ESTATE OF JOSHUA NAEVE, BY ITS ADMINISTRATORS, THAD NAEVE and NANCYE NAEVE, THAD NAEVE, INDIVIDUALLY, and NANCYE NAEVE, INDIVIDUALLY, Plaintiff-Appellants,
FBL FINANCIAL GROUP, INC., Defendant-Appellee.
from the Iowa District Court for Polk County, Jeanie K.
appeal a district court order granting FBL Financial Group,
Inc.'s motion to dismiss appellants' civil petition
H. Stoltze of Stoltze & Stoltze, PLC, Des Moines, for
Luke Craven, David L. Phipps, and Stephen E. Doohen of
Whitfield & Eddy, P.L.C., Des Moines, for appellee.
by Doyle, P.J., and Tabor and Mullins, JJ.
appeal a district court order granting FBL Financial Group,
Inc.'s (FBL) motion to dismiss appellants' civil
petition at law forwarding claims of bad faith, interference
with contract, and conspiracy or aiding and abetting bad
Background Facts and Proceedings
petition alleged the following facts. Joshua Naeve died in
August 2013 as a result of a motor-vehicle accident involving
a vehicle in which he was a passenger; he was nineteen years
of age. Joshua's parents, Thad and Nancy Naeve, were
appointed as administrators of Joshua's estate in
September. The driver of the vehicle was insured by an
automobile liability insurance policy up to $1.5 million.
Several parties, including the Naeves, made demands for
damages alleged to have been incurred as a result of the
driver's negligence. The entirety of the coverage
available under the policy was used to settle multiple
claims, which ultimately included remittance of $500, 000 to
the Naeves in return for a release from liability.
Naeves had an insurance policy with Farm Bureau Property
& Casualty Insurance Company (Farm Bureau), which
included underinsured motor-vehicle coverage providing the
named insureds-Thad, Nancy, and Joshua-with insurance
benefits covering damages exceeding the amount paid by the
driver's policy up to the policy limit under the Farm
Bureau policy. FBL is the "corporate parent" of
Farm Bureau. In return for a management fee, FBL manages all
aspects of Farm Bureau's operations, including the
management of all claims made under underinsured policies
made by insureds of Farm Bureau. Under the circumstances, the
Farm Bureau policy provided the Naeves with insurance
benefits up to $250, 000.
Naeves filed an underinsurance claim with Farm Bureau in June
2014. The petition alleged Farm Bureau, under the management
and at the direction of FBL, rejected the claim asserting it
could not evaluate it until it received information regarding
the settlement received from the driver of the vehicle.
Although Farm Bureau was made aware the Naeves' claim
exceeded the limits of the driver's policy, Farm Bureau
refused to pay the Naeves underinsurance benefits. The Naeves
hired an attorney and, on April 29, 2015, filed a
breach-of-contract lawsuit against Farm Bureau. Farm Bureau,
under the management and direction of FBL, continued to
contest the Naeves' entitlement to proceeds under the
underinsurance policy. The matter proceeded to a jury trial.
The jury returned a verdict against Farm Bureau and in favor
of the Naeves, and the court entered judgment against Farm
Bureau in the amount of $250, 000, the amount to which the
Naeves were entitled under the circumstances, plus court
costs and interest until paid, which Farm Bureau satisfied in
September 2017, appellants filed a petition at law against
FBL forwarding claims of bad faith, interference with
contract, and conspiracy or aiding and abetting bad faith.
Generally, appellants' claims were based on FBL's
conduct as manager of Farm Bureau in relation to the
underinsurance claim and resulting litigation. FBL moved to
dismiss the petition for failure to state a claim upon which
any relief may be granted. See Iowa R. Civ. P.
1.421(1)(f). Specifically, FBL argued appellants' claims
were barred by the doctrine of claim preclusion, stating
"all facts alleged by Plaintiffs giving rise to their .
. . claims against FBL . . . occurred before
Plaintiff's initial suit against Farm Bureau under the
policy," Farm Bureau and FBL are in privity, and the
claims were therefore required to be forwarded "at the
same time as claims for contractual damages arising out of
the same transaction." FBL alternatively argued
appellants' claims stemming from the Farm Bureau policy
do not extend to FBL, because FBL was not a party to the
contractual relationship. Appellants filed a resistance.
an unreported hearing, the district court entered an order
granting FBL's motion to dismiss. As to count one, bad
faith, the court concluded: "Because there was a valid
and final judgment previously rendered and Farm Bureau was in
privity with FBL, the Naeves' bad faith claim against FBL
is barred by the doctrine of claim preclusion" because
"bad faith claims against an insurer must be
brought at the same time as claims for contractual damages
arising out of the same transaction." As to count two,
interference with contract, the court determined the claim
does not apply to FBL due to the relationship among the
parties. As to count three, conspiracy or aiding and abetting
bad faith, the court essentially repeated the conclusion it
reached under count one and additionally concluded the claim
does not extend to FBL. As noted, the appellants appeal.
Standard of Review
review of a district court ruling granting a motion to
dismiss is for correction of errors at law. Ackerman v.
State, 913 N.W.2d 610, 614 (Iowa 2018). "A motion
to dismiss should only be granted if the allegations in the
petition, taken as true, could not entitle the plaintiff to
any relief." King v. State, 818 N.W.2d 1, 9
(Iowa 2012) (quoting Sanchez v. State, 692 N.W.2d
812, 816 (Iowa 2005)). Denying a motion to dismiss is
appropriate unless the petition "on its face shows no
right of recovery under any state of facts." Ritz v.
Wappello Cty. Bd. of Supervisors, 595 N.W.2d 786, 789
(Iowa 1999) (quoting Schaffer v. Frank Moyer Constr.,
Inc., 563 N.W.2d 605, 607 (Iowa 1997)). "[W]e view
the petition in the light most favorable to the plaintiff,
and will uphold dismissal only if the plaintiff's claim
could not be sustained under any state of facts provable
under the petition." Ackerman, 913 N.W.2d at
614 (quoting Berry v. Liberty Holdings, Inc., 803
N.W.2d 106, 108 (Iowa 2011)). We accept as true ...