Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_15-cv-02087/USCOURTS-caed-2_15-cv-02087-5/pdf.json

Nature of Suit Code: 380
Nature of Suit: Other Personal Property Damage
Cause of Action: 28:1332 Diversity-Insurance Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

JOHN DELEON, individually and on 

behalf of all others similarly situated 

and on behalf of the general public,

Plaintiff,

v.

ELITE SELF STORAGE 

MANAGEMENT, LLC, a California 

limited liability company, et al.,

Defendants.

No. 2:15-cv-02087-MCE-EFB

ORDER

Defendants Mandot, LLC (dba 1st American Self Storage), Budget Self Storage, 

(dba Tiger Self Storage), Elite Self Storage Management, LLC, Brandon Joseph Luthye 

and Tina Luthye (collectively “Moving Defendants”) have filed a motion in this matter 

seeking leave to file a cross-complaint against Defendant Repwest Insurance Company 

(“Repwest”) as well as a third-party complaint against Sage Insurance Servicing, LLC 

(“Sage”) and Ponderosa Insurance Agency, LLC (“Ponderosa”). As set forth below, 

those Motions are GRANTED.1

 1 Having determined that oral argument would not be of material assistance, the Court ordered the 

matter submitted on the briefs. E.D. Local Rule 230(g).

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Moving Defendants operate self-storage facilities, and for a time permitted 

Ponderosa, as well as Defendant Repwest, to sell property insurance to tenants of 

1st American. Defendant Tiger Self Storage similarly permitted the sale of policies to its 

tenants through Sage. Moving Defendants now seek to file a cross-complaint seeking 

equitable indemnity from Repwest if Repwest’s actions in securing insurance failed to 

satisfy various statutory and regulatory requirements. Similarly, Moving Defendants 

seek to file a third-party complaint against Sage, who is not yet a party to this litigation, 

on grounds that Sage may also have failed to comply with similar requirements. 

Defendant Repwest opposes Moving Defendant’s Motion on grounds that equitable 

indemnity claims are unavailable to claims brought against Moving Defendants pursuant 

to California’s Unfair Competition Law (“UCL”) as codified at California Business and 

Professions Code § 17200, et seq. Repwest further contends that Moving Defendants 

have not met the essential elements of a claim for equitable indemnity in any event 

because they do not allege to have been joint tortfeasors.

Federal Rule of Civil Procedure 13(g)2 permits a defendant to assert a cross-claim 

against a co-party who may be liable to the defendant for claims arising out of the same 

transaction or occurrence as the subject matter of the original action. Similarly, Rule 

14(a) permits a defending party to serve a summons and complaint on a nonparty 

alleged to be liable for all or part of the claims being asserted against the defendant. In 

asserting the propriety of a motion to amend, courts looks generally to whether 1) the 

moving party has acted in bad faith; 2) the presence of undue delay; 3) likely prejudice 

to the opposing party; 4) the futility of the amendment sought; and 5) the moving party’s 

previous amendments. Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990). 

If any of these factors justifies denying an opportunity to amend, a court has discretion to 

foreclose amendment. Foman v. Davis, 371 U.S. 178, 182 (1962).

///

 2 All further references to “Rule” or “Rules” are to the Federal Rules of Civil Procedure unless 

otherwise noted.

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In addressing these factors, Moving Defendants assert that there is no evidence 

of any bad faith, that neither undue delay or prejudice is an issue since the case is still in 

its infancy, that the asserted grounds for indemnity are not futile, and that no previous 

amendment to the pleadings has been sought. Repwest takes no issue with those 

assertions other than to argue, as indicated above, that the proposed amendments are 

futile since Moving Defendants cannot state a viable claim for equitable indemnity under 

the circumstances.

The Court disagrees with the contention that the proposed cross-claim or thirdparty complaint would necessarily be futile. While Repwest argues that statutory 

violations of the UCL, like those asserted against moving defendants, cannot form the 

basis for equitable indemnity, the authority it cites interprets not the UCL but instead 

other statutory schemes containing their own contribution and indemnity provisions. 

See, e.g., Employers Ins. v. Musick, Peeler & Garrett, 948 F. Supp. 942, 945 (S.D. Cal. 

1995) (no equitable indemnity where the California Corporations Code contained its own 

system for contribution and indemnity). Repwest cites no authority pertaining specifically 

to UCL violations, and Moving Defendants assert that the UCL contains no such 

provisions. Moreover, Repwest’s argument that equitable indemnity requires the 

presence of a joint tortfeasor appears misplaced. See BFGC Architects Planners, Inc. v. 

Forcum/Mackey Construction, Inc., 119 Cal. App. 4th 848, 852 (2004) (“[J]oint and 

several liability in the context of equitable indemnity is fairly expansive.” We agree it is 

not limited to ‘the old common term ‘joint tortfeasor’ . . . ‘It can apply to acts that are 

concurrent or successive, joint or several, as long as they create a detriment caused by 

several actors.”).

Repwest does correctly point out that the futility of amendment must be measured 

by the standards applicable to the sufficiency of a challenged pleading under Rule 

12(b)(6). See Kuschner v. Nationwide Credit, Inc., 256 F.R.D. 684, 687 (E.D. Cal. 

2009). Nonetheless, a proposed amendment is futile only if it would be immediately 

subject to dismissal. Johnson v. Serenity Transp., Inc., 2015 WL 4913266 at *3 (N.D. 

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Cal. Aug. 17, 2015). Here, no such showing has been made as indicated above. 

Additionally, and in any event, the Court declines to exhaustively adjudicate the propriety 

of pleadings in the context of a motion to amend. Instead, such a challenge under the 

circumstances present here should be made, if necessary, through a fully briefed motion 

to dismiss.

In sum, for all the foregoing reasons, Moving Defendants’ Motion for Leave to File 

Cross-Complaint and Third-Party Complaint (ECF No. 59) is GRANTED. Moving 

Defendants are directed to file and serve their proposed Cross-Complaint and ThirdParty Complaint within seven (7) days from the date this order is electronically filed.

IT IS SO ORDERED.

Dated: June 24, 2016

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