United States District Court, D. Montana, Missoula Division
PETER BYORTH and ANN McKEAN, on behalf of all others similarly situated, Plaintiff,
USAA CASUALTY INSURANCE COMPANY and JOHN DOES I-X, Defendant.
Kathleen L. DeSoto United States Magistrate Judge
Peter Byorth and Ann McKean bring this action against USAA
Casualty Insurance Company (“USAA”), alleging
USAA improperly administered medical payment insurance
benefits and wrongfully denied coverage to Montana consumers.
Plaintiffs assert five counts against USAA: (1) breach of
fiduciary duty; (2) breach of contract; (3) violation of
Montana's Unfair Trade Practices Act
(“UTPA”); (4) punitive damages; and (5)
declaratory and injunctive relief. This Court granted class
certification under Fed.R.Civ.P. 23(b)(2) as to
Plaintiffs' claim for declaratory and injunctive relief.
Court has previously discussed this matter's factual
history and therefore refrains from repeating it
here. For purposes of the pending Rule 12(b)(6) motion to
dismiss, the Court accepts as true all factual allegations in
the Second Amended Complaint, and construes them in a light
most favorable to the plaintiffs.
before this Court is USAA's motion to dismiss with
prejudice Counts I and V of Plaintiffs' Second Amended
Complaint. (Doc. 121.) USAA also requests dismissal of Count
III to the extent Plaintiffs seek to assert private causes of
action that are not recognized by the UTPA. On December 2,
2019, the Court heard oral argument from the parties on the
motion. (Doc. 159.) Having reviewed the parties'
arguments and submissions, and for the reasons discussed
below, USAA's motion is GRANTED in part
and DENIED in part.
Defendants move to dismiss pursuant to Fed.R.Civ.P. 12(b)(6).
A Rule 12(b)(6) motion to dismiss tests the sufficiency of a
complaint. Navarro v. Block, 250 F.3d 729, 732 (9th
Cir. 2001). Dismissal under Rule 12(b)(6) is informed by Rule
8(a)(2), which requires a pleading to contain “a short
and plain statement of the claim showing that the pleader is
entitled to relief.” Ashcroft v. Iqbal, 556
U.S. 662, 677-78 (2009). Dismissal is proper under
Fed.R.Civ.P. 12(b)(6) only when the complaint lacks a
cognizable legal theory or fails to allege sufficient facts
to support a cognizable legal theory. Zixiang Li v.
Kerry, 710 F.3d 995, 999 (9th Cir. 2013) (quoting
Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d
1097, 1104 (9th Cir. 2008)).
survive a 12(b)(6) 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. at 678. “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. Plausibility is context-specific, requiring
courts to draw on judicial experience and common sense when
evaluating a complaint. Levitt v. Yelp! Inc., 765
F.3d 1123, 1135 (9th Cir. 2014).
considering a 12(b)(6) motion, a court must accept as true
the allegations of the complaint and construe them in the
light most favorable to the nonmoving party. Hardesty v.
Barcus, 2012 WL 705862, *2 (D. Mont. Jan. 20, 2012).
However, “factual allegations must be enough to raise a
right to relief above the speculative level.” Bell
Atlantic Corp. v. Twombly, 550 U.S 544, 555 (2007).
Count I - Breach of Fiduciary Duty
argues Plaintiffs' claim for breach of fiduciary duty is
barred by the UTPA. Under Montana law, the UTPA governs all
claims brought by “[a]n insured who has suffered
damages as a result of the handling of an insurance
claim[.]” Mont. Code Ann. § 33-18-242(3). An
insured's claim for breach of fiduciary duty is preempted
by the UTPA. Burton v. State Farm, 105 Fed.Appx.
154, 160 (9th Cir. 2004); See also Hoffman v. Geico Ins.
Co., 2007 WL 9710396, n. 2 (D. Mont. 2007) (The UTPA
“precludes an insured from maintaining an independent
action in tort predicated upon breach of fiduciary duty for
an insurer's conduct in the handling of a claim for
benefits.”). The law is clear on this issue and
Plaintiffs do not oppose dismissal of their claim for breach
of fiduciary duty. (Doc. 130 at 10.) Accordingly, USAA's
request to dismiss Count I with prejudice is GRANTED.
Count III - Unfair Trade Practices Act
next requests dismissal of Plaintiffs' claim for
violation of the UTPA to the extent Plaintiffs seek to assert
private causes of action that are not recognized by the Act.
USAA contends it is unclear from the Second Amended Complaint
whether Plaintiffs allege that USAA violated Mont. Code Ann.
§ 33-18-201(2) and (7). Because subsection (2) and (7)
do not fall within the UTPA's limited right of action,
USAA argues Plaintiffs cannot assert those claims for
response, Plaintiffs clarify that they are not asserting a
claim for damages under § 33-18-201(2) and (7). (Doc.
130 at 9.) Rather, Plaintiffs request damages only for
USAA's alleged violations of the UTPA under §
33-18-201(1), (4), (5), (6), (9), and (13). (Doc. 118 at
¶ 50.) Plaintiffs explain that their allegations under
subsections (2) and (7) are contained in their request for
declaratory and injunctive relief under Count V. The Court
therefore finds Count III of Plaintiffs' Second Amended