1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 BIGGE CRANE & RIGGING CO., Case No. 25-cv-07460-AMO
8 Plaintiff, ORDER GRANTING MOTIONS TO 9 v. DISMISS
10 AGRI-SYSTEMS, et al., Re: Dkt. Nos. 19, 21 Defendants. 11
12 13 This is a contract dispute. Both Defendants, Agri-Systems d/b/a ASI Industrial and Tokio 14 Marine America Insurance Company filed motions to dismiss, which were heard before this Court 15 on February 5, 2026. Having read the papers filed by the parties and carefully considered their 16 arguments therein and those made at the hearing, as well as the relevant legal authority, the Court 17 hereby GRANTS both motions, for the following reasons. 18 I. BACKGROUND1 19 Plaintiff Bigge Crane and Rigging Co. (“Bigge”) is a California corporation headquartered 20 in San Leandro, California. Compl. ¶ 1. Defendant Agri-Systems dba ASI Industrial (“ASI”) is a 21 Montana corporation headquartered in Billings, Montana. Compl. ¶ 2; Notice of Removal ¶ 7. 22 Defendant Tokio Marine America Insurance Company (“Tokio Marine”) is a New York 23 corporation headquartered in New York, New York. Compl. ¶ 3; Notice of Removal ¶ 8. 24 25 26
27 1 “On a motion to dismiss, a court accepts as true a plaintiff’s well-pleaded factual allegations and 1 A. The Lease 2 On April 17, 2024, Bigge and ASI entered into a Bare Equipment Lease Agreement (the 3 “Lease”) for a Liebherr LR1130 crawler crane. Compl. ¶ 7; see also id., Ex. A. The Lease set a 4 monthly rental rate of $23,000, plus freight and personal property tax reimbursement. Compl. ¶ 8. 5 Under the Lease, ASI was required to procure $1.5 million in property insurance for the crane, 6 name Bigge as an additional insured, and list Bigge as a loss payee. Compl. ¶¶ 13-14. The Lease 7 further provided that ASI assumed responsibility for repair or replacement of the crane in the 8 event of damage and that rent would continue to accrue until Bigge was fully compensated for any 9 loss in the event of damage. Compl. ¶ 33. 10 B. The Damage and Insurance Claim 11 While on rent to ASI, the crane was damaged during a severe weather event in Houston 12 commonly referred to as the “Houston Derecho,” which brought winds of up to 100 miles per hour 13 and multiple tornadoes. Compl. ¶¶ 11-12. Following the weather event and damage, ASI 14 submitted an insurance claim to its insurer, Tokio Marine. Compl. ¶ 32. Tokio Marine paid ASI 15 $1.25 million under the insurance policy (the “Policy”), which did not include Bigge as an 16 additional insured or loss payee. Compl. ¶¶ 16, 32. ASI remitted only $640,708.44 to Bigge from 17 the Tokio Marine payout and retained the remaining $609,291.56. Compl. ¶¶ 32, 49. 18 Further, ASI missed at least two months of rent and failed to pay other charges due under 19 the Lease. Compl. ¶¶ 17-18, 34. The Lease contains a “continuing rent” clause providing that rent 20 must accrue until Bigge has been fully compensated for the crane loss, and Bigge claims further 21 sums therefore remain outstanding. Compl. ¶¶ 33-34. 22 C. Bigge’s Claims and Requested Relief 23 On August 6, 2025, Bigge filed its Complaint in the Superior Court of California, County 24 of Alameda. See Notice of Removal ¶ 1; see also Compl. Tokio Marine removed the case to this 25 Court on September 3, 2025. The Complaint asserts nine causes of action: 26 • (1) breach of written contract; 27 • (2) common count; 1 • (4) conversion; 2 • (5) breach of fiduciary duty; 3 • (6) intentional interference with contract; 4 • (7) negligent interference with contract; 5 • (8) violation of Penal Code § 496; and 6 • (9) declaratory relief. 7 Compl. ¶¶ 19-87. Bigge advances all nine causes of action against ASI, and Bigge includes Tokio 8 Marine only in the final cause of action for declaratory relief. 9 II. DISCUSSION 10 Both ASI and Tokio Marine separately move to dismiss. Dkt. Nos. 19 & 21. The Court 11 elects to consider ASI’s motion first. 12 A. ASI’s Partial Motion to Dismiss 13 ASI moves to dismiss counts three through eight alleged against it, leaving count one, 14 breach of contract; count two, common count; and count nine, seeking declaratory relief, to 15 proceed through litigation in this case. Dkt. No. 21. A motion to dismiss under Federal Rule of 16 Civil Procedure 12(b)(6) tests for the legal sufficiency of the claims alleged in the complaint. Ileto 17 v. Glock, 349 F.3d 1191, 1199-1200 (9th Cir. 2003). Under Federal Rule of Civil Procedure 8, 18 which requires that a complaint include a “short and plain statement of the claim showing that the 19 pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), a complaint may be dismissed under Rule 20 12(b)(6) if the plaintiff fails to state a cognizable legal theory, or has not alleged sufficient facts to 21 support a cognizable legal theory. Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013). 22 While the court is to accept as true all the factual allegations in the complaint, legally 23 conclusory statements, not supported by actual factual allegations, need not be accepted. Ashcroft 24 v. Iqbal, 556 U.S. 662, 678-79 (2009). The complaint must proffer sufficient facts to state a claim 25 for relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 558-59 26 (2007) (citations and quotations omitted). “A claim has facial plausibility when the plaintiff 27 pleads factual content that allows the court to draw the reasonable inference that the defendant is 1 pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the 2 complaint has alleged – but it has not ‘show[n]’ – that the pleader is entitled to relief.” Id. at 679. 3 Review is generally limited to the contents of the complaint, although the court can also 4 consider a document on which the complaint relies if the document is central to the claims asserted 5 in the complaint, and no party questions the authenticity of the document. See Sanders v. Brown, 6 504 F.3d 903, 910 (9th Cir. 2007). The court may consider matters that are properly the subject of 7 judicial notice, Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005); Lee v. City of Los Angeles, 8 250 F.3d 668, 688-89 (9th Cir. 2001), and may also consider documents referenced extensively in 9 the complaint and documents that form the basis of the plaintiff’s claims. See No. 84 Emp’r- 10 Teamster Jt. Council Pension Tr. Fund v. Am. W. Holding Corp., 320 F.3d 920, 925 n.2 (9th Cir. 11 2003). If dismissal is warranted, it is generally without prejudice, unless it is clear that the 12 complaint cannot be saved by any amendment. Sparling v. Daou, 411 F.3d 1006, 1013 (9th Cir. 13 2005). 14 ASI argues that counts three through eight all fail on their own and as a matter of law, but 15 ASI additionally argues that counts three through seven fail under California’s economic loss 16 doctrine. See Dkt. No. 21 at 17-19. The Court agrees that the economic loss doctrine applies to 17 bar counts four through seven and discusses that issue before turning to discuss the sufficiency of 18 pleading for counts three and eight separately. 19 1. Economic Loss Doctrine 20 California’s economic loss doctrine bars tort claims that seek nothing more than contract 21 damages. The California Supreme Court describes, “[i]n general, there is no recovery in tort for 22 negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by 23 physical or property damage. . . . [T]he rule functions to bar claims in negligence for pure 24 economic losses in deference to a contract between litigating parties.” Sheen v. Wells Fargo Bank, 25 N.A., 12 Cal. 5th 905, 922 (2022) (citation omitted). “Not all tort claims for monetary losses 26 between contractual parties are barred by the economic loss rule. But such claims are barred when 27 they arise from – or are not independent of – the parties’ underlying contracts.” Sheen, 12 Cal. 5th 1 law of tort from dissolving into one another” and “requires a [plaintiff] to recover in contract for 2 purely economic loss due to disappointed expectations, unless he can demonstrate harm above and 3 beyond a broken contractual promise.” Robinson Helicopter Co. v. Dana Corp., 34 Cal. 4th 979, 4 988 (2004) (brackets and internal quotation marks omitted); see also J’Aire Corp. v. Gregory, 24 5 Cal. 3d 799, 803 (1979) (describing the economic loss rule). If every breach of contract gave rise 6 to damages distinct from those afforded under contract law, the economic loss rule “would be 7 meaningless, as would the statutory distinction between tort and contract remedies.” Robinson 8 Helicopter, 34 Cal. 4th at 990. The rule applies when “the parties are in contractual privity and 9 the plaintiff’s claim arises from the contract (in other words, the claim is not independent of the 10 contract).” Moore v. Centrelake Med. Grp., Inc., 83 Cal. App. 5th 515, 535 (2022) (citing Sheen, 11 12 Cal. 5th at 923). And the rule is particularly strong when a party alleges “commercial activities 12 that negligently or inadvertently [went] awry.” Robinson Helicopter, 34 Cal.4th at 991. 13 Here, Bigge’s effort to portray its contract claims as independent torts fails because every 14 “duty” it identifies arises directly from the Lease provisions it invokes. For example, Bigge relies 15 on alleged duties not to “steal” or “interfere with equitable rights” (count four, conversion), not to 16 “interfere with Bigge’s right to receive insurance benefits” (count six, intentional interference; 17 count seven, negligent interference), and not to “violate trust or fiduciary obligations imposed by 18 law” (count 5, breach of fiduciary duty). Dkt. No. 28 at 15-16. But each of the duties Bigge 19 identifies arises directly from obligations imposed on ASI under the Lease, including the 20 requirements to obtain and maintain property insurance naming Bigge as an additional insured and 21 loss payee and to remit any insurance proceeds (Lease at § 10); to operate and maintain the crane 22 safely (Lease at § 6); to indemnify Bigge (Lease at § 9); and to repair or replace the crane if 23 damaged (Lease at § 11). Compl., Ex. A. These are the very contractual performance terms that 24 define the parties’ relationship. California law does not permit the transformation of contractual 25 obligations into tort duties. See Erlich v. Menezes, 21 Cal. 4th 543, 550-51 (1999); Body Jewelz, 26 Inc. v. Valley Forge Ins. Co., 241 F. Supp. 3d 1084, 1092 (C.D. Cal. 2017). Reframing those 27 same allegations as “conversion,” “interference,” or “fiduciary” theories of liability does not create 1 “conversion,” “interference,” or “fiduciary” theories only serves to conflate tort and contract, 2 which the economic loss doctrine prohibits. See Sheen, 12 Cal. 5th at 923 (barring tort claims for 3 monetary losses “when they arise from – or are not independent of – the parties’ underlying 4 contracts.”). 5 Bigge identifies only two categories of loss: (1) the alleged $405,781.85 in arrears under 6 the Lease, and (2) the alleged $609,291.56 shortfall in insurance proceeds following Tokio 7 Marine’s payment. Every claim in counts four through seven is tethered to one of these two 8 contract-based categories of damages. The conversion claim is confined to the portion of the 9 insurance proceeds Bigge alleges ASI should have remitted – a claim for economic damages 10 arising from the contract. The fiduciary duty claim then recharacterizes those same insurance 11 obligations as fiduciary duties, attempting to create a fiduciary relationship and a cause of action 12 sounding in tort – again seeking recovery of economic damages arising from the contract. And the 13 intentional and negligent interference claims are likewise based entirely on ASI’s handling of 14 insurance proceeds that Bigge contends were owed under the Lease – another pair of claims for 15 economic damages arising from the contract.2 The asserted rights and duties underlying all these 16 causes of action derive from the Lease, not independently. Bigge’s additional demands for 17 punitive or treble damages do not change the analysis because such remedies remain derivative, 18 depending entirely on the same obligations and insurance issues governed by the Lease; Bigge 19 offers no authority to the contrary. The economic loss doctrine thus requires Bigge “to recover in 20 contract for purely economic loss due to disappointed expectations, unless [it] can demonstrate 21 harm above and beyond a broken contractual promise.” Robinson Helicopter, 34 Cal. 4th at 988. 22 Bigge asserts that the economic loss rule does not apply here because the physical damage 23 to its crane constitutes harm beyond a broken contractual promise. See Dkt. No. 28 at 15 (citing 24 Dhital v. Nissan North America, Inc., 84 Cal. App. 5th 828, 837 (2022)). To this end, Bigge 25 focuses on its allegation that ASI failed to comply with the terms of the Lease by operating the 26 2 Bigge’s claim for negligent interference with contractual relations additionally and separately 27 fails because such a cause of action does not exist at law. Davis v. Nadrich, 174 Cal. App. 4th 1, 1 leased crane in a hazardous manner, subjecting the equipment to improper use during a very high 2 wind event. Compl. ¶ 27. Bigge’s argument fails on relatively straightforward reasoning: Bigge’s 3 contention that ASI caused damage beyond a broken contract promise itself relies on the contents 4 of the contract. The crane is the subject of the Lease, and its damage is precisely the contractual 5 risk the parties allocated through the insurance and indemnity provisions. The breach of those 6 insurance and indemnity provisions remains live for adjudication in this lawsuit. The only losses 7 Bigge seeks to recover are economic, consisting of the purported unpaid rent and the alleged 8 shortfall in insurance proceeds, not any independent injury to person or property. Bigge does not 9 allege a property-damage tort arising from the crane accident, and the allegations regarding 10 damage to the crane serve only as background to its claim for breach of contract. Accordingly, the 11 “physical damage” exception does not apply. See Dhital, 84 Cal. App. 5th at 837. Bigge fails to 12 establish harm above and beyond a broken contractual promise. Therefore, the economic loss rule 13 bars Bigge’s claims sounding in tort, including counts four through seven. 14 2. Count Three – Account Stated 15 An “account stated” is “an agreement, based on prior transactions between the parties, that 16 all items of the account are true and that the balance struck is due and owing from one party to the 17 other.” S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1091 (9th Cir. 1989); see also Trafton v. 18 Youngblood, 69 Cal. 2d 17, 25 (1968). An account stated arises only when the parties agree on a 19 final balance that replaces the prior obligation. Martini E Ricci Iamino S.P.A. v. W. Fresh Mktg. 20 Servs., 54 F. Supp. 3d 1094, 1107 (E.D. Cal. 2014) (citing Gardner v. Watson, 170 Cal. 570, 574 21 (1915)); see also Leighton v. Forster, 8 Cal. App. 5th 467, 491 (2017). “The elements of an 22 account stated are: ‘(1) previous transactions between the parties establishing the relationship of 23 debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due 24 from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount 25 due.’ ” Martini E Ricci, 54 F. Supp. 3d at 1107 (quoting Zinn v. Fred R. Bright Co., 271 Cal. App. 26 2d 597, 600 (1969)). A claim “predicated on an express contract cannot be the basis of an account 27 stated,” and courts routinely reject efforts to repackage a contractual debt as one. Martini E Ricci, 1 54 F. Supp. 3d at 1106; see also Nat’l Ins. Co. of Hartford v. Expert Auto. Reconditioning, Inc., 2 No. SACV 13-0873-DOC, 2013 WL 6190591, at *3-4 (C.D. Cal. Nov. 24, 2013). 3 Bigge’s claim for account stated fails on the most fundamental requirements. Bigge 4 alleges none of the elements necessary to form a new agreement. The Complaint identifies no 5 written statement of account, no assent by ASI, and no new promise to pay beyond the Lease. The 6 Complaint instead merely repeats the same obligation already alleged in count one for breach of 7 contract, asserting that “ASI agreed to pay Bigge this balance.” Compl. ¶¶ 42-43. But the 8 Complaint contains no other agreement – read in context, ASI’s “agreement” to pay refers only to 9 ASI’s original lease obligations, not a subsequent assent to a reconciled sum. Id. Without a new 10 promise separate from the Lease, there can be no claim for account stated as a matter of law. 11 Martini E Ricci, 54 F. Supp. 3d at 1106-07. 12 Bigge cites Zinn v. Fred R. Bright Co., 271 Cal. App. 2d 597 (1969), to argue that assent to 13 a stated balance may be implied without an express agreement. Dkt. No. 28 at 3. The matter of 14 Zinn involved an undisputed statement and assent where the employer issued a check fixing the 15 amount due, and the employee’s confirmation of that sum created a new and independent 16 agreement. Id., 271 Cal. App. 2d at 600. Bigge’s allegations here describe a continuing dispute 17 under the Lease involving missed rent, insurance obligations, and withheld proceeds, not any 18 meeting of the minds on a new fixed balance. Compl. ¶¶ 29, 32, 34, 81. Bigge’s reliance on Zinn 19 is thus misplaced. Because the alleged $405,781.85 Bigge seeks under this claim arises entirely 20 from the Lease and not from a separate agreement, California law bars pleading it as an account 21 stated. Count three for account stated must be dismissed as a matter of law. 22 3. Count Eight – Violation of California Penal Code § 496 23 ASI argues that count eight, alleging violation of California Penal Code § 496, fails as a 24 matter of law because it attempts to recast a contract dispute as theft, requires criminal intent that 25 is not alleged, and focuses on conduct arising entirely outside California. See Dkt. No. 21 at 16- 26 17. Penal Code § 496 authorizes treble damages where a defendant knowingly receives, conceals, 27 or withholds stolen property. Cal. Penal Code § 496(c). Courts have cautioned that Penal Code 1 Farkhondehpour, 13 Cal. 5th 333, 361-62 (2022). The California Supreme Court has held that 2 “[t]o prove theft, a plaintiff must establish criminal intent on the part of the defendant beyond 3 mere proof of nonperformance or actual falsity.” Id. (quoting People v. Ashley, 42 Cal. 2d 246, 4 264 (1954)). This requirement prevents “ordinary commercial defaults” from being transformed 5 into theft. Id. 6 California presumes its criminal statutes do not apply extraterritorially. O’Connor v. Uber 7 Techs., Inc., 58 F. Supp. 3d 989, 1005 (N.D. Cal. 2014). Courts have expressly rejected attempts 8 to apply Penal Code § 496 to conduct occurring outside California, holding that a contractual 9 choice-of-law provision cannot overcome the presumption. Dfinity USA Research LLC v. Bravick, 10 No. 22-cv-03732, 2023 WL 2717252, at *4-5 (N.D. Cal. Mar. 29, 2023). For example, in Dfinity, 11 the defendant allegedly retained computer equipment following the termination of his employment 12 with the plaintiff company. Id. at *1-2. Defendant sought to dismiss at the pleading stage the 13 claim that his retention of the computer equipment constituted theft in violation of Penal Code 14 § 496, arguing in part that California’s presumption against extraterritoriality prevented 15 enforcement of the Penal Code against him – he resided in Michigan and had worked remotely for 16 the plaintiff company. Id. at *4-5. The court agreed with the defendant as well as several other 17 California courts, holding that a Penal Code § 496 claim premised on conduct occurring in 18 Michigan could not lie against the out-of-state defendant regardless of the contract’s California 19 choice of law provision. Id. at *4-5 (collecting cases). 20 Here, Bigge alleges that ASI withheld insurance proceeds that Tokio Marine paid in 21 connection with the crane accident. Compl. ¶¶ 79-82. Those allegations, however, describe 22 nothing more than a contractual payment dispute over ASI’s obligations under the Lease. 23 California courts have made clear that Penal Code § 496 does not convert ordinary commercial 24 defaults into theft. Siry Inv., 13 Cal. 5th at 361-62. Alleged nonpayment of insurance proceeds 25 under a lease falls squarely in that category and cannot sustain a Penal Code § 496 claim. Further, 26 Bigge fails to identify any facts establishing criminal intent by ASI – conclusory assertions that 27 ASI “acted with willful and conscious disregard of the rights of others, fraudulently and with 1 see also Siry Inv., 13 Cal. 5th at 362 (requiring a plaintiff to establish criminal intent beyond mere 2 contractual nonperformance). Count eight fails on this basis. 3 Perhaps more clearly, the claim also fails because the alleged conduct arises entirely from 4 a Texas project. The crane was leased for use in Houston, damaged in Houston, and insured by a 5 Montana-based lessee. ASI is not a California company, and none of the allegedly wrongful acts 6 occurred in California. Under the presumption against extraterritoriality, Penal Code § 496 does 7 not apply to out-of-state conduct, and a contractual choice-of-law clause cannot expand its reach. 8 Dfinity, 2023 WL 2717252, at *4-5. Therefore, Bigge cannot assert a claim for violation of Penal 9 Code § 496 against ASI. Count eight of the Complaint must be dismissed with prejudice. 10 B. Tokio Marine’s Motion to Dismiss 11 Bigge brings only its ninth cause of action for declaratory relief against Tokio Marine. 12 Tokio Marine seeks to dismiss that claim for lack of standing. Dkt. No. 19. The Court evaluates 13 challenges to Article III standing under Rule 12(b)(1), which governs motions to dismiss for lack 14 of subject matter jurisdiction. Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011). Rule 15 12(b)(1) motions may be either facial, where the inquiry is confined to the allegations in the 16 complaint, or factual, where the court is permitted to look beyond the complaint to extrinsic 17 evidence. Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). When a defendant challenges 18 jurisdiction “facially,” all material allegations in the complaint are assumed true, and the court 19 determines whether the factual allegations are sufficient to invoke the court’s subject matter 20 jurisdiction. Id. When a defendant makes a factual challenge “by presenting affidavits or other 21 evidence properly brought before the court, the party opposing the motion must furnish affidavits 22 or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction.” Safe 23 Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004); see also Leite, 749 F.3d at 1121. 24 The court need not presume the truthfulness of the plaintiff’s allegations under a factual attack. 25 Wood v. City of San Diego, 678 F.3d 1075, 1083 n.8 (9th Cir. 2012). 26 “Article III confines the federal judicial power to the resolution of ‘Cases’ and 27 ‘Controversies.’ For there to be a case or controversy under Article III, the plaintiff must have a 1 413, 423 (2021) (citation omitted). To have standing under Article III of the Constitution, “[t]he 2 plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged 3 conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” 4 Spokeo, Inc. v. Robins, 578 U.S. 330, 330 (2016) (citing Lujan v. Defenders of Wildlife, 504 U.S. 5 555, 560 (1992)). “To establish an injury in fact, a plaintiff must show that he or she suffered ‘an 6 invasion of a legally protected interest’ that is ‘concrete and particularized.’ ” In re Facebook, 7 Inc. Internet Tracking Litig., 956 F.3d 589, 597 (9th Cir. 2020) (quoting Spokeo, 578 U.S. at 339). 8 Here, Tokio Marine argues that, as a third party to the insurance contract between ASI and 9 Tokio Marine (the “Policy”), Bigge has no enforceable interest in the Policy. Because Bigge 10 objects to Tokio Marine’s proffer of the Policy, the Court discusses the matter of incorporation by 11 reference before turning to the merits. 12 1. Incorporation by Reference 13 Tokio Marine asks the Court to consider the Policy underlying Bigge’s claims to be 14 incorporated into the Complaint by reference. See Goodman Decl., Ex. A (Dkt. No. 19-2). Under 15 the doctrine of incorporation-by-reference, the Court may consider a document not attached to the 16 complaint provided the complaint “necessarily relies” on the document or contents thereof, the 17 document’s authenticity is uncontested, and the document’s relevance is uncontested. Coto 18 Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010); see United States v. Ritchie, 342 19 F.3d 903, 908 (9th Cir. 2003) (“Even if a document is not attached to a complaint, it may be 20 incorporated by reference into a complaint if the plaintiff refers extensively to the document or the 21 document forms the basis of the plaintiff’s claim.”). “The defendant may offer such a document, 22 and the district court may treat such a document as part of the complaint, and thus may assume 23 that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6).” Ritchie, 342 24 F.3d at 908. 25 Bigge opposes the Court’s consideration of the Policy. Bigge spends two pages of its 26 opposition questioning the authenticity of the insurance policy provided by Tokio Marine. Dkt. 27 No. 30 at 10-12. Bigge first challenges the policy as improperly authenticated by Tokio Marine’s 1 Christopher E. Miley, can and does attest that the same copy is a true and correct copy. See Miley 2 Decl. (Dkt. No. 33-2). Bigge did not file an objection to the Miley Declaration. See Civil L.R. 7- 3 3(d)(1). In addition to challenging the person presenting the policy, Bigge contests the policy’s 4 authenticity as potentially incomplete. Bigge avers, “Until Bigge has been able to conduct 5 discovery as to the policy, its endorsements, and communications with and from TMAIC’s 6 representatives concerning the rights of equipment owners, Bigge is reasonably entitled to contest 7 the authenticity and completeness of the document upon which TMAIC bases its motion.” Dkt. 8 No. 30 at 11. 9 The Court overrules Bigge’s objection as insufficient to create a reasonable dispute as to 10 authenticity. Where a plaintiff offers only “perfunctory challenges” that fail to raise a “reasonable 11 dispute” as to the authenticity of a document offered for incorporation by reference, courts may 12 overrule the objection and still consider the materials incorporated by reference for purposes of 13 resolving a motion to dismiss. See Dimas v. JPMorgan Chase Bank, N.A., No. 17-CV-05205- 14 LHK, 2018 WL 809508, at *6 (N.D. Cal. Feb. 9, 2018) (citing Allen v. United Fin. Mortg. Corp., 15 660 F. Supp. 2d 1089, 1093 (N.D. Cal. 2009)). Here, Bigge challenges the authenticity of the 16 Policy primarily based on the possibility that ASI requested an endorsement that named Bigge as a 17 loss payee, a possibility that runs counter to Bigge’s entire Complaint and specifically its theory of 18 breach in that ASI failed to name Bigge as a loss payee or additional insured. See Dkt. No. 30 at 19 11. Bigge’s argument, however, does not identify any facts in the policy that conflict with the 20 allegations in the Complaint. Further, Bigge’s argument about what could possibly be missing 21 does not contain any facts that contradict the contents or undermine the reliability of the exhibit. 22 Accordingly, the Court finds that Bigge fails to raise a reasonable question as to the accuracy of 23 the Policy document proffered by Tokio Marine, and the Court overrules Bigge’s objection as to 24 authenticity. See Dimas, 2018 WL 809508, at *6. The Court deems the Policy incorporated into 25 the Complaint by reference. 26 2. Bigge’s Standing to Sue Tokio Marine – Generally 27 Bigge’s only claim against Tokio Marine seeks a declaration that the insurance funds paid 1 an insured or loss payee. Bigge admits it is not an insured within the language of the policy, nor is 2 it listed as a loss payee. See Compl. ¶ 16. Tokio Marine reasons that, because Bigge does not 3 have any privity with Tokio Marine, Bigge does not have standing to raise a claim for declaratory 4 relief. See Dkt. No. 19. 5 “The standing doctrine determines ‘whether the litigant is entitled to have the court decide 6 the merits of the dispute or of particular issues.’ ” United States v. Lazarenko, 476 F.3d 642, 649 7 (9th Cir. 2007) (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)). Unless there exists a 8 recognized exception, a party not in privity of contract with an insurer lacks standing to resolve 9 rights and obligations under an insurance policy. See Otay Land Co. v. Royal Indem. Co., 169 10 Cal. App. 4th 556, 564 (2008). Generally, third parties cannot challenge an insurer’s payment to 11 its insured. See San Diego Housing Comm’n v. Indus. Indem. Co., 95 Cal. App. 4th 669, 692 12 (2002) (“A third party claimant cannot bring an action upon a duty owed only to the insured . . . 13 without an assignment of the cause of action for breach of such duty.”); see also 7A COUCH ON 14 INS. 3d § 104:6 (“Where claimants do not have a right to sue an insurer directly, it necessarily 15 follows that they cannot object to the insurer’s performance of its obligations under the contract of 16 insurance[.]” (footnote omitted)). A third party generally may only sue an insurer directly where 17 there has been an assignment of rights or a final judgment against the insured. Reynolds v. Shure, 18 148 F. Supp. 3d 928, 934-35 (E.D. Cal. 2015). 19 Here, Bigge admits it is not an insured within the language of the policy, nor is it listed as a 20 loss payee. See Compl. ¶ 16. Bigge accordingly has no rights under contract with Tokio Marine, 21 and because the insurance proceeds to which Bigge may have rights are no longer in Tokio 22 Marine’s possession, Bigge has no legally sufficient claim against Tokio Marine. See Compl. ¶ 32 23 (stating that Tokio Marine paid ASI $1.25 million to satisfy the claim). In fact, Bigge does not 24 attempt to argue a specific duty was owed to it by Tokio Marine, only that Bigge is generally 25 owed the full limit of ASI’s Policy, $1.5 million. Because Bigge is not a party to the Policy and 26 lacks privity, it only has standing to sue Tokio Marine if a recognized exception applies. 27 Bigge argues in its opposition brief that three exceptions apply, giving rise to standing 1 they appear nowhere in the Complaint; rather, they appear to be introduced for the first time in 2 Bigge’s brief opposing Tokio Marine’s motion to dismiss. See id. But further, all three of these 3 theories fail as a matter of law. The Court considers them in turn below. 4 3. Exceptions for Third Party Claim Against Insurer 5 Bigge argues in its opposition brief that three exceptions apply in the alternative to each 6 other, allowing it to assert a claim against Tokio Marine: (1) Bigge possesses an equitable lien in 7 ASI’s insurance Policy; (2) Bigge possesses a trust interest in the insurance premiums paid by ASI 8 to Tokio Marine; and (3) Bigge qualifies as a third-party beneficiary. The Court is unpersuaded. 9 a. Equitable Lien 10 All of Bigge’s claims flow from ASI’s alleged failure to list Bigge on the Policy as a loss 11 payee or additional insured, violating an alleged contractual right. Bigge’s Complaint makes this 12 clear, specifying in count one of the Complaint that ASI breached the Lease agreement between 13 the parties by failing to obtain coverage listing Bigge on the Policy, and that the appropriate 14 remedy is money damages. Compl. ¶¶ 32, 40. Though Bigge purports to establish that an 15 equitable lien exists against the proceeds of the Policy, this argument ignores that an equitable lien 16 would attach only to the insurance proceeds and would not provide standing for Bigge’s claims 17 against Tokio Marine. Farmers Ins. Exch. v. Zerin, 53 Cal. App. 4th 445, 454 (1997) (“[W]here a 18 lessor contracted to purchase insurance on behalf of both the lessor and the lessee but purchased 19 protection for itself only, and a loss ensued for which the lessor was reimbursed, the lessee is 20 entitled to an equitable lien on the insurance proceeds.”). Even if Bigge could somehow establish 21 it possessed an equitable lien, it acknowledges in its Complaint that the insurance proceeds were 22 already paid out by Tokio Marine and that such proceeds are in ASI’s possession. Compl. ¶ 32. 23 Consequently, Bigge’s Complaint demonstrates that its claim for recovery cannot lie with Tokio 24 Marine under an equitable lien theory, and Bigge must instead proceed against ASI, the current 25 alleged possessor of the proceeds. 26 Bigge argues that the matter of Surrey Oaks LLC v. Evanston Insurance Company guides 27 the outcome here, but not only does that case involve another district court’s interpretation of non- 1 (citing Surrey Oaks LLC v. Evanston Ins. Co., No. 4:16-CV-516-A, 2017 WL 3085861, at *2 2 (N.D. Tex. July 19, 2017), aff’d sub nom. Surrey Oaks, L.L.C. v. Evanston Ins. Co., 728 F. App’x 3 314 (5th Cir. 2018)). In that case, plaintiff Surrey Oaks secured its interest to an apartment 4 complex through two deeds of trust that required the mortgagor (“Management”) to obtain 5 insurance listing Surrey Oaks as a loss payee and additional insured on the policy. Surrey Oaks, 6 2017 WL 3085861, at *1-2. Management failed to obtain a policy with Surrey Oaks listed as a 7 loss payee or additional insured, and when Management suffered a loss covered by its insurance, 8 the insurer issued proceeds only to Management. Id. When Surrey Oaks sought to enforce the 9 terms of its agreement with Management directly against the insurer, Evanston Insurance 10 Company, the court held that such claims failed as a matter of law because the insurer had already 11 issued its claim check and Surrey Oaks failed to show privity with the insurer or even provide 12 evidence that the insurer had knowledge of the agreement it had with Management. Id. at 4. The 13 same has occurred here – Tokio Marine already paid insurance proceeds to ASI, the only insured 14 and party listed in the Policy, and Bigge has provided no evidence or legal duty under which 15 Tokio Marine would have been obligated to issue payments to Bigge instead of its insured. 16 Accordingly, Bigge’s equitable lien theory for standing against Tokio Marine fails as a matter of 17 law. 18 b. Constructive Trust 19 A claim for constructive trust is a claim to compel the transfer of property from the person 20 wrongfully holding it to the rightful owner. Communist Party v. 522 Valencia, Inc., 35 Cal. App. 21 4th 980, 990 (1995). Bigge avers that California precedent establishes that insurance proceeds 22 held by a named insured are held in trust for the owner of the insured chattel. Dkt. No. 30 at 13 23 (citing Ferro v. Citizens Nat’l Tr. & Sav. Bank of Los Angeles, 44 Cal. 2d 401, 411 (1955)). The 24 Ferro case, however, is inapposite – that case stands for the premise that a constructive trust is 25 established where a named insured improperly holds insurance proceeds owed to a third-party. 26 Ferro, 44 Cal. 2d at 411. Tokio Marine, to the contrary, is neither a named insured nor the holder 27 of insurance proceeds – Bigge alleges such proceeds were already paid to ASI. Compl. ¶ 32. 1 “proceeds” Tokio Marine already issued to its insured, ASI. Dkt. No. 30 at 14. Because Tokio 2 Marine is not the party which holds or wrongfully acquired the insurance proceeds Bigge alleges it 3 is owed, the constructive trust theory also fails as a matter of law. 4 c. Third-Party Beneficiary 5 California codifies the third-party beneficiary exception to the privity requirement as 6 follows: “A contract, made expressly for the benefit of a third person, may be enforced by him at 7 any time before the parties thereto rescind it.” Cal. Civ. Code § 1559. “Because third party 8 beneficiary status is a matter of contract interpretation, a person seeking to enforce a contract as a 9 third party beneficiary must plead a contract which was made expressly for his [or her] benefit and 10 one in which it clearly appears that he [or she] was a beneficiary.” In re Nexus 6P Prods. Liab. 11 Litig., 293 F. Supp. 3d 888, 922 (N.D. Cal. 2018) (quoting Schauer v. Mandarin Gems of Cal., 12 Inc., 125 Cal. App. 4th 949 (2005)). 13 Bigge aims to establish it is a third-party beneficiary under the Policy between ASI and 14 Tokio Marine, yet it fails to even identify the requirements necessary to be considered a third- 15 party beneficiary under California law. Dkt. No. 30 at 14-20. Perhaps more importantly, Bigge 16 fails to demonstrate it meets such requirements. Bigge simply states it is a member of a class for 17 whose express benefit the contract was made, without identifying any allegations in the 18 Complaint, any portion of the Lease, or any portion of the Policy to support this assertion. Dkt. 19 No. 30 at 14. Bigge alleges no facts which indicate the parties manifested intent to secure a 20 benefit to Bigge and therefore fails to establish that it may enforce the Policy against Tokio 21 Marine as a third-party beneficiary. 22 Bigge separately argues that because the Policy contains “blanket coverage,” Bigge should 23 also receive coverage from Tokio Marine. Dkt. No. 30 at 18-19. Bigge avers that reference to 24 “blanket coverage” creates ambiguity in the contract that precludes resolution at the pleading stage 25 absent further factual development. See Dkt. No. 30 at 19. Two faults arise in this reasoning. 26 First, by emphasizing ambiguity in the Policy, Bigge undermines its assertion of third-party 27 beneficiary status, which requires that the contract be made expressly for the third party’s benefit. ] under the Policy should extend to owners of contractual equipment outside of those explicitly 2 |} listed in the Policy ignores the understood meaning of a specific term of art. See 12A COUCH ON 3 INS. 3d § 177:74 (a blanket policy “invariably attaches to, and covers to its full amount, every item 4 || of property described in it.”). Because blanket coverage applies only to items or parties explicitly 5 listed within an insurance policy, and because Bigge is not listed in the Policy in any form, its 6 || theory of being included as a third-party beneficiary under the provision for blanket coverage fails 7 || matter of law. Bigge does not qualify as a third-party beneficiary and cannot establish 8 standing to sue Tokio Marine. 9 In sum, Bigge lacks privity with Tokio Marine and it fails to establish any exception that 10 || would allow it to proceed with its claim for declaratory relief against Tokio Marine. Tokio Marine 11 must be dismissed from the case. 2 || II. CONCLUSION 13 For the foregoing reasons, the Court GRANTS both motions to dismiss. The Court 14 || DISMISSES counts three through eight asserted against ASI because all claims fail as a matter of 3 15 law. The Court DISMISSES count nine as asserted against Tokio Marine because Bigge lacks a 16 || standing against ASI’s insurer. Because counts one, two, and nine will proceed against ASI, the 17 || Court will set a case management conference via clerk’s notice. 18 19 IT IS SO ORDERED. 20 || Dated: May 7, 2026 21 □□ 7 22 : ARACELI MARTINEZ-OLGUIN 23 United States District Judge 24 25 26 27 28