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Viacom Int'l Inc. v. Axis Ins. Co.

United States District Court, C.D. California

December 19, 2014

Viacom Int'l Inc., et al.
v.
Axis Insurance Co

CIVIL MINUTES - GENERAL

Honorable Philip S. Gutierrez, United States District Judge.

Proceedings (In Chambers): (In Chambers) Order DENYING Defendant Axis Insurance Company's Motion to Dismiss for Failure to State a Claim upon which Relief can be Granted (FRCP 12(b)(6))

In this insurance coverage dispute, Plaintiffs Viacom International, Inc. and Ish Entertainment, LLC (" Plaintiffs") challenge Defendant AXIS Insurance Company's (" Defendant") refusal to indemnify Plaintiffs in an underlying litigation (" Underlying Litigation"). Dkt. # 1 (" Cpt."). Before the Court is Defendant's motion to dismiss the Complaint under Federal Rule of Civil Procedure 12(b)(6). Dkt. # 10 (motion); dkt. # 10-1 (memorandum of points and authorities) (" Mtn."). The Court finds the matter appropriate for decision without oral argument. Fed. Rule Civ. P. 78(b); L.R. 7-15. After considering the arguments in the moving, opposing, and reply papers, the Court DENIES the motion.

I. Background

A. The Insurance Policy

Defendant issued Plaintiffs a Film & Entertainment Liability Policy (" Policy") for the production, distribution, and broadcast of a television program entitled T.I.'s Road to Redemption (" Program"). Cpt. ¶ 7. The Policy has a self-insured retention of $25, 000 for " each loss, " a coverage limit of $3 million for " each loss, " and a total limit of $5 million. Id.; see also Dkt. # 10-2, Request for Judicial Notice (" RJN") Ex. A, at 3.

B. The Underlying Litigation

On February 9, 2011 (years after the Program was produced and broadcast), the eight plaintiffs in the Underlying Litigation (" Decedent's Family") sued Plaintiffs and other parties (" Georgia Parties") in the state court of Georgia in connection with the Program. Cpt. ¶ 9; Dkt. # 16 (" Opp.") at 1. Decedent's Family asserts twenty-four claims for damages arising from two types of activities and two spans of time: first, the production of the Program in November of 2008; and second, the broadcast of the Program on television and its distribution on the Internet beginning in February of 2009. Cpt. ¶ ¶ 9, 13; Opp. at 1.

Specifically, the Decedent's Family indicates that in November of 2008, the Georgia Parties interfered with their contract with a funeral home and invaded their privacy by viewing and filming the Decedent without their consent, and that during the filming, a funeral home employee made negligent misrepresentations concerning the Decedent and his cause of death. Cpt. ¶ ¶ 9, 13; Opp. at 4. Then, beginning in February of 2009, the Georgia Parties defamed the Decedent and his Family, presented the Decedent and his Family in a false light, misappropriated the Decedent's likeness, and intentionally and negligently caused emotional distress to his Family by broadcasting and distributing the misrepresentations. Cpt. ¶ ¶ 9, 13; Opp. at 4-5.

C. The Coverage Dispute

The parties agree that the Underlying Litigation is covered under the Policy. Cpt. ¶ 10. However, they do not agree on whether the underlying events constitute one or multiple " occurrences" pursuant to its terms. Id. ¶ 11. Thus, Plaintiffs ask Defendant to make the $5 million aggregate limit available to finance the defense and fund a settlement, but Defendant is willing to pay no more than the $3 million " each loss" limit. Id. ¶ ¶ 11, 14.

In their Complaint, Plaintiffs assert three claims for: (1) a declaratory judgment that the Underlying Litigation involves several occurrences, and that Plaintiffs are entitled to coverage of up to $5 million; (2) breach of contract; and (3) breach of the implied covenant of good faith and fair dealing. Defendant moves to dismiss the Complaint under Federal Rule of Civil Procedure 12(b)(6) on the ground that the Underlying Litigation involves one occurrence.

II. Standard of Review

Federal Rule of Civil Procedure 12(b)(6) permits a defendant to move to dismiss for failure " to state a claim upon which relief can be granted." In deciding a motion to dismiss, the Court " accept[s] all factual allegations of the complaint as true and draw[s] all reasonable inferences" in favor of the nonmoving party. TwoRivers v. Lewis, 174 F.3d 987, 991 (9th Cir. 1999); see also Rodriguez v. Panayiotou, 314 F.3d 979, 983 (9th Cir. 2002). However, the Court is not " required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). " To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations; rather, it must plead 'enough facts to state a claim to relief that is plausible on its face.'" Weber v. Dep't of Veterans Affairs, 521 F.3d 1061 (9th ...


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