IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

TERESA LAWSON, )

Plaintiff, )

)

v. ) CIVIL ACTION NO. 15-00026-N

)

STATE FARM FIRE AND CASUALTY )

COMPANY, )

Defendant. )

ORDER

This action is before the Court on the Motion to Dismiss Second and Third 

Causes of Action (Doc. 7) filed by Defendant State Farm Fire and Casualty 

Company (“State Farm”). State Farm moves for dismissal of these causes of action 

for failure to state a claim upon which relief can be granted, Fed. R. Civ. P. 12(b)(6), 

or in the alternative for lack of subject matter jurisdiction, Fed. R. Civ. P. 12(b)(1). 

This motion has been fully briefed (see Docs. 7, 18, 21) and is ripe for 

adjudication (see Doc. 11). By the consent of the parties (see Doc. 16), the Court has 

designated the undersigned Magistrate Judge to conduct all proceedings in 

accordance with 28 U.S.C. § 636(c) and Federal Rule of Civil Procedure 73. (See

Doc. 20). Upon consideration, and for the reasons stated herein, the Court finds 

that the motion is due to be DENIED in part and GRANTED in part, with leave 

given to file an amended complaint, as set out.

I. Facts

On November 12, 2013, Plaintiff Teresa Lawson (“Lawson”) was operating 

her vehicle at the intersection of Jupiter St. and Michigan Ave. in Foley, Alabama, 

and had brought her vehicle to a complete stop, when a vehicle traveling 

immediately behind her failed to stop at the intersection, thereby striking Plaintiff’s 

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vehicle in the rear. The vehicle then stopped and the occupants informed Lawson 

that they had called the police. After that, the occupants reentered their vehicle 

and drove off without providing Lawson with any information. Eventually Lawson 

learned that the police were never called. She eventually filed a police report, and 

made a claim with State Farm. On October 29, 2014, State Farm denied Lawson’s 

claim for payment under her UM contract. State Farm stated, “Our investigation 

has determined that you did not comply with the policy provisions of filing a police 

report within 24 hours of the loss. Therefore, the Uninsured Motorist Coverage will 

not extend to this loss.”1

II. Procedural History

On December 17, 2014, Lawson filed a complaint against State Farm in the 

Circuit Court of Baldwin County, Alabama, alleging claims for 

uninsured/underinsured motorist (“UM/UIM”) coverage (“First Cause of Action”)2

and bad faith (“Second” and “Third Cause[s] of Action”) arising from State Farm’s 

failure to pay UM/UIM benefits to her pursuant to an insurance policy she held 

with State Farm. (See Doc. 1-1 at 2 – 6). On January 22, 2015, Defendant removed 

the case to this Court pursuant to 28 U.S.C. §§ 1441 and 1446. (See generally Doc. 

1). Removal was timely pursuant to 28 U.S.C. § 1446, and the Court has original 

 

1 This statement of facts is derived from the allegations in Lawson’s Complaint (Doc. 1-1 at 

2 – 6), which the Court must accept as true for purposes of the present motion to dismiss for 

failure to state a claim. See, e.g., Edwards v. Prime, Inc., 602 F.3d 1276, 1291 (11th Cir. 

2010) (in deciding a motion to dismiss under Rule 12(b)(6), a court must “take the factual 

allegations in the complaint as true and construe them in the light most favorable to the 

plaintiffs.”).

2 “As statutorily defined, ‘un insured motorist’ includes ‘under insured’ motorist.” Lowe v. 

Nationwide Ins. Co., 521 So. 2d 1309, 1309 n.1 (Ala. 1988) (citing Ala. Code § 32-7-23(b)).

Case 1:15-cv-00026-N Document 26 Filed 05/15/15 Page 2 of 19
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jurisdiction due to diversity pursuant to 28 U.S.C. § 1332. (Doc. 22).

Following removal, State Farm filed the present motion to dismiss Lawson’s 

bad faith causes of action under Federal Rule of Civil Procedure 12(b)(6) for failure 

to state a claim upon which relief can be granted, or, alternatively, under Rule 

12(b)(1) for lack of subject matter jurisdiction. (Doc. 7) Because this Court must 

first have subject matter jurisdiction before it can address the merits of Lawson’s 

claims under Rule 12(b)(6), the Court will address State Farm’s arguments under 

Rule 12(b)(1) first.

III. Analysis

A. Applicable Law

Before addressing the parties’ substantive contentions, the Court must decide 

what substantive law governs the claims in this diversity action. “A federal court in 

a diversity case is required to apply the laws, including principles of conflict of laws, 

of the state in which the federal court sits.” Manuel v. Convergys Corp., 430 F.3d

1132, 1139 (11th Cir. 2005) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 

487, 496 (1941)).

Alabama law follows the traditional conflict-of-law principles of lex loci 

contractus and lex loci delicti. See Liberty Mut. Ins. Co. v. Wheelwright,

851 So.2d 466 (Ala. 2002). Under the principles of lex loci contractus, a 

contract is governed by the law of the jurisdiction within which the 

contract is made. Cherry, Bekaert & Holland v. Brown, 582 So.2d 502 

(Ala.1991). Under the principle of lex loci delicti, an Alabama court 

will determine the substantive rights of an injured party according to 

the law of the state where the injury occurred. Fitts v. Minnesota 

Mining & Mfg. Co., 581 So.2d 819 (Ala.1991).

Lifestar Response of Alabama, Inc. v. Admiral Ins. Co., 17 So. 3d 200, 213 (Ala. 

2009) (footnote omitted).

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Here, Lawson’s injuries all appear to have occurred in Alabama. The parties 

apply Alabama law in their briefing, and neither has argued that the law of any 

other jurisdiction should apply to Lawson’s claims. Therefore, the Court will apply 

Alabama law to the bad faith claims at issue.

B. Rule 12(b)(1) Motion to Dismiss for Lack of Ripeness

1. Standard of Review

As the Eleventh Circuit has explained the standard on motions to dismiss for 

lack of subject matter jurisdiction:

Attacks on subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1) 

come in two forms. “Facial attacks ” on the complaint “require the 

court merely to look and see if the plaintiff has sufficiently alleged a 

basis of subject matter jurisdiction, and the allegations in his 

complaint are taken as true for the purposes of the motion.” Menchaca 

v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir.), cert. denied, 449 

U.S. 953, 101 S.Ct. 358, 66 L.Ed.2d 217 (1980) (citing Mortensen v. 

First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir.1977)). 

“Factual attacks,” on the other hand, challenge “the existence of 

subject matter jurisdiction in fact, irrespective of the pleadings, and 

matters outside the pleadings, such as testimony and affidavits, are 

considered.” Id.

These two forms of attack differ substantially. On a facial attack, a 

plaintiff is afforded safeguards similar to those provided in opposing a 

Rule 12(b)(6) motion-the court must consider the allegations of the 

complaint to be true. Williamson v. Tucker, 645 F.2d 404, 412 (5th 

Cir.), cert. denied, 454 U.S. 897, 102 S.Ct. 396, 70 L.Ed.2d 212 (1981). 

But when the attack is factual, the trial court may proceed as it never 

could under 12(b)(6) or Fed.R.Civ.P. 56. Because at issue in a factual 

12(b)(1) motion is the trial court’s jurisdiction-its very power to hear 

the case-there is substantial authority that the trial court is free to 

weigh the evidence and satisfy itself as to the existence of its power to 

hear the case. In short, no presumptive truthfulness attaches to 

plaintiff’s allegations, and the existence of disputed material facts will 

not preclude the trial court from evaluating for itself the merits of 

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jurisdictional claims. Id. at 412–13 (quoting Mortensen, 549 F.2d at 

891).

Lawrence v. Dunbar, 919 F.2d 1525, 1528–29 (11th Cir. 1990).

2. Legal Conclusion

State Farm moves to dismiss Lawson’s bad faith claims, set forth in the 

Second and Third Causes of Action in her Complaint, without prejudice for lack of 

subject matter jurisdiction. (Doc. 7). State Farm does not dispute that, at time of 

the underlying accident, Lawson had a valid policy with it for UM/UIM benefits. 

State Farm’s motion is a facial attack on Lawson’s bad faith and breach of contract 

claims, arguing that, under the reasoning of Pontius v. State Farm Mutual 

Automobile Insurance Company, 915 So. 2d 557 (Ala. 2005), those claims are not

ripe for adjudication, and thus do not present a justiciable controversy.

The Alabama Supreme Court recently explained Pontius as follows:

Pontius involved a husband and wife who were in a car accident with a 

vehicle driven by an uninsured driver, a minor. The husband and wife 

sued the minor and the minor's parents and then filed a claim with 

State Farm for uninsured-motorist benefits. State Farm denied the 

claim and intervened in the case. The husband and wife amended their 

complaint to add State Farm as a defendant and alleged, among other 

things, that State Farm had denied their claim in bad faith. State 

Farm filed a motion to dismiss pursuant to Rule 12(b)(6), Ala. R. Civ. 

P., or for a judgment on the pleadings pursuant to Rule 12(c), Ala. R. 

Civ. P. The trial court granted the motion and entered a judgment in 

favor of State Farm.

On appeal, the issue before this Court was whether an action for badfaith failure to pay an uninsured-motorist claim could be maintained 

against an insurance company before the plaintiff demonstrated that 

she was legally entitled to recover damages from the uninsured 

motorist. This Court held that “ ‘[t]o be “legally entitled to recover as 

damages” the insured must establish fault on the part of the uninsured 

motorist, which gives rise to damages, and must then prove the extent 

of those damages.’ ” Pontius, 915 So. 2d at 560 (quoting State Farm's 

motion to dismiss and LeFevre v. Westberry, 590 So. 2d 154, 157 (Ala.

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1991)). Consequently, “ ‘[t]here can be no breach of an uninsured 

motorist contract, and therefore no bad faith, until the insured proves 

that he is legally entitled to recover.’ ” LeFevre, 590 So.2d at 158 

(quoting Quick v. State Farm Mut. Auto. Ins. Co., 429 So. 2d 1033, 

1035 (Ala.1983)).

The Court then cited LeFevre and Bowers v. State Farm Mutual 

Automobile Insurance Co., 460 So. 2d 1288, 1290 (Ala. 1984), for the 

proposition that a tort of bad-faith failure to pay uninsured-motorist 

benefits is not ripe for adjudication until the insurer and the insured 

become adversarial and that bad faith can arise only after that time, 

provided also that the dispute is legitimate and that the issues of fault 

and damages are resolved. “As to [the] bad-faith claim arising out of 

[the uninsured-motorist] coverage with State Farm,” the Court 

concluded, the husband and wife “had to demonstrate [that they were] 

‘legally entitled to recover’ damages for bad-faith failure to pay under 

the policy, and ... ‘ “must be able to establish fault on the part of the 

uninsured motorist, which gives rise to damages and must be able to 

prove the extent of those damages.” ’ ” Pontius, 915 So. 2d at 564. 

Because the husband and wife failed to meet that burden, their claims 

were not ripe and, the Court held, the trial court lacked subject-matter 

jurisdiction. Id. at 564–65.

Ex parte Safeway Ins. Co. of Ala., Inc., 148 So. 3d 39, 41-42 (Ala. 2013) (hereinafter, 

“Safeway II”), as modified on denial of reh'g (Dec. 13, 2013).

The Alabama Supreme Court reaffirmed [Pontius’s] holding in Ex parte 

Safeway Insurance Company of Alabama, Inc., 990 So. 2d 344 (Ala.

2008) (hereinafter “Safeway I”). The plaintiff seeking UIM benefits 

alleged that liability for the accident was uncontested and that the 

damages were undisputed, but the insurance company submitted an 

affidavit in which a claim manager stated the company needed to get 

the plaintiff's medical records to establish the extent of her damages. 

Id. at 347–52. The court held that the affidavit showed the plaintiff's 

damages were in dispute, which made the plaintiff's breach of contract 

and bad faith claims not ripe, and the court accordingly lacked subject 

matter jurisdiction. Id. at 352–53. Justice Murdock concurred in the 

result of Safeway I, but stated that, while the plaintiff's claim was 

premature on the grounds that her damages weren't settled, it was 

incorrect to say that the court lacked jurisdiction. Id. at 353 (Murdock, 

J., concurring). Rather, if a plaintiff pleads premature claims for UIM 

benefits, they should be subject to dismissal under 12(b)(6), or if a 

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plaintiff has failed to produce evidence of a completed harm, they 

should be dismissed at summary judgment. Id. at 353 n. 6.

Broadway v. State Farm Mut. Auto. Ins. Co., 4 F. Supp. 3d 1271, 1279 (M.D. Ala. 

Mar. 19, 2014), appeal dismissed (June 16, 2014).

In Safeway II, however, the Alabama Supreme Court limited the applicability 

of Pontius. In that case, a driver was allegedly injured when an unknown hit-andrun motorist stuck his car. Safeway II, 148 S. 3d at 40. The driver filed a claim 

with his UM/UIM insurer, which denied the claim. Id. The insured then sued his 

UM/UIM insurer for breach of contract and bad faith refusal to pay his claim. Id. 

The UM/UIM insurer moved to dismiss both claims for lack of subject matter 

jurisdiction, “arguing that a claim for uninsured-motorist benefits is not ripe for 

adjudication until liability and damages have been established.” Id. After the trial 

court denied the insurer’s motion to dismiss, and its subsequent motion for 

reconsideration, the insurer filed a petition “for a writ of mandamus directing the 

trial court to dismiss only the bad-faith claim, not the breach-of-contract claim, 

without prejudice, for lack of subject-matter jurisdiction[,]”3 arguing that the 

 

3 Per the Alabama Supreme Court:

“Mandamus is an extraordinary remedy and will be granted only where there 

is ‘(1) a clear legal right in the petitioner to the order sought; (2) an 

imperative duty upon the respondent to perform, accompanied by a refusal to 

do so; (3) the lack of another adequate remedy; and (4) properly invoked 

jurisdiction of the court.’ Ex parte Alfab, Inc., 586 So. 2d 889, 891 (Ala. 1991). 

This Court will not issue the writ of mandamus where the petitioner has ‘full 

and adequate relief’ by appeal. State v. Cobb, 288 Ala. 675, 678, 264 So. 2d 

523, 526 (1972) (quoting State v. Williams, 69 Ala. 311, 316 (1881)).”

Safeway II, 148 So. 3d at 41.

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holding in Pontius controlled. Id. at 41-42.

The Alabama Supreme Court disagreed. Initially, in a footnote, the court 

distinguished Pontius from the facts at issue in noting that “[]t]he present case 

allegedly involves a phantom driver, whereas Pontius[,]” as well as both predecessor 

and progeny cases, “involved a known driver.” Id. at 42 n.2. The court was unable 

to find “any controlling decisions that apply Pontius to cases involving phantom 

drivers.” Id.

The Safeway II court then held that the trial court “d[id] have the authority 

to hear the case and [could] dismiss it on the merits.” Id. at 42. As the court 

explained: 

The outcome of the case ought to depend on a Rule 12(b)(6) motion to 

dismiss, not a Rule 12(b)(1) motion to dismiss, and proving fault and 

damages ought to be an evidentiary or elemental prerequisite for 

showing an insurer's bad-faith failure to pay benefits, not a 

jurisdictional prerequisite.

...

In determining a trial court's subject-matter jurisdiction, this Court 

asks “ ‘only whether the trial court had the constitutional and 

statutory authority’ to hear the case.” Russell v. State, 51 So.3d 1026, 

1028 (Ala. 2010) (quoting Ex parte Seymour, 946 So.2d 536, 538 

(Ala.2006)). Problems with subject-matter jurisdiction arise if, for 

example, a party files a probate action in a juvenile court, a divorce 

action in a probate court, or a bankruptcy petition in a circuit court, 

because the nature or class of those actions is limited to a particular 

forum with the authority to handle them. There are, however, no 

problems with subject-matter jurisdiction merely because a party files 

an action that ostensibly lacks a probability of merit.

Id. at 42-43.4

 

4 In so holding, the Safeway II court cited to Justice Murdock’s special concurrence in 

(Continued)

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Applying this analysis to the bad faith claim at issue, the court then 

explained:

Alabama's uninsured-motorist statute, § 32–7–23, Ala. Code 1975, 

protects “persons ... who are legally entitled to recover damages from 

owners or operators of uninsured motor vehicles because of bodily 

injury, sickness or disease, including death, resulting therefrom.” We 

have held that “[u]nknown phantom drivers ... are included within the 

definition of an uninsured motorist.” Walker v. GuideOne Specialty 

Mut. Ins. Co., 834 So.2d 769, 772 (Ala. 2002) (citing Criterion Ins. Co. 

v. Anderson, 347 So.2d 384, 386 (Ala.1977)); see also Wilbourn v. 

Allstate Ins. Co., 293 Ala. 466, 468, 305 So. 2d 372, 373–74 (1974). Our 

analysis in Walker is relevant here:

“A motorist ‘legally entitled to recover damages' under § 32–7–23 

is one who presents facts sufficient to prove that the motorist 

was involved in an accident under circumstances that would 

entitle the motorist to uninsured-motorist coverage. Such a 

motorist is ‘legally entitled’ to damages if the motorist meets his 

or her burden of presenting substantial evidence to survive a 

motion for a summary judgment or a judgment as a matter of 

law and the fact-finder is reasonably satisfied from the evidence 

that the motorist should recover damages. See § 12–21–12, Ala. 

Code 1975. In [the plaintiff motorist's] case, the only evidence of 

a culpable phantom vehicle is [the plaintiff motorist's] own 

testimony, which could constitute substantial evidence.”

Walker, 834 So. 2d at 772. Like the plaintiff motorist in Walker,

Kimbrough has a chance to prove fault on the part of the phantom 

motorist. The holding in Pontius requires that Kimbrough first 

establish the fault of the phantom motorist before he may seek 

damages from Safeway for bad-faith failure to pay. We see no reason 

why ripeness and subject-matter jurisdiction must be implicated for 

this to happen. If Kimbrough cannot establish the fault of the phantom 

 

Safeway I. See 148 So. 3d at 42 n.3. This Court agrees with the U.S. District Court for the 

Middle District of Alabama that Safeway II “indicates a move towards the view of Justice 

Murdock in Safeway I.” Broadway, 4 F. Supp. 3d at 1279.

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driver, then he cannot prove bad faith and, accordingly, Safeway may 

prevail on a Rule 12(b)(6) motion to dismiss.

In light of the foregoing, Safeway has not clearly demonstrated that 

this case is not ripe or that the trial court lacks subject-matter 

jurisdiction. Therefore, Safeway does not have a clear legal right to 

mandamus relief.

Id. at 43.5

Like Safeway II, this case also involves a “unknown phantom driver” that 

allegedly struck the plaintiff’s vehicle and fled the scene; 6 whatever the wisdom of 

Safeway II,7 the Alabama Supreme Court declined to apply the ripeness reasoning 

 

5 To date, no Alabama appellate court has applied the reasoning of Safeway II in a 

published decision.

6 Two Alabama federal district courts have found this distinction to be key. See Broadway, 

4 F. Supp. 3d at 1279 (“The question before the Court is whether the holding in Safeway II

requires the Court to analyze State Farm's motion to dismiss under Rule 12(b)(1) or 

12(b)(6). The Court concludes that the Safeway II court intended to distinguish that case 

from Pontius and Safeway I on the grounds that Safeway II involved a phantom driver.”), 

appeal dismissed (June 16, 2014); Andersen v. Omni Ins. Co., No. 1:13–cv–2163, 2014 WL 

838811, at *3 n.6 (N.D.Ala. Mar. 4, 2014) (“Safeway II expressly distinguishes itself 

factually from Pontius (and those following Pontius, like Safeway I) because the latter two 

decisions involved known uninsured drivers, not phantom drivers.” (quotation omitted)). 

Unlike the present action, however, both of those decisions involved known uninsured 

drivers; thus, those courts applied the ripeness analysis of Pontius to the plaintiffs’ breach 

of contract and bad faith claims.

7 State Farm states that it “does not agree with the rationale derived from this mandamus 

case” (Doc. 7-1 at 4 n.3) but cites no authority to indicate that Alabama Supreme Court 

mandamus decisions carry less precedential weight than other opinion, and it is not this 

Court’s place to second-guess that court’s interpretation of Alabama law. State Farm also 

attempts to distinguish Safeway II by pointing out that “Safeway II was a case in which 

breach of contract was alleged which, as set forth in the preceding section, is not present in 

this case.” (Id.). This distinction is immaterial, however. While true that the plaintiff in 

Safeway II alleged claims for both breach of contract and bad faith, on mandamus review 

the insurer challenged only the trial court’s denial of dismissal of the bad faith claim. The 

breach of contract claim was mentioned only as part of the case’s procedural history, and 

there is no indication in Safeway II that the breach of contract claim played any significant 

(Continued)

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of Pontius to the plaintiff’s bad faith claims. Because State Farm raises the same 

argument here as the insurer in Safeway II, the Court will do likewise. As with 

Safeway II’s plaintiff motorist, “[i]f [Lawson] cannot establish the fault of the 

phantom driver, then [s]he cannot prove bad faith and, accordingly, S[tate Farm] 

may prevail on a Rule 12(b)(6) motion to dismiss[,]” and there is “no reason why 

ripeness and subject-matter jurisdiction must be implicated for this to happen.” 148 

So. 3d at 43. See also Broadway, 4 F. Supp. 3d at 1279 (“The issue of whether the 

plaintiff stated a claim was a matter of satisfying Rule 12(b)(6) by stating the 

elements or satisfying Rule 56 by producing evidence of a completed harm.” (citing 

Safeway II)). Therefore, the motion to dismiss Lawson’s bad faith claims for lack of 

subject matter jurisdiction under Rule 12(b)(1) is due to be DENIED. 

C. Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim

1. Standard of Review

A defendant may move to dismiss a complaint under Federal Rule of Civil 

Procedure 12(b)(6) if the plaintiff has failed to state a claim upon which relief may 

be granted. “When considering a motion to dismiss, all facts set forth in the 

plaintiff's complaint ‘are to be accepted as true and the court limits its consideration 

to the pleadings and exhibits attached thereto.’ “ Grossman v. Nationsbank, N.A., 

225 F.3d 1228, 1231 (11th Cir. 2000) (quoting GSW, Inc. v. Long County, 999 F.2d 

1508, 1510 (11th Cir. 1993)). All “reasonable inferences” are drawn in favor of the 

plaintiff. St. George v. Pinellas County, 285 F.3d 1334, 1337 (11th Cir. 2002).

 

role in the court’s reasoning.

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A complaint must “set forth a short and plain statement of the claim showing 

that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). In Bell Atlantic Corp. v. 

Twombly, 550 U.S. 544 (2007), the Supreme Court set forth the parameters of a 

well-pleaded complaint. A claim for relief “must set forth enough factual matter 

taken as true to suggest the required elements of a cause of action.” Id. at 556; see 

also Watts v. Florida Int'l University, 495 F.3d 1289, 1295 (11th Cir. 2007) 

(applying Twombly). Furthermore, a complaint must “provide the defendant with 

fair notice of the factual grounds on which the complaint rests.” Jackson v. 

Bellsouth Telecommc'ns, Inc., 372 F.3d 1250, 1271 (11th Cir. 2004).

2. Failure to State a Claim for Bad Faith

The Court disagrees with State Farm’s first argument under Rule 12(b)(6) 

that Lawson’s bad faith claims are due to be dismissed because she has failed to 

allege breach of contract, a necessary element for proving a bad faith claim under 

Alabama law. See Safeway I, 990 So. 2d at 351 (“Breach of an insurance contract is 

an element of a bad-faith-failure-to-pay claim.” (quoting Pontius, 915 So. 2d at 564 

(citing Ex parte Alfa Mut. Ins. Co., 799 So. 2d 957 (Ala. 2001))). Though Lawson 

admittedly does not invoke the precise phrase “breach of contract” anywhere in her 

Complaint, in both of her bad faith causes of action, Lawson alleges, inter alia, that, 

“by the terms of [her] contract, [State Farm] was obligated to pay [her] claims” but 

instead denied her coverage or refused to pay. (Doc. 1-1 at 4 – 6). These allegations 

adequately state that a breach of contract has occurred.

As part of its second argument under Rule 12(b)(6), State Farm points out, “ ‘

“there can be no breach of an uninsured motorist contract, and therefore no bad 

faith, until the insured proves that he is legally entitled to recover.” ’ ” Safeway I, 

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990 So. 2d at 351 (quoting Pontius, 915 So. 2d at 563 (quoting Quick v. State Farm 

Mut. Auto. Ins. Co., 429 So. 2d 1033, 1035 (Ala. 1983))). State Farm argues that 

“[h]ere, Plaintiff seeks to prove that legal entitlement so no claim for bad faith can 

lie.” (Doc. 7-1 at 3).

The “legally entitled to recover” “prerequisite to bad faith liability stems from 

Section 32–7–23 of the Alabama Code, which requires automobile policies to include 

UIM coverage ‘for the protection of persons insured thereunder who are legally 

entitled to recover damages’ from uninsured owners or operators. See LeFevre v. 

Westberry, 590 So. 2d 154, 156–57 (Ala.1991) (explaining the genesis of the term).” 

Joffrion v. Allstate Ins. Co., Civil Action No. 12-0434-WS-M, 2014 WL 3518079, at 

*3 (S.D. Ala. July 16, 2014) (Steele, C.J.).

The “legally entitled to recover” standard requires that the insured 

“must be able to [1] establish fault on the part of the uninsured 

motorist, which [2] gives rise to damages, and must be able to prove [3] 

the extent of those damages.” Quick, 429 So. 2d at 1035 (emphasis, 

internal quotes omitted); accord Ex parte State Farm Mutual 

Automobile Insurance Co., 893 So. 2d 1111, 1115 (Ala. 2004). That is, 

the insured must “prov[e] a lack of insurance on the part of the tortfeasor; the tort-feasor's legal liability; proximate cause; and damages,” 

including “the extent of his damages.” LeFevre, 590 So.2d at 162.

This threshold burden is placed on the insured because, although he is 

seeking benefits under his own policy, he is seeking benefits based on 

the wrongdoing of a third party, and the insurer may resist payment 

on substantive grounds “that would have been available to the 

uninsured motorist.” State Farm Mutual Automobile Insurance Co. v. 

Bennett, 974 So. 2d 959, 962 (Ala. 2007) (internal quotes omitted). 

“Thus, until the liability of the uninsured motorist has been 

determined, the insurer and insured occupy an adversary position 

toward each other.” Quick, 429 So. 2d at 1035. Their positions remain 

adverse “until the uninsured motorist's liability is fixed; therefore, 

there can be no action based on the tort of bad faith based on conduct 

arising prior to that time, only for subsequent bad faith conduct.” 

LeFevre, 590 So.2d at 159.

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Id. Accord Pontius, 915 So. 2d at 564 (“As to her bad-faith claim arising out of her 

UIM coverage with State Farm, Pontius had to demonstrate that she was ‘legally 

entitled to recover’ damages for bad-faith failure to pay under the policy, and she ‘

“must be able to establish fault on the part of the uninsured motorist, which gives 

rise to damages and must be able to prove the extent of those damages.” ’ LeFevre,

590 So. 2d at 157 (quoting Quick, 429 So.2d at 1035.”).

As Safeway II noted, a “ ‘motorist “legally entitled to recover damages” under 

§ 32–7–23 is one who presents facts sufficient to prove that the motorist was 

involved in an accident under circumstances that would entitle the motorist to 

uninsured-motorist coverage.’ ” 148 So. 3d at 43 (quoting Walker, 834 So. 2d at 772) 

(emphasis added). Moreover, Alabama law is clear that an insured need not obtain 

a judgment against an uninsured motorist before bringing a claim for bad faith 

against the insured’s UM/UIM insurer. See LeFevre, 590 So. 2d at 160 (“Clearly, 

the legislature did not intend that the insured would have to sue and receive a 

judgment in his or her favor before bringing an action alleging bad faith.”). Thus, at 

the Rule 12(b)(6) stage, Lawson need only allege facts that, taken as true, are 

sufficient to show that she was involved in an accident under circumstances that 

would entitle her to uninsured-motorist coverage. Walker, 834 So. 2d at 772.

As such, the mere fact that Lawson is asserting her bad faith claims 

contemporaneously with her claim for UM/UIM benefits does not, by itself, mandate 

dismissal of the bad faith claims. Apart from that, the only other element of bad 

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faith State Farm appears to challenge as lacking is the extent of damages.8 (See 

Doc. 7-1 at 4 (“Here, Plaintiff seeks to liquidate her damages caused by the 

uninsured motorist. The damages stated by Plaintiff include ‘pain and suffering,’ 

‘mental anguish,’ ‘future damages’ and even ‘others as proven.’ Complaint, ¶ 6. 

Clearly, Plaintiff’s damages are uncertain, unliquidated and necessarily disputed. It 

is also clear that Plaintiff has not alleged any amount certain, clearly indicating 

damages that show undisputed fluidity and speculative.”). It is true that, “where 

the evidence of the extent of damages is disputed, the insured has not proven, 

of course, that he is ‘legally entitled to collect’; therefore, one of the elements of 

proof necessary to support an action for bad faith is missing.” LeFevre, 590 So. 2d 

at 160 (emphasis added). Moreover, “[m]ere delay does not constitute vexatious or 

unreasonable delay in the investigation of a claim if there is a bona fide dispute on 

the issue of liability...Likewise, mere delay in payment does not rise to the level of 

bad faith if there is a bona fide dispute on the issue of damages.” Id. at 161.

“The insured, in short, cannot set up a bad faith claim merely by demanding 

payment. Instead, he must present the insurer with evidence supporting the 

demand. How much evidence? The insured's proof must attain a threshold 

‘specificity necessary to recover against an insurer for bad faith.’ ” Joffrion, 2014 

 

8 Lawson has alleged that, in the incident giving rise to her UM/UIM claims, she was rearended by an unknown driver (deemed an “uninsured motorist” under Alabama law), that 

the unknown driver was “negligent and/or wanton” in doing so by failing to stop behind her 

at an intersection, and that she has suffered injury as a result of the accident. (See Doc. 1-1 

at 2 – 3). Absent a substantive challenge from State Farm, the Court finds that she has 

sufficiently alleged facts showing “a lack of insurance on the part of the tort-feasor; the tortfeasor's legal liability; [and ]proximate cause...” LeFevre, 590 So.2d at 162.

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WL 3518079, at *4 (citing LeFevre, 590 So. 2d at 158; Aetna Cas. & Sur. Co. v. 

Beggs, 525 So. 2d 1350, 1352-53 (Ala. 1988)). Here, Lawson’s allegations do not 

meet that threshold, as she alleges only that she “made a claim against Defendant 

State Farm for uninsured motorist benefits.” (Doc. 1-1 at 4). Nowhere does she 

allege how much this claim was, that she submitted any evidence to State Farm to 

support this demand, or that her damages could be reasonably ascertained at the 

time of the claim. See Joffrion v. Allstate Ins. Co., 2014 WL 3518079, at *4 (“[T]he 

insured must present substantial evidence to the insurer, not merely that some 

vague amount of damage was caused by the fault of the uninsured motorist, but 

that the full amount of damage he claims actually was (or will be) suffered, that it 

has the value he claims, and that it was (or will be) all proximately caused by the 

accident.”); LeFevre, 590 So. 2d at 162 (“Alabama has imposed a rather heavy 

burden on a bad faith claimant; a cause of action for bad faith arises only ‘where the 

insurer has acted with an intent to injure.’ King v. National Found. Life Ins. Co.,

541 So.2d 502, 505 (Ala.1989); Alfa Mut. Ins. Co. v. Smith, 540 So.2d 691 (Ala.1988). 

In the present case, LeFevre has not presented sufficient evidence to prove that 

State Farm acted with an intent to injure him by delaying the offer of the entire 

policy limits until the damages were conclusively ascertained.”). Because Lawson 

has not met her burden of alleging facts showing the extent of her damages, she has 

failed to sufficiently allege a cause of action for bad faith by State Farm. Cf. 

LeFevre, 590 So. 2d at 162 (holding that the plaintiff insured had failed to show bad 

faith where he “proved each element except the extent of his damages”). 

Accordingly, State Farm’s Rule 12(b)(6) motion is due to be GRANTED as to 

Lawson’s bad faith claims.

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Nevertheless, the Eleventh Circuit has held that, “[w]here it appears a more 

carefully drafted complaint might state a claim upon which relief can be granted, ...

a district court should give a plaintiff an opportunity to amend his complaint 

instead of dismissing it.” Bank v. Pitt, 928 F.2d 1108, 1112 (11th Cir. 1991) (per 

curiam). This rule in Bank was overruled in part in Wagner v. Daewoo Heavy 

Industries America Corp., 314 F.3d 541 (11th Cir. 2002) (en banc), which 

substituted the rule that a district court may but “is not required to grant a 

plaintiff leave to amend his complaint sua sponte when the plaintiff, who is 

represented by counsel, never filed a motion to amend nor requested leave to amend 

before the district court.” 314 F.3d at 542 (emphasis added). Because the Court is 

of the belief that Lawson may still be able to allege a viable bad faith claim, the 

Court will, in exercise of its discretion, permit Lawson an opportunity to do so.

3. “Redundant” Bad Faith Claims

In a footnote, State Farm asserts that it is redundant for Lawson to assert 

two causes of action for bad faith and that one of them should accordingly be 

stricken. (Doc. 7-1 at 2 n.1). The Alabama Supreme Court has recently clarified 

that “there is only one tort of bad-faith refusal to pay a claim, not two ‘types' of bad 

faith or two separate torts.” State Farm Fire & Cas. Co. v. Brechbill, 144 So. 3d 

248, 257–58 (Ala. 2013) (emphasis in original), reh'g denied (Jan. 17, 2014). When 

the court “in 1981 adopted the tort of bad faith in regard to the failure to pay an 

insurance claim, it held, ‘an actionable tort arises for an insurer's intentional 

refusal to settle a direct claim where there is either “(1) no lawful basis for the 

refusal coupled with actual knowledge of that fact or (2) intentional failure to 

determine whether or not there was any lawful basis for such refusal.” ’ ” Id. at 257 

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(quoting Chavers v. National Sec. Fire & Cas. Co., 405 So. 2d 1, 7 (Ala. 1981)). 

“Since Chavers, [the Alabama Supreme Court] has referred to this tort in the 

singular[,]” and its decisions have “recogniz[ed] the singularity of the tort, albeit 

with different options for proof thereof.” Id. at 258.

[T]he tort of bad-faith refusal to pay a claim has four elements—(a) a 

breach of insurance contract, (b) the refusal to pay claim, (c) the 

absence of arguable reason, (d) the insurer's knowledge of such 

absence—with a conditional fifth element: (e) if the intentional failure 

to determine the existence of a lawful basis is relied upon, the plaintiff 

must prove the insurer's intentional failure to determine whether 

there is a legitimate or arguable reason to refuse to pay the claim. 

Thus, for the tort of bad-faith refusal to pay, requirements (a) through 

(d) represent the ‘normal’ case. Requirement (e) represents the 

‘abnormal’ case. But the tort has always been one.

Id. (citations and quotations omitted).

Here, Lawson’s Second Cause of Action appears to allege the “normal” case of 

bad faith/bad-faith refusal to pay, while her Third Cause of Action, alleging that 

State Farm “intentionally failed to determine whether there was a legitimate or 

arguable reason to refuse to pay [her] claim[,]” alleges the “abnormal” case/bad-faith 

refusal to investigate. The Court, however, finds nothing redundant about pleading 

such claims in separate counts. Rather, this appears to be permissive alternative 

pleading, in which Lawson alleges her intention to prove bad faith both by using 

only the first four elements of such a claim and by also using the conditional fifth 

element of the claim. Accordingly, the Court will DENY State Farm’s request to 

strike one of Lawson’s bad faith causes of action as redundant.

IV. Conclusion

In accordance with the foregoing analysis, it is ORDERED that State Farm’s 

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Motion to Dismiss Second and Third Causes of Action (Doc. 7) is DENIED as to 

dismissal under Rule 12(b)(1) and as to striking one of Lawson’s bad faith claims as 

redundant, and GRANTED as to dismissal under Rule 12(b)(6). Lawson’s Second 

and Third Causes of Action alleging claims for bad faith, as set forth in her 

Complaint (Doc. 1-1 at 2 – 6) are DISMISSED. However, Lawson is hereby 

GRANTED leave to file, no later than Friday, May 22, 2015, an amended 

complaint only for the purpose of making allegations sufficient to state a claim or 

claims for bad faith, in accordance with the reasoning of this Order and should she 

be able.9

DONE and ORDERED this the 15th day of May 2015.

/s/ Katherine P. Nelson

KATHERINE P. NELSON

UNITED STATES MAGISTRATE JUDGE

 

9 The Court wishes to make clear that Lawson is not being granted wholesale leave to 

amend her complaint. To the extent Lawson may wish to amend her complaint in a 

manner not provided for in this Order, she must do so in accordance with Federal Rule of 

Civil Procedure 15(a).

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