COI Litigation Update
USFL moved to dismiss all claims except the breach of contract claim, and moved to strike portions of the complaint it characterized as immaterial and impertinent to the case. The district court dismissed the unjust enrichment claim, as the dispute was governed by the contract. In so doing, the court rejected the plaintiff’s contention that the claim could be maintained because of alleged evidence of fraud. The court pointed out her failure to cite controlling authority on the issue. The court also dismissed the fraud claim predicated on USFL’s alleged concealment of the state of its financial solvency and alleged mismanagement, finding, inter alia, that alleged misrepresentations on its website and in corporate statements were too vague and ambiguous, and noting that the complaint was silent as to whether the plaintiff had even read them.
However, the court allowed other claims to proceed. The fraud claim regarding the 2015 rate increase survived as an alternative cause of action despite the court’s recognition that it could not find that USFL owed a duty separate and apart from the policy. The remaining claims, for conversion and breach of the covenant of good faith and fair dealing, also survived, as the court ultimately found both were adequately pled. Finally, the court denied the motion to strike, finding that USFL did not demonstrate that the allegations — regarding a prior rate increase and alleged so-called “shadow insurance” — did not relate to the subject matter or cause significant prejudice to the defendant.