Moss v. Infinity Insurance Company, et al

Filing 7

ORDER REVIEWING COMPLAINT UNDER SECTION 1915 AND DISMISSING COMPLAINT WITH LEAVE TO AMEND. Signed by Magistrate Judge Jacqueline Scott Corley on 9/11/2015. (ahm, COURT STAFF) (Filed on 9/14/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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ARRYANNE MOSS,

Case No. 15-cv-03456-JSC

Plaintiff,
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v.
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INFINITY INSURANCE COMPANY, et al.,
Defendants.

Re: Dkt. No. 2

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United States District Court
Northern District of California

ORDER REVIEWING COMPLAINT
UNDER SECTION 1915 AND
DISMISSING COMPLAINT WITH
LEAVE TO AMEND

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This matter involves insurance claims arising from an automobile collision. Plaintiff
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Arryanne Moss (“Plaintiff”), proceeding in forma pauperis, filed the instant complaint against
Defendants Infinity Insurance Company (“Infinity”), AWS Insurance Company (“AWS”), Lithia
Chrysler, Jeep, Dodge of Santa Rosa (“Lithia”), and a number of Doe Defendants (collectively,
“Defendants”). The Court previously granted Plaintiff’s application to proceed in forma pauperis.

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(Dkt. No. 6.) The Court must now review the allegations under 28 U.S.C. § 1915. Because the
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complaint fails to establish a basis for subject matter jurisdiction, the Court DISMISSES the
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complaint with leave to amend.
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COMPLAINT ALLEGATIONS
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In July 2012, Plaintiff—whose son was then 15 years old—visited her friend Charlotte
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Toth (“Toth”) at Lithia, the car dealership where Toth worked. There, Plaintiff entered a written

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contract with Lithia to purchase a 2012 Jeep liberty. Toth, who knew Plaintiff had a minor son,
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executed the contract on Lithia’s behalf. At Toth’s recommendation, Plaintiff also purchased
“gap” insurance payable to AWS at $649 per month. In addition, although Toth knew that

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Plaintiff already had an auto insurance policy, Toth persuaded Plaintiff to purchase an automobile
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liability policy from Infinity. As Plaintiff did not have her credit card at the time, Toth
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volunteered to pay the cost of the Infinity insurance policy on her own personal card until it was in

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place. Toth did so. Lithia and Toth promised Plaintiff that the gap insurer would promptly pay

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for any loss of the vehicle, and that Infinity would pay for any loss incurred as a result of an

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accident involving the vehicle. Plaintiff paid all payments under the policy.

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On September 6, 2012, Plaintiff’s vehicle was involved in a traffic accident and the vehicle

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was rendered a total loss. Plaintiff made a timely demand of payment to Infinity and AWS.

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Infinity refused to pay, denying coverage because Plaintiff’s son was not listed as an insured

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driver on the policy. Plaintiff then asked Toth to make a claim for benefits to AWS under the gap

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insurance policy. AWS denied her claim, as well.

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The complaint includes seven causes of action. The first three causes of action allege that

United States District Court
Northern District of California

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Lithia, Infinity, and AWS’s refusal to pay out on the insurance claims constitute breach of

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contract. In the fourth cause of action, Plaintiff alleges that all Defendants breached the implied

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covenant of good faith and fair dealing by failing and refusing to conduct an adequate

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investigation before denying and withholding benefits, failing to reasonably interpret provisions of

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her insurance policy, failing to provide a reasonable basis for denying the claims, withholding

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valid payments, and misrepresenting facts and policies. The fifth cause of action alleges

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negligence against all Defendants. The sixth and seventh causes of action arise under California’s

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Business & Professions Code. The Sixth cause of action is for false and misleading business

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practices under Section 17200, and the seventh is for false and misleading advertising practices

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under Section 17500. Plaintiff seeks damages, including compensatory, special, and punitive

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damages.

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LEGAL STANDARD

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The Court must dismiss an in forma pauperis (“IFP”) complaint before service of process

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if it is frivolous, fails to state a claim, or contains a complete defense to the action on its face. 28

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U.S.C. § 1915(e)(2). The Court retains discretion over the terms of dismissal, including whether

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to grant leave to amend. Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000).

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A complaint is frivolous for Section 1915 purposes where there is no subject matter

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jurisdiction. See Castillo v. Marshall, 207 F.3d 15, 15 (9th Cir. 1997) (citation omitted); see also
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Pratt v. Sumner, 807 F.2d 817, 819 (9th Cir. 1987) (recognizing the general proposition that a

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complaint should be dismissed as frivolous on Section 1915 review where subject matter

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jurisdiction is lacking). And in any event, the Court has an independent obligation to address

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whether it has subject matter jurisdiction over the case. See Valdez v Allstate Ins. Co., 372 F.3d

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1115, 1116 (9th Cir. 2004) (noting that district courts are “obligated to consider sua sponte

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whether [they] have subject matter jurisdiction”).
Regarding dismissals for failure to state a claim, Section 1915(e)(2) parallels the language

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of Federal Rules of Civil Procedure 12(b)(6). Lopez, 203 F.3d at 1126-27. The complaint

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therefore must allege facts that plausibly establish the defendant’s liability. See Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555-57 (2007). A complaint must also comply with Rule 8, which

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United States District Court
Northern District of California

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requires the complaint to contain “a short and plain statement of the grounds for the court’s

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jurisdiction[.]” Fed. R. Civ. P. 8(a)(1).
DISCUSSION

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I.

Lack of Subject Matter Jurisdiction
Plaintiff’s complaint lacks a basis for federal subject matter jurisdiction and must be

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dismissed pursuant to Section 1915(e). First, the complaint contains no short and plain statement

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of the Court’s jurisdiction, which fails to comply with Rule 8. But even apart from this

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requirement, the allegations and claims otherwise fail to support a basis for jurisdiction.

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In most cases, original federal subject matter jurisdiction may be premised on two grounds:

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(1) diversity jurisdiction, or (2) federal question jurisdiction. Plaintiff’s complaint alleges only

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state law claims and does not allege that any defendant violated her federal rights, so the only

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jurisdictional hook in this action can be through diversity. To properly allege diversity

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jurisdiction, a plaintiff must claim damages in excess of $75,000. 28 U.S.C. § 1332(a). In

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addition, “diversity jurisdiction requires complete diversity between the parties—each defendant

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must be a citizen of a different state from each plaintiff.” Diaz v. Davis (In re Digimarc Corp.

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Derivative Litig.), 549 F.3d 1223, 1234 (9th Cir. 2008); 28 U.S.C. § 1331. Plaintiff has not

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alleged facts to meet either requirement.

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“Generally, the amount in controversy is determined from the face of the pleadings.”
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Crum v. Circus Circus Enters., 231 F.3d 1129, 1131 (9th Cir. 2000). Here, Plaintiff has not

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alleged any facts from which the Court can draw a conclusion about the amount in controversy at

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all. Her prayer for relief seeks unpaid benefits under the insurance policy for the total loss of her

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car, but she does not allege a value.1 Nor does Plaintiff assign a dollar value to the any of the

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other damages she seeks. While Plaintiff also seeks punitive damages, courts “scrutinize [a] claim

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closely” where “a claim for punitive damages makes up the bulk of the amount in controversy” as

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it may here. Cason v. Cal. Check Cashin Stores, No. No. 13-cv-03388-JCS, 2013 WL 5609329, at

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*3 (N.D. Cal. Oct. 11, 2013) (citations omitted). Plaintiff’s complaint does not allege an amount

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in controversy and therefore it is not apparent that the matter in controversy exceeds the sum or

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value of $75,000, exclusive of interest or costs. The complaint therefore fails to allege diversity

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United States District Court
Northern District of California

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jurisdiction. See, e.g., White v. Lemendola, No. CIV S-10-3303 KJM DAD PS, 2011 WL

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2414420, at *2 (E.D. Cal. June 8, 2011).
Moreover, the complaint does not adequately allege complete diversity between the

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parties. “A plaintiff suing in a federal court must show in his pleading, affirmatively and

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distinctly, the existence of whatever is essential to federal jurisdiction, and, if he does not do so,

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the court, on having the defect called to its attention or on discovering the same, must dismiss the

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case unless the defect can be corrected by amendment.” Tosco Corp. v. Cmtys. for a Better Env’t,

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236 F.3d 495, 499 (9th Cir. 2001) (internal quotation marks and citation omitted), abrogated on

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other grounds by Hertz Corp. v. Friend, 559 U.S 77 (2010); see also Kanter v. Warner-Lambert

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Co., 265 F.3d 853, 857 (9th Cir. 2001) (“Absent unusual circumstances, a party seeking to invoke

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diversity jurisdiction should be able to allege affirmatively the actual citizenship of the relevant

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parties.” ). Thus, where the plaintiff makes no allegations in the complaint regarding citizenship,

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the court cannot properly exercise diversity jurisdiction over the claim. See Kanter, 265 F.3d at

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857 (“[F]ailure to specify state citizenship [is] fatal to [an] assertion of diversity jurisdiction.”);

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Taking judicial notice that the original manufacturer’s suggested retail price of a 2012 Jeep
Liberty was $23,395, even if she seeks benefits to recoup the full value of the car at the time of
purchase, this does not satisfy the $75,000 amount-in-controversy requirement. See 2012 Jeep
Liberty, US News Best Cars, http://usnews.rankingsandreviews.com/cars-trucks/Jeep_Liberty/
(last visited Sept. 10, 2015).
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Rilling v. Burlington N. R.R. Co., 909 F.2d 399, 400 (9th Cir. 1990) (holding that there was no

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diversity jurisdiction where the plaintiff made no allegations with respect to the citizenship of the

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defendant). Here, rather than “affirmatively and distinctly” alleging that Infinity, AWS, and Lithia

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are citizens of states other than California, Plaintiff merely describes them as businesses of

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“unknown legal origin and form[.]” (Dkt. No. 1 ¶¶ 2-5.) This is not enough. See Kanter, 265

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F.3d at 857; Rilling, 909 F.2d at 400; see, e.g., Telscape Comm’cns, Inc. v. Aspect Software, Inc.,

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No. 2:10-cv-00756-JHN-PLAx, 2010 WL 1444573, at *1 (C.D. Cal. Apr. 8, 2010).
In short, because the complaint does not allege that any defendant violated Plaintiff’s

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federal rights and does not allege facts supporting the amount in controversy or the citizenship of

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all relevant parties, allegations necessary to establish diversity jurisdiction, the complaint does not

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United States District Court
Northern District of California

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demonstrate a basis for federal subject matter jurisdiction and fails to survive Section 1915 review.

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See, e.g., Smiley v. JP Morgan Chase, No. 14-cv-01651 NC, 2014 WL 2605434, at *2 (N.D. Cal.

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June 10, 2014). When a court dismisses a complaint for failure to properly allege diversity

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jurisdiction, leave to amend should be granted unless doing so would be futile. See Jacobs v.

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Patent Enf’t Fund, 230 F.3d 565, 567-68 (9th Cir. 2000). Because it is possible that diversity

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jurisdiction exists in this matter, the Court will grant Plaintiff leave to file an amended complaint.

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CONCLUSION

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For the reasons described above, the Complaint does not allege facts necessary to establish

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either diversity jurisdiction or federal question jurisdiction. The complaint is therefore fails to

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allege a basis for subject matter jurisdiction and must be dismissed pursuant to Section 1915(e). If

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Plaintiff can correct this pleading defect, she may file an amended complaint no later than October

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1, 2015.

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IT IS SO ORDERED.
Dated: September 11, 2015
______________________________________
JACQUELINE SCOTT CORLEY
United States Magistrate Judge

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