Tarkett v. USAA General Indemnity Company

• Court: District Court, S.D. California
• Decided: June 10, 2024
• Docket: 3:23-cv-01724
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JOSEPH TARKETT, individually and Case No.: 3:23-cv-01724-H-BLM on behalf of all others similarly situated, 12 ORDER GRANTING DEFENDANT’S Plaintiff, 13 MOTION TO DISMISS WITH v. LEAVE TO AMEND 14

USAA GENERAL INDEMNITY 15 [Doc. No. 15.] COMPANY, a Texas Corporation, 16 Defendant. 17 18 On December 11, 2024, Defendant USAA General Indemnity Company 19 (“Defendant”) filed a motion to dismiss Plaintiff Joseph Tarkett’s (“Plaintiff”) first 20 amended complaint pursuant to Federal Rules of Civil Procedure 8, 12(b)(1), and 12(b)(6). 21 (Doc. No. 15.) On January 22, 2024, Plaintiff filed a response in opposition to Defendant’s 22 motion to dismiss. (Doc. No. 18.) On January 29, 2024, Defendant filed a reply. (Doc. 23 No. 19.) On March 28, 2024, the Court, pursuant to its discretion under Local 24 Rule 7.1(d)(1), submitted the motion on the parties’ papers. (Doc. No. 22.) For the reasons 25 below, the Court grants Defendant’s motion to dismiss Plaintiff’s first amended complaint 26 with leave to amend. 27 / / / 28 / / / 1 BACKGROUND 2 The following factual background is taken from the allegations in Plaintiff’s first 3 amended complaint. Plaintiff leased a vehicle from BMW Financial Services (“BMW”). 4 (Doc. No. 13 ¶ 10, First Amended Complaint (“FAC”).) Under the lease agreement, 5 Plaintiff agreed to pay BMW an initial payment of $20,500, plus $548.25 per month for 36 6 months, for a total of $40,038.75, in exchange for the right to possess and drive the vehicle 7 for three years. (Doc. No 13-3 ¶¶ 2, 3, 8, 10, Lease Agreement.) As required by the lease 8 agreement, Plaintiff purchased an automobile insurance policy from Defendant that 9 provided physical damage and collision coverage for the vehicle. (FAC ¶ 10; Lease 10 Agreement ¶ 20.) The insurance policy was effective at the time Plaintiff leased the vehicle 11 in 2021, and Plaintiff most recently renewed the policy for the period of October 27, 2022, 12 to April 27, 2023. (FAC ¶ 10.) 13 On January 26, 2023, Plaintiff was involved in a traffic accident in San Diego, 14 California. (Id. ¶ 11.) Defendant accepted coverage for the accident and declared the 15 leased vehicle to be a total loss. (Id.) Defendant then determined that it owed $59,834.90 16 for the totaled vehicle. (Id.) Plaintiff does not dispute the amount owed by Defendant for 17 the totaled vehicle. (See FAC.) Rather, Plaintiff disputes who was entitled to payment 18 under the insurance policy—Plaintiff or BMW. (Id. ¶ 11.) 19 Plaintiff alleges that at the time of the traffic accident, Plaintiff still owed $37,595.06 20 to BMW under the lease agreement. (Id.) Thus, Plaintiff contends that only $37,595.06 21 should have been paid to BMW, and the remainder should have been paid to Plaintiff. (Id.) 22 Instead, Defendant paid $58,834.90 to BMW, which Defendant contends was demanded 23 by BMW. (Id.; Doc. No. 15-1 at 10.) The remaining $1,000 was paid to Plaintiff directly. 24 (FAC ¶ 11.) Plaintiff alleges that he has suffered an injury in fact and has lost money as a 25 result of Defendant’s unlawful, unfair, and fraudulent conduct. (Id. ¶ 11, 89.) 26 On September 18, 2023, Plaintiff filed a putative class action complaint against 27 Defendant. (Doc. No. 1.) On November 6, 2023, Defendant filed a motion to dismiss 28 Plaintiff’s complaint. (Doc. No. 12.) On November 27, 2023, in lieu of filing an opposition 1 to Defendant’s motion to dismiss, Plaintiff filed a first amended complaint, alleging claims 2 for: (1) breach of contract; (2) violations of California’s Unfair Competition Law (“UCL”), 3 Cal. Bus. & Prof. Code §§ 17200 et seq.; (3) breach of the implied covenant of good faith 4 and fair dealing; and (4) declaratory relief. (Doc. No. 13.) By the present motion, 5 Defendant moves to dismiss Plaintiff’s first amended complaint pursuant to Federal Rules 6 of Civil Procedure 8, 12(b)(1), and 12(b)(6). (Doc. No. 15.) 7 DISCUSSION 8 I. LEGAL STANDARDS 9 A. Federal Rule of Civil Procedure 12(b)(6) 10 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal 11 sufficiency of the pleadings and allows a court to dismiss a complaint if the plaintiff has 12 failed to state a claim upon which relief can be granted. See Conservation Force v. 13 Salazar, 646 F.3d 1240, 1241 (9th Cir. 2011) (citing Navarro v. Block, 250 F.3d 729, 732 14 (9th Cir. 2001)). Federal Rule of Civil Procedure 8(a)(2) requires that a pleading that states 15 a claim for relief contain “a short and plain statement of the claim showing that the pleader 16 is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The function of this pleading requirement is 17 to “‘give the defendant fair notice of what the . . . claim is and the grounds upon which it 18 rests.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. 19 Gibson, 355 U.S. 41, 47 (1957)). 20 A complaint will survive a Rule 12(b)(6) motion to dismiss if it contains “enough 21 facts to state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial 22 plausibility when the plaintiff pleads factual content that allows the court to draw the 23 reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 24 Iqbal, 556 U.S. 662, 678 (2009). “A pleading that offers ‘labels and conclusions’ or ‘a 25 formulaic recitation of the elements of a cause of action will not do.’” Id. (quoting 26 Twombly, 550 U.S. at 555). “Threadbare recitals of the elements of a cause of action, 27 supported by mere conclusory statements, do not suffice.” Id. “While legal conclusions 28 can provide the framework of a complaint, they must be supported by factual allegations.” 1 Id. at 679. Accordingly, dismissal for failure to state a claim is proper where the claim 2 “lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 3 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008); see Los 4 Angeles Lakers, Inc. v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017). 5 In reviewing a Rule 12(b)(6) motion to dismiss, a district court must “‘accept the 6 factual allegations of the complaint as true and construe them in the light most favorable 7 to the plaintiff.’” Los Angeles Lakers, 869 F.3d at 800 (quoting AE ex rel. Hernandez v. 8 Cty. of Tulare, 666 F.3d 631, 636 (9th Cir. 2012)). But a court need not accept “legal 9 conclusions” as true. Iqbal, 556 U.S. at 678. “Further, it is improper for a court to assume 10 the claimant “can prove facts which it has not alleged or that the defendants have violated 11 the . . . laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. 12 v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). In addition, a court may 13 consider documents incorporated into the complaint by reference and items that are proper 14 subjects of judicial notice. See Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th 15 Cir. 2010). If the court dismisses a complaint for failure to state a claim, it must then 16 determine whether to grant leave to amend. See Doe v. United States, 58 F.3d 494, 497 17 (9th Cir. 1995). “A district court should grant leave to amend . . . unless it determines that 18 the pleading could not possibly be cured by the allegation of other facts.” Id. 19 B. Article III Standing 20 Federal Rule of Civil Procedure 12(b)(1) provides for dismissal for lack of subject 21 matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Under Rule 12(b)(1), a federal court is to 22 first determine its jurisdiction over the dispute. See Bates v. United Parcel Serv., Inc., 511 23 F.3d 974, 985 (9th Cir. 2007); Ellis v. J.P. Morgan Chase & Co., 950 F. Supp. 2d 1062, 24 1071 (N.D. Cal. 2013). A court sustains a facial attack on subject matter jurisdiction if 25 “the allegations contained in the complaint [or on matters which the court can take judicial 26 notice of] are insufficient on their face to invoke federal jurisdiction.” Safe Air for 27 Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). 28 Article III limits the jurisdiction of federal courts to “cases” and “controversies,” 1 which is delineated by the doctrine of standing. Lujan v. Defenders of Wildlife, 504 U.S. 2 555, 560 (1992). To establish standing, a plaintiff must first have suffered an “injury in 3 fact” which is “concrete and particularized” as well as “actual or imminent, not conjectural 4 or hypothetical.” Id. (citations omitted). The “threatened injury must be certainly 5 impending to constitute injury in fact, and . . . allegations of possible future injury are not 6 sufficient.” Clapper v. Amnesty Int’l USA, 568 U.S. 398, 409 (2013) (internal citations 7 omitted). Second, the injury must be “fairly traceable to the challenged action of the 8 defendant . . . .” Lujan, 504 U.S. at 560 (citations and alterations omitted). Finally, it must 9 be “likely” that the “injury will be redressed by a favorable decision.” Id. (citations 10 omitted). “The plaintiff, as the party invoking federal jurisdiction, bears the burden of 11 establishing these elements.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). Moreover, 12 “[a] plaintiff must demonstrate constitutional standing separately for each form of relief 13 requested.” Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 967 (9th Cir. 2018) (citing 14 Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC) Inc., 528 U.S. 167, 185 (2000)). 15 II. ANALYSIS 16 Defendant moves pursuant to Federal Rules of Civil Procedure 8, 12(b)(1), 17 and 12(b)(6) to dismiss Plaintiff’s first amended complaint with prejudice. (Doc. No. 15 18 at 2.) Specifically, Defendant argues that: (1) Defendant did not breach the insurance 19 policy by paying BMW for the totaled vehicle; (2) Plaintiff cannot pursue equitable 20 remedies because he has failed to plead facts establishing that his legal remedies are 21 inadequate; (3) Plaintiff lacks Article III standing to seek injunctive relief; (4) Plaintiff fails 22 to plead any claim for relief under the fraudulent prong of the UCL; and (5) Plaintiff’s 23 breach of the implied covenant of good faith and fair dealing and declaratory relief claims 24 are entirely duplicative of Plaintiff’s breach of contract claim. (Doc. No. 15-1 at 11–27; 25 Doc. No. 19 at 2–11.) 26 A. Plaintiff’s Breach of Contract Claim 27 In the first amended complaint, Plaintiff alleges a breach of contract claim. (FAC 28 ¶¶ 67–77.) Defendant argues that Plaintiff’s claim for breach of contract should be 1 dismissed because Plaintiff did not have an equity interest in the totaled vehicle under lease 2 agreement and Defendant was required to pay the actual cash value of the vehicle to the 3 entity with the controlling interest in the vehicle, which Defendant argues is BMW. (Doc. 4 No. 15-1 at 11–18; Doc. No. 19 at 2–6.) 5 Under California law, a claim for breach of contract requires (i) the existence of the 6 contract; (ii) plaintiff’s performance of the contract or excuse from non-performance; 7 (iii) defendant's breach of the contract; and (iv) the resulting damage to the plaintiff. 8 D’Arrigo Bros. of California v. United Farmworkers of Am., 224 Cal.App.4th 790, 800 9 (2014) (citations omitted). A plaintiff must plead “appreciable and actual damage” in 10 relation to their breach of contract claim. Low v. LinkedIn Corp., 900 F. Supp. 2d 1010, 11 1028 (N.D. Cal. 2012) (citing Aguilera v. Pirelli Armstrong Tire Corp., 223 F.3d 1010, 12 1015 (9th Cir. 2000)). “Nominal damages, speculative harm, or threat of future harm do 13 not suffice to show legally cognizable injury.” Id. “In an action for breach of a written 14 contract, a plaintiff must allege the specific provisions in the contract creating the 15 obligation the defendant is said to have breached.” Young v. Facebook, Inc., 790 16 F.Supp.2d 1110, 1117 (N.D. Cal. 2011). 17 Plaintiff’s amended complaint alleges that he “purchased an automobile insurance 18 policy from USAA that provides coverage for, inter alia, physical damage including 19 comprehensive loss and collision loss, to a 2021 BMW X5 that he leased.” (FAC ¶ 10.) 20 Plaintiff argues that the insurance policy “specified that Defendant would settle the claim 21 with the owner of the vehicle,” which Plaintiff argues is “defined to be the named 22 insureds.” (Id. ¶ 72.) Plaintiff further argues that “any total loss payout under the Policy 23 would be paid to the named insureds.” (Id.) Plaintiff asserts that Defendant breached the 24 insurance policy because Defendant did not settle the total loss claim with Plaintiff or issue 25 the loss payout amount to Plaintiff, the named insured. (Id.) While Plaintiff points to 26 numerous provisions from the insurance policy in his first amended complaint, Plaintiff 27 largely relies on the Payment of Loss provision and the Loss Payable Clause as the relevant 28 provisions that create the obligation Defendant allegedly breached. (Id. ¶¶ 71–72.) 1 The Payment of Loss provision states: 2 We may pay for loss in money, or repair or replace the damaged or stolen 3 property. We may, at our expense, return any stolen property to you or to the address shown on the Declarations. If we return stolen property, we will pay 4 for any damage resulting from the theft. We may keep all or part of the 5 damaged or stolen property and pay you an agreed or appraised value for it. We cannot be required to assume the ownership of damaged property. We 6 may settle a claim either with you or with the owner of the property. 7 (Doc. No. 13-1 at 21, Ex. A.) Moreover, the Loss Payable Clause states: 8 Loss or damage under this policy will be paid, as interest may appear, to the 9 named insured and the loss payee shown on the Declarations. This insurance, 10 with respect to the interest of the loss payee, will not become invalid because of your fraudulent acts or omissions unless the loss results from your 11 conversion, secretion, or embezzlement of your covered auto. We may cancel 12 the policy as permitted by policy terms and the cancellation will terminate this agreement as to the loss payee’s interest. We will give the same advance 13 notice of cancellation to the loss payee as we give to the named insured shown 14 on the Declarations. We may send notices to the loss payee either by mail or by electronic means. However, if the loss payee requests in writing that we 15 not send notices, including a notice of cancellation, we will abide by that 16 request. When we pay the loss payee we will, to the extent of payment, be subrogated to the loss payee’s rights of recovery. 17 18 (Id. at 21–22.) 19 As seemingly recognized by both parties, the Payment of Loss provision does not 20 govern who should receive the insurance payment—it provides that Defendant may settle 21 a claim with the claimant or the owner of the property. (Id. at 21 (“We may settle a claim 22 either with you or with the owner of the property.”).) The Loss Payable Clause, however, 23 is the relevant provision that governs to whom a settlement “will be paid.” (Id.) 24 Specifically, the Loss Payable Clause states: “Loss or damage under this policy will be 25 paid, as interest may appear, to the named insured and the loss payee shown on the 26 Declarations.” (Id.) 27 Plaintiff alleges that “[t]he Declarations referenced in the ‘Loss Payable Clause’ of 28 the Policy define Plaintiff as both the named insured and the loss payee.” (FAC ¶ 39.) 1 Thus, Plaintiff argues that because BMW is only named as an “additional interest—lessor” 2 and not a “loss payee” on the Declarations, Plaintiff was entitled to the insurance proceeds. 3 (Doc. No. 18 at 14–15.) But contrary to Plaintiff’s assertions, the term “loss payee” is not 4 a defined term in the insurance policy and more importantly, the Declarations do not name 5 Plaintiff as the loss payee. (See Ex. A at 4–5; Doc. No. 13-2 at 6–7, Ex. B.) Rather, 6 Plaintiff is only listed as the named insured on the Declarations. (Ex. B at 6–7.)

7 Furthermore, Plaintiff fails to allege any facts in his amended complaint that he has an 8 equity interest in the totaled vehicle and thus, was entitled to the equity surplus of the total 9 loss payout. (See FAC.) Indeed, while Plaintiff’s lease agreement with BMW provides 10 for a purchase option, (Lease Agreement ¶ 27), Plaintiff does not allege that he exercised 11 such option. (See FAC.) Just because “Plaintiff had a contract for insurance of a lease 12 vehicle does not lead to the conclusion that he was entitled to the benefit of all proceeds on 13 a vehicle he did not own.” Kumar v. Ally Fin. Inc., No. 22-cv-05184-SVW-MRW, 2022 14 WL 16962283, at *3 (C.D. Cal. Oct. 17, 2022). 15 Plaintiff has not sufficiently alleged a claim for breach of the insurance policy. 16 Accordingly, the Court grants Defendant’s motion to dismiss Plaintiff’s first cause of 17 action for breach of contract. 18 B. Plaintiff’s UCL Claim 19 Plaintiff also alleges a claim against Defendant for violations of California’s UCL. 20 (FAC ¶¶ 78–92.) Defendant argues that Plaintiff’s UCL claim should be dismissed 21 because (1) Plaintiff cannot pursue equitable remedies because he has failed to plead facts 22 establishing that his legal remedies are inadequate; (2) Plaintiff lacks standing to pursue 23 injunctive relief under the UCL; (3) Plaintiff cannot seek restitution relating to unpaid 24 policy benefits and premium payments; and (4) Plaintiff has failed to plead any claim for 25 relief under the fraudulent prong of the UCL. (Doc. No. 15-1 at 18–24; Doc. No. 19 26 at 6–9.) Given that Plaintiff fails to allege inadequacy of legal remedies and lacks standing 27 to pursue injunctive relief, the Court need not address Defendant’s remaining arguments. 28 To bring a claim for a violation of California’s UCL, “a plaintiff must show either 1 an (1) ‘unlawful, unfair, or fraudulent business act or practice,’ or (2) ‘unfair, deceptive, 2 untrue or misleading advertising.’” Lippitt v. Raymond James Fin. Servs., 340 F.3d 1033, 3 1043 (9th Cir. 2003) (quoting Cal. Bus. & Prof. Code § 17200). The UCL’s coverage is 4 “sweeping,” and its standard for wrongful business conduct is “intentionally broad.” In re 5 First Alliance Mortg. Co., 471 F.3d 977, 995 (9th Cir. 2006) (citation omitted). An 6 “unlawful” practice under the UCL is a business practice that “is forbidden by law.” 7 Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999). 8 An “unfair” practice is a business practice that “offends an established public policy 9 or . . . is immoral, unethical, oppressive, unscrupulous or substantially injurious to 10 consumers.” Id.; see also Day v. AT&T Corp., 63 Cal. App. 4th 325, 332 (1998) (“An 11 ‘unfair’ practice under section 17200 is one ‘whose harm to the victim outweighs it 12 benefits.’” (citation omitted)). “A fraudulent business practice is one that is likely to 13 deceive members of the public.” Boschma v. Home Loan Ctr., Inc., 198 Cal. App. 4th 230, 14 252 (2011) (citation omitted). “The challenged conduct ‘is judged by the effect it would 15 have on a reasonable consumer.’” Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1169 16 (9th Cir. 2012). But “[u]nlike common law fraud, a [UCL] violation can be shown even 17 without allegations of actual deception, reasonable reliance and damage.” Daugherty v. 18 Am. Honda Motor Co., Inc., 144 Cal. App. 4th 824, 838 (2006). “Absent a duty to disclose, 19 the failure to do so does not support a claim under the fraudulent prong of the UCL.” 20 Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 1544, 1557 (2007). 21 Here, Plaintiff’s UCL claim seeks equitable relief in the form of restitution and 22 injunctive relief. (FAC ¶ 92.) “[E]quitable relief is not appropriate where an adequate 23 remedy exists at law.” Schroeder v. U.S., 569 F.3d 956, 963 (9th Cir 2009). A plaintiff 24 “must establish that []he lacks an adequate remedy at law before securing equitable 25 restitution for past harm under the UCL.” Sonner v. Premier Nutrition Corp., 971 F.3d 26 834, 844 (9th Cir. 2020) (citations omitted). Upon review of Plaintiff’s amended 27 complaint, Plaintiff has failed to plead any facts establishing that he lacks an adequate 28 remedy at law. (See FAC.) “[A] party seeking equitable relief must specifically plead the 1 inadequacy of monetary damages in federal court.” Martinez v. Ford Motor Co., No. 22- 2 cv-01082-MMA, 2022 WL 14118926, at *8 (S.D. Cal. Oct. 24, 2022) (citations omitted). 3 Plaintiff failed to do so here. 4 Plaintiff argues that his claim for equitable relief is pleaded in the alternative and 5 such alternative pleading is permitted under the law. (Doc. No. 18 at 20.) While Plaintiff 6 may plead claims for equitable relief in the alternative at the pleading stage, see Johnson- 7 Jack v. Health-Ade LLC, 587 F. Supp. 3d 957, 976 (N.D. Cal. 2022), “[P]laintiff must, at 8 a minimum, plead that []he lacks adequate remedies at law if []he seeks equitable relief.” 9 Guthrie v. Transamerica Life Ins. Co., 561 F. Supp. 3d 869, 875 (N.D. Cal. 2021) 10 (emphasis removed) (citations omitted); see also Martinez, 2022 WL 14118926, at *8. And 11 again, Plaintiff’s amended complaint contains no allegations establishing that Plaintiff’s 12 legal remedies are inadequate. (See FAC.) As such, Plaintiff has failed to state a claim for 13 equitable relief and his UCL claim must be dismissed on this ground. See, e.g., 14 Sonner, 971 F.3d at 844; Freund v. HP, Inc., No. 22-cv-03794-BLF, 2023 WL 187506, 15 at *6 (N.D. Cal. Jan. 13, 2023) (granting motion to dismiss claims for equitable relief 16 because the plaintiffs failed to plead that they lack an adequate remedy at law); Clark v. 17 Am. Honda Motor Co., No. 20-cv-03147-AB-MRWx, 2021 WL 1186338, at *8 (C.D. Cal. 18 Mar. 25, 2021) (“Plaintiffs have not pointed to any allegation in the Complaint pleading 19 that they lack an adequate remedy at law.”). 20 Defendant also argues that Plaintiff lacks standing to pursue injunctive relief under 21 the UCL. (Doc. No. 15-1 at 23–24; Doc. No. 19 at 9–10.) The Court agrees. Prospective 22 injunctive relief under the UCL requires a plaintiff to show a “a real or immediate threat of 23 an irreparable injury.” Hangarter v. Provident Life & Acc. Ins. Co., 373 F.3d 998, 1021 24 (9th Cir. 2004) (quoting Clark v. City of Lakewood, 259 F.3d 996, 1007 (9th Cir.2001)) 25 (emphasis removed). “In other words, the ‘threatened injury must be certainly impending 26 to constitute injury in fact’ and ‘allegations of possible future injury are not sufficient.’” 27 Davidson, 889 F.3d at 967 (quoting Clapper, 568 U.S. at 409) (emphasis removed). Upon 28 review of the amended complaint, Plaintiff fails to plead any facts showing an immediate 1 threat of a future injury that is certainly impending. (See FAC.) Plaintiff’s future harm is 2 thus “conjectural or hypothetical” and not “actual and imminent.” Summers v. Earth Island 3 Inst., 555 U.S. 488, 493 (2009). As such, Plaintiff lacks standing to pursue his claim for

4 injunctive relief. 5 In sum, Plaintiff has failed to state a claim for equitable relief and lacks standing to 6 pursue injunctive relief under the UCL. As a result, the Court grants Defendant’s motion 7 to dismiss Plaintiff’s second cause of action for violations of California’s UCL.1 8 C. Plaintiff’s Breach of the Implied Covenant of Good Faith and Fair Dealing Claim 9 10 Next, Plaintiff asserts a breach of the implied covenant of good faith and fair dealing 11 claim. (FAC ¶¶ 93–106.) Defendant argues that Plaintiff’s breach of the implied covenant 12 of good faith and fair dealing claim should be dismissed because it is duplicative of 13 Plaintiff’s breach of contract claim. (Doc. No. 15-1 at 24–27; Doc. No. 19 at 10–11.) The 14 Court agrees. 15 “Every contract imposes upon each party a duty of good faith and fair dealing in its 16 performance and its enforcement.” Foley v. Interactive Data Corp., 47 Cal. 3d 654, 683 17 (1988) (citing Rest. 2d Contracts § 205). The implied covenant of good faith and fair 18 dealing in every contract obligates “that neither party will do anything which will injure 19 the right of the other to receive the benefits of the agreement.” Comunale v. Traders & 20 Gen. Ins. Co., 50 Cal. 2d 654, 658 (1958); see also Thrifty Payless, Inc. v. The Americana 21 at Brand, LLC, 218 Cal. App. 4th 1230, 1244 (2013) (“The covenant is read into contract 22 and functions ‘as a supplement to the express contractual covenants, to prevent a 23

24 1 Defendant has not raised the issue of whether Plaintiff’s UCL claim satisfies the 25 heighted pleading standard of Federal Rule of Civil Procedure 9(b), and the Court need not address this issue in light of the dismissal on other grounds. If Plaintiff chooses to amend, 26 however, his amended complaint should be consistent with that standard. See Kearns v. 27 Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009) (holding that Rule 9(b) applies to UCL claims that are grounded in fraud); see also Vess v. Ciba–Geigy Corp. USA, 317 F.3d 28 1 contracting party from engaging in conduct which (while not technically transgressing the 2 express covenants) frustrates the other party’s rights to the benefits of the contract.’” 3 (citation omitted) (emphasis removed)). 4 To assert a claim for breach of the covenant of good faith and fair dealing, plaintiffs 5 “must show that the conduct of the defendant, whether or not it also constitutes a breach of 6 a consensual contract term, demonstrates a failure or refusal to discharge contractual 7 responsibilities, prompted not by an honest mistake, bad judgement or negligence but 8 rather by a conscious and deliberate act.” Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 9 Cal. App. 3d 1371, 1395 (1990). Such conduct must “unfairly frustrate[] the agreed 10 common purposes and disappoint[] the reasonable expectations of the other party thereby 11 depriving that party of the benefits of the agreement.” Id. But “[i]f the allegations do not 12 go beyond the statement of a mere contract and, relying on the same alleged acts, simply 13 seek the same damages or other relief already claimed in a companion contract cause of 14 action, they may be disregarded as superfluous as no additional claim is actually stated.” 15 Id. 16 Plaintiff argues that his good faith and fair dealing claim should not be dismissed 17 because his breach of contract and good faith and fair dealing claims are unique. (Doc. 18 No. 18 at 17.) But Plaintiff does not articulate why his good faith and fair dealing claim is 19 distinct from his breach of contract claim. (See id. at 17–19.) Rather, Plaintiff’s theory is 20 that Defendant breached the implied covenant of good faith and fair dealing by “paying the 21 lessor the full insurance proceeds owed under the Policy” because it was Plaintiff who was 22 “entitled to receive benefits under the Policy.” (Id. at 18.) As Defendant correctly points 23 out, this is the same factual predicate as Plaintiff’s breach of contract claim. (Compare 24 FAC ¶¶ 69–76 with id. ¶¶ 102, 106.) Because the allegations underlying Plaintiff’s good 25 faith and fair dealing claim are “identical” to the allegations that form the basis of 26 Plaintiff’s breach of contract claim, Plaintiff’s good faith and fair dealing claim “must give 27 way to the breach of contract claim.” Evanston Ins. Co. v. Harrison, No. 20-cv-01672- 28 WBS-KJN, 2021 WL 260011, at *3 (E.D. Cal. Jan. 26, 2021). As such, Plaintiff’s breach 1 of the implied covenant of good faith and fair dealing claim is duplicative of Plaintiff’s 2 breach of contract claim and must be dismissed. Accordingly, the Court grants Defendant’s 3 motion to dismiss Plaintiff’s third cause of action for breach of the implied covenant of 4 good faith and fair dealing. 5 D. Plaintiff’s Declaratory Relief Claim 6 Plaintiff also seeks a “judicial determination of his rights and duties, and the rights 7 and duties of absent Class Members, and a declaration as to whether [Defendant’s] 8 insurance benefit payout practice is illegal or a breach of contract.” (FAC ¶ 113.) 9 Defendant argues that Plaintiff’s demand for declaratory relief is entirely duplicative of 10 Plaintiff’s breach of contract claim and thus, should be dismissed. (Doc. No. 15-1 at 27; 11 Doc. No. 19 at 11.) 12 Under the Declaratory Judgment Act, “[a]ny court of the United States, upon the 13 filing of an appropriate pleading, may declare the rights and other legal relations of any 14 interested party seeking such declaration, whether or not further relief is or could be 15 sought.” 28 U.S.C. § 2201. “Courts deny requests for declaratory relief when it is 16 duplicative of other claims because ‘[a] claim for declaratory relief is unnecessary where 17 an adequate remedy exists under some other cause of action.’” Glendora Courtyard, LLC 18 v. BBVA Compass Bancshares Inc., No. 16-cv-01189-JLS-KSC, 2017 WL 960431, at *8 19 (S.D. Cal. Mar. 13, 2017) (quoting Mangindin v. Wash. Mut. Bank, 637 F. Supp. 2d 700, 20 707–08 (N.D. Cal. 2009)); see also Permpoon v. Wells Fargo Bank Nat. Ass’n, No. 09-cv- 21 01140-H-BLM, 2009 WL 3214321, at *5 (S.D. Cal. Sept. 29, 2009) (holding declaratory 22 relief was “duplicative and unnecessary” where “the declaratory relief Plaintiffs seek is 23 entirely commensurate with the relief sought through their other causes of action”). Here, 24 the declaratory relief Plaintiff seeks is entirely commensurate with the relief sought through 25 his breach of contract claim. Thus, Plaintiff’s declaratory relief claim is duplicative and 26 unnecessary. Accordingly, the Court grants Defendant’s motion to dismiss Plaintiff’s 27 fourth cause of action for declaratory relief. 28 / / / 1 CONCLUSION 2 For the foregoing reasons, the Court grants Defendant’s motion to dismiss and 3 dismisses Plaintiffs first amended complaint with leave to amend. See Doe v. United 4 || States, 58 F.3d at 497 (“A district court should grant leave to amend. . . unless it determines 5 || that the pleading could not possibly be cured by the allegation of other facts.”). Plaintiff 6 || may file an amended complaint within thirty (30) days from the date of this order to cure 7 || the deficiencies in his first amended complaint if he can do so. 8 IT IS SO ORDERED. 9 || DATED: June 10, 2024 □□ | 10 MARILYN ®. HUFF, Distri ge 1] UNITED STATES DISTRICT COURT 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28