The opinion of the court was delivered by: Hon. Gerald E. Rosen
OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR PARTIAL DISMISSAL
At a session of said Court, held in the U.S. Courthouse, Detroit, Michigan on April 14 2010
Plaintiff Lanie Cromer ("Cromer") filed this action alleging that Defendant Safeco Insurance Company ("Safeco") breached its insurance contract with her. Cromer owned two adjacent houses in Detroit, Michigan insured with Safeco. As a result of a fire in March of 2008, both of these houses were damaged or destroyed. Cromer filed an insurance claim with Safeco and her claim was denied.*fn1 Cromer alleges Safeco denied her claim in bad-faith and did so in a way which caused her emotional distress and violated Michigan consumer protection laws. As a consequence, in addition to any amounts which she alleges to be due under the contract, Cromer is also seeking consequential damages, including attorney fees, for having to litigate her claim.
This matter is presently before the Court on Defendant Safeco's Fed. R. Civ. P. 12(b)(6) Motion for Partial Dismissal of Plaintiff's Complaint. In this motion, Safeco seeks dismissal of Cromer's Michigan Consumer Protection Act claim, her various tort claims, and her claim for attorney fees as consequential damages, arguing that these claims are not supported by Michigan law.
This motion has been fully briefed by the parties. Having reviewed these briefs, the Court has determined that oral argument is not necessary. Therefore, pursuant to Eastern District of Michigan Local Rule 7.1(e)(2), this matter will be decided on the briefs. This Opinion and Order sets forth the Court's ruling.
As alleged in the Complaint, this case arises out of a house fire which occurred at Cromer's house at 14703 Alma Street in Detroit, Michigan, and spread to an adjacent house at 14711 Alma Street, which she also owned. Cromer's houses were insured by Defendant Safeco under policy numbers OK 632187 for the house at 14703 Alma Street and OK 633498 for the house at 14711 Alma Street, and she alleges the policies covered the properties against fire, vandalism and theft losses, as well as the contents and loss of rental income. Safeco admits that insurance policies were in effect for the two houses at the time of the fire loss.
Cromer alleges that she timely informed Safeco of the fire losses, provided reasonable proof of her claim, and performed all necessary conditions for being paid on the claim. As a result of the fire, she claims to have incurred damages and expenses which are, or should be, covered by her policies. However, Safeco has not paid the claim. Cromer alleges the reason Safeco gave her for not paying the insurance claim was that "the fire was intentionally set by [her] or persons in privity with [her].[and].[she] made misrepresentation[s] and concealment of material facts including the cause of the fire." [Complaint, ¶¶ 18-19.].
Cromer further asserts that after she made a statement under oath, Safeco had no factual basis for denying her claim. Because Safeco still did not pay her claim following her statement, she alleges neglect in the handling of her claim, neglect in Safeco's refusal to pay her claim, and that Safeco's conduct amounted to a bad-faith breach of her contract. Based on her version of events, Cromer claims to have a reasonable expectation of coverage "under the circumstances of this case" and that she has not only suffered loss, but she will also suffer future losses. Cromer also alleges that Safeco's failure to pay her claim in a timely manner is being done in an "intentional, tortious and tortuous" manner and is, "extreme and outrageous and done with injurious intent or reckless disregard for the consequences to [her]." [Id., ¶¶ 25-26.].
Although Cromer's Complaint does not list individual counts, she is claiming she is owed:
(1) Amounts due under her insurance contract for her fire losses;
(2) 12% statutory interest pursuant to M.C.L. § 500.2006 for failing to pay the claim in excess of 60 days after reasonable proof of loss;
(3) Damages for bad-faith adjustment of her claim, which she asserts is a violation of the Michigan Consumer Protection Act ("MCPA"), M.C.L. § 445.901, et seq.;
(4) Damages for bad-faith adjustment of her claim, which she asserts is a violation of the Michigan [Uniform] Trade Practices Act ("UTPA"), M.C.L. § 500.2001, et seq.;
(5) Damages for Safeco's conduct "and or acts and omissions and failure to timely pay amounts due to Plaintiff [since they are] intentional, tortious, and tortuous . . . [and] . . . extreme and outrageous and done with injurious intent or reckless disregard for the consequences to the Plaintiff."; and,
(6) Future losses and consequential damages, including attorney fees.
In Safeco's answer to the complaint, it admits it did issue insurance policies on the two houses in question and that a letter was sent to her on July 2, 2009 outlining its reasons for denying her claim. Safeco also asserts that, "the insurance policy speaks for itself" with regard to what insurance benefits Cromer is or is not entitled. [Answer, ¶ 9.]. The Court has neither seen nor considered the July 2, 2009 letter from Defendant to Plaintiff nor the two insurance policies themselves as they have not been attached to any of the pleadings this Court reviewed. In this motion, Safeco seeks dismissal of all of Plaintiff's claims, ...