Moss v. Infinity Insurance Company, et al

Filing 65

ORDER, signed 7/14/16, by Magistrate Judge Jacqueline Scott Corley granting 40 Infinity's Motion to Dismiss; granting in part and denying in part 31 Lithia's Motion to Dismiss. Amended complaint shall be filed within 30 days of this Order. (klhS, COURT STAFF) (Filed on 7/14/2016)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ARRYANNE MOSS, Plaintiff, 8 9 10 United States District Court Northern District of California 11 Case No. 15-cv-03456-JSC v. INFINITY INSURANCE COMPANY, et al., Defendants. ORDER RE: DEFENDANTS LITHIA’S AND INFINITY’S MOTIONS TO DISMISS Re: Dkt. Nos. 31, 40 12 13 This matter involves insurance claims arising from an automobile collision. Plaintiff 14 Arryanne Moss (“Plaintiff”) brings this action against Defendants Infinity Insurance Company 15 (“Infinity”), Automobile Warranty Services Insurance Company (“AWS”), Lithia Chrysler, Jeep, 16 Dodge of Santa Rosa (“Lithia”), and Charlotte Toth (“Toth”). (Dkt. No. 1.) Now pending before 17 the Court are Lithia‟s and Infinity‟s motions to dismiss Plaintiff‟s Third Amended Complaint 18 (“TAC”). (Dkt. Nos. 15, 31, 40.) Having considered the parties‟ written submissions, and having 19 had the benefit of oral argument on July 7, 2016, the Court dismisses Plaintiff‟s seventh cause of 20 action with prejudice, and dismisses Plaintiff‟s eleventh and twelfth causes of action with leave to 21 amend. Additionally, the Court GRANTS Infinity‟s motion and dismisses Plaintiff‟s first, fifth, 22 and eighth causes of action with prejudice, and dismisses Plaintiff‟s eleventh and twelfth causes of 23 action with leave to amend. 24 BACKGROUND 25 The factual background of this matter was addressed in the Court‟s Orders dismissing the 26 earlier complaints and allowing the TAC to proceed to service. (See Dkt. No. 17 at 1-4; Dkt. No. 27 14 at 1-2; Dkt. No. 12 at 1-4; Dkt. No. 7 at 1-2). The Court will not reiterate the factual 28 allegations here and instead incorporates the factual background of the earlier Orders in full. The TAC alleges twelve causes of action against Defendants Infinity, AWS, Lithia, and 1 Toth. (Dkt. No. 15.) The first four causes of action allege breach of contract against Infinity, 3 AWS, Lithia, and Toth, respectively. The next three allege breach of the implied covenant of 4 good faith and fair dealing against Infinity, AWS, and, together, Lithia and Toth, respectively. 5 The Court previously dismissed the seventh cause of action, which alleges breach of the implied 6 covenant of good faith and fair dealing against Lithia and Toth, without leave to amend in its 7 Order reviewing the TAC. (Dkt. No. 17 at 4.) The eighth, ninth, and tenth causes of action allege 8 negligence against Infinity, AWS, and Lithia, respectively. The eleventh cause of action makes a 9 claim under California Business & Professions Code Section 17200—the Unfair Competition 10 Law—against Infinity, AWS, and Lithia, collectively. The final cause of action a claim under 11 United States District Court Northern District of California 2 California Business & Professions Code Section 17500—false or misleading statements in 12 advertising—against Infinity, AWS, and Lithia, collectively. Plaintiff seeks damages, including 13 compensatory, special, and punitive damages. (Dkt. No. 15 at 23.) Lithia and Infinity now move 14 the Court to dismiss Plaintiff‟s claims against them pursuant to Rule 12(b)(6) of the Federal Rules 15 of Civil Procedure. (Dkt. Nos. 31, 40.) DISCUSSION 16 17 18 I. Lithia’s Motion to Dismiss Lithia moves to dismiss each cause of action that Plaintiff alleges against it. (Dkt. No. 31.) 19 Specifically, Lithia contends that: (1) the breach of contract claim is barred by the statute of 20 limitations; (2) the cause of action for breach of implied covenant of good faith and fair dealing 21 was properly dismissed by the Court in its previous order; (3) the negligence cause of action is 22 barred by the statute of limitations and should also be dismissed because Lithia, as a car dealership 23 and not an insurance provider, had no duty to Plaintiff regarding her insurance policies; (4) the 24 claims for violations of California Business and Professions Code §§ 17200 and 17500 should be 25 dismissed because Plaintiff failed to meet the specificity requirement under Federal Rule of Civil 26 Procedure Rule 9(b); and (5) all claims against Lithia should be dismissed because Plaintiff has 27 not established an agency relationship between Lithia and any of the other defendants. 28 2 1 A. Breach of Contract 2 The Court previously noted that “Plaintiff‟s breach of contract causes of action against 3 Lithia and Toth sound in breach of an oral agreement.” (Dkt. No. 14 at 7 (emphasis added); see 4 TAC ¶¶ 34-43.) Specifically, Plaintiff alleges that Lithia and Toth orally promised that AWS 5 would pay for the loss of her vehicle to the extent there was any outstanding balance on the 6 vehicle and that Infinity would pay Plaintiff for “any loss incurred as a result of an accident 7 involving Plaintiff‟s new vehicle.” (Id. ¶¶ 35-36.) Plaintiff claims that Lithia and Toth “breached 8 their oral promises . . . to cover Plaintiff‟s losses, in the event that there later arose any difficulty 9 receiving the benefits of the policies which [they] actively persuaded Plaintiff to purchase” when 10 they failed to assist Plaintiff secure the “benefits due [to] her.” (Id. ¶ 41.) California law provides that a breach of oral contract is subject to a two-year statute of United States District Court Northern District of California 11 12 limitations. Cal. Civ. Pro. Code § 339(1). The clock starts running on a breach of oral contract at 13 the time of the breach. Cochran v. Cochran, 56 Cal. App. 4th 1115, 1124 (1997); Parker v. 14 Walker, 5 Cal. App. 4th 1173, 1190 (1992) (statute of limitations begins to run when the oral 15 contract is rejected). Lithia argues that breach of the oral contact occurred around the time of the 16 accident, September 2012, and that Plaintiff‟s claim for breach of contract, brought in July 2015, 17 is thus barred by the two-year statute of limitations. (Dkt. No. 31 at 5.) However, there are no 18 facts pled in the TAC indicating when Plaintiff sought payment from Lithia or when Lithia denied 19 any benefits due to Plaintiff. The Court cannot conclude, based on this record, that Lithia‟s breach 20 necessarily occurred outside of the statute of limitations. Rather, because the allegations in the 21 TAC must be construed in the light most favorable to Plaintiff, see Sprewell v. Golden State 22 Warriors, 266 F.3d 979, 988 (9th Cir. 2001), and because the TAC is silent as to when the actual 23 breach occurred, the Court must infer for purposes of Lithia‟s motion that the alleged breach 24 occurred within two years of Plaintiff‟s filing of this action.1 Accordingly, the Court denies 25 Lithia‟s motion to dismiss Plaintiff‟s third cause of action. 26 1 27 28 Plaintiff separately contends that a four-year statute of limitations applies under California Code of Civil Procedure § 337.1 because Lithia also breached a written “sales contract”—i.e., the Retail Installment Sales Contract when Lithia sold the 2012 Jeep Liberty to Plaintiff (see Dkt. No. 9-1)— “„by failing to assist Plaintiff to secure the benefits due her.‟” (Dkt. No. 44 at 5 (quoting TAC 3 1 B. Breach of Implied Covenant of Good Faith and Fair Dealing 2 The Court previously dismissed Plaintiff‟s seventh cause of action for breach of implied 3 covenant and fair dealing against Lithia and Toth. (Dkt. No. 17 at 4.) Plaintiff concedes this 4 point. (Dkt. No. 44 at 6.) Accordingly, the Court grants Lithia‟s motion to dismiss the seventh 5 cause of action with prejudice. 6 C. Negligence 7 Plaintiff alleges that Lithia had a duty to act “competently, promptly and in the highest 8 good faith with regard to the [insurance] application, the specific coverage provisions and 9 exclusions and the claims process.” (TAC ¶ 97.) She argues that Lithia was negligent and breached its duty when it failed to explain the coverage provisions, the claims procedures, and the 11 United States District Court Northern District of California 10 payment processing procedures, and this breach occurred when she made the demand for 12 assistance. (Id. ¶¶ 40-41, 98.) As a result of that breach, Plaintiff suffered “monetary damage [] 13 for denial of her claim under the [insurance] policies” as well as “anxiety, worry, mental and 14 emotional distress.” (Id. ¶¶ 99-100.) 15 The elements of negligence under California law are: “(a) a legal duty to use due care; (b) 16 a breach of such legal duty; [and] (c) the breach as the proximate or legal cause of the resulting 17 injury.” Evan F. v. Hughson United Methodist Church, 8 Cal. App. 4th 828, 834 (1992) (internal 18 quotation marks and citation omitted). The statute of limitations for a negligence claim is two 19 years. Cal. Civ. Code § 339(1); Hydro-Mill Co., Inc. v. Hayward, Tilton and Rolapp Ins. Assocs., 20 Inc., 115 Cal. App. 4th 1145, 1154 (2004) (finding that an insurance coverage negligence claim is 21 a claim of “professional negligence and is governed by the two-year statute of limitations set forth 22 in [S]ection 339, subdivision 1 of the [California] Code of Civil Procedure”); Osei v. Countrywide 23 Home Loans, 692 F. Supp. 2d 1240, 1251 (E.D. Cal. 2010). 24 25 26 27 ¶ 41).) As the Court previously noted, however, “the written purchase contract between Lithia and Plaintiff (signed by Toth) did not contain any term requiring Lithia or Toth to investigate, determine, or provide insurance benefits in the event of a collision.” ((Dkt. No. 14 at 6-7 (citing Dkt. No. 9-1).) And Plaintiff‟s TAC does not identify any term in the written contract that Lithia breached. Thus, the Court rejects Plaintiff‟s argument that a four-year statute of limitations applies with respect to its breach of contract claim against Lithia. 28 4 1 Lithia first argues that the negligence claim is barred by the statute of limitations because 2 Plaintiff filed suit more than two years after Lithia allegedly breached a duty to Plaintiff. (Dkt. 3 No. 31 at 6.) As with the oral contract claim, the TAC contains no factual allegations regarding 4 when Lithia allegedly breached its duty. Because the Court must construe all allegations in the 5 light most favorable to Plaintiff, see Sprewell, 266 F.3d at 988, the Court cannot conclude at this 6 juncture that the claim is barred by the statute of limitations as a matter of law. 7 Lithia additionally contends that the negligence claim fails because Lithia, as a car 8 dealership and not an insurance provider, owed no duty to Plaintiff with respect to the insurance 9 policy. (Dkt. No. 51 at 6.) However, drawing all inferences in Plaintiff‟s favor, the Court finds it plausible to infer that Lithia, by and through its employee Toth, acted as more than simply a car 11 United States District Court Northern District of California 10 dealership. For example, prior to arriving at Lithia on July 9, 2012, Plaintiff had never heard of 12 the insurance company Infinity. (TAC ¶ 20.) On that day, Toth convinced Plaintiff to purchase 13 insurance from Infinity and aided her in doing so—specifically, Toth aided Plaintiff with the 14 insurance application process and even made the first payment for the insurance policy on behalf 15 of Plaintiff. (Id.) And when Plaintiff left Lithia that day with her newly-purchased Jeep Liberty, 16 she also had effective insurance on the vehicle as well. (Id.) The Court thus declines to conclude 17 as a matter of law that Lithia did not owe a duty to Plaintiff. 18 19 For these reasons, Court denies Lithia‟s motion to dismiss the tenth cause of action for negligence against Lithia. Violation of California’s UCL, Bus. & Prof. Code § 17200 20 D. 21 To bring a claim for a violation of Section 17200 of California‟s Unfair Competition Law 22 (“UCL”), “a plaintiff must show either an (1) „unlawful, unfair, or fraudulent business act or 23 practice,‟ or (2) „unfair, deceptive, untrue or misleading advertising.‟” Lippitt v. Raymond James 24 Fin. Servs., 340 F.3d 1033, 1043 (9th Cir. 2003) (quoting Cal. Bus. & Prof. Code § 17200). Thus, 25 to state a claim under Section 17200, a plaintiff must establish that the practice is (1) unlawful 26 (i.e., is forbidden by law), (2) unfair (i.e., harm to victim outweighs any benefit) or (3) fraudulent 27 (i.e., is likely to deceive members of the public). A plaintiff only needs to establish a violation of 28 5 1 the UCL under one of these three prongs, as each operates independently from the others. See 2 State Farm Fire & Cas. Co. v. Super. Ct., 45 Cal. App. 4th 1093, 1102 (1996). 3 UCL claims alleging fraudulent business practices, under the third prong, trigger a 4 heightened pleading requirement; in addition to the general pleading requirements set forth in Rule 5 8, a plaintiff alleging fraud must allege “with particularity the circumstances constituting fraud.” 6 Fed. R. Civ. P. 9(b). “[W]hile a federal court will examine state law to determine whether the 7 elements of fraud have been pled sufficiently to state a cause of action, the Rule 9(b) requirement 8 that the circumstances of the fraud must be stated with particularity is a federally imposed rule.” 9 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103 (9th Cir. 2003). Thus, “[a]verments of fraud must be accompanied by „the who, what, when, where, and how‟ of the misconduct charged.” 11 United States District Court Northern District of California 10 Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009). “The requirement of specificity 12 in a fraud action against a corporation requires the plaintiff to allege the names of the persons who 13 made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what 14 they said or wrote, and when it was said or written.” Tarmann v. State Farm Mut. Auto. Ins. Co., 15 2 Cal. App. 4th 153, 157 (1991). “The plaintiff must set forth what is false or misleading about a 16 statement, and why it is false.” Decker v. GlenFed, Inc., 42 F.3d 1541, 1548 (9th Cir. 1994). The 17 pleading must be “specific enough to give defendants notice of the particular misconduct . . . so 18 that they can defend against the charge and not just deny they have done anything wrong.” 19 Sanford v. MemberWorks, Inc., 625 F.3d 550, 558 (9th Cir. 2010); Semegen v. Weidner, 780 F.2d 20 727, 731 (9th Cir. 1985). 21 It is unclear from Plaintiff‟s allegations which prong her UCL claim falls under. (See TAC 22 ¶¶ 101-105.) For this reason, the Court dismisses the eleventh cause of action for violation of the 23 UCL with leave to amend. At oral argument, counsel for Plaintiff indicated that she was 24 proceeding under the “unfair” and “fraudulent” prongs; Plaintiff should state as such in her new 25 amended complaint. Furthermore, if Plaintiff is indeed proceeding under the “fraudulent” prong, 26 her UCL claim, as currently pled, provides insufficient detail under Rule 9(b). Plaintiff claims 27 that “[b]ased upon the representations via statements, circular and solicitation materials [Lithia 28 made] . . . , Plaintiff agreed to purchase [] insurance.” (TAC ¶ 103; see also Dkt. No. 44 at 8.) 6 However, the TAC does not provide any detail regarding the allegedly misleading statements, 2 such as what specific statements were made, who made the statements, when those statements 3 were made, or how Plaintiff relied upon those statements. See Moore v. Kayport Package 4 Express, Inc., 885 F.2d 531, 540 (9th Cir. 1989) (“[M]ere conclusory allegations of fraud are 5 insufficient.”); Kearns, 567 F.3d at 1126 (finding that because the plaintiff did not “specify what 6 the television advertisements or other sales material specifically stated,” did not “specify which 7 sales material he relied upon,” and did not “specify who made [a certain] statement or when this 8 statement was made,” he “failed to plead his averments of fraud with particularity.”). In order to 9 sufficiently plead a Section 17200 violation against Lithia, Plaintiff must meet the requirements of 10 one of these three prongs. Thus, if proceeding under a theory of fraud, Plaintiff must provide this 11 United States District Court Northern District of California 1 additional detail in her amended complaint. 12 E. Violation of Business and Professions Code § 17500 13 California‟s False Advertising Law (“FAL”) makes it unlawful for a business to 14 disseminate any statement “which is untrue or misleading, and which is known, or which by the 15 exercise of reasonable care should be known, to be untrue or misleading . . . .” Cal. Bus. & Prof. 16 Code § 17500; see also People v. Dollar Rent-A-Car Sys., Inc., 211 Cal. App. 3d 119, 128-29 17 (1989) (providing that Section 17500 prohibits the use of any untrue or misleading statement in 18 selling personal property or services, including false or misleading oral statements). Courts have 19 interpreted this provision “broadly to embrace not only advertising which is false, but also 20 advertising which although true, is either actually misleading or which has a capacity, likelihood 21 or tendency to deceive or confuse the public.” Leoni v. State Bar, 39 Cal. 3d 609, 626 (1985). 22 Generally, whether the public has been or will be misled is a factual question that cannot be 23 resolved on a motion to dismiss. Cairns v. Franklin Mint Co., 24 F. Supp. 2d 1013, 1037 (C.D. 24 Cal. 1998). However, “[g]eneralized, vague, and unspecified assertions constitute „mere puffery‟ 25 upon which a reasonable consumer could not rely, and hence are not actionable.” Anunziato v. 26 eMachines Inc., 402 F. Supp. 2d 1133, 1139 (C.D. Cal. 2005) (citing Glen Holly Entm’t, Inc. v. 27 Tektronix Inc., 343 F.3d 1000, 1005 (9th Cir. 2003)). 28 7 1 The amount of specificity required in alleging a Section 17500 claim depends on the nature 2 of the allegations. While fraud is not an essential element of a Section 17500 claim, if a plaintiff 3 does allege fraud as the basis for the violation of Section 17500, the claim is subject to Rule 9(b)‟s 4 heightened pleading requirement. Vess, 317 F.3d at 1105. If that requirement is not met, the court 5 must disregard the fraud allegations to determine whether a claim has been stated under the notice 6 pleading standards of Rule 8(a). Under that standard, a Section 17500 claim must be alleged with 7 “reasonable particularity.” Khoury v. Maly’s of California, Inc., 14 Cal. App. 4th 612, 619 (1993). 8 9 Here, Lithia contends that Plaintiff‟s Section 17500 claim against it sounds in fraud and is thus subject to the Rule 9(b) heightened pleading standard. (Dkt. No. 31 at 7.) However, the Court need not presently decide whether the heightened standard applies because Plaintiff has not 11 United States District Court Northern District of California 10 met even the more liberal Rule 8 requirements. Plaintiff fails to identify what advertisements and 12 materials give rise to her false advertising claim and therefore does not give Lithia adequate notice 13 of its alleged violations. See In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection 14 HDTV Television Litig., 758 F. Supp. 2d 1077, 1093-94 (S.D. Cal. 2010) (finding that the failure 15 to identify “specific advertisements, when and where they were shown, or why they were untrue 16 or misleading . . . does not provide [defendant] with adequate notice of its alleged violations of the 17 FAL [under either Rule 9(b) or Rule 8].”); VP Racing Fuels, Inc. v. Gen. Petroleum, 673 F. Supp. 18 2d 1073, 1088 (E.D. Cal. 2009) (“The underlying element of a false advertising claim is some type 19 of advertising statement.”) (citation omitted); Tayag v. Nat’l City Bank, No. C 09-667SBA, 2009 20 WL 943897, at *2 (N.D. Cal. Apr. 7, 2009) (for FAL or UCL claims rooted in fraud, “[t]he 21 content of the alleged misrepresentation is necessary to state a claim”). 22 Accordingly, the Court grants Lithia‟s motion to dismiss Plaintiff‟s Section 17500 claim 23 with leave to amend. In her amended complaint, Plaintiff must clearly identify the specific 24 statements on which her claim is based and, if Plaintiff is alleging fraud, must meet Rule 9(b)‟s 25 heightened pleading requirements. 26 F. Agency 27 “An agent is one who „act[s] on the principal‟s behalf and subject to the principal‟s 28 control.‟ To form an agency relationship, both the principal and the agent must manifest assent to 8 1 the principal‟s right to control the agent.” United States v. Bonds, 608 F.3d 495, 506 (9th Cir. 2 2010) (internal citations omitted); see also Scott v. Ross, 140 F.3d 1275, 1280 (9th Cir. 1998) (“To 3 incur liability the agent must be acting on the parent‟s behalf, within the scope of its authority as 4 agent.”). Lithia contends that it should be dismissed from this case completely because Plaintiff 5 has not adequately alleged an agency relationship between Lithia and either Infinity or AWS. 6 (Dkt. No. 31 at 8-9.) Regarding agency, Plaintiff alleges that she “is informed and believes, and 7 thereon alleges that at all times mentioned herein, each of the defendants was the agent of the 8 remaining defendants and in doing things herein alleged, was acting within the course and scope 9 of such agency.” (TAC ¶ 6.) At oral argument, Plaintiff agreed that she could provide additional facts to support her agency allegation. Because the Court is already granting Plaintiff leave to 11 United States District Court Northern District of California 10 amend, Plaintiff should allege additional agency facts in her new amended complaint. However, the lack of an alleged agency relationship does not require dismissal of all of 12 13 Plaintiff‟s causes of action against Lithia. For example, Plaintiff‟s breach of contract and 14 negligence claims against Lithia arise from her direct interactions with Lithia and Toth; those 15 claims do not require any sort of agency relationship with Infinity or AWS. And with respect to 16 the violations of Sections 17200 and 17500, the TAC currently alleges that each of the 17 Defendants, on its own, made false and misleading statements to Plaintiff. (TAC ¶ 103 (“In 18 selling insurance to Plaintiff, Defendants LITHIA and INFINITY and AWS, and each of them, 19 and their agents, engaged in misleading statements.”) (emphasis added); ¶ 108 (“In selling 20 insurance to Plaintiff, Defendants LITHIA and INFINITY and AWS, and each of them, on their 21 own, and by and through their agents, engaged in false and misleading statements.”) (emphasis 22 added)). The Court denies Lithia‟s motion to dismiss all causes of action for Plaintiff‟s failure to 23 24 adequately allege agency. 25 II. Infinity’s Motion to Dismiss 26 Infinity also moves to dismiss each cause of action that Plaintiff alleges against it. (Dkt. 27 Nos. 40, 41.) Specifically, Infinity seeks dismissal of: (1) the first cause of action for breach of 28 contract because Infinity did not breach any terms of the insurance contract with Plaintiff; (2) the 9 1 fifth cause of action for breach of implied covenant of good faith and fair dealing because there is 2 no breach of the insurance contract; (3) the eighth cause of action for negligence because (a) 3 insurance companies in California cannot be sued for negligence and (b) Infinity owed no duty to 4 Plaintiff; and (4) the eleventh and twelfth causes of action for violations of California‟s Unfair 5 Competition Law (“UCL”) because (a) there is no breach of the insurance contract, (b) Plaintiff 6 has adequate remedies at law and cannot seek equitable relief, and (c) Plaintiff has not satisfied the 7 heightened pleading standards of Federal Rule of Civil Procedure 9(b). 8 A. Breach of Contract 9 The elements of a breach of contract action under California law are: (1) the existence of a contract, (2) plaintiff‟s performance or excuse for nonperformance, (3) defendant‟s breach, and (4) 11 United States District Court Northern District of California 10 damages to plaintiff as a result of the breach. Buschman v. Anesthesia Bus. Consultants, LLC, 42 12 F. Supp. 3d 1244, 1250 (N.D. Cal. 2014) (citing CDF Firefighters v. Maldonado, 158 Cal. App. 13 4th 1226, 1239 (2008)). 14 The Court previously held that Plaintiff had sufficiently pled elements (1), (2), and (4), but 15 that she had failed to adequately allege that Infinity breached the contract and instead appeared to 16 allege a valid contractual basis for the denial: that the policy excluded from coverage loss caused 17 to the insured automobile when driven by a person who resides in the policy holder‟s household 18 but who is not listed or endorsed on the policy prior to use. (Dkt. No. 17 at 2.) To overcome that 19 issue, Plaintiff alleges in the TAC that during the initial purchase of the car, when she signed up 20 for insurance, Toth informed her that she did not need to list her minor children on the policy 21 because they were minors. (TAC ¶ 20.) Thus, she alleges, the household exclusion that Infinity 22 cited as a basis for withholding coverage does not actually apply. (Id. ¶ 28.) 23 The Court disagrees. Because the household exclusion applies and Infinity therefore 24 properly withheld benefits under the written terms of the policy, Plaintiff cannot allege a claim for 25 breach of contract against Infinity. See State Farm Mut. Auto. Ins. Co. v. Davis, 7 F.3d 180, 184 26 (9th Cir. 1993) (finding that, because insurance coverage under policy does not exist, insurer was 27 not liable for breach of contract). Because Infinity complied with the express terms of the 28 contract, Plaintiff‟s contention that she relied on statements from Toth—or, as newly asserted in 10 1 her opposition, statements from Infinity itself (see Dkt. No. 52 at 6)—cannot save her breach of 2 contract claim. The Court expresses no opinion as to whether Plaintiff may proceed under a 3 different legal theory, such as the estoppel theory she argued for the first time in her opposition. 4 Accordingly, Infinity‟s motion to dismiss the first cause of action for breach of contract is 5 granted and the claim is dismissed with prejudice. Plaintiff is granted leave to amend to allege 6 new claims, if any, arising from Toth‟s alleged misrepresentation. 7 B. 8 The Court previously concluded that Plaintiff had not pled a bad faith claim against 9 Breach of Implied Covenant of Good Faith and Fair Dealing Infinity because Plaintiff had not plausibly alleged that Infinity actually owed Plaintiff benefits under the contract and instead the allegations alleged that the terms of her written contract 11 United States District Court Northern District of California 10 excluded from coverage the particular situation for which Plaintiff sought benefits. (Dkt. No. 14 12 at 9-10.) The Court subsequently allowed Plaintiff‟s claim to proceed based on the additional 13 allegations relating to Toth‟s statements that Plaintiff did not need to list her minor children on the 14 policy. (Dkt. No. 17 at 3.) 15 Infinity now seeks to dismiss the bad faith claim on the grounds that, under California law, 16 an insurer cannot be liable for bad faith where it complied with the written terms of an insurance 17 policy. (Dkt. No. 41 at 19.) The Court agrees. Under the household exclusion set forth in the 18 written insurance policy, Infinity properly withheld benefits from Plaintiff because her son was 19 not listed on the policy. Thus, as a matter of law, there can be no claim of bad faith against 20 Infinity. See, e.g., O’Keefe v. Allstate Indem. Co., 953 F. Supp. 2d 1111, 1116 (S.D. Cal. 2013) 21 (“Because [plaintiffs] cannot sue for bad faith without proving that benefits were withheld under 22 the policy „as written,‟ and because [plaintiffs] cannot establish that coverage existed under the 23 express terms of the contract, there is no cause of action for breach of the implied covenant of 24 good faith and fair dealing.”); Gasnik v. State Farm Ins. Co., 825 F. Supp. 245, 251 (E.D. Cal. 25 1992) (holding that plaintiffs failed to state a bad faith insurance claim for insurance company‟s 26 failure to provide benefits where the written terms of the contract did not require benefits to be 27 paid). The Court therefore grants with prejudice Infinity‟s motion to dismiss the fifth cause of 28 action for breach of the implied covenant of good faith and fair dealing. 11 1 C. Negligence 2 Under California law, an insured‟s cause of action against her insurer must be based on bad 3 faith conduct; negligent conduct is insufficient to bring a claim against an insurer. See Sanchez v. 4 Lindsey Morden Claims Servs., Inc., 72 Cal. App. 4th 249, 254 (1999) (“negligence is not among 5 the theories of recovery generally available against insurers”) (emphasis in original); Brown v. 6 Guarantee Ins. Co., 155 Cal. App. 2d 679, 689 (1957) (finding that “only bad faith should be the 7 basis of the insured‟s cause of action”); see also Tento Int’l, Inc. v. State Farm Fire & Cas. Co., 8 222 F.3d 660, 664 (9th Cir. 2000) (noting the unlikely viability of plaintiff‟s claim for negligent 9 handling of its insurance claim because, in California, negligence is not among the theories of recovery generally available against insurers”); Cobarrubias v. Allstate Ins. Co., No. CV-98-4136 11 United States District Court Northern District of California 10 R CWX, 1998 WL 656571, at *1 (C.D. Cal. July 10, 1998) (“The third cause of action for 12 negligence against Allstate is barred as a matter of law because the standard for tort liability 13 against an insurance company is bad faith, not negligence.”) (citations omitted). Accordingly, the 14 Court dismisses with prejudice Plaintiff‟s eighth cause of action for negligence against Infinity. Violation of California’s UCL, Bus. & Prof. Code § 17200 15 D. 16 A plaintiff may only seek equitable relief under California‟s UCL where she has no 17 adequate remedy at law. Philips v. Ford Motor Co., No. 14-CV-02989-LHK, 2015 WL 4111448, 18 at *16 (N.D. Cal. July 7, 2015) (“[T]he UCL provides only the equitable remedies of restitution 19 and injunctive relief. A plaintiff seeking equitable relief in California must establish that there is 20 no adequate remedy at law available.”) (citations omitted). Where, as here, a plaintiff can seek 21 money damages if she prevails on claims for breach of contract or breach of the implied covenant 22 of good faith and fair dealing, she has an adequate remedy at law. See, e.g., Gardner v. Safeco 23 Ins. Co. of Am., No. 14-CV-02024-JCS, 2014 WL 2568895, at *7 (N.D. Cal. June 6, 2014) 24 (dismissing UCL claim where “the money damages available to [plaintiff] in the event he prevails 25 on his claims for breach of contract and breach of the implied covenant of good faith and fair 26 dealing may provide an adequate remedy [at law]”); McAdam v. State Nat. Ins. Co., No. 27 12CV1333 BTM MDD, 2012 WL 4364655, at *3 (S.D. Cal. Sept. 24, 2012) (dismissing UCL 28 claim with prejudice where plaintiff “has an adequate legal remedy in the form of his breach of 12 1 contract claim and does not have a legitimate claim for injunctive relief or restitution”). Such is 2 the case even if all of plaintiff‟s non-UCL claims ultimately fail. Rhynes v. Stryker Corp., No. 10- 3 5619 SC, 2011 WL 2149095, at *4 (N.D. Cal. May 31, 2011) (“Plaintiffs‟ argument that they will 4 have no adequate remedy at law if their other claims fail is unavailing. Where the claims pleaded 5 by a plaintiff may entitle her to an adequate remedy at law, equitable relief is unavailable.”) 6 (emphasis in original) (citations omitted). 7 Plaintiff does not dispute that she has an adequate remedy at law by way of her breach of 8 contract claims against Infinity. Instead, she argues that she can proceed with her UCL claim 9 because she is permitted to seek restitution. (Dkt. No. 52 at 11.) “Restitution,” however, “is entirely inconsistent with the primary remedy [Plaintiff] seeks, which is payment of the policy 11 United States District Court Northern District of California 10 benefits in the form of damages.” Stewart v. Life Ins. Co. of N. Am., 388 F. Supp. 2d 1138, 1144 12 (E.D. Cal. 2005). Accordingly, the Court dismisses Plaintiff‟s UCL claim, as against Infinity 13 only, to the extent it is based on Infinity‟s alleged breach of the written contract. Plaintiff shall be 14 given leave to amend should she seek to assert a UCL claim on an alternative basis not related to 15 breach of the written contract. As above, any newly-pled UCL claim must identify the specific 16 prong(s) under which Plaintiff is proceeding; to the extent Plaintiff is proceeding under the 17 “fraudulent” prong, she must also satisfy the heightened pleading requirements of Rule 9(b). 18 E. 19 Plaintiff‟s claim against Infinity for violation of Section 17500 is dismissed with leave to 20 21 22 Violation of Business and Professions Code § 17500 amend for the same reasons articulated above with respect to Lithia. CONCLUSION For the foregoing reasons, the Court GRANTS-IN-PART and DENIES-IN-PART Lithia‟s 23 motion to dismiss and GRANTS Infinity‟s motion to dismiss. To summarize, Plaintiff‟s first, 24 fifth, seventh, and eighth causes of action are dismissed with prejudice. Plaintiff‟s eleventh and 25 twelfth causes of action are dismissed with leave to amend. The Court denies Lithia‟s motion to 26 dismiss Plaintiff‟s third and tenth causes of action. 27 28 Plaintiff shall file a new amended complaint within 30 days of this Order. Plaintiff is reminded that generally “an amended complaint supersedes the original complaint and renders it 13 1 without legal effect.” Lacey v. Maricopa Cnty., 693 F.3d 896, 927 (9th Cir. 2012) (en banc). 2 Plaintiff must therefore reattach any documents she relies upon, such as the Retail Installment 3 Sales Contract (Dkt. No. 9-1), to her new amended complaint. 4 5 IT IS SO ORDERED. Dated: July 14, 2016 6 7 JACQUELINE SCOTT CORLEY United States Magistrate Judge 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14

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