Howard v. Farmers Insurance Company Inc et al, No. 2:2012cv01068 - Document 50 (C.D. Cal. 2014)
Court Description: ORDER DENYING IN PART AND GRANTING IN PART DEFENDANTS' MOTION TO DISMISS by Judge Dean D. Pregerson. For the reasons stated in the Order, Defendants' Motion is DENIED insofar as Defendants assert that Plaintiff has failed to establish the existence of federal subject matter jurisdiction. Defendants' Motion is GRANTED with respect to the seventeen individual Defendants, who are hereby dismissed from this case. (cch)
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Howard v. Farmers Insurance Company Inc et al Doc. 50 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 DERRICK HOWARD, 12 Plaintiff, 13 14 v. FARMERS INSURANCE COMPANY, et al.,; 15 16 Defendants. ___________________________ 17 ) ) ) ) ) ) ) ) ) ) ) Case No. CV 12-01068 DDP (JCx) ORDER DENYING IN PART AND GRANTING IN PART DEFENDANTS’ MOTION TO DISMISS [Dkt. Nos. 17, 27] Before the court is a Motion to Dismiss filed by Defendant 18 Mid-Century Insurance Company (“Mid-Century”). (Dkt. No. 17.) 19 Defendant Farmers Insurance Company (“Farmers”) has joined Mid- 20 Century’s Motion. (Dkt. No. 27.) The matter is fully briefed and 21 suitable for adjudication without oral argument. Having considered 22 the parties’ submissions, the court adopts the following order. 23 24 25 I. Background In this action, Plaintiff in pro per, Derrick Howard, who is 26 currently incarcerated in the State of Florida, alleges Farmers 27 Insurance Company and Mid-Century Insurance failed to pay benefits 28 to him under two “Landlord Protector” insurance policies covering Dockets.Justia.com 1 properties in St. Louis, Missouri. According to the Complaint, the 2 first policy, No. 92838-63-11 (“the ‘11 policy”), insured a 3 property at 4423 Kossuth Avenue. The second policy, No. 92564-27-03 4 (“the ‘03 policy”), insured a property at 4433 Kossuth Avenue. 5 (Compl. ¶¶ 1-4, Dkt. No. 3.) 6 This is the second lawsuit filed by Plaintiff arising from the 7 same alleged loss under the ‘11 policy. In the earlier suit, 8 Plaintiff filed a claim in the Southern District of West Virginia 9 on December 3, 2010, alleging that Defendant Farmers Insurance 10 Company (“Farmers”) wrongfully denied his claim under the ‘11 11 policy for losses resulting from vandalism committed on July 15, 12 2006 by a tenant at 4423 Kossuth Avenue. (See Motion Ex. 2 ¶¶ 8, 13 10-12.) The Complaint alleged that Farmers wrongfully denied the 14 claim on the ground that the property was vacant 30 days prior to 15 the damage. (Id. ¶ 13-16.) Within a week of its filing, the action 16 was ordered transferred to the Eastern District of Missouri. (See 17 id. Ex. 3.) 18 Following the transfer, on August 9, 2011, Judge Henry Edward 19 Autrey ordered Plaintiff to show cause why the action should not be 20 dismissed for lack of jurisdiction and ordered Farmers to file a 21 brief as to whether diversity jurisdiction was present. (See id. 22 Ex. 5.) Farmers filed a response attaching the insurance policy at 23 issue, which, according to Farmers, limited claims for property 24 loss to $60,000. (See id. Ex. 6 at 2, 4-17.) Plaintiff did not 25 respond substantively to the court’s order to provide evidence 26 regarding jurisdiction. (Exs. 4, 7.) 27 28 On August 6, 2011, Judge Autrey issued an order stating that (1) “complete diversity is absent” and (2) “Defendant has also 2 1 shown that the maximum value of this case to plaintiff is $60,000.” 2 (Id. Ex. 8 at 5.) Accordingly, Judge Autrey dismissed the case for 3 lack of subject matter jurisdiction. (See id. Exs. 8-9.) On April 4 24, 2012, the Eighth Circuit Court of Appeals affirmed the 5 dismissal. (See id. Exs. 10-11.) 6 On February 13, 2012, Plaintiff filed the instant Complaint 7 against Farmers, Mid-Century, and 17 individual defendants who are 8 alleged to be corporate officials of the insuring entities. (Dkt. 9 No. 3.) As in the earlier suit, Plaintiff alleges that Defendants 10 wrongfully denied his claim under the ‘11 policy for losses 11 resulting from the act of vandalism on July 15, 2006 by a tenant at 12 4423 Kossuth Avenue. (Compl. ¶¶ 1-4, 7-9.) As in the earlier suit, 13 Plaintiff alleges that the claim was denied improperly on the 14 grounds that the property was vacant 30 days prior to the damage. 15 (Id. ¶ 9-16.) 16 Unlike the earlier suit, however, the instant Complaint also 17 includes claims alleging that Farmers and Mid-Century wrongfully 18 denied benefits under the ‘03 policy that insured the nearby 19 property at 4433 Kossuth Avenue. (Compl. ¶¶ 28-33.) The Complaint 20 does not clearly explain the basis for the claim; it is unclear 21 whether it relates to losses arising from the same alleged act of 22 vandalism as the ‘11 policy claim or from a different loss. 23 Plaintiff alleges that on or about December 1, 2007, Farmers and 24 Mid-Century fraudulently refused to process Plaintiff’s claim on 25 the false ground that the policy had been canceled. (Id. ¶ 32.) 26 The Complaint alleges causes of action for (1) breach of 27 fiduciary duty; (2) negligence; (3) breach of constructive trust; 28 (4) breach of contract under the ‘11 policy; (5) breach of contract 3 1 under the ‘03 policy; and (6) vexatious refusal under Mo. 2 §§ 375.296 and 375.420. He asserts complaints for damages of 3 $250,000. (Compl. at 19.) 4 Stat. Defendants Mid-Century and Farmers now moves to dismiss the 5 Complaint for lack of subject matter jurisdiction pursuant to 6 Federal Rule of Civil Procedure 12(b)(1). Defendants also move to 7 dismiss claims against the individual defendants who are alleged to 8 be corporate officers of the insuring entity pursuant to Rule 9 12(b)(6). 10 11 12 II. Subject Matter Jurisdiction Federal courts are courts of limited jurisdiction. Owen Equip. 13 & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). Federal 14 district courts have “original jurisdiction of all civil actions 15 arising under the Constitution, laws, or treaties of the United 16 States.” 17 exercise diversity jurisdiction when there is complete diversity 18 between the parties and the amount in controversy exceeds $75,000. 19 28 U.S.C. § 1332. 20 plaintiffs must be a citizen of a different state than each of the 21 defendants. 22 When subject matter jurisdiction is at issue, the plaintiff bears 23 the burden of establishing the jurisdiction it asks the court to 24 invoke. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 25 (1994). 26 28 U.S.C. § 1331. Alternatively, district courts may Complete diversity means that each of the Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). Defendants assert that Plaintiff cannot establish that this 27 court has subject matter jurisdiction over the instant dispute on 28 the ground that any assertion by Plaintiffs as to compliance with 4 1 the amount in controversy requirement is barred under the doctrine 2 of issue preclusion. 3 “The doctrine of issue preclusion prevents relitigation of all 4 issues of fact or law that were actually litigated and necessarily 5 decided in a prior proceeding. . . . 6 actually decided after a full and fair opportunity for litigation.” 7 Robi v. Five Platters, Inc., 838 F.2d 318, 322 (9th Cir. 1988) 8 (quotation marks and citation omitted). 9 to an earlier court’s determination of an issue related to the The issue must have been Issue preclusion applies 10 existence of subject matter jurisdiction. 11 F. Supp.2d 1161, 1170 n.4 (N.D. Cal. 2013)(quoting Wrigh, Miller & 12 Cooper, Federal Practice and Procedure: Jurisdiction 2d § 13 4436)(“Although a dismissal for lack of jurisdiction does not bar a 14 second action as a matter of claim preclusion, it does preclude 15 relitigation of the issues determined in ruling on the jurisdiction 16 question”); see also McNeil v. USPS, 2010 WL 3371751, at *10 (C.D. 17 Cal. July 27, 2010). See Hohu v. Hatch, 940 18 The court agrees with Defendants that Plaintiff is precluded 19 from arguing that the value of the ‘11 claim exceeds $60,000. The 20 issue was decided in the earlier case before Judge Autrey of the 21 Eastern District of Missouri after Plaintiff was given a full and 22 fair opportunity to litigate the issue. (See id. Ex. 3.) 23 However, this conclusion does not mean that the court does not 24 have subject matter jurisdiction over the instant Complaint. It is 25 well established that a single plaintiff may aggregate two or more 26 claims against a single defendant to satisfy the amount in 27 controversy requirement. See Snyder v. Harris, 394 U.S. 332, 335 28 (1969). Here, Plaintiff’s assertion that the amount in controversy 5 1 requirement is met is based upon the combined alleged damages for 2 the ‘11 and ‘03 policy claims. 3 “Where the plaintiff originally files in federal court, the 4 amount in controversy is determined from the face of the pleadings. 5 . . . 6 federal jurisdiction--typically the plaintiff in the substantive 7 dispute--controls so long as the claim is made in good faith.” 8 Geographic Expeditions, Inc. v. Estate of Lhotka ex rel Lhotka, 599 9 F.3d 1102, 1106 (9th Cir. 2010) (quotation marks and citation The amount in controversy alleged by the proponent of 10 omitted). Plaintiff seeks damages in relation to his claims under 11 the ‘11 and ‘03 claims in the amount of $250,000, which 12 significantly exceeds the jurisdictional requirement. (Compl. at 13 19-20.) Having reviewed the Complaint and Plaintiff’s explanation 14 of his assertions related to the amount in controversy, (Opp. at 4- 15 11), the court is persuaded that Plaintiff’s alleged damages are 16 made in good faith. When the alleged damages for the ‘03 claims are 17 added to those of the ‘11 claim, it is not “obvious that the suit 18 cannot involve the necessary amount.” Geographic Expeditions, 599 19 F.3d at 1106 (quoting St. Paul Mercury Indemnity Co. v. Red Cab 20 Co., 303 U.S. 283, 292 (1938). 21 22 23 III. Claims Against Individual Defendants A complaint will survive a motion to dismiss when it contains 24 “sufficient factual matter, accepted as true, to state a claim to 25 relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 26 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 27 570 (2007)). When considering a Rule 12(b)(6) motion, a court must 28 “accept as true all allegations of material fact and must construe 6 1 those facts in the light most favorable to the plaintiff.” Resnick 2 v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). Although a complaint 3 need not include “detailed factual allegations,” it must offer 4 “more than an unadorned, the-defendant-unlawfully-harmed-me 5 accusation.” Iqbal, 556 U.S. at 678. Conclusory allegations or 6 allegations that are no more than a statement of a legal conclusion 7 “are not entitled to the assumption of truth.” Id. at 679. In other 8 words, a pleading that merely offers “labels and conclusions,” a 9 “formulaic recitation of the elements,” or “naked assertions” will 10 not be sufficient to state a claim upon which relief can be 11 granted. Id. at 678 (citations and internal quotation marks 12 omitted). 13 “When there are well-pleaded factual allegations, a court 14 should assume their veracity and then determine whether they 15 plausibly give rise to an entitlement of relief.” Id. at 679. 16 Plaintiffs must allege “plausible grounds to infer” that their 17 claims rise “above the speculative level.” Twombly, 550 U.S. at 18 555. “Determining whether a complaint states a plausible claim for 19 relief” is a “context-specific task that requires the reviewing 20 court to draw on its judicial experience and common sense.” Iqbal, 21 556 U.S. at 679. 22 Defendants move to dismiss the seventeen individual 23 Defendants, who are alleged to be officers of Mid-Century and 24 Farmers. The court agrees that dismissal is appropriate. All of 25 Plaintiff’s claims arise from the alleged breach of contracts 26 Plaintiff entered into with the two entity Defendants. (See Compl. 27 ¶¶ 26, 41.) However, Plaintiff has not alleged any facts indicating 28 that any contract existed between Plaintiff and any of the 7 1 individual Defendants. Nor has Plaintiff offered in his Opposition 2 any explanation as to why the individual Defendants were included 3 in the Complaint. Accordingly, Plaintiff has failed to state a 4 plausible claim against the individual Defendants and their 5 dismissal from this action is warranted under Rule 12(b)(6). 6 III. Conclusion 7 For the reasons stated above, Defendants’ Motion is DENIED 8 insofar as Defendants assert that Plaintiff has failed to establish 9 the existence of federal subject matter jurisdiction. Defendants’ 10 Motion is GRANTED with respect to the seventeen individual 11 Defendants, who are hereby dismissed from this case. 12 13 IT IS SO ORDERED. 14 15 Dated: April 09, 2014 DEAN D. PREGERSON United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 8
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