Timmons v. Elco Administrative Services et al

Filing 26

ORDER granting 9 ELCO's Motion to Dismiss Plaintiff's claim for aiding and abetting. Signed by Senior Judge Paul G Rosenblatt on 9/16/13.(LSP)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Shuntrice Timmons,

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Plaintiff,
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v.
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ELCO Administrative Services, et al., )
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Defendants.
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CIV. 13-00846-PHX-PGR
ORDER

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Before the Court is Defendant ELCO Administrative Services’ motion to dismiss

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Plaintiff’s claim for aiding and abetting. (Doc. 9.) Plaintiff filed a response in opposition

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(Doc. 13), to which Defendants replied (Doc. 14). Having reviewed the pleadings, and

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determined that oral argument is unnecessary, the Court issues the following Order.

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BACKGROUND
Plaintiff filed a complaint in Maricopa County Superior Court on March 25, 2013.
(Doc. 1, Ex. A.) Defendant removed the case on April 25, 2013. (Doc. 1.)

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According to the complaint, Angela Sockwell rented a vehicle from Defendant

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Enterprise Leasing Company of Phoenix, LLC (“Enterprise Leasing”), on November 6, 2010.

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(Id., Ex. A,. ¶ 7). Pursuant to her rental agreement, Sockwell added Equalown Lorthridge as

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an additional authorized driver. (Id., ¶ 10). Sockwell allowed Lorthridge to operate the

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vehicle under the influence of alcohol, and Lorthridge negligently caused an accident,

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injuring Plaintiff, who was a passenger in the vehicle. (Id., ¶¶ 13-18). Plaintiff alleges she

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made insurance coverage demands under the rental agreement to Enterprise Leasing’s third

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party claims administrator, ELCO, and ELCO declined to provide coverage based on the

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terms of the rental agreement. (Id., ¶¶ 20–42).

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On March 25, 2013, after receiving an assignment of rights from Sockwell and

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Lorthridge, Plaintiff filed suit against Enterprise Leasing and ELCO. (Id., ¶ 44–54).

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Plaintiff’s Complaint alleges that Enterprise Leasing breached a contract of insurance implied

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by Arizona law within the motor vehicle rental agreement (Count 1) and breached a duty of

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good fair and fair dealing (Count 2), and that ELCO aided and abetted Enterprise Leasing’s

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breach of the implied covenant of good faith and fair dealing (Count 3). (Id., ¶¶ 76–82).

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DISCUSSION

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ELCO moves to dismiss Plaintiff’s aiding and abetting claim under Rule 12(b)(6) of

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the Federal Rules of Civil Procedure. (Doc. 9.) ELCO argues that Plaintiff “fails to state an

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aiding and abetting claim against ELCO because she does not allege ELCO committed

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tortious acts separate from those forming the basis of her bad faith claim against Enterprise

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Leasing.” (Id. at 3.) The Court agrees. The only tortious act Plaintiff alleges is Enterprise’s

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breach its duty of good faith and fair dealing. This breach is based solely on the fact that

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ELCO, acting as Enterprises’s third-party administrator, denied coverage, allegedly based

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on an inadequate investigation of the accident.

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The Court may dismiss a complaint for failure to state a claim under Rule 12(b)(6) for
lack of a cognizable legal theory or insufficient facts alleged under a cognizable legal theory.
Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). To survive a motion
to dismiss, a complaint must meet the requirements of Federal Rule of Civil Procedure
8(a)(2), which requires a “short and plain statement of the claim showing that the pleader is
entitled to relief.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
In deciding a motion to dismiss under Rule 12(b)(6), the Court must construe the facts
alleged in the complaint in the light most favorable to the drafter of the complaint and the

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Court must accept all well-pleaded factual allegations as true. See Shwarz v. United States,

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234 F.3d 428, 435 (9th Cir. 2000). However, the Court does not have to accept as true a legal

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conclusion couched as a factual allegation. Papasan v. Allain, 478 U.S. 265, 286 (1986).

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Three elements are required to establish a claim for aiding and abetting under Arizona

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law: “(1) the primary tortfeasor must commit a tort that causes injury to the plaintiff; (2) the

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defendant must know that the primary tortfeasor’s conduct constitutes a breach of duty; and

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(3) the defendant must substantially assist or encourage the primary tortfeasor in the

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achievement of the breach.” Wells Fargo Bank v. Arizona Laborers et al., 201 Ariz. 474,

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485, 38 P.3d 12, 23 (2002); see Young v. Liberty Mut. Group, Inc., No. CV-12-2032-PHX-

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JAT, 2011 WL 840618, at *3 (D.Ariz. March 6, 2013). The third element, substantially

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assisting or encouraging the primary tortfeasor, requires the secondary tortfeasor to have

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committed a separate tortious act in concert with the primary tortfeasor. Young, 2013 WL

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840618, at *2–3. Therefore, to state a claim for aiding and abetting Enterprise Leasing’s bad

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faith, Plaintiff is required to allege ELCO took a separate action in concert with the actions

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giving rise to the claim against Enterprise. Id.

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Accepting the facts set forth in the complaint as true, Plaintiff does not allege that

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ELCO took any action separate and apart from the alleged conduct giving rise to her claims

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for breach of contract and bad faith against Enterprise Leasing. Instead, Plaintiff’s bad faith

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claim against Enterprise is based entirely on the conduct of ELCO as Enterprise’s claims

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administrator. As in Young, Plaintiff’s aiding and abetting claim fails because it “alleges only
one tortious act: failing, in bad faith, to conduct an adequate investigation and make timely
benefit payments.” Young, 2013 WL 840618 at *3.
In addition, as ELCO notes, the second element of an aiding and abetting claim cannot
be satisfied here. Plaintiff must show that ELCO knew the primary tortfeasor’s conduct
constituted a breach of duty.” Wells Fargo, 38 P.3d at 23. In this case, however, there is no
conduct by the primary tortfeasor because the bad faith claim against Enterprise Leasing is

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based entirely on the conduct of ELCO. Therefore, the second element of an aiding and

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abetting claim cannot be satisfied since ELCO “could not have known about conduct that did

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not exist.” Young, 2013 WL 840618 at *4.
CONCLUSION

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The Court has accepted all material allegations in the complaint as true, and construed

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them in the light most favorable to Plaintiff. For the reasons set forth above, the complaint

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does not make out a cognizable legal theory or allege facts sufficient to support a cognizable

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legal theory with respect to the aiding and abetting claim (Count 3).

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Accordingly,
IT IS HEREBY ORDERED granting ELCO’s motion to dismiss Plaintiff’s claim for
aiding and abetting (Doc. 9).1
DATED this 16th day of September, 2013.

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ELCO requests attorneys’ fees under ARS § 12-341.01(a). (Doc. 9 at 5.) ELCO may
file a motion for attorneys’ fees and costs in accordance with LRCiv 54.2.
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