United States District Court, D. North Dakota
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO
DISMISS AND DENYING REQUEST FOR A HEARING
Charles S. Miller, Jr., United States District Court
the court is a “Motion to Dismiss for Failure to State
a Claim” filed by the Hanover Insurance Company
(“Hanover”) on May 26, 2017. See Doc.
Nos. 26 and 27. Also before the court is Estvold Oilfield
Services, Inc.'s (“Estvold”) motion for a
hearing on Hanover's motion. For the reasons set forth
below, Hanover's motion is granted in part and denied in
part and Estvold's motion for a hearing is denied.
following facts are either undisputed or are otherwise
accepted as true for the purposes of this motion. McAuley
v. Federal Ins. Co., 500 F.3d 784, 787 (8th Cir. 2007).
purchased a Hanover-underwritten insurance policy through
PayneWest in January 2016 for properties it owned in or near
three North Dakota towns: New Town, Alexander, and
Richardton. One of Estvold's properties, a Steel Shop
located at 8449 39th St. NW, New Town, North Dakota
(hereinafter referred to as the “39th St. Steel
Shop”) was destroyed in a conflagration on April 23,
2016. Estvold promptly tendered a fire loss claim to Hanover.
Hanover denied the claim on the ground that the 39th St.
Steel Shop was not amongst properties covered by
Estvold's insurance policy.
initiated the above-entitled action on January 18, 2017. It
has asserted claims against Hanover for breach of contract,
declaratory judgment, reformation of contract and specific
performance, and violation of the State's Unfair
Insurance Practices Act. It has asserted the same claims
along with additional claims for professional negligence and
negligence against PayneWest. It seeks a declaration that its
insurance policy covers the fire damage to the 39th St. Steel
Shop. In the alternative, it seeks either reformation of the
policy to reflect that the 39th St. Steel Shop was covered
and payment from Hanover for the fire loss claim, or a
finding that PayneWest was negligent for failing to correctly
identify the 39th St. Steel Shop in the insurance proposal.
insurance proposal prepared by PayneWest (and presumably
accepted as is by Estvold) listed the following schedule of
properties to be covered by the policy:
Loc. No. 1- 3962 84th Ave. NW, New Town, ND 58763:
Building #1 Office/Shop: Steel
Loc. No. 2 - 3914 84th Ave. NW, New Town, ND 58763:
Building #1 Steel Shop
Building #2 Shop
Loc. No. 3 - Lot 1; Blk 6, Alexander Energy park,
Building #1 Storage Loc. No. 4 - 4211 Hwy 8, Richardton,
Building #1 Steel Shop
Building #2 TBD
Building #3 Office
Building #4 Propane/water Depot tanks/pumps
(Doc. No. 1). Conspicuously absent from this schedule was any
explicit identification of a fifth location, i.e.,
8449 39th St. NW, New Town, or mention of the 39th St. Steel
Complaint, Estvold contends that the 39th St. Steel Shop was
not really omitted from the insurance proposal but rather
misidentified as Building #1 at Loc. No. 4, that there was
mutual understanding amongst the parties that 39th St. Steel
Shop was covered by the policy, and that such coverage was
calculated into the insurance premiums that were timely paid
and that Hanover accepted. Specifically, Estvold asserts that
its intent was clear from the outset that it was seeking
coverage for all of its property, including the 39th St.
Steel Shop; PayneWest understood this and twice inspected the
39th St. Steel Shop during coverage negotiations; PayneWest
prepared an insurance proposal that listed a nonexistent
property, Building #1 at Loc. No. 4; it and PayneWest
mutually understood and agreed that the insurance
proposal's reference to ...