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Motorist Commercial Mutual Insurance Co. v. Soltis

United States District Court, Ninth Circuit

December 31, 2013



TROY L. NUNLEY, District Judge.

This matter is before the Court pursuant to Defendant MCM Insurance Agency Incorporated's ("Defendant MCM")[1] Motion to Dismiss Count Four of the Complaint (ECF No. 8). Plaintiffs Motorist Commercial Mutual Insurance Company ("Plaintiff Motorist") and Bill Ackerman Tire Center ("Plaintiff Ackerman") oppose Defendant MCM's motion. ( See ECF No. 14.) The Court is duly advised of the parties' arguments and after careful consideration hereby GRANTS Defendant MCM's motion.


The Complaint alleges the following. Defendant MCM is an insurance brokerage firm that employed Defendant Kevin Soltis ("Defendant Soltis") as a broker. (Complaint, ECF No. 2 at ¶ 4.) In August 1984, Defendant Soltis entered into a contractual relationship with Plaintiff Motorist to act as a field representative for its insurance products. (ECF No. 2 at ¶ 7.) In his capacity as a field representative for Plaintiff Motorist, Defendant Soltis supplied one of his clients, Plaintiff Ackerman, with Motorist Insurance coverage on two of his tire center locations, Mt. Shasta and Weed. (ECF No. 2 at ¶ 10-11.) The policies provided a liability policy with a limit of $1, 000, 000 and an umbrella policy with an additional $3, 000, 000 in coverage. (ECF No. 11.)

On or about April 20, 2006, Plaintiff Motorist's representative inspected Plaintiff Ackerman's Weed location and discovered multiple insuring risks. (ECF No. 2 at ¶ 12.) Based upon this inspection, Plaintiff Motorist determined that it was no longer willing to provide insurance coverage to the Weed location and subsequently discontinued coverage on November 20, 2006. (ECF No. 2 at ¶ 12.) Thus, after November 20, 2006, Plaintiff Motorist continued to provide insurance coverage for the Mt. Shasta location only. (ECF No. 2 at ¶ 12.) Defendant Soltis, "who was aware or should have been aware" that Plaintiff Motorist declined to provide insurance coverage for the Weed location, contacted Defendant MCM and requested a $1, 000, 000 liability policy on the Weed location. (ECF No. 2 at ¶ 13.) In December of 2006, a policy was eventually obtained through Colony Insurance. (ECF No. 2 at ¶ 13.) However, the new policy did not provide the additional $3, 000, 000 in umbrella/excess coverage that Plaintiff Motorist had previously supplied. (ECF No. 2 at ¶ 14.)

On or about December 11, 2007, a motor vehicle accident took place resulting in multiple serious injuries and one fatality. (ECF No. 2 at ¶ 16.) The cause of the vehicle accident was determined to be the separation of a left rear wheel from an automobile which had previously been serviced at the Weed location approximately one month prior to the accident. (ECF No. 2 at ¶ 16.) Multiple lawsuits were filed against multiple defendants, including Plaintiff Ackerman, for severe personal injuries and one fatality. (ECF No. 2 at ¶ 16.) The matter was ultimately settled at mediation on behalf of Plaintiff Ackerman, with Colony Insurance paying its $1, 000, 000 limit, and Plaintiff Motorist contributing $2, 400, 000 in order to avoid exposing Plaintiff Ackerman to a personal judgment in excess of its insurance coverage limits. (ECF No. 2 at ¶ 16.)

Plaintiffs Motorist and Ackerman allege that the loss was caused by Defendant Soltis's failure to acquire the necessary umbrella coverage and subsequently filed this law suit against Defendants Soltis and MCM seeking reimbursement for losses stemming from the settlement and legal fees. In their Complaint, Plaintiffs Motorist and Ackerman assert four causes of action against Defendants Soltis and MCM: (1) equitable subrogation; (2) negligence; (3) breach of contract; and (4) breach of fiduciary duty. ( See generally ECF No. 2.) Defendant MCM's motion to dismiss only concerns the fourth cause of action, breach of fiduciary duty. Defendant MCM asserts that this cause of action fails because the Complaint fails to establish the existence of a fiduciary duty and that California law does not recognize a fiduciary duty on the part of an insurance broker or agent procuring insurance for an insured. (Mem. Supp. Def.'s Mot. to Dismiss, ECF No. 8-1 at 4-5.)


Federal Rule of Civil Procedure 8(a) requires that a pleading contain "a short and plain statement of the claim showing that the pleader is entitled to relief." See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). Under notice pleading in federal court, the complaint must "give the defendant fair notice of what the claim... is and the grounds upon which it rests." Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). "This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).

On a motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). A court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege "specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief." Twombly, 550 U.S. at 570. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. 544, 556 (2007)).

Nevertheless, a court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 678 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Moreover, it is inappropriate to assume that the plaintiff "can prove facts that it has not alleged or that the defendants have violated the... laws in ways that have not been alleged[.]" Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

Ultimately, a court may not dismiss a complaint in which the plaintiff has alleged "enough facts to state a claim to relief that is plausible on its face." Iqbal, 556 U.S. at 697 (quoting Twombly, 550 U.S. at 570). Only where a plaintiff has failed to "nudge[] [his or her] claims... across the line from conceivable to plausible[, ]" is the complaint properly dismissed. Id. at 680. While the plausibility requirement is not akin to a probability requirement, it demands more than "a sheer possibility that a defendant has acted unlawfully." Id. at 678. This plausibility inquiry is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679.

If a complaint fails to state a plausible claim, "[a] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.'" Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc) (quoting Doe v. United States, 58 F.3d 484, 497 (9th Cir. 1995)); see also Gardner v. Marino, 563 F.3d 981, 990 (9th Cir. 2009) (finding no abuse of discretion in denying leave to amend when amendment would be futile). Although a district court should freely give leave to amend when justice so requires under Rule 15(a)(2), "the court's discretion to deny such leave is particularly broad' where the plaintiff has previously ...

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