Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_16-cv-01069/USCOURTS-caed-2_16-cv-01069-1/pdf.json

Parties Involved:
Arsen Abramyan
Plaintiff
Geico Insurance Company
Defendant
Narina Zakharyan
Plaintiff

Document Text:

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

ARSEN ABRAMYAN and NARINA 

ZAKHARYAN,

Plaintiffs,

v.

GEICO INSURANCE COMPANY, and 

Does 1-40, inclusive,

Defendants.

No. 2:16-cv-01069-MCE-AC

MEMORANDUM AND ORDER

In bringing the present action, Plaintiffs Arsen Abramyan and Narina Zakharyan 

(“Plaintiffs”) allege that their automobile insurance carrier, Defendant GEICO Insurance 

Company (“GEICO”) wrongfully denied a theft loss claim submitted by Plaintiffs as 

fraudulent. Plaintiffs’ resulting lawsuit, originally filed in state court, asserts five causes 

of action. Through the Motion to Dismiss now before the Court, GEICO contends that 

Plaintiffs’ claims for unfair competition, in violation of California Insurance Code § 790, 

and their claim for discrimination in contravention of California Civil Code §§ 51 and 52, 

fail to state a claim upon which relief can be granted and are therefore subject to 

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dismissal under Federal Rule of Civil Procedure 12(b)(6).1 As set forth below, that 

Motion is GRANTED in part and DENIED in part.2

BACKGROUND3

According to Plaintiffs’ Complaint, they owned a 2011 BMW 335I insured by 

Defendant GEICO. On July 20, 2013, that vehicle was stolen from their home. Plaintiffs 

reported the theft to GEICO, who performed an investigation. On or about January 13, 

2014, Plaintiffs claim that GEICO wrongfully denied their claim for loss of the vehicle on 

grounds that they had engaged in fraud. According to Plaintiffs, that denial was 

premised on discriminatory animus by GEICO, who targeted them for investigation for 

fraud on the basis of their national origin as Armenians who previously resided in the 

former Soviet Union. Plaintiffs claim that GEICO did this in order to avoid paying claims.

STANDARD

On a motion to dismiss for failure to state a claim under Federal Rule of Civil 

Procedure 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, 

 

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

otherwise indicated.

2

Because the Court determined that oral argument would not be of material assistance, this 

Motion was submitted on the briefs in accordance with Local Rule 230(g).

3

This section is taken directly, and in some instances verbatim, from the allegations contained in 

Plaintiffs’ Complaint.

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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.” 

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 

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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

A. California Insurance Code § 790

GEICO moves to dismiss Plaintiffs’ Fourth Cause of Action, for Unfair Competition 

in violation of California Insurance Code § 790. There, is however, no private cause of 

action for violations of § 790. King v. Nat’l Gen. Ins. Co., 129 F. Supp. 3d 925, 941 n.10 

(N.D. Cal. 2015) (citing Moradi-Shalal v. Fireman’s Fund Ins. Cos., 46 Cal. 3d 287, 304 

(1988)). Moreover, by a stipulation and order filed July 15, 2016, Plaintiffs agreed not to 

oppose GEICO’s Motion to Dismiss the Fourth Cause of Action, and have not done so. 

Plaintiffs’ claim for violation of § 790 is accordingly dismissed with prejudice. 

B. California Civil Code §§ 51 and 52

Plaintiffs’ Fifth Cause of Action is premised on California’s Unruh Civil Rights Act, 

which, at California Civil Code § 51, prohibits “business establishments of every kind 

whatsoever” from discriminating on the basis of national origin, among other things. The 

Fifth Cause of Action also invokes § 52, which provides a private cause of action to seek 

damages for violations of the Unruh Act. 

GEICO moves to dismiss Plaintiffs’ Fifth Cause of Action on grounds that it is time 

barred by the one-year statute of limitations on Unruh actions set forth in Gatto v. County 

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of Sonoma, 98 Cal. App. 4th 744, 757-59 (2002), and Mitchell v. Sung, 816 F. Supp. 

597, 602 (N.D. Cal. 1993). According to GEICO, because it denied Plaintiffs’ claims on 

January 13, 2014, and Plaintiffs did not file their lawsuit until July 20, 2015—some 18 

months later—their Unruh Act claims run afoul of the one-year time bar.

As recognized by this Court in Hartline v. Nat’l Univ., No. 2:14-cv-0635 KJM AC, 

2015 WL 4716491 (E.D. Cal. August 7, 2015), however, California’s personal injury 

statute of limitations at California Code of Civil Procedure § 335.1 provides the limitation 

period for the Unruh Act. Id. at * 4 (‘[T]he Unruh Act and the personal injury statute are 

both subject to a two-year statute of limitations.”). Gatto and Mitchell, as relied upon by 

GEICO, were decided prior to January of 2003, when the California Legislature 

approved § 335.1, which expanded the statute of limitations for personal injury and 

wrongful death actions to two years. See Act of Sept. 10, 2002, ch. 448, 2002 Cal. 

Stats. 2521. Once the personal injury statute was extended to two years, the time within 

which an Unruh Action claim could be brought was likewise extended.4 Consequently, 

because the instant lawsuit was filed within two years of GEICO denying Plaintiffs’ theft 

claim on January 13, 2014, the Unruh Act claim is timely and GEICO’s motion to dismiss 

on that basis fails.

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The Court recognizes GEICO’s reliance on a 2015 decision by another court in this district, 

Zochlinski v. Regents of the Univ. of California, No. 2:10-cv-1824 KJM-KJN PS, 2015 WL 6744654, at *5 

(E.D. Cal. Nov. 4, 2015), continued to apply the one-year statute of limitations in reliance on Gatto. For 

the reasons provided, this Court believes that Zochlinksi’s decision to enforce that one-year period after 

the passage of § 335.1 was incorrect.

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CONCLUSION

Based on all the foregoing, Defendant GEICO’s Motion to Dismiss (ECF No. 5) is 

GRANTED, with prejudice, as to Plaintiffs’ Fourth Cause of Action but DENIED as to the 

Fifth Cause of Action.

IT IS SO ORDERED.

Dated: March 10, 2017

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