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Lohnes v. Liberty Mut. Ins. Co.

United States District Court for the Northern District of New York

September 17, 2019, Decided; September 17, 2019, Filed





Plaintiff Maria R. Lohnes ("Plaintiff") commenced this action as subrogee of Christopher Terrance against Liberty Mutual Insurance Company ("Liberty"). The Complaint is for injuries Plaintiff suffered when she was struck by Mr. Terrance's vehicle. Liberty moves to dismiss the action pursuant to Federal Rules of Civil Procedure 12(b)(1) and (6) because, it contends, Plaintiff lacks standing to maintain a subrogation action against Liberty because she made no payment to Mr. Terrance or anyone else for which she seeks to be subrogated. See Doc. No. 6. Liberty also maintains that Plaintiff fails to state actionable claims under New York Insurance Law § 3420 (which would allow her to bring a direct action against Liberty), and for bad faith denial of a defense and indemnification to Mr. Terrence. See id.

Plaintiff responds by pointing out that although she alleges that "an Arbitration Agreement was entered into [*2]  authorizing plaintiff . . . to pursue, as subrogee of Christopher Terrace, an action against Liberty . . . for its breach of duty to defend and indemnify Christopher Terrance," Compl. ¶ 16, the Complaint and its attachments make clear that she was assigned Mr. Terrence's rights against Liberty. See Doc. No. 8. Therefore, she maintains, she has standing to bring this action as an assignee. See id. Plaintiff also argues that as Mr. Terrance's assignee she is able to bring a direct action against Liberty for breach of contract, and has stated a valid bad faith claim. See id. In addition, Plaintiff cross-moves to file an amended complaint asserting that she proceeds pursuant to the assignment of rights she obtained in arbitration. See id. Other than Plaintiff's contention that she proceeds as an assignee as opposed to a subrogee, the allegations in the proposed amended complaint are identical to those in the Complaint. Compare Compl. Doc. No. 2, with Prop. Am. Compl., Doc. No. 8-9.

Liberty agrees that Plaintiff can pursue a claim directly against Liberty as assignee of Mr. Terrence's rights. Doc. No. 13. Accordingly, Liberty has no objection to Plaintiff's cross-motion seeking leave to [*3]  file an amended complaint for the purpose of curing the standing and New York Insurance Law § 3420 challenges. Id. Liberty does maintain, however, that the proposed amended complaint fails to cure the legal defect in Plaintiff's bad faith claim. See id. Therefore, Liberty argues, Plaintiff's bad faith claim should be dismissed whether asserted in the Complaint or the proposed amended complaint. See id.

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2019 U.S. Dist. LEXIS 158174 *; 2019 WL 4451363



bad faith, alleges, covenant, good faith, assignee, bad faith claim, indemnify, amended complaint, breach of contract claim, insured, proposed amended complaint, breach of contract, fair dealing, Arbitration, breached, proceeds