Cook v. State Farm General Insurance Company

Opinion

1 2 3 6 7 JASON COOK, et al., Case No. 21-cv-02458-MMC

8 Plaintiffs, ORDER GRANTING DEFENDANT'S MOTION TO DISMISS OR STRIKE 9 v. PORTIONS OF SECOND AMENDED COMPLAINT; DENYING PLAINTIFFS' 10 STATE FARM GENERAL INSURANCE REQUEST FOR FURTHER LEAVE TO COMPANY, AMEND 11 Defendant. 12 13 Before the Court is defendant State Farm General Insurance Company's ("State 14 Farm") Motion, filed February 22, 2022, "to Dismiss or Strike Portions of Plaintiffs' 15 Second Amended Complaint." Plaintiffs Jason Cook ("Cook") and Elfe Kuesters 16 ("Kuesters") have filed opposition, to which State Farm has replied. Having read and 17 considered the papers filed in support of and in opposition to the motion, the Court rules 18 as follows.1 20 In the Second Amended Complaint ("SAC"), plaintiffs allege they were "forced to 21 evacuate" their homes as a result of a wildfire (see SAC") ¶ 31), and that the power in 22 their homes was "out continuously" during the period of evacuation (see id.). Plaintiffs 23 further allege that, when they returned to their homes twenty days after such period, food 24 they had left in their refrigerators had decomposed, causing chemical reactions that 25 "physically altered the appliances' polymeric and other components," resulting in a "total 26 loss" of personal property. (See SAC ¶¶ 31-32, 34-35.) Plaintiffs allege they sought 27 1 coverage for the damaged refrigerators under their respective homeowners policies, 2 relying on a provision under which State Farm will cover damage to personal property 3 caused by "fire," and that State Farm denied the claims "for the stated reason that it does 4 not deem fire a predominant cause of unplanned, wildfire-caused power outages." (See 5 SAC ¶ 1; see also SAC ¶¶ 25-26.) Based on said allegations, plaintiffs, on their own 6 behalf and on behalf of a putative class, assert claims arising under state law. 7 By order filed January 26, 2022 ("January 26 Order"), the Court granted in part 8 State Farm's motion to dismiss the First Amended Complaint ("FAC"). Specifically, the 9 Court (a) dismissed the First Claim for Relief as asserted in the FAC, by which claim 10 plaintiffs sought declaratory relief, (b) dismissed the Fourth Claim for Relief as asserted in 11 the FAC, by which plaintiffs brought sought injunctive relief and restitution under § 17200 12 of the California Business & Professions Code (the "UCL"), and (c) afforded plaintiffs 13 leave to amend solely as to plaintiffs' claim for injunctive relief. Thereafter, plaintiff filed 14 the Second Amended Complaint ("SAC") and, in so doing, (1) realleged without 15 amendment the claims that had not been dismissed, specifically, the Second and Third 16 Claims for Relief, 2 (2) realleged without amendment the claims that had been dismissed 17 without leave to amend, specifically, their claims for declaratory relief and restitution, and 18 (3) amended their claim for injunctive relief. 20 By the instant motion, State Farm argues plaintiffs have failed to allege a viable 21 claim for injunctive relief and, consequently, that such claim should be dismissed without 22 further leave to amend. Additionally, State Farm argues, the claims for declaratory relief 23 and restitution, having previously been dismissed without leave to amend, should again 24 be dismissed or, in the alternative, stricken. The Court considers each such argument in 25 turn. 26 2 In the Second Claim for Relief, plaintiffs assert a claim for breach of contract, 27 and, in the Third Claim for Relief, plaintiffs assert a claim for breach of the covenant of 1 A. Injunctive Relief 2 As plaintiffs acknowledge, they seek, in the Fourth Claim for Relief, two forms of 3 injunctive relief.3 4 1. Injunctive Relief to Prohibit Future Claim Denials 5 Plaintiffs seek, as injunctive relief, an order prohibiting State Farm from "denying 6 claims under [their] Policies for personal property losses resulting from unplanned power 7 outages caused by fire, lightning, or windstorm" and from "continuing" to deny such 8 claims. (See TAC ¶ 81.) In dismissing plaintiffs' claim for injunctive relief, as pleaded in 9 the FAC, the Court found plaintiffs had failed to plead therein facts sufficient to support a 10 finding that they were "realistically threatened by a repetition" of State Farm's alleged 11 wrongful conduct (see January 26 Order at 2:22-3:1), a showing necessary to establish 12 standing for purposes of injunctive relief. See Gest v. Bradbury, 443 F.3d 1177, 1181-82 13 (9th Cir. 2006) (affirming dismissal of claim for injunctive relief, where plaintiffs failed to 14 show they were "realistically threatened by a repetition of the violation") (internal 15 quotation, emphasis, and citation omitted). 16 In the SAC, plaintiffs have added an allegation that California "will continue to 17 have major wildfires resulting in unplanned power outages in 2022 and each subsequent 18 year due to increasing temperatures." (See SAC ¶ 2.) Such allegation, however, does 19 not suffice to support a finding that Cook and Kuesters are "realistically threatened" with 20 a repetition of the same asserted wrongful conduct by State Farm. See Gest, 443 F.3d at 21 1181-82. In particular, as State Farm points out, in order for plaintiffs to be subjected to 22 the same allegedly wrongful conduct, a lengthy chain of events would have to occur. 23 (See Def.'s Mot. at 8:10-9:4); Nelsen v. King County, 895 F.2d 1248, 1252 (9th Cir. 1990) 24 (holding courts "cannot find standing" for injunctive relief where "threat of future harm" is 25

26 3 Although, as plaintiffs point out, the SAC also includes a request that the Court issue "any other injunctive relief that [p]laintiffs may more precisely specify at an 27 appropriate later stage of the litigation" (see SAC ¶ 81), plaintiffs have not identified, even 1 "based upon an extended chain of speculative contingencies, all of which would have to 2 be fulfilled in order to have the threat of [a repetition of the wrongful conduct] become 3 manifest"). 4 2. Injunctive Relief to Require State Farm to Determine Amount Owed 5 Plaintiffs also seek injunctive relief to prohibit State Farm from "refusing to open 6 [p]laintiffs' . . . claims . . . for the purpose of fairly and lawfully determining the payment 7 amount to which each [p]laintiff . . . is entitled." (See SAC ¶ 81.) 8 Although a plaintiff may seek injunctive relief and restitution under the UCL, see 9 Cal. Bus. & Prof. Code § 17203, "damages" are "not available" thereunder, see Korea 10 Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1148 (2003). In accordance 11 therewith, courts have found requests for an "injunction" or "restitution" by which an 12 insured seeks payment of benefits is, in effect, a claim for monetary damages, and, 13 consequently, not cognizable under the UCL. See Vepo Design Corp. v. American 14 Economy Ins. Co., 2020 WL 7382310, at *8 (C.D. Cal. October 16, 2020) (holding claim 15 seeking injunction precluding insurer from "wrongfully withholding benefits owed" not 16 cognizable under UCL; noting such "request for an injunction amounts to a request for 17 monetary damages"); Sheahan v. State Farm General Ins. Co., 394 F. Supp. 3d 997, 18 1006 (N.D. Cal. 2019) (holding claim seeking injunction requiring insurer to pay claim 19 "without respect to the policy limits" not cognizable under UCL; finding such claim 20 "amounts to a request for monetary damages"); Benn v. Allstate Ins. Co., 2021 WL 21 5049101, at *6 (C.D. Cal. October 29, 2021) (holding claim for "restitution" of "policy 22 benefits" not cognizable under UCL; "noting "[w]hat [plaintiff] is really seeking" is 23 "monetary damages"). 24 Here, plaintiffs' theory is that the damage to their refrigerators, is "covered" under 25 their policies (see SAC ¶ 26), and, consequently, State Farm has "deprive[d]" them of 26 "contractual benefits to which they are entitled" (see SAC ¶ 47). Consistent with said 27 theory, plaintiffs, as noted, seek an injunction requiring State Farm to "determin[e] the 1 requested injunction seeks an order directing State Farm to pay benefits, the claim is one 2 seeking damages, and, consequently, is not cognizable under UCL.4 3 3. Conclusion as to Claim for Injunctive Relief 4 As set forth above, the injunctive relief sought in the SAC is not cognizable under 5 the UCL. Accordingly, the Fourth Claim for Relief, to the extent plaintiffs request therein 6 injunctive relief, is subject to dismissal. 7 B. Realleged Claims Dismissed Without Leave to Amend 8 As noted, in granting in part State Farm's motion to dismiss the FAC, the Court 9 dismissed without leave to amend the First Claim for Relief, as well as the request for 10 restitution included in the Fourth Claim for Relief. As further noted, plaintiffs realleged 11 those claims in the SAC. By way of explanation, plaintiffs state:

12 Plaintiffs reallege their claims for declaratory relief and for restitution under the UCL, which were dismissed by the Court in its Order Granting in Part 13 and Denying in Party Defendant’s Motion to Dismiss; Vacating Hearing (Jan. 26, 2022) (Dkt. No. 52), to preserve those claims for appeal. See 14 Miletak v. Allstate Ins. Co., 2007 WL 7061350, at *4 (N.D. Cal. July 18, 2007). 15 (See SAC at 2:18-20.) 16 In Miletak, the case cited by plaintiffs, the district court found that, under then- 17 existing Ninth Circuit authority, "a plaintiff must reallege even dismissed causes of action 18 in order to preserve them on appeal," and, consequently, the plaintiff therein was allowed 19 to replead claims that earlier had been dismissed without leave to amend. See Miletak, 20 2007 WL 7061350 at *4. As State Farm correctly notes, however, the Ninth Circuit 21

22 4 Although plaintiffs rely on cases in which courts either issued an injunction requiring a defendant to reopen a denied claim, or allowed a plaintiff to proceed with such 23 claim, those cases are distinguishable, as the injunctions discussed therein required the defendant to review a claim and decide if the claim should be granted, and did not 24 require, as plaintiffs seek here, payment of the claim. See, e.g., Bowen v. City of New York, 476 U.S. 467, 476, 483 (1986) (affirming decision requiring Social Security 25 Administration to "reopen" plaintiffs' cases in which benefits were denied and "to redetermine eligibility," where denials were based on use of improper procedure; noting 26 plaintiffs "neither sought nor were awarded benefits in the District Court"); Vind v. Prudential Ins. Co., 2008 WL 11337424, at *10 (C.D. Cal. April 2, 2008) (denying motion 27 to dismiss plaintiff's claim for injunction requiring defendant to "investigate and make a 1 thereafter, sitting en banc, overruled its prior precedents requiring the repleading of 2 dismissed claims, and, instead held that, "[f]or claims dismissed with prejudice and 3 without leave, [it] w[ould] not require that they be repled in a subsequent amended 4 complaint to preserve them for appeal." See Lacey v. Maricopa County, 693 F.3d 896, 5 928 (9th Cir. 2012). 6 Although, as plaintiffs point out, the Ninth Circuit has not, to date, prohibited a 7 plaintiff from repleading claims that have been dismissed without leave to amend, "the 8 majority of cases addressing this issue" have found claims dismissed without leave to 9 amend may not be realleged, reasoning that "the inclusion of claims already dismissed 10 with prejudice . . . has the potential to confuse the scope of discovery and any dispositive 11 motions." See Benamar v. Air France-KLM, 2015 WL 4606751 at *3 (C.D. Cal. July 31, 12 2015) (citing cases). This Court, consistent with the reasoning in those cases, finds the 13 inclusion of dismissed claims is not warranted. 14 Accordingly, the First Claim for Relief (see SAC ¶¶ 59-62) and the Fourth Claim for 15 Relief, to the extent plaintiffs request therein restitution (see SAC ¶ 82), will be stricken 16 from the SAC, and State Farm, in answering the SAC, need not respond to those 17 paragraphs. 18 Lastly, to the extent plaintiffs request leave to further amend for purposes of 19 "preserv[ing] the factual allegations within the repled declaratory relief claim . . . that are 20 relevant to, and expressly incorporated by reference into, [p]laintiffs still-live contract 21 [and] implied covenant" claims (see Pls.' Opp. at 14:5-8), the request will be denied as 22 unnecessary. Specifically, the factual allegations to which plaintiffs refer, which are 23 located in ¶¶ 61 and 62, are also included in the "Introduction" and "Factual Allegations" 24 sections of the SAC (compare SAC ¶¶ 1, 12, 26, 47, with ¶¶ 61-62), which allegations are 25 incorporated by reference in the contract and implied covenant claims (see SAC ¶¶ 63, 26 68; see also SAC ¶ 71). 27 // 2 For the reasons stated above, State Farm's motion to dismiss or strike portions of 3 || the SAC is hereby GRANTED, as follows: 4 1. Plaintiffs’ claim for injunctive relief, included in the Fourth Claim for Relief, is 5 || hereby DISMISSED without further leave to amend. 6 2. Plaintiffs' First Claim for Relief and the Fourth Claim for Relief, to the extent 7 || plaintiffs seek restitution, are hereby STRICKEN. 8 3. Plaintiffs’ request for further leave to amend is hereby DENIED. 10 11 || Dated: April 26, 2022 . INE M. CHESNEY 12 United States District Judge — 13

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