United States District Court, D. Minnesota
E. Reisbord, Esq., and Jeanne H. Unger, Esq., Bassford
Remele; and Patrick Florian Hofer, Esq., Clyde & Co U.S.
LLP, counsel for Plaintiff.
Douglas L. Skor, Esq., John M. Bjorkman, Esq., and Monica
Detert, Esq., Larson King, LLP; and Michael Lamar Jones,
Esq., Henry & Jones, LLP, counsel for Defendant.
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE.
plaintiff-insurer filed suit for breach of contract and
seeking a declaratory judgment against the defendant-insured.
The insured answered and counterclaimed. The plaintiff moved
the Court to dismiss certain counterclaims and defenses. For
the reasons discussed below, the Court denies the
The Continental Insurance Co. filed suit alleging breach of
contract and seeking a declaration that it was not liable to
insure Defendant Daikin Applied Americas, Inc. From 1973
until 1982, Continental contracted to insure McQuay-Perfex,
Inc., a predecessor to Daikin. On September 24, 2013, Daikin
notified Continental that Daikin had been named a defendant
in mass tort asbestos litigation. In April 2014, Continental
told Daikin that it was searching for policies and requested
additional information. Then in June 2014, Continental
notified Daikin that it had received notice of only one of
the lawsuits, instead of the twenty-three cases incorporated
into the mass litigation. Finally on June 8, 2015,
Continental agreed to defend the asbestos suits with a
reservation of rights.
September 24, 2013 and June 8, 2015, Daikin incurred
approximately $680, 000 in attorney fees and costs. After
Continental agreed to defend Daikin, Continental sent a check
for $645, 346.37. Daikin asked for the money to be wired, and
Continental then sent $256, 183.61, because Continental
determined the remainder was unrecoverable as pre-tender
Continental filed suit, Daikin answered and counterclaimed
for breach of contract and declaratory judgment. Continental
has moved to dismiss: (1) Daikin's defense that
Continental waived its claim for breach of contract; (2)
Daikin's breach-of-contract defense that Continental
breached the implied covenant of good faith and fair dealing;
and (3) Daikin's claim for breach of contract based on a
conflict of interest.
deciding a motion to dismiss under Rule 12(b)(6), a court
assumes all facts in the complaint to be true and construes
all reasonable inferences from those facts in the light most
favorable to the complainant. Morton v. Becker, 793
F.2d 185, 187 (8th Cir. 1986). In doing so, however, a court
need not accept as true wholly conclusory allegations,
Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d
799, 805 (8th Cir. 1999), or legal conclusions drawn by the
pleader from the facts alleged, Westcott v. City of
Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court
deciding a motion to dismiss may consider the complaint,
matters of public record, orders, materials embraced by the
complaint, and exhibits attached to the complaint. See
Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079
(8th Cir. 1999).
survive a motion to dismiss, a complaint must contain
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). Although a complaint
need not contain “detailed factual allegations, ”
it must contain facts with enough specificity “to raise
a right to relief above the speculative level.”
Id. at 555. As the Supreme Court reiterated,
“[t]hreadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, ” will
not pass muster under Twombly. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 555). In sum, this standard
“calls for enough fact[s] to raise a reasonable
expectation that discovery will reveal evidence of [the
claim].” Twombly, 550 U.S. at 556.
Waiver and ...