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by Zachary Fechter

In Fif Engineering, LLC v. Pacific Employers Ins. Co., No. 24-665, 2025 WL 593384 (S.D. Tex. Feb. 24, 2025), a United States District Court for the Southern District of Texas, Houston Division, granted an insurer’s motion to dismiss all causes of action in an insured’s second amended complaint, except breach of contract, and refused to allow the insured to further amend its complaint, because—on three different occasions—the insured did not sufficiently plead its causes of action under the Federal Rules of Civil Procedure.

Fif Engineering, LLC (“Fif”) submitted a claim to its insurer Pacific Employers Insurance Company (“Pacific”) after of one Fif’s former employees reportedly stole company property. Fif alleged the theft caused $1,440,700 in damages, so when Pacific issued payment in the amount of $4,690.37, Fif filed suit in a Texas state court. In its original petition, Fif alleged breach of contract, breach of the duty of good faith and fair dealing, violations of the Deceptive Trade Practices Act (“DTPA”), violations of chapters 541 and 542 of the Texas Insurance Code, fraud, and ongoing conspiracy to commit illegal acts. After removing the case to federal court, Pacific filed a motion to dismiss the causes of action alleged in Fif’s original petition.

Under Fed. R. Civ. P. 12(b)(6), a party can move to dismiss causes of action it if the alleging party fails “to state a claim upon which relief can be granted.” Courts apply two different standards when determining whether a complaint properly states a claim upon which relief can be granted. Under Fed. R. Civ. P. 8(a) and federal case law, a complaint generally must state a “short and plain statement of the claim showing that the pleader is entitled to relief,” and the complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 554, 570 (2007)). Basically, a party must allege at least enough facts to “raise a right to relief above the speculative level.” Cicalese v. Univ. Tex. Med. Branch, 924 F.3d 762, 765 (5th Cir. 2019) (citations omitted).

But when a party alleges fraud, the “heightened” pleading standard under Fed. R. Civ. P. 9(b) applies, which requires the party “to state with particularly the circumstances constituting fraud or mistake,” including facts demonstrating the “who, what, when, where, and how” of the fraud. Benchmark Elec., Inc. v. J.M. Huber Corp., 343 F.3d 719, 724 (5th Cir. 2003) (citations omitted). A motion to dismiss under 12(b)(6) is thus an argument that a party has failed to sufficiently plead its causes of action under Rules 8(a) and/or 9(b).

Based on the federal rules and pleading standards, the court granted Pacific’s first motion to dismiss all of Fif’s causes of action in the original petition, but allowed Fif to amend its complaint to satisfy the pleading standards. After Fif filed its first amended complaint, Pacific filed another motion to dismiss under 12(b)(6), which the court granted. The court again let Fif amend its complaint.

After Fif filed its second amended complaint, Pacific again filed a motion to dismiss all of Fif’s causes of action, except breach of contract, under 12(b)(6). Applying Rule 8(a), the court ruled that Fif’s cause of action for breach of the duty of good faith and fair dealing was essentially the same as in its two prior pleadings, so the court held that Fif’s cause of action was not plausible and dismissed it. Moving to Fif’s cause of action under Tex. Ins. Code Chapter 542, Fif conceded to the court that it misstated the deadline for payment under the statute, and Fif did not allege when or if Pacific notified Fif that it would pay the claim. Therefore, the court dismissed this cause of action.

The court then applied the heightened pleading standard in 9(b) to Fif’s causes of action under Tex. Ins. Code Chapter 541 and the DTPA because Fif alleged Pacific fraudulently misrepresented the terms of the policy in violation of both statutes. The court determined that Fif failed to identify who made any alleged misrepresentation, Fif alleged it purchased the policy before any of Pacific’s alleged misrepresentations, and Fif did not allege that Pacific’s reported representation about theft coverage under the policy was false. As such, the court found that Fif did not satisfy the heightened pleading standard and dismissed these claims. Ultimately, the court dismissed all of Fif’s causes of action except breach of contract. And because the court determined that providing Fif with another opportunity to amend its complaint would be futile, Fif could not amend its complaint, so only the breach of contract cause of action survived.

The court’s holding in Fif Engineering should empower insurers to use the Federal Rules of Civil Procedure as a defense against “boilerplate” allegations lacking any factual detail. Insurers facing causes of action from their insureds, especially causes of action sounding in fraud, can dispose of baseless claims with relatively little expense by filing these Rule 12(b)(6) motions early.