J C v. Temporary Housing Inc

CourtDistrict Court, E.D. Washington
DecidedJanuary 12, 2022
Docket2:21-cv-00174
StatusUnknown

This text of J C v. Temporary Housing Inc (J C v. Temporary Housing Inc) is published on Counsel Stack Legal Research, covering District Court, E.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
J C v. Temporary Housing Inc, (E.D. Wash. 2022).

Opinion

1 2

3 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6

7 JC PICKETT, a minor child, KV PICKETT, a minor child, ANESSA NO. 2:21-CV-0174-TOR 8 PICKETT, an individual, IAN PICKETT and KHALIA PICKETT, ORDER DENYING DEFENDANT’S 9 husband and wife, both individually THIRD MOTION TO DISMISS and on behalf of their minor children, 10 Plaintiffs, 11 v. 12 TEMPORARY HOUSING, INC., 13 d/b/a CRS TEMPORARY HOUSING, 14 Defendant. 15

16 BEFORE THE COURT is Defendant’s Third Motion to Dismiss (ECF No. 17 21). This matter was submitted for consideration without oral argument. The 18 Court has reviewed the record and files herein, the completed briefing, and is fully 19 informed. For the reasons discussed below, Defendant’s Third Motion to Dismiss 20 (ECF No. 21) is denied. 1 BACKGROUND 2 This case concerns an insurance dispute that arose after a fire destroyed

3 Plaintiffs’ home. See ECF No. 17. On May 21, 2021, Plaintiffs filed a complaint 4 against Defendant. ECF No. 1. On August 3, 2021, the Court granted Defendant’s 5 motion to dismiss Plaintiffs’ constructive fraud claim and granted Plaintiffs leave

6 to amend their complaint within 21 days. ECF No. 8. 7 On October 26, 2021, the Court granted in part Defendant’s second motion 8 to dismiss Plaintiffs’ amended complaint, ECF No. 9, finding that Plaintiff failed to 9 allege sufficient factual matter to find Defendant is an insurance adjuster under

10 Washington law and failed to allege sufficient factual matter to find Defendant 11 owed Plaintiffs a tort duty, but finding Plaintiffs sufficiently alleged a non-per se 12 Washington Consumer Protection Act (“CPA”) claim. See ECF No. 16. The

13 Court granted Plaintiffs leave to amend, but barred amendment for claims for 14 breach of the statutory duty of good faith and a per se CPA violation. See id. 15 On November 16, 2021, Plaintiffs filed a second amended complaint. ECF 16 No. 17. Plaintiffs assert the following causes of action: (1) violation of the

17 common law duty of good faith, (2) negligent claim handling, (3) non-per se 18 violation of the CPA, (4) CPA injunction, and (5) constructive fraud. ECF No. 17 19 at 7-11, ¶¶ 29-58.

20 1 On November 30, 2021, Defendant filed the present motion to dismiss 2 Plaintiffs’ second amended complaint. ECF No. 18. On December 1, 2021,

3 Defendant filed a corrected motion. ECF No. 21. The parties filed their respective 4 response and reply. ECF Nos. 22- 26. 5 FACTS

6 The following facts are drawn from Plaintiffs’ second amended complaint 7 and are accepted as true for the purposes of the present motion. Chavez v. United 8 States, 683 F.3d 1102, 1108 (9th Cir. 2012). 9 On August 11, 2018, Plaintiffs lost their insured home to a fire in Kettle

10 Falls, Washington. ECF No. 17 at 3, ¶¶ 8-10. Plaintiffs paid insurance premiums 11 to receive coverage for their home and personal property through a policy issued 12 by third-party Liberty Mutual Insurance Company. ECF No. 17 at 3, ¶ 9. The

13 policy included the benefit of additional living expenses (“ALE”) following a 14 covered loss. ECF No. 17 at 3, ¶ 11. 15 Liberty Mutual hired Defendant to “assist” Plaintiffs with providing ALE 16 benefits. ECF No. 17 at 3, ¶ 14. Liberty Mutual incentivizes Defendant to pay as

17 little as possible on ALE claims to maintain and support the business and income 18 Defendant receives from Liberty Mutual. ECF No. 17 at 5, ¶ 23. Defendant did 19 not disclose the details of its business relationship or financial interest with

20 Plaintiffs. ECF No. 17 at 5, ¶ 24. Defendant was motivated by its own financial 1 interest to keep payment of ALE benefits as low as possible to the detriment of 2 Plaintiffs. ECF No. 17 at 5, ¶ 25.

3 Liberty Mutual paid for Plaintiffs to stay in various hotels and a trailer for a 4 short period of time, neither of which provided the standard of living Plaintiffs 5 were promised. ECF No. 17 at 4, ¶ 16. Liberty Mutual terminated Plaintiffs’ ALE

6 benefits after twelve months despite there being no ALE coverage limit and a 7 policy that provided a period of repair, restoration, or permanent relocation. ECF 8 No. 17 at 4, ¶ 17. Plaintiffs had to relocate out of Washington State to live with 9 family. ECF No. 17 at 4, ¶ 18.

10 During the year following Plaintiffs’ loss, Defendant (1) failed to explain to 11 Plaintiffs their ALE rights and benefits under the policy, (2) did not tell Plaintiffs 12 that their ALE coverage permitted them to purchase a home to live in during the

13 course of repairs given the limited rental market in the area, (3) failed to perform a 14 full or fair investigation into Plaintiffs’ standard of living, and (4) failed to perform 15 a full and fair investigation into all alternative housing options available to 16 maintain Plaintiffs’ standard of living in their geographical location. ECF No. 17

17 at 4, ¶¶ 19-22. 18 During the year following Plaintiffs’ loss, Defendant negligently or 19 intentionally failed to explain or provide a full measure of the ALE benefits

20 covered under the policy, including that Defendant (1) failed to inform Plaintiffs of 1 their rights and benefits under the policy, (2) never investigated the needs of the 2 Plaintiff children, (3) never treated the Plaintiff children as insureds, (4) never

3 familiarized itself with the available temporary housing options in the vicinity of 4 Plaintiffs’ home, (5) never sent anyone to meet with Plaintiffs, (6) failed to explore 5 the purchase of a temporary home, (7) failed to schedule motel stays for more than

6 a week which necessitated multiple moves for the family, (8) never responded 7 appropriately to Plaintiffs’ expressions of distress when forced to live in 8 unsatisfactory conditions, (9) shamed Plaintiffs into believing they were not 9 entitled to a standard of living comparable to that which existed pre-loss, (10)

10 suggested a “travel trailer” be brought to the property and that this was the “only 11 option” that could keep the family together in their school district, (11) promised a 12 winterized trailer but provided one from Arizona that was too small and not

13 winterized, and (12) contended that it was Plaintiffs’ obligation to perform the full 14 and fair investigation into the material components of Plaintiffs’ ALE claim. ECF 15 No. 17 at 5-6, ¶ 26. 16 Plaintiffs allege Defendant is an insurance adjuster where Defendant

17 performed adjusting activities because it either investigated and negotiated 18 settlement relative to insurance claims or applied the factual circumstances of an 19 insurance claim to the insurance policy provisions. ECF No. 17 at 6-7, ¶ 25(m)-

20 (o). Specifically, Defendant performed claims-handling functions on behalf of 1 Liberty Mutual related to the ALE benefits portion of the insurance policy, 2 including communicating with Plaintiffs, investigating facts related to the ALE

3 benefits, coordinating the ALE benefits, and processing the ALE benefits. ECF 4 No. 17 at 3-4, ¶ 15. These functions are traditionally fulfilled by insurance 5 adjusters, but Liberty Mutual outsourced them to Defendant. Id.

6 DISCUSSION 7 A. Motion to Dismiss 8 Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may 9 move to dismiss the complaint for “failure to state a claim upon which relief can be

10 granted.” A motion to dismiss for failure to state a claim will be denied if the 11 plaintiff alleges “sufficient factual matter, accepted as true, to ‘state a claim to 12 relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S.

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