Cook v. State Farm General Insurance Company

• Court: District Court, N.D. California
• Decided: January 26, 2022
• Docket: 3:21-cv-02458
• Status: Unknown

Opinion

1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 JASON COOK, et al., Case No. 21-cv-02458-MMC

8 Plaintiffs, ORDER GRANTING IN PART AND 9 v. DENYING IN PART DEFENDANT'S MOTION TO DISMISS; VACATING 10 STATE FARM GENERAL INSURANCE HEARING COMPANY, 11 Defendant.

12 13 Before the Court is defendant State Farm General Insurance Company's ("State 14 Farm") Motion, filed December 3, 2021, "to Dismiss or Strike Portions of Plaintiffs' First 15 Amended Complaint." Plaintiffs Jason Cook and Elfe Kuesters have filed opposition, to 16 which State Farm has replied. Having read and considered the papers filed in support of 17 and in opposition to the motion, the Court deems the matter appropriate for determination 18 on the parties' respective written submissions, VACATES the hearing scheduled for 19 January 28, 2022, and rules as follows: 20 1. Contrary to State Farm's argument, plaintiffs have sufficiently alleged their 21 refrigerators sustained a "direct physical loss" within the meaning of the subject policies 22 (see FAC Ex. 1 at 7, Ex. 2 at 7), specifically, that "noxious and malodorous gases and 23 liquids . . . physically altered the appliances' polymeric and other components, including 24 the shelves, drawers, panels, and seals, as well as inner linings, foams, and insulations." 25 (see First Amended Complaint ("FAC") ¶ 35; see also FAC ¶¶ 5-7, 32-34), and, 26 consequently, the claims are not subject to dismissal for failure to allege a covered claim. 27 2. To the extent State Farm seeks dismissal of the action as a sanction for 1 denied as premature at the pleading stage. See Unigard Security Ins. Co. v. Lakewood 2 Engineering & Mfg. Corp., 982 F.2d 363, 369 (9th Cir. 1992) (observing "factually 3 specific, case-by-case analysis [is] necessary to determine proper penalty for destruction 4 of evidence"); Leon v. IDX Systems Corp., 464 F.3d 951, 958 (9th Cir. 2006) (holding "a 5 finding of willfulness, fault, or bad faith is required" before imposing sanction of dismissal 6 for spoliation of evidence; requiring district court to "consider less severe alternatives 7 than outright dismissal") (internal quotations and citations omitted). 8 3. The First Cause of Action, by which plaintiffs allege a claim for "Declaratory 9 Relief," is, as State Farm argues, wholly duplicative of the Second Cause of Action, by 10 which plaintiffs allege breach of contract, as both claims seek a determination as to 11 whether plaintiffs are entitled to benefits under their insurance policies. (See FAC ¶¶ 62, 12 66.) Consequently, the First Cause of Action is subject to dismissal as duplicative. See 13 Swartz v. KPMG LLP, 476 F.3d 756, 765–66 (9th Cir. 2007) (holding “[t]o the extent 14 [plaintiff] seeks a declaration of defendants' liability for damages sought for his other 15 causes of action, the claim is merely duplicative and [is] properly dismissed”). 16 4. The Fourth Cause of Action, by which plaintiffs allege a violation of § 17200 of 17 the California Business & Professions Code, is subject to dismissal, as plaintiff do not 18 plead facts to support a finding that they are entitled to the injunctive relief identified in 19 the FAC or to restitution. See California v. IntelliGender, LLC, 771 F.3d 1169, 1174 (9th 20 Cir. 2014) (holding "private individuals" bringing claims under § 17200 are "limited to 21 injunctive relief and restitution"). 22 a. With regard to injunctive relief, although plaintiffs seek an order prohibiting 23 State Farm from "continuing to deny property loss claims . . . for losses resulting from 24 unplanned power outages caused by a wildfire, lightning, or windstorms" (see Compl. 25 ¶ 81), plaintiffs fail to plead facts to support a finding "that they are realistically threatened 26 by a repetition of the [wrongful conduct]." See Gest v. Sajo, 443 F.3d 1177, 1181 (9th 27 Cir. 2006) (emphasis, internal quotation, and citation omitted) (setting forth requisite 1 showing for injunctive relief).! 2 b. With regard to restitution, although plaintiffs seek an award based on 3 || "premiums" they paid and/or "amounts . . . withheld" by State Farm (see FAC □ 82), those 4 || sums are neither monies State Farm obtained "through an unfair business practice" nor 5 || monies in which plaintiffs have "an ownership interest." See Korea Supply Co. v. 6 || Lockheed Martin Corp., 29 Cal. 4th 1134, 1149 (2003) (setting forth requisite showing for 7 || award of restitution); Benn v. Allstate Ins. Co., 2021 WL 5049101, at *6 (E.D. Cal. 8 || October 29, 2021) (holding, where insurance claim was denied, plaintiff not entitled to 9 recover as restitution either paid premiums or unpaid benefits; finding "there [is] nothing 10 || unlawful about the collection of premiums" and plaintiff lacked ownership interest in 11 unpaid benefits). 12 CONCLUSION 13 For the reasons stated above, State Farm's motion to dismiss is hereby 14 || GRANTED in part and DENIED in part, as follows: 2 15 1. To the extent State Farm seeks dismissal of the First and Fourth Causes of a 16 || Action, the motion is GRANTED. g 17 2. In all other respects, the motion is DENIED. 18 Should plaintiffs wish to amend the Fourth Cause of Action for purposes of 19 || repleading their claim for injunctive relief, plaintiffs shall file a Second Amended 20 || Complaint no later than February 11, 2022. If plaintiffs do not file a Second Amended 21 Complaint, the instant action will proceed on plaintiffs' Second and Third Causes of 22 || Action. 23 IT IS SO ORDERED. 24 || Dated: January 26, 2022 Mae ld Cat MAXINE M. CHESNEY 25 United States District Judge 26 ‘In their opposition, plaintiffs argue they are entitled to an injunction requiring State Farm to "reopen and reprocess" their claims. (See Pls.' Opp. at 20:14-16.) In the 28 FAC, however, plaintiffs do not allege entitlement to such relief.