Depasquale v. Nationwide Mut. Ins. Co.

ALISHA DEPASQUALE, et al., Plaintiffs, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant.

Case No. 2:20-cv-5370

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

May 6, 2021

Judge Sarah D. Morrison

Chief Magistrate Judge Elizabeth P. Deavers

OPINION AND ORDER

This matter is before the Court for consideration of Defendant Nationwide Mutual Insurance Company's Motion to Dismiss (ECF No. 13) and Motion to Strike Class Allegations (ECF No. 14). Plaintiffs Alisha Depasquale and Trayton Cox have responded (ECF Nos. 17, 18) and Nationwide replied (ECF Nos. 19, 20). For the reasons set forth below, Nationwide's Motion to Dismiss is GRANTED and its Motion to Strike is DENIED as moot.

I. BACKGROUND

All well-pled factual allegations in the Complaint (Compl., ECF No. 1) are considered as true for purposes of the Motion to Dismiss. See Gavitt v. Born, 835 F.3d 623, 639-40 (6th Cir. 2016). The following summary draws from the allegations in that Complaint, the documents integral to and incorporated therein, and certain other documents which are subject to judicial notice.

On January 15, 2020, Plaintiffs purchased travel insurance from Nationwide (the "Travel Insurance Policy"), intending to protect a trip from Oregon to Mexico planned for early-April 2020. (Compl., ¶¶ 3-4. See also Travel Insurance Policy, ECF No. 1-1.) The Travel Insurance Policy included coverage for, inter alia, trip cancellation and interruption caused by the insured "being . . . quarantined . . . within 10 days of departure." (Id., ¶ 3. See also Travel Insurance Policy, PAGEID # 24.) The Travel Insurance Policy does not define "quarantine." (Id., ¶ 33.)

Shortly after Plaintiffs purchased the Travel Insurance Policy, and shortly before their planned departure, COVID-19 reached the United States.

On March 8, 2020, Oregon Governor Kate Brown declared a state of emergency. (Id., ¶ 26.) Within the week, Multnomah County and the City of Portland did the same. (Id., ¶¶ 27-28.) The World Health Organization (WHO) declared COVID-19 to be a global pandemic, and the President of the United States declared a national emergency. (Id., ¶¶ 18-19.) On March 15, the Centers for Disease Control and Prevention (CDC) issued guidance indicating that people should not attend gatherings of more than ten people. (Id., ¶ 20.) In rapid succession, the White House recommended that Americans avoid all discretionary travel and the State Department advised Americans not to travel outside the United States. (Id., ¶¶ 21-22.) On March 23, Governor Brown issued Executive Order 20-12. (Id. ¶ 26. See also Or. Exec. Order No. 20-12, available online at https://www.oregon.gov/gov/admin/Pages/eo_20-12.aspx (last visited May 4, 2021)). Executive Order 20-12 directs and orders, in relevant part:

1. It is essential to the health, safety, and welfare of the State of Oregon during the ongoing state of emergency, consistent with the directives set forth in my Executive Orders and guidance issued by the Oregon Health Authority. To that end, . . . I am ordering the following:

a. Non-essential social and recreational gatherings of individuals outside of a home or place of residence (e.g., parties, celebrations, or other similar gatherings and events) are prohibited immediately, regardless of size, if a distance of at least six feet between individuals cannot be maintained.

. . .

c. When individuals need to leave their homes or residences, they should at all times maintain social distancing of at least six feet from any person who is not a member of their immediate household, to the greatest extent possible, and comply with the other Social Distancing Requirements guidance issued by the Oregon Health Authority.

d. Individuals may go outside for outside recreational activities (walking, hiking, etc.), but must limit those activities to non-contact, and are prohibited from engaging in outdoor activities where it is not possible to maintain appropriate social distancing (six feet or more between individuals).

. . .

22. Individuals are directed to minimize travel, other than essential travel to or from a home, residence, or workplace; for obtaining or providing food, shelter, essential consumer needs, education, health care, or emergency services; for essential business and government services; for the care of family members, household members, elderly persons, minors, dependents, persons with disabilities, or other vulnerable persons, pets or livestock; travel as directed by government officials, law enforcement, or courts; and other essential travel consistent with the directives of my Executive Orders and guidance from the Oregon Health Authority.

Or. Exec. Order No. 20-12. Any person found to knowingly violate Executive Order 20-12 was subject to misdemeanor criminal charges. Id. See also Or. Rev. Stat. § 401.990. Plaintiffs refer to these federal, state, and local government pronouncements as the "COVID-19 Civil Authority Orders and Travel Advisories."

Plaintiffs cancelled their trip to Mexico on April 1, 2020, and filed a claim under the Travel Insurance Policy's quarantine coverage. (Compl., ¶ 34.) The claims administrator, Trip Mate, requested substantiating documentation and noted that "stay at home orders is [sic] not considered a quarantine under this plan." (Id.) In response, Plaintiffs "explained how the COVID-19 Civil Authority Orders and Travel Advisories . . . prevented them from leaving the country." (Id., ¶ 35.) Trip Mate again requested documentation, explaining:

We are also in receipt of the documentation you provided showing the recommendations from the Centers for Disease Control. Please note, these recommendations are not considered to be a quarantine. There is no documentation to verify a Physician or other government agency asked you specifically to quarantine, which is what is required in order pay a claim for this covered event. Additionally, a stay at home order issued from a governor is not a quarantine as it is not specific to you or your Traveling Companion.

(Id., ¶ 36.) Plaintiffs' maintained their position that their "travel cancellation was caused by COVID-19 Civil Authority Orders and Travel Advisories, which functioned as a quarantine for Plaintiffs since they restricted non-essential travel and were issued to prevent the potential spread of COVID-19." (Id., ¶ 40.)

Plaintiffs filed suit on October 13, 2020, requesting declaratory judgment and damages based on Nationwide's alleged breach of contract for failure to pay their claim. (Id., generally.)

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with sufficient specificity to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555(2007) (internal quotations omitted). A complaint which falls short of the Rule 8(a) standard may be dismissed if it fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). The Supreme Court has explained:

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations and quotations omitted). The complaint need not contain detailed factual allegations, but it must include more than labels, conclusions, and formulaic recitations of the elements of a cause of action. Directv, Inc. v. Treesh, 487 F.3d, 471, 476 (6th Cir. 2007). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555).

III. CHOICE OF LAW

As a threshold matter, the Court must determine the applicable law. "In a diversity action involving an insurance contract, a federal court applies the substantive law of the forum state"—in this instance, Ohio. Talley v. State Farm Fire and Cas. Co., 223 F.3d 323, 326 (6th Cir. 2000) (citing Erie R. Co. v. Tompkins, 304 U.S. 64 (1938)). The parties propose that, under Ohio's choice-of-law rules, Oregon law governs. (See ECF No. 13, 5 n.3.) However, neither identifies a conflictbetween the laws of Ohio and Oregon requiring a choice-of-law analysis. See Glidden Co. v. Lumbermens Mut. Cas. Co., 861 N.E.2d 109, 111 (Ohio 2006) (holding that "[a]n actual conflict between Ohio law and the law of another jurisdiction must exist before a choice-of-law analysis is undertaken"). The parties having provided no reason to do otherwise, the Court will apply Ohio law.

IV. ANALYSIS

Nationwide now argues that the breach of contract claim should be dismissed because the Complaint fails to allege facts sufficient to show that the quarantine¹ coverage was triggered and that failure to pay benefits cannot, therefore, constitute a breach. Nationwide further argues that the Complaint fails to allege facts showing that Plaintiffs performed under the contract, and that the claim for declaratory judgment is redundant. Because Nationwide's first argument is well-taken and is dispositive, the Court will not discuss the alternatives.

Both parties acknowledge that the Travel Insurance Policy does not define "quarantine." The term therefore requires interpretation—a matter for the Court. See Leber v. Smith, 639 N.E.2d 1159, 1163 (Ohio 1994) ("The interpretation of an insurance contract involves a question of law to be decided by a judge."). Under Ohio law, insurance contracts...