United States District Court, W.D. Missouri, Southwestern Division
PATRICIA BLOUNT and SANTA FE RANCH ENTERPRISES, LLC, f/k/a SANTA FE RANCH HOLDINGS, LLC, Plaintiffs,
NATIONWIDE AGRIBUSINESS INSURANCE COMPANY, Defendant.
STEPHEN R. BOUGH, UNITED STATES DISTRICT JUDGE
the Court is Defendant Nationwide Agribusiness Insurance
Company's Motion to Dismiss Plaintiffs' First Amended
Complaint. (Doc. #17). For the following reasons the motion
is GRANTED IN PART and DENIED IN PART.
to Federal Rule of Civil Procedure 12(b)(6), a court may
dismiss a claim for “failure to state a claim upon
which relief can be granted.” “To survive a
motion to dismiss [for failure to state a claim], 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)
(internal citations and quotation marks omitted) (quoting
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007)); Zink v. Lombardi, 783 F.3d 1089, 1098 (8th
Cir. 2015). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ash v. Anderson
Merchs., LLC, 799 F.3d 957, 960 (8th Cir. 2015) (quoting
Iqbal, 556 U.S. at 678) (internal quotations
omitted). The Court must accept all facts alleged in the
complaint as true when deciding a motion to dismiss. See
Data Mfg., Inc. v. United Parcel Serv., Inc., 557 F.3d
849, 851 (8th Cir. 2009) (noting “[t]he factual
allegations of a complaint are assumed true and construed in
favor of the plaintiff, even if it strikes a savvy judge that
actual proof of those facts is improbable”).
Patricia Blount and Santa Fe Ranch Enterprises, LLC, f/k/a
Santa Fe Ranch Holdings, LLC, allege the following facts,
which the Court accepts as true in deciding Defendant's
motion. Data Mfg., 557 F.3d at 851. Plaintiffs own a
ranch near Miller, Missouri (the “Ranch”).
Plaintiffs maintained farm liability insurance coverage
through an insurance policy with Defendant, which was in
effect during August of 2015. “Plaintiffs were
third-party beneficiaries to [an] agreement with Solar Sun
World, LLC [(“Solar Sun World”)] for the purchase
and installation” of solar panels at the Ranch. (Doc.
#12, ¶ 7). On August 12, 2015, “approximately 704
solar panels for the construction of the solar arrays,
arranged on 24 pallets, were delivered to the Ranch and
stored at the Ranch.” (Doc. #12, ¶ 10). On August
16, 2015, “the barn at the Ranch caught fire,
destroying all but one pallet of the solar panels.”
(Doc. #12, ¶ 11).
Solar Sun World “threatened to sue” Plaintiffs,
Defendant “agreed to pay Solar Sun World, LLC $55, 000
for a full settlement of all claims . . . .” (Doc. #12,
¶¶ 13, 14). Defendant, “however, failed to
settle the claim in a manner in which Plaintiffs' owners
and agents were released from future claims arising out of
the same occurrence.” (Doc. #12, ¶ 16).
“Defendant Nationwide was able to negotiate a lower
settlement by not releasing Plaintiffs from liability or
refused to settle the claims within policy limits.”
(Doc. #12, ¶ 32). Solar Sun World then filed a
state-court lawsuit (the “Lawsuit”) against
Plaintiffs “arising from the loss of the 23 pallets of
solar panels that were destroyed at the Ranch . . . .”
(Doc. #12, ¶ 17). “Plaintiffs were forced to
litigate with Solar Sun World” and “requested the
insurance file from Defendant Nationwide in order to obtain
all of the settlement documents from the prior settlement
negotiations . . . .” (Doc. #12, ¶¶ 20-21).
Defendant “never provided any documents” to
Plaintiffs. (Doc. #12, ¶ 21). “Defendant's
failure to produce Plaintiffs' insurance claims file
restricted the defense Plaintiffs had in the Lawsuit . . .
.” (Doc. #12, ¶ 46). Plaintiffs formed a
settlement agreement with Solar Sun World, under which
Plaintiffs paid Solar Sun World $40, 000 in exchange for
being “released form any and all claims of Solar Sun
World, LLC on account of the fire at the Ranch.” (Doc.
#12, ¶ 23). Plaintiffs bring four causes of action
against Defendant: negligence (Count I), bad faith failure to
settle within policy limits (Count II), breach of fiduciary
duty (Count III), and breach of legal duty (Count IV).
Negligence (Count I)
argues Plaintiffs' negligence claim “fails to
allege any independent tortious conduct (distinct from a
purported alleged breach of the [insurance policy]) that
could serve as a basis for an independent and separate
negligence claim.” (Doc. #18, pp. 5-6). Plaintiffs
argue that their claim “Defendant negligently drafted a
settlement agreement and release that did not in fact release
Plaintiffs from collateral litigation . . . is unrelated to a
breach of the [insurance] policy.” (Doc. #19, p. 3).
courts allow for tort claims by an insured against an insurer
where: (1) the claim is for bad faith refusal to settle a
claim brought by a third party; or (2) the claim is based on
conduct distinct from conduct constituting a breach of the
insurance contract.” Sentry Select Ins. Co. v.
Hosmer, No. 08-4254-CV-C-NKL, 2009 WL 2151557, at *8
(W.D. Mo. July 17, 2009) (citing Overcast v. Billings
Mut. Ins. Co., 11 S.W.3d 62, 68 (Mo. banc 2000)).
Plaintiffs' claim that Defendant negligently drafted a
settlement agreement that did not release Plaintiffs from
liability is “not distinct from conduct which would
constitute a breach of the [insurance policy].”
Sentry Select, 2009 WL 2151557, at *8. Much like the
negligent claims handling cause of action in Sentry
Select was “based entirely on Sentry's breach
of the Policy, ” Plaintiffs' claim that Defendant
negligently drafted the settlement agreement “relates
to [Defendant's] refusal to defend [Plaintiffs] and to
settle claims against [Plaintiffs] pursuant to the [insurance
policy].” Id.; Springfield Soc. Club v. Aspen
Specialty Ins. Co., No. 11-3366-CV-S-RED, 2012 WL
12896252, at *2 (W.D. Mo. Feb. 6, 2012) (“[I]t is clear
that Plaintiff would have no claim for negligent claims
handling absent the insurance contract between the parties.
Without the insurance contract . . . Defendant would have no
duty to act in the best interest of Plaintiff, to properly
investigate [the] claim, to properly determine the issue of
coverage or to settle or pay out on [the] claim[.]”)
cite no support for their contention that Defendant's
alleged negligence arises out of a duty of care the insurer
owes the insured that is unrelated to the insurance contract.
Plaintiffs' reliance on Overcast is misplaced.
In Overcast, the Missouri Supreme Court recognized
defamation as a tort claim independent of conduct
constituting a breach of insurance contract. 11 S.W.3d at 68.
Plaintiffs cite no case in which the Missouri Supreme Court
recognized “the negligent drafting of [a]
release” as a tort claim “distinct from conduct
constituting a breach of the insurance contract.”
Sentry Select, 2009 WL 2151557, at *8.
Defendant's motion to dismiss Count I is granted.
Bad Faith Failure to Settle Within Policy Limits (Count
argues Plaintiffs' claim for bad faith failure to settle
within policy limits lacks factual support sufficient to
survive a motion to dismiss. Plaintiffs argue they
“have pled facts sufficient to state a bad faith
claim.” (Doc. #19, p. 6). An “insurance company
is held to a duty to act in good faith to protect the
interests of its insured.” Overcast, 11 S.W.3d
at 67. “Inherent in a policy of insurance is the
insurer's obligation to act in good faith regarding
settlement of a claim.” Truck Ins. Exch. v. Prairie
Framing, LLC, 162 S.W.3d 64, 93 (Mo. App. W.D. 2005). A
claim for bad faith failure to settle within policy limits
“is a tort action based on the insurer's ...