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Marvin Milich v. State Farm Fire & Casualty Company

September 28, 2012

MARVIN MILICH, PLAINTIFF,
v.
STATE FARM FIRE & CASUALTY COMPANY, DEFENDANT.



The opinion of the court was delivered by: Hurley, Senior District Judge:

MEMORANDUM AND ORDER

Plaintiff Marvin Milich commenced this diversity action against defendant State Farm Fire & Casualty Company ("defendant" or "State Farm") seeking a declaratory judgment that "State Farm was required to provide coverage under the homeowners' policy issued to Plaintiff and to provide Plaintiff with a defense for the worker's compensation benefits claim filed by Plaintiff's former employee who alleged she was injured while working as Plaintiff's housekeeper." (Am. Compl. ¶ 2.) Plaintiff also asserted a claim pursuant to New York General Business Law ("GBL") Section 349, alleging that defendant "materially mis[led] policyholders, including Plaintiff, into believing that the Workers Compensation endorsement [to their homeowners' insurance policies] provided coverage for domestic workers." (Id. ¶ 40.) Finally, plaintiff asserted a breach of contract claim against defendant based upon its refusal to defend plaintiff against a workers' compensation claim filed against him. (Id. ¶50.)

Presently before the Court is defendant's motion, made pursuant to Federal Rule of Civil Procedure 12(b)(6), seeking the dismissal of the Amended Complaint in its entirety. Plaintiff has not opposed defendant's motion to the extent it seeks dismissal of his First Claim for Relief (i.e., declaratory judgment) and his Third Claim for Relief (i.e., breach of contract). (Pl.'s Opp'n at 1 n.1.) Accordingly, those claims are dismissed, and the Court need only examine whether plaintiff's Second Claim for Relief, which sets forth his GBL § 349 claim, is adequately pled. For the reasons set forth below, defendant's motion seeking dismissal of this claim is granted.

BACKGROUND

The following facts are taken from the Amended Complaint, including the attachments thereto,*fn1 and are presumed true for the purposes of this motion.

Plaintiff is a resident of Dix Hills, New York. Defendant is a corporation existing under the laws of Illinois and is licensed to transact business and issue policies of insurance in New York.

On some unspecified date, defendant issued to plaintiff a homeowners policy of insurance (the "Policy.") (Am. Compl., Ex. A.) Plaintiff alleges the he purchased the Policy "through Joseph R. Randall of Joseph R. Randall Agency, Inc.," and that Randall was "a State Farm insurance representative." (Am. Compl. ¶ 28.) According to plaintiff, he advised Randall that "he employed a housekeeper and that he needed full coverage for any potential liability." (Id.) At all relevant times, plaintiff made all premium payments necessary to maintain coverage under the Policy.

The following Policy language regarding defendant's duty to defend and indemnify plaintiff is set forth in "Section II - Liability Coverages":

COVERAGE L -- PERSONAL LIABILITY

If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence, we will:

1. pay up to our limit of liability for the damages for which the insured is legally liable; and

2. provide a defense at our expense by counsel of our choice. We may make any investigation and settle any claim or suit that we decide is appropriate. Our obligation to defend any claim or suit ends when our limit of liability has been exhausted by payment of judgment or settlement. (Am. Compl., Ex. A at 15.)

On November 12, 2008, plaintiff's "former housekeeper," Icelda DeLeon ("DeLeon"), filed a Workers' Compensation claim against plaintiff, "alleging that she has sustained a work-related injury at Plaintiff's residence." (Am. Compl. ¶ 15.) Plaintiff received notice of the claim from the New York Workers' Compensation Board on November 18, 2008, and provided "timely notice" of the claim to State Farm. (Id. ¶ 17.) State Farm, however, "refused to provide a defense" for plaintiff, asserting: "There is no coverage for a domestic worker working less than 40 hours . . . ." (Id. ¶ 19 & Ex. C.) Plaintiff alleges that as a result of defendant's refusal to provide him with a defense, he was required to retain counsel to represent him in connection with DeLeon's Workers' Compensation claim, thereby incurring "substantial legal fees." (Id. ¶ 21.)

DISCUSSION

I. Legal Standard

Rule 8(a) provides that a pleading shall contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Supreme Court has recently clarified the pleading standard applicable in evaluating a motion to dismiss under Rule 12(b)(6).

First, in Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007), the Court disavowed the well-known statement in Conley v. Gibson, 355 U.S. 41, 45-46 (1957) that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." See Twombly, 550 U.S. at 561 (quoting Conley, 355 U.S. at 45-46) (internal quotation marks omitted). Instead, to survive a motion to dismiss under Twombly, a plaintiff must allege "only enough facts to state a claim to relief that is plausible on its face." Id. at 570.

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual 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. at 555 (citations and internal quotation marks omitted).

More recently, in Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme Court provided further guidance, setting forth a two-pronged approach for courts deciding a motion to dismiss. First, a court should "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 679. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. Thus, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 678 (citing Twombly, 550 U.S. at 555).

Second, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at ...


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