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Eileen Blodgett v. Allstate Insurance Company

June 21, 2012


The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge


Before the Court is Defendant's Motion to Dismiss and Motion to Strike ("MTD") (ECF No. 8). Also before the Court is Defendant's Request for Judicial Notice ("RJN") (ECF No. 14). For the reasons that follow, the Motion to Dismiss and the Request for Judicial Notice are GRANTED. The Motion to Strike is GRANTED in part and DENIED in part.


Plaintiff, Eileen Blodgett, brings suit against Defendant, Allstate Insurance Company ("Allstate"), for (1) breach of the duty of good faith and fair dealing, and (2) breach of contract.

(Complaint ("Compl."), ECF No. 1, at 1.)*fn1 Blodgett's claims arise from an automobile insurance policy that provides for payment of up to $250,000 in benefits if she was involved in a motor vehicle accident with another vehicle with either no insurance, or a vehicle insured with bodily injury limits less than Blodgett's $250,000 limit. (Id. at 2).

On June 26, 2006, Blodgett was involved in an automobile accident with Laura Massey. (Id.) Massey's insurance coverage was limited to $15,000 and Blodgett was paid $15,000 by Massey's insurer in May, 2008. (Id.)

In July, 2008, Blodgett alleges that she first notified Allstate of her intention to seek benefits under her policy. (Id.) She claims that in September, 2009, she provided Allstate with copies of her relevant medical records and attempted to proceed towards arbitration or mediation to resolve the matter. (Id. at 3.) Between September and December, 2009, Allstate conducted discovery and agreed to non-binding mediation of the matter. (Id.) When this mediation was unsuccessful, another mediation was held in April, 2010. (Id.) At that time, Blodgett alleges that she offered to settle her claim for $105,720.75, and that Allstate responded with an offer to resolve the claim for $7,500. (Id.)

A binding arbitration hearing was then held on September 16, 2010. (Id.) During the course of the hearing, Allstate allegedly asserted that the gross value of Blodgett's claims were $7,500, and that she was entitled to no recovery because she had already collected $15,000 from Massey. (Id.) On November 2, 2010, Blodgett was awarded $104,110.25, equal to the total amount of her claimed damages ($119,110.25) minus the $15,000 paid by Massey's insurance. (Id.) Allstate paid the award on December 2, 2010. (Id.)

On September 12, 2011, Blodgett filed her Complaint in this Court. She first claims that Allstate breached a duty of good faith and fair dealing. (Id. at 4.) She alleges that Allstate unreasonably, and in bad faith, withheld payments that Allstate knew to be justified, and which were owed under the policy. (Id.) She further alleges that Allstate failed to undertake a reasonable investigation and misrepresented information in denying the claim (Id. at 4-5.) Blodgett says that this breach caused her damages in the form interest, delay, additional time, effort, expense and other consequential damages. (Id. at 5.) Additionally, Blodgett claims she suffered from unnecessary mental and emotional distress. (Id.) Finally, she claims that as a result of Allstate's bad faith conduct, she had to retain legal counsel, and therefore, Allstate is liable for attorney fees. (Id.) She also alleges that Allstate's conduct constitutes malice, oppression, or fraud under California Civil Code § 3294, and that she is therefore entitled to punitive damages. (Id.)

Blodgett's second claim is for breach of contract. (Id. at 6.) She claims that Allstate breached its contract by failing to pay her claim promptly and fairly, and by forcing her to participate in both mediation and binding arbitration procedures to obtain her benefits. (Id.)

Blodgett seeks consequential and punitive damages for the failure to promply pay her benefits. (Id. at 6.) She asks for compensation for costs associated with the late payment, her mental and emotional distress, and her legal fees. (Id. at 7.) She also requests punitive damages to punish or set an example of Allstate. (Id.)

Allstate moves to dismiss only Blodgett's breach of contract claim, pursuant to Federal Rule of Civil Procedure 12(b)(6), on the grounds that Allstate did not breach the insurance policy as a matter of law.*fn2 (MTD at 2.) Allstate also moves to strike language regarding specific dollar amounts discussed during the mediation from the Complaint pursuant to Rule 12(f) under California Evidence Code § 1119, and Federal Rule of Evidence Rule 408. (Id. at 5-6.)


On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party.

Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief" in order to "give the defendant fair notice of what the...claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1964 (2007) (internal citations and quotations omitted). Though "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." Id. at 1964-65 (internal citations and quotations omitted). A plaintiff's factual allegations must be enough to raise a right to relief above the speculative level. Id. at 1965 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-36 (3d ed. 2004) ("The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action")).

Moreover, "Rule 8(a)(2)...requires a 'showing,' rather than a blanket assertion of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirements of providing not only 'fair notice' of the nature of the claim, but also 'grounds' on which the claim rests." Twombly, at 1965, n.3 (internal citations omitted). A pleading must contain "only enough facts to state a claim to relief that is plausible on its face." Id. at 1960; see also Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009).

If the "plaintiffs...have not nudged their claims across the line from conceivable to plausible, their ...

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