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Porch v. Ochoa's Construction, Inc.

United States District Court, D. Montana, Billings Division

January 22, 2018

KELLY D. PORCH and MICHELLE R. PORCH, Plaintiff,
v.
OCHOA'S CONSTRUCTION, INC.; PREFERRED CONTRACTORS INSURANCE COMPANY RISK RETENTION GROUP; GOLDEN STATE CLAIMS ADJUSTERS; and JOHN DOES I-V, Defendants.

          FINDINGS AND RECOMMENDATION OF U.S. MAGISTRATE JUDGE

          TIMOTHY J. CAVAN United States Magistrate Judge.

         Before the Court is defendants Preferred Contractors Insurance Company Risk Retention Group's (“PCIC”) and Golden State Claims Adjusters' (“Golden State”) (collectively, “Defendants”) Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6) and Request for Oral Argument (the “Motion”). (Doc. 3.) For the reasons that follow, the Court recommends that Defendants' Motion be denied.

         I. Pertinent Facts

         When considering motions to dismiss, a court must accept as true all well-pleaded allegations of material fact and construe them in the light most favorable to the nonmoving party. Daniels-Hall v. National Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). The Court also may consider materials attached to the complaint or incorporated by reference. U.S. v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). Accordingly, the following facts are derived from plaintiffs Kelly D. Porch's (“Kelly”) and Michelle R. Porch's (“Michelle”) (collectively, “Plaintiffs”) Second Amended Complaint and Demand for Jury Trial (“SAC”) (Doc. 28.), together with the events occurring in the course of this litigation as reflected by the Court's docket.

         Plaintiffs filed their original Complaint and Demand for Jury Trial (“Complaint”) on November 24, 2014, in the Montana Thirteenth Judicial District Court, Yellowstone County. (Doc. 6.) The initial Complaint alleged damages arising from a workplace accident Kelly claims to have sustained in July 2014. (Id.) Neither PCIC nor Golden State were named as defendants.

         At the time of Kelly's alleged accident, PCIC insured defendant Ochoa's Construction, Inc. (“Ochoa”) under a commercial general liability policy. (Doc. 28 at ¶ 13.) PCIC informed Ochoa by letter dated May 21, 2015, that no coverage existed for the allegations in Plaintiffs' Complaint, and that PCIC would be denying coverage for defense and indemnity. (Id. at ¶¶ 14, 16.)

         On February 24, 2016, Ochoa entered into a stipulated consent judgment and covenant not to execute, and assigned to Plaintiffs all of its rights against Defendants. (Id. at ¶ 19.) Plaintiffs thereafter dismissed all defendants except Ochoa. (Docs. 18, 23.)

         On March 28, 2017, Judge Ingrid Gustafson of the Montana Thirteenth Judicial District Court held a reasonableness hearing with respect to Plaintiffs' and Ochoa's stipulated consent judgment. (Doc. 26.) Plaintiffs were present at the hearing and presented evidence in support of the reasonableness of the judgment; Ochoa did not appear. (Id.) On March 30, 2017, Judge Gustafson entered judgment in the amount of $4, 700, 000.00 in favor of Plaintiffs and against Ochoa. (Id.)

         On May 19, 2017, Plaintiffs filed an Unopposed Motion for Leave to File [SAC]. That motion apparently was not accompanied by any briefing or argument as to the appropriateness of amending a complaint after judgment had been entered against the last remaining defendant. (Doc. 5-1 at 521-522.) Judge Gustafson's order granting Plaintiffs leave to file the SAC notes “that the parties have conferred and the sole remaining current Defendant in this case, [Ochoa], has consented in writing to the filing of the [SAC].” (Doc. 27.) The order does not address any concerns as to the timing of the amendment.

         Plaintiffs filed the SAC on May 23, 2017, adding PCIC and Golden State as defendants, and asserting various claims against them based on their coverage decisions with respect to Ochoa. (See generally Doc. 28.) The SAC also restates Plaintiffs' original claims against Ochoa. (Id.)

         Defendants entered a Notice of Appearance in Montana State Court on June 28, 2017, whereupon they promptly removed the case to this Court. (Docs. 1, 5-1 at 527-528.) They filed the instant Motion July 5, 2017, seeking the dismissal of Plaintiffs' claims against them pursuant to Rule 12(b)(6), Fed.R.Civ.P. The Court may discuss additional facts below as necessary.

         II. Legal Standard

         A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001); see also Chavez v. Bank of America, N.A., 2010 WL 1854087 at *4 (E.D. Cal. 2010) (summarizing the legal standard to be applied to Rule 12(b)(6) motions to dismiss). “Dismissal under Rule 12(b)(6) is proper when the complaint either (1) lacks a cognizable legal theory or (2) fails to allege sufficient facts to support a cognizable legal theory.” Zixiang Li v. Kerry, 710 F.3d 995, 999 (9th Cir. 2013) (quoting Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008)).

         The Court evaluates Rule 12(b)(6) motions to dismiss in light of Rule 8(a), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” While “detailed factual allegations” are not required, Rule 8 “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotations and citations omitted). “[A] plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do....” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotations and citations omitted). ...


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