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Willis v. Nationwide Mutual Insurance Co.

United States District Court, W.D. Arkansas, Texarkana Division

September 30, 2014

GEORGE WILLIS and AUDREY WILLIS, Individually and on behalf of all others similarly situated, Plaintiffs,
v.
NATIONWIDE MUTUAL INSURANCE COMPANY and NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, d/b/a NATIONWIDE INSURANCE, Defendants.

ORDER

SUSAN O. HICKEY, District Judge.

Currently before the Court is Defendants' Motion to Dismiss (ECF No. 14) and Corrected Memorandum in Support. (ECF No. 30). Plaintiffs George and Audrey Willis have responded. (ECF No. 33). Defendants Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (collectively, "Nationwide") filed a reply to Plaintiffs' response. (ECF No. 34). The Court finds this matter ripe for consideration.

Defendants moves to dismiss some of the claims pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction because the Plaintiffs do not have standing. Nationwide also moves to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). For reasons reflected herein, Defendants' Motion to Dismiss (ECF No. 14) is GRANTED.

I. Background

Plaintiffs' Complaint, brought individually and on behalf of a class of individuals, alleged breach of contract and unjust enrichment against Nationwide. Plaintiffs allege that on or about April 1, 2008, they suffered a covered loss to their property. Nationwide estimated the amount of the loss, which included the cost of labor and materials. Nationwide compensated Plaintiffs for their loss, after subtracting depreciation and the amount of the deductible, and paid Plaintiffs "actual cash value" for the loss on or about April 4, 2008. The depreciated amount included both the cost of labor and materials. Plaintiffs, in their Complaint, argue that Arkansas law prohibits an insurance company from depreciating the cost of labor. Therefore, by depreciating this cost, Plaintiffs claim that Nationwide (1) breached its contract and (2) was unjustly enriched.

Nationwide asserts that the contract and unjust enrichment claims arising in 2008 are barred by a settlement in a previous case, res judicata, and statutes of limitations. They alternatively assert the 2008 unjust enrichment claim should be dismissed due to the existence of a valid contract.

II. Standard

"In appraising the sufficiency of the complaint we follow, of course, the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that plaintiff can prove no set of facts in support of his claim that would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). When ruling on a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss for failure to state a claim, the Court must take as true the alleged facts and determine whether they are sufficient to raise more than a speculative right to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). In deciding a Rule 12(b)(6) motion, courts are required to accept all of the complaint's well-pled allegations as true and resolve all inferences in the Plaintiffs' favor. Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928, 933 n.4 (8th Cir. 2012). The issue in considering such a motion is not whether the Plaintiffs will ultimately prevail, but whether the Plaintiffs are entitled to present evidence in support of the claim. See Nusku v. Williams, 490 U.S. 319, 327 (1989).

In reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court is "not precluded in [its] review of the complaint from taking notice of items in the public record" or considering documents that do not contradict the complaint. Papasan v. Allain, 478 U.S. 265, 269 n.1 (1986); Stahl v. U.S. Dep't of Agric., 327 F.3d 697, 700 (8th Cir. 2003); Nixon v. Coeur D'Alene Tribe, 164 F.3d 1102, 1107 (8th Cir. 1999). All documents submitted to the Court are either matters of public record or do not contradict the Complaint, so the Court will review the current motion under Federal Rule of Civil Procedure 12(b)(6) standards. Compare BJC Health Sys. v. Columbia Cas. Co., 348 F.3d 685, 687-88 (8th Cir. 2003) (district court erred in relying on matters outside the pleading that were not public documents). Moreover, Nationwide's arguments that Plaintiffs lack standing is a question of jurisdiction. Because jurisdiction is a threshold question, the court may look outside the pleadings to determine whether subject matter jurisdiction exists. Osborn v. United States, 918 F.2d 724, 728-30 (8th Cir. 1990).

III. Discussion

A. Alexander Settlement

First, Nationwide argues that Plaintiffs' claims from 2008 have been released by a settlement agreement in an earlier case in Arkansas state court, Alexander v. Nationwide Mutual Insurance Co., et al., Case No. CV-2009-120-3 (Ark. Cir. Ct. 2009), and the claims should therefore be dismissed because the Plaintiffs lack standing. The Court reads the language of the settlement more narrowly than Nationwide, and therefore finds that the settlement does not bar the present claims.

The Alexander class action alleged that multiple Nationwide defendants, including Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company were required, but failed, to compensate their customers for General Contractors' Overhead and Profit when making payments under homeowners' insurance policies. The parties negotiated a settlement to end the litigation, and in exchange for consideration, Nationwide, along with the other defendants, obtained a release from all members of the Alexander class for "Released Claims, " defined as follows:

[A]ny and all known claims and Unknown Claims, rights, demands, actions, claims for relief, causes of action, or suits of whatever kind or nature, debts, liens, contracts, liabilities, agreements, interest, attorneys' fees, costs, expenses or losses arising from or in any way related to any acts which have been alleged or which could have been alleged in the Action by the Plaintiffs, the Settlement Class, and/or a Class Member, whether arising under or based on contract, extra-contractual or tort, common law or equity, or federal, state or local law, statute, ordinance, rule or regulation, arising from or in any way related to any omission, inclusion, determination, and/or calculation of General Contractor's Overhead and Profit in the ...

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