Chang v. CSAA General Insurance Company

Filing 25

ORDER that 6 Motion to Dismiss is GRANTED. FURTHER ORDERED that Plaintiff's third cause of action, alleging violations of the Nevada Unfair Claims Practices Act, and Plaintiffs request for punitive damages are DISMISSED without prejudice. FU RTHER ORDERED that Plaintiff shall have until April 15, 2015, to file a Second Amended Complaint in this action. Failure to file by this deadline will result in dismissal of Plaintiff's third cause of action and request for punitive damages, with prejudice. Signed by Chief Judge Gloria M. Navarro on 3/20/15. (Copies have been distributed pursuant to the NEF - MMM)

1

UNITED STATES DISTRICT COURT

2

DISTRICT OF NEVADA

3

Robin Chang,

)
)
)
)
)
)
)
)
)

4

Plaintiff,

5

vs.

6

CSAA General Insurance Company,
7

Defendant.

8

Case No.: 2:14-cv-1411-GMN-CWH
ORDER

9

Pending before the Court is the Motion to Dismiss, (ECF No. 6), filed by Defendant

10
11

CSAA General Insurance Company. Plaintiff Robin Chang filed a Response, (ECF No. 10), to

12

which Defendant replied, (ECF No. 12).

13

I.

14
15
16

BACKGROUND
This case arises out of Defendant’s alleged refusal to pay benefits under an uninsured

motorist policy (“UIM” Policy) held by Plaintiff.
Specifically, the First Amended Complaint states that Plaintiff suffered extensive

17

injuries when he was struck by a vehicle while riding a bicycle on February 27, 2012. (Am.

18

Compl. ¶¶ 7-11, ECF No. 1-2). On May 29, 2012, Geico Claims Insurance Company, which

19

insured the alleged tortfeasor, tendered its policy limits of $15,000 to Plaintiff. (Id. at ¶ 12). On

20

January 11, 2013, Plaintiff submitted a demand letter to Defendant, requesting payment of the

21

full $250,000 UIM policy limit. (Id. at ¶ 15).

22

On February 13, 2013, Defendant declined to pay the full UIM policy limit, and instead

23

allegedly offered to pay $88,000 in “new money” to settle Plaintiff’s claim. (Id. at ¶ 16). After

24

Plaintiff rejected this offer, Defendant requested that Plaintiff undergo a medical examination

25

by a doctor of Defendant’s choosing in order to assess the value of Plaintiff’s claim. (Id. at ¶

Page 1 of 5

1

18). After the examination took place, Defendant allegedly offered to settle Plaintiff’s claim

2

for “$35,000.00 new money.” (Id. at ¶ 19).

3

On February 25, 2013, Plaintiff alleges that he supplemented his demand with a

4

“medical recommendation for surgery and a future cost estimate of $131,400.00.” (Id. at ¶ 20).

5

Nevertheless, Defendant refused to exceed its prior “$35,000.00 new money offer.” (Id. at ¶ 21).
In response to Defendant’s refusal to pay the requested sum, Plaintiff filed the instant

6
7

action in Nevada state court. See (Am. Compl., ECF No. 1-2). The Amended Complaint sets

8

forth three causes of action: (1) breach of contract; (2) breach of the implied covenant of good

9

faith and fair dealing; and (3) violations of the Nevada Unfair Claims Practices Act. (Id. at

10

¶¶ 22-37). Based on these claims, Plaintiff seeks general damages in excess of $10,000,

11

punitive damages in excess of $10,000, an unspecified amount in special damages, and

12

attorneys’ fees. (Id. at 9:1-13).

13

On August 29, 2014, Defendant removed the action to this Court. (Pet. For Removal,

14

ECF No. 1). Thereafter, Defendant filed the instant Motion, seeking the dismissal of Plaintiff’s

15

claims for violations of the Nevada Unfair Claims Practices Act and his request for punitive

16

damages pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 6).

17

II.

18

LEGAL STANDARD
Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon

19

which relief can be granted. Fed. R. Civ. P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544,

20

555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on

21

which it rests, and although a court must take all factual allegations as true, legal conclusions

22

couched as a factual allegation are insufficient. Twombly, 550 U.S. at 555. Accordingly, Rule

23

12(b)(6) requires “more than labels and conclusions, and a formulaic recitation of the elements

24

of a cause of action will not do.” Id. “To survive a motion to dismiss, a complaint must contain

25

sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its

Page 2 of 5

1

face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). “A

2

claim has facial plausibility when the plaintiff pleads factual content that allows the court to

3

draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. This

4

standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

5

If the court grants a motion to dismiss for failure to state a claim, leave to amend should

6

be granted unless it is clear that the deficiencies of the complaint cannot be cured by

7

amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Pursuant

8

to Rule 15(a), the court should “freely” give leave to amend “when justice so requires,” and in

9

the absence of a reason such as “undue delay, bad faith or dilatory motive on the part of the

10

movant, repeated failure to cure deficiencies by amendments previously allowed, undue

11

prejudice to the opposing party by virtue of allowance of the amendment, futility of the

12

amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962).

13

III.

14

DISCUSSION
In the instant Motion, Defendant argues that the Court should dismiss: (1) Plaintiff’s

15

claims arising under Nevada’s Unfair Claims Practices Act and (2) Plaintiff’s request for

16

punitive damages. The Court will address each of these arguments in turn.

17

A.

18

Defendant argues that Plaintiff has failed to provide sufficient factual allegations to

Violations of the Nevada Unfair Claims Practices Act

19

support his claims arising under the Nevada Unfair Claims Practices Act. The Nevada Unfair

20

Claims Practices Act, codified at Section 686A.310 of the Nevada Revised Statutes, lists sixteen

21

activities which constitute unfair practices in the insurance context.

22

In lieu of setting forth factual allegations to support Plaintiff’s claims, the Amended

23

Complaint asserts that Defendant committed violated the Nevada Unfair Claims Practices Act

24

with a series of conclusory allegations that consist of nothing more than the language of each

25

relevant subsection. For instance, Nev. Rev Stat § 686A.310(1)(e) prohibits an insurer from

Page 3 of 5

1

“[f]ailing to effectuate prompt, fair and equitable settlements of claims in which liability of the

2

insurer has become reasonably clear.” In alleging his claim under this subsection, Plaintiff

3

states only that Defendant “failed to effectuate a prompt, fair and equitable settlement of

4

Plaintiff’s claim even though liability was reasonably clear, as required by NRS

5

686A.310(1)(e).” (Am. Compl. ¶ 34, ECF No. 1-2). This type of cut-and-paste allegation is

6

precisely what the Supreme Court held to be insufficient in Iqbal and Twombly.

7

Plaintiff’s bald recitations of the various subsections of section 686A.310 fail to

8

plausibly allege violations of the Nevada Unfair Claims Practices Act. See Ashcroft v. Iqbal,

9

556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). Therefore, the Court will dismiss

10

Plaintiff’s claims arising under the Nevada Unfair Claims Practices Act. As Plaintiff may be

11

able to cure the defects in these claims through amendment, the dismissal will be without

12

prejudice.

13

B.

14

Under Nevada law, punitive damages may be awarded only upon a showing that a

15

defendant acted with oppression, fraud, or malice. See, e.g., D.R. Horton, Inc. v. Betsinger, 335

16

P.3d 1230, 1232 (Nev. 2014) (citing Nev. Rev. Stat. § 42.005). As relevant to this

17

determination, Section 42.001(2) of the Nevada Revised Statutes defines “fraud” as “an

18

intentional misrepresentation, deception or concealment of a material fact known to [a] person

19

with the intent to deprive another person of his or her rights or property or to otherwise injure

20

another person.” Nev. Rev. Stat. § 42.001(2). Section 42.001(3) defines “[m]alice, express or

21

implied” as “conduct which is intended to injure a person or despicable conduct which is

22

engaged in with a conscious disregard of the rights or safety of others.” Nev. Rev. Stat. §

23

42.001(3). Section 42.001(4) defines “oppression” as “despicable conduct that subjects a

24

person to cruel and unjust hardship with conscious disregard of the rights of the person.” Nev.

25

Rev. Stat. § 42.001(4).

Punitive Damages

Page 4 of 5

1

In the instant case, the allegations in the Amended Complaint do not raise a plausible

2

inference that Defendant acted with oppression, fraud, or malice. Indeed, Plaintiff’s allegations

3

indicate only that Defendant failed to tender the full amount to which Plaintiff believed he was

4

entitled as a result of his injuries. (Am. Compl. ¶¶ 7-21). Accordingly, the Court will dismiss

5

Plaintiff’s request for punitive damages. However, as Plaintiff may be able to correct this

6

deficiency through amendment, the dismissal will be without prejudice.

7

IV.

8
9
10

CONCLUSION
IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss, (ECF No. 6), is

GRANTED.
IT IS FURTHER ORDERED that Plaintiff’s third cause of action, alleging violations

11

of the Nevada Unfair Claims Practices Act, and Plaintiff’s request for punitive damages are

12

DISMISSED without prejudice.

13

IT IS FURTHER ORDERED that Plaintiff shall have until April 15, 2015, to file a

14

Second Amended Complaint in this action. Failure to file by this deadline will result in

15

dismissal of Plaintiff’s third cause of action and request for punitive damages, with prejudice.

16

DATED this 30th day of March, 2015.

17
18
19

___________________________________
Gloria M. Navarro, Chief Judge
United States District Court

20
21
22
23
24
25

Page 5 of 5