National Union Fire Insurance Company of Pittsburgh, PA v. J.B. Hunt Transport, Inc., et al.

• Court: District Court, N.D. California
• Decided: January 22, 2026
• Docket: 5:25-cv-06309
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 NATIONAL UNION FIRE INSURANCE Case No. 25-cv-06309-EKL COMPANY OF PITTSBURGH, PA, 8 Plaintiff, ORDER GRANTING J.B. HUNT 9 TRANSPORT, INC.’S MOTION TO v. DISMISS 10 J.B. HUNT TRANSPORT, INC., et al., Re: Dkt. No. 16 11 Defendants.

12 13 The motion to dismiss is GRANTED because the parties agree that Plaintiff’s cause of 14 action for breach of contract is untenable. This ruling assumes the reader is familiar with the facts, 15 applicable legal standard, and arguments made by the parties. 16 1. Defendant J.B. Hunt Transport, Inc. (“J.B. Hunt”) moved to dismiss Plaintiff National 17 Union Fire Insurance Company of Pittsburgh, PA’s (“National Union”) first cause of action for 18 breach of contract. Compl. at 10, ECF No. 2. As an insurer suing on behalf of its insured, 19 National Union cannot sue for breach of contract because it was not a party to the agreement 20 between its insured Meta Platforms, Inc. (“Meta”) and J.B. Hunt – as National Union concedes. 21 Opp. at 3, ECF No. 33. Thus, National Union cannot maintain suit for breach of contract. 22 2. Instead, as the parties agree, the correct cause of action is for equitable subrogation, 23 which the complaint does not plead. See Compl. at 10. Nevertheless, National Union argues that 24 J.B. Hunt’s motion to dismiss should be denied because the facts alleged purportedly state a claim 25 for equitable subrogation. Opp. at 3. However, “courts should not undertake to infer . . . one 26 cause of action when a complaint clearly states a claim under a different cause of action[.]” 27 Bogovich v. Sandoval, 189 F.3d 999, 1001 (9th Cir. 1999); see also Fontana v. Haskin, 262 F.3d 1 Instead, it is “appropriate to review [Plaintiff’s] complaint as they plead it[.]” Bogovich, 189 F.3d 2 at 1002. Here, that is a complaint for breach of contract, which is not viable.1 3 3. The Court grants leave to amend because this is its first ruling on the legal sufficiency 4 of National Union’s allegations. See Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) 5 (en banc) (holding that the “court should grant leave to amend . . . unless it determines that the 6 pleading could not possibly be cured by the allegation of other facts” (quoting Doe v. United 7 States, 58 F.3d 494, 497 (9th Cir. 1995))). Although the Court grants leave to amend, it may 8 dismiss National Union’s claims with prejudice if the amended complaint fails to plausibly state a 9 claim. See Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981, 1007 (9th Cir. 2009) (holding 10 that failure to correct pleading deficiencies after dismissal is a “strong indication” that further 11 amendment would be futile (citation and quote marks omitted)); see also Salameh v. Tarsadia 12 Hotel, 726 F.3d 1124, 1133 (9th Cir. 2013) (“A district court’s discretion to deny leave to amend 13 is ‘particularly broad’ where the plaintiff has previously amended.” (citation omitted)). 14 4. The Court provides the following guidance if National Union decides to amend its 15 complaint. National Union should consider whether it can plead facts sufficient to demonstrate 16 that the $250,000 per shipment “maximum liability” cap in Attachment B to the Statement of 17 Work does not preclude its recovery. Compl. ¶ 8, 5:26-28. National Union is incorrect that the 18 fact that the liability maximum equals Meta’s insurance deductible is immaterial simply because 19 “money is fungible[.]” Opp. at 5. As an equitable subrogee, National Union is standing in the 20 shoes of its insured meaning that it “cannot acquire by subrogation anything to which the insured 21 has no rights[.]” Am. States Ins. Co. v. Nat’l Fire Ins. Co. of Hartford, 202 Cal. App. 4th 692, 704 22 (2011). Here, Meta has uncompensated loss due to the $250,000 per shipment insurance 23 deductible under its policy with National Union. Compl. ¶ 14. As a result, Meta could pursue its 24 own claim against J.B. Hunt for the uncompensated $250,000 per shipment. If both Meta and 25 National Union sued J.B. Hunt, Meta would be entitled to recover its uncompensated loss before 26

27 1 Additionally, as discussed below, even if the Court did consider whether the complaint stated a 1 National Union because the “insured . . . has a legal right to be made whole[.]” Chandler v. State 2 Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1119 (9th Cir. 2010) (“[T]he subrogation doctrine is 3 founded upon the equitable principle that . . . it is fair to place the burden for any nonrecovery of 4 damages on the insurer, whom the insured pays, and who is in a better position to bear the loss.” 5 (citation and quote marks omitted)). Once Meta recovered its uncompensated loss, there would be 6 nothing left under the $250,000 liability cap for National Union to recover because Meta would 7 not be entitled to recover anything more. See Am. States Ins. Co., 202 Cal. App. 4th at 704; see 8 also Chandler, 598 F.3d at 1120 (“Subrogation’s primary purpose . . . is to prevent the insured 9 from obtaining double recovery.”). Accordingly, as currently pleaded, National Union could not 10 recover for equitable subrogation under the liability cap. 11 5. If National Union intends to overcome the liability limitation under the material 12 deviation doctrine, it must plead facts sufficient to show that the alleged breach was a material 13 deviation from a “‘separate, risk-related promise’ in the . . . [c]ontract[.]” Hanson v. Am. W. 14 Airlines, Inc., 544 F. Supp. 2d 1038, 1042 (C.D. Cal. 2008). As currently pleaded, the complaint 15 does not meet this high standard. The fact that the cargo did not reach its intended destination, see 16 Compl. ¶ 7, is insufficient to invoke the material deviation doctrine, see Hanson, 544 F. Supp. 2d 17 at 1042. And the only other detailed factual allegation in the complaint concerning J.B. Hunt is 18 that “Arvato Digital Services [], who was retained by Meta, used its own trackers . . . and did not 19 allow access to JB Hunt to monitor alerts, which meant that JB Hunt could only check the location 20 of the cargo at any given time.” Compl. ¶ 11, 6:25-27. It is unclear from this allegation how J.B. 21 Hunt breached its contract with Meta given that the conduct at issue concerned Arvato, a party that 22 Meta – not J.B. Hunt – hired. See Langan v. United Servs. Auto. Ass’n, 69 F. Supp. 3d 965, 979 23 (N.D. Cal. 2014) (“[T]he Court must be able generally to discern . . . what material obligation of 24 the contract the defendant allegedly breached.”). Thus, the complaint does not plead facts that, if 25 taken as true, would satisfy the material deviation doctrine.2 26 2 The Court does not consider whether Attachment C to the Statement of Work supports or 27 precludes application of the material deviation doctrine because the document was improperly ] 6. Separately, J.B. Hunt’s argument that National Union cannot recover prejudgment 2 || interest is unavailing at this time. “‘[A] defendant’s denial of liability does not make damages 3 uncertain for purposes of [Cal. Civ. Code § 3287(a)]’ . . . [aJnd ‘where the amount of the 4 || plaintiff's claim can be determined by established market values or by computation,’ that 5 || provision ‘mandates an award of prejudgment interest.’” U.S. Fid. & Guar. Co. v. Lee Invs. LLC, 6 || 641 F.3d 1126, 1140 (9th Cir. 2011) (quoting Wisper Corp. v. Cal. Com. Bank, 49 Cal. App. 4th 7 || 948, 958 (1996)). National Union has sufficiently pleaded an ascertainable value for its damages. 8 Compl. § 17. At the motion to dismiss stage, the Court must accept this factual pleading as true. 9 || See Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2011) (per 10 || curiam) (citation omitted). If J.B. Hunt disputes National Union’s calculation, it must raise that 11 issue at a later stage of the litigation. a 12 Accordingly, J.B. Hunt’s motion to dismiss is GRANTED. National Union may file an

13 amended complaint within 14 days of this Order. The parties are reminded that the moving party

14 || must meet and confer with the opposing party at least seven days before filing any motion. See 15 || Civil Standing Order § 8(A). Qa 16 IT IS SO ORDERED.

17 || Dated: January 22, 2026

Z 18 19 umi K. Lee 20 United States District Judge 21 22 23 24 25 26 97 || 2005) (permitting courts “to take into account documents “whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the 28 [plaintiff's] pleading.’” (citation omitted)); see also Ross Decl., Ex. A, ECF No. 34-1; Obj. to Evid., ECF No. 40 (objecting that Exhibit A was not properly authenticated).