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Capone v. Atlantic Specialty Insurance Company, LLC

United States District Court, N.D. Ohio, Eastern Division

July 19, 2019

RICK E. CAPONE, Plaintiff,
v.
ATLANTIC SPECIALTY INSURANCE COMPANY, LLC., Defendant.

          OPINION AND ORDER

          CHRISTOPHER A. BOYKO UNITED STATES DISTRICT JUDGE.

         This matter is before the Court upon the Defendant's Motion to Dismiss Plaintiff's Complaint for Failure to State a Claim (ECF DKT #6). For the following reasons, the Court GRANTS Defendant's Motion to Dismiss Plaintiff's Complaint.

         I. Factual Background

         A. Relevant Timeline

         Plaintiff Rick E. Capone (“Capone”) insured his 2000 Sunseeker 60' yacht (the “Vessel”) with Defendant Atlantic Speciality Insurance Company (“ASIC”). (ECF DKT #1, Plaintiff's Complaint). At the times relevant to Plaintiff's Complaint, the Vessel was insured under Yacht Policy B5JNN08746 (the “Policy”). (ECF DKT #1, Exhibit “A”).

         On July 20, 2013, Plaintiff's Vessel suffered a power loss and shutdown. (ECF DKT #1, Pl.'s Compl.). Plaintiff reported this loss to ASIC on July 31, 2013, alleging that ASIC's Policy covered his loss as a “latent defect.” Id. The relevant section of the Policy states coverage exists for: “(1) accidental, direct physical loss of or damage to the Claimant property or; (2) physical loss or damage to the yacht caused by a ‘latent defect.'” (ECF DKT #1, Exhibit “A”). Defendant initially denied coverage on February 24, 2014, but continued to investigate Plaintiff's claim and receive more documentation from Plaintiff. (ECF DKT #1, Pl.'s Compl.). On August 21, 2014, Defendant altered the basis for denial but ultimately denied Plaintiff's claim. Id.

         On March 7, 2015, Plaintiff requested arbitration. (ECF DKT #8). After a period of time where Defendant continued to contact and respond to Plaintiff, even after extended periods of silence, Plaintiff requested arbitration again on December 1, 2016. (ECF DKT #6). On February 2, 2017, the parties began to participate in “binding” arbitration pursuant to the ARBITRATION (“ARBITRATION”) Provision in the Policy. Id. On October 27, 2017, due to the parties' inability to agree on an arbitrator, the Cuyahoga County Court of Common Pleas appointed attorney Joseph B. Jerome, Esq., as arbitrator (“Arbitrator”). Id. Due to this appointment, the parties signed a contract titled “Private ADR Memorandum and Understanding, ” which reaffirmed that the arbitration's outcome would be “binding and conclusive.” (ECF DKT #6, Exhibit “2"). On September 26, 2018, the Arbitrator denied Plaintiff's Claim. (ECF DKT #6, Exhibit “3"). On December 7, 2018, Plaintiff filed a Complaint with claims for Breach of Contract and a Request for Declaratory Judgment. (ECF DKT #1, Pl.'s Compl.). On January 18, 2019, Defendant filed this Motion to Dismiss for failure to state a claim. (ECF DKT #6).

         B. Provisions of the Insurance Policy

         Pursuant to the Policy provided by Defendant, Plaintiff argues Defendant's actions resulted in a breach of contract on two policy provisions: “(1) accidental, direct physical loss of or damage to the Claimant property or (2) physical loss or damage to the yacht caused by a ‘latent defect.'” (ECF DKT #1, Exhibit “A”). Plaintiff claims Defendant breached the contract when Defendant failed to cover an alleged “latent defect.” Defendant argues the Court should dismiss Plaintiff's Complaint and uphold The Arbitrator's findings because arbitration already resolved these issues.

         II. Law and Analysis

         Rule 12(b)(6) authorizes dismissal of a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “Under Rule 12(b)(6), a complaint may be dismissed ‘only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'” Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)).

         A claim 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). Further, “the plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft, 556 U.S. 678 (quoting Bell Atl. Corp v. Twombly, 550 U.S. 554, 556) (2017)). “To survive a motion to dismiss, [plaintiff] must allege ‘enough facts to state a claim to relief that is plausible on its face.'” Traverse Bay Area Intermediate Sch. Dist. v. Michigan Dep't of Educ., 615 F.3d 622, 627 (6th Cir. 2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 554, 570 (2017)).

         In deciding a motion to dismiss under 12(b)(6), a court must accept as true all the factual allegations contained in the complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007). Thus, courts must “construe the complaint in the light most favorable to the plaintiff.” Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002). However, plaintiff must provide “more than labels and conclusions . . . a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. “Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Id. at 557.

         When a court is presented with a Rule 12(b)(6) motion, it may consider the complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the complaint and are central to ...


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