United States District Court, D. Arizona
Estate of Nicholas Edward Bensfield, by and through its Court Appointed Personal Representative, Shirley Bensfield, Plaintiff,
Liberty Mutual Fire Insurance Company, a foreign corporation doing business in Arizona, Defendant.
G. Campbell United States District Judge
the Estate of Nicholas Edward Bensfield, filed a complaint in
state court against Defendant Liberty Mutual Fire Insurance
Company. Doc. 1 at 10-18. Liberty Mutual removed the action
to this Court based on diversity jurisdiction. Id.
at 1-8. Liberty Mutual now moves for judgment on the
pleadings under Federal Rule of Civil Procedure 12(c). Doc.
10. The motion is fully briefed, and no party requests oral
argument. Docs. 13, 16. For reasons stated below, the Court
will grant the Estate leave to amend its complaint and
withhold a final ruling on Defendant's motion.
Court must take the facts alleged in the complaint as true
for purposes of this motion. Elvig v. Calvin Presbyterian
Church, 375 F.3d 951, 955 (9th Cir. 2004). Liberty
Mutual provided auto insurance coverage, including
underinsured motorist coverage, to Nicholas Edward Bensfield.
Doc. 1 at 11, ¶ 5. On November 12, 2014, an underinsured
motorist caused a collision that injured Bensfield.
Id. at 11, ¶¶ 6-7. As a result of the
accident, Bensfield incurred medical expenses and suffered
various general damages, including pain, disability,
disfigurement, anxiety, and loss of enjoyment of life.
Id. at 11, ¶ 7. The insurer for the motorist
paid its policy limits to Bensfield, but this sum did not
cover all of Bensfield's losses. Id. at 12,
¶ 14; Doc. 13 at 3.
March 12, 2015, Bensfield notified Liberty Mutual of his
underinsured motorist claim. Doc. 1 at 11, ¶ 8. Four
days later, Liberty Mutual confirmed coverage and requested
Bensfield's authorization to review his medical records.
Id. at 12, ¶ 10. Unfortunately, on March 25,
2016, and before Liberty Mutual finished its evaluation,
Bensfield died. Id. at 10, ¶ 1. The Estate does
not allege that Bensfield's death was related to the auto
accident and does not assert a claim for wrongful death.
See Doc. 1 at 10-18. Approximately four months
later, Liberty Mutual learned of Bensfield's death,
completed its evaluation, and issued a check to the Estate
for the balance of Bensfield's medical expenses. Doc. 10
at 2; see Doc. 1 at 18. The Estate does not dispute
that this payment, when combined with the payment from the
motorist's insurance company, covered all of
Bensfield's medical expenses. See Doc. 13.
complaint asserts a negligence claim in connection with
Liberty Mutual's processing of Bensfield's insurance
claim (Count One), a first-party bad faith claim (Count Two),
and a request for punitive damages (Count Three). Doc. 1 at
Rule 12(c) Standard.
motion for judgment on the pleadings under Rule 12(c)
“‘is properly granted when, taking all the
allegations in the non-moving party's pleadings as true,
the moving party is entitled to judgment as a matter of
law.'” United States v. Teng Jiao Zhou,
815 F.3d 639, 642 (9th Cir. 2016) (quoting Fajardo v.
Cty. of L.A., 179 F.3d 698, 699 (9th Cir. 1999)). Like a
Rule 12(b)(6) motion to dismiss, a motion for judgment on the
pleadings is directed at the legal sufficiency of the
opposing party's pleadings. Dworkin v. Hustler
Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). The
Court will assess the legal sufficiency of the Estate's
claims under Arizona law. See Erie R.R. Co. v.
Tompkins, 304 U.S. 64, 78-79 (1938).
Count One - Negligence.
One alleges that Liberty Mutual negligently handled
Bensfield's claim. Doc. 1 at 12-14. Liberty Mutual argues
that Arizona law prevents an insured from suing its insurer
for negligent handling of a claim. Doc. 10 at 3-4. The Estate
concurs, conceding that “a cause of action based solely
on negligence which does not rise to the level of bad faith
is precluded under Arizona law.” Doc. 13 at 1. The
Court agrees with both parties. Arizona law prohibits claims
against insurers for negligent claims processing. Miel v.
State Farm Mut. Auto. Ins. Co., 912 P.2d 1333, 1340
(Ariz.Ct.App. 1995). This bar applies to the Estate -
“an insured or his assignee may not sue his insurer for
negligent handling of claims that is separate and distinct
from the claim of breach of contract or bad faith.”
IDS Prop. Cas. Ins. Co. v. Gambrell, 913 F.Supp.2d
748, 752 (D. Ariz. 2012); see also Meineke v. GAB Bus.
Servs., Inc., 991 P.2d 267, 271 (Ariz.Ct.App. 1999). The
Estate's negligence claim fails as a matter of law.
Count Two - Bad Faith.
Mutual argues that it is entitled to judgment on the bad
faith claim because the damages the Estate seeks are
unrecoverable. Doc. 10 at 4-8. Liberty Mutual relies on
Arizona's survival statute, which precludes the recovery
of pain and suffering damages after an injured person's
Every cause of action, except a cause of action for damages
for breach of [a] promise to marry, seduction, libel,
slander, separate maintenance, alimony, loss of consortium or
invasion of the right of privacy, shall survive the death of
the person entitled thereto or liable therefor, and may be
asserted by or against the personal representative of such
person, provided that upon the death of ...