United States District Court, E.D. Tennessee
A. VARLAN, CHIEF UNITED STATES DISTRICT JUDGE
civil action is before the Court on defendant's Motion to
Dismiss for Failure to State a Claim [Doc. 8]. Plaintiff
filed a response [Doc. 11] and defendant replied [Doc. 12].
For the reasons contained herein, the Court will grant
defendant's motion to dismiss.
dispute in this action arises over an insurance policy
contract entered into by plaintiff, Ski Chalet Village Owners
Club, Inc., and defendant, Employers Mutual Casualty Company.
The policy covered three recreational facilities owned and
managed by plaintiff [Doc. 1 p. 2]. The facility relevant to
the present litigation is known as “Chalet Village
North Clubhouse, ” and is identified within the
insurance policy as Location No. 002 (“Location
insurance policy at issue provides affirmative coverage on
the swimming pool situated in Location 2 [Id.]. The
policy, however, contains a number of exclusions and
limitations, both with respect to the property covered, and
to the cause of the property loss. Notably, the policy
contains the following provisions:
2. Property Not CoveredCovered Property does
Land (including land on which the property is located),
water, growing crops or lawns;
B. Exclusions1. We will
not pay for loss or damage caused directly or indirectly by
any of the following. Such loss or damage is excluded
regardless of any other cause or event that contributes
concurrently or in any sequence to the loss.
b. Earth Movement…
(2) Landslide, including any earth
sinking, rising or shifting related to such event;
(4) Earth sinking (other than sinkhole
collapse), rising or shifting including soil conditions
which cause settling, cracking or other disarrangement of
foundations or other parts of realty. Soil conditions
include contraction, expansion, freezing, thawing, erosion,
improperly compacted soil and the action of water under the
(2) Mudslide or mudflow;
This exclusion applies regardless of whether any of the
above . . . is caused by an act of nature or is otherwise
caused . . . . [Doc. 1-A].
alleges that in October 2015, plaintiff's representatives
learned that one of Location 2's pools was suffering an
“uncharacteristic water loss” [Doc. 1 p. 3].
While conducting an investigation into the cause of the water
loss, plaintiff's representatives further learned that
the “ground supporting the pool on the lower side of
the structure had partially dropped or shifted”
[Id.]. Plaintiff subsequently learned that the
ground movement had resulted from the water loss, which
stemmed from a ruptured pipe servicing the pool
[Id.]. The ruptured pipe had discharged significant
amounts of water and “jeopardize[ed] the structural
integrity of the pool” [Id.]. An inspection by
defendant's agent indicated that the plumbing pipe
failure “most likely occurred due to cold
weather/frozen water in the pipes” [Id. at p.
result of the damage, plaintiff asserts that it was forced to
take “immediate extensive measures” to
“restore the structural integrity of the pool”
[Id. at p. 3]. In its complaint, plaintiff details
the measures that it took to sustain the pool, by
“reinforcing the pool by the excavation of saturated
soil and construction of a deeply embedded, large concrete
block retaining wall and placement of backfill and
rock” [Id. at p. 4]. Plaintiff avers that
these measures were necessary to prevent collapse of the pool
alleges that it submitted its claim through defendant's
agent on November 3, 2015 [Id. at p. 3]. Plaintiff
further alleges that when it received no response from
defendant, it retained counsel and again contacted defendant
[Id. at p. 5]. On January 6, 2016, plaintiff
received correspondence from defendant indicating that there
would be no coverage provided for the relevant damages.
[Id.]. Plaintiff subsequently initiated the present
Standard of Review
Rule of Civil Procedure 8(a) sets out a liberal pleading
standard. To survive a motion to dismiss, a complaint need
only contain a “short and plain statement of the claim
showing that the pleader is entitled to relief, ‘in
order to give [the opposing party] fair notice of what the .
. . claim is and the grounds upon which it rests.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).
Detailed factual allegations are not required, but a
party's “obligation to provide the
‘grounds' of his entitle[ment] to relief'
requires more than labels and conclusions.”
Id. at 555.
deciding a Rule 12(b)(6) motion to dismiss, a court must
construe the complaint in the light most favorable to the
plaintiff, accept all factual allegations as true, draw all
reasonable inferences in favor of the plaintiff, and
determine whether the complaint contains “enough facts
to state a claim to relief that is plausible on its
face.” Twombly, 550 U.S. at 570; Directv,
Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007)
(citation omitted). “A claim has facial plausibility
when the plaintiff pleads the factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Iqbal, 556
U.S. at 678. “Determining whether a complaint states a
plausible claim for relief will [ultimately] . . . be a
context-specific task that requires th[is Court] to draw on
its judicial experience and common sense.” Id.
at 679. When considering a 12(b)(6) motion, the Court
“may consider the complaint and any exhibits attached
thereto . . .” Basset v. National Collegiate
Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008).
brings claims for breach of the insurance contract, and also
for statutory and common law bad faith. Defendant moves to
dismiss all claims. The Court will first address the ...