Quijano v. GEICO Advantage Insurance Company

[3] 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 * * * 7 MARIA QUIJANO, an individual, Case No. 2:20-cv-01464-KJD-BNW 8 Plaintiff, ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 9 v. 10 GEICO ADVANTAGE INSURANCE COMPANY, DOES I-V, and ROE 11 CORPORATIONS I-V, inclusive, 12 Defendants. 13 Before the Court are two motions. First is Defendant’s Motion to Dismiss, or in the 14 alternative, to Sever/Bifurcate and Stay Claims for Bad Faith (ECF #6). Plaintiff responded in 15 opposition (ECF #9) and Defendant replied (ECF #10). Second is Plaintiff’s Motion to Remand 16 to State Court (ECF #7) to which Defendant responded (ECF #11). Plaintiff did not reply. 17 Because Plaintiff claims the Court does not have jurisdiction to rule on the motion to dismiss, 18 both motions will be addressed together. 19 I. Factual and Procedural Background 20 Plaintiff Maria Quijano (“Quijano”) was injured in a car accident in August 2018. (ECF 21 #7, at 10). At the time of the accident, Quijano had an automobile insurance policy with 22 Defendant GEICO Advantage Insurance (“GEICO”). Id. This policy included 23 uninsured/underinsured (“UM/UIM”) coverage. Id. While the complaint does not state that the 24 other driver involved in the accident lacked sufficient insurance coverage, Quijano alleges that 25 GEICO refused to provide her with the UM/UIM benefits owed to her under the policy. Id. 26 Quijano thus brings two causes of action: breach of contract, and breach of the covenant of good 27 faith and fair dealing. Id. at 10–11. Quijano originally filed her complaint in the Nevada state 28 court, but GEICO removed the action to federal court based on diversity jurisdiction. (ECF #1, at 1 2–4). Diversity exists as Quijano is a resident of Nevada and GEICO is a Nebraska corporation 2 with its principal place of business in Maryland. Id. at 3. Quijano claims that the suit does not 3 meet the $75,000 amount-in-controversy threshold and that the case must be remanded. (ECF #7, 4 at 4–7). 5 Quijano’s complaint lists two causes of action and claims damages for each. For the 6 breach of contract claim, Quijano claims damages “NOT exceeding $70,000.00.” (ECF #7, at 7 11). For the breach of the covenant of good faith and fair dealing cause of action, Quijano claims 8 damages “in excess of $15,000.00, but NOT exceeding $70,000.00.” Id. Quijano’s prayer for 9 relief requests “[s]pecial damages in an amount in excess of $15,000.00, but NOT more than 10 $70.000.00” plus costs of the suit, attorney’s fees, and other relief the Court finds just and 11 proper. Id. at 11–12. The language used in Quijano’s complaint makes it clear that Quijano 12 wished to emphasize that the amount in controversy did not exceed the $75,000 threshold and 13 that federal jurisdiction was improper. GEICO argues that the amount in controversy is more 14 likely than not more than $75,000 when combining the damages claimed for each cause of 15 action, attorney’s fees, and potential punitive or tort damages for the extra-contractual claim. 16 (ECF #11, at 8–10). 17 II. Legal Standard 18 a. Motion to Remand 19 A defendant may remove a civil action “brought in a State court of which the district 20 courts of the United States have original jurisdiction.” 28 U.S.C. § 1441 (a). The district courts 21 have original jurisdiction over actions “where the amount in controversy exceeds the sum or 22 value of $75,000, exclusive of interest and costs, and is between citizens of different states.” Id. 23 at § 1332(a)(1). Generally, “courts apply a mechanical test to determine whether the amount in 24 controversy requirement has been met when a case is removed to federal court.” McCaa v. Mass. 25 Mut. Life. Ins. Co., 330 F.Supp.2d 1143, 1145 (D. Nev. 2004). The court “simply reads the ad 26 damnum clause of the complaint to determine whether the matter in controversy exceeds 27 [$75,000].” Id. (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 28 1997)). 1 If a complaint “specifies damages in an amount less than the jurisdictional minimum, the 2 defendant must show, by a preponderance of the evidence, facts demonstrating that the amount 3 involved in the litigation exceeds the statutory jurisdictional threshold.” Id. (citing Sanchez v. 4 Monumental Life Ins. Co., 102 F.3d 398 , 403–04 (9th Cir. 1996)). “Where doubt regarding the 5 right to removal exists, a case should be remanded to state court.” Matheson v. Progressive 6 Specialty Ins. Co., 319 F.3d 1089, 1089 (9th Cir. 2003). Where a defendant’s assertion of the 7 amount in controversy is challenged “both sides submit proof and the court decides.” Dart 8 Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81 , 88 (2014). That proof is vital 9 because federal “jurisdiction may [not] be maintained by mere averment.” McNutt v. Gen. 10 Motors Acceptance Corp., 398 U.S. 178 , 189 (1936). 11 b. Motion to Dismiss 12 Under Rule 8, a pleading must contain “a short and plain statement of the claim showing 13 that the pleader is entitled to relief.” FED. R. CIV. P. 8(a)(2). A complaint does not require 14 “detailed factual allegations,” but “requires more than labels and conclusions, and a formulaic 15 recitation of the elements of a cause of action will not do.” Bell Atlantic Co. v. Twombly, 550 16 U.S. 544 , 555 (2007). “To survive a motion to dismiss, a complaint must contain sufficient 17 factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft 18 v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557). All “[f]actual 19 allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 20 U.S. at 555. While the court “must take all of the factual allegations in the complaint as true, we 21 ‘are not bound to accept as true a legal conclusion couched as a factual allegation.’” Iqbal, 556 22 U.S. at 678 (quoting Twombly, 550 U.S. at 555). “When the claims in a complaint have not 23 crossed the line from conceivable to plausible, the complaint must be dismissed.” Hendon v. 24 Geico Ins. Agency, 377 F.Supp.3d 1194, 1196 (D. Nev. 2019). 25 “Generally, a district court may not consider any material beyond the pleadings in ruling 26 on a Rule 12(b)(6) motion . . . However, material which is properly submitted as part of the 27 complaint may be considered on a motion to dismiss.” Hal Roach Studios, Inc. v. Richard Feiner 28 & Co., 896 F.2d 1542 , 1555 n.19 (9th Cir. 1990). 1 III. Analysis 2 The Court must determine if it has jurisdiction to rule on the motion to dismiss. 3 Therefore, the motion to remand is addressed first. Quijano concedes that diversity exists, thus 4 federal jurisdiction is proper if the amount in controversy exceeded $75,000 at the time of 5 removal. Quijano’s complaint alleges two causes of action with each one causing damages up to 6 $70,000. The complaint also requests attorney’s fees and any other relief the Court finds proper. 7 The complaint does not address the coverage parameters or policy limits of Quijano’s policy 8 with GEICO. Quijano’s motion for remand states that the policy limit is $25,000. Quijano sent 9 GEICO a settlement demand of $1,000,000 or policy limits prior to filing suit. The demand 10 included important information that the complaint lacks. It states that the at-fault carrier paid 11 their policy limit of $25,000, that Quijano suffered $46,104 in past special damages, has 12 $839,710.09 of future special damages, that Quijano expects general damages four times greater 13 than the special damages, and lays out what constitutes bad faith in Nevada. Based on the 14 demand, it appears that both parties agree that the amount in controversy at the time of removal 15 is greater than $75,000. 16 GEICO has met its burden, by a preponderance of the evidence, that the amount exceeds 17 the jurisdictional threshold. McCaa, 330 F.Supp.2d at 1145 . The evidence shows that the tort 18 damages involved with the extracontractual claim, combined with the special damages suffered 19 and attorney’s fees, make the amount in controversy greater than $75,000. Quijano’s expectation 20 that a court would grant general damages up to four times greater than the special damages is 21 further evidence of the amount in controversy. Because the parties are diverse and the amount in 22 controversy at the time of removal exceeded the jurisdictional threshold, the Court has 23 jurisdiction to rule on the motion to dismiss. Plaintiff’s motion to remand is denied. 24 GEICO urges the Court to dismiss Quijano’s extracontractual cause of action because she 25 has not pleaded facts sufficient to show that she is entitled to relief. To avoid converting the 26 motion into a motion for summary judgment, the Court will only consider the allegations of the 27 complaint. 28 The complaint is vague and does not list the amount of medical bills Quijano received, 1 any potential future medical bills, or if the other driver involved was underinsured. It does not 2 allege facts to show how GEICO breached its implied duty of good faith and fair dealing. The 3 complaint merely states that Quijano was involved in an accident and that GEICO has not paid 4 Quijano’s UM/UIM claim. Quijano alleges that GEICO “knowingly and/or recklessly” failed to 5 comply with the terms of the contract without alleging any facts to show such a failure. 6 “A violation of the covenant of good faith and fair dealing in the insurance context gives 7 rise to a bad-faith tort claim.” Sgrillo v. Geico Casualty Co., 323 F.Supp.3d 1167, 1170 (D. Nev. 8 2018). To “assert a claim for bad faith, a plaintiff must show: (1) an insurer’s denial of (or 9 refusal to pay) an insured’s claim; (2) without any reasonable basis; and (3) the insurer’s 10 knowledge or reckless disregard of the lack of a reasonable basis for its claim denial.” Id. 11 Quijano has not pleaded facts to show that relief is plausible. Similar to the plaintiff in Sgrillo, 12 Quijano’s complaint “does not detail plaintiff’s medical bills, the amount (if any) that she 13 received from the underinsured motorist, or the offer (if any) that she received from defendant.” [14] Id. The complaint does not contain factual allegations that plausibly suggest that GEICO’s 15 failure to pay the policy limits was without a reasonable basis or that GEICO had knowledge or 16 reckless disregard of the lack of a reasonable basis to deny the claim. Plaintiff’s complaint fails 17 to state a claim for which relief can be granted for bad faith and the claim is dismissed. GEICO’s 18 motion to sever and stay the claim is therefore denied as moot. 19 Quijano requests that if the Court intends to dismiss the extracontractual claims then she 20 should be granted leave to amend the complaint. However, Quijano did not attach a proposed 21 amended complaint or state what amendments would be made or what facts she would allege 22 that would support a bad faith claim. Quijano merely states that she made an offer to GEICO that 23 included her medical bills. That is not a sufficient factual matter to show that relief is plausible 24 on its face. Iqbal, 556 U.S. at 678 . Therefore, the motion to amend is denied without prejudice. 25 In the event Quijano intends to file an amended complaint, she should proceed by filing a formal 26 motion to amend within 30 days from the date of this order. Any motion to amend must contain 27 the attached proposed amended pleading per Local Rule 15-1. 28 // 1 TV. Conclusion 2 Accordingly, IT IS HEREBY ORDERED that Plaintiff's Motion to Remand (ECF #7) is 3| DENIED. 4 IT IS FURTHER ORDERED that Defendant’s Motion to Dismiss (ECF #6) is 5 | GRANTED. 6 | Dated this 30th day of March, 2021. 7 DAG S. Kent J. Dawson 9 United States District Judge [10] 1] [28] -6-