ORDER GRANTING DEFENDANT'S MOTION TO DISMISS THE FOURTH CAUSE OF ACTION AND DISMISSING THE FOURTH CAUSE OF ACTION WITHOUT PREJUDICE
On May 5, 2010, Plaintiff Kenneth Willbanks filed a complaint for tortious breach of contract, breach of the covenant of good faith and fair dealing, fraud, and unfair business practices in violation of California Business Code § 17000, et seq. The complaint arises from Defendant Progressive Choice Insurance Company's failure to pay Plaintiff benefits allegedly owed to Plaintiff under a car insurance policy. On July 21, 2010, Defendant removed the action to this court because the parties are citizens of different states and more than $75,000 is at issue.
On August 2010, Defendant filed a motion to dismiss. Defendant contends that the fourth cause of action, requesting relief under California Business Code § 17000, et seq., is barred by the California Supreme Court's ruling in Moradi-Shalal v. Fireman's Fund Ins. Co., 46 Cal.3d 287 (1988). Defendant argues that unlawful claims practices are codified in the Unfair Insurance Practices Act ("UIPA"), and no cause of action is available under California Business Code § 17000, et seq., the Unfair Competition Law ("UCL"), for alleged violations of the UIPA.
On September 21, 2010, Plaintiff filed an opposition. Plaintiff admits that the weight of authority stands for the proposition that a claim under California Business Code § 17000, et seq., the UCL, cannot be brought premised on UIPA violations. However, Plaintiff requests that if the court grants Defendant's motion, Plaintiff be allowed a reasonable time to amend the fourth cause of action to include allegations of unfair and fraudulent practices. In addition, Plaintiff requests that any dismissal be without prejudice to await the outcome of the California Supreme Court's decision in Zhang v. Superior Court,105 Cal.Rptr.3d 886 (2010).
On September 21, 2010, Defendant filed a reply. Defendant contends that the UCL claim is barred because the basis of Plaintiff's action against Defendant is how his insurance claims was handled, conduct covered by the UIPA. Defendant also asks the court not consider the Zhang decision because it does not represent current law.
Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of the plaintiff's "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A dismissal under Rule 12(b)(6) may be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir. 2008); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In reviewing a complaint under Rule 12(b)(6), all of the complaint's material allegations of fact are taken as true, and the facts are construed in the light most favorable to the non-moving party. Marceau v. Balckfeet Hous. Auth., 540 F.3d 916, 919 (9th Cir. 2008); Vignolo v. Miller, 120 F.3d 1075, 1077 (9th Cir. 1999). The court must also assume that general allegations embrace the necessary, specific facts to support the claim. Smith v. Pacific Prop. and Dev. Corp., 358 F.3d 1097, 1106 (9th Cir. 2004). However, the court is not required "to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1056-57 (9th Cir. 2008); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). Although they may provide the framework of a complaint, legal conclusions are not accepted as true and "[t]hreadbare recitals of elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50 (2009); see also Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003). As the Supreme Court has recently explained:
While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Iqbal, 129 S.Ct. at 1949.
The plausibility standard is not akin to a 'probability requirement,' but it asks more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of 'entitlement to relief.' . . .
Determining whether a complaint states a plausible claim for relief will . . . be a context specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged -- but it has not shown -- that the pleader is entitled to relief.
Iqbal, 129 S.Ct. at 1949-50. "In sum, for a complaint to survive a motion to dismiss, the nonconclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. ...