Columbia Casualty Company v. Cottage Health System
Filing
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ORDER GRANTING MOTION TO DISMISS 13 . The Court therefore DISMISSES the complaint WITHOUT PREJUDICE, so that the parties may pursue alternative dispute resolution under the terms of the policy by Judge Dean D. Pregerson . (MD JS-6. Case Terminated) . (lc) Modified on 7/17/2015 (lc).
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JS-6
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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COLUMBIA CASUALTY COMPANY,
an Illinois corporation,
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Plaintiff,
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v.
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COTTAGE HEALTH SYSTEM, a
California organization,
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Defendant.
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Case No. CV 15-03432 DDP (AGRx)
ORDER GRANTING MOTION TO DISMISS
[Dkt. No. 13]
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The parties in this action agree that they intend to attempt
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to resolve their dispute via mediation, as provided for in the
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insurance policy that is the subject of this action.
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at 4; Opp’n at 1.)
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dismiss the case altogether or to issue a stay.
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the parties’ submissions, the Court concludes that dismissal is
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appropriate.
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(Mot. Dismiss
The sole question in this motion is whether to
Having considered
The insurance policy provides that “[a]ll disputes and
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differences between the Insured and the Insurer which may arise
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under or in connection with this policy . . . shall be submitted to
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the alternative dispute resolution (“ADR”) process” and that if
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mediation is the chosen method of ADR “no . . . judicial proceeding
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shall be commenced until the mediation shall have been terminated
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and at least 60 days shall have elapsed from the date of the
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termination . . . .”
(Mot. Dismiss, Ex. A at 18.)
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The Court concludes that the above language controls the
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timing of suits arising out of the policy and requires that the ADR
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process take place before a lawsuit is initiated.
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no argument that the ADR provision is unconscionable or otherwise
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unenforceable as a matter of contract, and the provision does not
Plaintiff makes
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deprive Plaintiff of the right to bring a lawsuit if mediation
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fails.
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agreement.
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There is therefore no reason not to hold Plaintiff to its
Faced with a nearly identical ADR clause in a previous case,
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this Court concluded that dismissal was appropriate by treating the
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motion as a “‘non-enumerated’ Rule 12(b) motion[]” based on,
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essentially, “failure to exhaust non judicial remedies.”
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v. Nat'l Union Fire Ins. Co. of Pittsburgh PA, No. EDCV 12-00704
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DDP, 2012 WL 3257877, at *3 n.5 (C.D. Cal. Aug. 7, 2012).
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the case the Court relied on in Previti has since been overruled.
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Albino v. Baca, 747 F.3d 1162, 1171 (9th Cir. 2014) (overruling,
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inter alia, Inlandboatmens Union of the Pac. v. Dutra Grp., 279
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F.3d 1075, 1078 n. 2 (9th Cir.2002)).
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“non-enumerated” Rule 12(b) motions altogether as “not contemplated
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by” the Federal Rules, but in any event they are no longer a
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feasible mechanism for dealing with exhaustion questions, including
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failure to arbitrate or mediate.
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Previti
However,
Albino appears to disfavor
Id. at 1169.
The Albino court therefore laid out two alternative procedures
for dispensing with unexhausted claims.
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First, “where a failure to
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exhaust is clear from the face of the complaint, a defendant may
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successfully move to dismiss under Rule 12(b)(6) for failure to
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state a claim.”
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judicial remedies is not clear on the face of the complaint, the
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opposing party may move for summary judgment.
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for summary judgment is denied, disputed factual questions relevant
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to exhaustion should be decided by the judge, in the same manner a
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judge rather than a jury decides disputed factual questions
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relevant to jurisdiction and venue.”
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Id.
Second, where the failure to exhaust non-
Id.
“If a motion
Id. at 1170-71.
This should
all take place, “if feasible,” at the start of litigation.
Here, the Court concludes that failure to exhaust is clear
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from the face of the complaint.
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include the full policy or the ADR clause.
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fundamentally relies on the policy, and it may therefore be
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incorporated into the complaint by reference.
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Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (“Even if a document is
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not attached to a complaint, it may be incorporated by reference
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into a complaint if the plaintiff refers extensively to the
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document or the document forms the basis of the plaintiff's
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claim.”).
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the ADR clause in filing the action; nor, indeed, has Plaintiff
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argued otherwise.
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judicial remedies required by the contract is therefore apparent on
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the face of the complaint.1
Plaintiff’s complaint does not
However, the complaint
United States v.
The complaint does not allege that Plaintiff abided by
That Plaintiff has not exhausted the non-
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Plaintiff also provides no argument that it will suffer
prejudice if the action is dismissed rather than stayed, such as
the running of a statute of limitations. Thus, there is no
equitable or other concern on the table that would counsel against
dismissal.
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The Court therefore DISMISSES the complaint WITHOUT PREJUDICE,
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so that the parties may pursue alternative dispute resolution under
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the terms of the policy.
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IT IS SO ORDERED.
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Dated: July 17, 2015
DEAN D. PREGERSON
United States District Judge
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