Wright v. Travelers Home and Marine Insurance Company, The

Background

In August 2021, a water pipe above Morgan Wright’s residence burst, causing extensive damage to the residence and her personal property. The residence was insured under a policy issued by The Travelers Home and Marine Insurance Company. Wright filed an insurance claim.

Wright alleges that Travelers discriminated against her based on her disabilities in responding to the claim. She asserts unlawful-business-discrimination claims under the Minnesota Human Rights Act, Minnesota Statutes section 363A.17, and Minneapolis Code of Ordinances section 139.40. The opinion states that Wright did not assert a breach-of-contract claim.

Earlier Motions

In the first round of motions, Travelers moved to dismiss Wright’s original complaint under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal for failure to state a legally sufficient claim. Wright sought permission to amend the complaint to add a bad-faith claim under Minnesota’s Insurance Standard of Conduct statute. The court granted Travelers’ motion to dismiss and denied Wright’s request to add the bad-faith claim, but gave Wright an opportunity to file an amended complaint.

In the second round, Travelers again moved under Rule 12(b)(6) to dismiss Wright’s amended complaint. Travelers argued that Wright had not plausibly alleged discriminatory intent, that the Minnesota Human Rights Act claim was untimely under a one-year limitations period, and that the Minneapolis ordinance claim was barred by failure to exhaust administrative remedies and by a one-year limitations period.

The court denied that motion from the bench. It found that Wright’s allegations—that Travelers knew of her disability and disparaged her because of it, causing emotional distress—were sufficient at the pleading stage. The court also concluded that the limitations and administrative-exhaustion issues were affirmative defenses, meaning defenses that generally must be proved by the defendant, and that the amended complaint did not establish those defenses on its face.

Motion to Reconsider

Travelers then sought reconsideration of the denial of its second dismissal motion. A reconsideration motion is limited to correcting a clear legal or factual error or considering newly discovered evidence; it is not ordinarily a vehicle for presenting a new legal theory or authority that could have been raised earlier.

Travelers relied principally on Krueger v. Zeman Construction Co. and argued that a plaintiff bringing an unlawful-business-discrimination claim under Minnesota Statutes section 363A.17 must allege a breach of contract. Travelers argued that Wright’s Minnesota claim should therefore be dismissed and that the Minneapolis ordinance claim should receive the same treatment because the ordinance is textually identical to the Minnesota statute.

The court first ruled that Travelers’ argument did not satisfy the rules for reconsideration because Travelers could have cited Krueger or similar authority in its earlier motion but did not. The court also rejected Travelers’ interpretation of Krueger on the merits. It explained that Krueger addressed whether a person who was not a party to a contract could sue for discrimination in the contract’s performance. Wright, by contrast, was a party to the Travelers policy. The court read Krueger as requiring a contractual relationship, not an alleged breach of contract, and concluded that discrimination could occur even when the alleged discriminator had fulfilled its contractual obligations.

Disposition

The court ordered that Travelers’ Motion to Reconsider, ECF No. 53, was DENIED. The court did not alter its earlier denial of Travelers’ motion to dismiss Wright’s amended complaint.