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Flynn v. Rental Insurance Services Inc.

United States District Court, W.D. Washington, Tacoma

June 28, 2018

VENUS FLYNN, et al., Plaintiffs,
v.
RENTAL INSURANCE SERVICES INC, et al., Defendants.

          ORDER ON DEFENDANT RENTAL INSURANCE SERVICES, INC.'S MOTION TO DISMISS AMENDED COMPLAINT PURSUANT TO FRCP 12(B)(6) AND 9(B)

          Ronald B. Leighton United States District Judge.

         THIS MATTER comes before the Court on Defendant Rental Insurance Services, Inc.'s Motion to Dismiss Amended Complaint Pursuant to Fed.R.Civ.P. 12(b)(6) and 9(b). Dkt. 28. Initiated on January 31, 2018, this tort case arises out of a February 12, 2015 auto accident allegedly caused by a federal employee. RIS insured Enterprise, the car rental company used by the federal employee, and allegedly made a misrepresentation to the plaintiffs about the applicable statute of limitations. As discussed below, RIS' motion to dismiss should be granted in part, on two grounds: (1) FTCA claims alleged against RIS which should be dismissed, and (2) claims that sound in fraud should be dismissed for failure to state a claim under the heightened pleading standard of Fed.R.Civ.P. 9(b). RIS' motion should be denied in part as to the claim for negligent misrepresentation.

         I. BACKGROUND

         A. Procedural History.

         On April 25, 2017, Plaintiff Venus Flynn filed a negligence action in Pierce County Superior Court for damages arising out a February 12, 2015 auto accident, naming as defendants Beatrice and “John Doe” Ashburn[1]. W.D.Wash. Cause No. 3:17-cv-05316-RBL, Dkt. 1-2. Ms. Ashburn removed the case on April 28, 2017, averring that at the time of the incident she was an employee of the Federal Deposit Insurance Corporation (FDIC), a federal agency, acting within the course and scope of her employment. Id. at Dkt. 1 at 2. The United States substituted itself as a party for Ms. Ashburn and John Doe Ashburn pursuant to 28 U.S.C. § 2679(d)(4). Id. at Dkt. 5. On June 14, 2017, the Court dismissed the United States from the case for Ms. Flynn's failure to exhaust administrative remedies under the Federal Tort Claims Act. Id. at Dkt. 12, citing 28 U.S.C. § 2675(a).

         On May 4, 2017, Ms. Flynn, along with two family members, Autumn Flynn and G.F. (collectively, “the Flynns”) filed administrative claims with the FDIC, which denied the Flynns' administrative claims on November 6, 2017. Dkt. 18 at ¶¶7, 8. The Flynns filed this case on January 31, 2018. Dkt. 1.

         B. Amended Complaint.

         1. Factual Allegations.

         For purposes of this motion, the following facts alleged in or incorporated by the Amended Complaint are taken as true.

         The Flynns sustained harm in a three car chain-reaction accident on February 12, 2015, caused by two other drivers, Ms. Ashburn and Defendant Lorraine Craig. Dkt. 18 at ¶¶10, 12, 13, 14. Ms. Ashburn, then-employed by a federal agency and acting within the scope of her employment, was not wearing anything to indicate that she was a federal employee, and she made no representations about her federal employment to the Flynns. Id. at ¶¶15, 16. Ms. Ashburn was driving an Enterprise rental car. Dkt. 5 at 2.

         In February of 2015, counsel to the Flynns contacted Enterprise, and Enterprise directed counsel to RIS for its claims handling. Dkt. 5 at 2. RIS, which accepted tender of the Flynns' insurance claims, negotiated the claims on behalf of Ms. Ashburn and the United States. Id.; Dkt. 18 at ¶17. On March 18, 2015, RIS sent a letter the Flynns acknowledging its investigation of their claims. Dkt. 1-2 at 2. The letter warns the Flynns: “Under Washington state law, you have three years from the date of the accident to file a lawsuit for bodily injury . . . This means you must settle your claim or file a lawsuit by that date or you will be barred from recovery.” Id. The Flynns' counsel first learned of Ms. Ashburn's federal employee status on April 16, 2017. Id. at ¶21.

         2. Parties and claims.

         The Amended Complaint names as defendants the United States, liable for its employee, Ms. Ashburn, who is not separately named; Ms. Craig; and RIS. Dkt. 18 at ¶¶2, 3. According to the “Claims” portion of the Amended Complaint, RIS is liable for damages “under RCW 46.61 and/or Washington common law.” Id. at ¶26. The Prayer for Relief requests: (1) judgment against the defendants for damages from the February 12, 2015 collision, and (2) “application of the doctrine of equitable tolling to allow plaintiffs' claims to proceed against the United States[.]” Id. at p. 5.

         According to the Flynns, the Amended Complaint alleges three common law causes of action against RIS: fraud, fraudulent concealment, and negligent misrepresentation. Dkt. 30 at 3. In support of these three claims, the Amended Complaint alleges that the United States and RIS “fraudulently concealed that [Ms.] Ashburn was a federal employee . . . and induced or tricked plaintiffs into believing that claims . . . fell under Washington State law and its three-year statute of limitations.” Dkt. 18 at ¶¶22, 24. Particular to RIS, it is also alleged that RIS “negligently represented to plaintiffs that their claims against [Ms.] Ashburn were subject to Washington law and ...


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