Freitag v. Catlin Indemnity Company et al

Filing 20

ORDER: Defendants' Motion to Dismiss for Failure to State a Claim 7 is denied. Plaintiff's request [#17] is construed as a Motion for Leave to Amend his Complaint and is GRANTED. Signed on 9/12/12 by U.S. District Judge Michael R. Hogan. (sln)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
EUGENE DIVISION

KURT FREITAG dba BIG FISH
PARTNERS I,
Plaintiff,

Case No.

v.

6:12-CV-01111-HO

ORDER

CATLIN INDEMNITY COMPANY; CATLIN
INSURANCE COMPANY, INC.; and
CENTURY SURETY COMPANY,
Defendants.
INTRODUCTION
Defendants Catlin Indemnity Company, Catlin Insurance
Company, Inc., and Century Surety Company (defendants) removed
this declaratory judgment action from the Circuit Court of the
State of Oregon for the County of Lincoln, to this court on June
20, 2012.

[ # 1] .

This action arises from litigation involving non-performance
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of windows installed in several phases of a housing development
in Newport, Oregon.

[#1-Ex.Ap.8].

On or about March 9, 2011,

plaintiff tendered defense of that litigation to his insurers.
Id.

His complaint alleges that "despite several demands made

upon defendants, defendants have failed to honor their
obligations under the policy."

[#1-Ex.A.-p.9].

declaratory judgment and damages of $95,949.74.

Plaintiff seeks
Id.

Defendants move to dismiss plaintiff's complaint for failure
to state a claim under Fed.R.Civ.P. 12 (b) (6).

[ #7 J •

DISCUSSION
Plaintiff Kurt Freitag, dba Big Fish Partners I, alleges
that defendants are in breach of their contracts with him by
failing to provide a defense in pending litigation as required by
policy No.3600100613.

[#1-Ex.A].

The underlying litigation, a

dispute between plaintiff and Antlers Concrete Construction,
Michael Fisher Construction and Milgard Manufacturing Inc,
relates to the non-performance of windows installed in three
phases of plaintiff's Meritage Little Creek development, located
in Newport, Oregon.

[#1-Ex.A-pp. 7-8].

Defendants move to dismiss plaintiff's claims because:
(1)plaintiff is not the named insured in the policy identified in
plaintiff's complaint;

(2) neither of the named Catlin defendants

issued the policy identified in plaintiff's complaint;

(3) the

policy provides coverage for liability at a specific address

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different than the location in plaintiff's complaint and (4) the
policy is a surplus lines policy and thus not subject to a claim
for attorney fees under ORS 742.061.
~

[ #7 J •

Standard:
~

Motion to Dismiss:

A Motion to Dismiss under Fed.R.Civ.P. 12(b) (6) is proper
only where there is a lack of a cognizable legal theory or the
absence of sufficient facts alleged under a cognizable theory.
Balisteri v. Pacific Police Dept., 901 F.2d 696,699 (9th
Cir.1990).

The issue is not whether the plaintiff is likely to

succeed on the merits but if the complaint is sufficient to
entitle the plaintiff to proceed beyond the pleadings in an
attempt to establish his claim.
45, 48

(9th Cir 1978).

De La Cruz v. Torrey, 582 F.2d

Under these standards, leave to amend a

deficient complaint must be granted "...

[u] nless it is

absolutely clear that no amendment can cure the defects."
v. Dep't of Corrections,
~

66 F.3d 245, 248

Lucas

(9th Cir. 1995).

Defendants' Motion to Dismiss [#71:
~

Named Insured:

Defendants argue that plaintiff has not established that he
is an insured under the policy 1 and despite policy language

Defendants contend that Mr. Freitag has many business
identities, two of which are
Big Fish Partners and Big Fish
Partners I and note that the insured named in policy #3600100613,
is Kurt Freitag dba Big Fish Partners, not plaintiff Kurt Freitag
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stating that the policy was issued to: "you and your spouse
but only with respect to the conduct of a business of which you
are a sole owner," has made no allegations regarding the
ownership of either business.

[#8-p.3; #8-Ex.l-p.32; #19-p.3].

Plaintiff responds that because he was issued an individual
policy it does not matter which business entity is named because
he, as an individual, is the insured.

[#17-p.2].

An individual doing business under several different names,
and whose insurance policies are written to the individual doing
business under those names, is not a separate entity in his
capacity operating each of the businesses.
Wash.

See e.g., Providence

Ins. v. Valley Forge Ins., Co., 42 Cal. App. 1194, 1200-

1202 (1996) ("The designation 'd/b/a' means 'doing business as'
but is merely descriptive of the person or corporation who does
business under some other name. Doing business under another name
does not create an entity distinct from the person operating the
business.").

Thus, for the purposes of insurance coverage,

irrespective of any dba name,

the individual is the only legal

entity.
~

Catlin defendants: ..

Defendants assert that Policy # 3600100613 was issued by
Catlin Speciality Insurance Company, not by any of the named
defendants.

Plaintiff agrees that this assertion "appears to

dba Big Fish Partners I.
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[#8-Ex.l; #19-pp. 2-3].

possibly be correct." [#17-p.2].

Plaintiff requests that he be

allowed to file an amended petition naming an additional
defendant.

[#17-pp.2-3].

At this stage of the litigation, plaintiff has sufficiently
pleaded that he purchased insurance from a Catlin entity.
Discovery will serve to inform which corporate entity insured
plaintiff and may allow some of the named defendants to be
dismissed through summary judgment.
Given the complex corporate structure of the Catlin group of
insurers, plaintiff's request to amend his complaint is granted.
~

Address of Insured Property:

Defendants contend that even if they were the proper
defendants and plaintiff is the named insured, plaintiff has
failed to state a claim upon which relief may be granted because
the property at issue is not the premises listed on the schedule,
namely 33 Oceanview, Newport Oregon 97361.

[#8-pp.3-4 and Ex.l

-p.42; #19-p.S].
Plaintiff responds that the address on the policy is
incorrect and the result of a scriveners error.
Ex. 2-p .1].

[#17-p. 3; #18-

Plaintiff argues that he has never owned any property

at 33 Oceanview in Newport, and refers the court to his insurance
application which he asserts, shows 3360 Oceanview, Newport, OR,
(the address of his Meritage project), as the intended insured
premises.

Id.

5 - ORDER

Because the proffered evidence is extrinsic to

plaintiff's complaint it is not appropriate for the court's
consideration at this stage of litigation (even if it were
legible).
A mutual mistake by parties to an insurance contract can
provide the basis for reformation if it is proven by clear and
satisfactory evidence that the parties shared a misconception
about a basic assumption or vital fact upon which they based
their bargain.

Ranger Ins., Co., v. Globe Seed & Feed Co., Inc.,

125 Or.App. 321, 327-28 (1993).

Defendants note that plaintiff

may well have a viable reformation claim based on this alleged
scrivener's error.
~

[#19-p. 6].

I

agree.

Attorney Fees:

Finally defendants move to dismiss plaintiff's claim for
attorney fees arguing that the policy at issue in this matter
clearly states on the declaration page that it is a surplus lines
policy, which ORS 742.001(3) excludes.

[#7; #8-8-p.4; #19-p.7].

Plaintiff concedes that attorney fees are not available
against a surplus lines insurer however, argues that he is
entitled to fees accrued as a result of defending his claim, the
defense of which is owed under the four corners of the policy.

[ # 17 -p. 4] .
A Motion to Dismiss is evaluated on the pleadings alone.
While the parties concur that surplus lines policies are not
covered by the provisions of ORS 742, (including the attorney fee

6 - ORDER

provision), there is nothing on the face of the pleading that
would suggest the surplus lines exclusion applies to plaintiff's
claim for attorney fees.
CONCLUSION
Based on the foregoing, defendants' Motion to Dismiss [#7]
is DENIED.

Plaintiff's request [#17] is construed as a Motion

for Leave to Amend his Complaint and is GRANTED.
IT IS SO ORDERED
DATED this

/Zty-

day

of~-:-2012.

D STATES DI

7 - ORDER