Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_14-cv-01450/USCOURTS-caed-1_14-cv-01450-1/pdf.json

Parties Involved:
Centex Homes
Defendant
Centex Real Estate Corporation
Defendant
Travelers Property Casualty Company of America
Plaintiff

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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

TRAVELERS PROPERTY CASUALTY 

COMPANY OF AMERICA,

 Plaintiff, 

 v. 

CENTEX HOMES, et al.,

 Defendants.

1:14-cv-1450-LJO-GSA

MEMORANDUM DECISION AND 

ORDER RE DEFENDANT’S MOTION 

TO DISMISS (DOC. 7)

I. FACTUAL AND PROCEDURAL BACKGROUND

This case concerns a dispute between the parties regarding their rights and duties in an 

underlying action currently pending in Placer County Superior Court. See Doc. 1 at 4. On June 17, 2014, 

Plaintiff brought suit against Defendants in this Court based on the undisputed diversity of citizenship 

between the parties. Id. at 1.

Defendants Centex Homes and Centex Real Estate Corporation (collectively, “Centex”) obtained 

commercial general liability insurance (“the policies”) from Plaintiff. Id. at 3. In February 2014, 

homeowners brought suit against Centex in Placer County Superior Court for alleged construction 

defects in homes that Centex built (“the Griggs action”). Id. at 4. Centex tendered the Griggs action to 

Plaintiff pursuant to the policies. Id.

Plaintiff brought suit in this Court over disputes that arose between the parties regarding their 

respective rights and duties in handling Centex’s defense in the Griggs action. Plaintiff alleges causes of 

action for (1) declaratory relief; (2) breach of contract; and (3) equitable reimbursement. Id. at 5-8.

Currently before the Court is Centex’s motion to dismiss the complaint on the ground that (1) 

this Court does not have jurisdiction over the complaint; (2) Plaintiff’s first and second causes of action 

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are not ripe; and (3) all three causes of action fail to state a claim for relief. Doc. 7. The Court has 

reviewed the papers and has determined that the matter is suitable for decision without oral argument 

pursuant to Local Rule 230(g).

II. STANDARD OF DECISION

Federal Rule of Civil Procedure 12(b)(1) provides for dismissal of an action for “lack of subjectmatter jurisdiction.” Faced with a Rule 12(b)(1) motion, a plaintiff bears the burden of proving the 

existence of the court's subject matter jurisdiction. Thompson v. McCombe, 99 F.3d 352, 353 (9th Cir.

1996). A federal court is presumed to lack jurisdiction in a particular case unless the contrary 

affirmatively appears. Gen. Atomic Co. v. United Nuclear Corp., 655 F.2d 968, 968-69 (9th Cir. 1981).

A challenge to subject matter jurisdiction may be facial or factual. White v. Lee, 227 F.3d 1214, 1242 

(9th Cir. 2000). As explained in Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1038 (9th Cir. 2004):

In a facial attack, the challenger asserts that the allegations contained in a complaint are 

insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the 

challenger disputes the truth of the allegations that, by themselves, would otherwise invoke 

federal jurisdiction.

A Rule 12(b)(1) motion can be made as a speaking motion—or factual attack—when the 

defendant submits evidence challenging the jurisdiction along with its motion to dismiss. Thornhill 

Publ'g Co. v. Gen. Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979); see Savage, 343 F.3d at 1039-

40 & n. 2. A proper speaking motion allows the court to consider evidence outside the complaint 

without converting the motion into a summary judgment motion. See Safe Air, 373 F.3d at 1039. “Once 

the moving party has converted the motion to dismiss into a factual motion by presenting affidavits or 

other evidence properly brought before the court, the party opposing the motion must furnish affidavits 

or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction.” Savage, 343 

F.3d at 1039-40, n. 2. In a speaking motion, “[t]he court need not presume the truthfulness of the 

plaintiff's allegations.” Safe Air, 373 F.3d at 1039.

A motion to dismiss pursuant to Fed R. Civ. P. 12(b)(6) is a challenge to the sufficiency of the 

allegations set forth in the complaint. A 12(b)(6) dismissal is proper where there is either a “lack of a 

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

Balisteri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). In considering a motion to dismiss 

for failure to state a claim, the court generally accepts as true the allegations in the complaint, construes 

the pleading in the light most favorable to the party opposing the motion, and resolves all doubts in the 

pleader’s favor. Lazy Y. Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).

To survive a 12(b)(6) motion to dismiss, the Plaintiffs must allege “enough facts to state a claim 

to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim 

has facial plausibility when the Plaintiffs pleads factual content that allows the court to draw the 

reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 

662, 678 (2009). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for 

more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 

556). “Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops 

short of the line between possibility and plausibility for entitlement to relief.’” Id. (quoting Twombly, 

550 U.S. at 557). 

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

allegations, 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.” 

Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). Thus, “bare assertions . . . amount[ing] 

to nothing more than a ‘formulaic recitation of the elements’ . . . are not entitled to be assumed true.”

Iqbal, 556 U.S. at 681. In practice, “a complaint . . . must contain either direct or inferential allegations 

respecting all the material elements necessary to sustain recovery under some viable legal theory.” 

Twombly, 550 U.S. at 562. To the extent that the pleadings can be cured by the allegation of additional 

facts, the Plaintiffs should be afforded leave to amend. Cook, Perkiss and Liehe, Inc. v. Northern 

California Collection Serv., Inc., 911 F.2d 242, 247 (9th Cir. 1990) (citations omitted).

III. DISCUSSION

This case is one of many between the parties currently pending in this Court and elsewhere. The 

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Court already has ruled on Centex’s motions to dismiss in other cases between the parties that often are 

identical to one another. See, e.g., Travelers Indem. Co. of Conn. v. Centex Homes, No. 14-cv-217-LJOGSA, 2014 WL 2002320 (E.D. Cal. May 15, 2014); Fidelity & Guar. Ins. Co. v. Centex Homes, 1:14-

cv-826-LJO-GSA, 2014 WL 4075999 (E.D. Cal. Aug. 15, 2014). As in this case, Plaintiff1brought those 

cases against Centex due to Centex’s alleged refusal to allow Plaintiff to control Centex’s defense in 

underlying litigation. That allegation is the crux of Plaintiff’s claims against Centex in all of Plaintiff’s 

cases against Centex, including this one.

As a threshold matter, Centex asserts that this Court lacks subject matter jurisdiction over the 

complaint because the amount in controversy does not exceed $75,000.00. Doc. 7 at 25. This Court and 

others have addressed this precise argument on multiple occasions and have uniformly rejected it. See, 

e.g., Travelers Indem. Co. of Conn. v. Centex Homes, No. 1:14-cv-217-LJO-GSA, 2014 WL 2002320, at 

*3-5 (E.D. Cal. May 15, 2014); Doc. 22-1, Travelers Indem. Co. of Conn. v. Centex Homes, 14-cv-906 

JGB (SPx) (C.D. Cal. Oct. 2, 2014), at 5-7. This Court has subject matter jurisdiction over the 

complaint. Accordingly, the Court DENIES Centex’s motion to dismiss the entire complaint for lack of 

subject matter jurisdiction.

Plaintiff likewise alleges in this case that Centex refused to permit Plaintiff to appoint its counsel 

of choice in the Griggs case. Doc. 1 at ¶¶ 13-14. Here, however, Centex moves to dismiss Plaintiff’s

first (declaratory judgment) and second (breach of contract) causes of action on the ground those claims 

are not ripe2because Centex in fact allowed Plaintiff to appoint counsel of its choosing to defend Centex 

in the Griggs case. See Doc. 7 at 14. Centex further argues that Plaintiff’s first and second claims are not 

ripe because Plaintiff filed its complaint before Centex sent Plaintiff a reservation of rights in which it 

 

1 The plaintiffs in those cases are various affiliates of Plaintiff, are represented by the same counsel, and have made identical

allegations against Centex. For clarity, the Court will refer to them as one plaintiff.

2 Centex relies on Fed. R. Civ. P. 12(b)(6) as authority for its motion to dismiss Plaintiff’ first and second claims as unripe, 

and does not cite to Fed. R. Civ. P. 12(b)(1). Centex’s motion nonetheless provides Plaintiff with sufficient notice that Centex 

challenges this Court’s subject matter jurisdiction. Accordingly, the Court will construe Centex’s motion to dismiss 

Plaintiff’s first and second claims as unripe as a challenge to this Court’s subject-matter jurisdiction brought under Fed. R. 

Civ. P. 12(b)(1).

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agreed to allow Plaintiff to appoint its counsel of choice in defending the Griggs case.

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Id. Centex 

moves to dismiss Plaintiff’s third cause of action (equitable reimbursement) on the ground Plaintiff fails

to allege that Plaintiff agreed to defend Centex immediately after Centex tendered the Griggs action to 

Plaintiff and that they defended the Griggs action in its entirety. Id. at 22.

The Court already has ruled on the exact issues presented in Centex’s motion to dismiss. See

generally Fidelity, 2014 WL 4075999. In Fidelity, this Court dismissed Plaintiff’s declaratory relief and 

breach of contract claims on the ground they were unripe because Plaintiff filed its complaint before 

Centex sent Plaintiff its reservation of rights in which it agreed to allow Plaintiff to appoint its counsel 

of choice to defend Centex in underlying litigation. See id. at *3-4. Although squarely on point here, 

Plaintiff does not address Fidelity in its opposition. See Doc. 17.

Further, another court recently presented with “virtually identical allegations” explicitly relied on 

Fidelity in dismissing as unripe Plaintiff’s causes of action for declaratory relief and breach of contract. 

See St. Paul Fire & Marine Ins. Co. v. Centex Homes, 14-cv-1216 AB (JCx) (C.D. Cal. Oct. 7, 2014), 

Doc. 28 at 5-6 (“Central District case”).

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The court, “agree[ing] with the reasoning in Fidelity,” found 

that Plaintiff’s complaint was not ripe because it was filed before Centex had sent Plaintiff its 

reservation of rights in which it agreed to let Plaintiff choose counsel to defend the underlying lawsuit 

against Centex. Id. at 6. The court noted that Plaintiff did “not address Centex’s contention that the first 

and second causes of action are unripe” in its opposition. Id.

The Court finds that Plaintiff’s first and second claims were not ripe at the time the complaint 

was filed. Accordingly, the Court GRANTS WITH LEAVE TO AMEND Centex’s motion to dismiss 

Plaintiff’s first and second causes of action for lack of subject matter jurisdiction.

 

3 Centex provides documentation that corroborates these claims, see Doc. 7-1, Ex. B, at 1-4, which the Court may consider in 

assessing whether it has subject matter jurisdiction over Plaintiff’s claims. See Nicholson v. Cnty. of Stanislaus, No. CV F 

09–1941 AWI–SMS, 2010 WL 923729, at *2 (E.D. Cal. Mar.12, 2010) (citing St. Clair v. City of Chico, 880 F.2d 199, 201 

(9th Cir. 1989); Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987); Augustine v. United States, 704 F.2d 1074, 1077 

(9th Cir. 1983)).

4 Centex filed a copy of the Central District case on October 8, 2014. See Doc. 22-1, Ex. B.

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The court in the Central District case also dismissed Plaintiff’s third and final cause of action for 

equitable reimbursement for the same reasons that this Court has done so on multiple occasions. See 

Central District case at 7-9; see, e.g., Fidelity, 2014 WL 4075999, at *4; Travelers Indem. Co. of Conn. 

v. Centex Homes, No. 1:14-cv-217-LJO-GSA, 2014 WL 3778269, at *3-5 (E.D. Cal. July 30, 2014), 

amended on reconsideration, 2014 WL 4081861 (E.D. Cal. Aug. 19, 2014). Namely, Plaintiff failed to 

allege facts showing that it immediately agreed to defend Centex in the underlying lawsuit or that it did 

so entirely. See Central District case at 7-9.

Plaintiff likewise fails to do so here. See Travelers, 2014 WL 3778269, at *4. Accordingly, the 

Court GRANTS WITH LEAVE TO AMEND Centex’s motion to dismiss Plaintiff’s third cause of 

action.

IV. CONCLUSION AND ORDER

For the reasons more fully discussed in Fidelity and the Central District case, the Court 

GRANTS Centex’s motion to dismiss Plaintiff’s first and second causes of action WITH LEAVE TO 

AMEND only if and when those claims become ripe. The Court GRANTS WITH LEAVE TO AMEND 

Centex’s motion to dismiss Plaintiff’s third cause of action. Centex’s motion to dismiss is DENIED in 

all other respects. Plaintiff’s claims are DISMISSED WITHOUT PREJUDICE.

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Plaintiff shall file any 

further amended complaint on or before October 31, 2014.

IT IS SO ORDERED.

Dated: October 9, 2014 /s/ Lawrence J. O’Neill 

UNITED STATES DISTRICT JUDGE

 

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In granting Plaintiff leave to amend in the Central District case, the court admonished Plaintiff that any further amended 

complaint “must allege sufficient facts to ‘allow[] the court to draw the reasonable inference’ that [Plaintiff] suffered contract 

damages (as opposed to mere prejudice).” Central District case at 9. The court also “caution[ed] [Plaintiff] that any 

amendment to the third cause of action [for equitable reimbursement] must include an allegation (made in good faith) that the

[underlying litigation] has either terminated, or that [Plaintiff’s] duty to defend has otherwise discharged.” Id. The Court 

instructs Plaintiff to do the same in any further amendment in this case.

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