OPINION AND ORDER
Plaintiff Paraco Gas Corporation (hereinafter “Paraco” or “Plaintiff’) brings this Action against Travelers Casualty and Surety Company of America (“Travelers”), Fairfield County Bank Insurance Services, LLC (formerly known as Carnall Insurance, LLC, and hereinafter “FCBIS”), Alice Lara (“Lara”), and Jeffrey Welsch (“Welsch,” and with FCBIS and Lara, collectively “the FCBIS Defendants”).
I. BACKGROUND
A. Factual Background
Unless otherwise indicated, the following facts are derived from Plaintiffs Second Amended Complaint and accompanying exhibits, (see Second Am. Compl. (Dkt. No. 15)), and are assumed to be true for the purposes of the Court’s consideration of Defendant Travelers’s Motions To Dismiss.
In 2009, Plaintiff retained FCBIS to obtain Directors & Officers liability insurance to replace an expiring policy Paraco had with Chubb Insurance Company. (Second Am. Compl. ¶¶ 11-12.) Paraco
In the fall of 2009, representatives of FCBIS engaged in a series of communications with Jason E. Hull (“Hull”), an underwriter employed by Travelers, about a possible insurance policy for Paraco. (Second Am. Compl. ¶¶ 4, 18-22.) In these exchanges, Hull provided several different insurance coverage proposals. (Id. ¶ 18, 21.)
On October 2, 2009, Hull emailed FCBIS to provide “three different options for the [Paraco] account.” (Id. Ex. B, at 10 (“Oct. 2 email”).) In this email, Hull stated that “[t]he first option has the limits as requested but with a 15k retention!,] [t]he second quote matches Chubb [sic] expiring policy!,] and the third option includes ID fraud.” (Id.) Hull also attached a proposal letter containing a more detailed explanation of each of the three quotes. (See id. at 1-6.) This document notes an “Ownership Percentage Exclusion” of 5% of the named insured (i.e. Paraco) under the “Private D & O Endorsements” for both the first and second quotes. (Id. at 6-7.) The same day, FCBIS informed Paraco that Travelers offered a policy that matched the coverage of Paraco’s expiring Chubb policy. (Second Am. Compl. ¶ 20.)
On October 20, 2009, Hull provided four proposals for insurance coverage to FCBIS. (Id. ¶ 21.) This document lists an “Ownership Percentage Exclusion” of 5% of the named insured (i.e.Paraco) under the “Private D & O Endorsements” applicable to the first, second, and fourth quotes. (See id. Ex. D, at 8-9.) Paraco claims that the “second quote” from Hull’s October 2, 2009 email with FCBIS “became the ‘first quote’ attached [to] Hull’s October 20, 2009 letter.” (Second Am. Compl. ¶22.) Paraco accepted the first quote from Hull’s October 20, 2009 letter, (id. ¶ 28), believing that the policy would provide coverage for suits against Paraco’s directors and officers by any of its shareholders, (id. ¶ 25).
The resulting insurance policy issued by Travelers (the “Policy”) includes the endorsement titled “Ownership Percentage Exclusion,” which had been contained in the proposals. (Travelers’s Mem. Ex. 1, at 61.)
B. Procedural Background
Paraco filed a Complaint in the Supreme Court of the State of New York, Westches-ter County, on June 18, 2012, and served the same on Defendants on June 22, 2012. (See Notice of Removal (Dkt. No. 1).) Defendants subsequently removed to this Court on July 19, 2012. (See id.) Paraco twice amended the Complaint, first on December 18, 2012, (see Dkt. No. 11), and then again on March 8, 2013, (see Second Am. Compl.). In the Second Amended Complaint, Paraco claims that the Policy should be reformed on grounds of either mutual mistake or fraud, and that Paraco deserves damages due to Travelers’s negligent misrepresentatiоns. Paraco also requests that the Court declare that the existing Policy covers the Armentano Action. Finally, Paraco asserts claims against the FCBIS Defendants for breach of fiduciary duty and for making false or misleading statements that led to Paraco’s damages, but these claims are not at issue here.
On March 13, 2013, Defendant Travelers moved to dismiss Paraco’s Second Amended Complaint, (see Dkt. No. 16), and filed a Memorandum of Law in Support of its Motion, (see “Travelers’s Mem.” (Dkt. No. 17)). Paraco filed a Memorandum of Law in Opposition to Travelers’s Motion, (see “Paraco’s Mem.” (Dkt. No. 14)), to which Travelers later replied, (see “Travelers’s Reply Mem.” (Dkt. No. 18)). Lastly, on July 15, 2013, Paraco filed a Supplemental Memorandum of Law in Opposition to Travelers’s Motion. (See “Paraco’s Supp. Mem.” (Dkt. No. 34).)
On April 17, 2013, the FCBIS Defendants filed an Answer to Paraco’s Second Amended Complaint in which they raise several affirmative defenses and assert five cross-claims against Travelers. (See “FCBIS Cross-cl.” (Dkt. No. 23).) Specifically, the FCBIS Defendants claim that (a) Travelers made either negligent or fraudulent misrepresentations; (b) Travelers engaged in unfair trade and deceptive business practices in violation of state law; (e) the Policy should be reformed to delete the ownership exclusion at issue in this suit; (d) the FCBIS Defendants are indemnified under a prior agency agreement with Travelers; and (e) Travelers breaсhed the implied covenant of good faith and fair dealing in its agency agreement with the FCBIS Defendants. (See id.) On July 15, 2013, Travelers filed a Motion to Dismiss these Cross-claims, (see Dkt. No. 27), along with a supporting memorandum of law, (see “Travelers’s Cross-claim Mem.” (Dkt. No. 28)). The FCBIS Defendants filed a Memorandum of Law in Opposition to Travelers’s Motion to Dismiss the Cross-claims, (“FCBIS Mem.” (Dkt. No. 32)), along with supporting Declarations from Thomas Catalano, (see “Catala-no Decl.” (Dkt. No. 29)), Alica Lara, (Lara Deck), and Jeffrey Welsch, (Welsch Deck). Defendant Travelers filed a Reply Memorandum of Law in response to the FCBIS Defendants’ filings. (“Travelers’s Cross-claim Reply Mem.” (Dkt. No. 33).)
A. Standard of Review
In considering a defendant’s motion to dismiss pursuant to Rule 12(b)(6), the Court is required to construe the factual allegations contained in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See Ruotolo v. City of New York,
The Supreme Court has held that “[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly,
B. Analysis
In considering the motions to dismiss both Paraco’s and the FCBIS Defendants’ claims against Travelers, the Court will first address Paraco’s claim that the Policy covers the Armentano suit, which has the potential to render moot Paraco’s other claims in this action. Next, the Court will consider Paraco’s remaining claims, which overlap with most of the FCBIS Defendants’ cross-claims. Finally, the Court will consider the cross-claims asserted by the FCBIS Defendants alone, which large
In evaluating Paraco’s and the FCBIS Defendants’ state-law claims, the Court will apply New York law. Paraco is a New York corporation and has its principal place of business in New York, (see Second Am. Compl. ¶ 1); Travelers is authorized to do business in New York and has its principal place of business in Connecticut, (see id. ¶ 2); and FCBIS is both a Connecticut corporation and has offices in Connecticut (see id. ¶ 5; FCBIS Cross-cl. ¶2). Although the Parties have not addressed what law should be applied to thеir claims, both Plaintiff and Travelers have assumed that New York law governs, (see Paraco’s Mem. 9, 11-12; Travelers’s Mem. 9-13, 15-16; Travelers’s Reply Mem. 5, 7-10), and the FCIBS Defendants have done the same, (see FCBIS Mem. 7, 10, 12, 16, 17-21), asserting that “[t]he Court need not make a conflict of law determination ... since the New York and Connecticut law regarding negligent misrepresentation and fraud are essentially the same,” (id. 8-9). This sort of “implied consent is ... sufficient to establish the applicable choice of law.” Barbagallo v. Marcum LLP,
1. The Armentano Action
Paraco asserts that the Armentano Action should be covered by the Policy and requests a declaratory judgment to this effect. (See Second Am. Compl. ¶¶ 41-50.) Travelers argues that such a declaration is precluded by law, given the plain language of the Policy, and that the Court should declare the Policy not apply to the Armen-tano Action.
The “Ownership Percentage Exclusion” provision limits the applicability of the Policy’s directors and officers liability coverage, specifically stating that such coverage
shall not apply to, and [Travelers] shall have not duty to defend or pay, advance or reimburse Defense Expenses for, any Claim brought, maintainеd or asserted by or on behalf of or with the assistance or participation of any person or entity which owns or did own directly or beneficially more than 5% of [Paraco].
(Travelers’s Mem. Ex. 1, at 61.)
The Armentano Action was brought by Mr. Armentano on behalf of “all other shareholders of Paraco [that are] similarly situated.” (Second Am. Compl. ¶42, 45 (internal quotation marks omitted).) While Paraco acknowledges that Armenta-no himself is an owner of 5% or more of Paraco, (see id. ¶ 42, 46 (identifying Robert Armentano as a “shareholder” and asserting that “[a]t the applicable period in time,
“Under New York law, courts bear the responsibility of determining the rights and obligations of parties under insurance contracts based on the specific language of the policies.... [T]he court may not write into the contract conditions the parties did not insert by adding or excising terms under the guise of construction, nor may it construe the language in such a way as would distort the contract’s apparent meaning.” Georgitsi Realty, LLC v. Penn-Star Ins. Co.,
Paraco argues that the Court must make a factual determination as to whether the Grandchildren’s Trust is a “similarly situated” shareholder in order to determine whether the Armentano Action is covered. (See Paraco’s Mem. 11-12.) However, this factual issue does not affect the ability of Paraco’s claim to withstand Travelers’s Motion To Dismiss. Assuming the facts as asserted by Paraco in its Complaint — that the Grandchildren’s Trust is a “similarly situated” shareholder, (see Second Am. Compl. ¶ 48), and not an owner of more than a 5% interest in Paraco, (see id. ¶ 46) — the analysis above remains the same.
2. Reformation Claims
Both Paraco and the FCBIS Defendants ask the Court to reform the Policy to excise the Ownership Percentage Exclusion. (See Second Am. Compl. ¶¶ 29-40; , FCBIS Cross-cl. ¶¶ 118-121.) Under New York law, “mutual mistake or fraud may furnish the basis for reforming a written agreement.” Chimart Assocs. v. Paul,
a. Mutual Mistake
New York law permits reformation of a contract due to mutual mistake “where the parties have reached an oral agreement and, unknown to either, thе signed writing does not express that agreement ... such as when an inadvertent secretary’s error fails to reflect the actual agreement of the parties.” Barbagallo,
Paraco pleaded that it accepted an insurance quote that Travelers’s represented “match[ed] [Paraco’s] expiring insurance policy with the Chubb Insurance Company,” (Second Am. Compl. ¶ 23), and that the expiring Chubb policy did not have an ownership percentage exclusion, (id. ¶ 31), but fails to plead that Travelers intended to enter into an agreement without an Ownership Percentage Exclusion. To the contrary, Paraco asserts that the fact that the Policy includes the Ownership Percentage Exclusion was “known to Travelers and the [FCBIS] [Defendants.” (Id. ¶ 26.) Paraco’s Second Amended Complaint further alleges that Travelers was aware that the Policy contained the ownership exclusion, while Paraco believed it did not. (See id. ¶ 26 (“Unbeknownst to [P]laintiff, but known to Travelers ..., the insurance policy issued by Travelers included the 5% ownership exclusion.”).) Paraco has therefore pleaded the absence of the underlying meeting of the minds necessary to assert mutual mistake. See Simkin,
Like Paraco’s Second Amended Complaint, the FCBIS Defendants’ Cross-claim is also internally inconsistent with an assertion of mutual mistake, as the Cross-claim suggests Travelers’s ill intent. For example, the FCBIS Defendants allege that “Travelers buried [the Ownership Percentage Exclusion] on the eighth page of a nine page document, in small typeface, using a summary description of the exclusion and listing only the endorsement number rather than providing the endorsement itself’ and did not bring the exclusion to FCBIS’s attention. (FCBIS Cross-cl. ¶ 94.) The FCBIS Defendants also claim that Travelers knew that its representation that the Policy matched the expiring Chubb policy was false, (see id. ¶ 95), that “Travelers was aware that any [directors and officers liability coverage] that was subject to an exclusion for actions brought by shareholders with greater than a 5% ownership interеst would effectively mean that there would be virtually no coverage for any shareholder derivative actions,” (id. ¶ 75), and that Travelers “intended and expected” FCBIS and Paraco to “inadvertently overlook the exclusion,” (id. ¶ 96). At best, the FCBIS Defendants raise an argument of mutual mistake in the alternative, arguing that “[i ]f it was the intent of Travelers to provide coverage to Paraco that met or exceeded the coverage provided by the expiring Chubb policy ... then the inclusion of the [Ownership Percentage Exclusion] endorsement must have been a mutual mistake.” (Id. ¶ 120.) Moreover, a review of the materials incorporated in the FCBIS Cross-claim by reference suggest that inclusion of the Ownership Percentage Exclusion in the second policy listed in the October 2, 2009 email was not an error.
b. Fraud
Paraco and FCBIS also allege that they were mistakenly induced to accept the Ownership Percentage Exclusion by Travelers’s fraud. A party alleging fraud in the formation of a contract must plead “(i) a material misrepresentation of a presently existing or past fact; (ii) an intent to deceive; (iii) reasonable reliance on the misrepresentation ...; and (iv) resulting damages.” Johnson v. Nextel Commc’ns, Inc.,
Paraco’s Second Amended Complaint asserts that Travelers’s agent, Hull, represented to Paraco that “[t]he second quote matches [the] Chubb expiring policy” Paraco sought to replace, (Second Am. Compl. ¶ 19), that Paraco accepted this quote, (id. ¶ 22-23), that the resulting Policy contained the Ownership Percentage
Under New York law, a “party cannot claim reliance on a misrepresentation when he or she could have discovered the truth with due diligence.” Id. (citing East 15360 Corp. v. Provident Loan Soc’y of N.Y.,
Paraco claims that it relied on Travelers’s representation that “[t]he second quote matches Chubb expiring policy” from Hall’s October 2, 2009 email, (Second Am. Compl. ¶¶ 19, 23), despite subsequent communication involving multiple possible policies, (see id. ¶ 21) — including policies that Travelers is not accused of holding out to match the expiring Chubb policy. Paraco further claims that the second quote from Travelers’s October 2, 2009 email became the first quote in Travelers’s October 20, 2009 letter. (See id. ¶ 22.) But Paraco does not assert that Travelers articulated this connection. In addition, the October 2, 2009 email — the very communication containing the alleged misrepresentation upоn which Paraco claims to have relied — attaches a proposal letter and list of endorsements applicable to each quote. (See Catalano Deck Ex. I.) This
In defense of its purported reliance on the October 2, 2009 email statement, Para-co protests that the Policy “is 70 pages in length and ... [t]he exclusion does not come up until page 57 of the policy.” (Paraco’s Mem. 10.) But Paraco omits the fact that the exclusion appears on a page by itself and features a header in all caps stating that “THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.” (Travelers’s Mem. Ex. 1, at 61.) Paraco also complains that the Policy “contains language only an individual familiar with insurance policies could comprehend.” (Paraco’s Mem. 10.) Yet, courts applying general principles of contract law have little empathy for parties who fail to read and make sure they understand the terms of agreements they sign. See Copape Produtos de Pétroleo Ltda. v. Glencore Ltd., No. 11-CV-5744,
Moreover, Paraco is a sophisticated corporate party and was contracting with Travelers, which is similarly sophisticated, further undermining Paraco’s claim of reasonable reliance. See Frontline Processing Corp. v. Merrick Bank Corp., No. 13-CV-3956,
However, the reasonableness of Paraco’s reliance is complicated by the fact that it hired FCBIS to find a new policy that would provide the same coverage as the expiring Chubb policy. (See Second Am. Compl. ¶ 11). Where “a plaintiff has taken reasonable steps to protect itself against deception, it should not be denied recovery merely because hindsight suggests that it might have been possible to detect the fraud when it occurred.” DDJ Mgmt.,
In American Building Supply, the plaintiff hired the defendant, an insurance broker, for the purpose of helping it obtain a general liability insurance policy. See id. at 1183. The plaintiff “alleged that it informed [the] defendant that only employees entered the [company’s] premises, never customers, as no retail business was conducted at [that] location.” Id. However, the defendant secured a policy which contained a clause excluding coverage for “actual or alleged bodily injury, ... [or] personal injury ... [to] employee[s] of any insured.” Id. at 1183-84 (internal quotation marks omitted). When one of the plaintiffs employеes was injured at the facility and coverage under the insurance policy was denied due to this exclusion, the plaintiff sued the broker for negligence and breach of contract. See id. at 1184. The Court of Appeals rejected the defendant’s argument that the “plaintiffs claim is barred by its receipt of the insurance policy without complaint,” holding that “an insured should have a right to look to the expertise of its broker with respect to insurance matters.” Id.,
Here, Paraco hired FCBIS to secure a policy to replace, and “match,” the expiring Chubb policy. (See Second Am. Compl. ¶ 11.) Paraco expected that the replacement policy “would provide coverage for claims/suits alleged against” Para-co “by any of its shareholders.” (Id. ¶ 25 (emphasis added).) Therefore, because Travelers and FCBIS had access to Para-co’s application for insurance and were aware of the ownership stakes held by Paraco’s shareholders, (see id. ¶¶ 14-16; FCBIS Cross-cl. ¶¶ 72-74), the inclusion of the Ownership Percentage Exclusion in the Policy, which exempted from coverage suits by all but one of Paraco’s shareholders at the time the Policy was proposed, (see id. ¶ 27), hardly makes sense in context. While Paraco only discovered the Ownership Percentage Exclusion upon denial of coverage in the Armentano action, (see id. ¶ 28), this apparent failure to read the Policy and decision to rely on FCBIS’s representations and diligence in selecting a policy that met Paraco’s needs does not clearly make Paraco’s actions unreasonable. Thus, like the plaintiff in American Building Supply, Paraco should not be barred from suit. While Paraco’s reliance on FCBIS may not have been unreasonable, there- remаins the unasked (and un-briefed) question of whether FCBIS’s role absolves Travelers. Because this question needs further attention, the Court denies Travelers’s Motion without prejudice to renewal, if Travelers wishes to address this point in a subsequent motion.
The FCBIS Defendants’ fraudulent misrepresentation claims are a different matter. FCBIS’s Cross-claim alleges that Travelers made “repeated explanations” about how Travelers’s policy would meet or exceed the coverage provided by the expiring Chubb policy. (FCBIS Cross-cl. ¶82.) The FCBIS Defendants also specifically mention Hull’s written comments on a portion of the Chubb insurance policy, (see id. ¶ 79), as well as the much-cited October 2, 2009 email statement, (see id. ¶ 87). FCBIS’s assertions of these facts together are specific enough to satisfy the particularity requirements of Rule 9(b), though the Court notes the FCBIS Defendants’ claim that “Hull repeatedly explained to FCBIS how the Travelers policy would meet or exceed the coverage provided by the expiring Chubb policy,” (id. ¶ 82), fails to state where or when these statements were made, as Rule 9(b) requires. See Woori Bank,
The FCBIS Defendants’ alleged reliance is even less reasonable when considered in light of FCBIS’s obligations under New York law as Paraco’s broker. See Am. Bldg. Supply Corp.,
3. Negligent Misrepresentation Claims
Plaintiff and the FCBIS Defendants also bring negligent misrepresentation claims against Travеlers.
“[U]nder New York law, a plaintiff may recover for negligent misrepresentation only where the defendant owes [him or her] a fiduciary duty.” Turner v. Temptu Inc., No. 11-CV4144,
The assessment of whether such a relationship exists is normally fact-driven. See, e.g., Murphy,
In the instant case, Paraco asserts that it, FCBIS, and Travelers had a relationship in which the Parties engaged in communications for a month regarding the terms of the Policy. (See Second Am. Compl. ¶¶ 54-62.) However, the interactions Paraco describes are nothing more than arm’s length deal-making. Paraco sought a policy that would “match its expiring insurance policy with Chubb,” (id. ¶ 54), provided Travelers with the Chubb policy and other necessary information, (id. ¶¶ 14-15), and then relied upon Travelers’s representation to Plaintiff (through FCBIS) that one of its proposals for coverage “match[ed the] Chubb expiring policy,” (id. ¶ 58). But Paraco fails to allege that these interactions fall outside the normal practice when obtaining an insurance policy. Moreover, Travelers’s representations about various policies and how they compare with the Chubb policy reflect nothing more than Travelers’s knowledge about the products it sells. Paraco has not pleaded that Travelers took on an agent’s role with respect to procurement of the Policy, such as if Travelers had acted as Paraco’s insurance broker, or even advised Paraco on which policy of the several it provided Paraco should select. To the contrary, Paraco alleges that it hired FCBIS as its broker and retained it to obtain insurance “to match its expiring insurance policy” with Chubb. (Id. ¶ 11.) Therefore, Paraco has not pleaded facts to support a conclusion that this was the sort of “exceptional and particularized situations” that would provide grounds for a finding that Travelers owed a duty to Paraco. See Murphy,
The FCBIS Defendants similarly have failed to plead a special relationship between Travelers and FCBIS. The
In its Memorandum in Opposition to Travelers’s Motion, FCBIS denies being Paraco’s broker and instead claims to have been “Travelers’s agent” and claims that FCBIS and Travelers have a “principal and agent” relationship that would prevent the instant transaction from having been made at “arm’s-length.” (FCBIS Mem. 11-12.) As support for this argument, FCBIS cites to the “Agency Contract” between Travelers and FCBIS, which provides that “[FCBIS] may solicit, bind, execute[,] and service policies and endorsements for classes of businesses as [Travelers] may authorize from time-to-time.” (See FCBIS Mem. 11; Catalano Deck Ex. A, at 2.)
This contention is undone by FCBIS’s characterization of the deal in its Answer and Cross-claims, as well as its submissions related to the instant Motion. (See FCBIS Cross-cl. ¶ 67 (“FCBIS is an agency and/or brokerage invоlv[ed] in placing policies for numerous insurance carriers, including Travelers, on behalf of its clients, including Paraco”), ¶ 48 (admitting to Par-aco’s allegation that the FCBIS “[D]efen-dants held themselves out as having skill and expertise in procuring insurance and in advising clients at to their insurance needs”), ¶ 52 (admitting to having “arranged for and procured D & 0 insurance coverage for [Paraco] from Travelers”); FCBIS Mem. 6 (asserting that “FCBIS was certainly negotiating on behalf of its client Paraco to obtain the best possible deal”).) FCBIS’s claim that it was not Paraco’s broker also conflicts with Para-co’s understanding of their relationship. (See Second Am. Compl. ¶ 11 (claiming that [FCBIS] “was retained by [P]laintiff to obtain Directors & Officers (‘D & O’) liability insurance to match its expiring policy”).) Travelers does not allege that it was explicitly authorized to enter a policy with Paraco, as would appear to be required by the paragraph of the Agency agreement immediately following the one upon which FCBIS relies. (Catalano Deck Ex. A, at 2 (providing that “[FCBIS is] not authorized to make, alter, very or discharge any policy ... unless [Travelers] give[s] you written authorization.”).) In addition, while FCBIS identifies several “Representative samplefs] of Travelers/FCBIS agency compensation documents,” (Catalano Deck Ex. B), it provides no such document with respect to the Policy here, nоr does it allege that it was compensated by Travelers for securing the Policy with Paraco. The pleadings and information provided by FCBIS establish only that it has served as Travelers’s agent in some transactions, but do not support FCBIS’s contention that it acted in that capacity here. Instead, all the facts pleaded at this point show that FCBIS acted as Paraco’s broker in securing the Policy.
New York law provides that “an insurance broker is the agent of the insured, not the insurance company.”
A FCBIS Defendants’ Remaining Claims
Several of the Cross-claims asserted by the FCBIS Defendants do not track Para-co’s claims. Specifically, the FCBIS Defendants claim that they are indemnified in the instant suit pursuant to a contractual arrangement with Travelers, (see FCBIS Cross-cl. ¶¶ 122-131), that Travelers has breached an implied covenant of good faith and fair dealing with respect to the same contract, (see id. ¶¶ 132-139), and that Travelers’s actions violate state law prohibitions on unfair and deceptive business practices, (see id. ¶¶ 113-117).
First, the FCBIS Defendants claim that a contract between FCBIS and Travelers contains an indemnification provision that makes Travelers “liable for any damages and other relief as may be adjudicated against the [FCBIS] Defendants, and also for the costs of the defense of this action, including reasonable attornеy’s fees and expenses.” (Id. ¶ 131.) The FCBIS Defendants’ Cross-claim refers to the operative provision of this agreement, (see id. ¶ 125), which appears to be attached to FCBIS’s Declaration, (see Catalano Decl. Ex. A, at 5), and which the Court may consider when deciding Defendant Travelers’s Rule 12(b)(6) motion, see Roth v. Jennings,
Determining whether FCBIS contributed to any error — and to what extent that contribution harmed Paraco — requires a factual inquiry that the Court is unable to make at this stage of proceedings. See, e.g., Hammond v. Toy Indus. Ass’n, Inc.,
The FCBIS Defendants also assert a separate claim against Travelers for breach of the implied covenant of good faith and fair dealing with respect to the
New York law “does not recognize a separate cause of action for breach of the implied covenant of good faith and fair dealing when a breach of contract claim, based upon the same facts, is also pled.” Harris v. Provident Life & Accident Ins. Co.,
Lastly, the FCBIS Defendants claim that “Travelers’[s] actions constitute an unfair trade practice under Connecticut law, [Conn. Gen.Stat. Ann.] § 42-110b, or a deceptive business practice under New York law, [N.Y. Gen. Bus. Law § 349], or both.” (FCBIS Cross-cl. ¶ 115.) For
III. CONCLUSION
For the reasons stated above, Travelers’s Motions To Dismiss Paraco’s Second Amended Complaint and the FCBIS Defendants’ Cross-claims is granted in part and denied in part as follows:
Paraco’s clаim for a declaration that the Ownership Percentage Exclusion does not apply to the Armentano Action is dismissed without prejudice, as are Paraco’s claim for reformation due to mutual mistake and Paraco’s negligent misrepresentation claim. Travelers’s Motion is denied with respect to Paraco’s fraud claims.
The FCBIS Defendants’ claims for reformation due to mutual mistake or fraud, negligent misrepresentation, breach of an implied covenant of good faith and fair dealing, and unfair trade and deceptive business practices are dismissed without prejudice. Travelers’s Motion is denied with respect to the FCBIS Defendants’ claims for contractual indemnification.
Paraco and the FCBIS Defendants are granted 30 days in which to file amended complaints. The Clerk of Court is respectfully directed to dismiss the pending motions. (See Dkt. Nos. 16, 27.)
SO ORDERED.
Notes
. Lara and Welsch were listed as "Alice Lara-Pivetz” and "Jeff Welsch" in Plaintiffs Second Amended Complaint. (Dkt. No. 15.) The Court will refer to these parties by the names used in their sworn declarations. (See Decl. of Alice Lara ("Lara Decl.”) (Dkt. No. 30) and Decl. of Jeffrey Welsch ("Welsch Decl.”) (Dkt. No. 31).)
. Plaintiff refers to Exhibit A of its original Complaint as the "directors and officers liability insurance policy ... effective from October 25, 2009 through July 12, 2010,” (Compl. ¶ 6 (Dkt. No. 1)), however the dates included in the document suggest it is a renewal policy rather than the original. The "Ownership Pеrcentage Exclusion” endorsement is identical in both Plaintiff’s and Travelers's exhibits — including the policy number — with the exception that Plaintiff's version lists an effective date of July 12, 2011 and Travelers's version has an effective date of October 24, 2009. (Compare Travelers's Mem. Ex. 1, at 61, with Plaintiff’s Verified Complaint Ex. A, at 91.)
. In considering Travelers’s Motion To Dismiss, the Court may refer to the Policy, even if not attached to Plaintiff's Complaint, as Plaintiff is seeking relief under the Policy and the Policy is integral to the Complaint. See Svensson v. Securian Life Ins. Co.,
. Plaintiffs claim also fails if the facts were contrary to Plaintiff's pleading. If the Trust is not “similarly situated,’’ it would not be a party to the Armentano Action, removing the foothold for Plaintiff's argument. Similarly, if the Trust owned a 5% or greater interest in Paraco, coverage would be barred under the Ownership Percentage Exclusion.
. For the purposes of resolving the instant Motion To Dismiss FCBIS’s Cross-claims, the Court will adopt FCBIS's analysis that each of the four quotes offered "greater protection
. The FCBIS Defendants also assert a claim for "Fraudulent Misrepresentation,” (FCBIS Cross-cl. ¶¶ 105-112), which the FCBIS Defendants acknowledge shares the same elements of a fraud claim under New York law, (see FCBIS Mem. 9-10). See Guggenheim Capital, LLC v. Birnbaum,
. In addition, the Court notes — but does not consider — that the dates in the insurance policy attached to Plaintiff's original Complaint suggest that the Policy, including the Ownership Exclusion Provision, was renewed. (See Plaintiff's Verified Complaint Ex. A, at 91; see also Travelers's Mem. 1 n. 1). If true, this would only make it more difficult for Paraco to plead that its reliance on Travelers’s statement was reasonable and that Paraco was unaware of the Ownership Exclusion Provision. See Rogers v. Urbanke,
. Paraco’s Second Amended Complaint is more vague about the nature of the claim asserted as Paraco’s "Third Cause of Action,” (see Second Am. Compl. ¶¶ 51-67), but Para-co's Memorandum in response to Travelers’s Motion To Dismiss makes clear that this claim is for negligent misrepresentation, (see Para-co's Mem. at 12) ("The Third Cause of Action is for negligent misrepresentation.... ”).
. This case is also distinguishable from Gulf Ins. Co. v. Burns Motors, Inc.,
. Travelers also argues that the FCBIS Defendants' claims under Conn. Gen.Stat. Ann. § 42-110b fall outside the three-year statute of limitations for bringing such an action, (Travelers’s Cross-cl. Mem. 22), though the Court need not consider this issue to dismiss the state-law -unfair trade and business practices claims.