Dobbel v. Liberty Ins. Corp.
| Decision Date | 30 December 2018 |
| Docket Number | No. 2:17-cv-02114-MCE-EFB,2:17-cv-02114-MCE-EFB |
| Court | U.S. District Court — Eastern District of California |
| Parties | ROBIN L. DOBBEL and JONATHAN K. DOBBEL, Plaintiffs, v. LIBERTY INSURANCE CORPORATION; LIBERTY MUTUAL HOLDNG COMPANY, INC.; LIBERTY MUTUAL INSURANCE COMPANY; ANDI SHAFFER and DOES 1 through 50, inclusive, Defendants. |
By way of the present action, Plaintiffs Robin and Jonathan Dobbel ("Plaintiffs") seek redress from Defendants Liberty Insurance Corporation ("Liberty"), Liberty Mutual Insurance Company ("Liberty Mutual"), Liberty Mutual Holding Company ("Liberty Holding")1, and Andi Shaffer ("Shaffer"), an insurance adjuster for Liberty (collectively "Defendants"). In response to the Court's July 20, 2018 Order (ECF No. 28), Plaintiffs filed a Second Amended Complaint ("SAC") alleging five causes of action: (1) breach ofcontract; (2) breach of the duty of good faith; (3) unfair competition; (4) negligent misrepresentation; and (5) intentional misrepresentation. SAC, ECF No. 29, at 1. Plaintiffs allege, inter alia, that Liberty wrongly refused to authorize adequate repairs to their home after it sustained water damage from a broken pipe. Plaintiffs additionally allege that Shaffer failed to advise them of relocation options during the repairs—a benefit under their policy—and that this omission amounted to a misrepresentation of their benefits.
Presently before the Court are Plaintiffs' Motion to Remand (ECF No. 30) and Defendants' Motion to Dismiss. ECF No. 32. For the reasons set forth below, Defendants' Motion to Dismiss is GRANTED in part, and DENIED in part. Plaintiffs' Motion to Remand is DENIED.2
Liberty issued an insurance policy to Plaintiffs providing insurance coverage for their home. On January 15, 2016, the home sustained water damage due to a broken condensation pipe, which resulted in Plaintiffs submitting a claim under the policy. Defendant Shaffer was Liberty's adjuster assigned to the matter, and processed Plaintiffs' claims for damage to the master bedroom and bathroom, as well as for an additional bedroom. Anderson Group International ("AGI") began repairs to Plaintiffs' home on approximately January 20, 2016. Prior to the start of these repairs, Plaintiffs allegedly inquired with Shaffer about being relocated to a hotel, but she failed to advise them that alternate housing was a covered benefit under the policy. As a result, Plaintiffs remained in their home throughout the repairs, to include during moldremediation procedures. The SAC's additional allegations include, in part, that AGI caused secondary damage to Plaintiffs' hardwood floors, and that Liberty refused to (1) cover this additional flooring damage, (2) replace a mold-damaged bathroom cabinet, and (3) authorize the replacement of carpeting in non-damaged rooms to ensure a reasonably uniform appearance. The parties' dispute over repairs continued, and resulted in Plaintiffs filing their original complaint in the Sacramento County Superior Court against the Liberty Defendants and AGI. After Plaintiffs settled with AGI, the Liberty Defendants removed the action to this Court, citing diversity of citizenship since Plaintiffs are residents of California and the Liberty Defendants are residents of Massachusetts. Plaintiffs' operative SAC purports to add Shaffer as an individual Defendant in this action. If legitimate, the joinder of Shaffer—a California resident—destroys diversity and the action must be remanded to Sacramento Superior Court.
On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief" in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint attacked by a Rule 12(b)(6) motion to dismiss does not require detailed factual allegations. However, "a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (internal citations and quotations omitted). A court is not required to accept as true a "legal conclusioncouched as a factual allegation." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) (quoting Twombly, 550 U.S. at 555). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 ().
Furthermore, "Rule 8(a)(2) . . . requires a showing, rather than a blanket assertion, of entitlement to relief." Twombly, 550 U.S. at 556 n.3 (internal citations and quotations omitted). Thus, "[w]ithout some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirements of providing not only 'fair notice' of the nature of the claim, but also 'grounds' on which the claim rests." Id. (citing 5 Charles Alan Wright & Arthur R. Miller, supra, at § 1202). A pleading must contain "only enough facts to state a claim to relief that is plausible on its face." Id. at 570. If the "plaintiffs . . . have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed." Id. However, "[a] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and 'that a recovery is very remote and unlikely.'" Id. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
A court granting a motion to dismiss a complaint must then decide whether to grant leave to amend. Leave to amend should be "freely given" where there is no "undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of the amendment . . . ." Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (). Not all of these factors merit equal weight. Rather, "the consideration of prejudice to the opposing party . . . carries the greatest weight." Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 185 (9th Cir. 1987)). Dismissal without leave to amend is proper only if it is clear that"the complaint could not be saved by any amendment." Intri-Plex Techs. v. Crest Group, Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) ().
When a case "of which the district courts of the United States have original jurisdiction" is initially brought in state court, the defendant may remove it to federal court "embracing the place where such action is pending." 28 U.S.C. § 1441(a). There are two bases for federal subject matter jurisdiction: (1) federal question jurisdiction under 28 U.S.C. § 1331, and (2) diversity jurisdiction under 28 U.S.C. § 1332. A district court has federal question jurisdiction in "all civil actions arising under the Constitution, laws, or treaties of the United States." Id. § 1331. A district court has diversity jurisdiction Id. § 1332(a)(1)-(2).
A defendant may remove any civil action from state court to federal district court if the district court has original jurisdiction over the matter. 28 U.S.C. § 1441(a). "The party invoking the removal statute bears the burden of establishing federal jurisdiction." Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988) (citing Williams v. Caterpillar Tractor Co., 786 F.2d 928, 940 (9th Cir. 1986)). Courts "strictly construe the removal statute against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (internal citations omitted). "[I]f there is any doubt as to the right of removal in the first instance," the motion for remand must be granted. Id. Therefore, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded" to state court. 28 U.S.C. § 1447(c).
The district court determines whether removal is proper by first determining whether a federal question exists on the face of the plaintiff's well-pleaded complaint.Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). If a complaint alleges only state-law claims and lacks a federal question on its face, then the federal court must grant the motion to remand. See 28 U.S.C. § 1447(c); Caterpillar, 482 U.S. at 392. Nonetheless, there are rare exceptions when a well-pleaded state law cause of action will be deemed to arise under federal law and support removal. They are "(1) where federal law completely preempts state law, (2) where the claim is necessarily federal in character, or (3) where the right to relief depends on the resolution of a substantial, disputed federal question." ARCO Envtl. Remediation L.L.C. v. Dep't of Health & Envtl. Quality, 213 F.3d 1108, 1114 (9th Cir. 2000) (internal citations omitted).
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