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Albert v. GEICO General Insurance Co.

United States District Court, D. Minnesota

January 16, 2019

Kallys Albert Sr., Plaintiff,
v.
GEICO General Insurance Company and John Doe, Defendant.

          REPORT AND RECOMMENDATION

          ELIZABETH COWAN WRIGHT, United States Magistrate Judge.

         This matter is before the Court on Defendant GEICO General Insurance Company's (“GEICO” or “Defendant”) Motion to Dismiss (Dkt. No. 15) and Plaintiff Kallys Albert Sr.'s (“Albert” or “Plaintiff”) Motion to Strike (Dkt. No. 33). The case has been referred to the undersigned United States Magistrate Judge for a report and recommendation pursuant to 28 U.S.C. § 636 and Local Rule 72.1. For the reasons stated below, the Court recommends that the Motion to Dismiss be granted and the Motion to Strike be denied.

         I. BACKGROUND

         This case involves a dispute between Albert and GEICO, Albert's former auto insurance company, regarding automobile insurance policy number 4221139373. (Dkt. No. 1 at 2.)[1] This is not the first time Albert has brought his dispute with GEICO to federal court. In May 2017, Albert filed an action in this District alleging that GEICO had improperly modified its coverage of his and his family's vehicles, failed to refund or applied over-payments, and failed to properly handle his claims. Kallys Albert Sr. v. GEICO, GEICO General Insurance Company, John Doe, No. 17-cv-1697 (DWF/BRT) (D. Minn. May 22, 2017) (“Albert I”), Dkt. No. 1. That case was dismissed without prejudice for lack of subject matter jurisdiction. Id., Dkt. No. 42. On January 16, 2018, Albert filed the instant Complaint.

         A. Albert's Earlier Case (Albert I)

         In Albert I, Albert alleged that GEICO had improperly modified his coverage of his and his family's vehicles, failed to refund or applied over-payments, and failed to properly handle his claims. See generally Albert I, Dkt. No. 1. Albert alleged eight causes of action, including breach of contract, negligent misrepresentation, declaratory judgment, specific performance, unjust enrichment, violation of the Fair Credit Billing Act, bad faith, and loss of consortium/contractual interference with third party relationship. Id. at 7-11. Albert did not allege a specific monetary amount in his request for damages. See generally Id. He also did not allege racial discrimination or his race in that complaint. See generally id.

         On October 10, 2017, Magistrate Judge Becky R. Thorson issued a Report and Recommendation (“R&R”) recommending that Albert I be dismissed for lack of jurisdiction. Albert I, Dkt. No. 37. Judge Thorson found that there was no federal question jurisdiction because Albert's only federal claim, “Violation of Fair Credit Billing Act, ” was not valid since GEICO is undisputedly not a creditor and did not extend credit to Albert. Id. at 5-6. Judge Thorson also found diversity jurisdiction lacking because Albert had not suffered damages exceeding $75, 000 caused by GEICO. Id. at 8-10. Although Albert asserted entitlement to $5.4 million in opposing GEICO's motion to dismiss (based on a summation of the policy limits for the insurance coverage that Albert previously had under his GEICO policy), she found the estimation of damages was completely unrealistic because Albert did not allege accidents or losses entitling him to such policy limits. Id. at 7. To the contrary, Judge Thorson found that even if GEICO refunded every penny paid by Albert over the previous seven years (most of which was not at issue), the amount in controversy would be $46, 528-below the “greater than $75, 000” amount-in-controversy requirement for diversity jurisdiction. Id. at 9.

         On December 5, 2017, District Judge Donovan W. Frank adopted the R&R and dismissed Albert I without prejudice for lack of subject matter jurisdiction.[2] Albert I, Dkt. No. 42. Albert did not appeal that dismissal.

         B. The Instant Case

         On January 16, 2018, [3] Albert filed his Complaint in this action, naming GEICO and John Doe as Defendants. (Dkt. No. 1.) The bulk of the allegations are nearly identical to those in the Albert I complaint.[4] In addition, the instant Complaint contains four categories of new allegations. First, Albert alleges that he is “a black male, 65 years old.” (Dkt. No. 1 ¶ 7.) Second, Albert includes factual matter that occurred after he filed the Albert I complaint-namely that “GEICO published that [Albert's] automobile insurance policy lapsed on May 27, 2017; that it cancelled the Policy due to non-payment of premium rates.” (Id. at 3-4.) Third, Albert made several general allegations of racial bias and discrimination, including that “[t]he aggregate effect of GEICO's acts and conducts based and motivated by racial animus, its deliberate, indifference and reckless disregard to Plaintiff's legal and civil protected rights and placed him in a dissimilar circumstances [sic] with persons of a different race-Caucasians; whom GEICO would never have treated similarly.” (Id. at 4.) Fourth, Albert repeatedly alleged that his damages are “in the excess of not less than $75, 000, and a maximum of $5, 000.000. 00 [sic] the face value of the total insured vehicles.” (E.g., id. ¶¶ 40, 44, 47, 54.)

         In his Complaint, Albert recycles aspects of his breach of contract and declaratory judgment claims from Albert I. (Compare Dkt. 1, Counts III and IV, with Albert I, First Cause of Action and Third Cause of Action.) He also asserts new claims under 42 U.S.C. § 1981[5] (Counts I and II) and new state law claims for breach of the implied duty to deal with insured in good faith (Count III), unlawful conversion of funds (Count IV), invasion of privacy by false light publicity (Count VI), and tortious interference with contractual relationship with third part(ies) (Count VII).[6] (Id. at 9-14.) Albert alleges both federal question and diversity jurisdiction. (Dkt. No. 1-1.) Finally, Albert alleges that GEICO's arguments in Albert I somehow interfered with his right to a jury trial under the Seventh Amendment and denied him “Due Process of the law, ” although he did not assert a specific claim or count based on those allegations.[7] (See Dkt. No. 1 at 4.)

         C. The Present Motions

         1. GEICO's Motion to Dismiss

         GEICO moved to dismiss the Complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) for lack of subject matter jurisdiction and failure to state a claim on which relief may be granted. (Dkt. No. 16.) GEICO characterizes its 12(b)(1) challenge as a factual challenge to subject matter jurisdiction, arguing that evidence presented by GEICO establishes that Albert has not suffered damages in excess of $75, 000, and therefore there is no diversity jurisdiction over the state law claims. (Dkt. No. 18 at 16.) GEICO argues that Albert has not properly pleaded his § 1981 claims, and therefore there is also no federal question jurisdiction. (Id. at 20.) In the alternative, GEICO argues that Albert's Complaint should be dismissed under Rule 12(b)(6) because it does not contain sufficient facts that plausibly allege Albert's claims. (Id. at 21.) GEICO asks the Court to dismiss the case with prejudice “such that the Plaintiff may not refile this matter again at a later date.” (Id. at 12.)

         2. Albert's Motion to Strike

         Albert filed a motion to strike, which he states is “Pursuant to Federal Rule of Civil Procedure 12(f), and other applicable laws, ” seeking the following relief:

1. STRIKE AND DISMISS DEFENSE MOTION FOR ABUSE OF PROCESS
2. DISMISS FOR FAILURE TO STA[T]E LEGAL DEFENSE AND INTENTIONAL MISREPRESENTATION TO THE COURT
3. SANCTION ATTORNEY OF RECORD, PETER M. LINDBERG

(Dkt. No. 33 at 1.) In support of his motion, Albert filed a 37-page memorandum of law and a 17-page reply memorandum, along with an affidavit in support of his motions and numerous exhibits.[8] (Dkt. Nos. 30, 35, 37, 41, 44.) Based on its review of these memoranda, the exhibits, and the affidavit, the Court understands Albert to be arguing that an alleged “ex parte consultation with Court staff” that occurred in connection with GEICO filing a letter on January 25, 2018 opposing Albert's in forma pauperis application was improper, that GEICO improperly referenced a 2012 R&R from another case describing Albert's litigation history in the January 25 letter, that GEICO has generally abused the litigation process, and that GEICO's counsel should be sanctioned for alleged misrepresentations made in support of GEICO's motion to dismiss and for arguing for dismissal of Albert's Complaint. (See generally Dkt. Nos. 33, 35.)

         II. LEGAL STANDARD

         A. Subject Matter Jurisdiction

         “Federal courts are courts of limited jurisdiction, possessing only that power authorized by Constitution and statute.” Gunn v. Minton, 568 U.S. 251, 256 (2013) (quotation marks and citations omitted). Thus, subject matter jurisdiction “is a threshold requirement which must be assured in every federal case.” Turner v. Armontrout, 922 F.2d 492, 493 (8th Cir. 1991). Federal Rule of Civil Procedure 12(b)(1) permits a party to challenge whether the court has subject matter jurisdiction to hear the matter. Johnson v. United States, 534 F.3d 958, 964 (8th Cir. 2008). When considering a Rule 12(b)(1) motion, a district court may consider matters outside the pleadings. Satz v. ITT Fin. Corp., 619 F.2d 738, 742 (8th Cir. 1980). “[N]o presumptive truthfulness attaches to the plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Moreover, the plaintiff will have the burden of proof that jurisdiction does in fact exist.” Osborn v. United States, 918 F.2d 724, 730 (8th Cir. 1990).

         “Typically, complaints need only allege the jurisdictional amount in good faith and will be dismissed only if it ‘appear[s] to a legal certainty that the claim is really for less than the jurisdictional amount.' However, ‘[i]f the defendant challenges the plaintiff's allegations of the amount in controversy, then the plaintiff must establish jurisdiction by a preponderance of the evidence.'” Am. Fam. Mut. Ins. Co. v. Vein Centers for Excellence, Inc., ___ F.3d ___, 2019 WL 80707, at *2 (8th Cir. Jan. 3, 2019) (quoting Scottsdale Ins. Co. v. Universal Crop Prot. All., LLC, 620 F.3d 926, 931 (8th Cir. 2010)) (alteration in original). “‘[I]f, from the face of the pleadings it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed or if, from the proofs, the court is satisfied to a like certainty that the plaintiff never was entitled to recover that amount, and that his claim was therefore colorable for the purpose of conferring jurisdiction, the suit will be dismissed.'” Sanders v. Hiser, 479 F.2d 71, 73 (8th Cir. 1973) (emphases and alteration in original) (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)).

         When deciding a Rule 12(b)(1) motion, the Court must first “distinguish between a ‘facial attack' and a ‘factual attack.'” Osborn, 918 F.2d at 729 n.6 (quoting Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980)). “In a facial challenge to jurisdiction, all of the factual allegations concerning jurisdiction are presumed to be true and the motion is successful if the plaintiff fails to allege an element necessary for subject matter jurisdiction.” Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). In contrast, in a factual attack, the court “inquires into and resolves factual disputes, ” Faibisch v. Univ. of Minn., 304 F.3d 797, 801 (8th Cir. 2002), and is free to “consider[ ] matters outside the pleadings, ” Osborn, 918 F.2d at 729 n.6. The nonmoving party in a factual challenge does not enjoy the benefit of Rule 12(b)(6) safeguards. Id.

         B. Pleading Standard under Rule 12(b)(6)

         In considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the pleadings are construed in the light most favorable to the non-moving party, and the facts alleged in the complaints must be taken as true. See Ashley County, Ark. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009). In addition, when deciding a Rule 12(b)(6) motion, a court must afford the plaintiff all reasonable inferences from those allegations. See Blankenship v. USA Truck, Inc., 601 F.3d 852, 853 (8th Cir. 2010). At the same time, to withstand a motion to dismiss under Rule 12(b)(6), litigants must properly plead their claims under Federal Rule of Civil Procedure 8.

         Under Rule 8(a)(2), a pleading 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). The pleading standard articulated by Rule 8 “does not require detailed factual allegations, but it [does demand] more than an unadorned, the-defendant-unlawfully-harmed-me-accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citations omitted). A “pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Thus, to “survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Twombly, 550 U.S. at 556). “[T]he plausibility standard, which requires a federal court complaint to ‘state a claim for relief that is plausible on its face, . . . asks for more than a sheer possibility that a defendant has acted unlawfully.'” Ritchie v. St. Louis Jewish Light, 630 F.3d 713, 717 (8th Cir. 2011) (internal quotation and citation omitted). “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679 (citation omitted).

         Following Twombly and consistent with Iqbal, the Eighth Circuit explained:

While a plaintiff need not set forth “detailed factual allegations, ” or “specific facts” that describe the evidence to be presented, the complaint must include sufficient factual allegations to provide the grounds on which the claim rests. A district court, therefore, is not required “to divine the litigant's intent and create claims that are not clearly ...

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