Williamsburg Nat'l Ins. Co. v. N.Y. Marine & Gen. Ins. Co.

Decision Date12 August 2022
Docket NumberCV 21-04377-RSWL-JDE x
PartiesWILLIAMSBURG NATIONAL INSURANCE COMPANY, Plaintiff, v. NEW YORK MARINE AND GENERAL INSURANCE COMPANY, Defendant.
CourtU.S. District Court — Central District of California
ORDER RE: DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT [41]
HONORABLE RONALD S.W. LEW SENIOR U.S. DISTRICT JUDGE

Plaintiff Williamsburg National Insurance Company (Plaintiff) brings this Action against Defendant New York Marine and General Insurance Company (Defendant). In its First Amended Complaint Plaintiff alleges eleven causes of action involving contribution, indemnity, and other various tort claims. Currently before the Court is Defendant's Motion to Dismiss Plaintiff's First Amended Complaint [41] (the “Motion”). Having reviewed all papers submitted pertaining to this Motion, the Court NOW FINDS AND RULES AS FOLLOWS: the Court GRANTS in part and DENIES in part Defendant's Motion.

I. BACKGROUND
A. Factual Background

Plaintiff, a Michigan-based insurance corporation, issued a motor carrier liability policy to DLR Express, Inc. (“DLR”) that provides a $1,000,000 combined single limit for covered accidents. First Am. Compl. (“FAC”) ¶¶ 3, 5, ECF No. 37. Attached to the policy is the MCS-90 endorsement, which is a standardized form that requires an insurer to pay up to its policy limit to members of the public for liability arising from its insured's operations even where the policy itself provides no coverage. Id. ¶ 5.

Defendant, a New York-based insurance corporation, issued a motor carrier liability policy (Defendant Policy”) to Intermodal Contractor's Association of North America. Id. ¶¶ 4, 6. Arthur Trimble, Jr. (“Trimble”) was later added as a certificate holder under this policy. Id. ¶ 6. Defendant Policy similarly provides a $1,000,000 combined single limit and includes the MCS-90 endorsement. Id. ¶¶ 6, 31.

DLR leased a tractor with an attached trailer to Trimble pursuant to an Equipment Lease Agreement and a sub-haul agreement (collectively, the “Agreement”). Id. ¶ 8. Under the Agreement, Trimble agreed to indemnify and release DLR against all liability arising out of Trimble's use of the tractor. Id. ¶ 9. Pursuant to the Agreement, Trimble also added DLR to Defendant Policy as an additional insured with respect to the tractor. Id. ¶ 11. The Policy obligates Defendant to pay all sums Trimble is liable for related to any accident involving the tractor. Id. ¶ 29.

On March 5, 2015, Trimble was driving the tractor pulling a loaded trailer when he rear-ended a truck being driven by Ronald Foster, Jr. Id. ¶ 7. Foster, along with the truck's passenger and the truck's owner (collectively, the Foster plaintiffs), filed a complaint against Trimble in Los Angeles Superior Court on March 3, 2017, alleging injuries and damages related to the accident. Id. ¶ 12. DLR was later added to the action as a defendant. Id. ¶ 15. Defendant provided a defense for Trimble in the Foster litigation, and all claims against Trimble were settled for $155,000. Id. ¶ 13. Plaintiff alleges that Defendant “was aware, via its retained defense counsel for Trimble, that its additional insured DLR was named as a defendant in the Foster litigation.” Id. ¶ 16. However, neither Plaintiff nor Defendant provided a defense for DLR in the Foster litigation initially, and consequently DLR never appeared in the case. Id. ¶¶ 17, 18.

A default judgment of $6,085,702 was entered against DLR. Id. ¶ 18. DLR moved to set aside the default judgment, and subsequently filed an appeal when that motion was denied. Id. DLR then tendered its defense to Plaintiff, and Plaintiff agreed to defend DLR in the Foster litigation under a reservation of rights.[1] Id. ¶ 19. A month later, DLR tendered its defense and request for indemnity to Defendant as an additional insured under Defendant Policy. Id. ¶ 21.

The Foster plaintiffs then agreed to settle all claims against DLR for $1,000,000. Id. ¶ 22. Both DLR and Plaintiff demanded that Defendant contribute its remaining policy limit to settle the claim, but Defendant refused. Id. ¶¶ 23-25. Ultimately, Plaintiff paid the entire settlement amount on behalf of DLR. Id. ¶¶ 22, 26. Plaintiff alleges that Defendant had the primary duty to defend and indemnify DLR in the Foster litigation because DLR is an additional insured under Defendant Policy. Id. ¶ 34.

B. Procedural Background

Plaintiff filed its initial Complaint [1] on May 26, 2021, alleging claims for declaratory relief, equitable contribution, and equitable subrogation. Defendant filed a Motion to Dismiss (“Initial Motion”) [12] on July 16, 2021, and this Court subsequently entered an Order [18] granting in part and denying in part Defendant's Motion. Specifically, the Court dismissed Plaintiff's subrogation claims with leave to amend but denied Defendant's Motion as to the declaratory relief and contribution claims. See Order re: Mot. to Dismiss (“Order”) 18:2-8, ECF No. 18.

Plaintiff then filed its First Amended Complaint (“FAC”) [37] on March 30, 2022. The FAC includes the previous claims for contribution and declaratory relief, as well as additional claims for equitable and implied indemnity, negligence, and common law and statutory tort of another. Defendant filed the instant Motion to Dismiss (Second Motion) [41] on April 28, 2022. On June 21, 2022, Plaintiff filed its Opposition [42]. Defendant replied [43] on June 28, 2022.

II. DISCUSSION
A. Legal Standard

Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a party to move for dismissal of one or more claims if the pleading fails to state a claim upon which relief can be granted. A complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation omitted). Dismissal is warranted for a “lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988) (citation omitted).

In ruling on a 12(b)(6) motion, a court may generally consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice. Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). A court must presume all factual allegations of the complaint to be true and draw all reasonable inferences in favor of the non-moving party. Klarfeld v. United States, 944 F.2d 583, 585 (9th Cir. 1991). The question is not whether the plaintiff will ultimately prevail, but whether the plaintiff is entitled to present evidence to support its claims. Jackson v. Birmingham Bd. of Educ., 544 U.S. 167, 184 (2005) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). While a complaint need not contain detailed factual allegations, a plaintiff must provide more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

B. Analysis
1. Preliminary Matters
a. Local Rule 7-3

Defendant argues that Plaintiff failed to comply with Local Rule 7-3 because Plaintiff never informed Defendant of its objection to Defendant's reassertion of certain arguments. Reply 25:18-22, ECF No. 43. However, Local Rule 7-3 sets forth the meet and confer obligations of the moving party only. C.D. Cal. L.R. 73 (requiring that counsel contemplating the filing of any motion shall first contact opposing counsel to discuss the motion's substance) (emphasis added). Therefore, Plaintiff did not violate Local Rule 7-3 in failing to raise its objection during the meet and confer session. The Court accordingly considers the arguments raised in Plaintiff's Opposition.

b. Defendant's Requests for Judicial Notice

Pursuant to Federal Rule of Evidence 201, [a] court may judicially notice a fact that is not subject to reasonable dispute because it . . . can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Thus, while a court may take judicial notice of matters of public record, a court may not take judicial notice of the substance of such records if subject to reasonable dispute. Lee v. City of Los Angeles, 250 F.3d 668, 689-90 (9th Cir. 2001) (stating that a court may take judicial notice of the fact that certain court records were filed but not of the truth of any facts stated therein).

Defendant requests the Court judicially notice the following records from the Foster litigation: (1) the proof of service of the amended complaint substituting DLR for a Doe defendant; (2) the order granting default judgment against DLR; (3) DLR's motion to set aside default and default judgment; (4) the order denying DLR's motion to set aside default and default judgment; and (5) the Superior Court's entry of a $6,085,702 judgment against DLR. See generally Def.'s Req. for Judicial Notice, ECF No. 41-1. Defendant also requests that the Court judicially notice: (6) an excerpt from the Federal Motor Carrier Administration's (“FMCA”) Regulatory Guidance; and (7) the “About Us information from the FMCA's website. Id.

The Court GRANTS Defendant's first through fifth requests because they pertain to court documents, the existence of which is not subject to reasonable dispute. See Selane Prods., Inc. v. Cont'l Cas. Co., No. 2:20-cv-07834-MCS-AFM, 2020 WL 7253378, at *3 (C.D. Cal. Nov. 24, 2020). However, the Court DENIES Defendant's sixth and seventh requests. While these documents may qualify as judicially noticeable materials, they are not relevant to the resolution of this Motion and therefore need not be considered by this Court. See Santa Monica Food Not Bombs v. City of Santa Monica, 450 F.3d 1022, 1025 n.2 (9th Cir. 2006).

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