United States District Court, N.D. New York
MEMORANDUM-DECISION and ORDER
LAWRENCE E. KAHN, District Judge.
Plaintiff Martin, Shudt, Wallace, DiLorenzo & Johnson ("Plaintiff") brought this first-party insurance coverage action against The Travelers Indemnity Company of Connecticut ("Defendant"). Dkt. No. 1-1 ("Complaint"). Presently before the Court is Defendant's Motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Dkt. No. 11 ("Motion"). For the following reasons, the Court grants the Motion.
Plaintiff, a Troy, NY-based partnership, was insured by a policy issued by Defendant, a Connecticut-based insurance company. Compl. ¶ 5; Dkt. Nos. 11-3, -4 (the "Policy"). The Policy's Businessowners Property Coverage Special Form provides that Defendant "will pay for direct physical loss of or damage to Covered Property, " including money or securities, "caused by or resulting from a Covered Cause of Loss." Policy; Dkt. No. 11-11 ("Memorandum") at 2. Covered Causes of Loss include "risks of direct physical loss, " but exclude "loss or damage caused by or resulting from... [v]oluntary parting with any property by you or anyone else to whom you have entrusted the property. Policy; Mem. at 2-3.
In June 2012, Plaintiff lost $95, 000 (the "Loss"). Compl. ¶ 9. More specifically, someone tendered to Plaintiff what appeared to be a cashier's check for $95, 000, payable to Plaintiff. Id . ¶ 14. Plaintiff believed that the check represented a payment of funds owed to one of Plaintiff's clients. Id . Plaintiff deposited the check into its client escrow account, and after the funds were made available by the depository bank, Plaintiff wired $94, 470.00 to a third-party's bank account as instructed by the purported client. Id.
Plaintiff soon learned from its bank that the $95, 000 check it had deposited was forged, and the bank charged Plaintiff's account $95, 000. Id . Further investigation revealed that this transaction-the presentation of the check and the purported client's instructions to wire the funds to a third party-was an act of larceny. Id.
Plaintiff submitted a claim for the Loss to Defendant. Id . ¶ 11. On July 9, 2012, Defendant denied coverage, stating that Paragraph B.2.i. (the "Voluntary Parting Exclusion") of the Businessowners Property Coverage Special Form excluded from coverage any loss caused by or resulting from "[v]oluntary parting with any property" by Plaintiff. Id . ¶ 15; Dkt No. 1-1, Ex. A.
In March 2013, Plaintiff sued Defendant in New York State Supreme Court, Rensselaer County, alleging breach of contract and bad faith denial of its claim. Compl. ¶¶ 26-33. Defendant removed the action to this Court on May 1, 2013. Dkt. No. 1. Plaintiff seeks a declaration that the Policy covers its Loss, a money judgment of $95, 000, and attorney's fees. Compl. at 4-5. On July 9, 2013, Defendant filed its Motion to dismiss. Mot. Plaintiff filed a Response Memorandum, and Defendant filed a Reply. Dkt. Nos. 12-1 ("Response"); 13 ("Reply").
III. LEGAL STANDARD
To survive a motion to dismiss pursuant to Rule 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, 663 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)); see also FED. R. CIV. P. 12(b)(6). A court must accept as true the factual allegations contained in a complaint and draw all inferences in favor of a plaintiff. See Allaire Corp. v. Okumus , 433 F.3d 248, 249-50 (2d Cir. 2006). A complaint may be dismissed pursuant to Rule 12(b)(6) only where it appears that there are not "enough facts to state a claim to relief that is plausible on its face." Twombly , 550 U.S. at 570. Plausibility requires "enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the alleged misconduct]." Id. at 556. The plausibility standard "asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal , 556 U.S. at 678 (citing Twombly , 550 U.S. at 556). "[T]he pleading standard Rule 8 announces does not require detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id . (citing Twombly , 550 U.S. at 555). Where a court is unable to infer more than the mere possibility of the alleged misconduct based on the pleaded facts, the pleader has not demonstrated that she is entitled to relief and the action is subject to dismissal. See id. at 678-79.
A. Breach of Contract
Defendant contends that the Policy's Voluntary Parting Exclusion precludes coverage for Plaintiff's Loss. Mem. at 5-10. Plaintiff responds that the Voluntary Parting Exclusion does not clearly exclude losses resulting from larceny by fraud or false pretense, and that the ...