Canal Insurance Company v. Dara Transport, Inc. et al, No. 1:2009cv02104 - Document 23 (E.D. Cal. 2010)
Court Description: MEMORANDUM DECISION on Defendant's Motion to Dismiss 15 , signed by Judge Oliver W. Wanger on 7/1/2010. (Gaumnitz, R)
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Canal Insurance Company v. Dara Transport, Inc. et al Doc. 23 1 2 3 4 UNITED STATES DISTRICT COURT 5 EASTERN DISTRICT OF CALIFORNIA 6 7 8 CANAL INSURANCE COMPANY, 9 1:09-cv-02104-OWW-SKO MEMORANDUM DECISION ON DEFENDANTS MOTION TO DISMISS Plaintiff, 10 v. 11 12 DARA TRANSPORT, INC., et al., 13 Defendants. 14 I. 15 INTRODUCTION. 16 Canal Insurance Company ( Plaintiff ) is proceeding with an 17 action for declaratory relief pursuant to 28 U.S.C. §§ 2201 and 18 2202 against Dara Transport, Inc. ( Dara Transport ), Chandararoth 19 Pok 20 Defendants ). 21 ( Chandararoth ), Sila Sok, and Darryl R. Pok Plaintiff filed its complaint on December 2, 2009. ( Moving (Doc. 1). 22 Plaintiff filed requests for entry of default judgements against 23 Dara Transport and Chandararoth on March 9, 2010. 24 On March 12, 2010, the Clerk of the Court entered default judgments 25 against Dara Transport and Chandararoth. (Docs. 9, 10). (Docs. 13, 14). 26 Defendants filed a motion to dismiss the complaint or, in the 27 alternative, to stay Plaintiff s action pending resolution of a 28 related case being litigated in state court. (Doc. 15). Plaintiff 1 Dockets.Justia.com 1 filed opposition to the motion to dismiss on May 13, 2010. 2 19). Defendants filed a reply on May 29, 2010. (Doc. (Doc. 20). II. FACTUAL BACKGROUND. 3 4 On March 28, 2007, Noch Pok ( Decedent ) died while operating 5 a 1999 Freightliner tractor and 1994 Great Dane trailer ( subject 6 vehicle ). (Complaint at 2). Decedent lost control of the subject 7 vehicle while traveling on Interstate Highway 395 in Bishop, 8 California. 9 Moving Defendants in the instant action. (Complaint at 2). Decedent s spouse and son are the (Complaint at 2). 10 Moving Defendants filed a state court action against Dara 11 Transport and Chandararoth for wrongful death on March 25, 2009 in 12 the California Superior Court for the County of Los Angeles. 13 (Complaint at 5). 14 trucking 15 Chandararoth is an individual and an officer of Dara Transport. 16 (Complaint at 2). 17 action alleges that Chandararoth owned, serviced, repaired, and was 18 otherwise responsible for the maintenance and operation of the 19 subject 20 (Complaint, Ex. B at 3). 21 that 22 operation and loading of the subject vehicle. (Complaint, Ex. B at 23 4). Moving Defendant s state court complaint alleges that Dara 24 Transport and Chandararoth were negligent in the maintenance and 25 service of the subject vehicle, and that as a result of Dara and 26 Chandararoth s negligence, the subject vehicle was incapable of 27 operating 28 (Complaint, Ex. B at 4). company vehicle Dara and Dara Transport is an interstate commercial based in State of Rhode Island, and Moving Defendants complaint in the state court that allegedly and caused Decedent s death. The state court complaint also alleges Chandararoth properly the were legally proximately 2 responsible caused decedent s for the death. 1 Plaintiff Canal Insurance Company is Dara Transport s insurer. 2 (Complaint at 5). Dara Transport and Chandararoth tendered defense 3 of the Moving Defendants state court action to Plaintiff pursuant 4 to the terms of their insurance agreement, and Plaintiff commenced 5 defense of the action. 6 defend the ongoing litigation in state court under a reservation of 7 rights. (Complaint at 7). Plaintiff continues to (Complaint at 2, 7). 8 On December 2, 2009, Plaintiff filed this case seeking a 9 declaratory judgment that the insurance policy between Plaintiff 10 and Dara Transport does not cover the underlying claim. 11 Plaintiff s complaint alleges that the Moving Defendants state 12 court action is not covered by the insurance policy because, inter 13 alia,: 14 1) Dara Transport did not in fact own the subject vehicle; 15 2) Decedent was not operating the subject vehicle with the 16 permission of Dara Transport at the time of Decedent s death, 17 or 18 Transport s permission; 19 3) Decedent was operating the vehicle pursuant to a long term 20 leased owner-operator agreement or other agreement subject to 21 an exclusion under the insurance policy; and 22 4) Dara Transport s liability is predicated on an obligation 23 for which Dara Transport or an unknown insurer may be held 24 liable 25 compensation, disability benefits law, or similar law by 26 reason of common law or statutory employment. was operating under 27 vehicle workmen s (Complaint at 9-10). 28 a the /// 3 beyond the compensation, scope of Dara unemployment III. LEGAL STANDARD. 1 2 Dismissal under Rule 12(b)(6) is appropriate where the 3 complaint lacks sufficient facts to support a cognizable legal 4 theory. 5 (9th Cir.1990).1 To sufficiently state a claim to relief and 6 survive a 12(b) (6) motion, the pleading does not need detailed 7 factual allegations but the [f]actual allegations must be enough 8 to raise a right to relief above the speculative level. Bell Atl. 9 Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 10 929 (2007). Mere labels and conclusions or a formulaic 11 recitation of the elements of a cause of action will not do. Id. 12 Rather, there must be enough facts to state a claim to relief that 13 is plausible on its face. Id. at 570. In other 14 complaint must contain sufficient factual matter, accepted as 15 true, to state a claim to relief that is plausible on its face. 16 Ashcroft v. Iqbal, --- U.S. ----, ----, 129 S.Ct. 1937, 1949, 173 17 L.Ed.2d 868 (2009) (internal quotation marks omitted). words, the 18 The Ninth Circuit has summarized the governing standard, in 19 light of Twombly and Iqbal, as follows: In sum, for a complaint to 20 survive a motion to dismiss, the nonconclusory factual content, and 21 reasonable 22 suggestive of a claim entitling the plaintiff to relief. Moss v. 23 U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir.2009) (internal 24 quotation marks omitted). Apart from factual insufficiency, a 25 complaint is also subject to dismissal under Rule 12(b)(6) where it inferences from that content, must be plausibly 26 27 28 1 Defendants ask the court to dismiss, or in the alternative, to stay Plaintiff s action. Because Plaintiff s complaint must be dismissed, the court does not address the propriety of issuing a stay. 4 1 lacks a cognizable legal theory, Balistreri, 901 F.2d at 699, or 2 where the allegations on their face show that relief is barred 3 for some legal reason, Jones v. Bock, 549 U.S. 199, 215, 127 S.Ct. 4 910, 166 L.Ed.2d 798 (2007). 5 In deciding whether to grant a motion to dismiss, the court 6 must accept as true all well-pleaded factual allegations in the 7 pleading under attack. Iqbal, 129 S.Ct. at 1950. A court is not, 8 however, required to accept as true allegations that are merely 9 conclusory, unwarranted deductions of fact, or unreasonable 10 inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 11 (9th Cir.2001). When ruling on a Rule 12(b)(6) motion to dismiss, 12 if a district court considers evidence outside the pleadings, it 13 must normally convert the 12(b)(6) motion into a Rule 56 motion for 14 summary 15 opportunity to respond. United States v. Ritchie, 342 F.3d 903, 16 907 court 17 materials-documents 18 incorporated by reference in the complaint, or matters of judicial 19 notice-without converting the motion to dismiss into a motion for 20 summary judgment. Id. at 908. 23 24 25 26 27 28 and Cir.2003). A it A. must attached IV. 21 22 (9th judgment, give may, to the nonmoving however, the party consider complaint, an certain documents DISCUSSION. Declaratory Judgment Standard Plaintiff asserts it is entitled to a declaratory judgment pursuant to 28 U.S.C. §§ 2201 and 2202. Section 2201(a) provides: In a case of actual controversy within its jurisdiction ¦, any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be 5 1 reviewable as such. 2 28 U.S.C. § 2201 (2009). Section 2202 provides [f]urther necessary 3 or proper relief based on a declaratory judgment or decree may be 4 granted, after reasonable notice and hearing, against any adverse 5 party whose rights have been determined by such judgment. 28 6 U.S.C. § 2202 (2009). 7 The phrase "case of actual controversy" in section 2201 refers 8 to the type of "Cases" and "Controversies" that are justiciable 9 under Article III of the United States Constitution. 10 Inc. 11 omitted). 12 the purposes of an action pursuant to section 2201, a court must 13 determine whether the facts alleged, under all the circumstances, 14 show that there is a substantial controversy, between parties 15 having adverse legal interests, of sufficient immediacy and reality 16 to warrant the issuance of a declaratory judgment. 17 Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 18 (1941)). 19 20 21 v. Genentech, Inc., 549 U.S. 118, 127 MedImmune, (2007) (citation In determining whether a case or controversy exists for Id. (citing Section 2201 requires that a dispute be "definite and concrete, touching the legal relations of parties having adverse legal interests"...and "admit of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts." 22 23 Id. (citations omitted). 24 Once a court determines that a complaint presents a case or 25 controversy within the court s jurisdiction, the court must decide 26 whether to exercise that jurisdiction based on the factors set 27 forth in Brillhart v. Excess Ins. Co., 316 U.S. 491 (1942). 28 Kearns, 15 F.3d at 144. E.g. Essentially, the district court must 6 1 balance concerns of judicial administration, comity, and fairness 2 to the litigants. Id. (citation omitted). 3 B. Plaintiff s Complaint 4 The complaint fails to allege facts sufficient to permit the 5 court to determine whether there is a substantial controversy 6 between the parties. 7 between a party suing an insured defendant and the insurer where 8 the insurer denies liability, see, e.g., American States Ins. Co. 9 v. Kearns, 15 F.3d 142, 144 (9th cir. 1994), Plaintiff s complaint 10 does not allege facts which establish the existence of a real and 11 substantial dispute as required by section 2201, MedImmune, 549 12 U.S. at 127. 13 situations in 14 insurance policy. 15 hypothetical facts need not be entertained by federal courts. 16 MedImmune, 549 U.S. at 127. 17 As Although an actual controversy may exist The complaint simply posits a series of hypothetical Moving which Plaintiff Section Defendants might 2201 point not be actions out, the liable based under the solely on complaint advances 18 contradictory theories unsupported by any allegations of fact. For 19 example, the complaint alleges: 20 21 22 23 On or about March 28, 2007, the decedent was operating Dara Transport s 1999 Freightliner tractor and 1994 Great Dane trailer...while hauling cargo for Dara Transport under its authority and in the course and scope of his employment as a common law or statutory employee of Dara Transport. While in the course of doing so, the decedent lost control of such vehicle on a downhill grade...resulting in the death of the decedent. 24 (Complaint at 5-6). Later in the complaint, Plaintiff alleges: 25 26 27 28 The Canal policy does not afford any coverage whatsoever with respect to [Moving Defendant s state court action], as Dara Transport did not in fact own the 1999 Freightliner tractor and/or 1994 Great Dane trailer being operated by the decedent at the time of his death, and/or said vehicles were not being operated by the decedent 7 1 2 with the permission of Dara Transport and/or were not being operated by the decedent within the scope of such permission at the time of his death. 3 (Complaint at 9). 4 allege Dara Transport did not own the accident vehicle; further, 5 that decedent was driving without the permission of Dara Transport, 6 an owner; and that decedent exceed the scope of any permission. 7 From the allegations of the complaint it cannot be ascertained 8 whether decedent was a common law or statutory employee of Dara 9 Transport; whether the subject vehicle was owned by a party other 10 than Dara Transport; or whether Decedent was operating the subject 11 vehicle without the permission of Dara Transport. 12 controversy exists cannot be determined based on these conclusory, 13 contradictory allegations. 14 Plaintiff contends Rule that Defendant 12(b)(6) not entitled 16 actually an improperly identified motion to dismiss for lack of 17 subject matter jurisdiction on ripeness grounds pursuant to Rule 18 12(b)(1). 19 have made no showing whatsoever in support of their contention that 20 Plaintiff s 21 (Opposition at 4). Although Defendants motion to dismiss consists 22 primarily of arguments concerning the prematurity of Plaintiff s 23 action, Defendants do assert that Pursuant to Federal Rule of 24 Civil Procedure 12(b)(6), the complaint and each claim for relief 25 set forth therein fail to state a claim upon which relief can be 26 granted. (Motion to Dismiss at 2). Defendants motion to dismiss 27 also argues that: complaint fails Defendant s motion to dismissal (Opposition at 4). because is Whether a real 15 28 under Plaintiff s alternative hypothetical scenarios is Plaintiff contends that Defendants to state a cause of action. Pursuant to Federal Rule of Civil Procedure 12(b)(6), a 8 1 court may dismiss a complaint as a matter of law for one of two reasons: (1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizabloe claim. See Robertson v. Dean Witter, 749 F.2d 530, 533-34 (9th Cir. 1984). Plaintiff must provide more than a formulaic recitation of the elements of a cause of action and its factual allegations must be enough to raise a right to relief above the speculative level. See Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007). 2 3 4 5 6 (Motion to Dismiss at 5). Defendants motion to dismiss does not 7 contain detailed analysis of the complaint s deficiencies, however, 8 given the conclusory nature of the complaint, detailed analysis is 9 not required. The insufficiency of Plaintiff s complaint is 10 apparent. The complaint must be DISMISSED, without prejudice. 11 ORDER 12 For the reasons stated, IT IS ORDERED: 13 1) The complaint is DISMISSED, without prejudice; 14 2)Defendants shall lodge a formal order consistent with this 15 decision within five (5) days following electronic service 16 of this decision by the clerk. Plaintiff shall file an 17 amended complaint within fifteen (15) days of the filing of 18 the order. Defendant shall file a response within fifteen 19 (15) days of receipt of the amended complaint. 20 21 22 IT IS SO ORDERED. 23 24 Dated: hkh80h July 1, 2010 /s/ Oliver W. Wanger UNITED STATES DISTRICT JUDGE 25 26 27 28 9
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