United States District Court, N.D. California
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.
HAYWOOD S. GILLIAM, JR., UNITED STATES DISTRICT JUDGE.
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
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.
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.
Rule 12(b)(6) Dismissal
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).
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).
Rule 12(e) More Definite Statement
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, ...