Shelby v. Northfield Insurance Company, 2:17-cv-02418

Plaintiffs Anthony Shelby, Shelby & Shelby Properties, LLC, and Shelby, Arnold & Shelby Property Management, LLC bought a commercial insurance policy from Northfield Insurance covering rental properties.
On September 25, 2016 a fire severely damaged Plaintiffs’ rental property at 940 Faxton Avenue; Plaintiffs submitted a timely claim for property damage and loss of rental income.
Northfield allegedly denied the claim, asserting lack of operable smoke detectors; Plaintiffs contend detectors were installed before the fire.
Plaintiffs sued in Tennessee state court alleging breach of contract, bad-faith refusal to pay under Tenn. Code Ann. § 56-7-105, and TCPA violations; defendant removed to federal court.
Northfield moved to dismiss the bad-faith claim, arguing Plaintiffs failed to plead a formal demand and the required 60-day waiting period under § 56-7-105.
The Magistrate Judge recommended granting the motion; Plaintiffs did not object. The district court adopted the Report and granted dismissal of the bad-faith claim, leaving the breach of contract and TCPA claims pending.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Plaintiffs stated a claim under Tenn. Code Ann. § 56-7-105 (bad faith)	Plaintiffs alleged timely claim and statutory violation for failure to pay within 60 days	Plaintiffs failed to plead a formal demand for payment and failure to wait 60 days after such demand before filing suit	Court granted dismissal: Plaintiffs did not object to the Magistrate Judge’s recommendation and claim dismissed

United States v. Curtis, 237 F.3d 598 (6th Cir. 2001) (discusses purpose of 28 U.S.C. § 636 and magistrate judge referrals)
Gomez v. United States, 490 U.S. 858 (1989) (role of magistrate judges in relieving district court burden)
Thomas v. Arn, 474 U.S. 140 (1985) (district court need not review de novo issues not objected to after a magistrate judge's report)
United States v. Walters, 638 F.2d 947 (6th Cir. 1981) (district court should adopt magistrate judge findings absent specific objections)
Baker v. Peterson, [citation="67 F. App'x 308"] (6th Cir. 2003) (application of magistrate judge procedural standards)