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El Cajon Luxury Cars, Inc., Dba Bob Baker v. Tokio Marine & Nichido Fire Insurance Co

March 6, 2012


The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge


Presently before the Court is Defendant Tokio Marine and Nichido Fire Insurance Co., Ltd.'s ("Defendant" or "Tokio Marine") motion to dismiss complaint. (Mot. to Dismiss, ECF No. 15) Also before the Court are Plaintiff El Cajon Luxury Cars, Inc., dba Bob Baker Lexus's ("Plaintiff" or "Bob Baker Lexus") response in opposition, (Resp. in Opp'n, ECF No. 17), and Defendant's reply, (Reply in Supp., ECF No. 18). The Court heard oral argument on February 23, 2012, and the matter was thereafter taken under submission. Having considered the parties' arguments and the law, the Court GRANTS Defendant's motion to dismiss, but gives Bob Baker Lexus an opportunity to amend.


This Order incorporates the factual and procedural history as set forth in this Court's prior Order dismissing Plaintiff's complaint. (Order, Nov. 8, 2011, at 1--2, ECF No. 13) In that Order, the Court held that although coverage for the underlying claim against Bob Baker Lexus was within the scope of the Tokio Marine insurance policy, the claim nevertheless fell within the Completed Operations exclusion. (Id. at 8) As such, the Court dismissed without prejudice Plaintiff's declaratory relief and other claims. (Id. at 9)

Bob Baker Lexus filed a First Amended Complaint ("FAC") on November 22, 2011, (FAC, ECF No. 14), and Tokio Marine again moved to dismiss on December 12, 2011, (Mot. to Dismiss, ECF No. 15).


Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint "fail[s] to state a claim upon which relief can be granted," generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Although Rule 8 "does not require 'detailed factual allegations,' . . . it [does] demand[] more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 557).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible when the facts pled "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. Facts "'merely consistent with' a defendant's liability" fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true "legal conclusions" contained in the complaint. Id. This review requires context-specific analysis involving the Court's "judicial experience and common sense." Id. at 1950 (citation omitted). "[W]here 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 'show[n]'-'that the pleader is entitled to relief.'" Id. Moreover, "for a complaint to be dismissed because the allegations give rise to an affirmative defense[,] the defense clearly must appear on the face of the pleading." McCalden v. Ca. Library Ass'n, 955 F.2d 1214, 1219 (9th Cir. 1990).

Where a motion to dismiss is granted, "leave to amend should be granted 'unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.'" DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, where leave to amend would be futile, the Court may deny leave to amend. See Desoto, 957 F.2d at 658; Schreiber, 806 F.2d at 1401.


Bob Baker Lexus urges that the FAC should not be dismissed because (1) the correct interpretation of the policy compels a finding of potential coverage, (2) the history of the subject policies compels a finding of potential coverage, (3) the history between the parties reveals an admission of coverage, and (4) the underlying claims and potential claims are covered. (See Resp. in Opp'n, ECF No. 17)*fn1 The Court considers each argument in turn.

1. Interpretation of the Policy

In this Court's prior Order, it conducted a thorough analysis of the Tokio Marine insurance policy. (Order, Nov. 8, 2011, at 4--9, ECF No. 13) Applying California insurance contract interpretation principles, the Court determined that the claim asserted in the underlying action was "unambiguously within the scope of the policy." (Id. at 7) Nevertheless, the Court found that the "'Completed Operations' exclusion in the Tokio Marine policy is not ambiguous," and that "claims arising out of Plaintiff's work-which encompasses Plaintiff's service on the vehicle-after that work is completed are excluded from coverage under the insurance policy." (Id. at 8)

Plaintiff's opposition brief on this point is a verbatim copy of its opposition filed in support of the prior motion to dismiss in this case. Compare (Resp. in Opp'n 2--3, 9--11, ECF No. 17), with (Resp. in Opp'n 2--4, 4--7, ECF No. 10). This is tantamount to a request for reconsideration of the Court's prior Order, but in a procedurally improper manner and without any asserted justification for reconsideration.*fn2 See Sch. Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993) (indicating that reconsideration of a prior order is "appropriate if the district court (1) is presented with newly discovered evidence; (2) committed clear error or the initial decision was ...

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