United States District Court, N.D. Alabama, Middle Division
MEMORANDUM OPINION AND ORDER
ANNEMARIE CARNEY AXON UNITED STATES DISTRICT JUDGE
breach of contract and bad faith action arises out of the
purchase and loss of Plaintiffs Paula and Steven
Thompson's car. The Thompsons financed the purchase of
the car with a loan from Defendant JPMorgan Chase Bank, N.A.
(“Chase”), and Chase is named as an additional
insured under the Thompsons' car insurance policy. After
a fire destroyed their car, the Thompsons submitted a claim
to their insurer, Defendant Lyndon Southern Insurance Company
(“Lyndon Southern”), alleging that the full
amount owed under the policy was the purchase price of the
vehicle. (See Doc. 28 at 3). Lyndon Southern denied
the Thompsons' claim, but paid Chase for the loss. The
Thompsons then filed suit against Chase and Lyndon
Southern. The Thompsons assert breach of contract,
bad faith, and conversion claims against Lyndon Southern, and
a claim against Chase for tortious interference with a
contractual relationship. (Doc. 1-1 at 7-12). This action is
before the court on Chase's motion for judgment on the
pleadings. (Doc. 24). For the reasons explained below, the
court finds that Chase's motion is due to be granted.
STANDARD OF REVIEW
Rule of Civil Procedure 12(c) provides that: “After the
pleadings are closed-but early enough not to delay trial-a
party may move for judgment on the pleadings.”
Fed.R.Civ.P. 12(c). “Judgment on the pleadings is
appropriate when there are no material facts in dispute and
the moving party is entitled to judgment as a matter of
law.” Douglas Asphalt Co. v. Qore, Inc., 541
F.3d 1269, 1273 (11th Cir. 2008) (citing Cannon v. City
of West Palm Beach, 250 F.3d 1299, 1301 (11th Cir.
2001)). When ruling on a motion for judgment on the
pleadings, the court must accept the facts alleged in the
complaint as true and view them in the light most favorable
to the nonmoving party. Mikko v. City of Atlanta,
Georgia, 857 F.3d 1136, 1139 (11th Cir. 2017) (citation
Thompsons purchased a used car on May 11, 2016. (Doc. 1-1 at
¶ 6). To help finance the purchase, the Thompsons took
out a loan with Chase. (Id. at ¶¶ 6-7,
11). The loan required the Thompsons to insure the car and
name Chase as an “additional loss payee” under
the insurance policy. (Id. at ¶¶ 8-9).
Accordingly, the Thompsons had the car insured with a policy
from Lyndon Southern, and the insurance policy names Chase as
an additional insured. (Doc. 1-1 at ¶ 12-14; Doc. 2-2 at
15, 2016, a fire caused substantial damage to the
Thompsons' car, and the car was a total loss. (Doc. 1-1
at ¶¶ 15, 20). The Thompsons reported the loss to
Lyndon Southern. (Id. at ¶¶ 18-19).
According to the Thompsons, the insurance policy required
Lyndon Southern to provide full coverage for the loss.
(See Id. at ¶ 20). Nevertheless, Lyndon
Southern refused to pay the Thompsons' claim.
(Id. at ¶¶ 22-23, 29). The Thompsons
allege that Lyndon Southern acted in bad faith and did not
determine the value of the loss before refusing to pay the
Thompsons' claim. (Id. at ¶¶ 22, 34).
than paying the Thompsons, Lyndon Southern paid Chase for the
loss without obtaining the Thompsons' permission.
(Id. at ¶ 23). The amount Lyndon Southern paid
to Chase was less than the amount the Thompsons owed to Chase
under the loan. (Id. at ¶ 35). According to the
Thompsons, Chase settled the claim without their consent for
less than “the full and fair market value” of
their car, and Chase “has not taken any action to
receive the full money owed” to the Thompsons under the
insurance policy. (Id. at ¶¶ 23, 35-36,
on Lyndon Southern's and Chase's alleged actions
following the loss of the Thompsons' car, the Thompsons
initiated this action against Chase, Lyndon Southern, and
another allegedly related insurance company in the Circuit
Court of Etowah County. (Doc. 1-1). Chase and Lyndon Southern
removed the action to this court on the basis of diversity
jurisdiction. (Doc. 1). The Thompsons' complaint asserts
a single claim against Chase for tortious interference with a
contractual relationship. (Doc. 1-1at 10-11).
Thompsons allege that Chase negligently, wantonly, or
intentionally interfered with their contractual rights under
the Lyndon Southern insurance policy. (Doc. 1-1 at 10-11).
Chase contends that the Thompsons' tortious interference
claim fails as a matter of law and should be dismissed. (Doc.
24 at 6-9). For the reasons discussed below, the court
establish a claim for tortious interference, a plaintiff must
prove: “‘1) the existence of a contract or
business relation; 2) the defendant's knowledge of the
contract or business relation; 3) intentional interference by
the defendant with the contract or business relation; 4) the
absence of justification for the defendant's
interference; and 5) damage to the plaintiff as a result of
the interference.'” McFarlin v. Conseco Serv.,
LLC, 381 F.3d 1251, 1261 (11th Cir. 2004) (quoting
Ex parte Awtrey Realty Co., 827 So.2d 104, 108-09
(Ala. 2001)). In addition to these elements, the defendant
must be “a ‘third party,' i.e., a
‘stranger' to the contract with which the defendant
allegedly interfered.” Id. (quoting
BellSouth Mobility, Inc. v. Cellulink, Inc., 814
So.2d 203, 212 (Ala. 2001)); see also Waddell & Reed,
Inc. v. United Investors Life Ins. Co., 875 So.2d 1143,
1154 (Ala. 2003) (“Clearly, a party to a contract or
business relationship cannot be liable for tortious
interference with that contract or business
relationship.”) (citation omitted). A defendant
“is not a stranger to a contract just because [he] is
not a party to the contract.” Parsons v.
Aaron, 849 So.2d 932, 946 (Ala. 2002) (quotation and
emphasis omitted). Instead, “‘a defendant is a
party in interest to a business or contractual relationship
if the defendant has any beneficial or economic interest in,
or control over, that relationship.'” Tom's
Foods, Inc. v. Carn, 896 So.2d 443, 454 (Ala. 2004)
(quoting Waddell & Reed, Inc., 875 So.2d at 1154
(alterations in original omitted).
argues that the Thompsons' tortious interference claim
fails because, as an additional insured, it is not a stranger
to the insurance policy. (Doc. 24 at 8; Doc. 30 at 4).
Indeed, the Thompsons allege that their loan with Chase
required them to name Chase an additional loss payee on the
insurance policy and that the Lyndon Southern policy names
Chase an additional loss payee. (Doc. 1-1 at ¶¶ 9,
14). The policy's declaration page confirms that Chase is
an additional insured under the policy. (Doc. 2-2 at 3). As
an additional insured, Chase has a direct, legitimate
economic interest in the Lyndon Southern insurance policy.
See Standard Fire Ins. Co. v. Knowles, 129 F.Supp.3d
1271, 1292 (N.D. Ala. 2015) (“A lienholder who is named
as a loss payee on an insurance policy is entitled to the
insurance proceeds to the extent of the amount of his debt .
. . .”). Thus, Chase is not a stranger to the insurance
policy, and, as a matter of law, it cannot be liable to the
Thompsons for interfering with the policy. See Waddell
& Reed, 875 So.2d at 1153-57.
Thompsons do not respond directly to Chase's argument
that their tortious interference claim fails because it is
not a stranger to the insurance policy. (See Doc.
28). Rather, in their opposition to Chase's motion, the
Thompsons argue that Lyndon Southern and Chase conspired to
settle the loss without the Thompsons' consent for less
than the fair market value of their car at the time of the
fire. (Id. at 3-5). That argument does not save
their claim against ...