Henley v. Safeco Insurance Company of America

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 EVA JO HENLEY, 10 Case No. 21-cv-04243-RS Plaintiff, 11 v. ORDER GRANTING MOTION TO 12 DISMISS SAFECO INSURANCE COMPANY OF 13 AMERICA, 14 Defendant.

15 I. INTRODUCTION 16 Plaintiff Eva Jo Henley asserts that her insurer, Safeco Insurance Company of America 17 (“Safeco”), owes her additional policy benefits flowing from her claim of water damage. She 18 brings causes of action for breach of contract, breach of the implied covenant of good faith and 19 fair dealing, and financial elder abuse. She seeks declaratory relief as to the attorneys’ fees 20 allegedly owed under the policy and money damages. In this motion, Safeco challenges the 21 sufficiency of her claims related to attorneys’ fees and elder abuse. For the reasons set forth 22 herein, the motion is granted with leave to amend. 23 II. BACKGROUND1 24 Eva Jo Henley, now 97 years old, has been a Safeco customer since 1992, the year she 25 purchased her first homeowner’s insurance policy. In 2020, water intrusion severely damaged 26

27 1 The factual background is based on the allegations in the complaint, which must be taken as true 1 Henley’s home while she was temporarily away at an assisted living facility. After discovering the 2 damage, one of Henley’s daughters submitted a claim on her behalf under her policy, number 3 OA2612882. According to the complaint, Safeco undervalued her claim and continues to deny 4 some costs and expenses. She further alleges Safeco observes a practice of regularly denying the 5 claims of its elderly insureds. 6 III. LEGAL STANDARD 7 Rule 12(b)(6) governs motions to dismiss for failure to state a claim. A complaint must 8 contain a short and plain statement of the claim showing the pleader is entitled to relief. Fed. R. 9 Civ. P. 8(a). While “detailed factual allegations” are not required, a complaint must have sufficient 10 factual allegations to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 11 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)). A Rule 12 12(b)(6) motion tests the legal sufficiency of the claims alleged in the complaint. Parks Sch. of 13 Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Thus, dismissal under Rule 12(b)(6) 14 may be based on either the “lack of a cognizable legal theory” or on “the absence of sufficient 15 facts alleged” under a cognizable legal theory. UMG Recordings, Inc. v. Shelter Capital Partners 16 LLC, 718 F.3d 1006, 1014 (9th Cir. 2013). When evaluating such a motion, courts generally 17 “accept all factual allegations in the complaint as true and construe the pleadings in the light most 18 favorable to the nonmoving party.” Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). 19 However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory 20 statements, do not suffice.” Iqbal, 556 U.S. at 678. 21 IV. DISCUSSION2 22 A. Declaratory Relief 23 Declaratory relief is appropriate where, “the facts alleged, under all the circumstances, 24 show that there is a substantial controversy, between parties having adverse legal interests, of 25

26 2 After Safeco removed the case, Henley served insurance adjuster Christina Reid, a California resident, and argued her joinder destroyed diversity jurisdiction. The parties have since stipulated 27 to Reid’s dismissal. Consequently, there is no dispute as to subject matter jurisdiction at this time. 1 sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” MedImmune, 2 Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007). The burden is on the party seeking declaratory 3 judgement to show the existence of a controversy. Cardinal Chem. Co. v. Morton Int'l, Inc., 508 4 U.S. 83, 95 (1993). 5 Henley seeks a declaration that she is entitled to attorneys’ fees under the terms of the 6 policy. In response, Defendant attaches to its motion a copy of the policy showing that benefits 7 available under the policy do not include attorneys’ fees. Though at the motion to dismiss stage 8 facts in the complaint are taken as true, courts are not required to “credit a complaint’s conclusory 9 statements without reference to its factual context.” See Iqbal, 556 U.S. at 686. Because Henley 10 has provided no factual details to support her claim – she does not identify which section of the 11 policy or other agreement addresses attorneys’ fees – the claim is dismissed with leave to amend. 12 B. Financial Elder Abuse 13 An entity commits financial elder abuse when it “takes, secretes, appropriates, obtains, or 14 retains real or personal property of an elder” for a wrongful use, with intent to defraud, or by 15 undue influence. Cal. Welf. & Inst. Code § 15610.30. Claims alleging an “intent to defraud” must 16 meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b) and identify the 17 “who, what, when, where, and how” of a defendant’s misconduct. Vess v. Ciba-Geigy Corp. USA, 18 317 F.3d 1097, 1106 (9th Cir. 2003) 19 As currently pled, this appears to be a straightforward contract dispute. Though Henley 20 accuses Safeco of “unreasonably” and “maliciously” withholding benefits, she does not identify 21 what made Safeco’s actions unreasonable or malicious. Complaint ¶ 8. Stripped of all improper 22 legal conclusions and rote invocations of the statute, Henley’s elder abuse claim contains nothing 23 indicating Safeco acted badly. Her contentions that Safeco “refused to pay, submit reasonable 24 estimates for work to be performed, and refused coverage” under the policy and offered an 25 “unreasonably low” initial estimate are routine breach of contract allegations that do not rise to the 26 level of elder abuse. Id. ¶¶ 9, 16. She furthermore puts forth no facts showing “when, where, and 27 1 how” Safeco allegedly engaged in fraud. See Vess, 317 F.3d at 1106. Henley’s elder abuse claim is 2 therefore dismissed with leave to amend. 3 V. CONCLUSION 4 For the reasons set forth above, the motion to dismiss is granted with leave to amend. 5 6 IT IS SO ORDERED. 4 8 Dated: August 16, 2021 9 RICHARD SEEBORG 10 Chief United States District Judge 11 a 12

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15 16 € = 17

Zz 18 19 20 21 22 23 24 25 26 27 98 ORDER GRANTING MOTION TO DISMISS CASE No. 21-cv-04243-RS