Bibbs v. Allstate Insurance Company

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

JOHN BIBBS, ) CASE NO. 1:23-cv-1968

)

Plaintiff, ) JUDGE CHARLES E. FLEMING

)

v. )

)

ALLSTATE INSURANCE COMPANY, et al., )

) MEMORANDUM OPINION AND

) ORDER

Defendants. )

Before the Court is Defendants’ Motion to Dismiss or Stay Action Based on Mandatory,

Binding Appraisal and Failure to State a Claim (“Motion to Dismiss”). (ECF No. 11). Plaintiff

filed a timely opposition, (ECF No. 12), and Defendants filed a reply in support of the Motion,

(ECF No. 13). For the reasons discussed below, the Motion to Dismiss is GRANTED IN

PART AND DENIED IN PART, to the extent that: (i) the request to compel appraisal is

GRANTED; (ii) Counts II, III, and IV are DISMISSED; (iii) Defendant Allstate Insurance

Company is DISMISSED as a defendant.; and (iv) the case is STAYED pending completion of

the appraisal.

I. PROCEDURAL BACKGROUND

On August 25, 2023, Plaintiff John Bibbs filed a class action complaint, individually and

on behalf of all others similarly situated, against Defendants Allstate Insurance Company

(“AIC”) and Allstate Fire & Casualty Ins. Co. (“AFCIC”), alleging that Defendants arbitrarily

and unlawfully deducted a “condition adjustment” from the actual cash value of a vehicle loss

when paying insurance claims to their customers. (ECF No. 1-2). The case was originally filed

in Cuyahoga County Common Pleas Court. (Id.). The complaint asserts four causes of action:

(i) Breach of Contract (Count I); (ii) Unjust Enrichment (Count II); (iii) Fraud by Present Intent

Not to Perform (Count III); and (iv) Fraud and Fraudulent/Negligent Misrepresentation and

Omission (Count IV).! (/d. at PageID #37-44).

On October 6, 2023, Defendants removed the action to this Court, pursuant to the Class

Action Fairness Act (28 U.S.C. § 1332(d)). (ECF No. 1). On November 3, 2023, Defendants

filed the Motion to Dismiss. (ECF No. 11). Defendants argued that: (4) AIC was not a proper

defendant and should be dismissed; (11) the Court should compel appraisal and either dismiss or

stay the action; (111) Plaintiff failed to sufficiently state a claim for relief in Counts I through IV;

(iv) Plaintiff failed to satisfy the heightened pleading requirements under Rule 9(b) to sustain his

claims for fraud in Counts III and IV; (v) Counts III and IV are barred by the economic loss

doctrine; and (vi) Plaintiff's class definition is overly broad and asserts claims that are time-

barred. (Ud. at PageID #154-67). Plaintiff filed a timely opposition, (ECF No. 12), and

Defendants filed a reply in support of the Motion to Dismiss, (ECF No. 13).

Il. FACTUAL BACKGROUND

A, Plaintiff’s Insurance Policy and Total Loss Calculation”

Plaintiff was insured under a policy issued by Defendants? for a vehicle garaged in Ohio

(the “Policy”). (ECF No. 1-2, §§ 105-06; id. at PageID #47-80). The Policy provided coverage

for a total loss of the policyholder’s listed, insured vehicle. (Ud. § 107). Under the Policy, the

payment for a total loss was limited to either: (1) the actual cash value (“ACV”) of the vehicle,

minus a deductible for depreciation; or (11) the cost to repair or replace the vehicle. (/d. § 108; id.

' The complaint mistakenly labels two counts as “Count III.” (See ECF No. 1-2, PageID #41-42). The

Court will refer to Plaintiff's fourth cause of action—his claim for Fraud and Fraudulent/Negligent

Misrepresentation and Omission—as Count Four.

? The factual allegations that follow are contained within Plaintiff’s complaint and its attached exhibits:

(i) Plaintiff?s insurance policy with Defendants; and (11) the relevant market valuation of Plaintiff’s vehicle. (ECF

No. 1-2).

3 Throughout the complaint, Plaintiff asserts factual allegations against “Defendant” without specifying or

clarifying which of the two defendants. The Court assumes that the factual allegations are being made collectively

against the Defendants.

at PageID #62). The Policy did not define the term ACV and made no mention of a “condition

adjustment.” (Id. ¶¶ 109–10).

Plaintiff filed an insurance claim in September 2022 for damage to his insured vehicle.

(Id. ¶ 116; id. at PageID #81). Defendants determined that Plaintiff’s vehicle was a total loss and

they owed Plaintiff the ACV of the vehicle at the time of the loss. (Id. ¶ 117). To process

Plaintiff’s claim, Defendants used the “CCC One system” (the “CCC Program”) to calculate the

vehicle’s ACV and generated a “CCC One Market Valuation” (the “Market Valuation”). (Id.

¶¶ 118–19; id. at PageID #81–87). The CCC Program calculated the ACV of Plaintiff’s vehicle

by averaging the value of comparable vehicles to arrive at a “base vehicle value” and then

adjusting for the condition of Plaintiff’s vehicle. (Id. ¶ 120; id. at PageID #81). Plaintiff’s

Market Valuation states that the “base vehicle value” is “the weighted average of the adjusted

values of the comparable vehicles based on the following factors: Source of the data (such as

inspected versus advertised); Similarity (such as equipment, mileage, and year); Proximity to the

loss vehicle’s primary garage location; Recency of information.” (Id. ¶ 123; id. at PageID #82).

The Market Valuation then states that the base vehicle value was further reduced by another

factor labeled as a “condition adjustment.” (Id. ¶¶ 121, 124). The Market Valuation specifically

states that “[a] condition adjustment is also made to set the comparable vehicle to Private Owner

condition, which the loss vehicle is also compared to in the Vehicle Condition section.” (Id. at

PageID #87).

Plaintiff alleges that this “condition adjustment” for comparable vehicles resulted in

Defendants paying Plaintiff less than the ACV of his vehicle, in violation of the Policy; he

clarifies that he is only challenging the Defendants’ use of the “condition adjustment” to

determine the total loss of a damaged vehicle. (Id. ¶¶ 120–21, 126). The Market Valuation

determined the total payout for Plaintiff’s vehicle to be $16,288.00, which was based on: (i) a

base vehicle value of $15,730.00; (ii) a condition adjustment for the loss vehicle of -$205.00;

(iii) adding $1,263.00 for vehicular tax, title, registration, and other fees; and (iv) subtracting a

$500 deductible. (Id. at PageID #81).

B. The Policy’s Appraisal Provision

The Policy provides that AFCIC and Plaintiff have the right to demand an appraisal of

the calculated loss amount when the parties disagree as to the amount of loss. (Id. at PageID

#61). The Policy provides the following language regarding such appraisals under a section

labeled “Right to Appraisal”:

Both you and we have a right to demand an appraisal of the loss. Each will

appoint and pay a qualified appraiser. Other appraisal expenses will be shared

equally. The two appraisers, or a judge of a court of record, will select an umpire.

Each appraiser will state the actual cash value and the amount of loss. If the

appraisers disagree, they’ll submit their differences to the umpire. A written

agreement by any two of these three persons will determine the amount of the

loss.

(Id. at PageID #61–62). In October 2023, AFCIC submitted a written request to Plaintiff,

demanding an appraisal pursuant to the terms of the Policy. (ECF No. 11-1, PageID #170–71).

III. DISCUSSION

The Court will first address Defendants’ arguments for dismissal for lack of standing and

failure to state a claim under Rules 12(b)(6) and 9(b). The Court will then address Defendants’

request to compel appraisal and either dismiss or stay this action.

A. Motion to Dismiss Pursuant to Rule 12(b)(6) and Rule 9(b)

1. Standard of Review

To survive a Fed. R. Civ. P. 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.’”

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Bell

Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). A claim

is plausible on its face 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. at 678. Rule

8(a)(2) provides that the complaint should contain a short and plain statement of the claim, but

that it should be more than a “the-defendant-unlawfully-harmed-me” accusation. Id. at 677–78

(citing Twombly, 550 U.S. at 555). A plaintiff is obligated to provide sufficient grounds to show

entitlement to relief; “labels, conclusions, and a formulaic recitation of the elements of a cause of

action will not do.” Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286, 106

S. Ct. 2932, 92 L. Ed. 2d 209 (1986)). Although a complaint need not contain detailed factual

allegations, its “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.” Id. When reviewing a

complaint, a court must construe the pleading in the light most favorable to the plaintiff. Bibbo

v. Dean Witter Reynolds, Inc., 151 F.3d 559, 561 (6th Cir.1998).

When deciding a motion to dismiss under Rule 12(b)(6) or Rule 12(c), as a general rule, the

court cannot consider matters outside the pleadings, unless the motion is converted to a motion

for summary judgment under Rule 56. See Fed. R. Civ. P. 12(d). However, the Court may

consider exhibits attached to or otherwise incorporated in the complaint without converting a

Rule 12(b) motion to dismiss into a motion for summary judgment. Fed. R. Civ. P. 10(c);

Weiner v. Klais & Co., 108 F.3d 86, 89 (6th Cir. 1997).

2. Dismissal of Allstate Insurance Company as a Defendant

Defendants argue that AIC is not a proper defendant for Plaintiff’s breach of contract

claim because it is a not a party to the Policy (AFCIC and Plaintiff are the only signatories and

parties to the Policy) and AIC and AFCIC are separate entities. (ECF No. 11, PageID #154–55).

Plaintiff essentially concedes that AIC is not a party to the contract. However, he argues that the

complaint sufficiently alleges facts to plausibly support an agency theory of liability for the

breach of contract claim as to AIC. (ECF No. 12, PageID #190–91). Defendants’ reply brief

notes that: (i) Plaintiff’s opposition brief cites two, non-binding, unpublished cases; and (ii) “the

Sixth Circuit ruled on this issue in Perry v. Allstate Indem. Co., 953 F.3d 417, 420 (6th Cir.

2020), and held the plaintiff could not pursue claims against Allstate entities that were not parties

to the policy at issue.” (ECF No. 13, PageID #200).

Under Ohio law, a non-party to a contract cannot generally be held liable for its breach.

See Three-C Body Shops, Inc. v. Nationwide Mut. Fire Ins. Co., 2017-Ohio-1462, 81 N.E.3d 499,

503 (Ohio Ct. App. 2017) (“It goes without saying that a contract cannot bind a nonparty.”

(quoting EEOC v. Waffle House, Inc., 534 U.S. 279, 294, 122 S. Ct. 754, 151 L. Ed. 2d 755

(2002))); White v. Adena Health Sys., No. 2:17-cv-593, 2018 U.S. Dist. LEXIS 114975, at *22

(S.D. Ohio July 11, 2018) (same); see also Samadder v. DMF of Ohio, Inc., 2003-Ohio-5340,

154 Ohio App. 3d 770, 798 N.E.2d 1141, 1147 (Ohio Ct. App. 2003) (However, a contract is

binding only upon parties to a contract and those in privity with them.”). “Yet, that general

principle does not hold in some cases. For example, it is possible for a non-party parent

company to be liable for a subsidiary’s breach, e.g., on an agency, alter ego, or veil-piercing

theory.” Duff v. Centene Corp., 565 F. Supp. 3d 1004, 1018 (S.D. Ohio 2021) (citing Boyd v.

Archdiocese of Cincinnati, No. 25950, 2015-Ohio-1394, ¶ 27 (Ohio Ct. App. 2015) (“The only

way that the agreement could be enforced against these nonparties is through a liability theory

like assumption, piercing the corporate veil, alter ego, incorporation by reference, third-party

beneficiary theories, waiver and estoppel.” (citation and internal quotation marks omitted))).

Plaintiff does not argue or allege that AIC is liable under an “alter ego” or “piercing the

veil” theory of liability. There are also no allegations suggesting that AIC abused the corporate

form. Plaintiff only argues that there were sufficient allegations to support an agency theory of

liability. However, the Court finds that the complaint does not sufficiently allege a principal-

agent relationship between AIC and AFCIC.

“A complaint relying on agency must plead facts which, if proved, could establish the

existence of an agency relationship. It is insufficient to merely plead the legal conclusion of

agency.” McWilliams v. S.E., Inc., 581 F. Supp. 2d 885, 893 (N.D. Ohio 2008) (quoting Bird v.

Delacruz, No. 04-CV-661, 2005 U.S. Dist. LEXIS 48388, 2005 WL 1625303, at *4 (S.D. Ohio

July 6, 2005) (internal quotation marks omitted). “While the existence and extent of the agency

relationship is a question of fact, the plaintiff must sufficiently allege that an agency relationship

existed in order to survive a Rule 12(b)(6) motion to dismiss.” Id. (quoting MJ & Partners

Restaurant Ltd. Partnership v. Zadikoff, 10 F. Supp. 2d 922, 931 (N.D. Ill. 1998)). “Under Ohio

law, the ‘primary distinguishing characteristic of an agency relationship is the right of the

principal to control the conduct of the agent when the agent is performing work on behalf of the

principal.’” Kendell v. Phoenix Home Health Care Servs., No. 2:15-cv-3009, 2016 U.S. Dist.

LEXIS 139831, at *10 (S.D. Ohio Oct. 7, 2016) (quoting Costell v. Toledo Hosp., 98 Ohio App.

3d 586, 649 N.E.2d 35, 39 (Ohio Ct. App. 1994)).

The complaint does not provide sufficient allegations to support a principal-agent

relationship between AFCIC and AIC. Plaintiff does not allege any explicit agency agreement

between the two defendants. Plaintiff solely alleges that AFCIC is an underwriter for AIC.

(ECF No. 1-2 ¶ 10). Nowhere in the complaint does he allege that: (i) AIC is the parent

company or principal for AFCIC; or (ii) AFCIC is a subsidiary or agent for AIC. Contrary to

Plaintiffs assertions, the complaint does not allege that all actions were taken by agents of AIC

or that AIC operates a “single claims adjusting operation”; instead, the complaint attributes those

allegations to “Allstate,” which is defined in the complaint as AFCIC and AIC collectively. (dd.

44 1, 11, 13). There are no allegations as to: (1) whether AIC directs the operations of AFCIC;

(11) what level of control AIC exerts over AFCIC; or (111) whether AFCIC entered into the Policy

with Plaintiff on behalf of AIC. The allegations in the complaint, even when taken in the light

most favorable to Plaintiff, simply do not establish a principal-agent relationship between AIC

and AFCIC.4

Accordingly, Plaintiff has failed to state a claim against AIC. AIC is hereby

DISMISSED as a defendant from this action WITHOUT PREJUDICE. If Plaintiff wishes to

amend the complaint to provide sufficient allegations to add AIC as a proper party defendant, he

may file a motion for leave to amend within 30 days of this order. The motion should attach a

proposed amended complaint and provide an explanation as to how it sufficiently alleges

standing to assert claims against AIC.

3. Count I — Breach of Contract

Defendants argue that Count I must be dismissed because: (1) the Policy’s use of the term

ACV unambiguously refers to the market value of Plaintiff's vehicle; and (11) application of a

4 The analysis in Duff v. Centene Corp. is particularly instructive and highlights the insufficiency of the

allegations in this case. In Duff; the district court took note of several allegations by the plaintiff concerning the

interconnectedness between the defendant parent company and defendant subsidiary, as well as the specific

allegations that the defendant parent company controlled the operations of the subsidiary defendant and the two

defendants operated in concert and as part of a common enterprise. Duff, 565 F. Supp. 3d at 1018-19. The Duff

court found that these allegations were barely sufficient to raise a plausible inference that the defendant parent

company was a proper defendant under an alter ego, veil-piercing, or agency theory. Jd. at 1019. The allegations in

this case clearly fall short of the barely sufficient allegations presented in Duff:

Plaintiff’s citation to See v. GEICO, No. 21-CV-00547, 2022 U.S. Dist. LEXIS 52647 (E.D.N.Y. Mar. 22,

2022) is unavailing. (ECF No. 1-2, PageID #190-91). The amended complaint in See contained allegations that

detailed the interconnectedness of the parent company and subsidiary (same phone number, website, and physical

address). The amended complaint further asserted that the subsidiary was the only entity registered to do business in

New York and both entities signed the policy at issue. See, 2022 U.S. Dist. LEXIS 52647, at *19-21. This was

sufficient to support a theory of agency liability in that case, but such allegations are entirely absent m Plaintiffs

complaint.

condition adjustment when determining a vehicle’s ACV is not barred under either the Policy or

Ohio law. (ECF No. 11, PageID #157–60). Plaintiff responds that he is not challenging the

adjustment of his own vehicle’s value based on its mileage, options, and condition; he is

challenging the process of reducing the value of all comparable vehicles using a uniform

“condition adjustment” which is based on assumptions without an actual inspection. (ECF

No. 12, PageID #181–82). Plaintiff argues that the condition adjustment used by Defendants to

reduce the value of comparable vehicles constitutes a breach of contract because the adjustment

is not mentioned in or otherwise permitted under the terms of the Policy; Plaintiff asserts that

such a reduction is not an “intrinsic component of a market value calculation” nor is it applied in

all markets. (Id. at PageID #183–85).

After reviewing the complaint and the parties’ briefing, the Court notes that neither side

is disputing that the term ACV, as provided in the Policy, refers to the market value of damaged

vehicles like those of Plaintiff and the putative class members. Plaintiff is arguing that

Defendants breached the contract because the method used by Defendants to calculate the

damaged vehicle’s ACV did not accurately determine the actual market value of that vehicle.

With this in mind, the Court finds that Plaintiff plausibly alleged a breach of contract claim.

“Under Ohio law, the elements of a breach of contract claim are: (1) the existence of a

contract; (2) performance by the plaintiff; (3) breach by the defendant; and (4) damage or loss to

the plaintiff as a result of the breach.” V & M Star Steel v. Centimark Corp., 678 F.3d 459, 465

(6th Cir. 2012) (citing Savedoff v. Access Grp., Inc., 524 F.3d 754, 762 (6th Cir. 2008)). It is

undisputed that there is an existing contract (the Policy) and Defendants do not argue that

Plaintiff failed to perform under the contract. Defendants instead contend that Plaintiff has not

identified a breach of contract or adequately alleged damages. (ECF No. 11, PageID #157–60).

Under the Policy, AFCIC is required to pay Plaintiff either the ACV of the damaged

vehicle, which might include a deductible for depreciation, or the cost to repair/replace the

damaged vehicle. (ECF No. 1-2, PageID #62). Plaintiff alleges that Defendants breached this

term of the Policy by paying less than his vehicle’s ACV minus a deductible, through the

addition of “condition adjustment” under the CCC Program. (Id. ¶ 132). Plaintiff supports this

conclusion by alleging that: (i) Defendants used the CCC Program to determine his vehicle’s

market value; (ii) when calculating the ACV, the CCC Program reduced the value of comparable

vehicles using an improper “condition adjustment”; (iii) such an adjustment is not contemplated

in the Policy; (iv) this adjustment resulted in Defendant not paying the ACV as required by the

Policy; and (v) it is impossible to determine how Defendants arrived at the condition adjustment

because there is no specific data or sufficient explanation regarding the amount of the reduction.

(Id. ¶¶ 31–33, 50–53, 122–26, 139, 142).

The Market Valuation demonstrates that the base vehicle value for Plaintiff’s vehicle was

calculated using the weighted average of adjusted values of comparable vehicles. (ECF No. 1-2,

PageID #81–82, 87). This was further adjusted using a “condition adjustment,” which “set the

comparable vehicle to Private Owner condition.” (Id. at PageID #87). It appears that applying

this condition adjustment reduced the value of the comparable vehicles, which then reduced the

base vehicle value and ultimately lowered the total value of Plaintiff’s vehicle.

Construing the complaint in a light most favorable to Plaintiff, the factual pleadings

plausibly make out a claim that AFCIC breached the Policy by failing to pay Plaintiff the

ACV/market value of his vehicle after applying the challenged condition adjustment. The

factual allegations are sufficient to “nudge [Plaintiff’s breach of contract] across the line from

conceivable to plausible” based on “judicial experience and common sense.” See Twombly, 550

U.S. at 570.

The Court further finds that the complaint sufficiently alleged damages to support a

breach of contract claim; Plaintiff alleges he suffered damages related to Defendants failing to

pay the amount required under the Policy. (ECF No. 1-2, ¶¶ 126–27, 142, 145). In this case, the

alleged damages are the amount that the application of the challenged “condition adjustment”

reduced the total loss amount calculated for Plaintiff’s vehicle. Accordingly, the Motion to

Dismiss is DENIED as to Count I.

4. Count II – Unjust Enrichment

Defendants argue that Plaintiff’s claim for unjust enrichment must be dismissed because

Plaintiff cannot sustain a claim for unjust enrichment under Ohio law when that claim is

premised on a contractual right that is undisputedly governed by the Policy. (ECF No. 11,

PageID #161–62). Alternatively, they argue that the unjust enrichment claim also fails because

Plaintiff only alleged that he was underpaid by Defendants, which does not sufficiently establish

one of the elements for an unjust enrichment claim—that Plaintiff conferred a benefit on

Defendants. (Id. at PageID #162–63). Plaintiff responds that, although he is not allowed to

recover under both a breach of contract and unjust enrichment claim, he is allowed to plead

alternative theories of recovery. (ECF No. 12, PageID #185–86). He also argues that he is

entitled to restitution under a theory of unjust enrichment because he paid a premium to

Defendants who are now withholding funds that rightfully belong to him. (Id. at PageID #186–

87).

First, Plaintiff is not barred from asserting an alternative claim for unjust enrichment in

this case. “Under Ohio law, a plaintiff may not recover under the theory of unjust enrichment

when an express contract covers the same subject.” Bihn v. Fifth Third Mortg. Co., 980 F. Supp.

2d 892, 904 (S.D. Ohio 2013) (citing Wuliger v. Mfrs. Life Ins. Co., 567 F.3d 787, 799 (6th Cir.

2009)). But the law also provides an exception, such that a plaintiff can maintain a claim for

unjust enrichment, even when there is no dispute over the existence of an express contract, when

there are allegations of fraud, bad faith, or some illegality. Gascho v. Glob. Fitness Holdings,

LLC, 863 F. Supp. 2d 677, 699 (S.D. Ohio 2012) (“A claim for unjust enrichment may be pled in

the alternative . . . and may be maintained despite the existence of an express contract where

there is evidence of fraud, bad faith, or illegality.”); R.J. Wildner Contracting Co. v. Ohio Tpk.

Comm’n, 913 F. Supp. 1031, 1043 (N.D. Ohio 1996); see also Cristino v. Ohio Bur. Of Workers’

Comp., 977 N.E.2d 742, 753 (Ohio Ct. App. 2012) (“The existence of an express contract

precludes an unjust-enrichment claim only in the absence of bad faith, fraud, or some other

illegality.” (citing Aultman Hosp. Assn. v. Community Mut. Ins. Co., 46 Ohio St. 3d 51, 55, 544

N.E.2d 920 (Ohio 1989)). To trigger this exception, the alleged bad faith or fraud must have

occurred during the formation of the contract. R.J. Wildner Contracting Co., 913 F. Supp. at

1043.

Under Counts III and IV, Plaintiff alleges bad faith and fraud in the formation of the

contract between Plaintiff and Defendants, asserting that AFCIC: (i) entered into the agreement

with an intent not to perform certain obligations; (ii) intentionally created a vague definition for

“actual case value”; and (iii) intentionally failed to disclose material information in its policies,

as well as its intention to apply a condition adjustment. At this stage of the proceeding, the Court

finds these allegations are sufficient to trigger the exception and allow Plaintiff to alternatively

plead a claim for unjust enrichment.

However, Plaintiff has failed to sufficiently plead the claim. Under Ohio law, there are

three elements for a claim of unjust enrichment: “(1) a benefit conferred on a defendant by a

plaintiff; (2) the defendant’s knowledge of the benefit; and (3) retention of the benefit by the

defendant under circumstances where it would be unjust to do so without payment.” Cook v.

Ohio Nat’l Life Co., 961 F.3d 850, 858 (6th Cir. 2020) (quoting Hambleton v. R.G. Barry Corp.,

12 Ohio St. 3d 179, 465 N.E.2d 1298, 1302 (Ohio 1984)) (internal quotation marks omitted).

The complaint does not allege that Plaintiff conferred any benefit on Defendants. In fact, it

explicitly alleges that Defendants conferred a benefit upon themselves when they paid Plaintiff

and class members less than they were owed under the contract by using the “challenged

deduction.” (ECF No. 1-2, PageID #40). A review of the pleadings reveals that Plaintiff does

not allege, at any point, that he paid premiums to Defendants, or that any other benefit was

conferred upon Defendant by Plaintiff. Although Plaintiff notes that he paid premiums for

insurance coverage in his opposition brief, no such allegation is contained within the pleadings

themselves. As such, Plaintiff has failed to state a claim for unjust enrichment. Accordingly,

Count II is DISMISSED WITHOUT PREJUDICE.

5. Counts III and IV – Fraud Claims

Defendants argue that Counts III and IV are subject to dismissal because Plaintiff failed

to meet the heightened pleading requirements for fraud claims under Fed. R. Civ. P. 9(b). (ECF

No. 11, PageID #163–65). Specifically, they contend that the pleadings are insufficient because:

(i) ”Plaintiff vaguely asserts that the policy terms dealing with property payments and ACV are

intentionally false without providing any factual support for this remarkable assertion”; and

(ii) the complaint failed to identify the individuals who made the alleged fraudulent

misrepresentations. (Id. at PageID #164). They separately argue that Counts III and IV are also

barred by the “economic loss doctrine.” The Court will first address the arguments for dismissal

as to Count IV before moving to Count III. For both Counts, the Court must first determine what

specific claims are asserted in the complaint.

i. Count IV

Count IV is labeled as “Fraud and Fraudulent/Negligent Misrepresentation and

Omission.” (ECF No. 1-2, PageID #42). Plaintiff generally alleges that Defendants either

intentionally, recklessly, or negligently provided misleading information to Plaintiff by declining

to define ACV in the Policy and failing to disclose a policy of applying a condition adjustment.

(Id. ¶¶ 158–71). Plaintiff alleges these misrepresentations/omissions resulted in justifiable

reliance and caused damages to Plaintiff. (Id. ¶¶ 170–74).

To the extent that Plaintiff intended to assert a negligent misrepresentation/omission

claim, the claim fails. Under Ohio law, the elements of negligent misrepresentation are:

(1) one who, in the course of his or her business, profession or employment, or in

any other transaction in which he or she has a pecuniary interest; (2) supplies false

information for the guidance of others in their business transactions; (3) is subject

to liability for pecuniary loss caused to them by their justifiable reliance upon the

information; and (4) if he or she fails to exercise reasonable care or competence in

obtaining or communicating the information.

Martin v. Ohio State Univ. Found., 139 Ohio App. 3d 89, 742 N.E.2d 1198, 1209 (Ohio Ct. App.

2000) (citing Delman v. Cleveland Hts., 41 Ohio St. 3d 1, 534 N.E.2d 835, 837–38 (Ohio 1989)).

Notably, “[a] negligent misrepresentation claim does not lie for omissions; there must be an

affirmative false statement.” Id. (citations omitted). Thus, Plaintiff cannot state a claim for

negligent omission.

Courts have typically limited claims for negligent misrepresentation under Ohio law to

certain professionals who are in the “business of supplying information to others” such as

“attorneys, surveyors, abstractors of title and banks dealing with no-depositors’ checks.”

Middlefield Banking Co. v. Deeb, 2012-Ohio-3191, ¶35 (Ohio Ct. App. 2012) (internal quotation

marks omitted); see also Ohio Police & Fire Pension Fund v. Standard & Poor’s Fin. Servs.

LLC, 700 F.3d 829, 840–41 (6th Cir. 2012) (providing that the defendant in a negligent

misrepresentation claim is typically a professional “who is in the business of rendering opinions

to others for their use in guiding their business”); Levy v. Seiber, 2016-Ohio 68, 57 N.E.3d 331,

340 (Ohio Ct. App. 2016) (explaining that a negligent misrepresentation claim requires both a

“defendant . . . in the business of supplying information” and that a “plaintiff seek guidance with

respect to [a] business transaction, such as when there is a special relationship between the

parties”). In other words, negligent misrepresentation is related to professional malpractice and

requires a plaintiff to demonstrate that: (i) the defendant is in the business of supplying

information; and (ii) the plaintiff sought guidance from the defendant with respect to a business

transaction. Thornton v. State Farm Mut. Auto Ins. Co., No. 1:06-CV-00018, 2006 U.S. Dist.

LEXIS 83968, at *49–50 (N.D. Ohio Nov. 17, 2006) (“[T]his Court will not expand the tort into

the realm of simple consumer transactions. To do so would wholly remove a tort originally

founded in concepts of professional liability from its foundations.”).

Here, it is undisputed that the transaction between Plaintiff and Defendants was a

standard consumer transaction. The complaint contains no allegations that Defendants were in

the “business of supplying information,” that Plaintiff sought guidance from Defendants, or that

there was any special relationship between Defendants and Plaintiff. Thus, Plaintiff has failed to

state a claim for negligent misrepresentation.

To the extent that Plaintiff asserts a claim for fraudulent misrepresentation/omission, this

claim likewise fails. A claim for fraud under Ohio law consists of the following elements:

(a) a representation, or, where there is a duty to disclose, a concealment of a fact,

(b) which is material to the transaction at hand, (c) made falsely, with knowledge

of its falsity, or with such utter disregard and recklessness as to whether it is true

or false that knowledge may be inferred, (d) with the intent of misleading another

into relying upon it, (e) justifiable reliance upon the representation or

concealment, and (f) a resulting injury proximately caused by the reliance.

Ross v. PennyMac Loan Servs. LLC, 761 F. App’x 491, 493 (6th Cir. 2019) (quoting Burr v. Bd.

of Cty. Comm’rs, 23 Ohio St. 3d 69, 23 Ohio B. 200, 491 N.E.2d 1101, 1105 (Ohio 1986)); see

also Evon v. Walters, 2021-Ohio-3475, ¶ 15 (Ohio Ct. App. 2021). However, “the existence of a

contract action generally excludes the opportunity to present the same case as a tort claim.”

Wolfe v. Continental Cas. Co., 647 F.2d 705, 710 (6th Cir. 1981) (interpreting Ohio law). More

specifically, “Ohio law does not recognize a tort claim premised upon the same actions as those

upon which the plaintiff bases a breach of contract claim unless the plaintiff identifies some duty

or misrepresentation by the breaching party independent of the contract.” Davis Diamond

Galerie, Inc. v. Silverman Jewelers Consultants, Inc., 106 F. App’x 341, 342 (6th Cir. 2004).

Under Count IV, Plaintiff cannot sustain a claim for fraudulent

misrepresentation/omission because he has not identified any duty or misrepresentation

independent of the contract itself. Plaintiff is essentially attempting to recast his breach of

contract claim as a fraudulent misrepresentation/omission claim. Plaintiff’s claim is premised

entirely on alleged statements or omissions within the contract. In cases like this, the Sixth

Circuit has held that when “the causes of action in tort and in contract are factually intertwined, a

plaintiff must show that the tort claims derive from the breach of duties that are independent of

the contract and would exist by force of law notwithstanding the formation of the contract.”

Academic Imaging, LLC v. Soterion Corp., 352 F. App’x 59, 65 (6th Cir. 2009) (interpreting

Ohio law) (quoting Cuthbert v. Trucklease Corp., 2004-Ohio-4417, ¶ 44 (Ohio Ct. App. 2004)

(internal quotation marks omitted). Plaintiff cannot make such a showing because the claims

under Count IV would not exist without the formation of the contract at issue.

Thus, Plaintiff’s fraud claims under Count IV must be dismissed for failure to state a

claim. See Davis Diamond Galerie, Inc., 106 F. App’x at 342; Am. Colloid Co. v. Fire Star

Energy Res., No. 3:22 CV 1342, 2024 U.S. Dist. LEXIS 116101, at *5 (N.D. Ohio June 6, 2024)

(determining that a fraudulent misrepresentation claim “may not survive if it is based on the

terms of the contract at issue in the underlying breach-of-contract claim”). Accordingly, Count

IV is DISMISSED.

ii. Count III

Count III is labeled as “Fraud by Present Intent Not to Perform.” (See ECF No. 1-2,

PageID #41). The pleadings do not provide any further clarification as to the specific claim

asserted, but the present intent not to perform a promise can form the basis for both a claim of

promissory fraud and fraudulent inducement. King v. Hertz Corp., 1:09 cv 2674, 2011 U.S. Dist.

LEXIS 35610, at *17 (N.D. Ohio Mar. 31, 2011) (citing Langford v. Sloan, 162 Ohio App. 3d

263, 268, 2005 Ohio 3735, 833 N.E.2d 331 (Ohio Ct. App. 2005)). Under Ohio law, a claim for

promissory fraud occurs “when an individual makes a promise concerning future action,

occurrence, or conduct and, at the time he makes it, has no intention of keeping the promise.”

Williams v. Edwards, 129 Ohio App. 3d 116, 717 N.E.2d 368, 374 (Ohio Ct. App. 1998); see

Coal Res., Inc. v. Gulf & W. Indus., Inc., 756 F.2d 443, 446 (6th Cir. 1985) (“[I]t is clear that

making a contractual promise with no present intention of performing it constitutes promissory

fraud in Ohio, . . .”); Action Grp. Int’l, LLC v. AboutGolf, Ltd., No. 3:10CV2132, 2011 U.S. Dist.

LEXIS 46133, at *25 (N.D. Ohio Apr. 29, 2011) (“But a plaintiff may prevail on a claim of

promissory fraud by proving the defendant made a promise without the present intention of

performing it.”). By contrast, “[a] claim of fraud in the inducement arises when a party is

induced to enter into an agreement through fraud or misrepresentation.” Captiva, Inc. v. Viz

Commc’ns, Inc., 85 F. App’x 501, 505 (6th Cir. 2004) (citing ABM Farms, Inc. v. Woods, 81

Ohio St. 3d 498, 1998 Ohio 612, 692 N.E.2d 574, 578 (Ohio 1998)).

The claims in Count III are not subject to the same grounds for dismissal as the claims in

Count IV. “A plaintiff can maintain a tort claim for fraud in the inducement or promissory fraud

occurring in the contractual relationship because both theories raise separate and independent

legal duties that are considered outside the scope of the contract.” King, 2011 U.S. Dist. LEXIS

35610, at *8–9 (citing Integrated Molding Concepts, Inc. v. Stopol Auctions, 1:07 CV 2617,

2007 U.S. Dist. LEXIS 75646, at *16–18 (N.D. Ohio 2007). “This is because the focus of the

wrongful conduct in a fraud in the inducement or promissory fraud claim is not the conduct that

causes a contractual or promissory breach, but the intent of the tortfeasor, at the formation of the

contract or promise, to defraud the other party into entering into the agreement.” Id. at *9 (citing

Link v. Leadworks Corp., 79 Ohio App. 3d 735, 742–44 (Ohio Ct. App. 1992)).

To the extent that Plaintiff intended to assert a fraud in the inducement claim, that claim

fails. The Ohio Supreme Court has explained that a claim of fraudulent inducement “asserts that

a misrepresentation of facts outside the contract or other wrongful conduct induced a party to

enter into the contract.” ABM Farms, Inc., 692 N.E.2d at 578 (emphasis added); see also Res.

Title Agency, Inc. v. Morreale Real Estate Servs., 314 F. Supp. 2d 763, 774 (N.D. Ohio 2004).

“In other words, the claim involves some collateral misrepresentation designed to induce the

plaintiff to enter into the contract.” Aero Fulfillment Servs. Corp. v. Oracle Corp., 186 F. Supp.

3d 764, 775 (S.D. Ohio 2016) (citing Wall v. Planet Ford, Inc., 159 Ohio App. 3d 840, 2005

Ohio 1207, 825 N.E.2d 686, 694 (Ohio Ct. App. 2005). “Ohio and federal courts addressing this

issue often find that a fraudulent inducement claim cannot succeed if the alleged

misrepresentation is a contractual provision itself. . . . even if the plaintiff alleges a present

intention not to perform.” Little Mt. Precision, LLC v. DR Guns, LLC, No. 22 CV 1471, 2023

U.S. Dist. LEXIS 21665, at *16 (N.D. Ohio Feb. 8, 2023) (citing Dayton Children’s Hospital v.

Garrett Day, LLC, 2019-Ohio 4875, 149 N.E.3d 1004 (Ohio Ct. App. 2019)); id at *18

(collecting cases).

Under Count III, Plaintiff makes no allegations about misrepresentations of facts outside

the contract; instead, he implies that the misrepresentations at issue are related entirely to

statements and representations made in the Policy as to how the ACV of a damaged vehicle will

be calculated. Accordingly, Plaintiff cannot sustain a claim for fraud in the inducement.

To the extent that Plaintiff intended to assert a claim for promissory fraud, the claim also

fails. Both promissory fraud and fraud in the inducement claims require a plaintiff to plead the

same elements for all other fraud claims under Ohio law: (i) “a representation, or, where there is

a duty to disclose, a concealment of a fact”; (ii) “which is material to the transaction at hand”;

(iii) “made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as

to whether it is true or false that knowledge may be inferred”; (iv) “with the intent of misleading

another into relying upon it”; (v) “justifiable reliance upon the representation or concealment”,

and (vi) “a resulting injury proximately caused by the reliance.” Franco Marine 1, LLC v. Great

Lakes Towing Co., No. 1:17CV2506, 2018 U.S. Dist. LEXIS 99982, at *15 (N.D. Ohio June 14,

2018) (citing Chem. Bank of New York v. Neman, 52 Ohio St. 3d 204, 208, 556 N.E.2d 490

(Ohio 1990)) (promissory fraud); see also Kettering Adventist Healthcare v. Jade Designs, LLC,

677 F. Supp. 3d 735, 749 (S.D. Ohio 2023) (fraud in the inducement).

“Where a complaint contains allegations of fraud, the plaintiff must also meet the

heightened pleading standard set forth under Rule 9(b).” Roden v. Schlichter, No. 20-3466, 2021

U.S. App. LEXIS 4562, at *5 (6th Cir. Feb. 17, 2021) (citing Heinrich v. Waiting Angels

Adoption Servs., Inc., 668 F.3d 393, 403 (6th Cir. 2012)). Under Federal Rule of Civil Procedure

9(b), a plaintiff asserting a claim of fraud is required to “state with particularity the

circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). Within the context of the

liberal pleading standard under Fed. R. Civ P. 8, the purpose of Rule 9(b)’s heightened pleading

standard is to “provide defendants with more specific notice “as to the particulars of their alleged

misconduct.” United States ex rel. Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d 493 (6th Cir.

2007). Thus, to plead fraud with sufficient particularity, “a plaintiff must (1) specify the time,

place, and content of the alleged misrepresentation, (2) identify the fraudulent scheme and the

fraudulent intent of the defendant, and (3) describe the injury resulting from the fraud.”

Thompson v. Bank of Am., N.A., 773 F.3d 741, 751 (6th Cir. 2014) (citing United States ex rel.

SNAPP, Inc. v. Ford Motor Co., 532 F.3d 496, 504 (6th Cir. 2008)).

Plaintiff did not provide sufficient allegations of fact to plausibly support a claim for

promissory fraud. Under Count HI, the complaint identifies the alleged fraudulent

misrepresentation (the provision of the Policy requiring payment of ACV less deductible for total

loss) and alleges that: (1) Defendants had fraudulent intent (the present intent to not abide by the

Policy and apply a condition adjustment); and (11) the foregoing resulted in harm to Plaintiff.

(ECF No. 1-2, □□ 155-57). However, there are no allegations concerning reliance as to the

claims under Count III]—a required element for a claim of promissory fraud.° See Franco

Marine I, LLC, 2018 U.S. Dist. LEXIS 99982, at *15.

Moreover, the pleadings do not sufficiently allege damages to support a claim of

promissory fraud. Ohio law requires that “fraud damages be limited to the injury actually arising

from the fraud. The tort injury must be unique and separate from any injury resulting from a

breach of contract.” Medical Billing, Inc. v. Medical Management Sciences, Inc., 212 F.3d 332,

5 The lack of reliance allegations similarly dooms any purported claim for fraud in the inducement.

20

338 (6th Cir. 2000) (citing Davison Fuel & Dock Co. v. Pickands Mather & Co., 54 Ohio App.

2d 177, 376 N.E.2d 965, 968 (Ohio Ct. App. 1977)). The damages alleged under Count III are

not separate and distinct from those attributable to the breach of contract claim under Count I.

Plaintiff alleges damages “in the amount of the reduction of their payment by the improper

deduction”—damages entirely attributable to, and recoverable under, the breach of contract

claim. (ECF No. 1-2, ¶ 157). He then alleges that there are damages outside of “losses typical

for breach of contract,” stating that plaintiff and class members suffered: (i) “costs and expense

incurred by them”; and (ii) attorney fees. The Court finds the allegations that Plaintiff suffered

“costs and expenses” from the alleged promissory fraud to be wholly conclusory and

unsupported. The complaint does not allege facts to support a plausible claim that Defendants’

present intent not to abide by the alleged ACV calculation provisions in the Policy resulted in

costs and expenses outside of those that are attributable to the breach of contract. There are no

allegations in the pleadings that Plaintiff was induced to enter into the contract based on the

ACV calculation provisions (the alleged fraudulent statement) or that he suffered any reliance

injuries (e.g., lost opportunity costs).

As for attorneys’ fees, those are again recoverable under the breach of contract claim.

Additionally, attorneys’ fees alone are insufficient to satisfy the injury requirement for a fraud

claim under Ohio law. MISC Berhad v. Advanced Polymer Coatings, Inc., No. 1:14 CV 1188,

2014 U.S. Dist. LEXIS 165070, at *7–8 (N.D. Ohio Nov. 24, 2014) (determining that, after

conducting research, attorneys’ fees alone could not meet the injury element of a fraud claim

because “Ohio follows the ‘American Rule’ that ‘attorney’s fees are not ordinarily recoverable in

the absence of a statute or enforceable contract providing therefore.’” (quoting Nottingdale

Homeowners’ Ass’n v. Darby, 33 Ohio St. 3d 32, 34, 514 N.E.2d 702 (Ohio 1987)).

Accordingly, Plaintiff has failed to plead sufficient facts to sustain a claim for fraud

under Count III. Count III is hereby DISMISSED for failure to state a claim.®

6. Time-Barred Class Claims

Defendants argue that Plaintiffs class definition is overly broad and likely encompasses

many claims that are barred by the statute of limitations because: (1) Plaintiff brought this suit on

behalf of a putative class dating back fifteen years from the filing of the complaint; (11) Counts I

and II are subject to a six-year statute of limitations; (111) Counts HI and IV are subject to a four-

year statute of limitations; and (iv) the Policy further limits the statute of limitations for

Plaintiff's claims to one year. (ECF No. 11, PageID #165-66). Defendants state that the Court

“should limit the putative class claims to those that are within the applicable contractual

limitations period.” (/d. at PageID #166). Plaintiff responds that Defendants’ challenge to the

scope of the class certification is premature and should be addressed during Rule 23 class

certification proceedings. (ECF No. 12, PageID #189-90).

It is unclear from Defendants’ motion whether they are seeking to strike the class

allegations or dismiss specific putative class claims as time-barred. Furthermore, it is not

entirely clear whether Defendants are specifically seeking to dismiss or strike all putative class

claims based on a one-year statute of limitations or the statutory four-year or five-year statutes of

limitations. Given this uncertainty, Defendants’ request to strike or dismiss the putative class

allegations would be more appropriately and cleanly resolved in response to a motion for class

6 Having dismissed both Counts III and IV on other grounds, the Court need not address Defendants’

arguments concerning the economic loss doctrine. Alternatively, the Court finds that the economic loss doctrine

would not serve to bar Plaintiff’s claims of fraud under Counts III and IV. The Court is persuaded by the weight of

authority i this district finding that the economic loss doctrine does not apply to mtentional torts under Ohio law,

including claims for fraud in the inducement and fraudulent misrepresentation. See, e.g., Med. Mut. of Ohio v. AXA

Assistance USA, Inc., No. 1:22-cv-1313, 2023 U.S. Dist. LEXIS 174427, at *26—28 (N.D. Ohio Sep. 28, 2023); MRI

Software, LLC v. Pac. Capital Mgmt., No. 1:15 CV 1268, 2016 U.S. Dist. LEXIS 49077, at *10—11 (N.D. Ohio Apr.

11, 2016); Hodell-Natco Indus. Inc. v. SAP Am., Inc., No. 1:08-CV-02755, 2010 U.S. Dist. LEXIS 143144, at □□□□

36 (N.D. Ohio Sept. 2, 2010), report and recommendation adopted, 2011 U.S. Dist. LEXIS 59276 (N.D. Ohio June

2, 2011).

22

certification or in future motions for dismissal. Accordingly, this portion of the Motion to

Dismiss is DENIED WITHOUT PREJUDICE.

B. Motion to Compel Appraisal

Defendants move the Court to order the parties to submit to the Policy’s mandatory

appraisal provisions and either dismiss this action or stay proceedings pending the outcome of

the appraisal. (ECF No. 11, PageID #155-56). Defendants argue that AFCIC made an appraisal

demand as authorized under the Policy, appraisal provisions are valid and enforceable under

Ohio law, and federal courts have compelled appraisal in circumstances similar to those

presented in this case. (/d.). Plaintiff responds by arguing that: (1) Plaintiffs vehicle has already

been appraised; (11) the issue in this case is a question of law that cannot be resolved by or

submitted to appraisal; and (i11) appraisal is not mandatory under Ohio law. (ECF No. 12,

PageID #191—94).

As to Plaintiffs first argument, his vehicle has not yet been appraised pursuant to the

“Right To Appraisal” provision of the Policy—the appraisal that Defendants now seek to compel

in the instant motion. Plaintiffs third argument is unpersuasive because, while appraisal might

not be mandatory under Ohio law, Ohio courts have held that appraisal provisions like the one in

the Policy are valid and enforceable. See Westview Vill. v. State Farm Fire & Cas. Co., No.

1:22-cv-0549, 2022 U.S. Dist. LEXIS 150500, at *3 (N.D. Ohio Aug. 22, 2022) (“Parties may

enforce appraisal provisions under Ohio law”) (citing Saba v. Homeland Ins. Co. of Am., 159

Ohio St. 237, 112 N.E.2d 1, 3 (Ohio 1953)); Bobel v. Safeco Ins. Co., No. 18CV245, 2018 □□□□

Dist. LEXIS 240663, at *3 (N.D. Ohio May 9, 2018) (same).’

7 Plaintiff's citations to Fire Ass’n of Phila. y. Agresta are unavailing because that court was not

considering the enforceability of an appraisal provision but determining whether a party’s untimely request for an

oe could retroactively impose a condition precedent to suit. See 115 Ohio St. 426, 154 N.E. 723, 725 (Ohio

23

The Court finds Plaintiff’s remaining argument against compelling appraisal

unpersuasive as well. Plaintiff maintains that appraisal is unwarranted because an appraisal

cannot resolve the sole legal issue in this case: whether the application of a condition adjustment

is permitted under the Policy. (ECF No. 12, PageID #192–93). Plaintiff attempts to characterize

this action as one solely concerning the interpretation of the Policy and whether the use of a

condition adjustment is permitted. This case is ultimately a dispute over the amount of money

owed to Plaintiff under the Policy (a classic loss claims dispute). Plaintiff is asserting that

Defendants paid less than the ACV of Plaintiff’s damaged vehicle, in violation of the Policy.

The condition adjustment was used as part of the calculation of the ACV, and the payout to

Plaintiff, as evidenced by the Market Valuation. (See ECF No. 1-2, PageID #81–82, 87).

Plaintiff disputes the use of the condition adjustment because he believes that it results in a loss

amount that does not properly reflect the ACV of the vehicle. As such, the crux of this dispute is

about the amount of loss.

Because the parties ultimately dispute the amount of the ACV of Plaintiff’s vehicle, the

Court finds that compelling appraisal would not be useless in this matter. Courts have rejected

similar attempts by plaintiffs who challenge the use of a condition adjustment in the insurance

company’s valuation method and oppose appraisal as unwarranted. See, e.g., Enger v. Allstate

Ins. Co., 407 F. App’x 191, 193 (9th Cir. 2010) (“By the plain language of the insurance policy,

it is immaterial that Enger believes the cause of the disagreement concerning the actual cash

value is Allstate’s alleged use of an improper valuation method. . . . Until an appraisal is

completed, it is impossible to know whether Enger’s claim in fact was undervalued, such that her

claims for breach of contract, [and] breach of the covenant of good faith and fair dealing, . . . are

viable.”); Bloomgarden v. Allstate Fire & Cas. Ins. Co., No. 18-62059, 2019 U.S. Dist. LEXIS

44118, at *11 (S.D. Fla. Mar. 15, 2019) (collecting cases), report and recommendation adopted

in part, rejected in part, 2019 U.S. Dist. LEXIS 181090 (S.D. Fla. Aug. 6, 2019); Fortson v.

Garrison Prop. & Cas. Ins. Co., No. 1:19CV294, 2019 U.S. Dist. LEXIS 187036, at *6–7

(M.D.N.C. Oct. 29, 2019) (finding appraisal appropriate despite the plaintiff’s contention that

she was not challenging her vehicle’s valuation but only the right to deduct a condition

adjustment from the payment to the plaintiff); accord Schmidt v. State Farm Mut. Auto. Ins. Co.,

No. 22-12926, 2024 U.S. Dist. LEXIS 63349, at *7–9 (E.D. Mich. Apr. 5, 2024).

Moreover, the cases cited by Plaintiff to support denying appraisal are distinguishable.

Both McPheeters v. United Servs. Auto. Ass’n, No. 1:20-cv-414, 2020 U.S. Dist. LEXIS 150965,

at *3–5 (S.D. Ohio Aug. 20, 2020), and Ostendorf v. Grange Indem. Ins. Co., No. 2:19-CV-

1147, 2020 U.S. Dist. LEXIS 5163, at *12–13 (S.D. Ohio Jan. 13, 2020), did not involve

disputes concerning the total loss amount, but presented challenges as to scope of coverage,

ambiguity in the language of the polices, and whether the policies at issue required the payment

of sales tax. Here, the parties do not dispute the definition of ACV. They dispute the total loss

amount and whether a condition adjustment can be used when calculating the ACV. As for

Ngethpharat v. State Farm Mut. Auto. Ins. Co., 499 F. Supp. 3d 908 (W.D. Wash. 2020), another

case cited by Plaintiff, that case is distinguishable because the plaintiff in that case did not

challenge the amount of the relevant deduction, but instead challenged only the legality of the

deduction under state statute. Id. at 919.

The Policy gives either party the right to demand an appraisal of the loss. (ECF No. 1-2,

PageID #61). AFCIC submitted a written request for an appraisal of the loss amount to Plaintiff,

citing to the “Right to Appraisal” under the Policy. (ECF No. 11-1, PageID #170–71 (“This

letter serves as Allstate’s written demand for an appraisal of the insured’s loss, pursuant to the

terms of his Auto Policy with Allstate, . . .”). The Policy provides that the appraisal process will

result in a determination of the ACV and the amount of the loss for the damaged vehicle, which

are questions of fact that fall within the scope of the Policy’s appraisal provision. (ECF No. 1-2,

PageID #61–62). In accordance with the Policy, Plaintiff must participate in an appraisal to

determine the loss amount because AFCIC has exercised its right to demand an appraisal when

the parties are in disagreement over the amount of loss. The language in the Policy concerning

appraisal is clear and unambiguous, and it is therefore enforceable. Accordingly, the Court

GRANTS Defendants’ motion to compel appraisal and STAYS this action until the appraisal is

completed.

IV. CONCLUSION

For the foregoing reasons, the Court rules as follows:

1. Defendants’ Motion to Dismiss (ECF No. 11) is GRANTED IN PART AND DENIED

IN PART;

2. Defendant Allstate Insurance Company is DISMISSED WITHOUT PREJUDICE as a

defendant in this action;

3. Counts II, III, and IV are DISMISSED for failure to state a claim, pursuant to Fed. R.

Civ. P. 12(b)(6);

4. The Motion to Dismiss is DENIED as to Count I;

5. Defendants’ request to compel appraisal is GRANTED and Plaintiff is instructed to

comply with the appraisal provisions within the Policy;

6. This action is STAYED pending completion of the appraisal and the parties shall notify

the Court immediately upon completion of the appraisal process.

IT IS SO ORDERED.

Date: September 9, 2024 OVnd 4 Hinurg

CHARLES E.FLEMING □

U.S. DISTRICT COURT JUDGE

27