United States District Court, S.D. California
NICHOLAS KORMYLO, M.D.; KIMBERLY KORMYLO; and BRYCE KORMYLO, by and through his guardian ad litem KIMBERLY KORMYLO, Plaintiffs,
FOREVER RESORTS, LLC, dba CALVILLE BAY RESORT & MARINA; and KENNETH WILLIAMS, Defendants. FOREVER RESORTS, LLC, dba CALVILLE BAY RESORT & MARINA; and KENNETH WILLIAMS, Third-Party Plaintiffs,
SCOTT PETERSON NEELY, Third-Party Defendant. FOREVER RESORTS, LLC, dba CALVILLE BAY RESORT & MARINA; and KENNETH WILLIAMS, Third-Party Plaintiffs,
BOY SCOUTS OF AMERICA; BOY SCOUTS OF AMERICA SAN DIEGO-IMPERIAL COUNCIL; MARK ALLEN; WILLIAM DALE; KELLY GARTON; TAYLOR HETHERINGTON; ROBERT JAFEK; JAMES MICHAEL LEDAKIS; ROGER McCLOSKEY; ERIC JONATHAN SANFORD; ROBERT SHUMWAY; DAVID TAYLOR; and CHRIS WADDELL, Third-Party Defendants.
ORDER (1) GRANTING BSA AND BSA-SD'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM; (2) DENYING BSA AND BSA-SD'S MOTION TO STRIKE; AND (3) GRANTING IN PART AND DENYING IN PART MARK ALLEN AND CHRIS WADDELL'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
JEFFREY T. MILLER, District Judge.
Three motions are before the court. Third-Party Defendants Boy Scouts of America ("BSA") and Boy Scouts of San Diego-Imperial Council ("BSA-SD") (collectively, "the Boy Scouts") move to dismiss the amended third-party complaint for failure to state a claim, (Doc. No. 77), and to strike the attorney-fee allegations, (Doc. No. 78). Separately, Third-Party Defendants Mark Allen and Chris Waddell move to dismiss the amended third-party complaint for lack of personal jurisdiction. (Doc. No. 90.) The motions were fully briefed and were set for hearing on December 1, 2014. After considering the filings, and because the parties did not request oral argument, the court determined that the matters were suitable for resolution without oral argument pursuant to Civil Local Rule 7.1.d.1.
For the reasons set forth below, the court dismisses the claims against the Boy Scouts but grants leave to amend; denies the Boy Scouts' motion to strike; concludes that it has general personal jurisdiction over Mark Allen; dismisses Chris Waddell for lack of personal jurisdiction; and denies Williams and Forever Resorts' requests for jurisdictional discovery and leave to amend the jurisdictional allegations regarding Waddell.
A. Case History
On March 5, 2013, Plaintiffs Nicholas Kormylo, ("Kormylo"), Kimberly Kormylo, and Bryce Kormylo (collectively, "Plaintiffs") filed the initial complaint in this matter. (Doc. No. 1.) According to the complaint, Kormylo and his son, Bryce, were on a Boy Scout outing at Lake Mead, Nevada in July 2012, when Kormylo was run over and severely injured by the propeller of a power boat driven by Defendant Kenneth Williams, who was an employee of Defendant Forever Resorts LLC ("Forever Resorts"). (Id. ¶¶ 10-47.) At the time of the accident, the complaint alleges, Kormylo was swimming in a triangular safe-swim zone he created by anchoring his boat about 50 yards away from two houseboats that were secured to the shore. (Id. ¶¶ 23-24, 31-34.) The triangle formed by the boats was intended "to provide notice to others that the area within the triangle was a designated swimming area." (Id. ¶ 24.) Plaintiffs assert claims for (1) negligence and vicarious liability; (2) negligent entrustment; (3) negligent hiring, supervision, instruction, and training; (4) loss of consortium; and (5) negligent infliction of emotional distress. (Id. ¶¶ 48-90.) Plaintiffs allege that this court has diversity jurisdiction, as they are California residents, Williams is a Nevada resident, Forever Resorts is an Arizona corporation, and the amount in controversy exceeds $75, 000. (Id. ¶¶ 2-7.)
On August 2, 2013, Williams filed a third-party complaint against Scott Peterson Neely, alleging that it was Neely, rather than Williams, who ran over Kormylo. (Doc. No. 14-5.) Williams's complaint against Neely asserts claims for (1) equitable indemnity, (2) comparative indemnity, and (3) declaratory judgment apportioning liability to Neely. (Id. ¶¶ 11-19.) On September 16, 2013, Forever Resorts also filed a third-party complaint against Neely, asserting the same claims and allegations Williams asserted against Neely. (Doc. No. 27.)
B. The Instant Third-Party Complaint
On August 13, 2014, Williams and Forever Resorts filed another third-party complaint, this time against BSA, BSA-SD, and the adult leaders of Boy Scouts of America Team 719 ("BSA Team 719"), the unit that organized the trip. (Doc. No. 51.) On August 25, 2014, they filed an amended third-party complaint against BSA, BSA-SD, and the adult leaders of BSA Team 719, whom they identify as Mark Allen, William Dale, Kelly Garton, Taylor Hetherington, Robert Jafek, James Michael Ledakis, Roger McCloskey, Eric Jonathan Sanford, Robert Shumway, David Taylor, and Chris Waddell (collectively, "the adult leaders"). (Doc. No. 58.) The amended third-party complaint asserts claims for (1) equitable indemnity, (2) comparative indemnity, and (3) declaratory judgment apportioning liability to the Boy Scouts and the adult leaders. (Id. ¶¶ 39-47.)
The amended third-party complaint alleges as follows: The adult leaders, who are all California citizens, (id. ¶¶ 6-16), organized and planned the trip to Lake Mead, set up the safe-swim zone Kormylo was swimming in when he was injured, and prepared and filed the tour and activity plan for the trip, (id. ¶ 21). The adult leaders were negligent in organizing and planning the trip, as well as in setting up the safe-swim zone because, among other things, they failed to follow the Boy Scouts' Safe Swim Defense and Safety Afloat requirements, thereby causing or contributing to any injuries Kormylo may have suffered. (Id. ¶ 22.)
BSA provided the tour and activity plan on its website, sets the national Boy Scout guidelines and requirements for tour and activity plans, and created the national Guide to Safe Scouting, which includes Safe Swim Defense and Safety Afloat. (Id. ¶ 23.) BSA-SD requires a tour and activity plan for all unit activities that take place at a location other than the regular meeting place for the unit, and it is authorized to reject any nonconforming tour and activity plan. (Id. ¶ 24.) As required by BSA and BSA-SD, the adult leaders filed a tour and activity plan prior to the trip, were authorized by BSA and BSA-SD to take the trip, and were allowed to label it a BSA-approved and authorized trip. (Id. ¶ 25.)
Before a Boy Scout group engages in any swimming activity, BSA and BSA-SD require that at least one adult leader has completed Safe Swim Defense training within the previous two years, has a commitment card, and agrees to use the eight defenses in Safe Swim Defense. (Id. ¶ 26.) Only one of the adult leaders listed on the tour and activity plan is listed as having had Safe Swim Defense training. (Id. ¶ 27.)
Safe Swim Defense requirements include qualified supervision during all swimming activity; personal health review of all participants; establishment of a safe area with controlled access that is clearly marked and cleared of boating, surfing, or other non-swimming activities; proper bottom conditions, depth, visibility, water temperature, water quality, and weather; life-jacket use; assigning response personnel, lookout, and a buddy system; and communication of the rules and safety procedures for the trip. (Id. ¶ 28.) The adult leaders failed to follow Safe Swim Defense by failing to adequately supervise swimming activity, failing to establish safety protocols, failing to communicate the rules and safety procedures for the trip, failing to use a lookout, failing to use a buddy system, and failing to clearly establish a safe-swim area with controlled access. (Id. ¶ 29.)
Similarly, before a BSA group engages in watercraft activity, BSA and BSA-SD require that adult leaders have completed Safety Afloat training within the previous two years, have a commitment card, and are dedicated to full compliance with all nine requirements of Safety Afloat. (Id. ¶ 30.) Although Safety Afloat requires one trained adult leader for every 10 participants, there were 20 youth participants on the trip, but only one of the adult leaders listed on the tour and activity plan is listed as having Safety Afloat training. (Id. ¶ 31.)
Safety Afloat requirements include a personal health review and BSA swimming classification for all participants, including adults; use of life jackets and a buddy system; proper planning, including itinerary, notification of proper parties regarding activities, communication of arrangements, contingency in case of foul weather or equipment failure, and emergency response options; all equipment must be suitable for the activity; and all rules and procedures for safe boating must be communicated. (Id. ¶ 32.) The adult leaders failed to follow Safety Afloat by not having the required number of trained adult leaders, failing to implement safety protocols, failing to provide a lookout, failing to supervise, and failing to adequately plan for activities and communicate those plans. (Id. ¶ 33.)
Because BSA and BSA-SD required and provided the tour and activity plan and required proper supervision and training for aquatic activities, they had a duty to ensure that tour and activity plans were properly approved and authorized, that safety requirements were followed, and that there were enough adult leaders who were adequately trained. (Id. ¶¶ 34-35.) BSA and BSA-SD were negligent in training the adult leaders and approving the tour and activity plan for the outing, which caused or contributed to any injuries Kormylo suffered. (Id. ¶ 36.)
A. The Boy Scouts' Motion to Dismiss
Third-Party Defendants the Boy Scouts contend that the claims against them in the amended third-party complaint should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) because they fail to state a claim for relief and the indemnity claims are unripe. (Doc. No. 77.) For the reasons set forth below, the court construes the ripeness challenge as a motion to dismiss for lack of subject-matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), and addresses that threshold issue before turning to the sufficiency of the allegations and whether amendment should be allowed.
1. Motion to Dismiss for Lack of Ripeness
a. Legal Standard
Federal Rule of Civil Procedure 12(b)(1) allows a litigant to seek dismissal of an action from federal court for lack of subject-matter jurisdiction. "Whether a claim is ripe for adjudication goes to the court's subject matter jurisdiction under the case or controversy clause of article III of the federal Constitution." St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989). "Like other challenges to a court's subject matter jurisdiction, motions raising the ripeness issue are treated as brought under Rule 12(b)(1) even if improperly identified by the moving party as brought under 12(b)(6)." Id . "When subject matter jurisdiction is challenged under Federal Rule of Procedure 12(b)(1), the plaintiff has the burden of proving jurisdiction in order to survive the motion." Tosco Corp. v. Cmtys. for a Better Env't., 236 F.3d 495, 499 (9th Cir. 2001), abrogated on other grounds by Hertz Corp. v. Friend, 559 U.S. 77 (2010).
"Ripeness has both constitutional and prudential components." Wolfson v. Brammer, 616 F.3d 1045, 1058 (9th Cir. 2010). The constitutional component "overlaps with the injury in fact' analysis for Article III standing." Id . "Whether framed as an issue of standing or ripeness, the inquiry is largely the same: whether the issues presented are definite and concrete, not hypothetical or abstract." Id . (internal quotation marks omitted).
b. Ripeness of the Instant Third-Party Claims
The Boy Scouts assert that the claims against them are unripe because, under California law, indemnity claims do not accrue until a judgment has been entered, and at this point there has been no settlement or judgment in the underlying case. (Doc. No. 77-1 at 7-9.) As they point out, "[t]he California Supreme Court has consistently ruled that a cause of action for indemnity does not accrue until after the indemnitee has suffered a loss through payment of an adverse judgment or settlement, " and some courts have dismissed indemnity claims as premature for that reason. See, e.g., Oildale Mut. Water Co. v. Crop. Prod. Servs., Inc., 2014 WL 824958, at *4 (E.D. Cal. Mar. 3, 2014); Gregory Vill. Partners, L.P. v. Chevron USA, Inc., 2012 WL 832879, at *6 (N.D. Cal. Mar. 12, 2012); Major Clients Agency v. Diemer, 67 Cal.App.4th 1116, 1132 (1998).
Williams and Forever Resorts counter, correctly, that the cases the Boy Scouts rely on are inapposite because none of them involve a third-party complaint brought under Federal Rule of Civil Procedure 14(a). (Doc. No. 98 at 11). That is an important distinction. Rule 14(a) permits a defendant to file a third-party complaint against a nonparty "who is or may be liable to it for all or part of the claim against it." Fed.R.Civ.P. 14(a)(1) (emphasis added). Accordingly, several federal circuit courts, including the Ninth Circuit, have held that Rule 14(a) permits a defendant to pursue an indemnity claim "even though the defendant's claim is purely inchoate- i.e., has not yet accrued under the governing substantive law- so long as the third-party defendant may become liable for all of part of the plaintiff's judgment." Andrulonis v. United States, 26 F.3d 1224, 1233 (2d Cir. 1994); see Mid-States Ins. Co. v. Am. Fid. & Cas. Co., 234 F.2d 721, 731-32 (9th Cir. 1956) (holding that a subrogation claim was not premature for this reason); 6 Wright et al., Federal Practice & Procedure § 1451 (3d ed. 2010 & Supp. 2014) ("The words may be liable' mean that defendant is permitted to join someone against whom a cause of action has not yet accrued, provided that the claim is contingent upon the success of plaintiff's action and will accrue when defendant's liability is determined in the main action or plaintiff's claim is satisfied."). As one court explained it: "Rule 14(a) is, in effect, a recognition that where procedurally it is possible to bring all related liability and indemnity or contribution claims in a single action, the interests involved are sufficiently concrete to permit accelerated adjudication of the inchoate claims." Hecht v. Summerlin Life & Health Ins. Co., 536 F.Supp.2d 1236, 1241-42 (D. Nev. 2008).
The court agrees with this assessment and concludes that the indemnity claims against the Boy Scouts are sufficiently ripe for adjudication because they were brought pursuant to Federal Rule of Civil Procedure 14(a), although they have not yet accrued under California law. Accordingly, the court denies the Boy Scout's request to dismiss the claims for lack of ripeness.
2. Motion to Dismiss for Failure to State a Claim
As noted earlier, the amended third-party complaint asserts claims against the Boy Scouts for (1) equitable indemnity, (2) comparative indemnity, and (3) declaratory judgment apportioning liability to BSA, BSA-SD, and the adult leaders. The Boy Scouts contend that all three claims must be dismissed for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). The court addresses the relevant legal standards before turning to the arguments regarding each claim and whether amendment should be allowed.
a. Legal Standards
A motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) challenges the sufficiency of the pleadings. For a plaintiff to overcome such a motion, the complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The court "must take all of the factual allegations in the complaint as true, " but is "not bound to accept as true a legal conclusion couched as a factual allegation." Id . (internal quotation marks omitted). Factual pleadings merely consistent with a defendant's liability are insufficient to survive a motion to dismiss because they establish only that the allegations are possible rather than plausible. See id. at 678-79. The court should grant 12(b)(6) relief if the complaint lacks either a cognizable legal theory or facts sufficient to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
b. Equitable-Indemnity Claim
The Boy Scouts contend that the claim for equitable indemnity must be dismissed as duplicative because equitable indemnity is a subset of comparative indemnity, not a distinct cause of action. (Doc. No. 77-1 at 7.) Williams and Forever Resorts counter that equitable indemnity and comparative indemnity are distinct causes of action because "comparative indemnity is tort-based, " while "equitable indemnity can be contract-based." (Doc. No. 98 at 9.)
Williams and Forever Resorts do not identify any contract to support such a claim, and, in the context of torts, the California Supreme Court has instructed that "there are not two separate equitable indemnity doctrines in California, but a single comparative indemnity doctrine which permits partial [or total] indemnification on a comparative fault basis in appropriate ...