Amir v. Amguard Ins. Co.

606 F.Supp.3d 653

Musaid AMIR, et al., Plaintiffs,

v.AMGUARD INSURANCE COMPANY, Defendant.

Case No. 21-12457

United States District Court, E.D. Michigan, Southern Division.

Signed June 8, 2022

Dewnya A. Bazzi, AT Law Group, PLLC, Dearborn, MI, Michael P. Pieknik, AT Law Group, MI, for Plaintiffs.

Patrick C. Lannen, Tanya Marie Murray, Plunkett Cooney, Bloomfield Hills, MI, Kenneth C. Newa, Plunkett & Cooney, Detroit, MI, for Defendant.

OPINION & ORDER GRANTING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS

Sean F. Cox, United States District Judge

The three named Plaintiffs in this putative class action own or rent residential properties in Michigan that were insured by the Defendant insurance company. Plaintiffs allege that they purchased "flood insurance" from Defendant, that their basements then flooded on June 26, 2021 after a heavy rainfall, but that Defendant refused to pay their insurance claims. Plaintiffs assert breach of contract claims, based on the insurer's denial of their claims, along with fraud, innocent misrepresentation, silent fraud, and promissory estoppel claims under Michigan law. The matter is currently before the Court on Defendant's Motion for Judgment on the Pleadings. The parties have briefed the issues and the Court heard oral argument on May 26, 2022. As explained below, the Court grants the motion and dismisses this action.

BACKGROUND

A. Procedural Background

Acting through counsel, Plaintiffs Musaid Amir, Zead Rammouni, and Ali Yahya, filed this putative class action against Defendant AmGuard Insurance Company in state court. Defendant removed the action to this Court based upon diversity jurisdiction.

Plaintiffs’ "Class Action Complaint And Jury Demand" states that it is "brought on behalf of current and future insureds who have entered into contractual agreements whereby Defendant represented that it was providing coverage for flood as that term is commonly understood." (Compl. at ¶ 31). It includes the following five causes of action: 1) "Fraud," 2) "Innocent Misrepresentation," 3) "Silent Fraud," 4) "Breach of Express Contract," and 5) "Promissory Estoppel."

Plaintiffs’ "Fraud" count alleges that Defendant "acting through its agents made material representations regarding the nature and scope of its insurance coverage." (Compl. at ¶ 38). They allege that "Defendant's material representations were false" and that "[w]hen Defendant made the material representations it knew that they were false, or made it recklessly, without any knowledge of its truth and as a positive assertion." (Id. at ¶¶ 39-40). Plaintiffs allege that "Defendant made the material representations with the intention that they should be acted upon by Plaintiffs." (Compl. at ¶ 41). Plaintiffs allege that they "acted in reliance upon Defendant's material representations" and that they "suffered injury as a result of Defendant's material representations." (Id. at ¶¶ 42-33).

Plaintiffs’ "Innocent Misrepresentation" count alleges that "Defendant acting through its agents made material representations in transaction between it and Plaintiffs," that "Defendant's material representations were false," and that "Defendants material representations actually deceived Plaintiffs." (Compl. at ¶¶ 45-47). Plaintiffs allege that they "relied upon Defendant's material representations," and that "Defendant benefitted from its material representations by collecting insurance premiums for coverage that it would never provide thereby selling illusory insurance coverage to Plaintiffs." (Compl. at ¶¶ 48-49). Plaintiffs allege that they "suffered injury as a result of Defendant's material representations", and that "Plaintiffs acted in reliance upon Defendant's material representations." (Compl. at ¶¶ 50-51).

Plaintiffs’ "Silent Fraud" count alleges that "Defendant failed to disclose a material fact about the subject matter at issue, namely that the purported flood insurance coverage that it sold to Plaintiffs would not provide actual coverage for a flood as that term is commonly understood." (Compl. at ¶ 54). Plaintiffs allege that "Defendant knew that the purported flood insurance coverage that Defendant sold to Plaintiffs would not provide actual coverage for a flood as that term is commonly understood." (Compl. at ¶ 55). They allege that "Defendant's failure to disclose that the purported flood insurance coverage that Defendant sold to Plaintiffs would not provide actual coverage for a flood as that term is commonly understood gave Plaintiffs a false impression that the flood insurance coverage that Defendant sold to Plaintiffs would in fact provide actual coverage for a flood as that term is commonly understood." (Compl. at ¶ 56). They allege that "[w]hen Defendant failed to disclose that the purported flood insurance coverage that Defendant sold to Plaintiffs would not provide actual coverage for a flood as that term is commonly understood, it knew that the failure to disclose would create a false impression." (Compl. at ¶ 56). "When Defendant failed to disclose that the purported flood insurance coverage that Defendant sold to Plaintiffs would not provide actual coverage for a flood as that term is commonly understood, it intended that Plaintiffs rely on the resulting false impression." (Compl. at ¶ 58). Plaintiffs allege that they "in fact relied upon the false impression created by Defendant" and that they "suffered damages as a result of relying upon the false impression created by Defendant." (Compl. at ¶ 59).

The "Breach Of Express Contract" count alleges that "[c]ontracts existed between Plaintiffs and Defendant whereby Defendant agreed to provide Plaintiffs coverage for flood damage to their respective properties" and that Defendant breached those contracts "by refusing to provide Plaintiffs coverage for flood damage to their respective properties." (Compl. at ¶¶ 61-62). Plaintiffs allege that "Defendant's breach of said contracts resulted in damages to Plaintiffs’ respective properties." (Compl. at ¶ 63).

Plaintiffs’ "Promissory Estoppel" count alleges that "Defendant promised to provide Plaintiffs coverage for flood damage to their respective properties," that Defendant "should reasonably have expected to induce action of definite and substantial character by Plaintiffs," and that "Defendant in fact produced reliance or forbearance of that nature in circumstances such that the promise must be enforced if injustice is to be avoided." (Compl. at ¶¶ 65-67).

The December 2, 2021 Scheduling Order in this case provides, among other things, that any amendments to the pleadings had to be made by January 13, 2022. Plaintiffs did not seek to file an amended complaint.

On February 3, 2022, Defendant filed a "Motion For Judgment On The Pleadings."

B. Standard Of Decision

The pending motion seeking judgment on the pleadings was brought pursuant to Fed. R. Civ. P. 12(c). A motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) generally follows the same rules as a motion to dismiss the complaint under Rule 12(b)(6). Bates v. Green Farms Condo. Ass'n , 958 F.3d 470, 480 (6th Cir. 2020).

"To survive a motion to dismiss" under Fed. R. Civ. P. 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is facially plausible when a plaintiff pleads factual content that permits a court to reasonably infer that the defendant is liable for the alleged misconduct. Id. When assessing the sufficiency of a plaintiff's claim, this Court must accept the complaint's factual allegations as true. Ziegler v. IBP Hog Mkt., Inc. , 249 F.3d 509, 512 (6th Cir. 2001). "Mere conclusions," however, "are not entitled to the assumption of truth. While legal conclusions can provide the complaint's framework, they must be supported by factual allegations." Iqbal , 556 U.S. at 664, 129 S.Ct. 1937. Thus, a plaintiff must provide "more than labels and conclusions," or a "formulaic recitation of the elements of a cause of action" in order to survive a motion to dismiss. Twombly , 550 U.S. at 555, 127 S.Ct. 1955. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do no suffice." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.

Rule 9(b) of the Federal Rules of Civil Procedure "sets the pleading standard for ‘alleging fraud or mistake’ " and governs state-law fraud claims in diversity cases. Smith v. General Motors, LLC , 988 F.3d 873, 883 (6th Cir. 2021). " Rule 9(b) requires parties to ‘state with particularity the circumstances constituting fraud or mistake’ for fraud claims but permits general allegations about the defendant's knowledge to avoid a 12(b)(6) motion to dismiss. The adequacy of 9(b) pleadings in the face of a motion to dismiss under 12(b)(6) are analyzed under the Twombly / Iqbal framework." Id. "To satisfy Rule 9(b), ‘the plaintiff must allege (1) ‘the time, place, and content of the alleged misrepresentation,’ (2) ‘the fraudulent scheme,’ (3) the defendant's fraudulent intent, and (4) the resulting injury.’ " Smith, supra (citations omitted).

In evaluating the pending motion, this Court may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion so long as they are referred to in the Complaint and are central to the claims contained therein. Bassett v. National Collegiate Athletic Ass'n , 528 F.3d 426, 430 (6th Cir. 2008).

Here, the parties submitted copies of the named Plaintiffs’ insurance policies with Defendant. Those exhibits may be considered by this Court, without converting the motion into a summary judgment motion, because they are referred to in the complaint and central to the claims. Brent v. Wayne Cnty. Dept....