United States District Court, N.D. California
ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS AND
GRANTING PLAINTIFF LEAVE TO AMEND RE: DKT. NOS. 5, 6
ILLSTON, United States District Judge.
September 12, 2019, the Court held a hearing on
defendants’ motions to dismiss the complaint. Although
defense counsel attended the hearing, plaintiff’s
counsel failed to appear and the matter was submitted on the
papers. For the reasons set forth below, the Court
GRANTS defendants’ motions to dismiss and GRANTS
plaintiff leave to amend consistent with the guidance
provided by this order. The amended complaint shall be filed
no later than October 7, 2019.
Essentia Insurance Company (“Essentia”) issues
automobile policies, and defendant Hagerty Insurance Agency,
LLC (“Hagerty”) “is an insurance agency
and/or broker that provides automobile coverage policies
underwritten by Essentia.” Compl. ¶¶
Plaintiff alleges that he obtained an insurance policy from
defendants for his 1966 Ford Fairlane
(“Fairlane”), and that he discovered the policy
was inadequate after the Fairlane was declared a “total
loss” after an accident. Id. ¶¶
to plaintiff, Hagerty advertises that it specializes in
classic car insurance and “promises to pay the agreed
upon amounts.” Id. ¶ 20. Plaintiff has
attached to the complaint various Hagerty advertisements as
they appeared on March 26, 2019. Id., Ex. B. The
complaint quotes from these advertisements as follows:
Hagerty Collector & Classic Car Insurance. Why Hagerty?
We’re as passionate about cars as you are. Our deep
knowledge of cars and their owners allows us to offer you
better classic car insurance coverage for less.
We [Hagerty] guarantee your value. Guaranteed Value. You tell
us your classic’s value and we’ll confirm that
it’s fair. In the event of a total covered loss, we
guarantee that you’ll receive the amount we agreed
Expert in-house claims. Our claims adjusters undergo training
in classic car repair, and our parts specialists can access
the original replacement parts for every vehicle we insure.
Guaranteed Value. More commonly known as “Agreed
Value” coverage, it means you tell us the value of your
classic and we’ll affirm that it’s a fair,
accurate number. Then, we GUARANTEE that value will be paid
to you in the event of a total covered loss . . . .
Compl. ¶¶ 20, 22. Plaintiff alleges that Hagerty
“consistently communicated to him that there was
effectively no limit to the value for which it would insure a
classic automobile.” Id. ¶ 21. Plaintiff
alleges, “[h]ence, by advertising, as well as conduct
in course of dealings, [d]efendant Hagerty held itself out as
having special expertise in [c]lassic automobile insurance .
. . and assumed a special relationship with [p]laintiff . . .
.” Id. ¶¶ 24, 26.
alleges that he visited Hagerty’s website on April 12,
2016, to obtain insurance coverage for his Fairlane.
Id. ¶ 22. Plaintiff describes the website as
having had a chat feature, which included a human avatar that
communicated with plaintiff to assist him in completing the
online insurance application. Id. ¶¶
15-16. Plaintiff alleges that it was under prompt by this
human avatar that he disclosed “the make, model,
model-year, and estimated value of the vehicle.”
Id. ¶ 14. The complaint is silent regarding the
estimated value that plaintiff disclosed.
alleges that after he submitted the application, he received
an insurance policy (“Policy”) that was issued
and underwritten by Essentia. Id. ¶¶
17-19. Essentia issued the Policy on March 20, 2016. Essentia
Mot. Dismiss at 1:3-5. Plaintiff alleges that Hagerty renewed the
Policy on March 20, 2018, and that the policy was effective
from March 30, 2018 through March 30, 2019. Id.
¶¶ 13, 18. Plaintiff has attached a copy of the
Policy to the complaint, and in relevant part, it states,
Limit of Liability
We will pay the limit shown under Coverage D in the
Declarations for each scheduled vehicle, which is agreed to
be the value of “your covered auto, ” in case of
a total loss or “constructive total
Vehicle(s) We Cover:
1966 Ford Fairlane 500 XL 2DR Hardtop Coupe….
Guaranteed Value: $30, 000
Id., Ex. A.
alleges that “he communicated his perceived value of
the Fairlane on every pertinent communication with every
[d]efendant Hagerty agent, as well as his willingness to pay
the premiums required for full coverage of the value of the
Fairlane.” Compl. ¶ 23. Furthermore, according to
plaintiff, various “unknown representative[s], working
on behalf of [d]efendant Hagerty, communicated to [p]laintiff
. . . that [p]laintiff was adequately insured . . .”
and that “‘he was in good shape insurance-wise
(paraphrased).’” Id. ¶¶ 28,
156(i). Plaintiff alleges that he believed “that the
Fairlane was insured for its full fair market value.”
Id. ¶ 29. Plaintiff does not allege any
specificity about these communications, including when they
occurred or the values that the parties discussed.
alleges that on May 12, 2018, he was driving the Fairlane and
the brakes failed, causing him to crash into several steel
pylons. Id. ¶¶ 30-32. According to
plaintiff, “[t]he Fairlane was declared a total
loss.” Id. ¶ 33. Plaintiff alleges that
“on information and belief, the Fairlane’s value,
immediately prior to the collision, and at the time it was
insured with [d]efendants, was over $100, 000.”
Id. However, plaintiff alleges that
“[d]efendant[s] . . . subsequently refused to pay for
property damage to the Fairlane to cover its entire fair
market value . . . claiming that it was not obligated to do
so under [p]laintiff[‘s] . . . insurance policy . . .
.” Id. ¶¶ 36-37. Plaintiff alleges
that “[d]efendant Hagerty failed to assess the required
amount of insurance [and] . . . to provide [p]laintiff . . .
with adequate policy coverage limits.” Id.
10, 2019, plaintiff filed this lawsuit against defendants in
Alameda County Superior Court. Defendants removed the case to
this Court on July 26, 2019, pursuant to diversity
jurisdiction. The complaint asserts the following eight
causes of action against both defendants: (1) breach of
contract, (2) breach of the implied covenant of good faith
and fair dealing, (3) negligent failure to obtain insurance
coverage, (4) failure to use reasonable care, (5) intentional
misrepresentation, (6) actionable deceit, (7) concealment,
and (8) unfair business practices. Defendants move to dismiss
all claims for failure to state a claim.