McQueen v. MetLife Auto & Home ( 2023 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Roxanne B McQueen, No. CV-22-01018-PHX-DLR 10 Plaintiff, ORDER 11 v. 12 MetLife Auto & Home, et al., 13 Defendants. 14 15 Before the Court is Defendant Farmers Insurance Group’s motion to dismiss 16 (Doc. 21) and Plaintiff Roxanne McQueen’s related motion for leave to amend (Doc. 41). 17 Both are fully briefed.1 For the following reasons, Farmers Insurance Group’s motion is 18 granted, and Plaintiff’s motion is denied without prejudice. 19 I. Background 20 This case arises from an insurance claim following a car accident involving Plaintiff, 21 her minor daughter, and an underinsured motorist. (See Doc. 20.) On April 25, 2021, 22 Plaintiff was driving her car with her daughter as a passenger when an underinsured 23 motorist t-boned her vehicle, seriously injuring Plaintiff and her daughter. (Id. ¶¶ 16–18.) 24 The underinsured motorist’s insurance carrier, GEICO, paid Plaintiff its policy limit of 25 $100,000. (Id. ¶ 25.) Plaintiff held an active automobile insurance policy with Defendant 26 Metropolitan Group Property and Casualty Insurance Company (“MetLife”). (Id. ¶ 11.) 27 1 Oral argument is denied because the motions are adequately briefed, and oral 28 argument will not help the Court resolve the issues presented. See Fed. R. Civ. P. 78(b); LRCiv. 7.2(f). 1 Plaintiff filed a claim with MetLife for Underinsured Motorist Coverage, claiming she was 2 inadequately compensated by the underinsured motorist’s policy payout. (Id. ¶¶ 27, 39.) 3 Plaintiff claims that, as of April 7, 2021, Farmers Insurance Group acquired 4 MetLife’s home and auto policies, including her own, and assumed responsibility for those 5 policies. (Id. ¶¶ 28–32.) Accordingly, it was a Farmers Insurance Group adjuster, rather 6 than a MetLife adjuster, who allegedly adjusted and ultimately denied Plaintiff’s claim for 7 Underinsured Motorist Coverage. (Id. ¶¶ 33–34, 43.) Plaintiff alleges that Defendants 8 “failed to properly evaluate and investigate Plaintiff’s . . . damages from th[e] collision.” 9 (Id. ¶ 38.) If Defendants had done so, Plaintiff claims, they would have “fully 10 compensate[d]” Plaintiff for her damages. (Id. ¶ 40.) 11 Following the claim denial and unsuccessful settlement negotiation, Plaintiff filed 12 this action against Defendants in state court. Defendants removed the action on diversity 13 jurisdiction, bringing the matter before this Court. Plaintiff asserts breach of contract and 14 bad faith claims. (Id. ¶¶ 50–71.) Farmers Insurance Group has moved to dismiss the claims 15 against it, arguing it is merely a federally registered service mark and thus a non-jural 16 entity. (Doc. 21.) Even if it could be subject to suit, Farmers Insurance Group asserts that 17 Plaintiff failed to state a claim against any Farmers entity because she contracted with— 18 and could only recover damages from—MetLife, not Farmers. (Id. at 4–5.) 19 Plaintiff subsequently filed a motion requesting leave to amend.2 (Doc. 41.) The 20 parties agree that amending the complaint to remove Plaintiff’s minor child as a plaintiff 21 2 Paragraph 3 of the Court’s standard order issue on June 14, 2022 requires a party 22 who responds to a motion to dismiss with a request, in the alternative, for leave to amend to “submit, no later than the time Plaintiff files a response to the motion, a proposed 23 amended complaint that complies with LRCiv. 15.1(a) and contains all further allegations Plaintiff could make. In the event a motion to dismiss . . . is granted in any part, no leave 24 to amend the complaint will be granted beyond what is offered in the proposed amended complaint.” The purpose of this order is to streamline the process and to ensure that drive- 25 by, one-sentence requests for leave to amend added to the conclusion of a response in opposition to a motion to dismiss comport with LRCiv. 15.1(a). Here, Plaintiff included 26 such a drive-by request in the last sentence of her response in opposition to Farmers Insurance Group’s motion to dismiss (Doc. 28 at 11) but did not comply with the Court’s 27 order by submitting a proposed amended pleading at that time. Instead, Plaintiff waited a month after the close of briefing on the motion to dismiss to file her motion for leave to 28 amend and the accompanying proposed amended pleading. The Court reminds all parties to review the Court’s order and to take care to comply in the future. 1 is appropriate. (Doc. 46 at 8.) The disagreement stems from Plaintiff’s proposal to remove 2 Farmers Insurance Group as a defendant and instead assert her breach of contract claim 3 against Farmers Group Property and Casualty Insurance Company (aka Metropolitan 4 Group Property and Casualty Insurance Company) (“Farmers P & C”) and her breach of 5 contract and bad faith claims against Farmers Insurance Exchange (“FIE”). (Doc. 43; Doc. 6 41-1.) 7 II. Motion to Dismiss 8 Dismissal of a complaint is appropriate when a plaintiff fails to “state a claim to 9 relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 10 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows 11 the court to draw the reasonable inference that the defendant is liable for the misconduct 12 alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 13 To state a claim for breach of contract, “the Plaintiff must plead facts alleging (1) a 14 contract exists between the plaintiff and defendant; (2) the defendant breached the contract; 15 and (3) the breach resulted in damage to the plaintiff.” Hannibal-Fisher v. Grand Canyon 16 University, 523 F. Supp. 3d 1087, 1093 (D. Ariz. 2021) (quotation and citation omitted). 17 Farmers Insurance Group contends, and Plaintiff does not dispute, that it is a federally 18 registered service mark owned by Farmers Insurance Exchange, an inter-insurance 19 exchange. (Doc. 3 at 3.) A service mark essentially is a trademark for services. Service 20 Mark, Black’s Law Dictionary (11th ed. 2019). It is not a jural entity. Because a service 21 mark lacks the capacity to contract, to sue, and to be sued, Plaintiff has not stated a plausible 22 claim against Farmers Insurance Group. The motion to dismiss therefore is granted. 23 III. Motion for Leave to Amend 24 Leave to amend should be granted “when justice so requires.” Fed. R. Civ. P. 25 15(a)(2). In deciding whether to grant leave to amend, the Court considers several factors, 26 including: “(1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility 27 of amendment; and (5) whether plaintiff has previously amended his complaint.” Allens v. 28 City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990). “Leave to amend may be denied 1 if the proposed amendment is futile or would be subject to dismissal.” Wheeler v. City of 2 Santa Clara, 894 F.3d 1046, 1059 (9th Cir. 2018). 3 Plaintiff has amended her complaint once previously. (See Doc. 20.) Still, the Court 4 finds no evidence of bad faith, undue delay, or prejudice. Because the defect in Plaintiff’s 5 operative complaint is merely a misnomer (the naming of a service mark rather than a jural 6 Farmers entity), leave to amend would typically be granted. See Simon v. Maricopa Med. 7 Ctr., 234 P.3d 623, 628–29 (Ariz. Ct. App. 2010). Farmers Insurance Group argues, 8 however, the proposed amendment is futile because no Farmers entity may properly be 9 sued here. It therefore is necessary for the Court to understand the nature of the Farmers 10 entities Plaintiff wishes to sue, and their relationship to her insurance contract. 11 Unfortunately, Plaintiff confuses the entities and leaves the Court unable to make 12 these determinations. In her motion and proposed amended pleading, Plaintiff claims that 13 Farmers P & C is a proper defendant because MetLife changed its name to Farmers P & C. 14 (Doc. 41 at 1; Doc 41-1 at ¶¶ 3, 8.) In the same breath, however, Plaintiff asserts that 15 Farmers P & C acquired MetLife. (Doc. 41-1 at ¶ 8.) At other points, she suggests that 16 MetLife still exists and remains a separate entity. (Id. ¶ 39; Doc. 41 at 4.) Additionally, in 17 her motion, Plaintiff characterizes FIE as a subsidiary of Farmers P & C (Doc. 41 at 4), but 18 her proposed amended pleading states that Farmers P & C is a wholly owned subsidiary of 19 a (presumably distinct) entity called Farmers Property and Casualty Insurance Company, 20 which is itself a direct, wholly owned subsidiary of FIE. (Doc 41-1 at ¶ 2.) It consequently 21 is unclear which corporate veil Plaintiff is attempting to pierce. 22 Given these discrepancies and internal contradictions, the Court cannot adequately 23 discern exactly what entities Plaintiff is suing and how she claims they are related to her 24 insurance contract. The Court therefore will deny Plaintiff’s motion for leave to amend 25 without prejudice to her submitting a new motion and proposed amended pleading that 26 corrects these discrepancies and internal contradictions so that the Court may properly 27 evaluate whether she is suing a Farmers entity with a sufficient connection to her insurance 28 contract. 1 IT IS ORDERED that Farmers Insurance Group’s motion to dismiss (Doc. 21) is 2 || GRANTED. Farmers Insurance Group is dismissed from this action. 3 IT IS FURTHER ORDERED that Plaintiff's motion for leave to amend (Doc. 41) 4|| is DENIED without prejudice to Plaintiff renewing her motion in a manner that addresses 5 || the discrepancies identified in this order. 6 Dated this 14th day of March, 2023. 7 8 : Apues le 10 _- Ch 11 Ubited States Dictric Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5-