Kee v. United States Fidelity & Guaranty Company

• Court: District Court, W.D. Washington
• Decided: January 10, 2025
• Docket: 3:24-cv-05535
• Status: Unknown

Opinion

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4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT TACOMA 7 C.C., AS ASSIGNEE, C.L.C., AS Case No. 3:24-cv-05535-TMC 8 ASSIGNEE, S.C., AS ASSIGNEE, G.F., AS ASSIGNEE, C.H., AS ASSIGNEE, LAURA ORDER GRANTING DEFENDANT 9 KIM, AS ASSIGNEE AND GUARDIAN FIREMAN’S FUND INSURANCE FOR R.K., AS ASSIGNEE, C.C.M., AS COMPANY AND DEFENDANT 10 ASSIGNEE, D.A.M., AS ASSIGNEE, R.N., TRANSAMERICA INSURANCE AS ASSIGNEE, J.R., AS ASSIGNEE, COMPANY’S MOTIONS TO DISMISS 11 B.A.T., AS ASSIGNEE, B.L.T., AS ASSIGNEE, S.W., AS ASSIGNEE, M.A., 12 AS ASSIGNEE, J.B., AS ASSIGNEE, J.W., AS ASSIGNEE, D.Q.M., AS ASSIGNEE, 13 Brian Frazier, AS ASSIGNEE AND GUARDIAN FOR K.F., J.H, AS ASSIGNEE, 14 and A.L., AS ASSIGNEE, Plaintiffs, 15 v. 16 UNITED STATES FIDELITY & 17 GUARANTY COMPANY, GRANITE STATE INSURANCE COMPANY, 18 INSURANCE COMPANY OF NORTH AMERICA, FEDERAL INSURANCE 19 COMPANY, TRANSAMERICA INSURANCE COMPANY, WESTPORT 20 INSURANCE CORPORATION, AND FIREMAN’S FUND INSURANCE 21 COMPANY, Defendants. 22

24 1 I INTRODUCTION 2 This action arises from allegations of physical and sexual abuse at a foster home during 3 the 1980s and 1990s. Plaintiffs, the alleged victims, settled six underlying lawsuits against the

4 former executive director and assistant executive director of Kiwanis Vocational Home 5 (“KVH”), the foster home at issue and a service project of Kiwanis International. Following the 6 settlement, Plaintiffs—as assignees of the alleged insureds—sued seven insurance companies 7 they claim issued policies to Kiwanis International during the relevant period. Plaintiffs advance 8 claims of Declaratory Judgment, breach of contract, negligence, bad faith, violations of the 9 Washington Consumer Protection Act (“CPA”) and violations of the Washington Insurance Fair 10 Conduct Act (“IFCA”). Before the Court is Defendant Fireman Fund Insurance Company’s 11 (“FFIC”) Motion to Dismiss the claims against it in Plaintiff’s Amended Complaint 12 (“Complaint”). Dkt. 36; Fed. R. Civ. P. 12(b)(6). Also before the Court is Defendant TIG

13 Insurance Company’s, formerly known as Transamerica Insurance Company (“TIG”), Motion 14 for Judgment on the Pleadings. Dkt. 51; Fed. R. Civ. P. 12(c). Having reviewed the parties’ 15 pleadings and briefs (Dkt. 5, 36, 44, 48, 51, 64, 67), and the balance of the record, the Court 16 GRANTS FFIC’s and TIG’s motions to dismiss. Plaintiffs’ claims against FFIC and TIG are 17 DISMISSED WITHOUT PREJUDICE. 18 II BACKGROUND 19 Plaintiffs are twenty individuals who allege they were physically and sexually abused 20 during the 1980s and 1990s at KVH, a group foster home for boys near Centralia, Washington. 21 Dkt. 5 ¶¶ 1.1; 4.16–4.17. KVH was a service project for multiple local and national Kiwanis 22 clubs, including Kiwanis International. Id. ¶ 4.16. Plaintiffs allege that Charles McCarthy and

23 Guy Cornwell were the executive director and assistant executive director, respectively, of the 24 home and were responsible for their safety when they were abused. Id. ¶¶ 1.1–1.3. 1 Plaintiffs asserted claims against McCarthy, Cornwell, KVH, and Kiwanis International 2 in six underlying lawsuits. Id. ¶¶ 1.4; 4.26. In October 2022, Plaintiffs entered into a covenant 3 judgment settlement agreement (“Covenant Agreement”) with McCarthy’s estate1 and Cornwell 4 to settle the underlying claims against them for $65,130,000. Id. ¶ 4.54. Following a 5 reasonableness hearing, the trial court reduced the Covenant Agreement judgment to 6 $21,251,250. Id. ¶¶ 4.57; 4.62. Plaintiffs have appealed the trial court’s reduction to the 7 Washington Court of Appeals. Id. ¶ 4.63. 8 Defendants are seven insurance companies (“Insurers”), including FFIC and TIG, that 9 Plaintiffs allege issued various insurance policies to Kiwanis International during the relevant 10 period. Plaintiffs also allege that McCarthy and Cornwell were insured under the policies. Id. ¶¶ 11 4.1–4.15. 12 Kiwanis International contracted with FFIC to provide excess liability coverage from

13 November 1, 1991 to November 1, 1992. Id. ¶ 4.14; Dkt. 37-1 at 2.2 The policy provides third- 14 level indemnity coverage and, according to its terms, applies “(a) only in excess of all 15 Underlying Insurance, and (b) only after all Underlying Insurance has been exhausted by 16 payment of the limits of such insurance.” Dkt. 37-1 at 5, 15. Kiwanis International’s underlying 17 insurance limit, before excess coverage applies, is $35 million. Dkt. 37-1 at 2. 18

19 1 McCarthy died in 2020 and was defended in the underlying lawsuits by representatives of his estate. Id. ¶ 1.4; 4.51. 20 2 The Court may consider the insurance policy FFIC attaches to its Motion to Dismiss. See 21 Mendoza v. Amalgamated Transit Union Int’l, 30 F.4th 879, 884 (9th Cir. 2022) (when considering a motion to dismiss, courts “may consider only allegations contained in the 22 pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice, as well as any writing referenced in [the] complaint but not explicitly incorporated therein if 23 the complaint relies on the document and its authenticity is unquestioned.”) (cleaned up). Plaintiffs rely on FFIC’s policy in their Complaint, Dkt. 5 ¶ 4.14, and do not 24 dispute its authenticity. See Dkt. 44 at 3, n.1. 1 Kiwanis International also contracted with TIG to provide excess liability coverage from 2 November 1, 1990 to November 1, 1991. Dkt. 5 ¶ 4.10; Dkt. 52-1 at 3.3 Like FFIC’s excess 3 policy, there are two underlying layers of coverage beneath the TIG policy. See Dkt. 52-1 at 3-4. 4 The policy states that TIG “will pay on your behalf the Limits of Insurance, for the ultimate net 5 loss, in excess of the Underlying Limits of Insurance[.]” Id. at 8. As with FFIC, Kiwanis 6 International’s underlying insurance limit is $35 million. Id. at 3. 7 Plaintiffs assert claims in this action as assignees of Cornwell and the estate of McCarthy. 8 Id. ¶ 1.4. Plaintiffs filed seven causes of action against all defendant Insurers: Declaratory 9 Judgment, breach of contract, negligence, bad faith, violations of the CPA and IFCA, and 10 punitive damages. Id. ¶¶ 5.1-11.1. Plaintiffs’ specific allegations against FFIC and TIG are 11 identical: 12 • “Plaintiffs sent multiple demands to settle the claims asserted against McCarthy

13 and Cornwell within the limits of the FFIC Policy.” Id. ¶ 4.47; see also id. ¶ 4.41 14 (“. . . within the limits of the TIG policy.”). 15 • “FFIC conducted an unreasonable investigation and placed its own financial 16 interests ahead of McCarthy’s and Cornwell’s when it unreasonably refused to 17 settle the claims asserted against them within the limits of the FFIC Policy.” Id. 18 ¶ 4.48. see also id. ¶ 4.42 (“TIG conducted an unreasonable investigation . . . .”). 19 • “FFIC’s unreasonable investigation and breach of the duty to settle exposed 20 McCarthy and Cornwell to judgments that would far exceed the FFIC Policy’s 21 limits.” Id. ¶ 4.49; see also id. ¶ 4.43 (“TIG’s unreasonable investigation . . . .”). 22

23 3 As above, the Court can properly consider TIG’s policy attached to its Motion to Dismiss because the Complaint relies on TIG’s policy, Dkt. 5 ¶ 4.10, and Plaintiffs do not dispute its 24 authenticity. See Dkt. 64 at 3, n.1; Mendoza, 30 F.4th at 884. 1 FFIC argues under Rule 12(b)(6) that each of Plaintiffs’ claims fails as a matter of law 2 because Plaintiffs have not exhausted the $35 million in underlying primary insurance to trigger 3 excess coverage. Dkt. 36 at 2–3. FFIC points to Plaintiffs’ Complaint, asserting just over $21

4 million in consent judgments, showing “Plaintiffs have not—and indeed, cannot—allege this 5 critical prerequisite for coverage under the Policy[.]” Id. at 2; Dkt. 5 ¶ 4.64. TIG argues similarly 6 under Rule 12(c) that Plaintiffs’ claims are unripe because they have failed to exhaust the 7 underlying coverage limit. Dkt. 51 at 1–2. 8 In their opposition briefs, Plaintiffs concede that their damages claims against the 9 movants for all but the declaratory judgment action “appear to be unripe due to lack of 10 exhaustion of the underlying insurance policies.” Dkt. 44 at 3, n.1; Dkt. 64 at 3, n.1. Plaintiffs 11 ask the Court to stay these claims, or in the alternative, dismiss them without prejudice. Id. But 12 Plaintiffs contend that their request for a declaratory judgment on coverage under FFIC and

13 TIG’s excess insurance policies, respectively, is ripe. Dkt 44 at 3–4; Dkt. 64 at 3–4. The motions 14 to dismiss are fully briefed and ready for the Court’s consideration. 15 III DISCUSSION 16 A. Legal standards 17 Federal Rule of Civil Procedure 8(a)(2) requires that a complaint contain “a short and 18 plain statement of the claim showing that the pleader is entitled to relief.” Under Federal Rule of 19 Civil Procedure 12(b)(6), the Court may dismiss a complaint for “failure to state a claim upon 20 which relief can be granted.” Rule 12(b)(6) motions may be based on either the lack of a 21 cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. 22 Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010) (citation

23 omitted). 24 1 Under Federal Rule of Civil Procedure 12(c), “[a]fter the pleadings are closed—but early 2 enough not to delay trial—a party may move for judgment on the pleadings.” The legal standard 3 for Rule 12(c) is “substantially identical” to the standard for a motion to dismiss under

4 Rule 12(b)(6) because under both rules, “a court must determine whether the facts alleged in the 5 complaint, taken as true, entitle the plaintiff to a legal remedy.”4 Chavez v. United States, 683 6 F.3d 1102, 1108 (9th Cir. 2012) (quotation marks and citation omitted). 7 As with a motion to dismiss, to survive a motion for judgment on the pleadings, the 8 complaint “does not need detailed factual allegations,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 9 555 (2007), but “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief 10 that is plausible on its face.’” Boquist v. Courtney, 32 F.4th 764, 773 (9th Cir. 2022) (quoting 11 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “A claim is facially plausible ‘when the plaintiff 12 pleads factual content that allows the court to draw the reasonable inference that the defendant is 13 liable for the misconduct alleged.’” Id. (quoting Iqbal, 556 U.S. at 678). “[A] plaintiff’s 14 obligation to provide the grounds of his entitlement to relief requires more than labels and 15 conclusions, and a formulaic recitation of the elements of a cause of action will not do.” 16 Twombly, 550 U.S. at 555 (internal quotation marks omitted). 17 The Court “must accept as true all factual allegations in the complaint and draw all 18 reasonable inferences in favor of the nonmoving party.” Retail Prop. Tr. v. United Bhd. of 19

20 4 Motions to dismiss and motions for judgment on the pleadings differ in only two respects: “(1) the timing (a motion for judgment on the pleadings is usually brought after an answer has been 21 filed, whereas a motion to dismiss is typically brought before an answer is filed), and (2) the party bringing the motion (a motion to dismiss may be brought only by the party against whom 22 the claim for relief is made, usually the defendant, whereas a motion for judgment on the pleadings may be brought by any party).” Sprint Telephony PCS, L.P. v. County of San Diego, 23 311 F. Supp. 2d 898, 902–03 (S.D. Cal. 2004), opinion clarified sub nom. Sprint Tel. PCS, L.P. v. County of San Diego, No. 03-CV-1398-K(LAB), 2004 WL 859333 (S.D. Cal. Jan. 23, 2004) 24 (internal citation omitted). 1 Carpenters & Joiners of Am., 768 F.3d 938, 945 (9th Cir. 2014). But the Court is “not bound to 2 accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555. 3 “Threadbare recitals of the elements of a cause of action, supported by mere conclusory

4 statements, do not suffice.” Iqbal, 556 U.S. at 678. 5 Finally, in a case alleging the same claims against multiple defendants, there must be 6 specific allegations explaining what each defendant allegedly did wrong, rather than general 7 allegations asserted against them as a group. Trusov v. Oregon Health & Sci. Univ., No. 3:23- 8 CV-77-SI, 2023 WL 6147251, at *2 (D. Or. Sept. 20, 2023); see In re Nexus 6P Prod. Liab. 9 Litig., 293 F. Supp. 3d 888, 908 (N.D. Cal. 2018) (“Plaintiffs must identify what action each 10 Defendant took that caused Plaintiffs’ harm, without resort to generalized allegations against 11 Defendants as a whole.”) (cleaned up). 12 B. Plaintiffs’ Declaratory Judgment Act claim against FFIC and TIG is not ripe.

13 Plaintiffs’ request for a declaratory judgment on FFIC and TIG’s coverage obligations 14 under their excess insurance policies does not present a justiciable case or controversy. Under the 15 Declaratory Judgment Act, “in a case of actual controversy,” a court “may declare the rights and 16 other legal relations of any interested party seeking such declaration.” 28 U.S.C. § 2201(a). A 17 court, therefore, has jurisdiction to award declaratory relief “only in a case of actual 18 controversy.” Am. States Ins. Co. v. Kearns, 15 F.3d 142, 143 (9th Cir. 1994) (citation omitted). 19 The actual controversy requirement of the Declaratory Judgment Act “is the same as the ‘case or 20 controversy’ requirement of Article III of the United States Constitution.” Aydin Corp. v. Union 21 of India, 940 F.2d 527, 528 (9th Cir. 1991) (citation omitted). Whether Plaintiffs’ declaratory 22 judgment action presents a justiciable case or controversy requires the Court to “consider

23 whether the facts alleged . . . show that there is a substantial controversy . . . of sufficient 24 immediacy and reality to warrant the issuance of a declaratory judgment.” Shell Gulf of Mex., 1 Inc. v. Ctr. for Biological Diversity, Inc., 771 F.3d 632, 635 (9th Cir. 2014) (citation omitted); 2 see also Aydin Corp., 940 F.2d at 528 (“In order for a case to be justiciable under Article III of 3 the Constitution, it must be ripe for review.”).

4 Although a dispute between an insurer and its insured over the duties imposed by an 5 insurance policy generally “satisfies Article III’s case and controversy requirement,” 6 Government Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1222 n. 2 (9th Cir. 1998), “an 7 insurance dispute may be insufficiently ripe to qualify as a proper case or controversy.” Century 8 Indem. Co. v. Marine Grp., LLC, 848 F. Supp. 2d 1229, 1234–35 (D. Or. 2012). In determining 9 whether contingencies inherent to insurance disputes, such as the size of the potential damage 10 award, “are so great that they preclude the existence of an actual case and controversy between 11 the parties, courts must attempt to balance two competing interests, namely (1) the Declaratory 12 Judgment Act's purpose of enabling the early and comprehensive resolution of disputes and (2)

13 considerations of judicial economy and restraint.” Seattle Times Co. v. Nat'l Sur. Corp., C13- 14 1463RSL, 2016 WL 3033498, at *3 (W.D. Wash. May 27, 2016) (citation omitted). 15 In this declaratory judgment action, there is another contingency—Defendants are excess 16 insurers. “The critical and distinctive feature of an excess insurance policy is that it provides 17 coverage only after the primary coverage is exhausted.” Quellos Grp. LLC v. Fed. Ins. Co., 177 18 Wn. App. 620, 633, 312 P.3d 734 (2013) (internal quotation omitted). “There is no clear 19 consensus as to whether a claim against an excess insurer is ripe for adjudication where the 20 underlying primary policies have not yet been exhausted.” Century Indem. Co., 848 F. Supp. 2d 21 at 1235. “Although there is no hard and fast rule, courts generally find that a claim against an 22 excess insurer is ripe for adjudication if there is a substantial, reasonable, and/or practical

23 likelihood that the dispute will trigger the excess policies.” Seattle Times, 2016 WL 3033498, at 24 *3 (collecting cases). 1 Here, it is undisputed that the primary policies underlying the excess coverage issued by 2 FFIC and TIG have not been exhausted. Dkt. 36 at 2; Dkt. 44 at 3, n.1; Dkt. 51 at 1–2; Dkt. 64 at 3 3, n.1. “The Court’s task, therefore, is to ascertain whether the likelihood that the excess policies

4 will be triggered is sufficient to confer jurisdiction with respect to this request for declaratory 5 judgment.” Seattle Times, 2016 WL 3033498, at *4. Plaintiffs admit that as of December 30, 6 2022, the primary policies contained at least $26,923,101 in remaining coverage below the FFIC 7 policy’s attachment point during its relevant coverage year (1991–1992) and $30,364,658.505 8 below the TIG policy’s attachment point during its relevant coverage year (1990–1991). 9 See Dkt. 45 at 183; Dkt. 44 at 9; Dkt. 48 at 6; Dkt. 64 at 8–9; Dkt. 67 at 4. Even if Plaintiffs 10 could assign the entirety6 of the Covenant Agreement judgment—$21,251,250—to the relevant 11 coverage year for either FFIC or TIG, Plaintiffs would still be more than $5 million from 12 triggering the excess liability policy of FFIC and nearly $10 million from reaching the excess 13 policy of TIG. See Dkt. 45 at 183. 14 Plaintiffs argue that the ruling in Seattle Times supports finding the “requisite likelihood 15 that the excess policies will be triggered.” Dkt. 44 at 16; see also Dkt. 64 at 14–15. In that case, 16 environmental contamination had been found on the former property of the Times. Seattle Times, 17 2016 WL 3033498, at *2. Primary insurance policies provided $10.5 million in coverage and at 18 5 Plaintiffs appear to have miscalculated the total coverage remaining below TIG’s policy as 19 “30,664,658.50,” despite including accurate figures from the declarations of the primary insurers. See Dkt. 64 at 9; Dkt. 45 at 183. 20 6 TIG contends that the judgment attributable to TIG’s policy period is a fraction of the total 21 because only some Plaintiffs resided at KVH during the relevant policy period (11/1/1990 to 11/1/1991). Dkt. 51 at 4–5; Dkt. 67 at 4. n. 4. For purposes of TIG’s (and FFIC’s) motions to 22 dismiss, it is unnecessary for the Court to resolve this allocation question. See Tocci Bldg. Corp. of New Jersey v. Virginia Sur. Co., 750 F. Supp. 2d 316, 323 (D. Mass. 2010) (citations omitted) 23 (“Courts have refrained from making a detailed examination of the policy terms and exclusions when determining whether there is a ‘practical likelihood’ that the primary limit could be 24 exceeded.”). 1 the time of the suit, the Times had spent or received demands for around $9.1 million in cleanup 2 costs. Id. at *1, 2. Expert testimony estimated an additional $1.075–$1.5 million more in federal 3 cleanup costs, and the possibility of millions more if off-site contamination had to be remediated.

4 Id. at *4. The Times sought declaratory relief establishing its rights and duties under several 5 insurance policies, including an excess insurance policy issued by the defendant National Surety. 6 Id. at *1. Although the limits underlying the Times’ excess policy had not yet been exhausted, 7 the Court found a “substantial likelihood that National Surety’s policy will be triggered.” Id. at 8 *4. Because of this substantial likelihood, the Court also found that National Surety’s continued 9 participation would “promote[] judicial economy and the just, speedy, and comprehensive 10 resolution of this dispute.” Id. 11 Although Seattle Times is persuasive that exhaustion of primary insurance is not a 12 prerequisite to seek declaratory relief against an excess insurer, this action is distinguishable. In

13 Seattle Times, nearly 90 percent of the primary policy had been exhausted at the time of the suit 14 and evidence showed that remediation costs would soon surpass the remaining underlying 15 insurance. See id. at *1, 2, 4. Here, Plaintiffs’ allegations do not show an equivalent “likelihood” 16 of exhaustion. See id. at *3. At the time of this suit, less than 80 percent of the primary insurance 17 policy against FFIC’s coverage year was exhausted, while only 70 percent of primary insurance 18 was exhausted against TIG’s coverage year. See Dkt. 45 at 183. Unlike the expected ongoing 19 remediation costs in Seattle Times that showed a “substantial likelihood that National Surety’s 20 policy will be triggered,” Plaintiffs do not plead facts demonstrating the insureds’ expected 21 liability beyond the Covenant Judgment. See 2016 WL 3033498, at *4; compare Fed. Deposit 22 Ins. Corp. v. Arch Ins. Co., CV C14-0545RSL, 2017 WL 5461360, *3–4 (W.D. Wash. Nov. 13,

23 2017) (finding a “substantial likelihood” that defendants’ excess policies would be triggered 24 when plaintiffs alleged in the complaint and produced evidence that the remaining $49 million in 1 coverage below defendants’ excess coverage would be surpassed by nearly $3 million); with 2 Iolab Corp. v. Seaboard Sur. Co., 15 F.3d 1500, 1503–04 (9th Cir. 1994) (rejecting plaintiff’s 3 appeal for declaratory relief against excess insurers where plaintiff’s aggregate primary coverage

4 totaled $36 million and the underlying claims against it had settled for $14.5 million). 5 Plaintiffs offer two arguments that they have pled facts showing a “substantial 6 likelihood” that the excess policies will be triggered. First, in their opposition to the motions to 7 dismiss, Plaintiffs argue that several pending cases involving abuse allegations against alleged 8 insureds under the primary policies “demonstrate[] a practical likelihood of exceeding [the] 9 attachment point in the future.” Dkt. 64 at 18–19, 8–11; Dkt. 44 at 17, 8–11. To support these 10 allegations, Plaintiffs submit hundreds of pages of materials not referenced in the Complaint. See 11 Dkt. 45; Dkt. 65. Plaintiffs’ argument is unavailing for two reasons. As a threshold matter, 12 Plaintiffs’ materials cannot be considered on a 12(b)(6) motion to dismiss. In reviewing a

13 12(b)(6) motion, a court may consider documents outside the complaint only if all three of the 14 following criteria are met: “(1) the complaint refers to the document; (2) the document is central 15 to the plaintiff’s claim; and (3) no party questions the authenticity of the copy attached to the 16 12(b)(6) motion.” Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006). Here, Plaintiffs cannot 17 proceed beyond the first criterion because the documents they submitted regarding the related 18 cases were not referenced in the Complaint. See generally Dkt. 5. And even if these opposition 19 materials were considered at the pleading stage, Plaintiffs cannot show a “likelihood” of 20 exhaustion by pointing the Court to other pending cases involving different parties that may 21 implicate coverage rights in the future. See Twombly, 550 U.S. at 555 (“Factual allegations must 22 be enough to raise a right to relief above the speculative level.”).

23 Second, Plaintiffs argue that because their Complaint alleged error by the state trial court 24 in reducing the Covenant Judgment amount—from $65,130,000 to $21,251,250—the Court must 1 accept this allegation as true, triggering Defendants’ excess policies. Dkt. 64 at 17–18; see Dkt. 2 44 at 16–17. But the Court is “not bound to accept as true a legal conclusion couched as a factual 3 allegation.” Twombly, 550 U.S. at 555. Plaintiffs’ assertion that the state trial court “erred” is a

4 legal conclusion not accepted as true at the pleading stage. See id; Dkt. 5 ¶ 4.62. Given Plaintiffs 5 cannot show the “likelihood” that the primary policies will be exhausted, Plaintiffs’ other 6 arguments that FFIC and TIG’s continued participation in the case would promote judicial 7 economy are premature. See Dkt. 44 at 4, 17; Dkt. 64 at 4, 20–21; Seattle Times, 2016 WL 8 3033498, at *4 (“In light of the substantial likelihood that National Surety’s policy will be 9 triggered . . . [its] continued participation and concomitant ability to protect its interests is not 10 unfair compared to the likely unfairness and inefficiencies . . . if it were dismissed.”). Because at 11 this time there is no “substantial, reasonable, and/or practical likelihood that the dispute will 12 trigger the excess policies,” Plaintiffs’ declaratory judgment actions against FFIC and TIG are

13 not justiciable. See Seattle Times, 2016 WL 3033498, at *3. 14 C. Plaintiffs’ other claims against FFIC and TIG are also not ripe. 15 Plaintiffs’ other causes of action against FFIC and TIG are also not justiciable. Plaintiffs 16 ask the Court to stay their remaining damages claims—negligence, bad faith, breach of contract, 17 and violations of the IFCA and CPA —which they concede are unripe as applied to the excess 18 insurers. Dkt. 44 at 3–4, n.1; Dkt. 64 at 3, n.1. But ripeness is a jurisdictional requirement under 19 Article III, and the Court cannot stay claims over which it lacks jurisdiction. 20 Instead, all claims against FFIC and TIG must be dismissed without prejudice. “Ripeness 21 is more than a mere procedural question; it is determinative of jurisdiction. If a claim is unripe, 22 federal courts lack subject matter jurisdiction and the complaint must be dismissed.” S. Pac.

23 Transp. Co. v. City of Los Angeles, 922 F.2d 498, 502 (9th Cir. 1990). Because Plaintiffs’ 24 damages claims and declaratory judgment action are unripe, the Court dismisses all claims 1 against FFIC and TIG without prejudice. See Seattle Times, 2016 WL 3033498, at *3; see also 2 || 18 Unnamed John Smith Prisoners v. Meese, 871 F.2d 881, 883 (9th Cir. 1989). 3 IV CONCLUSION 4 For the foregoing reasons, the Court GRANTS Defendant FFIC’s 12(b)(6) Motion to 5 Dismiss, Dkt. 36, and TIG’s 12(c) Motion to Dismiss, Dkt. 51. Plaintiffs’ claims against FFIC 6 || and TIG are DISMISSED WITHOUT PREJUDICE. 7 8 Dated this 10th day of January, 2025. Lg 10 TiffanyM. Cartwright United States District Judge 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 ORDER GRANTING DEFENDANT FIREMAN’S FUND INSURANCE COMPANY AND DEFENDANT