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Allstate Insurance Co. v. American Reliable Insurance Co.

United States District Court, E.D. California

March 27, 2017




         This matter is before the Court on Defendant American Reliable Insurance Company's (“Defendant”) Motion to Dismiss. (ECF No. 5.) Plaintiff Allstate Insurance Company (“Plaintiff”) opposes the motion. (ECF No. 8.) Pursuant to this Court's March 8, 2017, Order (ECF No. 11), Plaintiff filed supplemental briefing addressing whether Plaintiff has Article III standing to bring its claims and whether those claims are ripe for adjudication.[1] (ECF No. 12.) The Court has carefully considered the arguments raised by the parties. For the reasons set forth below, Defendant's Motion to Dismiss is GRANTED.

         I. Factual and Procedural Background

         This is an insurance coverage dispute arising out of an underlying action in Butte County Superior Court: Spangler v. Carajuana et al., No. 164234 (“Spangler” or the “underlying action”). In Spangler, Paula Spangler (“Spangler”) sued three people for injuries she suffered when a dog bit her. She sued the dog's owner, John Caruana (“Caruana”).[2] (Compl., ECF No. 1 at ¶ 5.) She also sued a couple, Floyd and Laura Damschen (collectively “the Damschens”), who were taking care of Caruana's dog as a favor when the dog bit Spangler. (ECF No. 1 at ¶¶ 5, 10.)

         The parties in the instant case are the insurers of the Spangler defendants. Plaintiff insured the Damschens. Defendant insured Caruana. Plaintiff has borne the expense of defending the Damschens in Spangler. (ECF No. 1 at ¶ 6.) Plaintiff contends that the Damschens' potential liability in Spangler also falls within the scope of the farm and ranch policy that Defendant issued Caruana. Plaintiff asked Defendant to contribute to the defense and indemnity of the Damschens, but Defendant refused. (ECF No. 1 at ¶ 12.)

         Plaintiff filed this lawsuit on April 26, 2016. Plaintiff seeks a declaration that Defendant is required to defend and indemnify the Damschens in Spangler. Plaintiff also seeks equitable contribution and equitable subrogation. (ECF No. 1 at 6.)

         II. Legal Standard

         A motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). On a motion to dismiss, the factual allegations of the complaint are assumed to be 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.” Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007) (citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 (2009)). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (citing Twombly, 550 U.S. at 556). But the 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).

         In ruling upon a motion to dismiss, the court may consider only the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of United States, Inc., 12 F.Supp.2d 1035, 1042 (C.D. Cal. 1998). If the court finds that the complaint fails to state a plausible claim for relief, the 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)).

         III. Discussion

         Plaintiff asserts three causes of action: declaratory relief, equitable contribution, and equitable subrogation. The Court addresses Plaintiff's claims for equitable contribution and equitable subrogation before addressing Plaintiff's request for declaratory relief.

         A. Equitable Contribution

         Plaintiff contends that it is entitled to equitable contribution under California law because Plaintiff and Defendant “share the same level of liability on the same risk” but Plaintiff “alone has borne the expense of defending the Damschens” in Spangler. (ECF No. 1 at ¶ 16.) Plaintiff seeks an order declaring this entitlement and requests that the order “stat[e] that [Defendant] is required to pay its proportionate share of any sums” Plaintiff has spent or will spend defending the Damschens with respect to the underlying action and any amounts that might be spent indemnifying the Damschens with respect to the underlying action, regardless of whether spent to settle the underlying action or satisfy a judgment entered in connection with it. (ECF No. 1 at 6.)

         Assuming Plaintiff can eventually make out a claim for equitable contribution, the Court concludes that Plaintiff's claim is not yet ripe. “[T]he question of ripeness may be considered on a court's own motion.” Nat'l Park Hosp. Ass'n v. Dep't of Interior, 538 U.S. 803, 808 (2003). The “ripeness doctrine precludes federal courts from exercising their jurisdiction over an action that is filed before a real dispute exists between the parties.” See Hawaii Newspaper Agency v. Bronster, 103 F.3d 742, 746 (9th Cir. 1996). The basic rationale behind the ripeness doctrine “is to prevent ...

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