United States District Court, E.D. California
MEMORANDUM AND ORDER
MORRISON C. ENGLAND, JR. UNITED STATES DISTRICT JUDGE.
Through
this action, Plaintiffs Donald and Rebecca Durben
(“Plaintiffs”) claim that Defendants State Farm
General Insurance Company (“State Farm”) and
Brenda Ericksen (“Ericksen”) forced them to sell
their home at a loss by refusing to pay Plaintiffs’
preferred contractor to repair fire damage to their home
under their homeowners’ insurance policy. Defendants
seek to dismiss Plaintiffs’ claims for
misrepresentation under Federal Rule of Civil Procedure
12(b)(6)[1] on the ground that Plaintiffs’
claims are insufficiently pleaded under Rule 9(b). They
further argue that Ericksen is not a proper defendant.
Defendants are correct, and their Motion to Dismiss (ECF No.
4) is GRANTED.
BACKGROUND[2]
Plaintiffs
owned a home located at 12830 River Hills Drive, Bella Vista,
CA (the “Home”) and purchased a homeowners
insurance policy (the “Policy”) from State Farm.
On February 1, 2014, a fire damaged the Home and Plaintiffs
tendered a claim under the Policy. Defendant Ericksen, a
State Farm employee, handled Plaintiffs’ claim in the
normal course and scope of her employment with State Farm.
At
State Farm’s request, Plaintiffs hired Service Master
by Chronic Disaster Services (“Service Master”)
to estimate the cost of restoring the Home to its pre-fire
condition. State Farm rejected Service Master’s $690,
000 estimate, and thereafter hired another contractor, Clean
Rite/Build Rite (“Clean Rite”), to submit an
estimate. In July of 2014, Clean Rite estimated the cost of
repairing the Home at $272, 000. Plaintiffs allege that
Defendant Ericksen told them that Clean Rite was ineligible
to perform the repairs.[3]In the Spring of 2015, Clean Rite
revised its repair estimate to $430, 000. State Farm then
informed Plaintiffs that it would only pay for repair costs
that did not exceed that sum.
Instead
of repairing the home, Plaintiffs sold it at a loss. They
filed this lawsuit in Shasta County Superior Court bringing
claims against State Farm for breach of contract, breach of
the implied covenant of good faith and fair dealing, and
declaratory relief and reformation. The Complaint also
alleges claims for intentional misrepresentation and
negligent misrepresentation against both State Farm and
Ericksen. Those latter two claims are the subject of the
pending Motion to Dismiss.
STANDARD
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,
550 U.S. 544, 555 (2007) (quoting Conley v. Gibson,
355 U.S. 41, 47 (1957)). A complaint attacked by a Rule
12(b)(6) motion to dismiss does not require detailed factual
allegations. However, “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. (internal citations and quotations omitted). A
court is not required to accept as true a “legal
conclusion couched as a factual allegation.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 555). “Factual
allegations must be enough to raise a right to relief above
the speculative level.” Twombly, 550 U.S. at
555 (citing 5 Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1216 (3d ed.
2004) (stating that the pleading must contain something more
than “a statement of facts that merely creates a
suspicion [of] a legally cognizable right of action”)).
Furthermore,
“Rule 8(a)(2) . . . requires a showing, rather than a
blanket assertion, of entitlement to relief.”
Twombly, 550 U.S. at 555 n.3 (internal citations and
quotations omitted). Thus, “[w]ithout 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.”
Id. (citing Wright & Miller, supra, at
94, 95). A pleading must contain “only enough facts to
state a claim to relief that is plausible on its face.”
Id. at 570. If the “plaintiffs . . . have not
nudged their claims across the line from conceivable to
plausible, their complaint must be dismissed.”
Id. However, “[a] well-pleaded complaint may
proceed even if it strikes a savvy judge that actual proof of
those facts is improbable, and ‘that a recovery is very
remote and unlikely.’” Id. at 556
(quoting Scheuer v. Rhodes, 416 U.S. 232, 236
(1974)).
A court
granting a motion to dismiss a complaint must then decide
whether to grant leave to amend. Leave to amend should be
“freely given” where there is no “undue
delay, bad faith or dilatory motive on the part of the
movant, . . . undue prejudice to the opposing party by virtue
of allowance of the amendment, [or] futility of the amendment
. . . .” Foman v. Davis, 371 U.S. 178, 182
(1962); Eminence Capital, LLC v. Aspeon, Inc., 316
F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman
factors as those to be considered when deciding whether to
grant leave to amend). Not all of these factors merit equal
weight. Rather, “the consideration of prejudice to the
opposing party . . . carries the greatest weight.”
Id. (citing DCD Programs, Ltd. v. Leighton,
833 F.2d 183, 185 (9th Cir. 1987)). Dismissal without leave
to amend is proper only if it is clear that “the
complaint could not be saved by any amendment.”
Intri-Plex Techs. v. Crest Group, Inc., 499 F.3d
1048, 1056 (9th Cir. 2007) (citing In re Daou Sys.,
Inc., 411 F.3d 1006, 1013 (9th Cir. 2005); Ascon
Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th
Cir. 1989) (“Leave need not be granted where the
amendment of the complaint . . . constitutes an exercise in
futility . . . .”)).
ANALYSIS
Plaintiffs’
misrepresentation claims cannot survive as to either
defendant. Defendants argue that Plaintiffs cannot maintain a
claim against Ericksen based on statements Plaintiffs
specifically allege she made within the course and scope of
her employment. Defendants also observe that the
misrepresentation claims are too generally pleaded to pass
muster under Rule 9(b). The Court agrees with both of
Defendants’ arguments.
A.
Defendant Ericksen is not a proper defendant.
Courts
adjudicating insurance disputes under California law rarely
permit direct claims against an insurer’s individual
employees for conduct arising solely from the insurer’s
performance under the policy. See Icasiano v. Allstate
Ins. Co., 103 F.Supp.2d 1187, 1189 (N.D. Cal. June 23,
2000) (“An agent of an insurance company is generally
immune from suits brought by claimants for actions taken
while the agent was acting within the scope of its
agency.”). Under California law, insurance company
employees who act within the course and scope of their
employment cannot be held individually liable for that
conduct unless they act as a dual agent or for their own
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