United States District Court, N.D. Alabama, Northeastern Division
K. KALLON, UNITED STATES DISTRICT JUDGE
Ray Stone pursues this action against State Automobile Mutual
Insurance Company (“State Auto”) for breach of
contract and bad faith. Doc. 1-4. Stone contends that State
Auto refused or failed to pay Stone the amount due to him
under his automobile insurance policy (Count I) after an
accident with an uninsured or underinsured motorist, and
acted in bad faith in intentionally refusing to pay an agreed
upon settlement amount of $30, 000 (Count II). Id.
Stone originally filed this action in the Circuit Court of
Madison County, Alabama, and State Auto subsequently removed
it to this court. Docs. 1; 1-4. The court has for
consideration State Auto's motion for summary judgment,
doc. 19, which is fully briefed, docs. 19-1; 34; 35, and ripe
for review. State Auto and the individual defendants whom
Stone seeks to add through his First Amended Complaint (Holly
Sutton, Theresa Gad, and Earl T. Forbes), doc. 26, also filed
a motion to strike, doc. 29, the amended complaint. For the
reasons stated below, the motions to strike and for summary
judgment are due to be granted.
MOTION TO STRIKE
filed an amended complaint, whereby Stone joined three
additional parties - State Auto claims adjusters Sutton and
Gad, and Wilmer & Lee, P.A. attorney Earl T. Forbes - and
amended the pleadings to include three additional claims
arising out of the $30, 000 settlement agreement with State
Auto. Docs. 26 at 6; 29 at 2. The amended complaint includes
breach of contract and bad faith claims (Counts I and II)
against Sutton, Gad, and Forbes, and fraud claims (Counts
III, IV, and V) against State Auto, Sutton, Gad, and Forbes.
See generally doc. 26. The motion to strike is due
to be granted.
The Amended Complaint Violates Rule 15(a)
party may amend its pleading once as a matter of course
within . . . 21 days after serving it, or . . . if the
pleading is one to which a responsive pleading is required,
21 days after service of a responsive pleading or 21 days
after service of a motion under Rule 12(b), (e), or (f),
whichever is earlier.” Fed.R.Civ.P. 15(a). “In
all other cases, a party may amend its pleading only with the
opposing party's written consent or the court's
leave.” Id. Stone is not entitled to amend his
complaint as a matter of course under Rule 15(a), because he
filed the amended complaint eight months after State Auto
removed the case to this court, see docs. 1; 26, and
well over the “21 days after service of a responsive
pleading” limit, see doc. 3 - and State Auto
did not file any Rule 12(b), (e), or (f) motions that would
have similarly given Stone leave to amend. As such,
consistent with Rule 15(a), Stone can only amend with leave
of the court. In light of Stone's failure to obtain leave
to amend, the amended complaint is due to be stricken under
the Scheduling Order. See doc. 18 at 3
(“Unless the party's pleading may be amended as a
matter of course pursuant to Fed.R.Civ.P. 15(a), the party
must file a Motion for Leave to Amend.”).
The New Claims Are Futile
Stone had moved to amend, the court would have denied the
request on futility grounds. Although the court “should
freely give leave [to amend a pleading] when justice so
requires, ” Fed.R.Civ.P. 15(a), Stone's new claims
fail on their merits. First, as to Counts I and II, which
Stone amended to include State Auto's counsel (Forbes)
and employees (Sutton and Gad), under Alabama law,
“claims for breach of contract and bad faith based on
an insurance contract may only be brought against a party to
that contract.” Butler v. Allstate Indem. Co.,
No. 3:09-CV-838-WKW-WO, 2010 WL 381164, at *3 (M.D. Ala.
2010) (holding that an insurance agent is not a proper
defendant for the plaintiff's breach of contract and bad
faith claims); Wright v. State Farm Fire & Cas.
Co., No. CIV. A. 96-A- 1663-N, 1997 WL 114902, at *3
(M.D. Ala. 1997) (citing Ligon Furniture Co. v. O.M.
Hughes Ins. Co., Inc., 551 So.2d 283, 285 (Ala. 1989))
(“Thus, while an adjuster or other agent may
commit [bad faith] acts . . . it is the company which is
liable.”) (emphasis added); Pate v. Rollison
Logging Equip., Inc., 628 So.2d 337, 343 (Ala. 1993)
(insurance broker was not liable for breach of contract
because he acted to place the insurance and was not a party).
Therefore, because there is no assertion in the amended
complaint that Forbes, Sutton, or Gad were parties to the
contract between Stone and State Auto, the proposed breach of
contract and bad faith claims against them are futile.
the fraud claims (Counts III, IV, and V) are also futile. An
essential element of fraud is that the plaintiff must have
reasonably relied on the alleged misrepresentation.
Waddell & Reed, Inc. v. United Inv'rs Life Ins.
Co., 875 So.2d 1143, 1160 (Ala. 2003), as modified
on denial of reh'g (Sept. 5, 2003) (citations
omitted). In fact,
[i]f the circumstances are such that a reasonably prudent
person who exercised ordinary care would have discovered the
true facts, the plaintiffs should not recover . . . . If the
purchaser blindly trusts, where he should not, and closes his
eyes where ordinary diligence requires him to see, he is
willingly deceived, and the maxim applies, “volunti non
Id. (internal citations and quotations omitted).
Here, Stone signed a “Full and Final Release”
that, among other things, obligated him to provide
information regarding Medicare/Medicaid liens. Doc. 19-20 at
4-5. By signing the agreement, Stone knew and accepted his
duty to investigate any Medicare liens and provide State Auto
with “any and all” information requested
regarding such liens. Stone has no credible basis to plead
that State Auto, or any of its agents, misrepresented his
responsibilities regarding Medicare liens. To the contrary,
the language in the agreement is clear, and a reasonably
prudent person - especially one who, as was the case here,
was represented by counsel - could have discovered that
Stone's ability to receive his settlement check was
contingent on his providing the requested information
regarding potential Medicare liens.
conclusion, for all the aforementioned reasons, State
Auto's motion to strike, doc. 29, Stone's Amended
Complaint is due to be granted.
JUDGMENT STANDARD OF REVIEW
Fed.R.Civ.P. 56(a), summary judgment is proper “if the
movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” To support a summary judgment motion,
the parties must cite to “particular parts of materials
in the record, including depositions, documents,
electronically stored information, affidavits or
declarations, stipulations, admissions, interrogatory
answers, or other materials.” Fed.R.Civ.P. 56(c).
Moreover, “Rule 56(c) mandates the entry of summary
judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to
establish the existence of an element essential to that
party's case, and on which that party will bear the
burden of proof at trial.” Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). The moving party
bears the initial burden of proving the absence of a genuine
issue of material fact. Id. at 323. The burden then
shifts to the nonmoving party, who is required to “go
beyond the pleadings” to establish that there is a