Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_16-cv-00754/USCOURTS-caed-2_16-cv-00754-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

DONALD DURBEN, REBECCA 

DURBEN,

Plaintiffs,

v.

STATE FARM GENERAL INS. CO.,

BRENDA ERICKSEN,

Defendants.

No. 2:16-cv-00754-MCE-EFB

MEMORANDUM AND ORDER

Through this action, Plaintiffs Donald and Rebecca Durben (“Plaintiffs”) claim that 

Defendants State Farm General Insurance Company (“State Farm”) and Brenda 

Ericksen (“Ericksen”) forced them to sell their home at a loss by refusing to pay Plaintiffs’ 

preferred contractor to repair fire damage to their home under their homeowners’

insurance policy. Defendants seek to dismiss Plaintiffs’ claims for misrepresentation 

under Federal Rule of Civil Procedure 12(b)(6)1 on the ground that Plaintiffs’ claims are 

insufficiently pleaded under Rule 9(b). They further argue that Ericksen is not a proper 

defendant. Defendants are correct, and their Motion to Dismiss (ECF No. 4) is 

GRANTED. 

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

otherwise indicated. 

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BACKGROUND2

Plaintiffs owned a home located at 12830 River Hills Drive, Bella Vista, CA (the 

“Home”) and purchased a homeowners insurance policy (the “Policy”) from State Farm. 

On February 1, 2014, a fire damaged the Home and Plaintiffs tendered a claim under the 

Policy. Defendant Ericksen, a State Farm employee, handled Plaintiffs’ claim in the 

normal course and scope of her employment with State Farm. 

At State Farm’s request, Plaintiffs hired Service Master by Chronic Disaster 

Services (“Service Master”) to estimate the cost of restoring the Home to its pre-fire 

condition. State Farm rejected Service Master’s $690,000 estimate, and thereafter hired 

another contractor, Clean Rite/Build Rite (“Clean Rite”), to submit an estimate. In July of 

2014, Clean Rite estimated the cost of repairing the Home at $272,000. Plaintiffs allege 

that Defendant Ericksen told them that Clean Rite was ineligible to perform the repairs.3 

In the Spring of 2015, Clean Rite revised its repair estimate to $430,000. State Farm 

then informed Plaintiffs that it would only pay for repair costs that did not exceed that 

sum. 

Instead of repairing the home, Plaintiffs sold it at a loss. They filed this lawsuit in 

Shasta County Superior Court bringing claims against State Farm for breach of contract, 

breach of the implied covenant of good faith and fair dealing, and declaratory relief and 

reformation. The Complaint also alleges claims for intentional misrepresentation and 

negligent misrepresentation against both State Farm and Ericksen. Those latter two 

claims are the subject of the pending Motion to Dismiss. 

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 2 The following recitation of facts is taken from Plaintiffs’ Complaint (ECF No. 1). 

3 The Complaint does not specify why, how, or for how long Clean Rite was “ineligible” to perform 

the repairs, or how their eligibility to perform the necessary repairs impacted their estimate. 

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STANDARD

On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all 

allegations of material fact must be accepted as true and construed in the light most 

favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 

(9th Cir. 1996). Rule 8(a)(2) “requires only ‘a short and plain statement of the claim 

showing that the pleader is entitled to relief’ in order to ‘give the defendant fair notice of 

what the . . . claim is and the grounds upon which it rests.’” Bell Atl. Corp. v. Twombly, 

550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A 

complaint attacked by a Rule 12(b)(6) motion to dismiss does not require detailed factual 

allegations. However, “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.” Id. (internal citations and quotations omitted). 

A court is not required to accept as true a “legal conclusion couched as a factual 

allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 

555). “Factual allegations must be enough to raise a right to relief above the speculative 

level.” Twombly, 550 U.S. at 555 (citing 5 Charles Alan Wright & Arthur R. Miller, 

Federal Practice and Procedure § 1216 (3d ed. 2004) (stating that the pleading must 

contain something more than “a statement of facts that merely creates a suspicion [of] a 

legally cognizable right of action”)).

Furthermore, “Rule 8(a)(2) . . . requires a showing, rather than a blanket 

assertion, of entitlement to relief.” Twombly, 550 U.S. at 555 n.3 (internal citations and 

quotations omitted). Thus, “[w]ithout some factual allegation in the complaint, it is hard 

to see how a claimant could satisfy the requirements of providing not only ‘fair notice’ of 

the nature of the claim, but also ‘grounds' on which the claim rests.” Id. (citing Wright & 

Miller, supra, at 94, 95). A pleading must contain “only enough facts to state a claim to 

relief that is plausible on its face.” Id. at 570. If the “plaintiffs . . . have not nudged their 

claims across the line from conceivable to plausible, their complaint must be dismissed.” 

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Id. However, “[a] well-pleaded complaint may proceed even if it strikes a savvy judge 

that actual proof of those facts is improbable, and ‘that a recovery is very remote and 

unlikely.’” Id. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).

A court granting a motion to dismiss a complaint must then decide whether to 

grant leave to amend. Leave to amend should be “freely given” where there is no 

“undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice 

to the opposing party by virtue of allowance of the amendment, [or] futility of the 

amendment . . . .” Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. 

Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to 

be considered when deciding whether to grant leave to amend). Not all of these factors 

merit equal weight. Rather, “the consideration of prejudice to the opposing party . . . 

carries the greatest weight.” Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 

185 (9th Cir. 1987)). Dismissal without leave to amend is proper only if it is clear that 

“the complaint could not be saved by any amendment.” Intri-Plex Techs. v. Crest Group, 

Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 1006, 

1013 (9th Cir. 2005); Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 

1989) (“Leave need not be granted where the amendment of the complaint . . . 

constitutes an exercise in futility . . . .”)).

ANALYSIS

Plaintiffs’ misrepresentation claims cannot survive as to either defendant. 

Defendants argue that Plaintiffs cannot maintain a claim against Ericksen based on 

statements Plaintiffs specifically allege she made within the course and scope of her

employment. Defendants also observe that the misrepresentation claims are too 

generally pleaded to pass muster under Rule 9(b). The Court agrees with both of 

Defendants’ arguments. 

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A. Defendant Ericksen is not a proper defendant. 

Courts adjudicating insurance disputes under California law rarely permit direct 

claims against an insurer’s individual employees for conduct arising solely from the 

insurer’s performance under the policy. See Icasiano v. Allstate Ins. Co., 103 F. Supp. 

2d 1187, 1189 (N.D. Cal. June 23, 2000) (“An agent of an insurance company is 

generally immune from suits brought by claimants for actions taken while the agent was 

acting within the scope of its agency.”). Under California law, insurance company 

employees who act within the course and scope of their employment cannot be held 

individually liable for that conduct unless they act as a dual agent or for their own 

personal benefit. Mercado v. AllState Ins. Co., 340 F.3d 824, 826 (9th Cir. 2003). This 

rule applies even to an insured’s claims of fraud. Icasiano, 103 F. Supp. 2d at 1190. 

Here, Plaintiffs specifically allege that Defendant Ericksen acted “within the 

course and scope of her . . . employment and agency.” ECF No. 1-1 at ¶ 1. There are 

no facts alleged that tend to establish that Ericksen acted as a dual agent or for her own 

personal benefit in her conversations with Plaintiffs or her adjustment of their insurance 

claim. Furthermore, the only injury that Plaintiffs allege was caused by Ericksen is the 

same injury caused by the denial of policy benefits by State Farm. Id. at ¶¶ 28, 34. 

Plaintiffs’ failure to allege that Ericksen acted outside the course and scope of her 

employment—either as a dual agent or for her own personal benefit—entitles her to 

dismissal from this action. Their clear allegation that she acted within the scope of her 

employment would make any attempt at amending their claims against her futile. See

Trew v. International Game Fish Ass’n, Inc., 404 F. Supp. 2d 1173, 1177 (N.D. Cal. Dec. 

13, 2005) (“In determining whether amendment would be futile, a court examines 

whether the complaint could be amended to cure the defect requiring dismissal without 

contradicting any of the allegations of the original complaint.” (internal quotation marks 

and brackets omitted)). Accordingly, Plaintiffs’ claims against Defendant Ericksen are 

DISMISSED without leave to amend. 

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B. Plaintiffs’ fraud claims are insufficiently pleaded. 

Plaintiffs’ Fourth and Fifth Causes of Action for intentional and negligent 

misrepresentation against State Farm must also be dismissed for failure to comply with 

Rule 9(b). Rule 9(b) requires fraud claims to be pleaded with particularity. In the Ninth 

Circuit, a fraud claim can withstand an attack under Rule 9(b) if the plaintiff alleges 

specific facts concerning the “who, what, when, where, and how of the misconduct 

charged.” Vees v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (internal 

quotation marks omitted). Rule 9(b) applies not only to claims for intentional 

misrepresentation, but claims for negligent misrepresentation as well. See Cisco 

Systems, Inc. v. STMicroelectronics, Inc., 77 F. Supp. 3d 887, 898 (N.D. Cal. Dec. 29,

2014) (applying Rule 9(b) to the plaintiff’s claim for negligent misrepresentation). 

Here, Plaintiffs’ Complaint is bereft of the specificity necessary to state claims for 

misrepresentation. For example, there are no allegations that explain what was false or 

misleading about the misrepresentations identified in the Complaint, why those 

statements were false, or when they were made. Furthermore, Plaintiffs’ damages 

allegations are far too general to support their fraud claims. Accordingly, Plaintiffs’ fraudbased claims are DISMISSED, with leave to amend, as to State Farm. 

CONCLUSION

Defendants’ Motion to Dismiss (ECF No. 4) is GRANTED in its entirety. 

Defendant Brenda Ericksen is hereby DISMISSED from this action with prejudice. 

Plaintiffs’ Fourth and Fifth Causes of Action are DISMISSED with leave to amend as to 

State Farm. Plaintiff may file a First Amended Complaint within twenty-one (21) days 

from the date this Order is electronically filed. 

IT IS SO ORDERED. 

Dated: July 29, 2016

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