United States District Court, W.D. Washington, Tacoma
CHARLON R. JOHNSON, Plaintiff,
GALLAGHER BASSETT SERVICES INC., et al., Defendants.
ORDER GRANTING IN PART AND DENYING IN PART MOTIONS TO
B. Leighton United States District Judge
MATTER is before the Court on Defendant Gallagher
Bassett's Motion to Dismiss [Dkt. # 12], Defendant'
ACE American Insurance Co.'s similar Motion to Dismiss
and Partial Joinder in Gallagher Bassett's Motion [Dkt. #
13] and Gallagher Bassett's Motion to Join in ACE's
Reply in support of its own Motion. [Dkt. # 23]. The Motions
to Join are GRANTED.
case arises from an automobile accident and a subsequent a
UIM claim. Plaintiff Johnson was injured when her vehicle was
struck by a stolen truck. Her ACE insurance policy included a
$50, 000 UIM coverage. She made a policy limits UIM claim to
ACE's claims service provider, Gallagher Bassett, and
neither Gallagher Bassett nor ACE offered or paid her
anything. She sued in state court, alleging state law
specific performance (of contract), Insurance Fair Conduct
Act, and related “bad faith”/breach of fiduciary
duty/CPA claims. Defendants removed the case to this Court
under 28 U.S.C. § 1332 (diversity jurisdiction).
Bassett seeks dismissal with prejudice, arguing that Johnson
has not pled and cannot plausibly plead that she had a
contractual relationship (of insurance or otherwise) with
Gallagher Bassett, and that because it is not an insurer, it
owed her “no duties.” ACE-which did have a
contract, is an insurer, and does owe its insureds various
duties, even in the UIM context-joins in this motion.
also asks the Court to dismiss with prejudice all of
Johnson's claims against it. It argues that Johnson's
“specific performance” contract claim cannot
proceed where her claim is really one for breach of contract
and money damages, though it implicitly concedes that she
could assert a claim for the latter. It also seeks dismissal
of her “fiduciary duty” claim, arguing that ACE
owed her no such duty as a matter of law, particularly in the
UIM context. It seeks dismissal (with prejudice) of
Johnson's remaining “bad faith” claims,
arguing essentially that Johnson has not plausibly pled that
it denied her claim for UIM benefits under her ACE policy.
response, Johnson filed an amended complaint which adds
detail, including her efforts to obtain benefits and
specifically alleging the Gallagher Bassett's and
ACE's failure to respond is “effectively a denial
of” her claim, and that it has “unreasonably
denied payment of UIM benefits.” She retains her
“specific performance” contract claim but adds a
“breach of contract” claim. Johnson has since
voluntarily dismissed her specific performance and CPA claims
[Dkt. # 19].
Bassett's Reply concedes that it is ACE's adjuster
and agent, but continues to argue that because it is not an
insurer it is not bound by the IFCA, and that it has no
contractual (or other) duties to Johnson. It reiterates that
Johnson's UIM claim has not been denied argues that delay
in responding to or handing a claim does not necessarily
amount to bad faith.
Reply argues that its (and Gallagher Bassett's) delay in
responding to or in the handling of Johnson's UIM claim
was “not unreasonable.” It does not say “as
a matter of law, ” but this is nevertheless a summary
judgment argument. Both defendants appear to concede that
Johnson was insured, that she was injured in an auto accident
with an underinsured driver, that she made claim-in July, or
at the latest, November-and that neither defendant has
responded or paid any amount.
under Rule 12(b)(6) may be based on either the 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.
1990). A plaintiff's complaint must allege facts to state
a claim for relief that is plausible on its face. See
Aschcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). A claim
has “facial plausibility” when the party seeking
relief “pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. Although the
Court must accept as true the Complaint's well-pled
facts, conclusory allegations of law and unwarranted
inferences will not defeat a Rule 12(b)(6) motion.
Vazquez v. L. A. County, 487 F.3d 1246, 1249 (9th
Cir. 2007); Sprewell v. Golden State Warriors, 266
F.3d 979, 988 (9th Cir. 2001). “[A] plaintiff's
obligation to provide the ‘grounds' of his
‘entitle[ment] to relief' requires more than labels
and conclusions, and a formulaic recitation of the elements
of a cause of action will not do. Factual allegations must be
enough to raise a right to relief above the speculative
level.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007) (citations and footnotes omitted). This
requires a plaintiff to plead “more than an unadorned,
Iqbal, 129 S.Ct. at 1949 (citing Twombly).
12(b)(6) motion, “a district court should grant leave
to amend even if no request to amend the pleading was made,
unless it determines that the pleading could not possibly be
cured by the allegation of other facts.” Cook,
Perkiss & Liehe v. N. Cal. Collection Serv., 911
F.2d 242, 247 (9th Cir. 1990). However, where the facts are
not in dispute, and the sole issue is whether there is
liability as a matter of substantive law, the court may deny
leave to amend. Albrecht v. Lund, 845 F.2d 193,
195-96 (9th Cir. 1988).
proposed amendment is futile “if no set of facts can be
proved under the amendment to the pleadings that would
constitute a valid and sufficient claim or defense.”
Gaskill v. Travelers Ins. Co., No. 11-cv-05847-RJB,
2012 WL 1605221, at *2 (W.D. Wash. May 8, 2012) (citing
Sweaney v. Ada County, Idaho, 119 F.3d 1385, 1393
insurer has a duty of good faith to its policyholder and
violation of that duty may give rise to a tort action for bad
faith. Truck Ins. Exch. v. Vanport Homes, Inc., 147
Wash.2d 751, 765, 58 P.3d 276 (2002). To succeed on a bad
faith claim, the policyholder must show the insurer's
breach of the insurance contract was unreasonable, frivolous,
or unfounded. Overton v. Consol. Ins. Co., 145
Wash.2d 417, 433, 38 P.3d 322 (2002). Whether an insurer
acted in bad faith is a question of fact. Van Noy v.
State Farm Mut. Auto. Ins. Co., 142 Wash.2d 784, 796, 16
P.3d 574 (2001). If reasonable minds could differ that an
insurer's conduct was reasonable, or if there are
material issues of fact with respect to the reasonableness of
the insurer's action, then summary judgment is not
appropriate. Smith v. Safeco Ins. Co., 150 Wash.2d
478, 486, 78 P.3d 1274, 1277-78 (2003).
Basset's claim that it does not owe Johnson a
fiduciary duty is correct, and that specific claim is
dismissed. Johnson's breach of contract claim against
Gallagher Basset is also implausible, in the absence of any
such contract. But the claim that an outside adjuster owes an
insured no duty whatsoever-that it is free to ignore her
claim-is not correct. An adjuster cannot claim immunity from
the various statutes, regulations, “bad faith”
opinions governing claims handling by pointing to the absence
of a contract, any more than an insurer can immunize itself
by delegating its claims handling to an outside adjuster.
Johnson's core, “unreasonable claims