Gehrisch v. Chubb Grp. of Ins. Cos.

Dennis M. Gehrisch, Plaintiff, v. Chubb Group of Insurance Companies, et al, Defendant.

CASE NO.1:14 CV 2439

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

July 2, 2015

JUDGE DONALD C. NUGENT

MEMORANDUM OPINION

This matter is before the Court on a Motion to Dismiss Plaintiff's Second Amended Complaint (ECF #27) for failure to state a claim on which relief can be granted filed by Defendants Pacific Indemnity Company ("Pacific"), Chubb Group of Insurance Companies dba The Chubb Corporation, Federal Insurance Company dba Chubb & Son, Inc., and Chubb and Son, Inc. ("Defendants"). (ECF #35). In a separate Motion to Dismiss, Defendants move to dismiss claims against the parties sued as Chubb Group of Insurance Companies dba The Chubb Corporation, Federal Insurance Company dba Chubb & Son, Inc., and Chubb and Son, Inc., for failure to state a claim on which relief can be granted. (ECF #34). Plaintiff, Dennis M. Gehrisch, opposes both Motions to Dismiss by Memorandum in Opposition. (ECF #39, ECF #40). For the reasons set forth herein, Defendants' Motion to Dismiss (ECF #35) is GRANTED. Because the Court finds that Plaintiff has failed to state a claim on which relief can be granted against any of the parties named as Defendants, the Motion to Dismiss claims against the parties sued as ChubbGroup of Insurance Companies dba The Chubb Corporation. Federal Insurance Company dba Chubb & Son, Inc., and Chubb and Son, Inc., is moot. (ECF #34).

STANDARD OF REVIEW

In evaluating a motion to dismiss, a court must construe the complaint in the light most favorable to the plaintiff, accept its factual allegations as true, and draw reasonable inferences in favor of the plaintiff. See Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6^th Cir. 2007). The court will not, however, accept conclusions of law or unwarranted inferences cast in the form of factual allegations. See Gregory v. Shelby County, 220 F.3d 433, 446 (6^th Cir. 2000); see also City of Heath, Ohio v. Ashland Oil, Inc., 834 F.Supp 971, 975 (S.D.Ohio 1993).

In order to survive a motion to dismiss, a complaint must provide the grounds of the entitlement to relief, which requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action. See Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1964-65 (2007). That is,"[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. (internal citation omitted); see also Association of Cleveland Fire Fighters v. City of Cleveland, No. 06-3823, 2007 WL 2768285, at *2 (6^th Cir. Sept. 25, 2007) (recognizing that the Supreme Court "disavowed the oft-quoted Rule 12(b)(6) standard of Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 2 L. Ed.2d 80 (1957)"). Accordingly, the claims set forth in a complaint must be plausible, rather than conceivable. See Twombly, 127 S. Ct. at 1974. Conclusory allegations, or legal conclusions asserted in lieu of factual allegations are not sufficient. Bishop v. Lucent Tech, Inc., 520 F.3d 516, 519 (6^th Cir. 2008).

On a motion brought under Rule 12(b)(6), the court's inquiry is limited to the content ofthe complaint, although matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint may also be taken into account. See Amini v. Oberlin College, 259 F.3d 493, 502 (6^th Cir. 2001).

FACTUAL AND PROCEDURAL HISTORY

Plaintiff Dennis Gehrisch, with residences in Florida and Ohio, purchased a new Aston Martin ("Vehicle") and a Masterpiece Auto Preference insurance policy ("Policy") covering said Vehicle from Defendant Pacific in 2013.¹ (ECF #27, ¶ 1, 8, 10, ECF #1-1). Plaintiff's Policy is marked as "Issued by Pacific Indemnity Company." (ECF #1-1, Page ID #19).

Defendant Pacific Indemnity Company is an insurance company incorporated under the laws of the state of Wisconsin and is a subsidiary company of Defendant Chubb Group of Insurance Companies and is licensed to issue insurance policies and conduct business within the state of Ohio. (ECF #27, ¶ 3). Defendant Chubb Group of Insurance Companies dba The Chubb Corporation is an insurance company incorporated under the laws of the state of New Jersey, with its principal place of business in New Jersey, that does business within the state of Ohio. (ECF #27, ¶ 2). Defendant The Chubb Corporation is a publicly traded holding company located in New Jersey, is responsible for the business activities of "Chubb Group of Insurance Companies," and isnot licensed to issue insurance policies in the state of Ohio. (ECF #27, ¶ 4). Defendant Federal Insurance Company dba Chubb & Son, Inc., is an insurance company licensed to issue insurance policies and conduct business in the State of Ohio that Plaintiff alleges, based upon reasonable belief, issued Plaintiff's Policy. (ECF #27, ¶ 5).

Plaintiff arranged for the insured Vehicle to be transported by a third party carrier, Gulf Coast Auto Services, from Naples, Florida, to Cleveland, Ohio in May 2014. (ECF #27, ¶ 11). The transport trailer carrying Plaintiff's Vehicle flipped over, causing damage to the Vehicle, on May 22, 2014, while passing through Georgetown, Kentucky. (ECF #27, ¶ 12). Defendant's adjuster, Tom Coletta, inspected the Vehicle and provided a cost estimate to repair the damage on June 17, 2014. (ECF #27, ¶ 14). Plaintiff was advised that Plaintiff's Policy would not cover diminution in value caused to the Vehicle as a result of the damage and repair. (ECF #27, ¶ 15). Claim Examiner Heather Lindsay sent Plaintiff a letter dated September 5, 2014, attached as Exhibit A to the Second Amended Complaint, advising Plaintiff that Plaintiff's First Party DIV (diminution in value) coverage was being investigated. (ECF #27, ¶ 17, ECF #27-1). Lindsay attached a two page document listing state penalties for persons who knowingly present fraudulent insurance claims, which Plaintiff believes was intended to intimidate and deter Plaintiff from pursuing the diminution in value claim. (ECF #27, ¶ 17, ECF #27-2).

Plaintiff's Policy provides that a vehicle is considered a total loss "when the salvage value (determined by [Pacific]) plus the cost (labor and parts of like kind and quality without deduction for depreciation) necessary to repair the vehicle is equal to or greater than the market value of the vehicle." (ECF #27, ¶ 22, ECF #44-1, Page ID#1061). During Initial Disclosures, Plaintiff obtained from Defendant a File Note incorporated as Exhibit C to the Second Amended Complaintlisting the salvage value as $125,000, the repair costs as $36,065.35, the combined salvage and repair total as $161,065.35, and the value of the vehicle as $297,940. (ECF #27, ¶ 18, ECF #27-3). The difference between the market value and the combined salvage value and repair cost is calculated to be $136,874.65, so the salvage value plus total cost to repair the vehicle is not equal to or greater than the market value of the vehicle as cited in the File Note. (ECF #27-3). Plaintiff alleges Defendant Chubb & Son, Inc., is identified as an entity holding the copyright of the Policy that is licensed to conduct business in Ohio but not to issue insurance policies in Ohio. (ECF #27, ¶ 25, 6).

Plaintiff originally filed this suit in the Court of Common Pleas, Lake County, Ohio, and Defendants removed to this Court on November 4, 2014, on the basis of diversity. (ECF #1). Plaintiff's Second Amended Complaint (ECF #27), at issue in the present Motion to Dismiss (ECF #35), names as Defendants "Chubb Group of Insurance Companies dba The Chubb Corporation," Pacific Indemnity Company, The Chubb Corporation, Federal Insurance Company dba Chubb & Son Inc., and Chubb & Son Inc. Plaintiff claims bad faith denial of claim for denying diminution in value claim, bad faith and fraud by failing to declare a total loss, breach of contract, two counts of fraudulent inducement to purchase Policy, negligent and/or intentional infliction of emotional distress, and declaratory relief.

LAW AND ANALYSIS

Defendant Pacific Indemnity Company has moved to dismiss all of Plaintiff's substantive claims for failure to state a claim on which relief can be granted, which include bad faith denial of claim for denying diminution in value claim, bad faith and fraud by failing to declare a total loss, breach of contract, two counts of fraudulent inducement to purchase Policy, negligent and/orintentional infliction of emotional distress, and declaratory relief. (ECF #35). For the reasons stated herein, the Court GRANTS Defendant's Motion to Dismiss. (ECF #35).

I. Diminution in Value

Under Ohio law, insurance policies are contracts to be interpreted as a matter of law by the Court. Ramsey v. Allstate Ins. Co., 416 Fed.Appx. 516, 520-21 (6th Cir.2011), LuK Clutch Systems, LLC v. Century Indem. Co., 805 F.Supp.2d 370, 376 (N.D. Ohio 2011), Sharonville v. Am. Employers Ins. Co., 109 Ohio St.3d 186, 187 (Ohio 2006). While ambiguities will generally be construed in favor of the insured, "this rule of insurance-policy interpretation will not be applied in an unreasonable manner.' Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216 (Ohio 2003)." LuK Clutch Sys., LLC v. Cent. Indem. Co., 805 F. Supp. 2d 370, 376 (N.D. Ohio 2011) quoting Allstate Ins. Co. v. Eyster, 189 Ohio App.3d 640 (Ohio Ct.App.2010). It is "[o]nly when a definitive meaning proves elusive should rules for construing ambiguous language be employed. Otherwise, allegations of ambiguity become self-fulfilling." State v. Porterfield, 829 N.E.2d 690, 692-93 (Ohio 2005). The mere possibility of an alternative reading does not mean an insurance policy should be construed strictly against the insurer and in favor of the insured. Skinner v. Guarantee Trust Life Ins. Co., 813 F.Supp.2d 865, 868-69 (S.D. Ohio 2011).

Plaintiff argues that under the Policy, the provision of coverage for "all risk of physical...