Williamsburg National Insurance Company v. New York Marine and General Insurance Company

• Court: District Court, C.D. California
• Decided: August 12, 2022
• Docket: 2:21-cv-04377
• Status: Unknown

Opinion

Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 1 of 17 Page ID #:1033

1 'O 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 CV 21-04377-RSWL-JDE x 11 WILLIAMSBURG NATIONAL INSURANCE COMPANY, ORDER re: Defendant’s 12 Motion to Dismiss Plaintiff, 13 Plaintiff’s First Amended v. Complaint [41] 14 15 NEW YORK MARINE AND GENERAL INSURANCE COMPANY, 16 Defendant. 17 18 Plaintiff Williamsburg National Insurance Company 19 (“Plaintiff”) brings this Action against Defendant New 20 York Marine and General Insurance Company (“Defendant”). 21 In its First Amended Complaint, Plaintiff alleges eleven 22 causes of action involving contribution, indemnity, and 23 other various tort claims. Currently before the Court 24 is Defendant’s Motion to Dismiss Plaintiff’s First 25 Amended Complaint [41] (the “Motion”). Having reviewed 26 all papers submitted pertaining to this Motion, the 27 Court NOW FINDS AND RULES AS FOLLOWS: the Court GRANTS 28 in part and DENIES in part Defendant’s Motion. 1 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 2 of 17 Page ID #:1034

1 I. BACKGROUND

2 A. Factual Background

3 Plaintiff, a Michigan-based insurance corporation, 4 issued a motor carrier liability policy to DLR Express, 5 Inc. (“DLR”) that provides a $1,000,000 combined single 6 limit for covered accidents. First Am. Compl. (“FAC”) 7 ¶¶ 3, 5, ECF No. 37. Attached to the policy is the MCS- 8 90 endorsement, which is a standardized form that 9 requires an insurer to pay up to its policy limit to 10 members of the public for liability arising from its 11 insured’s operations even where the policy itself 12 provides no coverage. Id. ¶ 5. 13 Defendant, a New York-based insurance corporation, 14 issued a motor carrier liability policy (“Defendant 15 Policy”) to Intermodal Contractor’s Association of North 16 America. Id. ¶¶ 4, 6. Arthur Trimble, Jr. (“Trimble”) 17 was later added as a certificate holder under this 18 policy. Id. ¶ 6. Defendant Policy similarly provides a 19 $1,000,000 combined single limit and includes the MCS-90 20 endorsement. Id. ¶¶ 6, 31. 21 DLR leased a tractor with an attached trailer to 22 Trimble pursuant to an Equipment Lease Agreement and a 23 sub-haul agreement (collectively, the “Agreement”). Id. 24 ¶ 8. Under the Agreement, Trimble agreed to indemnify 25 and release DLR against all liability arising out of 26 Trimble’s use of the tractor. Id. ¶ 9. Pursuant to the 27 Agreement, Trimble also added DLR to Defendant Policy as 28 an additional insured with respect to the tractor. Id. 2 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 3 of 17 Page ID #:1035

1 ¶ 11. The Policy obligates Defendant to pay all sums

2 Trimble is liable for related to any accident involving

3 the tractor. Id. ¶ 29. 4 On March 5, 2015, Trimble was driving the tractor 5 pulling a loaded trailer when he rear-ended a truck 6 being driven by Ronald Foster, Jr. Id. ¶ 7. Foster, 7 along with the truck’s passenger and the truck’s owner 8 (collectively, the “Foster plaintiffs”), filed a 9 complaint against Trimble in Los Angeles Superior Court 10 on March 3, 2017, alleging injuries and damages related 11 to the accident. Id. ¶ 12. DLR was later added to the 12 action as a defendant. Id. ¶ 15. Defendant provided a 13 defense for Trimble in the Foster litigation, and all 14 claims against Trimble were settled for $155,000. Id. ¶ 15 13. Plaintiff alleges that Defendant “was aware, via 16 its retained defense counsel for Trimble, that its 17 additional insured DLR was named as a defendant in the 18 Foster litigation.” Id. ¶ 16. However, neither 19 Plaintiff nor Defendant provided a defense for DLR in 20 the Foster litigation initially, and consequently DLR 21 never appeared in the case. Id. ¶¶ 17, 18. 22 A default judgment of $6,085,702 was entered 23 against DLR. Id. ¶ 18. DLR moved to set aside the 24 default judgment, and subsequently filed an appeal when 25 that motion was denied. Id. DLR then tendered its 26 defense to Plaintiff, and Plaintiff agreed to defend 27 DLR in the Foster litigation under a reservation of 28 3 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 4 of 17 Page ID #:1036

1 rights.1 Id. ¶ 19. A month later, DLR tendered its

2 defense and request for indemnity to Defendant as an

3 additional insured under Defendant Policy. Id. ¶ 21. 4 The Foster plaintiffs then agreed to settle all 5 claims against DLR for $1,000,000. Id. ¶ 22. Both DLR 6 and Plaintiff demanded that Defendant contribute its 7 remaining policy limit to settle the claim, but 8 Defendant refused. Id. ¶¶ 23-25. Ultimately, Plaintiff 9 paid the entire settlement amount on behalf of DLR. Id. 10 ¶¶ 22, 26. Plaintiff alleges that Defendant had the 11 primary duty to defend and indemnify DLR in the Foster 12 litigation because DLR is an additional insured under 13 Defendant Policy. Id. ¶ 34. 14 B. Procedural Background 15 Plaintiff filed its initial Complaint [1] on May 16 26, 2021, alleging claims for declaratory relief, 17 equitable contribution, and equitable subrogation. 18 Defendant filed a Motion to Dismiss (“Initial Motion”) 19 [12] on July 16, 2021, and this Court subsequently 20 entered an Order [18] granting in part and denying in 21 part Defendant’s Motion. Specifically, the Court 22 dismissed Plaintiff’s subrogation claims with leave to 23 amend but denied Defendant’s Motion as to the 24 declaratory relief and contribution claims. See Order 25

26 1 The MCS-90 endorsement included in the policy that Plaintiff issued to DLR required Plaintiff to cover DLR’s claim 27 despite DLR’s failure to provide Plaintiff with timely notice of the Foster litigation. Pl.’s Opp’n to Mot. to Dismiss (“Opp’n”) 28 16:27-17:3, ECF No. 15. 4 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 5 of 17 Page ID #:1037

1 re: Mot. to Dismiss (“Order”) 18:2-8, ECF No. 18.

2 Plaintiff then filed its First Amended Complaint

3 (“FAC”) [37] on March 30, 2022. The FAC includes the 4 previous claims for contribution and declaratory relief, 5 as well as additional claims for equitable and implied 6 indemnity, negligence, and common law and statutory tort 7 of another. Defendant filed the instant Motion to 8 Dismiss (“Second Motion”) [41] on April 28, 2022. On 9 June 21, 2022, Plaintiff filed its Opposition [42]. 10 Defendant replied [43] on June 28, 2022. 11 II. DISCUSSION 12 A. Legal Standard 13 Rule 12(b)(6) of the Federal Rules of Civil 14 Procedure allows a party to move for dismissal of one or 15 more claims if the pleading fails to state a claim upon 16 which relief can be granted. A complaint must “contain 17 sufficient factual matter, accepted as true, to state a 18 claim to relief that is plausible on its face.” 19 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation 20 omitted). Dismissal is warranted for a “lack of a 21 cognizable legal theory or the absence of sufficient 22 facts alleged under a cognizable legal theory.” 23 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 24 (9th Cir. 1988) (citation omitted). 25 In ruling on a 12(b)(6) motion, a court may 26 generally consider only allegations contained in the 27 pleadings, exhibits attached to the complaint, and 28 matters properly subject to judicial notice. Swartz v. 5 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 6 of 17 Page ID #:1038

1 KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). A court

2 must presume all factual allegations of the complaint to

3 be true and draw all reasonable inferences in favor of 4 the non-moving party. Klarfeld v. United States, 944 5 F.2d 583, 585 (9th Cir. 1991). The question is not 6 whether the plaintiff will ultimately prevail, but 7 whether the plaintiff is entitled to present evidence to 8 support its claims. Jackson v. Birmingham Bd. of Educ., 9 544 U.S. 167, 184 (2005) (quoting Scheuer v. Rhodes, 416 10 U.S. 232, 236 (1974)). While a complaint need not 11 contain detailed factual allegations, a plaintiff must 12 provide more than “labels and conclusions” or “a 13 formulaic recitation of the elements of a cause of 14 action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 15 (2007). 16 B. Analysis 17 1. Preliminary Matters 18 a. Local Rule 7-3 19 Defendant argues that Plaintiff failed to comply 20 with Local Rule 7-3 because Plaintiff never informed 21 Defendant of its objection to Defendant’s reassertion of 22 certain arguments. Reply 25:18-22, ECF No. 43. 23 However, Local Rule 7-3 sets forth the meet and confer 24 obligations of the moving party only. C.D. Cal. L.R. 7- 25 3 (requiring that “counsel contemplating the filing of 26 any motion shall first contact opposing counsel” to 27 discuss the motion’s substance) (emphasis added). 28 Therefore, Plaintiff did not violate Local Rule 7-3 in 6 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 7 of 17 Page ID #:1039

1 failing to raise its objection during the meet and

2 confer session. The Court accordingly considers the

3 arguments raised in Plaintiff’s Opposition. 4 b. Defendant’s Requests for Judicial Notice 5 Pursuant to Federal Rule of Evidence 201, “[a] 6 court may judicially notice a fact that is not subject 7 to reasonable dispute because it . . . can be accurately 8 and readily determined from sources whose accuracy 9 cannot reasonably be questioned.” Thus, while a court 10 may take judicial notice of matters of public record, a 11 court may not take judicial notice of the substance of 12 such records if subject to reasonable dispute. Lee v. 13 City of Los Angeles, 250 F.3d 668, 689-90 (9th Cir. 14 2001) (stating that a court may take judicial notice of 15 the fact that certain court records were filed but not 16 of the truth of any facts stated therein). 17 Defendant requests the Court judicially notice the 18 following records from the Foster litigation: (1) the 19 proof of service of the amended complaint substituting 20 DLR for a Doe defendant; (2) the order granting default 21 judgment against DLR; (3) DLR’s motion to set aside 22 default and default judgment; (4) the order denying 23 DLR’s motion to set aside default and default judgment; 24 and (5) the Superior Court’s entry of a $6,085,702 25 judgment against DLR. See generally Def.’s Req. for 26 Judicial Notice, ECF No. 41-1. Defendant also requests 27 that the Court judicially notice: (6) an excerpt from 28 the Federal Motor Carrier Administration’s (“FMCA”) 7 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 8 of 17 Page ID #:1040

1 Regulatory Guidance; and (7) the “About Us” information

2 from the FMCA’s website. Id.

3 The Court GRANTS Defendant’s first through fifth 4 requests because they pertain to court documents, the 5 existence of which is not subject to reasonable dispute. 6 See Selane Prods., Inc. v. Cont’l Cas. Co., No. 2:20-cv- 7 07834-MCS-AFM, 2020 WL 7253378, at *3 (C.D. Cal. Nov. 8 24, 2020). However, the Court DENIES Defendant’s sixth 9 and seventh requests. While these documents may qualify 10 as judicially noticeable materials, they are not 11 relevant to the resolution of this Motion and therefore 12 need not be considered by this Court. See Santa Monica 13 Food Not Bombs v. City of Santa Monica, 450 F.3d 1022, 14 1025 n.2 (9th Cir. 2006). 15 2. The Motion 16 Defendant argues that all of Plaintiff’s claims 17 should be dismissed because Defendant had no duty to 18 indemnify and defend DLR. See Mot. to Dismiss FAC 19 (“Second Mot.”) 3:7-14, ECF No. 37. For the following 20 reasons, the Court DENIES Defendant’s Motion as to 21 Plaintiff’s claims for contribution, indemnity, and 22 declaratory relief. The Court GRANTS Defendant’s Motion 23 as to Plaintiff’s claims for negligence and both common 24 law and statutory tort of another. 25 a. Contribution and Indemnity 26 i. Notice 27 Defendant’s Motion repeats a central argument that 28 the Court previously rejected — namely, that Defendant 8 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 9 of 17 Page ID #:1041

1 cannot be liable for contribution because Defendant

2 lacked sufficient notice of DLR’s potential claims. See

3 generally Second Mot. In its prior Order, the Court 4 rejected Defendant’s argument that Plaintiff failed to 5 state a claim for contribution due to lack of notice. 6 Order 13:19-15:16. The Court found that Plaintiff 7 adequately alleged that Defendant had sufficient inquiry 8 notice of the potential for a contribution claim. Id. 9 Nevertheless, Defendant’s current Motion restates the 10 same notice argument, contending that Defendant did not 11 have constructive notice and thus that Plaintiff cannot 12 state “any claim” against Defendant. See Second Mot. 13 3:15-4:11. 14 Although Defendant does not expressly ask the Court 15 to reconsider the conclusions it reached in the prior 16 Order, Defendant’s Motion functions as a motion for 17 reconsideration and should be analyzed as such. See 18 Laub v. Horbaczewski, No. CV 17-6210-JAK (KSX), 2020 WL 19 7978227 at *4 (C.D. Cal. Nov. 17, 2020) (analyzing a 20 motion to compel and for sanctions as a motion for 21 reconsideration where it “essentially request[ed] that 22 the [c]ourt revisit its [prior] ruling”).2

23 2 Defendant contends that it may repeat its constructive 24 notice argument because the filing of an amended complaint allows the Court to alter its prior judgment. Reply 22:19-24:4. 25 However, Defendant provides no authority for the proposition that the filing of an amended complaint authorizes a court to revisit 26 previously rejected arguments attacking claims that remain 27 identical in the amended complaint. Cf. Askins v. U.S. Dep’t of Homeland Sec., 899 F.3d 1035, 1043 (9th Cir. 2018) (discussing 28 the standard for evaluating an amended complaint itself rather than the standard for reconsideration of previously rejected 9 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 10 of 17 Page ID #:1042

1 Local Rule 7–18 allows reconsideration “of the

2 decision on any motion,” which includes interlocutory

3 orders such as an order denying a motion to dismiss or 4 granting a motion to dismiss without prejudice. C.D. 5 Cal. L.R. 7–18; see also United States v. Curiel, No. 6 2:05–cr–00889–RSWL, 2015 WL 143897, at *1 (C.D. Cal. 7 Jan. 12, 2015). 8 A motion for reconsideration pursuant to Local Rule 9 7–18 may be made only on the following grounds: 10 (a) a material difference in fact or law from 11 that presented to the Court before such 12 decision that in the exercise of reasonable diligence could not have been known to the 13 party moving for reconsideration at the time of 14 such decision, or

15 (b) the emergence of new material facts or a 16 change of law occurring after the time of such decision, or 17

18 (c) a manifest showing of a failure to consider material facts presented to the Court before 19 such decision. 20 21 C.D. Cal. L.R. 7–18; see In re Countrywide Fin. Corp. 22 Mortg.-Backed Sec. Litig., 966 F. Supp. 2d 1031, 1036 23 (C.D. Cal. 2013). Additionally, a motion for 24 reconsideration must not “repeat any oral or written 25 argument made in support of or in opposition to the 26 arguments in a motion to dismiss). Even if the standard for 27 reconsideration were somehow lower in this procedural context, the Court declines to alter its previous rulings for the reasons 28 stated below. 10 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 11 of 17 Page ID #:1043

1 original motion.” C.D. Cal. L.R. 7–18.

2 Defendant has not demonstrated that the Court’s

3 prior decision was erroneous, nor that any of the 4 limited circumstances for reconsideration apply here. 5 Defendant appears to confuse two distinct notice 6 requirements. As the Court explained in its prior 7 Order, the notice required for a contribution claim is 8 distinct from the notice that an insured must give its 9 insurer to trigger the insurer’s duty to indemnify and 10 defend. This is because a coinsurer’s right to 11 contribution is not governed by the terms of either 12 insurance policy. Therefore, “an insured’s lack of 13 tender or compliance with a policy provision is not 14 fatal to a coinsurer’s right of equitable contribution; 15 rather, adequate notice of the potential for 16 contribution and the opportunity for investigation and 17 participation in the defense in the underlying 18 litigation will suffice.” OneBeacon Am. Ins. Co. v. 19 Fireman’s Fund Ins. Co., 95 Cal. Rptr. 3d 808, 822 (Cal. 20 Ct. App. 2009). The Court carefully considered 21 Plaintiff’s allegations regarding Defendant’s notice of 22 DLR’s involvement in the Foster litigation, and it 23 determined that Plaintiff had pled notice sufficient to 24 state a claim for contribution against Defendant. The 25 Court declines to revisit that conclusion here.3

26 3 Defendant provides no authority holding that the notice 27 standard for indemnity is different from that for contribution, and the Court could find none. A claim for indemnity lies where 28 “one party pays a debt for which another is primarily liable and which in equity and good conscience should have been paid by the 11 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 12 of 17 Page ID #:1044

1 As such, Defendant may not repeat its prior

2 arguments about its lack of notice simply because it is

3 dissatisfied with the Court’s prior conclusions. See 4 Rhodes v. Pfeiffer, No. CV 14-7687, 2017 WL 10519635, at 5 *1 (C.D. Cal. June 30, 2017) (noting that litigants may 6 not use motions for reconsideration to get a “proverbial 7 second bite at the apple”) (internal quotation marks and 8 citation omitted); Laub v. Horbaczewski, No. CV 17-6210- 9 JAK (KSX), 2020 WL 7978227 at *4 (C.D. Cal. Nov. 17, 10 2020) (denying reconsideration where movant failed to 11 show court error or material difference in fact or law). 12 ii. MCS-90 Endorsement 13 Because the Court finds that Plaintiff’s 14 contribution and indemnity claims survive Defendant’s 15 Motion based on adequate notice, the Court need not 16 address whether the MCS-90 endorsement attached to 17 Defendant Policy provides an alternative basis for these 18 claims. Nevertheless, the Court briefly notes its 19 previous finding that the public protection purpose of 20 the MCS-90 endorsement has been fulfilled in this case 21 “[b]ecause Trimble, the injured member of the public, 22 has already been compensated for his injuries.” Order 23 11:8-12. Thus, as with Plaintiff’s prior claims for

24 latter party.” Travelers Indem. Co. of Conn. v. Navigators 25 Specialty Ins. Co., 285 Cal. Rptr. 3d 289, 308 (Cal. Ct. App. 2021). Like contribution, equitable and implied indemnity are 26 “premised on a joint legal obligation to another” and are not governed by the language of the insurers’ respective policies. 27 Prince v. Pac. Gas & Elec. Co., 202 P.3d 1115, 1120 (2009). Thus, Plaintiff’s indemnity claims similarly survive Defendant’s 28 arguments concerning lack of notice. 12 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 13 of 17 Page ID #:1045

1 subrogation, the MCS-90 is irrelevant to Plaintiff’s

2 claims for contribution and indemnity.4

3 This is not to say that declining to apply the MCS- 4 90 endorsement here in any way precludes Plaintiff’s 5 claims for contribution and indemnity. As the Court has 6 explained, claims for equitable contribution and 7 indemnity do not arise out of a contract between two 8 insurers and thus are not controlled by the language of 9 either policy. See Fireman’s Fund Ins. Co. v. Md. Cas. 10 Co., 77 Cal. Rptr. 2d 296, 313 (Cal. Ct. App. 1998); 11 Travelers, 285 Cal. Rptr. 3d at 308. Plaintiff has pled 12 facts sufficient to plausibly allege that Defendant had 13 notice of DLR’s addition to the Foster litigation. 14 Plaintiff can therefore state claims for contribution 15 and indemnity regardless of the protections afforded by 16 the MCS-90 endorsement. 17 In sum, the FAC alleges notice sufficient to state 18 claims for contribution and indemnity. The Court 19 therefore DENIES Defendant’s Motion as to Plaintiff’s 20 first through eighth claims for contribution, indemnity, 21 and declaratory relief. 22 b. Negligence and Tort of Another 23 Plaintiff’s FAC fails to state claims for 24

25 4 This holding is consistent with the majority view that the MCS-90 endorsement applies only “when necessary to protect 26 injured members of the public” and does not control the allocation of loss among insurers. Canal Ins. Co. v. Distrib. 27 Servs., Inc., 320 F.3d 488, 492-93 (9th Cir. 2003) (collecting cases); see also John Deere Ins. Co. v. Nueva, 229 F.3d 853, 858 28 (9th Cir. 2000). 13 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 14 of 17 Page ID #:1046

1 negligence and common law and statutory tort of another.

2 To state a claim for either negligence or tort of

3 another, Plaintiff must establish that Defendant owed it 4 a duty of due care. Artiglio v. Corning, Inc., 18 Cal. 5 4th 604, 614 (1998); Zahnleuter v. Lenhart, No. 2:20-CV- 6 02492-KJM-KJN, 2021 WL 1721812, at *4 (E.D. Cal. Apr. 7 30, 2021) (internal citations omitted). In a dispute 8 between insurers like the one here, a primary insurer 9 owes an excess insurer a duty of good faith identical to 10 that owed to the insured. Diamond Heights Homeowners’ 11 Ass’n v. Nat’l Am. Ins. Co., 227 Cal. App. 3d 563, 579 12 (1991). As such, the excess carrier may recover in tort 13 against the primary insurer only through equitable 14 subrogation, by subrogating to the rights of the 15 insured.5 Id.; see also Signal Cos., Inc. v. Harbor 16 Ins. Co., 27 Cal. 3d. 359, 365 (1980) (“[T]he primary 17 carrier, in settling an action, owes a duty of good 18 faith to the excess carrier based on the theory of 19 equitable subrogation.”). 20 As the Court has previously held, Plaintiff cannot 21 state a claim for subrogation because Plaintiff has not 22

23 5 Plaintiff argues that duty is established because California Civil Code section 1714 imposes liability on any 24 person for “an injury occasioned to another by his or her want of 25 ordinary care or skill in the management of his or her property or person.” However, this general provision cannot be relied 26 upon to establish the legal duty of a defendant in a particular case. Lundy v. Cal. Realty, 170 Cal. Rptr. 575, 577-78 (Cal. Ct. 27 App. 1985). Rather, the duty owed by Defendant in this particular insurance context has been defined through the case 28 law cited above. 14 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 15 of 17 Page ID #:1047

1 alleged facts establishing that DLR itself has an

2 existing, assignable cause of action against Defendant.

3 Indeed, any duty Defendant owed to DLR was extinguished 4 because DLR failed to timely tender its defense to 5 Defendant. See Order 10:5-14. Because Defendant owed 6 no duty to DLR, Defendant likewise owed no duty to 7 Plaintiff. Plaintiff’s claims for negligence and tort 8 of another therefore fail. 9 The MCS-90 endorsement is no help to Plaintiff’s 10 claims for negligence and tort of another. As explained 11 above, the MCS-90 does not apply in this dispute between 12 insurers. While the MCS-90 endorsement creates a 13 suretyship relationship, the insurer becomes a surety to 14 protect the public only. See Harco Nat. Ins. Co. v. 15 Bobac Trucking Inc., 107 F.3d 733, 736 (9th Cir. 1997). 16 Because the injured members of the public — the Foster 17 plaintiffs — have been compensated in this case, the 18 MCS-90 endorsement does not give rise to a duty on the 19 part of Defendant, and therefore it does not create any 20 rights which Plaintiff may be subrogated to. 21 Because Defendant owed no duty to Plaintiff based 22 either on subrogation or on its suretyship obligations 23 under the MCS-90 endorsement, Plaintiff cannot state 24 claims for negligence or for common law or statutory 25 tort of another. As such, the Court GRANTS Defendant’s 26 Motion as to Plaintiff’s ninth through eleventh claims 27 for negligence and tort of another. 28 /// 15 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 16 of 17 Page ID #:1048

1 c. Leave to Amend

2 “The Court should give leave [to amend] freely when

3 justice so requires.” Fed. R. Civ. P. 15(a)(2). While 4 the Ninth Circuit has “stressed Rule 15’s policy of 5 favoring amendments,” leave need not be granted where 6 amendment would be “an exercise in futility.” Ascon 7 Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th 8 Cir. 1989). 9 Here, allowing Plaintiff to amend the FAC would be 10 futile because Plaintiff has not indicated the existence 11 of any additional facts that would establish the duty 12 required for negligence or tort of another. The Court 13 previously afforded Plaintiff an opportunity to amend 14 its subrogation claims to allege that Defendant owed a 15 duty to DLR, and Plaintiff declined to do so. Plaintiff 16 has not indicated that it could allege any additional 17 facts to establish such a duty. The Court therefore 18 finds that amendment of these claims would be futile and 19 dismisses Plaintiff’s negligence and tort of another 20 claims without leave to amend. See Cahill v. Liberty 21 Mut. Ins. Co., 80 F.3d 336, 339 (9th Cir. 1996) (holding 22 that district court did not abuse discretion in denying 23 leave to amend where amendment would be futile). 24 III. CONCLUSION 25 Based on the foregoing, the Court GRANTS in part 26 and DENIES in part Defendant’s Motion. The Court DENIES 27 the Motion as to Plaintiff’s first through eighth claims 28 for contribution, indemnity, and declaratory relief. 16 Case 2:21-cv-04377-RSWL-JDE Document 45 Filed 08/12/22 Page 17 of 17 Page ID #:1049

1 The Court GRANTS the Motion as to Plaintiff’s ninth

2 through eleventh claims for negligence and tort of

3 another without leave to amend. 4 IT IS SO ORDERED. 5 6 DATED: August 12, 2022 ____/_s_/ _R_o_n_a_ld_ S_._W__. L_e_w________ HONORABLE RONALD S.W. LEW 7 Senior U.S. District Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17