Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-00022/USCOURTS-casd-3_15-cv-00022-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332in Diversity-Insurance Contract

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AUG 2 8 2015 

CLERK U.S. '::I:::;n~:CT COURT 

sounlERN D!SH\ICT jf;CAUrORNIA 

UNITED STATES DISTRICT C ~TD.,,!, v\ ~ DEPUTY

, 

SOUTHERN DISTRICT OF CALIFORNIA 

SAN DIEGO UNIFIED PORT CASE NO. 15-cv-00022-WQH­ DISTRICT, JLB 

Plaintiff, ORDER 

vs. 

UNDERWRITERS AT LLOYD'S"'T 

LONDON AND OTHER LONDON 

MARKET INSURERS' NORTH 

PACIFIC INSURANCB COMPANY, 

LTD., 

Defendants. 

NORTH PACIFIC INSURANCE 

COMPANY, 

Counterclaimant, 

vs. 

SAN DIEGO UNIFIED PORT 

DISTRICT, 

Counter-Defendant. 

fL\1nES,Judge: 

The matter before the Court is the motion to dismiss pursuant to Federal Rule of 

Civil Procedure 12(b)(6) or, in the alternative, motion for a more definite statement 

pursuant to Federal Rule ofCivil Procedure 12( e) ("motion to dismiss the Counterclaim 

for Reimbursement") (ECF No. 25) filed by Plaintiff and Counter-Defendant San Diego 

Unified Port District. 

I. Background 

On January 6, 2015, Plaintiff San Diego Unified Port District commenced this 

action by filing the Complaint in this Court against Defendants Underwriters atLloyd's 

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London and Other London Market Insurers ("Lloyd's") and North Pacific Insurance 

Company, Ltd. (ECF No.1). On March 5,2015, North Pacific Insurance Company 

("North Pacific") appeared in this action, filing a motion for a more definite statement. 1 

(ECF No.6). On March 26, 2015, Plaintiff filed the First Amended Complaint 

("F AC"), which is the operative complaint in this case. (ECF No. 12). On March 27, 

2015, the Court issued an Order, denying North Pacific's motion for a more definite 

statement as moot. (ECF No. 14). On May 28, 2015, Defendant Lloyd's filed an 

answer. (ECF No. 21). On May 28, 2015, Defendant North Pacific filed an answer and 

Counterclaim for Reimbursement against Plaintiff. (ECF No. 20). 

On June 22, 2015, Plaintiff filed the motion to dismiss the Counterclaim for 

Reimbursement, accompanied by a declaration and two exhibits. (ECF No. 25). On 

July 13,2015, Defendant North Pacific filed an opposition (ECFNo. 29), accompanied 

by a request for judicial notice (ECF No. 30). On July 20, 2015, Plaintiff filed a reply, 

accompanied by a request for judicial notice. (ECF No. 33). 

II. Allegations of the FAC 

The F AC alleges that North Pacific entered into insurance policies, Policy Nos. 

85CB 1 004 (9-1-85 to 9-1-87), with non-party Campbell Industries, Inc. ("Campbell"), 

which agreed to "defend the Port against property damage liability claims arising out 

of an occurrence .... " (ECF No. 12 at 4). In 2004, the California Regional Water 

Quality Control Board (''the Regional Board") issued Investigative Order No. R9-2004­

0027, requiring Plaintiff to "prepare and submit a technical report to the Regional 

Board regarding contaminated marine sediment in the San Diego Bay" at the National 

Steel & Shipbuilding Company Shipyard Sediment Site ("the Site"). Id. at 5. In 2009, 

the City ofSan Diego filed a lawsuit against Plaintiff and other parties in the Southern 

1 According to North Pacific North Pacific and North Pacific Insurance Company, Ltd. 

are distinct and unrelated entitles. (ECF No. 20 at 18). North Pacific is a company organized 

under the laws ofOregon, and North Pacific Insurance Company, Ltd. is a company organized 

under the laws of Bermuda. Id. North Pacific appears in this action as "Defendant North 

Pacific Insurance Company ... sued erroneously as North Pacific Insurance Company, Ltd.... " 

Id. at 2. 

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District, and other parties filed cross-claims against Plaintiff ("the Shipyard Suit"). In 

2012, the Regional Board ordered Plaintiff to take "corrective actions necessary to 

remediate the contaminated marine bay sediment" at the Site. Id. 

Plaintiff"timely tendered the Shipyard Suit to North Pacific, along with written 

requests that North Pacific defend and indemnify the Port pursuant to the provisions 

ofthe North Pacific Policies." Id. at 6. In April 2012, Defendant North Pacific agreed 

to defend Plaintiff in the Shipyard Suit, subject to a reservation of rights. "North 

Pacific has failed to fully defend the Port in the Shipyard Suit pursuant to the Port's 

North Pacific Policies." Id. 

The F AC asserts eight claims for relief, and three claims against Defendant 

North Pacific: (1) declaratory relief; (2) breach of contract; and (3) bad faith and the 

breach of the implied covenant of good faith and fair dealing. Plaintiff requests a 

declaration that the North Pacific policies obligate Defendant North Pacific "to fully 

defend and reimburse the Port and to pay in full on the Port's behalf all defense fees, 

costs and expenses related to the Shipyard Suit." Id. at 16. Plaintiff requests 

compensatory, consequential, exemplary, and punitive damages, attorneys' fees, costs, 

interest, and future costs from Defendant North Pacific. 

III. Allegations ofthe Counterclaim for Reimbursement 

Defendant North Pacific is an insurance company incorporated under Oregon 

law. North Pacific Insurance Company, Ltd. is a Bermuda corporation. Defendant 

North Pacific was unaware ofNorth Pacific Insurance Company, Ltd.' s existence until 

April 20 15. North Pacific Insurance Company, Ltd. insured Campbell from 1985 until 

1987, "under Policy Nos. 85CBI004 and 86CBI004." (ECF No. 20 at 18). When 

Plaintiff tendered defense in the Shipyard Suit, Plaintiff tendered the defense to 

Defendant North Pacific instead ofNorth Pacific Insurance Company, Ltd. 

"North Pacific accepted tender ofthe Shipyard Suit, in a situation where North 

Pacific reasonably believed the actual policy or policies ofinsurance to be lost, subject 

to and expressly conditioned on North Pacific's full reservation of rights to deny 

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coverage." Id. at 18. Defendant North Pacific has been defending Plaintiff since 2012 

and paying 6.6% share ofPlaintiff's invoices, for a total of$129,525.96. "On April 22, 

2015, shortly after North Pacific learned it owed no obligations to the Port, North 

Pacific demanded repayment ofthis $129,525.96 sum." Id. at 19. 

The Counterclaim for Reimbursement asserts one claim for relief: reimbursement 

ofDefense Fees and Costs against the Port. Under the heading "First Cause ofAction" 

for "Reimbursement of Defense Fees and Costs against the Port," the Counterclaim 

alleges, "North Pacific is entitled to recovery of the $129,525.96 on the theories of 

restitution, unjust enrichment, quasi-contract, and/or reimbursement under Buss v. 

Superior Court, 16 Cal. 4th 35 (1997)." Id. at 20. The Counterclaim requests 

judgment in Defendant North Pacific's favor, reimbursement, costs, and attorneys' fees. 

IV. Motion to Dismiss 

A. Rule 12(b)(6) Standard 

Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state 

a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Federal Rule of 

Civil Procedure 8(a) provides that "[a] pleading that states a claim for relief must 

contain ... a short and plain statement ofthe claim showing that the pleader is entitled 

to relief." Fed. R. Civ. P. 8(a)(2). "A district court's dismissal for failure to state a 

claim under Federal Rule of Civil Procedure 12(b)( 6) is proper ifthere is a 'lack of a 

cognizable legal theory or the absence of sufficient facts alleged under a cognizable 

legal theory.'" Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) 

(quoting Balistreri v. Pacifica Police Dep't, 901 F .2d 696, 699 (9th Cir. 1990)). 

"[A] plaintiffs obligation to provide the 'grounds' ofhis 'entitle[ment] to relief 

requires more than labels and conclusions, and a formulaic recitation of the elements 

ofa cause ofaction will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) 

(quoting Fed. R. Civ. P. 8(a)). "To survive a motion to dismiss, a complaint must 

contain sufficient factual matter, accepted as true, to 'state a claim to relief that is 

plausible on its face.'" Ashcroftv. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 

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550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual 

content that allows the court to draw the reasonable inference that the defendant is 

liable for the misconduct alleged." Id. (citation omitted). "[T]he tenet that a court must 

accept as true all of the allegations contained in a complaint is inapplicable to legal 

conclusions. Threadbare recitals of the elements of a cause of action, supported by 

mere conclusory statements, do not suffice." Id. (citation omitted). "When there are 

well-pleaded factual allegations, a court should assume their veracity and then 

determine whether they plausibly give rise to an entitlement to relief." Id. at 679. "In 

sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, 

and reasonable inferences from that content, must be plausibly suggestive of a claim 

entitling the plaintiff to relief." Moss v. U.S. Secret Serv., 572 F.3d 962,969 (9th Cir. 

2009) (quotations and citation omitted). 

B. Contentions of the Parties 

Plaintiff moves to dismiss Defendant North Pacific's Counterclaim on the 

ground that Defendant North Pacific was required to submit a written claim to Plaintiff 

pursuant to California's Tort Claims Act ("CTCA"), California Government Code §§ 

900, et seq., prior to filing the Counterclaim for Reimbursement because Plaintiff is a 

public agency. Plaintiff asserts that Defendant did not comply with the written claim 

requirement. Plaintiff contends that the Counterclaim contains no allegations 

demonstrating that Defendant North Pacific complied with the written claim 

requirement, or that Defendant North Pacific should be excused from complying. 

Plaintiff submits an April 22, 2015 letter from Defendant North Pacific's counsel to 

Plaintiff's counsel and contends that the April 22, 2015 letter does not satisfy the 

CTCA's written claim requirement. 

Defendant North Pacific contends that two exceptions to the written claim 

requirement apply to this case. First, Defendant North Pacific contends that it is not 

required to submit a written claim pursuant to the CTCA because Plaintiffis not listed 

on the California Secretary of State's Roster of Public Agencies. Defendant North 

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Pacific requests judicial notice of a "California Secretary of State Certificate of No 

Record re: the San Diego Unified Port District." (ECF No. 30 at 2). Second, 

Defendant North Pacific contends that the written claim requirement "does not apply 

to a defendant's counterclaims against a government-entity plaintiff that relate [ s] to the 

same set offacts that are alleged in the government-plaintiffs complaint." (ECF No. 

29 at 10). 

With respect to the first exception, Plaintiff contends that Defendant North 

Pacific is still required to submit a written claim because Plaintiff satisfied its 

obligation to file a statement with the Secretary of State to be placed on the Roster of 

Public Agencies. Plaintiff asserts that the failure to list Plaintiff on the Roster ofPublic 

Agencies is the Secretary of State's fault, not Plaintiff's fault. Plaintiff requests 

judicial notice offilings it submitted to the Secretary ofState to be listed on the Roster 

ofPublic Agencies. 

With respect to the second exception, Plaintiff contends that the second 

exception raised by Defendant North Pacific only applies to a "cross-action against a 

cross-defendant and raises the issue ofrelative liability among the public entity and the 

defendant in a third-party lawsuit." (ECF No. 33 at 5). Plaintiff contends that 

Defendant North Pacific's Counterclaim and Plaintiffs FAC "arise out of very 

different factual and legal circumstances." Id. at 4. 

C. Requests for Judicial Notice 

Federal Rule ofEvidence 201 provides that "[t]he court may judicially notice a 

fact that is not subject to reasonable dispute because it ... is generally known within the 

trial court's territorial jurisdiction; or ... can be accurately and readily determined from 

sources whose accuracy cannot reasonably be questioned." Fed R. Evid. 210(b). 

"[U]nder Fed. R. Evid. 201, a court may take judicial notice of 'matters of public 

record.'" Lee v. City ofLos Angeles, 250 F 3d 668,689 (9th Cir. 2001) (quoting Mack 

v. 	South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir.1986)). 

Defendant North Pacific requests judicial notice of a "California Secretary of 

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State Certificate ofNo Record re: the San Diego Unified Port District." (ECF No. 30). 

Plaintiff does not object. The Court takes judicial notice ofthe "California Secretary 

of State Certificate ofNo Record re: the San Diego Unified Port District" as a matter 

ofpublic record. 

Plaintiff requests judicial notice of four exhibits, all filings submitted to the 

California Secretary of State with respect to the "Roster of Public Agencies." (ECF 

No. 33-1 at 2). All exhibits are file-stamped by the California Secretary of State. The 

Court takes judicial notice ofthe four exhibits appearing at ECF No. 33-3 as a matter 

ofpublic record. 

D. Analysis 

California Government Code section 945.4 provides: 

Except as provided in Sections 946.4 and 946.6, no suit for money or 

damages may be brought against a public entity on a cause of action for 

whicli a claim is regUlred to be presented in accordance with Chapter 1 

(commencing with Section 900) and Chapter 2 (commencing with Section 

910) of Part 3 of this division until a written claim therefor has been 

presented to the public entity and has been acted upon by the board, or has 

been deemed to have been rejected by the board, in accordance with 

Chapters 1 and 2 ofPart 3 ofthis divislOn. 

Cal. Gov. Code § 945.4. Section 946.4 provides two exceptions to this requirement: 

(a) Where provision is made by or pursuant to law that no suit may be 

brought against a public agency as defined in Section 53050 unless and 

until a claim is presented to the agency, the failure to present a claim does 

not constitute a bar or defense to the maintenance of" a suit against such 

p'ublic agency i(, during the 70 days immediately following the accrual of 

the cause of actlOn: 

(1 ) No statement pertaining to the 'public agency is on file, or is placed on 

file; in the Roster ofPublic AgenCies in the office ofthe Secretary ofState 

ana of the county clerk of each county in which the public agency then 

maintains an office, as required by Section 53051; or 

(2) A statement or amended statement pertaining to the public agen~ is 

on file;..or is placed on file, in the Roster ofPubhc Agencies in tlie otllce 

ofthe ~ecretary ofState and ofthe county clerk of each county in which 

the public agency then maintains an office, but the information contained 

therein is so inaccurate or incomp'lete that it does not substantially conform to the requirements of Section 53051. 

(b) On any guestion offact arising within the scope ofparagraphs (1) and 

(2) of suDdivision (a), the burden ofproof is upon the public agency. 

[d. § 946.4(a), (b). Section 53051(c) provides that "[i]t shall be the duty of the 

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Secretary of State and ofthe county clerk of each county to establish and maintain an 

indexed 'Roster of Public Agencies,' to be so designated, which shall contain all 

information as required in subdivisions (a) and (b), which roster is hereby declared to 

be a public record." Id. § 53051(c). 

Plaintiffhas submitted a judicially noticeable document from the Secretary of 

State, dated July 8, 2015, titled "CERTIFICATE OF NO RECORD," and stating that 

the Secretary of State has "failed to find any records of a filing in this office and in 

accordance with California Government Code section 53051" for Plaintiff. (ECF No. 

30-1 at 2). The fact that Plaintiff submitted four documents to the Secretary of State 

pertaining to the Roster ofPublic Agencies between April 20 13 and January 2015 does 

not establish that these filings were "on file, or placed on file, in the Roster ofPublic 

Agencies" during the 70 days immediately following the accrual ofDefendant North 

Pacific's claim. Cal. Gov. Code § 946.4(a). The Court concludes that Plaintiffhas the 

"burden ofproof' as the "public agency" and has failed to establish that a "statement 

pertaining to [Plaintiff] is on file, or is placed on file, in the Roster ofPublic Agencies" 

during the 70 days immediately following the accrual of Defendant North Pacific's 

claim. Id. §§ 946.4(a), (b). 

"[I]t is manifestly unjust to allow a State to bring a suit upon a contract and then 

to use what amounts to a notice statute to shield itself from a cross-complaint asserted 

by the defendant in the same suit and arising from that very contract. People ex reI. 

Dep'tofParks andRecreationv. West-A-Rama, Inc., 35 Cal. App. 3d 786,794 (1973). 

Both the Complaint and the Counterclaim seek a determination ofrights and liabilities 

pursuant to Policy No. 85CB 1 004. See ECF No. 12 at 4-5 ("North Pacific insured 

Campbell pursuant to one or more written policies of insurance in effect for all of or 

portions ofthe period from September 1, 1985 to September 1, 1987 under Policy Nos. 

85CB 1 004 (9-1-85 to 9-1-87) .... "); ECF No. 20 at 18 ("Bermuda North Pacific insured 

Campbell Industries and certain ofits affiliates ... from October 16, 1985 to September 

1, 1987 under Policy Nos. 85CB 1 004 and 86CB 1 004."). Plaintiff seeks a declaration 

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that it is entitled to defense pursuant to this policy, while Defendant North Pacific 

seeks a judgment that Defendant has no obligations to Plaintiff pursuant to this policy 

and that it is entitled to reimbursement for defense costs paid under this policy. The 

Court concludes that Plaintiff is not entitled to "shield itself from a [ counterclaim] 

asserted by the defendant in the same suit and arising from" the same contract upon 

which Plaintiff commenced this action. West-A-Rama, Inc., 35 Cal. App. 3d at 794. 

Plaintiffs motion to dismiss pursuant to Rule 12(b)(6) is denied. 

V. Motion for a More Definite Statement 

Plaintiff moves for a more definite statement pursuant to Rule 12( e) on the 

ground that Plaintiff is unable to ascertain Defendant North Pacific's legal theories. 

Plaintiff contends that Defendant North Pacific's reimbursement claim is vague 

because one of the supporting allegations for that claim states that Defendant North 

Pacific is entitled to recovery under restitution, unjust enrichment, quasi-contract, and 

reimbursement theories. 

Defendant North Pacific contends that the Counterclaim for Reimbursement sets 

forth all key facts. Defendant North Pacific contends that Plaintiff only objects to one 

paragraph as vague, paragraph 115. Defendant North Pacific contends that there is 

nothing improper about paragraph 115. 

Federal Rule ofCivil Procedure 12( e ) provides that a party may move for a more 

definite statement for a pleading that is "so vague or ambiguous that the party cannot 

reasonably prepare a response." Fed. R. Civ. P. 12(e). A Rule 12(e) motion "must 

point out the defects complained of and the details desired." Id. 

The Counterclaim for Reimbursement contains factual allegations and a single 

claim for reimbursement. Paragraph 115 states that "North Pacific is entitled to 

recovery ofthe $129,525.96 on the theories ofrestitution, unjust enrichment, quasicontract, and/or reimbursement under Buss v. Superior Court, 16 Cal. 4th 35 (1997)." 

(ECF No. 20 at 20). 

Buss held that an insurer may seek "reimbursement" from the insured when it 

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assumes defense for claims that are "not even potentially covered." Buss, 16 Cal. 4th 

at 50. Buss explained: 

The insurer therefore has a right ofreimbursement that is implied in law 

as quasi-contractual, whether or not it has one that is implied in fact in 

the policy as contractual. As stated, under the law of restitution such a 

right runs against the person who benefits from "unjust enrichmenf' and 

in favor ofthe person who suffers loss thereby. 

Id. at 51 (emphases added). The Court concludes that the Counterclaim for 

Reimbursement is not "so vague" that Plaintiff"cannot reasonably prepare a response." 

Fed. R. Civ. P. 12(e). 

The Court concludes that a more definite statement is not warranted. Plaintiff s 

motion for a more definite statement is denied. 

VI. Conclusion 

ITIS HEREBY ORDERED that Plaintiffs motion to dismiss pursuanttoFederal 

Rule of Civil Procedure 12(b)( 6) or, in the alternative, motion for a more definite 

statement pursuant to Federal Rule of Civil Procedure 12(e) is DENIED. 

DATED: tjx/!(~ WILLIAM O. H S 

United Statesl)isttict Judge 

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