United States District Court, N.D. California
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS' MOTION TO DISMISS Re: Dkt. No. 14
Illston United States District Judge.
the Court is a motion to dismiss the plaintiff's
complaint filed by Langan Engineering, Environmental,
Surveying and Landscape Architecture, D.P.C., Langan
Engineering & Environmental Services, Inc. (collectively
“Langan”), and T&R Consolidated (erroneously
named in the Complaint as Treadwell & Rollo, Inc.)
(collectively, “defendants”). Pursuant to Civil
Local Rule 7-1(b), the Court finds this matter appropriate
for resolution without oral argument and VACATES the hearing
set for September 13, 2019.
lawsuit arises out of four excess insurance policies - the
2014, 2015, 2016, and 2017 policies, respectively - that
Langan took out from plaintiff RLI Insurance Company
(“RLI”). Dkt. No. 14 at 4 (Motion to Dismiss).
RLI alleges Langan falsely answered two questions on its
application for the 2014, 2015, and 2016 policies. Compl.
⁋⁋ 18, 20, 31, 33, 44, 46. Specifically,
RLI's application asked Langan:
28(b). Is the Applicant (after proper inquiry of each
Director, Officer or Partner of the Applicant or other
prospective insured party) aware of any circumstance,
incident, situation or accident during the past ten years
which may result in a claim being made against the Applicant,
its Predecessors in business, or any of the present or past
Partners, Officers or Directors of the Applicant.
28(d). Has the Applicant or any other party proposed for
insurance knowledge of injury to people or damage to property
during the [last] five years on or at projects where the
Applicant has rendered professional services?
⁋⁋ 17, 19, 30, 32, 43, 45. Langan answered
“no” to both of those questions for the 2014,
2015, and 2016 policies. Id. Langan did not answer
the questions one way or another for the 2017 policy.
Id. ⁋⁋ 55, 56. RLI's complaint alleges
Langan's answers were false because Langan was aware of
potential liability due to Langan's 2010 purchase of
various T&R Consolidated (“T&R”) assets
and concurrent acquisition of many of the principals and
staff of T&R. Compl. ⁋ 10. T&R was a
geotechnical engineering firm which performed work on the
Millennium Tower project in San Francisco, including
preparation of reports relating to the projected settling of
the building in light of the soil on which it was
constructed. Compl. ⁋ 6. In 2005, T&R estimated up
to six inches of potential long-term settlement at the
Millennium Tower site. Dkt. No. 14 at 1 (Motion to Dismiss).
After construction began on Millennium Tower, but prior to
its completion, the Tower had already settled more than six
inches. Id. During the course of due diligence prior
to purchasing T&R, the complaint alleges Langan learned
that T&R notified its insurance carrier in 2008 of a
potential claim regarding accelerated, excessive and/or
differential settlement of Millennium Tower. Compl. ⁋
April, 2015, Langan notified its primary insurance carrier,
Markel, of a “circumstance” it asked to be
handled by its 2014-2015 Primary Policy with Markel. Compl.
⁋ 35. The “circumstance” Langan reported
related to T&R's allegedly faulty work at Millennium
Tower and the resulting allegations of excessive or
differential settlement and resulting structural damage.
August 2016, Langan was named in various lawsuits under a
theory of successor liability for T&R's work on
Millennium Tower. Dkt. No. 14 at 4 (Motion to Dismiss). These
cases were ultimately consolidated under lead case Laura
Lehman v. Transbay Joint Powers Authority, et al., San
Francisco Superior Court, No. CGC-16-553758. Id. The
complaint alleges August 2016 is the first time Langan
informed RLI of a potential claim. Compl. ⁋ 119.
Federal Rule of Civil Procedure 12(b)(6), a district court
must dismiss a complaint if it fails to state a claim upon
which relief can be granted. To survive a Rule 12(b)(6)
motion to dismiss, the plaintiff must allege “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). This “facial plausibility”
standard requires the plaintiff to allege facts that add up
to “more than a sheer possibility that a defendant has
acted unlawfully.” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009). While courts do not require
“heightened fact pleading of specifics, ” a
plaintiff must allege facts sufficient to “raise a
right to relief above the speculative level.”
Twombly, 550 U.S. at 555, 570.
deciding whether the plaintiff has stated a claim upon which
relief can be granted, the Court must assume that the
plaintiff's allegations are true and must draw all
reasonable inferences in the plaintiff's favor. See
Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th
Cir. 1987). However, the court is not required to accept as
true “allegations that are merely conclusory,
unwarranted deductions of fact, or unreasonable
inferences.” In re Gilead Scis. Sec. Litig.,
536 F.3d 1049, 1055 (9th Cir. 2008).