Randal Robinson, Kaylie Robinson, and Marianne Maxson v. Liberty Mutual Personal Insurance Company

Summary

The United States District Court for the Northern District of Alabama grants Liberty Mutual’s motion to dismiss an amended complaint asserting misrepresentation and fraud claims arising from the denial of insurance coverage for a fire loss. The court holds that the plaintiffs failed to plead fraud with particularity under Federal Rule of Civil Procedure 9(b) and that their theories impermissibly sound in contract. The claims are dismissed with prejudice because the plaintiffs had already been given an opportunity to amend.

Holdings

1. The amended misrepresentation and fraud claims failed to plead fraud with particularity because Plaintiffs did not identify the precise statements or documents, the responsible speaker or author, when and where the statements were made or transmitted, how Plaintiffs were misled, or what Liberty Mutual gained.
2. Even if pleaded with sufficient particularity, Plaintiffs' fraud and misrepresentation theories were not actionable as fraud because the alleged duties to maintain coverage, properly handle claims, and pay policy benefits arose from the insurance policy and therefore sounded in contract.
3. Dismissal with prejudice was proper because Plaintiffs had been given a specific opportunity to cure the Rule 9(b) deficiencies and failed to do so.

Questions Presented

1. Whether the amended misrepresentation and fraud claims pleaded the circumstances of fraud with the particularity required by Federal Rule of Civil Procedure 9(b).
2. Whether Plaintiffs' fraud-based theories impermissibly recast alleged contractual obligations concerning insurance coverage, claim handling, and payment of policy benefits as tort claims.
3. Whether dismissal with prejudice was proper after Plaintiffs were given an opportunity to amend and failed to cure the pleading deficiencies.

Disposition

dismissed