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Freeman v. Liberty Mutual Insurance Company

United States District Court, E.D. Tennessee, Chattanooga

January 24, 2018

MELISSA TRICELLE FREEMAN, Plaintiff,
v.
LIBERTY MUTUAL INSURANCE COMPANY and DOES I-X, Defendants.

          Magistrate Judge Susan K. Lee

          MEMORANDUM OPINION

          TRAVIS R. MCDONOUGH, UNITED STATES DISTRICT JUDGE.

         Before the Court are Defendant Liberty Mutual Insurance Company's (“Liberty Mutual”): (1) partial motion to dismiss for failure to state a claim (Doc. 18); and (2) motion to enforce settlement agreement (Doc. 25). For the following reasons, Liberty Mutual's motions (Docs. 18, 25) will be GRANTED.

         I. BACKGROUND

         According to Plaintiff, she entered into an insurance contract (the “Policy”) with Liberty Mutual in December 2002 to cover risk of loss to her home (the “Property”). (Doc. 2, at 2.)[1]Plaintiff alleges that she made timely payments on the Policy at all relevant times. (Id. at 2-3.) On August 22, 2013, a fire erupted, severely damaging the Property and its contents. (Id. at 3.) Plaintiff filed a claim with Liberty Mutual under the Policy for damages to the Property, but Liberty Mutual denied the claim and “cancelled Plaintiff's insurance on the [P]roperty.” (Id. at 3-4.)

         On August 1, 2014, Plaintiff, through counsel, filed a complaint against Liberty Mutual in Hamilton County Circuit Court. (Freeman v. Liberty Mutual Insurance Company, No. 1:14-cv-266 (“Freeman I”), Doc. 1-1.) Plaintiff asserted claims for: (1) breach of contract; (2) bad-faith denial of insurance coverage; (3) intentional misrepresentation; (4) negligent misrepresentation; (5) intentional interference with business relations; (6) negligence; (7) discharge in violation of public policy; and (8) intentional infliction of emotional distress. (Id.) Liberty Mutual removed Freeman I to this Court on September 5, 2014, on the basis of diversity jurisdiction. (Freeman I, Doc. 1.) After Liberty Mutual filed a partial motion to dismiss, Plaintiff sought leave to amend her complaint to add five causes of action based upon the Tennessee Consumer Protection Act (“TCPA”). (Freeman I, Docs. 6, 8.) In January 2015, the Court granted Liberty Mutual's partial motion to dismiss and dismissed Plaintiff's claims for intentional misrepresentation, negligent misrepresentation, intentional interference with business relations, negligence, and intentional infliction of emotional distress, because they either: (1) were subsumed under her breach-of-contract claim; (2) were barred by Tennessee Code Annotated § 56-7-105, which provides the sole extracontractual remedy for bad-faith denial of insurance claims; or (3) failed to state a claim. (Freeman I, Doc. 12, at 3-5.) The Court also dismissed Plaintiff's claim for discharge in violation of public policy because Plaintiff's complaint failed to plead an employment relationship, an essential element of that claim. (Id. at 6.) Finally, the Court denied Plaintiff leave to amend her complaint because amendment would have been futile. (Id. at 6-7.) The Court reasoned that, under an amendment to the Tennessee Code, the TCPA was eliminated as a viable cause of action for insurance disputes accruing after April 29, 2011, and Plaintiff's cause of action-an insurance dispute-accrued in 2013. (Id.) After the Court issued its memorandum and order on Liberty Mutual's partial motion to dismiss, only Plaintiff's breach-of-contract and bad-faith claims remained. (Id. at 6.)

         According to Liberty Mutual, the parties engaged in settlement negotiations in November 2015. (Doc. 25-1.) On November 24, 2015, after a telephone conversation, Plaintiff's counsel sent an e-mail to counsel for Liberty Mutual stating: “[M]y client has authorized me to settle for Ten Thousand Dollars ($10, 000.00).” (Id. at 2.) Plaintiff's counsel inquired what the next steps would be to execute the settlement, when he could expect the check, and whether they should file a joint or unilateral motion for dismissal. (Id.) Counsel for Liberty Mutual agreed to draft the release, which he described as “[n]othing special, . . . but it will contain a confidentiality provision ONLY as to the amount of money paid . . . .” (Id.) He also requested a W9 form from Plaintiff's counsel, which Plaintiff's counsel provided the next day via e-mail. (Id. at 1-2.) On December 9, 2015, counsel for Liberty Mutual sent Plaintiff's counsel a proposed “Confidential Settlement Agreement and Release.” (Doc. 25-2.)

         According to Plaintiff, she “was suffering from depression, and [was] estranged from [her] spouse” during the settlement negotiations in late 2015. (Doc. 34, at 9.) Nevertheless, Plaintiff avers she “was informed of [Liberty Mutual's] settlement offer in the amount of $10, 000.00” and “said yes to the settlement offer over the phone . . . .” (Id.) However, according to Plaintiff, after reviewing the proposed “Confidential Settlement Agreement and Release, ” she “had concerns about the terms of the agreement, ” specifically: (1) how she would be paid out under the proposed settlement agreement; and (2) that she would “be held responsible for mortgage payments.” (Id. at 9-20.) Plaintiff avers that, upon learning these terms, she “refused to sign” the proposed agreement. (Id. at 10.) Accordingly, the proposed settlement agreement appears to never have been executed. (See generally Docs. 25, 26, 34.)

         Plaintiff avers that she “was encouraged to dismiss the case without prejudice to obtain additional time to secure an expert for trial” and agreed to do so, “believing that [she] would have an opportunity to take this case to trial.” (Doc. 34, at 10.) On December 23, 2015, Plaintiff, through her counsel, filed a motion to voluntarily dismiss her case without prejudice. (Freeman I, Doc. 26.) However, because Defendant had filed an answer in the case, barring Plaintiff from dismissing her complaint without court approval, the Court proposed certain terms in granting Plaintiff's dismissal and gave the parties fourteen days in which to lodge objections to those terms. (Freeman I, Doc. 27.) After that time period passed without objection, the Court dismissed Plaintiff's case without prejudice and ordered that “[s]hould Plaintiff decide to refile her case . . . [a]ll previous rulings and entries on the docket . . . must stand, and, if refiled before the Court, the case will be in the same procedural posture as when it was dismissed.” (Freeman I, Doc. 28.) In addition, the Court ordered that “[i]f Plaintiff prevails in her refiled suit, she must pay Defendants' expenses, costs, and fees for work performed in the first suit that cannot be used in the second suit.” (Id.)

         On December 21, 2016, Plaintiff, proceeding pro se, filed the above-captioned matter. (Doc. 2.) Plaintiff asserts claims against Liberty Mutual for: (1) breach of contract; (2) bad-faith denial of insurance coverage; (3) intentional misrepresentation; (4) negligent misrepresentation; (5) intentional interference with business relations; (6) negligence; (7) discharge in violation of public policy; and (8) intentional infliction of emotional distress. (Id.) Plaintiff also asserts the same five causes of action under the TCPA she attempted to assert in Freeman I. (Id.) Plaintiff's complaint tracks her proposed amended complaint in Freeman I almost word for word. (Compare id., with Freeman I, Doc. 8.) On August 4, 2017, Liberty Mutual filed a motion to dismiss Plaintiff's intentional-misrepresentation, negligent-misrepresentation, intentional-interference-with-business-relations, negligence, discharge-in-violation-of-public-policy, intentional-infliction-of-emotional-distress, and TCPA claims. (Doc. 18.) On September 12, 2017, Liberty Mutual filed a motion to enforce settlement agreement. (Doc. 25.) Liberty Mutual also seeks attorneys' fees in connection with its motion to enforce the settlement agreement. (Doc. 26, at 7-8.) Liberty Mutual's motions are now ripe for review.

         II. MOTION TO DISMISS

         a. Standard of Law

         According to Rule 8 of the Federal Rules of Civil Procedure, a plaintiff's complaint 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). Though the statement need not contain detailed factual allegations, it must contain “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Rule 8 “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id.

         A defendant may obtain dismissal of a claim that fails to satisfy Rule 8 by filing a motion pursuant to Rule 12(c). A 12(c) motion for judgment on the pleadings is analyzed using the same standards that apply to 12(b)(6) motions for failure to state a claim. Lindsay v. Yates, 498 F.3d 434, 438 (6th Cir. 2007). Thus, on a Rule 12(c) motion, the Court considers not whether the plaintiff will ultimately prevail, but whether the facts permit the court to infer “more than the mere possibility of misconduct.” Iqbal, 556 U.S. at 679. For purposes of this determination, “all well-pleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment.” Tucker v. Middleburg-Legacy Place, 539 F.3d 545, 549 (6th Cir. 2008) (quoting JPMorgan Chase Bank, N.A. v. Winget,510 F.3d 577, 581 (6th Cir. 2007)). This assumption of ...


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