Westridge Townhomes Owners Association v. Great American Assurance Company et al

Filing 46

ORDER granting plaintiff's 38 Motion for Leave to File Amended Complaint within 14 days by Judge Ricardo S Martinez.(RS)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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WESTRIDGE TOWNHOMES OWNERS
ASSOCIATION,

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Plaintiff,

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GREAT AMERICAN ASSURANCE
COMPANY, a foreign insurance company, as
successor to AGRICULTURAL
INSURANCE COMPANY; GREENWICH
INSURANCE COMPANY, a foreign
insurance company,

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ORDER GRANTING PLAINTIFF’S
MOTION FOR LEAVE TO FILE
AMENDED COMPLAINT

v.

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Case No. C16-1011RSM

Defendants.
This matter comes before the Court on Plaintiff Westridge Townhomes Owners

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Association (“the Association”)’s Motion for Leave to File Amended Complaint. Dkt. #38.

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The Association moves to amend its Complaint to add claims for insurance bad faith and IFCA

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violations.

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Defendants Great American Assurance Company (“Great American”) and

Greenwich Insurance Company (“Greenwich”)’s oppose the Motion. Dkts. #41 and #43.

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Pursuant to Fed. R. Civ. P. 15(a)(2), a “court should freely give leave [to amend] when

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justice so requires,” Fed. R. Civ. P. 15(a)(2).

Courts apply this policy with “extreme

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liberality.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003). Five

ORDER GRANTING PLAINTIFF’S MOTION FOR LEAVE TO FILE AMENDED COMPLAINT

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factors are commonly used to assess the propriety of granting leave to amend: (1) bad faith, (2)

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undue delay, (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether

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plaintiff has previously amended the complaint. Allen v. City of Beverly Hills, 911 F.2d 367,

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373 (9th Cir. 1990); Foman v. Davis, 371 U.S. 178, 182 (1962). In conducting this five-factor

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analysis, the court must grant all inferences in favor of allowing amendment. Griggs v. Pace

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Am. Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999). In addition, the court must be mindful of

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the fact that, for each of these factors, the party opposing amendment has the burden of

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showing that amendment is not warranted. DCD Programs, Ltd. v. Leighton, 833 F.2d 183,

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187 (9th Cir. 1987); see also Richardson v. United States, 841 F.2d 993, 999 (9th Cir. 1988).

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The Court has reviewed Plaintiff’s Motion, Defendants’ Responses, the associated

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materials, and Plaintiff’s Reply brief. The Court is convinced that the Association has satisfied

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the IFCA notice requirement by providing at least 20 days’ written notice to the insurers and

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the insurance commissioner of its intent to assert the claim.

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See Dkt. #42; RCW

48.30.015(8)(a)–(c); Bronsink v. Allied Prop. & Cas. Ins. Co., 2010 U.S. Dist. LEXIS 56159,

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*4-5, 2010 WL 2342538 (W.D. Wash. June 8, 2010). The fact that Defendants did not

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expressly deny Plaintiff’s claim until April 12, 2017, under the unusual circumstances of this

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case, does not change the fact that notice was given. Plaintiff argues that Defendants refused to

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process Plaintiff’s claim in a reasonably prompt manner. Dkt. #45 at 3. There appears to be

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several questions of fact as to the reasonableness of Defendants actions in processing Plaintiff’s

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claim. This is enough to defeat a futility argument. See, e.g., Cedar Grove Composting, Inc. v.

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Ironshore Specialty Ins. Co., No. C14-1443RAJ, 2015 WL 3473465, at *6 (W.D. Wash. June 2,

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2015) (“A refusal to pay a demand for coverage reasonably promptly is an unreasonable denial

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of benefits, even if only temporary.”); Taladay v. Metro. Grp. Prop. & Cas. Ins. Co., No. C14-

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ORDER GRANTING PLAINTIFF’S MOTION FOR LEAVE TO FILE AMENDED COMPLAINT

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1290-JPD, 2016 WL 3681469, at *20 (W.D. Wash. July 6, 2016) (“Although MetLife never

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explicitly denied plaintiffs’ requests for coverage, MetLife’s unreasonable delay in payment

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and/or underpayment of various aspects of plaintiffs’ claim violated IFCA.”); Kifer v. Am.

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Family Mut. Ins. Co., No. 13-6085 RJB, 2015 WL 12030068, at *4–5 (W.D. Wash. Feb. 10,

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2015) (issues of fact prevented dismissing IFCA claim although insurer “eventually paid the

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full amount”). Whether or not Plaintiff’s IFCA claims succeed on the merits is not before the

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Court.

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Plaintiff’s Motion satisfies factors one, two, three, and five, above, and these factors are
not discussed by Defendants.

The only factor before the Court is futility.

Defendants’

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arguments are not particularly convincing. As stated by Defendant Greenwich, “a claim for

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unreasonableness is a question of fact for a jury.” Dkt. #43 at 6. Further, the Court will not

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consider the extensive facts submitted by Defendant Greenwich at this stage as this is not a

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motion for summary judgment. See Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir.

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1988) (“[A] proposed amendment is futile only if no set of facts can be proved under the

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amendment to the pleadings that would constitute a valid and sufficient claim or defense.”)

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Plaintiff’s proposed amended complaint adds claims that could conceivably survive if Plaintiff

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can establish certain facts. Accordingly, the Court finds that the requested amendment is

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warranted.

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Having reviewed the relevant briefing, the declarations and exhibits attached thereto,
and the remainder of the record, the Court hereby finds and ORDERS that:
(1) Plaintiff Westridge Townhomes Owners Association (“the Association”)’s Motion
for Leave to File Amended Complaint (Dkt. #38) is GRANTED.

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ORDER GRANTING PLAINTIFF’S MOTION FOR LEAVE TO FILE AMENDED COMPLAINT

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(2) Plaintiffs shall file their Proposed Amended Complaint (Dkt. #38-3) and serve it on
Defendants within fourteen (14) days of this Order.

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DATED this 2nd day of June 2017.

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A

RICARDO S. MARTINEZ
CHIEF UNITED STATES DISTRICT JUDGE

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ORDER GRANTING PLAINTIFF’S MOTION FOR LEAVE TO FILE AMENDED COMPLAINT

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