United States District Court, S.D. Mississippi, Northern Division
HERITAGE PROPERTIES, INC. PLAINTIFF
IRONSHORE SPECIALTY INSURANCE COMPANY, ET AL. DEFENDANTS
P. JORDAN, III CHIEF UNITED STATES DISTRICT JUDGE.
ask the Court to dismiss this breach-of-contract case under
Federal Rule of Civil Procedure 12(b)(6). Because Plaintiff
has stated a plausible claim for breach of the duty of good
faith and fair dealing, Defendants' Motion to Dismiss
 is denied in part without prejudice. The motion is
otherwise granted for the reasons that follow.
Facts and Procedural History
Heritage Properties, Inc. (“Heritage”) manages
several multi-family residential properties, including one
owned by Carleton Holdings, LLC (“Carleton”), in
Hinds County, Mississippi. At all relevant times, Heritage
was insured under a commercial general liability policy
issued by Defendant Ironshore Specialty Insurance Company
August 22, 2016, Kate Speed, a tenant of the complex owned by
Carleton and managed by Heritage, sued both entities. She
alleged that she “was exposed to mold and hazardous
substances and conditions on the subject premises that
proximately caused her emotional and bodily injury.”
Underlying Compl. [11-1] ¶ 7. Upon receipt of the
lawsuit, Heritage placed its insurance agent on notice of the
claim, which notified the broker, which in turn notified
Defendant RSG Underwriting Managers, LLC/WKFC Underwriting
Managers (“WKFC”) on August 31, 2016. “WKFC
acknowledged receipt of the claim on behalf of . . .
Ironshore . . . and then assigned the claim administration to
[D]efendant York Risk Services Group
(‘York').” Compl.  ¶ 12.
September 6, 2016, York sent an Acknowledgement of Assignment
to Heritage and WKFC. “Thereafter, neither Heritage,
nor the agent . . . nor the broker . . . nor . . . WKFC
heard anything further until January 24, 2017[, ] when
Heritage learned that a default judgment had been taken
against [it.]” Compl.  ¶ 14. When asked by
Heritage about the default, York initially said that it sent
a letter denying coverage for the claims in the underlying
lawsuit in September 2016. York said that “the
certified letter was unclaimed and returned to [it, so] the
certified copy was then sent [to Heritage via] regular
mail” on October 12, 2016. Id. ¶ 21. York
later “admitted” that “the disclaimer
letter was sent out to Heritage . . . but it was sent regular
mail and not certified mail on [September 9, 2016.]”
Id. ¶ 28.
Heritage filed this lawsuit on July 31, 2017, against
Ironshore, York, and WKFC. It asserts claims for breach of
the duty of good faith and fair dealing, fraud and negligent
misrepresentation, breach of contract, and conspiracy arising
out of the handling of the underlying lawsuit. Defendants
moved to dismiss under Federal Rule of Civil Procedure
12(b)(6). The matters raised in Defendants' motion have
been fully briefed, and the Court has personal and
considering a motion under Rule 12(b)(6), the “court
accepts ‘all well-pleaded facts as true, viewing them
in the light most favorable to the plaintiff.'”
Martin K. Eby Constr. Co. v. Dall. Area Rapid
Transit, 369 F.3d 464, 467 (5th Cir. 2004) (quoting
Jones v. Greninger, 188 F.3d 322, 324 (5th Cir.
1999) (per curiam)). But “the tenet that a court must
accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions. Threadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007)). To overcome a Rule 12(b)(6) motion, a plaintiff must
plead “enough facts to state a claim to relief that is
plausible on its face.” Twombly, 550 U.S. at
570. “Factual allegations must be enough to raise a
right to relief above the speculative level, on the
assumption that all the allegations in the complaint are true
(even if doubtful in fact).” Id. at 555
(citations and footnote omitted).
in considering a motion to dismiss under Rule 12(b)(6), the
Court “must limit itself to the contents of the
pleadings, including attachments thereto.” Collins
v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th
Cir. 2000). An exception to this rule exists for
“matters of public record” of which the Court may
take judicial notice. Norris v. Hearst Tr., 500 F.3d
454, 461 n.9 (5th Cir. 2007). And “[d]ocuments that a
defendant attaches to a motion to dismiss are considered part
of the pleadings if they are referred to in the
plaintiff's complaint and are central to her
claim.” Causey v. Sewell Cadillac-Chevrolet,
Inc., 394 F.3d 285, 288 (5th Cir. 2004). Here,
Defendants attached to their motion the insurance policy,
which is part of the pleadings under Causey, and the
complaint and default judgment in the underlying lawsuit, of
which the Court may take judicial notice. And Heritage has
submitted copies of the email correspondence referenced in
the Complaint, which are also part of the pleadings under
Causey. The documents submitted are properly before
the Court on Defendants' Rule 12(b)(6) motion.
assert that Ironshore had no duty to defend Heritage in the
underlying litigation under the insurance policy and
therefore they did not breach the contract or the duty of
good faith and fair dealing. They argue that Heritage has not
pleaded that it relied upon any false statement, resulting in
injury, such that its fraud claims fail as a matter of law.
And they say Heritage's civil-conspiracy claim likewise
provides no basis for liability. The Court will address the
claims in turn.
Breach of Contract and of the Duty of Good Faith and Fair
insist that Heritage's claims for breach of contract and
of the duty of good faith and fair dealing fail because
Ironshore had no duty to defend Heritage in the underlying
lawsuit. “The general rule in Mississippi is that an
insurer's duty to defend hinges on the allegations in the
underlying complaint.” Am. States Ins. Co. v.
Natchez Steam Laundry, 31 F.3d 551');">131 F.3d 551, 553 (5th Cir.
1998). “Accordingly, to determine whether an insurance
company has a duty to defend its insured, the Court
‘must look at the facts alleged in the complaint,
together with the policy.'” Leaf River
Cellulose, LLC v. Mid-Continent Cas. Co., No.
2:11-CV-54-KS-MTP, 2012 WL 1906529, at *3 (S.D.Miss. May 25,
2012) (quoting Auto. Ins. Co. v. Lipscomb, 75 So.3d
557, 559 (Miss. 2011)). “Only if the pleadings state
facts which bring the injury within the coverage of the
policy is the insured required to defend.” Shelter
Mut. Ins. Co. v. Brown, 345 F.Supp.2d 645, 648-49
(S.D.Miss. 2004). Importantly, the Court “look[s]
‘not to the particular legal theories' pursued by
the plaintiff, ‘but to the allegedly tortious conduct
underlying' the suit.” Evanston Ins. Co. v.
Neshoba Cty. Fair Ass'n, Inc., 442 F.Supp.2d 344,
346 (S.D.Miss. 2006) (quoting Ingalls Shipbuilding v.
Fed. Ins. Co., 410 F.3d 214, 225 (5th Cir. 2005)).
case, the insurance policy obligated Ironshore to defend
Heritage from any suit seeking “damages because of
‘bodily injury' or ‘property damage' to
which this insurance applies.” Policy [11-2] at 5. It
made clear, though, that Ironshore “will have no duty
to defend the insured against any ‘suit' seeking
damages for ‘bodily injury' or ‘property
damage' to which this insurance does ...