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Ostendorf v. Grange Indemnity Insurance Co.

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

January 13, 2020

VICKI OSTENDORF, Plaintiff,
v.
GRANGE INDEMNITY INSURANCE COMPANY, Defendant.

          Jolson Magistrate Judge.

          OPINION & ORDER

          ALGENON L. MARBLEY CHIEF UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Defendant Grange Indemnity Insurance Company's Motion to Dismiss or, in the alternative, Stay and Compel Appraisal. (ECF No. 7). For the following reasons, Defendant's Motion is hereby DENIED.

         I. BACKGROUND

         On March 27, 2019, Plaintiff Vicki Ostendorf (“Ostendorf”) filed a Complaint on behalf of herself and those similar situated against Grange Indemnity Insurance Company (“Grange”), bringing claims for breach of contract and declaratory relief related to her auto insurance policy with Grange (“the Policy”). (ECF No. 1). Ostendorf insured her 2001 Grand Prix vehicle with Grange. (Id. at ¶¶ 12-13). On or about May 6, 2018, the insured vehicle was involved an accident and Ostendorf filed a total loss insurance claim. (Id. at ¶ 14). Grange determined that the vehicle was worth $1, 773, and after applying a $100 deductible, paid Ostendorf $1, 673. (Id. at ¶ 15).

         Plaintiff alleges that Defendant Grange underpaid her and similarly situated policy holders for failing to include the cost of a title transfer, tag transfer, and 6% sales tax in the “actual cash value” (“ACV”) calculation under the Policy for reimbursements of total losses. (Id. at ¶ 21). Plaintiff brings a breach of contract claim, alleging Grange's failure to pay sales tax and registration fees amounts to a material breach of their insurance policy contract, and a claim for declaratory relief that an insured under the policy is entitled to sales tax and registration fees for total loss claims. (Id. at ¶¶ 69, 72, 75). On May 30, 2019, Defendant Grange moved to dismiss the Complaint for failure to state a claim, or in the alternative, moved the Court to stay and compel Plaintiff to participate in the mandatory appraisal process pursuant to the Policy. (ECF No. 7 at 1). Plaintiff filed her Response in Opposition to the Motion to Dismiss on June 20, (ECF No. 12), and Grange filed its Reply on July 17. (ECF No. 15). The Motion to Dismiss is now ripe for review.

         II. STANDARD OF REVIEW

         The Court may dismiss a cause of action under Federal Rule of Civil Procedure 12(b)(6) for “failure to state a claim upon which relief can be granted.” Such a motion “is a test of the plaintiff's cause of action as stated in the complaint, not a challenge to the plaintiff's factual allegations.” Golden v. City of Columbus, 404 F.3d 950, 958-59 (6th Cir. 2005). The Court must construe the complaint in the light most favorable to the non-moving party. Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 434 (6th Cir. 2008). If more than one inference may be drawn from an allegation, the Court must resolve the conflict in favor of the plaintiff. Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993). The Court cannot dismiss a complaint for failure to state a claim “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Id. The Court is not required, however, to accept as true mere legal conclusions unsupported by factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Although liberal, Rule 12(b)(6) requires more than bare assertions of legal conclusions. Allard v. Weitzman, 991 F.2d 1236, 1240 (6th Cir. 1993) (citation omitted). Generally, a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A complaint's factual allegations “must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). It must contain “enough facts to state a claim to relief that is plausible on its face.” Id. at 570. A claim is plausible when it contains “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.

         III. LAW & ANALYSIS

         A. Breach of Contract

         In her Complaint, Plaintiff brings a claim for breach of contract and seeks a declaratory judgment that Grange is required to pay sales tax and vehicle fees as part of the “actual cash value” (“ACV”) owed to her for the total loss of her vehicle. To state a breach of contract claim under Ohio law, Plaintiff must show: “(1) existence of a valid contract; (2) performance by the plaintiff; (3) non-performance by the defendant; and (4) damages resulting from the defendant's breach.” Yoder v. Hurst, No. 07AP-121, 2007 WL 27943 at *5 (Ohio Ct. App. 2007). Defendant Grange argues that Plaintiff has failed to allege elements 3 and 4. (ECF No. 7 at 6). Grange argues that Plaintiff has not alleged non-performance because there is nothing in the plain language of the Policy that defines ACV or otherwise requires Grange to reimburse insureds for sales tax and vehicle fees. (Id. at 6). Furthermore, Grange argues Plaintiff cannot show damages related to sales tax or vehicle fees until or unless she actually incurs such expenses by replacing her vehicle. (ECF No. 7 at 5-6).

         1. Non-performance

         In determining whether Plaintiff's claims survive Defendant's Motion to Dismiss, the Court starts with the language of the Policy. Under Part D, “Coverage For Damage to Your Auto, ” the Policy states: “Subject to the limit of liability, we will pay for sudden, direct and accidental loss to your covered auto.” (ECF No. 1 Ex. A at 21). The Policy defines the limit of liability as the lesser of the:

1. Actual cash value of the stolen or damaged property, reduced by the salvage value if you or the owner ...

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