Reitz et al v. Progressive Direct Insurance Company et al

Filing 32

ORDER signed by Judge Garland E. Burrell, Jr. on 7/9/2015 DENYING 26 Rule 12(c) Motion and 27 Motion in Limine. (Zignago, K.)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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MISTY DAWN REITZ AND NICHOLAS
IVEY,
Plaintiffs,

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v.
PROGRESSIVE DIRECT INSURANCE
COMPANY, an Ohio Corporation
registered to do business in
the State of California, and
DOES 1 through 200,
inclusive,

No. 2:14-CV-01614-GEB-EFB

ORDER DENYING DEFENDANT’S MOTION
FOR PARTIAL JUDGMENT ON THE
PLEADINGS AND ITS IN LIMINE
MOTION

Defendants.

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Defendant

Progressive

Direct

Insurance

Company

moves

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for partial judgment on the pleadings under Federal Rule of Civil

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Procedure (“Rule”) 12(c), contending “[P]laintiffs’ claims for

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extra-contractual damages . . . are not recoverable in contract

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and are barred by this Court’s August 27, 2014, Order dismissing

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Plaintiffs’ tort-based claim for breach of the implied covenant

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of good faith and fair dealing.” (Def. Mot. J. Pleadings 2:3-5,

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ECF No. 26.) Defendants also move in the alternative for an order

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excluding “any evidence [from] trial related to [Plaintiffs’]

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claims for extra-contractual damages... on relevance grounds.”

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(Def. MTE 2:2-4, ECF No. 27.)
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Plaintiffs argue as follows concerning Defendant’s Rule

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12(c) motion:
The motion under Rule 12(c) of the Federal
Rules of Civil Procedure depends upon the
pleadings[,] and paragraphs 16, 17, and 18 of
the complaint plead an implied contract to
investigate claims fairly and in good faith
and further plead a breach of that implied
contract by [Defendant].
Read collectively
with paragraph 19, these paragraphs allege
that the breach of this promise proximately
resulted in damage to [Plaintiffs] . . . of a
nature
that
was
not
only
contemplated
by the parties at the inception of the
agreement,
but
that
was
specifically
understood by the parties to be a likely
result of a breach by [Defendant] and
constituted
substantial
bargained
for
consideration on the part of [Plaintiffs].
Those pleadings cannot be read to allow
[Defendant] judgment on them . . . under
California contract law.

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(Mem. Opp’n MIL & Mot. Partial J. (“Opp’n”) 11:17-12:2, ECF No.

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29.)

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Defendant’s Rule 12(c) motion is “functionally identical to

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[a motion under] Rule 12(b)(6) and . . . the same standard of

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review applies to motions brought under either rule.” Cafasso,

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U.S. ex. rel. v. Generay Dynamics C4 Sys., 637 F.3d 1047, 1054

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n.4 (9th Cir. 2011) (quotation omitted)). “To survive [a motion

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for

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sufficient factual matter, accepted as true, to state a claim to

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relief that is plausible on its face.” Caviness v. Horizon Cmty.

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Learning Ctr., Inc., 590 F.3d 806, 812 (9th Cir. 2010).

judgment

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on

the

Defendant

pleadings],

does

not

a

complaint

challenge

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this

has

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proceed

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sounding in contract, Plaintiffs are foreclosed from seeking any

with

their

claim

for

breach

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that
of

argues:

of

factual

determined

it

plausibility

Plaintiffs’

already

rather

contain

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Court

allegations;

the

must

“[b]ecause

Plaintiffs
the

implied

may

only

covenant

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damages over the limit of liability specified in the policy of

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insurance,”

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contractual damages . . . are not recoverable.” (Def. Mot. 6:7-9;

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6:14-16.)

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referenced prior ruling addressed the contractual damages claim

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Defendant asserts it now challenges.

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and

therefore

However,

“Plaintiffs’

Defendant

has

not

allegations

shown

that

of

the

extra-

Court’s

Plaintiffs allege in their Complaint that they “entered

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into

a[]

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Defendant “would indemnify [Plaintiffs] from any damage that they

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may sustain by reason of fire to or theft of [their vehicle;]”

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however, after their vehicle was stolen and destroyed in a

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Defendant “refused to indemnify [Plaintiffs on the grounds that]

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. . .

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deliberately procured the removal of the [vehicle] from their

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residence and . . . caused [the fire that destroyed it].” (Compl.

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¶¶

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Defendant’s conduct:

4,

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contract”

with

Defendant

stating

fire,

it [had] probable cause to believe [Plaintiffs] . . .

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Plaintiffs

allege

the

following

resulted

from

(Compl. ¶¶ 18-19) (emphasis added.)

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insurance

[They] suffered damages contemplated by the
Policy, in that they were unable to replace
the [vehicle], they were accused of and
prosecuted for criminal activity, they were
subjected to arrest and detention, they lost
past
and
future
income,
and
lost
the
bargained for peace and security of knowledge
that their financial losses covered by the
Policy would be indemnified by [Defendant],
all to their damages in the sum of nine
million, nine hundred fifty thousand dollars
($9,950,000.00,) or according to proof.

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written

The
whether

core

Plaintiffs

of
can

Defendant’s
seek

“extra-contractual damages.”

what

Rule

12(c)

Defendant

motion

concerns

characterizes

as

California Civil Code section 3300,
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the statute under which Plaintiffs’ damages claim is analyzed,

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states:

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[f]or the breach of an obligation arising
from contract, the measure of damages, except
where otherwise expressly provided by this
code, is the amount which will compensate the
party for all the detriment proximately
caused thereby, or which, in the ordinary
course of things, would be likely the result
therefrom.

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Further, the California Supreme Court states in Weaver

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v. Bank of Am. Nat’l Trust & Sav. Ass’n, 59 Cal. 2d 428, 434

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(1963), that in contract actions “[w]hile the causal extent of

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damages may be more limited than in tort, nevertheless, damages

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actually contemplated, or within the reasonable contemplation of

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the parties, are recoverable.”

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In light of this authority, Defendant has not shown it
prevails on its Rule 12(c).

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Plaintiffs also oppose Defendant’s alternative motion

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to exclude from trial any evidence related to Plaintiff’s claim

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for extra-contractual damages, arguing the motion seeks an unripe

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in limine ruling that would prevent evidence from being used at

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trial.

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concrete enough for a judicial ruling, and is therefore denied.

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(Opp’n

4:5-9.)

Defendant’s

alternative

motion

is

not

For the stated reasons, Defendant’s Rule 12(c) motion

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and its alternative motion are DENIED.

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Dated:

July 9, 2015

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