EXHIBIT A

Case 2:17-cv-04641-SPL Document 18-1 Filed 02/28/18 Page 1 of 7
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Bryan M. Folger, #022867

FOLGER LAW FIRM

11811 N. Tatum Blvd., Suite 3031

Phoenix, Arizona 85028

Telephone: (602) 774-0033

Facsimile: (602) 753-0178

bfolger@folgerlaw.com

docket@folgerlaw.com

Attorneys for Plaintiffs

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA

CALVIN JOHNSTUN and STEPHANIE 

JOHNSTUN, individually and as husband 

and wife, and G.J. and J.J., minors, through 

CALVIN JOHNSTUN, their natural father, 

Plaintiffs.

v.

USAA GENERAL INDEMNITY 

COMPANY USAA CASUALTY 

INSURANCE COMPANY, a Texas 

corporation, and JOHN and JANE DOES 1-

50; and ABC ENTITIES 1-50,

Defendant.

 

 No. CV-17-04641-PHX-SPL

FIRST AMENDED COMPLAINT

(Assigned to the Honorable Steven P. 

Logan)

Plaintiffs, allege as follows:

1. Plaintiff CALVIN JOHNSTUN was at all relevant times a resident of 

Maricopa County, Arizona, and continues to reside in Maricopa County. 

2. Plaintiff STEPHANIE JOHNSTUN was at all relevant times a resident of 

Maricopa County, Arizona, and continues to reside in Maricopa County. 

3. Plaintiff G.J., a minor, was at all relevant times a resident of Maricopa County, 

Arizona, and continues to reside in Maricopa County. 

4. Plaintiff J.J., a minor, was at all relevant times a resident of Maricopa County, 

Arizona, and continues to reside in Maricopa County. 

5. CALVIN JOHNSTUN and STEPHANIE JOHNSTUN were at all times.

6. CALVIN JOHNSTUN brings this action on behalf of his minor children G.J.

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and J.J. (collectively the “Johnstuns”). 

7. Plaintiffs are citizens of Arizona for federal diversity jurisdiction purposes. 

8. USAA GENERAL INDEMNITY COMPANY (“USAA”) is a citizen of Texas 

for federal diversity jurisdiction purposes because USAA is a Texas corporation; USAA’s 

principal place of business is in Texas; and the officers of USAA direct, control, and 

coordinate the activities of USAA from San Antonio, Texas.

9. Pursuant to 28 U.S.C. § 1332, this Court has diversity jurisdiction over this 

civil action because Plaintiffs’ damages demanded in this matter exceed the $75,000 

minimum amount in controversy.

10. Defendant, UNITED SERVICES AUTOMOBILE ASSOCIATION

(“USAA”), is a corporation organized and existing under the laws of the State of Texas and 

is duly authorized and does transact insurance business in the State of Arizona.

11. The Court has jurisdiction to hear this matter pursuant to Article VI, Section 

14, of the Arizona Constitution and A.R.S. § 12-123 in that the amount in controversy 

exceeds the minimum jurisdictional limits of this Court.

12. Venue is proper in Maricopa County, Arizona, pursuant to A.R.S. § 12-401 

because Defendant(s) caused events to occur in Maricopa County, Arizona out of which the 

claims alleged arose.

13. Defendants JOHN AND JANE DOES 1-50 AND ABC ENTITIES 1-50 are 

fictitious individuals and/or business entities whose true identities will be substituted, if

necessary, once they are known.

FACTS

14. On November 14, 2015 the Johnstuns were involved in an automobile collision

at the intersection of 91st Avenue and Peoria Avenue in Peoria, Arizona. 

15. Gilbert Escobedo, who caused the accident by running a red light, did not have 

auto insurance at the time of the accident and has not paid the JOHNSTUNS for their 

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injuries. 

16. As a direct result of the collision, the JOHNSTUNS suffered injuries, which 

required medical care for which they incurred medical expenses. 

COUNT ONE

(Breach of Contract)

17. Plaintiffs incorporate and re-allege the preceding paragraphs as if separately 

stated.

18. At the time of the accident, the JOHNSTUNS were passengers in a vehicle 

insured under an automobile insurance policy issued by USAA. 

19. The owners of the insurance policy are Christopher and Sherri Mills. 

20. Under the policy, USAA promised it would pay compensatory damages, which 

the JOHNSTUNS, as insureds, 3rd party beneficiaries, covered persons, and family members 

are legally entitled to recover from the owner or operator of an uninsured motor vehicle 

because of bodly injury sustained by the JOHNSTUNS in an auto accident up to the amount 

of $100,000 per person and up to $300,000 per accident. 

21. Pursuant to the provisions of the insurance policy, the JOHNSTUNS made a 

claim to USAA under the uninsured motorist coverage. 

22. USAA failed to make good faith offers to the JOHNSTUNS and refused to 

consider payment for STEPHANIE JOHNSTUN’S future surgery for her labral tear and 

future pain and suffering, which constitutes a de facto denial of coverage. 

23. Upon information and belief, USAA settled Christopher Mills and Sherri 

Mills’ personal injury claims without giving equal consideration to the JOHNSTUN”S 

claims.

24. USAA exhausted the policy limits to the extent the limits are not adequate to 

compensate the JOHNSTUNS. 

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25. USAA failed to tender the policy limits to all the claimants to negotiate a good 

faith distrubtion of the limits, especially when USAA knew all of the claimants were family 

members and their legal counsel were working towards an agreeable distribution. 

26. USAA’s failures constitute a breach of the insurance contract. 

27. As a direct and proximate result of USAA’s breach of the insurance contract, 

Plaintiff incurred direct and consequential damages.

COUNT TWO

(Bad Faith)

28. Plaintiffs incorporate and re-allege the preceding paragraphs as if separately 

stated.

29. There is an implied duty of good faith and fair dealing in the insurance policy 

issued by USAA.

30. The duty of good faith and fair dealing requires an insurance company to give 

as much consideration to its insured’s interests as its own interests when it is investigating, 

evaluating, and processing the insured’s claim. 

31. The duty of good faith and fair dealing requires an insurance company to not 

do anything that prevents an insured from receiving the benefits provided by the insurance 

contract. 

32. The duties are afforded to insureds, 3rd party beneficiaries, covered persons, 

and family members under USAA’s policy. 

33. USAA breached its duty of good faith and fair dealing by failing to make good 

faith offers to the JOHNSTUNS and refusing to consider payment for STEPHANIE 

JOHNSTUN’S future surgery for her labral tear and future pain and suffering. 

34. USAA breached its duty of good faith and fair dealing by settling Christopher 

Mills and Sherri Mills’ personal injury claims without giving equal consideration to the 

JOHNSTUN”S claims.

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35. USAA breached its duty of good faith and fair dealing by exhausting the policy 

limits to the extent the limits are not adequate to compensate the JOHNSTUNS. 

36. USAA breached its duty of good faith and fair dealing by failing to tender the 

policy limits to all the claimants to negotiate a good faith distrubtion of the limits, especially 

because USAA knew all of the claimants were family members and their legal counsel were 

working towards an agreeable distribution. 

37. USAA intentionally failed to pay the JOHNSTUNS pursuant to their claim for 

uninsured benefits under the insurance policy without a reasonable basis and USAA either 

knew that it had no reasonable basis for that action or recklessly disregarded that it had no 

reasonable basis for that action. 

38. As a direct and proximate result of USAA’S breach of its duty of good faith 

and fair dealing, the JOHNSTUNS have been damaged in an amount to be determined at 

trial.

39. The JOHNSTUNS are entitled to punitive damages against USAA.

The JOHNSTUNS pray for judgment against USAA as follows:

1. For an amount to compensate the JOHNSTUNS for the cost of medical and 

mental health care, past and future; 

2. For an amount to compensate the JOHNSTUNS for the physical and mental 

pain, suffering, loss of enjoyment of life, and other recoverable damages 

already sustained and will be sustained in the future; 

3. For other special damages proven at trial; 

4. For other general damages proven at trial; 

5. For punitive damages in an amount sufficient to punish the Defendant and to 

deter similar future conduct by Defendant and other similarly situated insurance 

companies; 

6. Pre-judgment interest;

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7. Post-judgment interest at the statutory rate from the entry of judgment until 

paid;

8. Attorneys’ fees, costs, and other expenses under A.R.S. §§12-341 and 12-

341.01 and/or allowed by law; and

9. For such other and further relief as the court and jury may appear just and 

proper.

Plaintiffs respectfully request a trial by jury.

RESPECTFULLY SUBMITTED this 28th day of February, 2018.

FOLGER LAW FIRM

By /s/ Bryan M. Folger 

Bryan M. Folger

11811 N. Tatum Blvd., Suite 3031

Phoenix, Arizona 85028

Attorneys for Plaintiffs

CERTIFICATE OF SERVICE

I hereby certify that on this 28th day of February, 2018 I electronically filed the 

foregoing document to the Clerk’s Office using the CM/ECF System for filing. Notice and 

service of the filing is made to counsel of record by the Court’s electronic filing system.

Nathan D. Meyer

Jaburg & Wilk, P.C.

3200 N. Central Avenue, 20th Floor

Phoenix, AZ 85012

Telephone (602) 248-1000

ndm@jaburgwilk.com

Attorneys for Defendant USAA General Indemnity Company

/s/ Bryan M. Folger

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