In re American Bankers Insurance Company of Florida

          ORDER DENYING DEFENDANT INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA'S MOTION TO DISMISS RE: DKT. NO. 69

          HAYWOOD S. GILLIAM, JR., UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Defendant Insurance Company of the State of Pennsylvania's (“Pennsylvania” or “ICSOP”) motion to dismiss the first, second and third causes of action in the Plaintiff City of Walnut Creek's (the “City”) First Amended Complaint, for which briefing is complete. See Dkt. No. 69 (“Mot.”), 75 (“Opp.”), 76 (“Reply”). In the alternative, Pennsylvania moves for a more definite statement under Federal Rules of Civil Procedure 12(e) for the second and third causes of action. The Court DENIES Pennsylvania's motion.^[1]

         I. BACKGROUND

         This action consists of two consolidated cases, American Bankers Ins. Co. of Florida v. The City of Walnut Creek, No. 19-cv-2237, and The City of Walnut Creek v. Admiral Ins. Co. et al., No. 19-cv-3556. Both actions stem from three underlying actions: Coleman et al v. City of Walnut Creek, No. 03-3157 (Coleman I), Garibian et al v. City of Walnut Creek, No. 14-0777 (Garibian), and Coleman et al. v. City of Walnut Creek, 12-2997 (Coleman II). Underlying plaintiffs in those cases sued the City for its alleged failure to develop and maintain storm drains, which caused flooding and damage to their real property. The City settled each case. Dkt. No. 30 ¶¶ 10, 14 (First Amended Complaint or “FAC”). The City now alleges that its policies with Admiral Insurance Company, Travelers Indemnity Company, Pennsylvania, Atlanta International Insurance Company, American Bankers Insurance Company of Florida, Transcontinental Insurance Company (National Fire Insurance Company of Hartford is their successor-in-interest), and Columbia Casualty Company (collectively, “Insurers”) for some period between 1974 to 1986 should indemnify all damages and fees. Id. ¶¶ 21-34.

         The City asserts four causes of action against all Insurers: (1) declaratory relief regarding indemnification, (2) breach of contract for failure to indemnify, (3) breach of contract for refusal to accept settlement demand, and (4) breach of the implied covenant of good faith and fair dealing. Id. ¶¶ 35-57. As relevant here, the City's allegations as to Pennsylvania specifically state:

27. ICSOP and/or its predecessors in interests insured the City pursuant to one or more policies of umbrella liability. The policies included: at least ICSOP policy No. 4177-8136, which covered the City from 7/01/1977 to 7/01/1978 (the ICSOP Policy). The City alleges that the ICSOP Policy include terms under which ICSOP will pay on behalf of the City all sums which the City shall become legally obligated to pay as ultimate net loss due to injury or damage to property. The City further alleges that the ICSOP Policy includes terms under which ICSOP has a duty to defend all such claims against the City.

28. When the City became aware of these policies, on or about May 8, 2017[, ] the City provided ICSOP with notice of the Lawsuits and requested that ICSOP defend and/or indemnify the City. ICSOP has failed and/or refused to provide the City with a defense and/or indemnity, has failed to reimburse the City for such costs, and continues to fail and/or refuse to do so. The City alleges the ICSOP's failure and/or refusal to provide the City with a defense and/or indemnity has caused the City to incur significant expenses in defending and settling the Lawsuits including but not limited to attorneys' fees, and for damages and that ICSOP's failure to reimburse the City could cause economic hardship to the City.

Id. ¶¶ 27-28.

         II. LEGAL STANDARD

         A. Rule 12(b)(6) Dismissal

         Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) motion, a plaintiff must plead “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 is facially plausible when a 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).

         In reviewing the plausibility of a complaint, courts “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nonetheless, Courts do not “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) (quoting Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001)). Even if the court concludes that a 12(b)(6) motion should be granted, 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, 1127 (9th Cir. 2000) (en banc) (quotation omitted).

         B. Rule 12(e) More Definite Statement

         Federal Rule of Civil Procedure 12(e) permits a party to “move for a more definite statement of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response.” “A Rule 12(e) motion is proper only where the complaint is so indefinite that the defendant cannot ascertain the nature of the claim being asserted and therefore cannot reasonably be expected to frame a proper response.” Sides v. Cisco Sys., Inc., No. 15-CV-03893-HSG, 2017 WL 4236960, at *7 (N.D. Cal. Sept. 25, 2017) (quoting Gregory Vill. Partners, L.P. v. Chevron U.S.A., Inc., 805 F.Supp.2d 888, ...