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Davis v. Geico Casualty Co.

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

January 7, 2020

JANET DAVIS, et al., Plaintiffs,
GEICO CASUALTY COMPANY, et al., Defendants.

          Elizabeth P. Deavers, Magistrate Judge



         This matter is before the Court on Defendants' Motion to Compel Appraisal and Dismiss Plaintiffs' Complaint (Doc. 10). Plaintiffs have responded in opposition (Doc. 21) and Defendants have replied (Doc. 24). For the following reasons, Defendants' Motion is DENIED.

         I. BACKGROUND

         Plaintiffs Janet Davis, Angel Randall, and Melissa Schaller all had motor vehicle insurance policies with one of the Defendants (the “Policies”). (Doc. 1, Compl. at ¶¶ 25, 33, 41). Plaintiffs allege that they were each involved in an automobile accident that resulted in a claim for physical damage to their respective vehicles under the Policies. (Id. at ¶¶ 27, 35, 43). Following submission of the claims, GEICO ultimately determined that Plaintiffs' vehicles were total losses. (Id. at ¶¶ 28, 36, 44). Under these circumstances, the GEICO Policy at issue provides that GEICO must determine Actual Cash Value of the vehicle “at the time of the loss”, which is defined as “the replacement costs of the auto or property less depreciation or betterment.” (Doc. 1-1, GEICO Policy attached as Ex. A to the Complaint).[1] Plaintiffs allege that GEICO breached the Policies with Plaintiffs by failing to pay the Actual Cash Value sales tax, title-transfer fees, and registration fees at the time of the loss. (Doc. 1, Compl. at ¶¶ 4, 7, 8, 31, 39, 47). Plaintiffs assert that nothing in the GEICO Policy pertains to the sales tax and other fees, nor does it provide that Plaintiffs were to pay new sales tax on the new vehicle before receiving sales tax coverage.

         Section III of the Policies, Physical Damage Coverages, covers the amount of “each loss, less the applicable deductible.” (Doc. 1-1, GEICO Policy at 8). “Loss” is defined as “direct and accidental loss of or damage to” the insured vehicle. (Id.). The GEICO Policy does require the Insured to: “File with us, within 91 days after loss, his sworn proof of loss including all information we may reasonably require.” (Id. at 10). Section III also contains an appraisal provision which states in full:

If we and the insured do not agree on the amount of loss, either may, within 60 days after proof of loss is filed, demand an appraisal of the loss. In that event, we and the insured will each select a competent appraiser. The appraisers will select a competent and disinterested umpire. The appraisers will state separately the actual cash value and the amount of the loss. If they fail to agree, they will submit the dispute to the umpire. An award in writing of any two will determine the amount of loss. We and the insured will each pay his chosen appraiser and will bear equally the other expenses of the appraisal and umpire.
We will not waive our rights by any of our acts relating to appraisal.

(Id. at 10 (emphasis in original)).

         Further, the “Conditions” portion of Section III provides that “[s]uit will not lie against [GEICO] unless the policy terms have been complied with and until 30 days after proof of loss is filed and the amount of loss is determined.” (Id.).

         Plaintiffs initiated this case on June 13, 2019. (Doc. 1). Plaintiffs each assert a breach of contract claim against Defendants. On August 15, 2019, in response to Plaintiffs initiating this case, GEICO invoked its right to appraisal under their insurance policies by letter to Plaintiffs through their counsel of record in this case. (Doc. 10-3, GEICO's Ltr. to Demand Appraisal, attached as Ex. A to the Declaration of Michael R. Nelson). Defendants now move for the Court to compel the requested appraisal and/or dismiss this case.


         In addition to moving for an appraisal, Defendants also move to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, alleging that Plaintiff has failed to state a claim upon which relief can be granted.

         Under the Federal Rules, any pleading that states a claim for relief must contain a “short and plain statement of the claim” showing that the pleader is entitled to such relief. Fed.R.Civ.P. 8(a)(2). To meet this standard, a party must allege sufficient facts to state a claim that is “plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A claim will be considered “plausible on its face” when a plaintiff sets forth “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         Rule 12(b)(6) allows parties to challenge the sufficiency of a complaint under the foregoing standards. In considering whether a complaint fails to state a claim upon which relief can be granted, the Court must “construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.” Ohio Police & Fire Pension Fund v. Standard & Poor's Fin. Servs. LLC, 700 F.3d 829, 835 (6th Cir. 2012) (quoting Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007)). However, “the tenet that a court must accept a complaint's allegations as true is inapplicable to threadbare recitals of a cause of action's elements, supported by mere conclusory statements.” Iqbal, 556 U.S. at 663. Thus, while a court is to afford plaintiff every inference, the pleading must still contain facts sufficient to ‚Äúprovide a plausible basis for the ...

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