Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-00540/USCOURTS-azd-2_08-cv-00540-0/pdf.json

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

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

John H. Vela,

Plaintiff,

vs.

American Family Mutual Insurance

Company, a Foreign Corporation; John

Does I-X; Jane Does I-X; Black

Corporations I-XX; Gray Partnerships

I-XX; Blue Limited Partnerships I-XX,

Defendants.

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No. CV-08-540-PHX-SMM

ORDER

Currently pending before the Court is Defendant American Family Mutual Insurance

Company’s (American) Motion to Dismiss (Doc. 3) filed on March 19, 2008. Plaintiff has

failed to file a Response within the permitted time frame. 

STANDARD OF REVIEW

A complaint may be dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil

Procedure only if “it appears beyond doubt that the plaintiff can prove no set of facts in

support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-

46 (1957); Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). When

deciding a motion to dismiss, all allegations of material fact in the complaint are taken as true

and construed in the light most favorable to the plaintiff. W. Mining Council v. Watt, 643

F.2d 618, 624 (9th Cir. 1981).

A court may dismiss a claim either because it lacks “a cognizable legal theory” or

because it fails to allege sufficient facts to support a cognizable legal claim. SmileCare

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Dental Group v. Delta Dental Plan of Cal., Inc., 88 F.3d 780, 783 (9th Cir. 1996).

“Dismissal without leave to amend is improper unless it is clear, upon de novo review, that

the complaint could not be saved by any amendment.” Polich v. Burlington N., Inc., 942

F.2d 1467, 1472 (9th Cir. 1991). When exercising its discretion to deny leave to amend, “a

court must be guided by the underlying purpose of Rule 15 to facilitate decisions on the

merits, rather than on the pleadings or technicalities.” United States v. Webb, 655 F.2d 977,

979 (9th Cir. 1981).

DISCUSSION

Despite the failure of Plaintiff to file a Response to American’s Motion to Dismiss,

the Court will nonetheless decide the pending issue based on the substantive issue at hand,

whether punitive and exemplary damages are permitted as relief strictly for a breach of

contract claim. Id. 

It is well settled in Arizona that punitive and or exemplary damages are not allowed

in a breach of contract suit. Continental National Bank v. Evans, 107 Ariz. 378 (1971); John

Hancock Mut. Life Ins. Co. v. McNeill, 27 Ariz. App. 502 (1976). In other words, Plaintiffs

are not entitled to recover such damages strictly based on a breach of contract claim. Id.

In the Complaint, Plaintiff alleges that he was insured by American under an

automobile insurance policy (Complaint, ¶ III). Plaintiff alleges that the policy provides

under-insured motorists coverage and that he was injured as a result of an automobile

accident (Id. at ¶ IV). Plaintiff further alleges that American breached the contract by failing

to pay a reasonable sum under the under-insured motorists coverage (Id. at ¶¶ VI-VIII).

Finally, Plaintiff alleges that he is entitled to exemplary and punitive damages (Id. at ¶ VIII).

Plaintiff’s complaint states only a claim for breach of contract (Id. at ¶ VIVIII). Thus, as a

matter of law, Plaintiff is not entitled to punitive damages as they are not recoverable for

breach of contract alone. Continental National Bank v. Evans, 107 Ariz. 378 (1971). 

Accordingly,

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IT IS HEREBY ORDERED GRANTING Defendant American’s Motion to Dismiss

(Doc. 3) Plaintiff’s claim for punitive and exemplary damages for his breach of contract

claim.

DATED this 9th day of May, 2008.

Case 2:08-cv-00540-SMM Document 7 Filed 05/09/08 Page 3 of 3