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Southbridge 21 LLC v. Standard Fire Insurance Co.

United States District Court, N.D. New York

September 16, 2014

SOUTHBRIDGE 21 LLC, Plaintiff,
v.
THE STANDARD FIRE INSURANCE COMPANY, Defendant.

Hinman, Howard Law Firm, RICHARD C. LEWIS, ESQ., Binghamton, NY, for the Plaintiff.

Bond, Schoeneck Law Firm, SUZANNE O. GALBATO, ESQ., Syracuse, NY, for the Defendant.

MEMORANDUM-DECISION AND ORDER

GARY L. SHARPE, Chief District Judge.

I. Introduction

Plaintiff Southbridge 21 LLC commenced this diversity action against defendant Standard Fire Insurance Company, alleging breach of contract and "willful[] and negligent[] refus[al] to bargain in good faith." (Compl., Dkt. No. 1.) Pending is Standard Fire's motion for partial dismissal of the complaint pursuant to Fed.R.Civ.P. 12(b)(6). (Dkt. No. 8.) For the reasons that follow, the motion is granted.

II. Background

A. Facts[1]

In 2011, Standard Fire issued a Standard Flood Insurance Policy (SFIP), pursuant to the National Flood Insurance Act[2] (NFIA), to Southbridge. (Compl. ¶ 9; Dkt. No. 1 at 7, 9-27.) The SFIP policy period ran from July 16, 2011 to July 16, 2012, and provided $250, 000 of coverage for Southbridge's Binghamton, New York, business property, and an additional $50, 000 of coverage for the contents of the property. (Compl. ¶¶ 11-13.) In September 2011, as a result of a flood caused by Tropical Storm Lee, the property was damaged in the amount of $472, 000. ( Id. ¶¶ 14, 15.) Thereafter, Southbridge filed a timely notice of loss, and complied with the requirements of the SFIP. ( Id. ¶ 16.) After conducting its own investigation, however, Standard Fire failed to tender the full amount of the coverage available under the policy or "bargain in good faith, " despite Southbridge's repeated demands that Standard Fire tender the full amount and requests that Standard Fire "amicably settle" with Southbridge. ( Id. ¶¶ 17, 20-22, 25, 28.)

B. Procedural History

Southbridge commenced this action on April 4, 2014. ( See generally Compl.) In its complaint, Southbridge asserts two causes of action: (1) breach of contract and (2) "willful[] and negligent[] refus[al] to bargain in good faith." ( Id. ¶¶ 8-23, 24-30.) On June 2, 2014, Standard Fire filed the now-pending pre-answer partial motion to dismiss, seeking dismissal only of Southbridge's second cause of action, along with Southbridge's requests for extra-contractual damages, costs, and disbursements. (Dkt. No. 8; Dkt. No. 8, Attach. 1 at 2.)

III. Standard of Review

The standard of review applicable to Fed.R.Civ.P. 12(b)(6) motions is well settled and will not be repeated here. For a full discussion of the standard, the court refers the parties to its decision in Ellis v. Cohen & Slamowitz, LLP, 701 F.Supp.2d 215, 218 (N.D.N.Y. 2010).

IV. Discussion

In brief, relying on "[a] national body of case law, " Standard Fire argues that, under the National Flood Insurance Program (NFIP), the only remedy available for contesting flood coverage determinations is one for breach of contract, alleging breach of the SFIP. (Dkt. No. 8, Attach. 1 at 4-7.) In response, relying on only one case from the District of Connecticut, and impermissibly attaching affidavits and exhibits to its opposition papers, [3] Southbridge contends that the NFIA's regulations specifically contemplate extra-contractual claims, such as ...


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