The opinion of the court was delivered by: Garnett Thomas Eisele United States District Judge
ORDER ON MOTION TO DISMISS
Presently before the Court is Third Party Defendant Johnny Warren's Motion to Dismiss. Movant seek dismissal on the grounds that Third Party Plaintiff State Farm Fire and Casualty Company has failed to state a claim upon which relief can be granted.
I. Motion to Dismiss Standard
When ruling on a motion to dismiss, the court must accept the allegations contained in the complaint as true and draw all reasonable inferences in favor of the nonmoving party. Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir. 2005). A complaint shall not be dismissed for its failure to state a claim upon which relief can be granted unless it appears beyond a reasonable doubt that plaintiff can prove no set of facts in support of a claim entitling him to relief. Young v. City of St. Charles, Mo., 244 F.3d 623, 627 (8th Cir. 2001). Nevertheless, dismissal under Rule 12(b)(6) serves to eliminate actions which are fatally flawed in their legal premises and deigned to fail, thereby sparing litigants the burden of unnecessary pretrial and trial activity. Id. (citing Neitzke v. Williams, 490 U.S. 319, 326-27, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989)). To avoid dismissal, a complaint must allege facts sufficient to state a claim as a matter of law and not merely legal conclusions. Id.
Plaintiff Gloria Warren and Johnny Warren, Plaintiff's son and Third-Party Defendant, are co-owners of a residence located at 816 Park, Earle, Crittenden County, Arkansas. Gloria and Johnny Warren are co-mortgagors of the property and parties to the mortgage contract with Countrywide Home Loans, Inc. ("Countrywide"). On or about March 29, 2000, Defendant State Farm Fire and Casualty Company ("State Farm") issued Plaintiff Gloria Warren a homeowner's policy of insurance on the residence. On or about March 14, 2005, a fire destroyed Plaintiff Gloria Warren's home. Plaintiff filed suit in the Circuit Court of Crittenden County, Arkansas, to recover under the policy, and Defendant removed the cause of action to this Court. In the Complaint by Gloria Warren, it is alleged that the policy provides coverage for dwelling and dwelling extension loss up to policy limits coverage of $61,710.00, contents coverage up to policy limits of $42,075.00, plus loss of use in the amount of the actual loss sustained less any applicable deductibles as more particularly described in the policy. Gloria Warren claims that she has made demand upon State Farm for dwelling coverage of $56,100.00 and contents coverage of $42,075.00. It is also alleged that State Farm had not paid the mortgage indebtedness owing on the property to the mortgagee, Defendant Countrywide Home Loans, Inc. ("Countrywide"), as required under the policy. State Farm states that it originally failed to pay Countrywide because Countrywide would not supply the necessary documentation.
In State Farm's Answer, it states that the insurance policy is void and no sum is owed to the insured because the fire was intentionally set by the Plaintiff or by another or others acting on behalf of the Plaintiff, citing the Intentional Acts provision of the policy, which states, "If you or any person insured under this policy causes or procures a loss to property covered under this policy for the purpose of obtaining insurance benefits, then this policy is void and we will not pay you or any other insured for this loss." Additionally, State Farm claims that Gloria Warren intentionally concealed or misrepresented material facts and circumstances relating to the insurance, citing the Concealment and Fraud provision, which states, "This policy is void as to you or any other insured, if you or any insured under this policy has intentionally concealed or misrepresented any material fact or circumstance relating to this insurance, whether before or after a loss." Specifically, State Farm alleges that Gloria Warren made misrepresentations of and concealed material facts concerning matters including, but not limited to, the true cause and origin of the fire, the financial condition of Ms. Warren at the time of and before the occurrence of the fire, and her previous loss history. State Farm alleges that if Plaintiff is entitled to recover in the action, State Farm is entitled to a setoff or credit for all sums paid to the mortgagee or lienholder by State Farm and additional sums paid by State Farm to or on behalf of the Plaintiff following the fire, including advances and additional living expenses.
On May 4, 2006, State Farm filed a Third Party Complaint against Johnny Warren, Plaintiff Gloria Warren's son and co-owner of the property. On June 15, 2006, the Court entered an Order of Dismissal with prejudice as to Countrywide. It appears that entry of this Order was due to State Farm's payment of the mortgage indebtedness owing on the property to Countrywide. On June 26, 2006, Third Party Defendant, Johnny Warren, filed a Motion to Dismiss, which is presently before the Court.
Third Party Defendant Johnny Warren ("Defendant Warren") argues that State Farm's reliance on Ark. Code Ann. § 16-111-103 as the basis for the Court's entry of a declaratory judgment, rather than 28 U.S.C. § 2001, requires dismissal of the Third Party Complaint for failure to state a claim. The Court notes that it appears Defendant Warren intended to cite 28 U.S.C. § 2201, as it is the provision quoted by him, which states:
In a case of actual controversy within its jurisdiction . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.
In its Response, State Farm requests the Court's leave under Rule 15 of the Federal Rules of Civil Procedure to amend to correct this error. The Court would grant this request, but finds that ...