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Endrawes v. Safeco Insurance Co.

United States District Court, M.D. Tennessee, Nashville Division

August 25, 2017

HANAN ENDRAWES and SHENOUDA HENIN, Plaintiffs
v.
SAFECO INSURANCE CO., Defendant

          MEMORANDUM

          ALETA A. TRAUGERUNITED STATES DISTRICT JUDGE

         Pending before the court are Defendant's Motion to Dismiss (Docket No. 6), Plaintiffs' Response (Docket No. 11), and Defendant's Reply (Docket No. 16). Also pending before the court are Plaintiffs' Motion to Remand to State Court (Docket No. 12) and Defendant's Response thereto (Docket No. 16). For the reasons stated herein, Defendant's Motion to Dismiss will be GRANTED, and Plaintiff's Motion to Remand to State Court will be DENIED as moot.

         INTRODUCTION

         This action, originally filed in state court, concerns an automobile collision and resulting injuries to Plaintiff Endrawes.[1] The third-party driver of the other vehicle was at fault. That driver's insurance carrier has accepted liability and paid its policy limits per person of $25, 000 to Plaintiffs. Plaintiffs assert that the $25, 000 is “close to the past medical bills.” Plaintiffs are now suing Endrawes' own insurance carrier, Safeco Insurance Co., pursuant to its under-insured motorist coverage. Plaintiffs allege that Safeco owed them a contractual duty to properly and promptly investigate the collision in good faith and to pay for Plaintiffs' damages up to the policy limits.

         Plaintiffs contend that Defendant's failures constitute a breach of contract, a bad faith act, and an unfair, deceptive act in violation of the Tennessee Consumer Protection Act (“TCPA”).

         Plaintiffs seek compensatory damages for their personal injuries and treble damages for Defendant's alleged bad faith. Defendant asks the court to dismiss this action for failure to state a claim upon which relief may be granted, arguing that Plaintiffs have failed to provide sufficient factual allegations to support their causes of action.

         MOTIONS TO DISMISS

         For purposes of a motion to dismiss, the court must take all of the factual allegations in the complaint as true. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). To survive a motion to dismiss, a complaint must contain 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. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Id. at 1950. A legal conclusion couched as a factual allegation need not be accepted as true on a motion to dismiss, nor are recitations of the elements of a cause of action sufficient. Fritz v. Charter Township of Comstock, 592 F.3d 718, 722 (6th Cir. 2010).

         BREACH OF CONTRACT

         Defendant argues that Plaintiffs have failed to allege sufficient facts to support a breach of contract claim, such as which provision(s) of the insurance contract Defendant allegedly violated or how Defendant's investigation and settlement offer were not “prompt.” Defendant points out that its adjuster made a settlement offer to Plaintiffs less than two months after the collision. Despite Plaintiffs' characterization of the offer as “shameful, ” failing to pay the amount Plaintiffs want is not a breach of the contract. Moreover, Defendant did not deny coverage; it simply did not offer the amount Plaintiffs sought. The Complaint makes no citation to the policy provisions that Plaintiffs contend Defendant breached. Moreover, the Complaint offers no explanation as to what “properly and timely” mean in this context, how Defendant's actions were improper and untimely, or how Defendant failed to act in good faith. Plaintiffs rely on Leverette v. Tennessee Farmers Mut. Ins. Co., 2013 WL 817230 (Tenn. Ct. App. 2013) to support their breach of contract claim, but in Leverette, the insurer denied coverage. Defendant has not denied coverage in this case.

         As noted above, 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. The factual content of Plaintiffs' Complaint does not allow the court to draw such an inference. Defendant's Motion to Dismiss Plaintiffs' breach of contract claim will be granted.

         BAD FAITH

         Plaintiffs also assert that Defendant acted in bad faith in failing properly and promptly to investigate their claim and resolve it. The Complaint includes no facts as to when or how the claim was investigated. The Complaint states that Defendant's representative made a settlement offer to Plaintiffs on April 27, 2017. The Complaint includes no facts as to how this offer was improper, not prompt, or the result of Defendant's bad faith.

         In Chandler v. Prudential Ins. Co., 715 S.W.2d 615, 621 (Tenn. Ct. App. 1986), the court held that the tort of bad faith is not cognizable in Tennessee between an insurer and an insured; but rather, the bad faith penalty statute, Tenn. Code Ann. § 56-7-105, provides the exclusive remedy for bad faith claims against insurers by the insured. See also Persian Galleries, Inc. v. Transcontinental Ins. Co., 38 F.3d 253, 259 (6th Cir. 1994) and Wesley v. Liberty Ins. Corp., 2015 WL 5999879 at * 2 (M.D. Tenn. Oct. 14, 2015). The statute applies to insurers and provides that, in all cases when a loss occurs and an insurance company of this state refuses to pay the loss within sixty days after a demand has been made by the insured, the insurer shall be liable to pay the insured, in addition to the loss and interest, a sum not exceeding twenty-five percent of the liability for the loss, provided the refusal to pay the loss was not in good ...


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