US Bank National Association, Trustee v. Foremost Insurance Company et al

1:17-cv-00114-AJ

2017 | Cited 0 times | D. New Hampshire | June 14, 2017

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

U.S. Bank, National Association, Trustee v. Civil No. 17-cv-114-JD Opinion No. 2017 DNH 121 Foremost Insurance Company and Douglas C. Colby, Jr.

O R D E R

for the RMAC Trust, Series 2016-CTT trust brings suit against

Jr., seeking to recover the proceeds paid under a homeowners insurance policy that Foremost issued Colby on his property. Foremost moves to dismiss the claims against it. U.S. Bank did

Standard of Review A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) addresses whether the complaint states a claim on which relief may be granted. Lister v. Bank of Am., N.A., 790 F.3d 20, 23 (1st Cir. 2015). In reviewing the motion, the court pled facts alleged in the complaint and draw[s] all reasonable inferences in the plaintiff Miller v. Town of Wenham, 833 F.3d 46, 51 (1st Cir. 2016) (internal quotation marks omitted).

are sufficient to overcome a Rule 12(b)(6) motion if they

plausible on Yershov v. Gannett Satellite Info. Network, Inc., 820 F.3d 482, 485 (1st Cir. 2016) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 569 (2007)).

In support of its motion to dismiss, Foremost attached as an exhibit a copy of an insurance policy, which, it asserts, is the policy at issue See Doc. no. 12- 3. On a motion to dismiss, a court ordinarily may only consider facts alleged in the complaint and exhibits attached thereto, or else convert the motion into one for summary judgment. Freeman v. Town of Hudson, 714 F.3d 29, 35 36 (1st Cir. 2013) (internal citation omitted). The court may consider Id. at 36 (internal quotations omitted). One such exception is for Id.

Nahass v. Harrison, 207 F. Supp. 3d 96, 100 (D. Mass. 2016) (citing Clorox Co. P.R. v. Proctor & Gamble Commercial Co., 228 F.3d 24, 32 (1st Cir. 2000)

will consider it here.

Background In November of 2006, Colby obtained a loan secured by a mortgage on a property located in Danbury, New Hampshire ( the Although the loan and mortgage were made in favor of other entities, U.S. Bank was the investor in the loan at all relevant times. U.S. Bank subsequently obtained the mortgage via assignment. During the events at issue, Nationstar Mortgage, LLC was the mortgagee of record and was servicing the

After entering into the mortgage, Colby obtained a homeowners insurance policy from Foremost covering the property. In February of 2016, the property caught fire and suffered severe damage. Colby made a claim on the policy for the loss associated with that damage. At the time of the fire, Colby was a debtor in a Chapter 13 bankruptcy case. Because of his bankruptcy status bankruptcy counsel seeking guidance concerning the distribution of the told Foremost to send the insurance proceeds to him, and Foremost complied. Colby eventually received the insurance proceeds and, shortly thereafter, voluntarily dismissed the bankruptcy case. Neither U.S. Bank nor Nationstar received the policy proceeds for the fire damage on the property.

Discussion U.S. Bank brings claims for breach of contract, breach of third-party beneficiary contract, violation of RSA §§ 417:1, et seq., and a declaratory judgment against Foremost. Each of was a loss payee under the policy and therefore entitled to the insurance proceeds that Foremost paid Colby. 1

Foremost moves to dismiss, arguing that the policy does not contain a provision identifying U.S. Bank or Nationstar as a loss payee. In additio claims under RSA 417:1, et seq., must be dismissed because that statute does not provide a private right of action under the circumstances alleged.

I. Breach of Contract

U.S. Bank alleges that Foremost breached the terms of the policy by failing to pay the insurance proceeds to U.S. Bank or Nationstar. In support, U.S. Bank alleges that the policy

under the coverage for Dwellings and Other Structures be paid to

1 A loss payee is a person or entity named in an insurance policy ... to be paid if the insured property suffers a loss. Supermercados Econo, Inc. v. Integrand Assurance Co., 375 F.3d 1, 3 (1st Cir. 2004) (quoting Black's Law Dictionary 958 (7th ed. 1999)).

1 at ¶ 10. U.S. Bank further alleges belief, Nationstar . . . was specifically listed as a loss payee on the declarations page of the policy. Id. at ¶ 11-12.

without legal excuse to perform any promise which forms the Audette v. Cummings, 165 N.H. 763, 767 (2013) (quoting Lassonde v. Stanton, 157 N.H. 582, 588 (2008) (quotation omitted)). Here, the policy does contain a clause concerning mortgagees, as U.S. Bank alleges. That clause

mortgagees named on the Declarations Page, to the extent of their interest and in their order of precedence. All provisions of this policy apply to these mortgagees. doc. no. 12-3 at 19 (em s page does not list a mortgagee, and it does not mention Nationstar or U.S. Bank. Only Colby is listed as a named insured. As a result, neither U.S. Bank nor Nationstar were listed as mortgagees or loss payees under the policy. Accordingly, the policy does not provide for payment to U.S. Bank or Nationstar.

Therefore, the breach of contract claim is dismissed.

II. Breach of Third-Party Beneficiary Contract

U.S. Bank alleges that it was an intended third-party

provided that a loss payable under the [p]olicy for dwellings and other structures at the [p]roperty shall be paid to the [m]ortgagee if o 1 at ¶ 29. A third-party beneficiary relationship exists if: (1) the contract calls for a performance by the promisor, which will satisfy some obligation owed by the promisee to the third party; or (2) the contract is so expressed as to give the promisor reason to know that a benefit to a third party is contemplated by the promisee as one of the motivating causes of his making the contract. Brooks v. Trustees of Dartmouth Coll., 161 N.H. 685, 697 (2011). o a contract only where the promisee intends to give the beneficiary the benefit of the promised Id. at 697-98 (internal quotation marks omitted). As discussed above, the policy does not identify U.S. Bank or Nationstar as a mortgagee and does not provide for payment to either entity. U.S. Bank does not identify any other language in the agreement that would have given Foremost reason to know that it was an intended beneficiary of the policy. Therefore, U.S. Bank has failed to state a third-party beneficiary contract claim.

III. Violation of RSA 417:1, et seq.

U.S. Bank brings a claim against Foremost under RSA 417:1, et seq., which prohibits the use of unfair methods of competition and unfair and deceptive acts or practices in the business of insurance. RSA 417:3-4. Foremost contends that under RSA 417:1, et seq., must be dismissed because (1) U.S. Bank has failed to allege any actionable conduct under the statute and (2) U.S. Bank does not have a private right of action to bring a claim under the statute.

A. Private Right of Action RSA 417:1, et seq., provides for private actions against suppliers of insurance, such as Foremost, very spe Ben's Auto Body, Inc. v. Teitelbaum, No. CIV. 08-CV-207-SM, 2008 WL 5244420, at *2 (D.N.H. Dec. 15, 2008). 2

RSA 417:19, the provision permitting such actions, provides that:

When a supplier, in any action or proceeding brought by the insurance commissioner, has been found to be in violation of this chapter or has been ordered to cease and desist, and said finding or order has become final, any consumer claiming to be adversely affected by the act or practice giving rise to such finding or 2 partnership, reciprocal exchange, inter-insurer, Lloyd's insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including agents, brokers, and adjusters. RSA 417:18, III.

order may bring suit against said supplier to recover any damages or loss suffered because of such action or practice. RSA 417:19, I. Therefore, a finding by the insurance commissioner that a supplier has violated chapter 417 is a prerequisite to bringing a private action. Hunt v. Golden Rule Ins. Co., 638 F.3d 83, 87 88 (1st Cir. 2011); Lacaillade v. Loignon Champ Carr, Inc., No. 10 cv 68 JD, 2010 WL 2902251 (D.N.H. July 22, 2010) a private action against an insurer, but only after the insurance commissioner has determined that the practice in . Absent such a finding, a private suit cannot proceed. Hunt, 638 F.3d at 88-89.

U.S. Bank does not allege that the New Hampshire insurance commissioner has made a finding that Foremost engaged in an act or practice in violation of RSA 417:1, et seq. Therefore, U.S. Bank cannot maintain its claim under the statute. 3

3 Foremost also contends that U.S. Bank is barred from bringing any action under RSA 417:1, et seq., because it is not See RSA 417:18 (defining consumer); Teitelbaum, 2008 WL 5244420, at *2 (dismissing claim under RSA 417:1, et seq., because plaintiff was not a consumer under the statute). Because the court concludes that U.S. Bank has no private right of action under the act on different grounds, it need not decide whether U.S. Bank is a consumer under RSA 417:18.

B. Actionable Conduct Because U.S. Bank has no private right of action to bring its claim under RSA 417:1, et seq., the court need not decide whether it has alleged conduct that is actionable under that statute.

IV. Declaratory Judgment

U.S. Bank alleges that it is entitled to a declaration that

interests as a loss payee under the Policy are unaffected by any alleged misconduct of the insu 1 at ¶¶ 43-44. U.S. Bank has not alleged facts to show that it has any interest under the policy. Accordingly, U.S. Bank has not stated a claim for declaratory relief.

Conclusion For the foregoing reasons, Foremost (doc. no. 12) is granted. All claims against Foremost are dismissed.

SO ORDERED.

__________________________

Joseph A. DiClerico, Jr. United States District Judge June 14, 2017 cc: Joseph A. Farside, Jr., Esq. Dean J. wagner, Esq. Douglas C. Colby, Jr., pro se

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

U.S. Bank, National Association, Trustee v. Civil No. 17-cv-114-JD Opinion No. 2017 DNH 121 Foremost Insurance Company and Douglas C. Colby, Jr.

O R D E R

for the RMAC Trust, Series 2016-CTT trust brings suit against

Jr., seeking to recover the proceeds paid under a homeowners insurance policy that Foremost issued Colby on his property. Foremost moves to dismiss the claims against it. U.S. Bank did

Standard of Review A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) addresses whether the complaint states a claim on which relief may be granted. Lister v. Bank of Am., N.A., 790 F.3d 20, 23 (1st Cir. 2015). In reviewing the motion, the court pled facts alleged in the complaint and draw[s] all reasonable inferences in the plaintiff Miller v. Town of Wenham, 833 F.3d 46, 51 (1st Cir. 2016) (internal quotation marks omitted).

are sufficient to overcome a Rule 12(b)(6) motion if they

plausible on Yershov v. Gannett Satellite Info. Network, Inc., 820 F.3d 482, 485 (1st Cir. 2016) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 569 (2007)).

In support of its motion to dismiss, Foremost attached as an exhibit a copy of an insurance policy, which, it asserts, is the policy at issue See Doc. no. 12- 3. On a motion to dismiss, a court ordinarily may only consider facts alleged in the complaint and exhibits attached thereto, or else convert the motion into one for summary judgment. Freeman v. Town of Hudson, 714 F.3d 29, 35 36 (1st Cir. 2013) (internal citation omitted). The court may consider Id. at 36 (internal quotations omitted). One such exception is for Id.

Nahass v. Harrison, 207 F. Supp. 3d 96, 100 (D. Mass. 2016) (citing Clorox Co. P.R. v. Proctor & Gamble Commercial Co., 228 F.3d 24, 32 (1st Cir. 2000)

will consider it here.

Background In November of 2006, Colby obtained a loan secured by a mortgage on a property located in Danbury, New Hampshire ( the Although the loan and mortgage were made in favor of other entities, U.S. Bank was the investor in the loan at all relevant times. U.S. Bank subsequently obtained the mortgage via assignment. During the events at issue, Nationstar Mortgage, LLC was the mortgagee of record and was servicing the

After entering into the mortgage, Colby obtained a homeowners insurance policy from Foremost covering the property. In February of 2016, the property caught fire and suffered severe damage. Colby made a claim on the policy for the loss associated with that damage. At the time of the fire, Colby was a debtor in a Chapter 13 bankruptcy case. Because of his bankruptcy status bankruptcy counsel seeking guidance concerning the distribution of the told Foremost to send the insurance proceeds to him, and Foremost complied. Colby eventually received the insurance proceeds and, shortly thereafter, voluntarily dismissed the bankruptcy case. Neither U.S. Bank nor Nationstar received the policy proceeds for the fire damage on the property.

Discussion U.S. Bank brings claims for breach of contract, breach of third-party beneficiary contract, violation of RSA §§ 417:1, et seq., and a declaratory judgment against Foremost. Each of was a loss payee under the policy and therefore entitled to the insurance proceeds that Foremost paid Colby. 1

Foremost moves to dismiss, arguing that the policy does not contain a provision identifying U.S. Bank or Nationstar as a loss payee. In additio claims under RSA 417:1, et seq., must be dismissed because that statute does not provide a private right of action under the circumstances alleged.

I. Breach of Contract

U.S. Bank alleges that Foremost breached the terms of the policy by failing to pay the insurance proceeds to U.S. Bank or Nationstar. In support, U.S. Bank alleges that the policy

under the coverage for Dwellings and Other Structures be paid to

1 A loss payee is a person or entity named in an insurance policy ... to be paid if the insured property suffers a loss. Supermercados Econo, Inc. v. Integrand Assurance Co., 375 F.3d 1, 3 (1st Cir. 2004) (quoting Black's Law Dictionary 958 (7th ed. 1999)).

1 at ¶ 10. U.S. Bank further alleges belief, Nationstar . . . was specifically listed as a loss payee on the declarations page of the policy. Id. at ¶ 11-12.

without legal excuse to perform any promise which forms the Audette v. Cummings, 165 N.H. 763, 767 (2013) (quoting Lassonde v. Stanton, 157 N.H. 582, 588 (2008) (quotation omitted)). Here, the policy does contain a clause concerning mortgagees, as U.S. Bank alleges. That clause

mortgagees named on the Declarations Page, to the extent of their interest and in their order of precedence. All provisions of this policy apply to these mortgagees. doc. no. 12-3 at 19 (em s page does not list a mortgagee, and it does not mention Nationstar or U.S. Bank. Only Colby is listed as a named insured. As a result, neither U.S. Bank nor Nationstar were listed as mortgagees or loss payees under the policy. Accordingly, the policy does not provide for payment to U.S. Bank or Nationstar.

Therefore, the breach of contract claim is dismissed.

II. Breach of Third-Party Beneficiary Contract

U.S. Bank alleges that it was an intended third-party

provided that a loss payable under the [p]olicy for dwellings and other structures at the [p]roperty shall be paid to the [m]ortgagee if o 1 at ¶ 29. A third-party beneficiary relationship exists if: (1) the contract calls for a performance by the promisor, which will satisfy some obligation owed by the promisee to the third party; or (2) the contract is so expressed as to give the promisor reason to know that a benefit to a third party is contemplated by the promisee as one of the motivating causes of his making the contract. Brooks v. Trustees of Dartmouth Coll., 161 N.H. 685, 697 (2011). o a contract only where the promisee intends to give the beneficiary the benefit of the promised Id. at 697-98 (internal quotation marks omitted). As discussed above, the policy does not identify U.S. Bank or Nationstar as a mortgagee and does not provide for payment to either entity. U.S. Bank does not identify any other language in the agreement that would have given Foremost reason to know that it was an intended beneficiary of the policy. Therefore, U.S. Bank has failed to state a third-party beneficiary contract claim.

III. Violation of RSA 417:1, et seq.

U.S. Bank brings a claim against Foremost under RSA 417:1, et seq., which prohibits the use of unfair methods of competition and unfair and deceptive acts or practices in the business of insurance. RSA 417:3-4. Foremost contends that under RSA 417:1, et seq., must be dismissed because (1) U.S. Bank has failed to allege any actionable conduct under the statute and (2) U.S. Bank does not have a private right of action to bring a claim under the statute.

A. Private Right of Action RSA 417:1, et seq., provides for private actions against suppliers of insurance, such as Foremost, very spe Ben's Auto Body, Inc. v. Teitelbaum, No. CIV. 08-CV-207-SM, 2008 WL 5244420, at *2 (D.N.H. Dec. 15, 2008). 2

RSA 417:19, the provision permitting such actions, provides that:

When a supplier, in any action or proceeding brought by the insurance commissioner, has been found to be in violation of this chapter or has been ordered to cease and desist, and said finding or order has become final, any consumer claiming to be adversely affected by the act or practice giving rise to such finding or 2 partnership, reciprocal exchange, inter-insurer, Lloyd's insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including agents, brokers, and adjusters. RSA 417:18, III.

order may bring suit against said supplier to recover any damages or loss suffered because of such action or practice. RSA 417:19, I. Therefore, a finding by the insurance commissioner that a supplier has violated chapter 417 is a prerequisite to bringing a private action. Hunt v. Golden Rule Ins. Co., 638 F.3d 83, 87 88 (1st Cir. 2011); Lacaillade v. Loignon Champ Carr, Inc., No. 10 cv 68 JD, 2010 WL 2902251 (D.N.H. July 22, 2010) a private action against an insurer, but only after the insurance commissioner has determined that the practice in . Absent such a finding, a private suit cannot proceed. Hunt, 638 F.3d at 88-89.

U.S. Bank does not allege that the New Hampshire insurance commissioner has made a finding that Foremost engaged in an act or practice in violation of RSA 417:1, et seq. Therefore, U.S. Bank cannot maintain its claim under the statute. 3

3 Foremost also contends that U.S. Bank is barred from bringing any action under RSA 417:1, et seq., because it is not See RSA 417:18 (defining consumer); Teitelbaum, 2008 WL 5244420, at *2 (dismissing claim under RSA 417:1, et seq., because plaintiff was not a consumer under the statute). Because the court concludes that U.S. Bank has no private right of action under the act on different grounds, it need not decide whether U.S. Bank is a consumer under RSA 417:18.

B. Actionable Conduct Because U.S. Bank has no private right of action to bring its claim under RSA 417:1, et seq., the court need not decide whether it has alleged conduct that is actionable under that statute.

IV. Declaratory Judgment

U.S. Bank alleges that it is entitled to a declaration that

interests as a loss payee under the Policy are unaffected by any alleged misconduct of the insu 1 at ¶¶ 43-44. U.S. Bank has not alleged facts to show that it has any interest under the policy. Accordingly, U.S. Bank has not stated a claim for declaratory relief.

Conclusion For the foregoing reasons, Foremost (doc. no. 12) is granted. All claims against Foremost are dismissed.

SO ORDERED.

__________________________

Joseph A. DiClerico, Jr. United States District Judge June 14, 2017 cc: Joseph A. Farside, Jr., Esq. Dean J. wagner, Esq. Douglas C. Colby, Jr., pro se

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