Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-00245/USCOURTS-casd-3_16-cv-00245-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332oc Diversity-Other Contract

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16-CV-0245 W (BGS) 

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ROBERT M. JAFFE, individually and as 

Trustee of the Robert M. Jaffe Trust, dated 

10/08/1990,

Plaintiff,

v.

MICHAEL DEMICH, et al.,

Defendants.

Case No.: 16-CV-0245 W (BGS) 

ORDER DENYING MOTION FOR 

LEAVE TO AMEND THE 

COMPLAINT [DOC 33]

Plaintiff Robert Jaffe requests leave to amend the First Amended Complaint 

(“FAC”). Defendants Michael Demich and Michael A. Demich Construction, Inc.

(collectively “Demich”) oppose. 

The Court decides the matter on the papers submitted and without oral argument 

pursuant to Civil Local Rule 7.1(d)(1). For the reasons discussed below, the Court 

DENIES the motion [Doc. 33].

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I. BACKGROUND

In 2009, Plaintiff Robert Jaffe entered into an informal agreement with Defendant 

Michael Demich, under which Demich would perform work on Jaffe’s property in 

Escondido, California, in exchange for a fee. (FAC [Doc. 4] ¶ 6.) Specifically, Demich 

was charged with improving “an appurtenant easement in the form of an access road 

adjacent to [Jaffe’s] property and adjacent to the property of neighbor Robert Bradshaw” 

and two other neighboring properties owned by Corbett and Wymbs. (Id.) Demich 

entered into subcontracts with Joe’s Paving Company (“Joe’s Paving”) to assist with the 

work. (Id. ¶ 7.) Jaffe alleges the contract with Joe’s Paving “specified that Joe’s 

Paving’s billings for work would include the costs for Joe’s Paving to obtain and 

maintain liability insurance for the work to be performed.” (Id.) Jaffe also alleges he 

paid Demich to be added as an additional insured under Demich’s general liability policy, 

and that Jaffe continued payments on the policy from 2009 through the conclusion of the

work in 2012. (Id.) 

From 2011 through 2013, Jaffe was involved in litigation against his neighbors 

Bradshaw, Corbett, and Wymbs, during which Jaffe claims he paid $580,000 in litigation 

costs. (FAC ¶ 17.) Jaffe alleges that his “liability for these damages arose, not as a result 

of any actual fault on his part, but solely by operation of law, arising from the actions of 

defendants and his agents as to the damage they caused to the neighbors’ property.” (Id. 

¶ 13.) Accordingly, Jaffe alleges he is entitled to indemnity from Defendants for: (1) the 

damages paid to Bradshaw, Corbett, and Wymbs; (2) legal costs incurred in defending 

the underlying action; and (3) loss of value to his property resulting from the Superior 

Court’s Judgment in the underlying matter. (Id. ¶¶ 18–20.)

While Jaffe concedes that no written contract existed between Demich and himself 

for general contractor services, he alleges a written contract existed for general liability 

insurance payments on Demich’s policy issued by AIX Specialty Insurance Co. (“AIX”), 

under which Jaffe was named an additional insured. (Plf.’s Reply [Doc. 35] 2:11–14.) 

Jaffe contends a Certificate of Insurance issued on September 1, 2009 (the “Certificate”) 

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by Target Financial & Insurance Services (“Target Financial”) constitutes the written 

contract confirming Defendants’ promise to provide liability insurance coverage. (Id. 

2:14–19, 4:2–15.) Accordingly, Jaffe alleges AIX’s denial of his insurance claim for 

coverage for the underlying litigation constituted a breach of the written contract between 

Jaffe and Demich. (Id. 4:18–26.) He now seeks to amend the FAC to add a cause of 

action for breach of contract based on the Certificate. (P&A [Doc. 33] 2:11–12.)

II. LEGAL STANDARD

Federal Rule of Civil Procedure 15(a) provides that after a responsive pleading has 

been served, a party may amend its complaint only with leave of court, and leave “shall 

be freely given when justice so requires.” Fed. R. Civ. P. 15(a). Granting leave to amend 

rests in the sound discretion of the district court. Pisciotta v. Teledyne Industries, Inc., 91 

F.3d 1326, 1331 (9th Cir. 1996). Although the rule should be interpreted with extreme 

liberality, leave to amend is not to be granted automatically. Jackson v. Bank of Hawaii, 

902 F.2d 1385, 1387 (9th Cir. 1990) (citations omitted). Five factors are taken into 

account to assess the propriety of a motion for leave to amend: (1) bad faith, (2) undue 

delay, (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether the 

plaintiff has previously amended the complaint. Johnson v. Buckley, 356 F.3d 1067, 

1077 (9th Cir. 2004). 

In assessing whether a proposed amendment should be permitted, the court’s 

limited role is identical to its role in assessing a 12(b)(6) motion to dismiss for failure to 

state a claim, namely to assess the legal feasibility of the complaint, not to weigh 

evidence or resolve the disputed facts of the case. See e.g., Luce v. Dalton, 166 F.R.D. 

457 (S.D. Cal. 1996). It follows that, when determining the legal feasibility of a 

proposed amendment, “[t]he Court must accept as true the complaint’s material 

allegations and any reasonable inferences that may be drawn from them.” Chavez v. 

Immigration Naturalization Service, 17 F.Supp.2d 1141 , 1143 (S.D. Cal. 1998), citing 

Parks School of Business, Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995) (“We 

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take all allegations of material fact as true and construe them in the light most favorable 

to the nonmoving party.”). 

Here, Demich argues the motion to amend should be denied because the proposed 

amendment has been proffered in bad faith, is untimely, and because it would be futile. 

(Opp. [Doc. 34] 3:22–7:1.) Because the Court agrees that the amendment would be 

futile, the remaining arguments will not be addressed.

III. DISCUSSION

To successfully plead a breach of contract claim in California, Jaffe must allege 

facts demonstrating: (1) the existence of a contract; (2) Jaffe’s performance of all 

contractual obligations; (3) Demich’s breach; and (4) that Jaffe suffered damages from 

the breach. See Maxwell v. Dolezal, 231 Cal.App. 4th 93, 98 (2014). Under California 

law, the interpretation of a written contract is a question of law. Citri-Lite Co. v. Cott 

Beverages, Inc., 721 F.Supp.2d 912, 922 (E.D. Cal. 2010). So too is the question of 

whether a contract is sufficiently definite. Hynix Semiconductor Inc. v. Rambus Inc., 

441 F.Supp.2d 1066, 1073 (N.D. Cal. 2006).

Here, Jaffe’s reply clarifies that the proposed breach of written contract claim is 

premised on the theory that the Certificate constitutes the written contract in which

Demich agreed to provide insurance to Jaffe:

Plaintiff’s breach of written contract claim . . . is based on the Defendants’ 

promise to provide liability insurance coverage to Plaintiff. The claim is 

premised on the law of agency and on the Certificate provided to Plaintiff. It 

is the Certificate which constitutes the written promise by Defendants, 

through their agent, to provide insurance coverage to Plaintiff.

(Reply 4:1–6.) But the Certificate’s terms do not support Jaffe’s claim that it is a written 

contract. Printed at the top of the Certificate is the following statement:

THIS CERTIFICATE IS ISSUED AS A MATTER OF 

INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE 

CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT 

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AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY 

THE POLICIES BELOW.

(See Robberson Dec. [Doc. 33-1], Exhibit C [Doc. 33-3] at 1, emphasis in original.) The 

second page of the Certificate then includes the following “Disclaimer”:

The Certificate of Insurance on the reserve side of this form does not 

constitute a contract between the issuing insurer(s), authorized representative 

or producer, and the certificate holder, nor does it affirmatively or negatively 

amend, extend or alter the coverage afforded by the policies listed thereon.

(Id. at 2.) 

Aside from the above terms, the Certificate also fails to include the essential 

elements of a contract. For example, assuming the document can be interpreted—at 

best—as requiring Demich to name Jaffee as an additional insured under Demich’s 

policy, the document fails to identify any consideration flowing to Demich. “[S]ufficient 

cause or consideration” is an essential element of a contract under California Civil Code 

§ 1550. 

Because the Certificate is not a written contract between Demich and Jaffe, the 

proposed amendment would be futile.

IV. CONCLUSION & ORDER

For the reasons stated above, Plaintiff’s motion for leave to amend is DENIED

[Doc. 33]. 

IT IS SO ORDERED.

IT IS SO ORDERED.

Dated: March 30, 2017

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