Travelers Indemnity Company of Connecticut et al v. Centex Homes et al

Filing 34

ORDER by Judge Samuel Conti granting 21 Motion to Dismiss (sclc1, COURT STAFF) (Filed on 1/5/2015)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

United States District Court

For the Northern District of California

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TRAVELERS INDEMNITY COMPANY OF
CONNECTICUT; and ST. PAUL FIRE
AND MARINE INSURANCE COMPANY,

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Plaintiffs,

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v.
CENTEX HOMES; and CENTEX REAL
ESTATE CORPORATION,

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Defendants.
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) Case No. 14-cv-02378
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) ORDER GRANTING MOTION TO
) DISMISS
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I. INTRODUCTION
Now pending before the Court is Defendants Centex Homes and

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Centex Real Estate Corporation's (collectively "Defendants" or

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"Centex") motion to dismiss Plaintiffs' First Amended Complaint,

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ECF No. 20 ("FAC"), for lack of subject-matter jurisdiction and

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failure to state a claim.

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of Connecticut ("Travelers Indemnity") and St. Paul Fire and Marine

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Insurance Company ("St. Paul") oppose the motion.

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Plaintiffs Travelers Indemnity Company

The motion is

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fully briefed 1 and suitable for decision without oral argument

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pursuant to Civil Local Rule 7-1(b).

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below, Defendants' motion to dismiss is GRANTED.

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equitable reimbursement and breach of contract claims are DISMISSED

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WITHOUT PREJUDICE.

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DISMISSED WITHOUT PREJUDICE to the extent that they are premised on

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Centex's violation of its duty to cooperate.

For the reasons set forth
Plaintiffs'

Plaintiffs' declaratory relief claims are

United States District Court

For the Northern District of California

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II. BACKGROUND

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This is one of a large number of similar insurance disputes

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between these parties.

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Indemnity and St. Paul (collectively "Plaintiffs") are insurers.

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Id. ¶¶ 1-2.

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Golden State Carpet Service, Inc. (the "Golden Carpet Policies"),

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and St. Paul issued insurance to Mike McCall Landscape, Inc. (the

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"Mike McCall Policy").

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granted Travelers Indemnity the right to retain counsel of its

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choosing in representing the insured (or any additional insureds)

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and included a covenant requiring the insured to cooperate with

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Travelers Indemnity in the investigation or settlement of any

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covered claim or lawsuit against the insured.

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Carpet Policies also prohibited the insured from voluntarily making

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any payment towards its defense without Travelers Indemnity's

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consent.

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retain counsel of its choosing to represent the insured (or any

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Id.

Centex builds homes.

FAC ¶ 3.

Travelers

Travelers Indemnity issued two insurance policies to

Id. ¶¶ 8, 10.

The Golden Carpet Policies

Id. ¶ 9.

The Golden

The Mike McCall Policy granted St. Paul the right to

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ECF Nos. 21 ("Mot."); 22 ("Opp'n"); 25 ("Reply"); 30 ("Travelers
Supp. Br."); 32 ("Centex Supp. Br.").

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additional insureds) and required the insured to cooperate with St.

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Paul in any defense covered by the policy.

Id. ¶ 11.

California filed suit against Centex in California state court,

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alleging a number of construction defects (the "Underlying

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Action").

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Underlying Action to Plaintiffs as an additional insured under the

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United States District Court

In January 2014, several owners of homes in Brentwood,

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For the Northern District of California

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Golden Carpet Policies and the Mike McCall Policy.

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Plaintiffs responded on May 23, 2014 by agreeing to defend Centex

Id. ¶ 12.

On May 2, 2014, Centex tendered the

Id. ¶ 13.

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under a reservation of rights and asserting its right to retain

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counsel of its choice.

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Lee to represent Centex in the Underlying Action.

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On June 18, 2014, Centex responded to Plaintiffs' reservation of

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rights letters by asserting its right to independent counsel.

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Centex also insisted that Plaintiffs pay the fees of Centex's

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independent counsel, Newmeyer & Dillon ("Newmeyer").

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informed Plaintiffs that if they refused to pay Newmeyer's fees,

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Centex would agree to allow Mr. Lee to defend the action only if

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Plaintiffs agreed to pay Mr. Lee's fees as well as all vendor

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invoices in the action.

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between Mr. Lee and Centex, and informed Plaintiffs that Centex

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would file a motion to disqualify counsel and reserved its right to

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seek reimbursement for Newmeyer's fees.

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Id. ¶¶ 14-16.

Plaintiffs appointed David
Id. ¶¶ 14, 17.

Centex

Centex also claimed that conflicts exist

Id. ¶ 17.

In response to Centex's letter, Plaintiffs filed this lawsuit

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in federal court.

Plaintiffs seek declaratory relief under

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California law, in the form of a declaration that, with respect to

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both the Golden Carpet and Mike McCall policies, (1) Plaintiffs

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have the right to control Centex's defense in the Underlying

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Action; (2) Centex is not entitled to the appointment of

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independent counsel; (3) Centex has breached its duty to cooperate;

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and (4) Centex's appointment of independent counsel constitutes a

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voluntary payment for which Plaintiffs are not obligated to

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reimburse Centex.

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reimbursement for any fees they have paid or will pay in defending

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Centex in the underlying action.

Id. ¶¶ 21, 26.

Plaintiffs also seek equitable

Centex now moves to dismiss.

United States District Court

For the Northern District of California

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III. LEGAL STANDARD
A motion to dismiss under Federal Rule of Civil Procedure

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12(b)(6) "tests the legal sufficiency of a claim."

Navarro v.

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Block, 250 F.3d 729, 732 (9th Cir. 2001).

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on the lack of a cognizable legal theory or the absence of

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sufficient facts alleged under a cognizable legal theory."

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Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.

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1988).

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should assume their veracity and then determine whether they

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plausibly give rise to an entitlement to relief."

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Iqbal, 556 U.S. 662, 679 (2009).

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must accept as true all of the allegations contained in a complaint

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is inapplicable to legal conclusions.

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elements of a cause of action, supported by mere conclusory

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statements, do not suffice."

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Twombly, 550 U.S. 544, 555 (2007)).

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complaint must be both "sufficiently detailed to give fair notice

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to the opposing party of the nature of the claim so that the party

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may effectively defend against it" and "sufficiently plausible"

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such that "it is not unfair to require the opposing party to be

"Dismissal can be based

"When there are well-pleaded factual allegations, a court

Ashcroft v.

However, "the tenet that a court

Threadbare recitals of the

Id. (citing Bell Atl. Corp. v.

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The allegations made in a

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subjected to the expense of discovery."

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Starr v. Baca, 652 F.3d

1202, 1216 (9th Cir. 2011).

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IV. DISCUSSION

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A.

Diversity Jurisdiction

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The only basis for subject-matter jurisdiction that Plaintiffs

United States District Court

assert is diversity jurisdiction under 28 U.S.C. Section 1332.

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For the Northern District of California

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¶ 6.

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FAC

between parties of diverse citizenship in which the amount in

Section 1332 provides for federal jurisdiction in cases

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controversy exceeds $75,000.

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time a lawsuit is filed.

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L.P., 541 U.S. 567, 570-71 (2004).

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ordinarily determined from the face of the pleadings.

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defendant raises a factual challenge to jurisdiction, dismissal is

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warranted only if it appears to a legal certainty that the required

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amount cannot be recovered.

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Vegas, Inc., 802 F.2d 362, 363-64 (9th Cir. 1986).

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Jurisdiction is determined at the

Grupo Dataflux v. Atlas Global Grp.,
The amount in controversy is
If a

Pachinger v. MGM Grand Hotel-Las

There is no dispute that the parties in this case are diverse,

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but Centex argues that the amount in controversy does not exceed

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$75,000, for two reasons.

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improperly aggregate the claims by the two plaintiffs against the

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two defendants in this case.

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time the lawsuit was filed, the amount in controversy did not

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exceed $75,000.

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1.

First, Centex argues that Plaintiffs

Second, Centex asserts that, at the

Aggregation

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Centex first argues that Plaintiffs improperly aggregate the

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claims between the two plaintiffs and the two defendants to reach

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the jurisdictional threshold.

Plaintiffs counter by arguing that

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purpose of attaining the jurisdictional amount if they are jointly

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liable to the plaintiff."

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support United States v. Southern Pacific Transportation Company,

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in which the Ninth Circuit held that the plaintiffs' claims could

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not be aggregated to meet the amount in controversy.

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683 (9th Cir. 1976).

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United States District Court

"[c]laims against two or more defendants may be aggregated for the

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For the Northern District of California

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plaintiff's claims may not be aggregated against both defendants.

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The problem is that there are two different plaintiffs (Travelers

Opp'n at 17.

Oddly, Travelers cites in

543 F.2d 676,

Regardless, the problem here is not that each

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Indemnity and St. Paul) whose claims stem from two different

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insurance contracts. 2
Applying Southern Pacific -- the case Travelers cites -- is

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rather straightforward.

In that case, the Ninth Circuit held that

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the plaintiffs could aggregate their claims only if those claims

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derived from rights the plaintiffs held in group status.

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Here, Travelers Indemnity and St. Paul do not hold any rights in

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group status; their rights come from separate contracts with

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different entities (Travelers Indemnity contracted with Golden

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State Carpets, while St. Paul contracted separately with Mike

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McCall Landscape).

Id.

Unfortunately for Centex, the prohibition on aggregation does

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not matter at all in this case.

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assert that the fees and costs they will incur in defending the

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As discussed below, Plaintiffs

That is, the issue is not that St. Paul's claims may not be
aggregated against Centex Homes and Centex Real Estate, or that
Travelers Indemnity's claims may not be aggregated against Centex
Homes and Centex Real Estate. The problem is that St. Paul's
claims are separate from Travelers Indemnity's claims, and those
claims may not be aggregated. Plaintiffs give this issue short
shrift in their brief and do not explain why they believe that two
different contracts involving entirely distinct parties give them
rights held in group status.

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accept Plaintiffs' estimate of the amount in controversy, it

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follows that the amount in controversy in at least one plaintiff's

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claims must exceed the jurisdictional threshold. 3

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Court would then have jurisdiction over at least one plaintiff's

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claims, supplemental jurisdiction would exist over the other

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plaintiff's claims.

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United States District Court

Underlying Action will exceed $300,000.

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For the Northern District of California

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Thus, if the Court were to

Inc., 545 U.S. 546, 559 (2005) ("If the court has original

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jurisdiction over a single claim in the complaint, it has original

Because the

See Exxon Mobil Corp. v. Allapattah Servs.,

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jurisdiction over a 'civil action' within the meaning of § 1367(a),

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even if the civil action over which it has jurisdiction comprises

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fewer claims than were included in the complaint.").

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Plaintiffs' (admittedly improper) aggregation of Plaintiffs' claims

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fails to divest the Court of jurisdiction.
2.

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Accordingly,

Amount in Controversy

In each of their three claims, Plaintiffs seek damages in the

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amount of all defense or indemnification fees and costs they have

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paid or will pay on Centex's behalf in the Underlying Action.

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¶¶ 31, 35, 40.

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suit, Centex had incurred only $6,304.33 in fees and costs in the

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Underlying Action, and none of those fees or costs had been paid by

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Plaintiffs.

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here, a plaintiff brings a claim for declaratory relief, the amount

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in controversy "is not what might have been recovered in money, but

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rather the value of the right to be protected or the injury to be

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FAC

According to Centex, at the time Plaintiffs filed

ECF No. 21-1 ("O'Connell Decl.") ¶¶ 4, 6.

Where, as

Assuming arguendo that one plaintiff's claims are worth $75,000
(the maximum amount that would fail to satisfy the amount in
controversy requirement), the other plaintiff's claims would be
worth $225,000, and the Court would have jurisdiction over the
second plaintiff's claims.

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1976).

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not be permitted, under the guise of seeking declaratory judgments,

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to drag into the federal courts the litigation of claims over

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which, because involving less than the jurisdictional amount, it

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was never intended that the federal courts should have

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jurisdiction."

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United States District Court

prevented."

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For the Northern District of California

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F.2d 601, 604 (9th Cir. 1955) (quoting Mut. Life Ins. Co. of New

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York v. Moyle, 116 F.2d 434, 437 (4th Cir. 1940)).

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Jackson v. Am. Bar Ass'n, 538 F.2d 829, 831 (9th Cir.

The Ninth Circuit has warned that "insurance companies may

Canadian Indem. Co. v. Republic Indem. Co., 222

Plaintiffs accept Centex's figures and do not claim that they

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have paid anything at this point.

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Plaintiffs assert that they expect fees and costs in the Underlying

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Action to total over $300,000.

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jurisdiction is determined at the moment a case is filed, the Court

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may not consider future fees and costs in determining the amount in

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controversy.

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Opp'n at 18.

However,

Centex argues that, because

District courts in California are split as to whether future

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fees and costs may be considered in calculating the amount in

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controversy.

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Realty Network, Inc., No. C 12-2637 PJH, 2013 WL 271668, at *3-4

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(N.D. Cal. Jan. 24, 2013) (Hamilton, J.) (holding that because

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"Travelers did not notify defendants that it had accepted the

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tender of the . . . action until June 7, 2012, and had not incurred

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any defense costs until that point, there was no amount in

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controversy as of May 22, 2012 when the complaint was filed -- and

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thus, no diversity jurisdiction."), with Travelers Cas. Ins. Co. of

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Am. v. Am. Home Realty Network, Inc., No. 13-0360 SC, 2013 WL

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1808984, at *5 (N.D. Cal. Apr. 29, 2013) ("The Court finds that

Compare Travelers Cas. Ins. Co. of Am. v. Am. Home

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arguments, that a duty to defend the Regional Action would result

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in costs totaling more than $75,000 . . . .") (Conti, J.), and

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Travelers Indem. Co. of Conn. v. Centex Homes, No. 1:14-CV-217-LJO-

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GSA, 2014 WL 2002320, at *5 (E.D. Cal. May 15, 2014) (O'Neill, J.)

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("[T]he Court finds that subject matter jurisdiction exists because

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Plaintiffs allege their anticipated costs in defending Centex . . .

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United States District Court

Travelers has shown, based on its pleadings, declarations, and

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For the Northern District of California

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exceed $75,000.").

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fees and costs may be considered part of the "injury to be

The undersigned has previously held that future

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prevented" under Jackson, and the Court continues to so hold.

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Am. Home Realty, 2013 WL 1808984, at *5.

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See

However, there is a wrinkle here that was not raised in

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American Home Realty.

In addition to its declaratory relief

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action, Plaintiffs bring a claim for equitable reimbursement.

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insurer may only seek a claim for equitable reimbursement "after

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providing an entire defense."

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App. 4th 1535, 1550 (Cal. Ct. App. 1998) (emphasis in original).

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To support their claim, therefore, Plaintiffs allege that

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"TRAVELERS' duty to defend CENTEX has now ceased and any payments

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made to CENTEX for fees incurred from the date of tender until the

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date of CENTEX's breach constitute an entire defense."

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But if the Court were to presume the truth of that allegation --

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and therefore to accept that Plaintiffs have already provided an

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entire defense -- then it is difficult to see how Plaintiffs can

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assert that the amount in controversy is dependent on future costs

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of defense.

An

State v. Pac. Indem. Co., 63 Cal.

FAC ¶ 38.

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For two reasons, the Court finds that it may consider future

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fees and costs for the amount in controversy, even in the face of

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allegations that Plaintiffs' duty to defend has ceased and that

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Plaintiffs provided an entire defense are legal conclusions, not

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factual allegations.

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presumption of truth.

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Plaintiffs were instead to bring this lawsuit after the Underlying

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Action had ceased, Plaintiffs would presumably have incurred the

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United States District Court

Plaintiffs' allegations.

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For the Northern District of California

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First, the Court holds that the

costs they anticipate -- so those costs constitute the value of the

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injury to be prevented.

As a result, they are not entitled to a
See Iqbal, 556 U.S. at 679.

Second, if

As a result, it is still proper to

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consider the future cost of litigating in the amount in

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controversy, consistent with Jackson.

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diversity jurisdiction over this case because the parties are

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diverse and it does not appear to a legal certainty that the amount

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in controversy does not exceed $75,000.
B.

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The Court finds that it has

Ripeness
1.

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Duty to Cooperate

Plaintiffs' breach of contract claim and some of Plaintiffs'

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declaratory relief claims are premised on Centex's alleged failure

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to fulfill the duty to cooperate mandated by the insurance

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policies.

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Plaintiffs' claims based on breach of the duty to cooperate are not

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ripe.

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FAC ¶¶ 20(c), 25(c), 29, 33.

Centex argues that

"If a case is not ripe for review, then there is no case or

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controversy, and the court lacks subject-matter jurisdiction."

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Principal Life Ins. Co. v. Robinson, 394 F.3d 665, 669 (9th Cir.

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2005).

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substantial controversy, between parties having adverse legal

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interests, of sufficient immediacy and reality to warrant the

The traditional ripeness standard is "whether 'there is a

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issuance of a declaratory judgment.'"

Id. (quoting Md. Cas. Co. v.

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Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)).
Centex argues that Plaintiffs' claims are unripe because those

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acknowledge Plaintiffs' right to control Centex's defense in the

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Underlying Action.

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acceptance of Mr. Lee as counsel was under a reservation of rights

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United States District Court

claims depend upon Centex's future, hypothetical refusal to

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For the Northern District of California

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and conditioned on Plaintiffs' agreement to pay Mr. Lee's fees as

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well as all vendor invoices in the action, even though other

Mot. at 3-4.

Plaintiffs reply that Centex's

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insurers were also defending Centex.

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point out that Centex asserted its right to retain counsel of its

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choice due to an alleged conflict between Centex and Mr. Lee.

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¶ 17.

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allow them to control the defense, despite Centex's express

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statement to the contrary.

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Additionally, Plaintiffs

FAC

Plaintiffs argue that these demands constitute refusal to

Opp'n at 6-7.

"Where the jurisdictional issue is separable from the merits

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of the case, the judge may consider the evidence presented with

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respect to the jurisdictional issue and rule on that issue,

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resolving factual disputes if necessary."

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Gen. Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979).

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"However, where the jurisdictional issue and substantive issues are

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so intertwined that the question of jurisdiction is dependent on

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the resolution of factual issues going to the merits, the

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jurisdictional determination should await a determination of the

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relevant facts on either a motion going to the merits or at trial."

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Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983).

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Here, the jurisdictional issue is not separable from the merits of

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the case: both ripeness and Plaintiffs' substantive claims depend

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Thornhill Pub. Co. v.

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on the truth of its contention that Centex has refused to allow

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Plaintiffs to control the defense.

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consider only the factual allegations in the FAC, and will presume

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them to be true.

Accordingly, the Court will

Plaintiffs' reservation of rights is incorporated by reference into

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the FAC.

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United States District Court

That said, the Court finds that Centex's letter in response to

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For the Northern District of California

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to "take into account documents whose contents are alleged in a

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complaint and whose authenticity no party questions, but which are

The incorporation by reference doctrine permits the Court

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not physically attached to the [plaintiff's] pleading."

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ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).

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contents of the letter in Paragraph 17, and Centex attaches the

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letter as an exhibit to a declaration filed with its motion to

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dismiss.

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Letter").

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Knievel v.

The FAC alleges the

See ECF No. 21-1 ("O'Connell Decl.") Ex. B (the "Centex
Its contents are not in dispute.

Plaintiffs argue that "[t]he allegations [in the FAC] clearly

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state that Centex breached by refusing counsel."

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(emphasis added).

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contents of the Centex Letter but states only that Centex

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conditioned its acceptance of Mr. Lee as counsel upon Plaintiffs'

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agreement to pay his fees.

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obligated to defend Centex under the insurance policies, the Court

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cannot conclude that asking Travelers to pay for the lawyer it

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appointed in any way constituted refusal of Plaintiffs' choice.

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is true that the FAC later characterizes the Centex Letter as a

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refusal to allow Plaintiffs to appoint counsel.

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25(c).

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other than the Centex Letter, and it is clear that the Centex

Not so.

Opp'n at 12

Paragraph 17 of the FAC summarizes the

Given that Travelers was already

It

See FAC ¶¶ 20(c),

But the FAC does not allege any communication from Centex

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1

Letter does not refuse to allow Plaintiffs to appoint counsel or

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control the defense.

3

Next, the Court turns to the issue of Centex's insistence that

accepting appointment of Mr. Lee as co-counsel.

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issue with this condition because other insurers are also involved

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in Centex's defense in the underlying action, and Plaintiffs

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United States District Court

Plaintiffs pay all expert and vendor fees as a condition for

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For the Northern District of California

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apparently believe that Centex is obliged to divide these fees and

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costs among its insurers.

Plaintiffs take

Again, Plaintiffs are incorrect.

In

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Travelers Property Casualty Company of America v. Centex Homes, the

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undersigned held that cooperation clauses similar to those at issue

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here did not create a duty to tender a case to other insurers, and

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that it was the insurer's responsibility to seek contribution.

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Travelers Prop. Cas. Co. of Am. v. Centex Homes, No. 11-3638-SC,

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2013 WL 1411135, at *4 (N.D. Cal. Apr. 8, 2013) (Conti, J.).

16

Moreover, "[a]n insurer generally cannot use its right to seek

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contribution from other insurers to avoid fronting an insured's

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full defense costs."

19

Inc. v. Aetna Cas. & Sur. Co., 45 Cal. App. 4th 1, 105–06 (Cal. Ct.

20

App. 1996)).

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Plaintiffs pay all of its expert and vendor costs cannot constitute

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a refusal to allow Travelers to control the defense.

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Id. at *3 (citing Armstrong World Indus.,

As a matter of law, therefore, Centex's request that

Nor can Centex's warning about Mr. Lee's potential conflicts

24

of interest be construed as a refusal to allow Plaintiffs to

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control Centex's defense.

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provisions of a policy of insurance impose a duty to defend upon an

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insurer and a conflict of interest arises which creates a duty on

28

the part of the insurer to provide independent counsel to the

California law provides that "[i]f the

13

1

insured, the insurer shall provide independent counsel to represent

2

the insured . . . ."

3

Centex might choose to exercise that statutory right does not mean

4

that Centex refused to allow Plaintiffs to appoint counsel or

5

control the defense.

6

ripe. 4

Cal. Civ. Code § 2860(a).

Stating that

Accordingly, Plaintiffs' claims are not yet

A judge in the Eastern District of California recently reached

7

United States District Court

For the Northern District of California

8

a similar conclusion.

In Fidelity & Guaranty Insurance Co. v.

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Centex Homes, Centex sent a letter to its insurer allowing the

10

insurer to appoint co-counsel for Centex's defense.

But Centex

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also explained, as it did here, that Centex believed it was

12

entitled to independent counsel and would allow the insurer to

13

appoint co-counsel subject to a full reservation of rights.

14

1:14-CV-826-LJO-GSA, 2014 WL 4075999, at *3 (E.D. Cal. Aug. 15,

15

2014).

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refusal to accept the insurer's appointed counsel.

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dismissed the insurer's claims as unripe.

No.

Judge O'Neill found that the letter did not constitute
Accordingly, he

Id. at *4.

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Thus, the Court finds that Plaintiffs' claims based on

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Centex's alleged breach of its duty to cooperate are unripe, as

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Centex has not yet refused to allow Travelers to appoint counsel.

21

Centex explicitly stated that it "will allow Travelers, subject to

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a full reservation of rights, to appoint co-counsel to participate

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in the defense of Centex in [the Underlying Action] . . . ."

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25
26
27
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4

In their opposition brief, Plaintiffs complain that "[i]f there
are any claims that could be riper, Travelers does not know what
they are." That is an odd turn of phrase. Just because Plaintiffs
believe that they have been wronged does not necessarily mean, as a
matter of law, that they must have ripe claims. The issue is not
that Plaintiffs have failed to identify the correct legal claims
arising from these facts, but that the facts as they stand now do
not give rise to ripe claims.

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Plaintiffs may amend these claims if they become ripe.

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be noted, however, that this ruling does not apply to Plaintiffs'

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declaratory relief claim regarding Newmeyer's fees.

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also seek a declaration that they are not obligated to pay any of

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Newmeyer's fees, because those fee payments constitute voluntary

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payments that Plaintiffs need not reimburse.

8

United States District Court

Centex Letter.

2

For the Northern District of California

1

acknowledges, that claim is ripe for adjudication.
2.

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10

These claims are DISMISSED WITHOUT PREJUDICE.
It should

Plaintiffs

As Centex
Reply at 4.

Equitable Reimbursement

"To state a claim for equitable reimbursement, Plaintiffs must

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plead that (1) they agreed to immediately defend Defendant in the

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[Underlying Action] in its entirety; (2) they paid money to defend

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claims against Defendant 'that are not even potentially covered'

14

under the insurance policies; and (3) they reserved their right to

15

seek reimbursement."

16

Homes, No. 1:14-CV-217-LJO-GSA, 2014 WL 3778269, at *2 (E.D. Cal.

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July 30, 2014) (Travelers I) (citing Buss v. Super. Ct., 16 Cal.

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4th 35, 47–50 (Cal. 1997)).

19

action for equitable reimbursement is premised on a 'defend now

20

seek reimbursement later' theory."

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v. Pac. Indem. Co., 63 Cal. App. 4th 1535, 1549 (Cal. Ct. App.

22

1998)).

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Travelers Indem. Co. of Conn. v. Centex

Generally speaking, "the cause of

Travelers I at *2 (citing State

In this case, the FAC alleges only that "TRAVELERS has paid or

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will pay certain defense fees and costs incurred by Defendant

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CENTEX in defense in the Underlying Action."

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added).

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reimbursement, Plaintiffs must allege that they paid money to

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defend Centex's claims in the Underlying Action, not that

FAC ¶ 37 (emphasis

That is insufficient; to state a ripe claim for equitable

15

1

Plaintiffs will do so in the future.

As discussed above,

2

Plaintiffs do not contest the fact that they have not yet paid

3

anything to cover Centex's defense costs.

4

Plaintiffs' equitable reimbursement claim is unripe and is

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DISMISSED WITHOUT PREJUDICE.

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if this claim becomes ripe.

Consequently,

Plaintiffs may amend their complaint

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United States District Court

For the Northern District of California

8
9

V. CONCLUSION
For the reasons set forth above, Centex's motion to dismiss is

10

GRANTED.

Plaintiffs' breach of contract and equitable

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reimbursement claims are not ripe, and they are DISMISSED WITHOUT

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PREJUDICE.

13

to the extent they are premised on violation of the duty to

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cooperate.

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Travelers may amend its complaint if those claims become ripe.

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Plaintiffs' declaratory relief claims remain undisturbed to the

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extent that they seek a declaration that Plaintiffs have no

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obligation to reimburse Centex for Newmeyer's fees.

Plaintiffs' declaratory relief claims are also unripe

Those claims, too, are DISMISSED WITHOUT PREJUDICE.

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IT IS SO ORDERED.

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Dated: January 5, 2015

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UNITED STATES DISTRICT JUDGE

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