The opinion of the court was delivered by: RICARDO URBINA, District Judge
DENYING THE DEFENDANT'S MOTION TO DISMISS
This matter comes before the court on Defendant C.J. Thomas'
("C.J. Thomas") motion to dismiss for failure to state a claim on
which relief can be granted pursuant to Federal Rule of Civil
Procedure 12(b)(6). C.J. Thomas asserts that the complaint fails
to properly allege (1) a duty of care owed by the defendant to
the plaintiff and (2) that the plaintiff's reliance on the
alleged misrepresentations was reasonable. Because the plaintiff
has adequately pled negligent misrepresentation, the court denies
C.J. Thomas' Motion to Dismiss.
Defendant Okie Dokie, Inc. ("Okie Dokie") is the owner and
operator of Dream, an establishment in the District of Columbia
described in the complaint as a nightclub. Compl. ¶¶ 8, 10. C.J. Thomas, an insurance broker, prepared an application
for insurance on behalf of Okie Dokie for a commercial general
liability insurance policy to cover Dream. Id. ¶¶ 3, 23, 26.
The application described Dream as a restaurant, claiming that:
(1) the previous insurance carrier cancelled its policy primarily
because Dream had a dance floor; (2) Dream does not sponsor
"Social Events;" and (3) Dream's $4 million in total sales is
comprised of $3 million food sales and $1 million in liquor
sales. Id. ¶¶ 25, 26-30. In reliance on these statements,
plaintiff Burlington Insurance Company ("Burlington") issued a
commercial general liability policy to Okie Dokie on June 28,
2002. Id. ¶¶ 34, 36.
On August 10, 2002, an underaged drunk driver who had allegedly
been drinking at Dream, struck and killed a police officer named
Hakim Farthing. Id. ¶ 44. Farthing's estate sued Okie Dokie for
$50 million on October 1, 2002 ("Farthing Action"). Id. ¶ 45.
Burlington is currently defending Okie Dokie in the Farthing
Action. Id. ¶ 46.
In response to the Farthing Action, Burlington filed this
action against Okie Dokie and C.J. Thomas on September 26, 2003.
See generally Compl. With regard to Okie Dokie, Burlington
seeks: (1) a declaration that Burlington has no duty to defend or
indemnify Okie Dokie in the Farthing Action; (2) rescission of
the insurance policy; and (3) restitution for all costs
Burlington has paid with respect to the Farthing Action. Id.
With regard to C.J. Thomas, Burlington seeks damages stemming
from alleged negligent misrepresentation in the insurance
application. Id. ¶¶ 70-76. The complaint also alleges that C.J.
Thomas failed to disclose that Dream is a nightclub, which hosts
concerts, seeks the patronage of persons age eighteen to twenty, derives over 25% of
its revenue from the sale of alcoholic beverages, and regularly
features an "open bar." Id. ¶ 72. The plaintiff asserts that
"C.J. Thomas was under a duty to disclose one or more of the
facts identified in ¶ 72 to Burlington." Id. ¶ 73. The
complaint alleges that these false statements and omissions were
material to the plaintiff's decision to issue the policy to Okie
Dokie. Id. ¶ 74. The plaintiff claims that it "reasonably
relied on one or more of the false statements and omissions set
forth in ¶¶ 71 and 72. Id. ¶ 75.
C.J. Thomas moved to dismiss Burlington's complaint on the
grounds that the complaint inadequately asserts all essential
elements of the negligent misrepresentation claim. Def.'s Mot. to
Dismiss at 1 ("Def.'s Mot."). The court now turns to that motion.
A. Legal Standard for Motion to Dismiss for Failure to State a
A Rule 12(b)(6) motion to dismiss tests the legal sufficiency
of a complaint. Browning v. Clinton, 292 F.3d 235
, 242 (D.C.
Cir. 2002). The complaint need only set forth a short and plain
statement of the claim, giving the defendant fair notice of the
claim and the grounds upon which it rests. Kingman Park Civic
Ass'n v. Williams, 348 F.3d 1033
, 1040 (D.C. Cir. 2003) (citing
FED R. CIV. P. 8(a)(2) and Conley v. Gibson, 355 U.S. 41
(1957)). "Such simplified notice pleading is made possible by the
liberal opportunity for discovery and the other pre-trial
procedures established by the Rules to disclose more precisely
the basis of both claim and defense to define more narrowly the
disputed facts and issues." Conley, 355 U.S. at 47-48 (internal
quotation marks omitted). It is not necessary for the plaintiff
to plead all elements of his prima facie ...