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Tracey Road Equipment, Inc. v. Ally Financial Inc.

United States District Court, N.D. New York

March 29, 2018

TRACEY ROAD EQUIPMENT, INC., Plaintiff,
v.
ALLY FINANCIAL, INC., Defendant.

          MEMORANDUM-DECISION AND ORDER

          Lawrence E. Kahn U.S. District Judge

         I. INTRODUCTION

         This action, commenced in state court by Plaintiff Tracey Road Equipment, Inc. on November 30, 2017, was removed to federal court on January 2, 2018. Dkt. Nos. 1 (“Removal Notice”), 1-1 at 6-14 (“Complaint”).[1] Plaintiff alleges negligence and breach of fiduciary duty claims against Defendant Ally Financial, Inc., Plaintiff's insurance broker, in connection with Defendant's failure to advise Plaintiff to acquire credit card fraud insurance. Compl. Defendant moves to dismiss the Complaint. Dkt. Nos. 9 (“Motion”), 9-1 (“Memorandum”). For the following reasons, Defendant's Motion is granted.

         II. BACKGROUND

         A. Factual History

         The facts in this section are drawn from the Complaint. Plaintiff “is a heavy-duty truck and construction equipment dealership that sells and rents new and used trucks and equipment.” Compl. ¶ 5. Defendant is, in relevant part, an insurance broker. Id. ¶ 6. Plaintiff used Defendant

         B. Procedural History

         Plaintiff commenced this action in the Supreme Court of the State of New York, Onondaga County, on November 30, 2017. Removal Notice ¶ 1. Defendant removed the action to this Court on January 2, 2018. Id. ¶ 19. Plaintiff alleges negligence and breach of fiduciary duty claims in connection with Defendant's failure to advise Plaintiff to purchase credit card fraud insurance coverage or to procure the coverage on Plaintiff's behalf. Compl. ¶¶ 24-35. Defendant moved to dismiss the Complaint, Mot.; Mem., Plaintiff opposed the Motion, Dkt. No. 13 (“Response”), and Defendant filed a reply, Dkt. No. 15 (“Reply”).

         III. LEGAL STANDARD

         To survive a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, 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, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A court must accept as true the factual allegations contained in a complaint and draw all inferences in favor of the nonmoving party. Allaire Corp. v. Okumus, 433 F.3d 248, 249-50 (2d Cir. 2006). Plausibility, however, requires “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the alleged misconduct].” Twombly, 550 U.S. at 55.

         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. (quoting 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. Id. at 678-79.

         IV. DISCUSSION

         A. Motion to Dismiss

         Defendant argues that Plaintiff's negligence and breach of fiduciary duty claims both fail because Defendant did not have a duty to advise Plaintiff to purchase credit card fraud insurance or to procure credit card fraud insurance on its behalf. Mem. at 9-11. To state a negligence claim under New York law, a plaintiff must allege “(1) the existence of a duty on defendant's part as to plaintiff; (2) a breach of this duty; and (3) injury to the plaintiff as a result thereof.” Caronia v. Philip Morris USA, Inc., 715 F.3d 417, 428 (2d Cir. 2013) (quoting Akins v. Glen Falls City Sch. Dist., 424 N.E.2d 531, 535 (N.Y. 1981)). To state a breach of fiduciary duty claim under New York law, a plaintiff must allege “(i) the existence of a fiduciary duty; (ii) a knowing breach of that duty; and (iii) damages resulting therefrom.” Johnson v. Nextel Commc'ns, Inc., 660 F.3d 131, 138 ...


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