United States District Court, M.D. Alabama, Northern Division
JOSEPH J. BROADWAY, Plaintiff,
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
MEMORANDUM OPINION AND ORDER
KEITH WATKINS, CHIEF UNITED STATES DISTRICT JUDGE
the second iteration of litigation between the parties over
Plaintiff's uninsured/underinsured motorist policy with
State Farm Mutual Automobile Insurance Company. The first,
Broadway v. State Farm Mut. Auto. Ins. Co., No.
2:13-CV-628, 2016 WL 2946418 (M.D. Ala. May 20, 2016)
(Broadway I), was dismissed by Judge Starrett
(Broadway I, Doc. # 159) and affirmed by the
Eleventh Circuit in Broadway v. State Farm Mut. Auto.
Ins. Co., 683 Fed.Appx. 801 (11th Cir. 2017).
first case contained a claim for breach of contract, a claim
for bad faith, and a claim for fraud. The fraud count was
dismissed with prejudice, and the other two counts were
dismissed without prejudice. (Broadway I, Doc. #16.)
This case contains those two remaining claims, breach of
contract and bad faith, plus one for benefits under the
policy. Defendant moves to dismiss the breach of contract
claim and the bad-faith claim. The bad-faith claim is due to
be dismissed without prejudice for failure to state a claim.
The motion to dismiss the breach of contract claim will be
denied without prejudice, with directions to the parties to
brief the distinction, if any, between a “breach of
contract” cause of action and “an action for
contract benefits” when both actions are based on the
same insurance contract.
is no dispute that Plaintiff suffered damages due to the
fault of an underinsured motorist. After notice to State Farm
as required by the policy, Plaintiff settled with the other
driver for policy limits. State Farm considered the claims of
Plaintiff over and above the policy limits of the
underinsured driver, and determined that Plaintiff was
entitled to an additional $5, 000 under his personal policy
with State Farm. With the payment enclosed, State Farm wrote
Plaintiff that the claim was still active and that it would
consider any other evidence Plaintiff wished to provide to
support additional benefits. Since that correspondence, the
parties have been in dispute as to the amount of damages to
which Plaintiff is entitled. Per the terms of the policy,
Plaintiff filed this action to collect his policy benefits
element of bad faith in the underinsured motorist context is
breach of contract. See Ex parte Alfa Mut. Ins. Co.,
799 So.2d 957, 962 (Ala. 2001). Additionally, at least as to
bad faith, Alabama requires that a bad-faith plaintiff have
already established the amount of damages to which he is
entitled before bringing suit. Quick v. State
Farm Mut. Auto Ins. Co., 429 So.2d 1033, 1035 (Ala.
1983). Plaintiff has not done so. That is why that claim is
due to be dismissed without prejudice.
Farm argues that the claim for breach of contract is also
barred in Alabama until Plaintiff has proved the amount of
damages to which he is entitled from the underinsured
motorist. There is quite a bit of authority for this
statement of the law in Alabama, see Quick, 429
So.2d at 1035; Aetna Cas. & Sur. Co., Inc. v.
Beggs, 525 So.2d 1350, 1352 (Ala. 1988) (quoting
Quick, 429 So.2d at 1035); LeFevre v.
Westberry, 590 So.2d 154, 158 (Ala. 1991) (quoting
Quick, 429 So.2d at 1035); Pontius v. State Farm
Mut. Auto. Ins. Co., 915 So.2d 557, 563 (Ala. 2005)
(quoting Quick, 429 So.2d at 1035), but that
statement is so broad as to include a contract action for
benefits under a UIM policy, as well as an action
for breach of the same policy. The court conceives
no analytical difference between the two causes of action,
especially where State Farm concedes Plaintiff is entitled to
the benefit but merely disputes the amount of damages. The
parties did not brief this issue. Hence, the motion to
dismiss the breach of contract action is denied without
prejudice, with instructions to the parties to brief the
legal and analytical difference, if any, between an action
for benefits under a policy and an action for
breach of that same policy, in view of the policy
it is ORDERED as follows:
Recommendation of the Magistrate Judge (Doc. # 27) is ADOPTED
as to the bad-faith claim in Count III of the amended
complaint and REJECTED at this time as to the
breach-of-contract claim in Count I of the amended complaint.
Defendant's motion to dismiss (Doc. # 13) is GRANTED as
to Count III, and Count III is DISMISSED without prejudice.
Defendant's motion to dismiss (Doc. # 13) is DENIED
without prejudice as to Count I.
Defendant's alternative motion for summary judgment (Doc.
# 13) is DENIED AS MOOT.
parties are DIRECTED to brief the legal and analytical
difference, if any, between an action for benefits under a
policy and an action for breach of that same policy. Briefs
shall be filed on or before Octobe ...