United States District Court, W.D. Washington, Tacoma
ORDER GRANTING PLAINTIFF'S MOTION FOR LEAVE TO
BENJAMIN H. SETTLE United States District Judge.
matter comes before the Court on Plaintiff Chad Toland's
(“Toland”) motion for leave to amend complaint.
Dkt. 10. The Court has considered the pleadings filed in
support of and in opposition to the motion and the remainder
of the file and hereby grants the motion for the reasons
PROCEDURAL HISTORY AND FACTUAL BACKGROUND
February 2, 2016, Toland sustained injuries when the truck he
was driving was rear-ended by an underinsured motorist. Dkt.
1-2, ¶¶ 4, 7, 10. Toland was driving the truck
while on the job for his employer, South Bay Excavating.
Id. ¶ 4. Defendants CNA Insurance
(“CNA”) and Valley Forge Insurance Company
(“Valley Forge”) (collectively
“Defendants”) provided commercial auto insurance
for South Bay Excavating. Id. The uninsured
motorist's insurer tendered the limits of her policy,
$50, 000, to Toland. Id. ¶ 10. Toland alleges
he has accumulated medical expenses of more than $100, 000
since the accident. Id. ¶ 9. Upon notice, CNA
permitted release of the uninsured motorist for the policy
limit. Id. ¶ 12. On October 5, 2017, a demand
was filed with CNA for Toland's claims. Id.
¶ 13. On April 5, 2018, CNA responded with an offer
of $10, 000. Id.
March 28, 2019, Toland filed a complaint against Defendants
for breach of contract, negligence, and violation of the
Washington Consumer Protection Act in the Pierce County
Superior Court for the State of Washington. Dkt. 1-2. On
April 10, 2019, Toland filed an IFCA notice with the
Washington Insurance Commissioner. Dkt. 10 at 2. On May 3,
2019, Defendants removed the case to this Court. Dkt. 1.
October 7, 2019, Toland moved for leave to amend. Dkt. 10. On
October 21, 2019, Defendants responded. Dkt. 12. Toland did
seeks to amend his complaint to allege a violation of the
Insurance Fair Conduct Act (“IFCA”), RCW
48.30.015, and to allege a claim for bad faith. Dkt. 11-3.
the time for amendment as a matter of course has expired,
“a party may amend its pleading only with the opposing
party's written consent or the court's leave.”
Fed.R.Civ.P. 15(a)(2). To determine whether amendment is
appropriate, the Court considers five potential factors: (1)
bad faith, (2) undue delay, (3) prejudice to the opposing
party, (4) futility of amendment, and (5) whether there has
been previous amendment. United States v. Corinthian
Colleges, 655 F.3d 984, 995 (9th Cir. 2011). Leave to
amend “shall be freely given when justice so
requires.” AmerisourceBergan Corp. v. Dialysist
West, Inc., 465 F.3d 946, 951 (9th Cir. 2006).
proposed amendment is futile only if no set of facts can be
proved under the amendment to the pleadings that would
constitute a valid and sufficient claim or defense.”
Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214
(9th Cir. 1988). Leave to amend should be denied when
“it appears beyond doubt that the proposed pleading
would be subject to dismissal.” Wizards of the
Coast LLC v. Cryptozoic Entm't LLC, 309 F.R.D. 645,
654 (W.D. Wash. 2015).
do not oppose Toland's addition of a bad faith claim.
Dkt. 12 at 1-2. Defendants argue that Toland should not be
permitted to add a claim under the IFCA because such a claim
would be futile. Id. at 2. Defendants present
arguments on futility which are more appropriate to a
fully-briefed motion to dismiss than to opposition to a
motion for leave to amend. Denial of leave to amend for
futility is rare. Nebula, LLC v. Distinct Corp., 212
F.R.D. 534, 539 (N.D. Cal. 2003). Leave to amend should be
denied only if it is “beyond doubt” that the
amended complaint would be subject to dismissal for failure
to state a claim. DCD Programs, Ltd. v. Leighton,
833 F.2d 183, 188 (9th Cir. 1987).
argue that Toland's citation to their April 5, 2018
settlement offer shows that they never denied Toland's
claim, but instead made a settlement offer and invited Toland
to submit additional information. Dkt. 12 at 3-4. Defendants
ask the Court to conclude that Toland has failed to allege
facts showing that, as required under Perez-Crisantos v. State Farm Fire & Cas. Co., 187
Wn.2d 669, 684 (2017), Defendants either unreasonably denied
a claim for coverage or unreasonably denied payment of
benefits. Dkt. 12 at 5. Defendants argue that like the
plaintiff in Spencer v. State Farm Mut. Auto. Ins.
Co., No. C16-5885 BHS, 2017 WL 4619221, at *3 (W.D.
Wash. Oct. 16, 2017), Toland has alleged only disparity in
claim value, which does not establish a claim for
unreasonable denial of benefits without more. Id. at
6. However, at least some of Toland's allegations could
provide a basis to conclude that Defendants unreasonably
denied coverage, such as the failure to investigate wage
loss. Dkt. 10 at 4-5. While it is possible that a court would
agree with Defendants that Toland's facts as alleged do
not state a claim for an ...