Manrique v. State Farm Mutual Automobile Insurance Company
- Kenneth Karas
- 7:21-cv-00224
- U.S. District Court · Southern District of New York
- 18
In Manrique v. State Farm, Judge Karas denied dismissal of insurance and contract claims but granted it on deceptive-practices and relief claims.
Jose Manrique’s New York Insurance Law and breach-of-contract claims, including his proposed class action, were allowed to continue past the pleading stage. His New York General Business Law § 349 claim and requests for declaratory and injunctive relief were dismissed at this stage; the opinion does not state that a class was certified.
What happened
In Manrique v. State Farm Mutual Automobile Insurance Company, Jose Manrique claimed that State Farm improperly calculated benefits under a New York no-fault automobile insurance policy and sought to represent a class of similarly situated plaintiffs.
State Farm argued that the complaint should be dismissed because its calculation of wage-related benefits complied with New York law. Manrique also asserted breach of contract, deceptive-practices, declaratory-relief, and injunctive-relief claims.
Judge Kenneth M. Karas denied State Farm’s motion to dismiss the insurance-law and breach-of-contract claims. He granted the motion as to the deceptive-practices claim and the claims for declaratory and injunctive relief.
The detailed version
- Manrique v. State Farm Mutual Automobile Insurance Company · No. 7:21-cv-00224
- Kenneth Karas
- Dec. 2, 2021
Background
Jose Manrique brought a proposed class action against State Farm Mutual Automobile Insurance Company. He alleged violations of New York Insurance Law and New York General Business Law, breach of contract, and sought declaratory and injunctive relief concerning automobile insurance benefits.
Manrique was injured on July 31, 2019, while riding in a vehicle insured under a State Farm policy. The policy provided $50,000 in basic no-fault personal-injury-protection benefits and $25,000 in optional benefits, for a total of $75,000. State Farm paid $49,214.90 in medical benefits and $14,444.08 in wage benefits. It also credited $4,420 in New York State Disability benefits and $2,648 in Social Security benefits, for total first-party benefits of $70,726.98.
At the time of the accident, Manrique’s monthly wage was $3,424.99. The dispute concerned whether State Farm could both apply New York’s $2,000-per-month cap on lost earnings and deduct 20 percent of earnings from the amount counted against the policy’s basic-economic-loss limit. State Farm argued that the statute allowed both calculations. Manrique argued that State Farm could not use the 20-percent deduction to reduce the coverage available beyond the statutory wage cap.
Court’s Analysis
The court considered State Farm’s motion under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to state a legally plausible claim. At this stage, the court accepted the complaint’s factual allegations as true and drew reasonable inferences in Manrique’s favor.
New York Insurance Law claim
The court held that Manrique plausibly alleged a violation of New York Insurance Law § 5102. Relying principally on the New York Court of Appeals’ decision in Kurcsics v. Merchants Mutual Insurance Co., the court concluded that the $2,000-per-month limit on lost earnings functions as an outer limit on recovery and does not permit an insurer to obtain an additional benefit by applying the 20-percent deduction to earnings above that limit when calculating basic economic loss. The court rejected State Farm’s interpretation of Kurcsics and denied the motion to dismiss Count I.
Breach-of-contract claim
Manrique alleged that the insurance policy breached its contract because it did not comply with the No-Fault Statute. The court explained that applicable, valid insurance-law provisions become part of an insurance contract. Because Manrique adequately alleged a statutory violation and monetary injury, the court held that he also adequately pleaded breach of contract and denied the motion to dismiss Count II.
New York General Business Law § 349 claim
The court held that Manrique plausibly alleged that State Farm’s conduct was consumer-oriented and potentially misleading. But a claim under § 349 also requires an injury caused by the deception that is independent of the loss caused by a contract breach. The court found that Manrique’s alleged injury was the same underpayment addressed by his breach-of-contract claim. It therefore granted the motion to dismiss Count III.
Declaratory and injunctive relief
The court granted the motion with respect to Count IV. It explained that declaratory judgments and injunctions are remedies rather than separate causes of action. Independent declaratory relief would serve no useful purpose because the parties’ legal dispute would be addressed through Counts I and II, so the court dismissed Count IV as to declaratory relief.
The court also dismissed Count IV as to injunctive relief. Manrique had not shown that he or similarly situated people were likely to suffer the same harm in the future, and monetary compensation could address the alleged loss. The court therefore found no basis for injunctive relief.
Disposition
Judge Kenneth M. Karas denied State Farm’s motion to dismiss Counts I and II and granted the motion with respect to Counts III and IV. The court directed the Clerk to terminate the motion and scheduled a status conference for January 10, 2022.
Read the full 18-page opinion on CourtListener, the free public archive maintained by the Free Law Project.