. (See id.; Compl. ¶¶ 15-16.) Although Green listed Billups as her spouse, she states in Plaintiffs' Complaint that "Robert Billups was listed in the spouse designation, although his name differed from Ms. Green's, because the only other designation in which his name would fit would be a child." (Compl. ¶ 16.) Although Green listed Billups as her spouse on the application, Plaintiffs do not aver in the Complaint that Green and Billups were married. (See id.)
Green submitted the application on January 25, 2007. (Id. ¶ 24.) After Green had submitted the application, Mutual mailed a copy of it to her with the name Roman Burks lined out with pen under the persons to be insured because he was over twenty-one years old.*fn1 (Id. ¶¶ 19, 21.) On the insurance application, Green had stated that Roman Burks was thirty-three years old and that his date of birth was November 7, 1973. (See Ex. A, at 29.) When Mutual returned a copy of the application to Green, Mutual stamped the application with text stating "I authorize and approve the alteration(s) on my application removing the individuals that have been lined thru" and space for Green to sign below the text. (See id.) Green did not sign that authorization. (Compl. ¶ 20.)
After receiving the application, Mutual issued an accidental death insurance policy. (See id. ¶ 25.) The policy stated:
Please read the attached copy of your application. If anything is not correct or if you know of any misstatement in your application, you should tell us.
Your policy was issued on the basis that all information in the application is correct and complete. If not, your policy may be void. (Ex. A, at 31.) The policy also stated that eligible family members covered under the family plan included the applicant's spouse if the spouse was under age eighty, any unmarried dependent child of the applicant or spouse under age twenty-one, and any adopted child or child in the applicant's custody who qualified as an unmarried dependent child. (See id. at 35.) It defined "Insured Person" as "you, your Spouse or your Dependent Child who is insured under this policy" and defined "Spouse" as "your lawful spouse who is insured under this policy, in accordance with the Spouse and Dependent Child Provisions." (Id. at 33.) The policy also provided that "[t]his policy and any attachments are the entire contract of insurance" and that "[a]fter two years from the date a person becomes covered under this policy, we cannot use misstatements, except fraudulent misstatements in your application, to void coverage or deny a claim for loss incurred after the two-year period." (Id. at 37.)
After the insurance policy had been in full force and effect for two years, Billups died on August 3, 2009, due to complications from a motorcycle accident. (See id. ¶¶ 26-27.) Plaintiffs submitted a claim to Mutual on August 13, 2009. (See id. ¶ 28.) On November 2, 2009, Mutual sent a letter to Green denying coverage for the death of Billups. (See id. ¶ 30.) In response, Plaintiffs sent a bad faith demand letter to Mutual on January 5, 2010. (See id. ¶ 31.) After mailing the bad faith demand letter, Plaintiffs filed the Complaint on May 24, 2010. (See Compl. 1.)
II.Jurisdiction and Choice of Law
Plaintiffs filed a Complaint against Mutual in the Circuit Court of Tennessee for the 30th Judicial District at Memphis, Tennessee. (Compl. 1.) Mutual removed the case to this Court, alleging that this Court has diversity jurisdiction. (See Notice of Removal ¶¶ 2-3, ECF No. 1.) Green is a Tennessee citizen and Gregory A. Burks is an Arkansas citizen. (Id. ¶ 2; Compl. ¶¶ 1-2.) Mutual is a Nebraska corporation with its principal place of business in Nebraska. (Notice of Removal ¶ 2.) Thus, complete diversity exists. See V&M Star, LP v. Centimark Corp., 596 F.3d 354, 355 (6th Cir. 2010) (citation omitted). Because Plaintiffs seek to recover, inter alia, $1 million under the accidental death insurance policy, more than $75,000 is in controversy, and the amount-in-controversy requirement is satisfied. See 28 U.S.C. § 1332(a); Ozormoor v. T-Mobile USA, Inc., 354 F. App'x 972, 973-74 (6th Cir. 2009); Hayes v. Equitable Energy Res. Co., 266 F.3d 560, 573 (6th Cir. 2001). Therefore, this Court has diversity jurisdiction. See 28 U.S.C. § 1332(a). Because it has original jurisdiction based on diversity of citizenship, removal was proper. See 28 U.S.C. § 1441(a); Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89-90 (2005).
In a diversity action, state substantive law governs. See Brocklehurst v. PPG Indus., Inc., 123 F.3d 890, 894 (6th Cir. 1997) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)). A federal district court is required to apply the choice-of-law rules of the state in which it sits. See Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496 (1941); Montgomery v. Wyeth, 580 F.3d 455, 459 (6th Cir. 2009) (citation omitted). "In Tennessee, absent a valid choice of law provision, the rights and obligations under an insurance policy are governed by the law of the state where the insurance policy was 'made and delivered.'" Charles Hampton's A-1 Signs, Inc. v. Am. States Ins. Co., 225 S.W.3d 482, 485 n.1 (Tenn. Ct. App. 2006) (quoting Ohio Cas. Ins. Co. v. Travelers Indem. Co., 493 S.W.2d 465, 467 (Tenn. 1973)); accord Yarnell v. Transamerica Life Ins. Co., 694 F. Supp. 2d 857, 861 (E.D. Tenn. 2010).
Here, the Complaint states that "[t]he advertisement and enticement which preceded the execution of the life insurance contract took place in Shelby County, Tennessee" and "the contract was executed in Shelby County, Tennessee." (Compl. ¶ 6.) Plaintiffs invoke Tennessee law, and both parties assume that Tennessee law governs. (See, e.g., id. ¶¶ 81, 88-93, 107-19; Def.'s Mem. of Law in Supp. of Its Mot. to Dismiss Pls.' Compl. 3, ECF No. 4-1 ("Def.'s Mem.").) The facts alleged in the Complaint demonstrate that the insurance policy was made and delivered in Tennessee. (See Compl. ¶¶ 1, 6-7, 24-25.) The insurance policy attached to the Complaint does not contain a choice of law provision, and the parties have not brought such a provision to the Court's attention. (See Ex. A, at 31-40.) Therefore, the Court will apply Tennessee substantive law to Plaintiffs' claims. See In re Korean Air Lines Disaster of Sept. 1, 1983, 932 F.2d 1475, 1495 (D.C. Cir. 1991); Charles Hampton's A-1 Signs, 225 S.W.3d at 485 n.1.
In addressing a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the Court must construe the complaint in the light most favorable to the plaintiff and accept all well-pled factual allegations as true.
League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007). A plaintiff can support a claim "by showing any set of facts consistent with the allegations in the complaint." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 563 (2007). This standard requires more than bare assertions of legal conclusions. Bovee v. Coopers & Lybrand C.P.A., 272 F.3d 356, 361 (6th Cir. 2001) (citation omitted). "[A] formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. Any claim for relief must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "Specific facts are not necessary; the statement need only 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Twombly, 550 U.S. at 555). Nonetheless, a complaint must contain sufficient facts "to 'state a claim to relief that is plausible on its face'" to survive a motion to dismiss. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has ...