Hale v. Country Mutual Insurance Company, No. 3:2019cv06059 - Document 22 (W.D. Wash. 2020)
Court Description: ORDER granting 15 Plaintiff's Motion to Amend. Counsel is directed to e-file their Amended Complaint; signed by Judge Ronald B. Leighton.(DN)
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ce to the opposing party, futility of amendment, and whether the 9 plaintiff has previously amended the complaint.” United States v. Corinthian Colleges, 655 F.3d 10 984, 995 (9th Cir. 2011) (emphasis added). Among these factors, prejudice to the opposing party 11 carries the greatest weight. Eminence Capital, 316 F.3d at 1052. A proposed amendment is 12 futile “if no set of facts can be proved under the amendment to the pleadings that would 13 constitute a valid and sufficient claim or defense.” Gaskill v. Travelers Ins. Co., No. 11-cv- 14 05847-RJB, 2012 WL 1605221, at *2 (W.D. Wash. May 8, 2012) (citing Sweaney v. Ada 15 County, Idaho, 119 F.3d 1385, 1393 (9th Cir.1997)). 16 “If after removal the plaintiff seeks to join additional defendants whose joinder would 17 destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the 18 action to the State court.” 28 U.S.C. § 1447(e). The court should consider the following factors: 19 “(1) whether the party sought to be joined is needed for just adjudication and would be joined 20 under Federal Rule of Civil Procedure 19(a); (2) whether the statute of limitations would 21 preclude an original action against the new defendants in state court; (3) whether there has been 22 unexplained delay in requesting joinder; (4) whether joinder is intended solely to defeat federal 23 jurisdiction; (5) whether the claims against the new defendant appear valid; and (6) whether 24 ORDER ON PLAINTIFF’S MOTION FOR LEAVE TO AMEND COMPLAINT - 3 Case 3:19-cv-06059-RBL Document 22 Filed 06/23/20 Page 4 of 6 1 denial of joinder will prejudice the plaintiff.” Falcon v. Scottsdale Ins. Co., No. CV-06-122-FVS, 2 2006 WL 2434227, at *2 (E.D. Wash. Aug. 21, 2006) (quoting IBC Aviation Servs., Inc. v. 3 Compania Mexicana de Aviacion, S.A. de C.V., 125 F. Supp. 2d 1008, 1011 (N.D. Cal. 2000)). 4 The Court will begin by analyzing the validity of Hale’s claims. If her claims are futile, 5 then she would not be prejudiced by denying leave to amend. If Hale’s claims are valid, then she 6 would likely be prejudiced if the Court forced her to file a separate lawsuit against Campbell- 7 VanDyke in state court. Hale asserts seven claims against Campbell-VanDyke: violation of the 8 Washington Consumer Protection Act (CPA), negligence, estoppel/promissory estoppel, breach 9 of fiduciary duty, failure to act in good faith, and negligent misrepresentation. Dkt. # 17-6 at 9- 10 11 11. Hale premises her CPA claim on WAC 284-30-330 and “common law bad faith.” 12 Proposed FAC, Dkt. # 17-6, at 9. The Supreme Court of Washington recently held that WAC 13 284-30-330 cannot support a CPA claim against an individual employee of the insurer. Keodalah 14 v. Allstate Ins. Co., 194 Wash. 2d 339, 350 (2019). However, as this Court held in Leonard v. 15 First American Property & Casualty Insurance Co., No. 3:19-CV-06089-RBL, 2020 WL 16 634430, at *2 (W.D. Wash. Feb. 11, 2020), Keodalah does not extend to CPA claims based on 17 the common law duty of good faith. See also Zuniga v. Standard Guar. Ins. Co., No. C17- 18 5176RBL, 2017 WL 2266243, at *3 (W.D. Wash. May 24, 2017). There is no case clearly 19 barring such claims against employees of the insurer such as an insurance agent. Consequently, 20 the Court cannot say with certainty that a state court would dismiss Hale’s CPA claim against 21 Campbell-VanDyke and that it is therefore futile. 22 As for the negligence claim, an insured may bring a negligence claim against an 23 insurance agent by proving “(1) that the agent had a duty of care to protect the insured against a 24 ORDER ON PLAINTIFF’S MOTION FOR LEAVE TO AMEND COMPLAINT - 4 Case 3:19-cv-06059-RBL Document 22 Filed 06/23/20 Page 5 of 6 1 certain risk, (2) a breach of that duty, and (3) that the breach was the proximate cause, (4) of the 2 insured’s damages.” Peterson v. Big Bend Ins. Agency, Inc., 150 Wash. App. 504, 515 (2009). 3 “Generally, an insurance agent represents the insurer, while an insurance broker represents an 4 insured.” AAS-DMP Mgmt., L.P. Liquidating Tr. v. Acordia Nw., Inc., 115 Wash. App. 833, 838 5 (2003). An insurance agent normally only assumes the duties of an agency relationship, but an 6 “enhanced duty” can arise when the insured and agent have a “special relationship.” Id. at 839. 7 “[A] special relationship may be shown by a long-standing relationship, and some type of 8 interaction on the question of coverage, coupled with the insured’s reliance on the expertise of 9 the insurance agent, to the insured’s detriment.” Id. (citing Suter v. Virgil R. Lee & Son, Inc., 51 10 11 Wash. App. 524, 528 (1988)). Here, Hale’s allegations support the possibility that Campbell-VanDyke assumed an 12 “enhanced duty” to her. The two had a longstanding relationship, and Hale alleges that she relied 13 on Campbell-VanDyke’s advice on how to update the coverage for her Property and handle her 14 claim. The Court therefore cannot say at this early stage that Campbell-VanDyke could not be 15 independently liable to Hale. 16 The Court need not analyze the rest of Hale’s claims; the fact that these two are not futile 17 means Hale would be prejudiced if forced to abandon her case against Campbell-VanDyke and 18 sue separately. The remaining § 1447(e) factors, when taken together, also do not favor denying 19 amendment. Country Wide argues that Campbell-VanDyke is not a necessary party and that Hale 20 could still sue in state court, but that does not mean she should be forced to. Indeed, this would 21 be unjust. 22 23 The Court also does not find Hale’s delay to be unreasonable. Country Mutual argues that, if Hale was able to allege claims against Country Mutual in her original complaint, she also 24 ORDER ON PLAINTIFF’S MOTION FOR LEAVE TO AMEND COMPLAINT - 5 Case 3:19-cv-06059-RBL Document 22 Filed 06/23/20 Page 6 of 6 1 could have included her claims against Campbell-VanDyke. But even if this is theoretically true, 2 Hale contends that her bare-bones Complaint was little more than a method of satisfying the 3 policy’s suit limitation period. According to Hale, when Country Mutual finally denied her claim 4 on April 3, 2020, she gained additional information that let her assert claims against Campbell- 5 VanDyke. 6 The Court agrees that Country Mutual’s delay in processing Hale’s claim preceded any 7 delay by Hale. Even if Hale arguably could have asserted claims against Campbell-VanDyke 8 earlier, that does not mean she should have. This case was also filed just under nine months ago 9 and no substantive motions have been filed before this Court. Remanding the case would thus 10 result in little waste of judicial resources. Hale’s delay is harmless and understandable under the 11 circumstances. 12 Finally, it is not clear that Hale’s motive in adding Campbell-VanDyke is to defeat 13 diversity jurisdiction. Suing an insurance agent in addition to the insurer is not unusual, and 14 Hale’s allegations make clear that Campbell-VanDyke was intimately involved with the events 15 underlying Hale’s claims. As such, Hale should be permitted to add Campbell-VanDyke to the 16 case, even if it destroys diversity. CONCLUSION 17 18 Hale’s Motion for Leave to Amend her Complaint is GRANTED. 19 IT IS SO ORDERED. 20 Dated this 24th day of June, 2020. 21 22 A 23 Ronald B. Leighton United States District Judge 24 ORDER ON PLAINTIFF’S MOTION FOR LEAVE TO AMEND COMPLAINT - 6
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