Atlantic insured DFWS. DFWS alleges it suffered damages as the result of a tornado and high winds. After making a claim for damages, DFWS alleges that Atlantic “engaged in a results-based investigation to find a non-covered cause of loss to the detriment of DFWS and contrary to the clear evidence otherwise.”
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[its] 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).
The Supreme Court has prescribed a “two-pronged approach” to determine whether a complaint fails to state a claim under Rule 12(b)(6). The court must “begin by identifying the pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” The court should then assume the veracity of any well-pleaded allegations and determine whether they plausibly give rise to an entitlement to relief. The plausibility principle does not convert the Rule 8(a)(2) notice pleading to a “probability requirement,” but a sheer possibility that a defendant has acted unlawfully will not defeat a motion to dismiss. The plaintiff must plead factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct,the complaint has alleged — but it has not shown — that the pleader is entitled to relief. The court, drawing on its judicial experience and common sense, must undertake the “context-specific task” of determining whether the plaintiff’s allegations “nudge” its claims against the defendant “across the line from conceivable to plausible.”
Federal Rule 8(a)(2) states that a complaint need only recite a short and plain statement of the claim showing that the pleader is entitled to relief. However, Rule 9(b) says When, defendants are charged with fraudulent activity, the plaintiff must state with particularity the circumstances constituting fraud. In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. The Fifth Circuit interprets Rule 9(b) strictly, requiring the plaintiff to “specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent. If the facts pleaded in a complaint are within the opposing party’s knowledge, fraud pleadings may be based on information and belief.
To adequately plead fraudulent intent, the plaintiff must set forth specific facts that support an inference of fraud. The factual background adequate for an inference of fraudulent intent can be satisfied by alleging facts that show the defendant’s motive.
Based on the law as stated above the Court then discussed how the pleadings in the case apply to the law and made its ruling. It is a must read for lawyers handling bad faith insurance claims.