Yoakam v. State Farm Fire & Casualty Company et al

Filing 60

OPINION and ORDER: Granting in Part Denying in Part Motion for Leave to File Amended Complaint/Petition 51 . Plaintiffs proposed breach of contract, breach of the covenant of good faith, and negligence per se claims regarding insufficient i nsurance coverage are allowed, as explained above. The motion is denied in all other respects. See, formal Opinion. Further, as previously ordered by the Court, this case is referred to Magistrate Judge Thomas Coffin for settlement conference. Wit hin 21 days of this Order, the parties shall contact Paul Bruch, Courtroom Deputy for Magistrate Judge Thomas Coffin, at 541-431-4111 to schedule judicial settlement proceedings. Signed on 1/11/2017 by Judge Ann L. Aiken. (rdr) Modified from standard to opinion and corrected filed date on 1/13/2017 (kf).

UNITED STATES DISTRICT COURT
DISTRICT OF OREGON

LUJEAN YOAKAM, A.K.A. LOU JEAN
YOAKAM,

Case No. 6:15-cv-00478-AA
OPINION AND ORDER

Plaintiff,
v.
STATE F ARlvf FIRE AND CASUALTY
COMPANY and WELLS FARGO HOME
MORTGAGE, INC., A DIVISION OF
WELLS FARGO BANK, N.A.,
Defendants.

AIKEN, District Judge:
Plaintiff filed suit alleging claims for breach of contract, reformation of contract and
declaratory judgment. Plaintiff alleged that defendant State Faim Fire and Casualty Company
(State Farm) breached the terms of insurance contract by failing to provide adequate coverage for
storm damage that rendered plaintiffs residence uninhabitable. Plaintiff also alleged claims for
reformation of contract against State Fatm and defendant Wells Fargo Home Mortgage, Inc.
(Wells Fargo), claiming that the relevant insurance and mortgage contacts should be reformed to··
. convey the intent of the parties and to provide a replacement for plaintiffs residence. Defendants
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- OPINION AL'!D ORDER

moved to dismiss plaintiffs claim alleging refo1mation of contract, and in response, plaintiff
agreed that dismissal of the refo1mation claims were warranted. Plaintiff also argued that she
should be given the opportunity to amend her complaint to allege a claim of unconscionability
against State Farm and an unspecific contract claim for specific perfo1mance against Wells
Fargo. Finding it was unclear whether plaintiffs proposed amendments would be futile, I
allowed plaintiff the opportunity to seek amendment. See generally docs. 28, 35, 37.
Plaintiff now moves to amend her complaint. Rather than adding claims of
unconscionability and specific performance previously identified by plaintiff, however, she seeks
to expand her breach of contract claims against State Farm to include coverage for personal
prope1iy and loss of use; add claims against State Faim for fraud, elder abuse, intentional
infliction of emotional distress, tortious breach of the covenant of good faith and fair dealing,
negligence per se, and unjust emichment; add new factual allegations; and add damages for
physical injury, emotional distress, and punitive damages. State Fatm opposes plaintiffs motion,
arguing that the proposed amendments are untimely, prejudicial, futile, and will result in undue
delay. See Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2003) ("In assessing the propriety of a
motion for leave to amend, we consider five factors: (1) bad faith; (2) undue delay; (3) prejudice
to the opposing party; (4) futility of amendment; and (5) whether the plaintiff has previously
amended his complaint.")
I will allow plaintiffs proposed amendments with respect to claims closely related to
plaintiffs initial breach of contract claim alleging failure to provide adequate coverage and
adjust her loss under the relevant insurance policy. See Proposed ,Am. Comp!.

ifif 10,

18-20, 68-

70. I find that these claims - breach of contract for inadequate insurance coverage, breach of the
covenant of good faith and fair dealing, and negligence per se - involve the same allegations,
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evidence, and theories of liability underlying plaintiffs original breach of contract claim
involving State Farm's adjustment of her loss and failure to provide sufficient coverage. While I
agree that these proposed amendments could have and should have been brought at the
commencement of litigation, at this point I cannot find that they are futile or will cause undue
delay or prejudice.
However, I deny as futile the proposed amendments alleging breach of contract based on
inadequate alternative housing, fraud, elder abuse, intentional infliction of emotional distress
(IIED), unjust emichment, and tortious breach of the covenant of good faith and fair dealing.
Proposed Am. Comp!. ifif 13, 21, 25-68; see Nunes, 375 F.3d at 808 (futility alone can justify
denial of amendment).
First, plaintiff does not allege or identify a policy provision that requires State Farm to
mrnnge and provide housing deemed "adequate" so as to support plaintiffs contract and unjust
emichment claims related to housing; rather, plaintiff simply asserts that the policy provides
coverage for alternative housing after damage to covered residential propeiiy. See Proposed Am.
Comp!. ifif 13, 21, 27. Moreover, State Fmm presents evidence that plaintiff chose to live in her
daughter's camp trailer, and that it offered plaintiff alternative housing. See Thommen Deel. Exs.
3-4. Plaintiff offers no argument or evidence in response, stating only that the court should
accept plaintiffs proposed allegations as true at the pleading stage. Pl. 's Reply at 5. However,
this case is far beyond the pleading stage, discovery has occurred, and evidence suppo1iing
breach of contract and unjust emichment claims should be within plaintiffs possession and
knowledge.
Second, plaintiffs claim for fraud is similarly based on State Farm's alleged
misrepresentation that plaintiff could live only in a camp trailer after her home sustained
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damage. Proposed Am. Comp!.

iii!

26-29, 33. As noted above, State Farm presents evidence

contradicting this claim, in that plaintiff chose to live in the camp trailer and State Faim offered
alternative housing and made arrangements for plaintiff to reside in a motel. Thommen Deel.
Exs. 3-4. Again, plaintiff makes no effort to rebut this evidence. Moreover, plaintiffs allegations
fail to assert when and where the fraudulent representation was made and by whom, and this
information should not be incumbent on discovery; representations made by State Farm should
be within plaintiffs knowledge. See Avenue Lofts Condominiums Owners' Ass 'n v. Victaulic

Co., 24 F. Supp. 3d 1010, 1020 (D. Or. 2014) ("Averments of fraud must be accompanied by
'the who, what, when, where, and how' of the misconduct charged.") (citation omitted). Even if
additional discovery was necessary, some discovery has occuned and this case has proceeded to
the point where plaintiff cannot rely on concluso1y allegations. Should plaintiff obtain evidence
that supports a claim for fraudulent misrepresentation, the court may reconsider.
Third, the elder abuse statute requires wrongful taking or appropriation of money or
property of a vulnerable person. Or. Rev. Stat. § 124.110(1). Plaintiffs claim is based on her
payment of insurance premiums to State Fmm and State Fmm's alleged refusal to provide
sufficient insurance coverage. Proposed Am. Comp!.

iii! 40-43. These allegations do not asse11 a

claim for wrongfully taken or appropriated property, as plaintiff paid those premiums in
exchange for coverage under an insurance policy. Whether State farm breached the terms of that
policy is properly brought as a breach of contract rather than an elder abuse claim.
Finally, with respect to the claims for IIED and tortious breach of the covenant of good
faith and fair dealing, plaintiff does not allege "outrageous conduct" by State Fmm to support
either claim. lvfancuso v. Am. Family },fut. Ins. Co., 2009 WL 130259, at *4 (D. Or. Jan. 16,
2009) ("At the core of every IIED claim is the requirement that the behavior engaged in be
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- OPINION AND ORDER

'outrageous in the extreme."') (citing Watte v. Edgar lvfaeyens, Jr., }JD., P.C., 112 Or. App.
234, 239, 828 P.2d 479 (1992)); Thompson v. Allied 1Vfut. Ins. Co., 2000 WL 264318, at *1 (D.
Or. Mar. 3, 2000) (allowing tort claim where defendant insurance company falsely accused the
insured plaintiffs of arson, threatened and intimidated plaintiffs, and falsely told third parties that
plaintiff was an arsonist, burglar, and rapist); Christojferson v. Church of Scientology of

Portland, 57 Or. App. 203, 212-13, 644 P.2d 577 (1982) ("It is only by proof of conduct that is
'beyond the limits of social toleration' that plaintiff may recover in an action for outrageous
conduct."). Accordingly, these amendments will not be allowed.
CONCLUSION
Plaintiff's Motion to Amend (doc. 51) is GRANTED in part and DENIED in part.
Plaintiffs proposed breach of contract, breach of the covenant of good faith, and negligence per
se claims regarding insufficient insurance coverage are allowed, as explained above. The motion
is denied in all other respects. As previously ordered by the comi, the parties shall contact Paul
Brnch, Courtroom Deputy for Magistrate Judge Thomas Coffin, at 541-431-4111 to schedule
judicial settlement proceedings.
IT IS SO ORDERED.
Dated this

_j{__~f January, 2017.

Ann Aiken
United States District Judge

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