Huntington Heights Homeowners Association, Inc. v. Nationwide Mutual Insurance Co.

          ENTRY ON DEFENDANT'S MOTION TO DISMISS

          TANYA WALTON PRATT, JUDGE United States District Court

         This matter is before the Court on Defendant Nationwide Mutual Insurance Company's (“Nationwide”) Motion to Dismiss Plaintiff's Complaint. (Filing No. 11.) Plaintiff, Huntington Heights Homeowners Association, Inc. (“Huntington Heights”) filed this action for breach of contract and bad faith, alleging that Nationwide, its insurer, failed to fully pay for covered losses it sustained. (Filing No. 1-1.) Nationwide moves to dismiss both claims under Federal Rule of Civil Procedure 12(b)(6), arguing that even if the allegations in the Complaint are true, Huntington Heights failed to plead sufficient factual matter to state a claim for relief. For the following reasons, the Court grants in part and denies in part the Motion to Dismiss.

         I. BACKGROUND

         The following facts are not necessarily objectively true, but as required when reviewing a motion to dismiss, the Court accepts as true all factual allegations in the complaint and draws all inferences in favor of Huntington Heights as the non-movants. See Bielanski v. County of Kane, 550 F.3d 632, 633 (7th Cir. 2008).

         Huntington Heights, an incorporated homeowners' association in Marion County, Indiana, insured its property with Nationwide under policy number ACP BPHM5802376668. (Filing No. 1-1 at 2.) The Complaint alleges that during the policy period, Huntington Heights' covered property sustained covered losses. (Filing No. 1-1 at 2). It does not say how Huntington Heights sustained those losses or what the losses were. Huntington Heights reported the losses to Nationwide, but “Nationwide breached the contract by failing to fully pay for all covered losses.” Id. at 2. The Complaint further alleges that “Nationwide breached its duty of good faith and fair dealing by denying open and obvious covered damage, by deceiving its insured by stating that there was no damage, and by making an unfounded refusal to pay for the full value of the covered damage.” Id. Nationwide moves for dismissal of the Complaint asserting that the allegations are “threadbare and conclusory” and that Huntington Heights is not a named insured on the policy.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 12(b)(6) allows a defendant to move to dismiss a complaint that has failed to “state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). When deciding a motion to dismiss under Rule 12(b)(6), the Court accepts as true all factual allegations in the complaint and draws all inferences in favor of the plaintiff. Bielanski, 550 F.3d at 633. However, courts “are not obliged to accept as true legal conclusions or unsupported conclusions of fact.” Hickey v. O'Bannon, 287 F.3d 656, 658 (7th Cir. 2002).

         The 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). In Bell Atlantic Corp. v. Twombly, the Supreme Court explained that the complaint must allege facts that are “enough to raise a right to relief above the speculative level.” 550 U.S. 544, 555 (2007). Although “detailed factual allegations” are not required, mere “labels, ” “conclusions, ” or “formulaic recitation[s] of the elements of a cause of action” are insufficient. Id.; see also Bissessur v. Ind. Univ. Bd. of Trs., 581 F.3d 599, 603 (7th Cir. 2009) (“it is not enough to give a threadbare recitation of the elements of a claim without factual support”). The allegations must “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555. Stated differently, the complaint must include “enough facts to state a claim to relief that is plausible on its face.” Hecker v. Deere & Co., 556 F.3d 575, 580 (7th Cir. 2009) (citation and quotation marks omitted). To be facially plausible, the complaint must allow “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) (citing Twombly, 550 U.S. at 556).

         III. DISCUSSION

         Nationwide makes two primary arguments in support of dismissal.^[1] It argues the Court should dismiss Huntington Heights' breach of contract claim because “Plaintiff does not identify the specific terms of the alleged contract that was breached.” (Filing No. 12 at 3.) And it argues the Court should dismiss Huntington Heights' bad faith claim because the Complaint “fail[s] to offer any support which would show an ‘element of conscious wrongdoing, '” (Id. at 4).

         A. Breach of Contract-Count I

         Citing Cincinnati Specialty Underwriters Ins. Co. v. DMH Holdings, LLC, 2013 WL 683493 at *5-6 (N.D. Ind. 2013) and Owner-Operator Indep. Drivers Ass'n, Inc. v. Mayflower Transit Inc., 2007 WL 2900561, *13 (S.D. Ind. Sept. 28, 2007), Nationwide argues “a plaintiff must identify the specific contractual provision that has been breached” in order to survive a motion to dismiss. (Filing No. 12 at 3.) “Plaintiffs' [sic] failure to identify the operative terms of the contract compels dismissal of Count I.” Id.

         In response, Huntington Heights argues the Complaint is sufficiently detailed because it lists the policy it held with Nationwide by number, thus informing it of which contract it allegedly breached. (Filing No. 14 at 4.) Huntington Heights distinguishes the two cases Nationwide relies upon and argues that Cincinnati Specialty delved only into specific provisions of the contract because the complaint alleged the insurer had failed to acknowledge a policy limit, had failed to perform an adequate investigation, and placed the issues raised in a declaratory action at issue prematurely. Id. The court dismissed the claim because it “found that these allegations did not constitute a breach of any identifiable contractual duty that is implied by Indiana contract law.” Id. Huntington Heights argues Mayflower Transit does not apply here because it concerns a lease agreement, not an insurance contract and was resolved on summary judgment rather than a motion to dismiss. Id. at 5.

         The Court agrees that Cincinnati Specialty and Mayflower Transit may not support granting Nationwide's motion to dismiss. The facts in Cincinnati Specialty are dissimilar. Moreover, in Mayflower Transit, summary judgment was granted in favor of a defendant on a breach of contract claim because the “Plaintiffs [had] not specified a lease provision which has been breached.” 2007 WL 2900561 at *13. As Huntington Heights points out, on summary judgment, the moving party must show that there are no disputed issues of material fact and that it is entitled to judgment as a matter of law. On a 12(b)(6) motion, the plaintiff must merely give a “short and plain statement of the claim showing that the ...