United States District Court, D. Arizona
Honorable Rosemary Marquez United States District Judge.
before the Court is Defendant Employers Mutual Casualty
Company's (“EMC”) Motion to Dismiss (Doc. 7).
Plaintiff Raygarr LLC (“Raygarr”) filed a
Response (Doc. 10), and EMC filed a Reply (Doc. 13).
filed a Complaint in Pima County Superior Court case number
C20181666 on April 5, 2018. (Doc. 1-4 at 8-17.) EMC removed
the case to federal court on May 11, 2018. (Doc. 1.)
Raygarr's Complaint alleges the following:
about February 18, 2014, EMC issued Commercial General
Liability Policy #5D0-74-23---15 and Umbrella Policy
#5J0-74-23---15 to Raygarr as insured and Raytheon Missile
Systems Company (“Raytheon”) as an additional
insured. (Doc. 1-4 at 9.) The policies were effective for the
period February 22, 2014 to February 22, 2015. (Id.)
On or about July 28, 2014, Raygarr signed Purchase Order No.
4200942454 with Raytheon to perform as a general contractor
and provide all labor, materials, and equipment to renovate
and upgrade bathrooms in Raytheon's Building 842.
(Id.) On or about September 9, 2014, Raytheon
informed Raygarr that a flood in Building 842 had caused
extensive damage to the building and to personal property
inside it. (Id.) The flood was allegedly caused by
the breaking of PVC caps installed by Raygarr's
subcontractor, Qualified Mechanical Contractors.
(Id.) Raytheon demanded Raygarrr be responsible for
flood remediation and repairs. (Id.) A
representative of Raygarr contacted its insurance broker, who
notified EMC of the flood. (Id. at 10.) EMC
established a claim file and claim number for the incident
and assigned EMC Senior Claims Adjuster Fabien Mireles to the
remediation contractors Abracadabra and ATI were contacted to
provide immediate flood remediation work. (Id.)
Raytheon refused to sign contracts for the flood remediation
work, informing Abracadabra and ATI that Raygarr should sign
the contracts. (Id.) Raygarr's principle, Ray
Garrison, informed Mireles that Raygarr was being asked to
sign contracts for the flood remediation work. (Id.
at 11.) Mireles told Garrison to sign the contracts and
proceed with the flood remediation, and he ensured Garrison
that the cost of the flood remediation and repairs would be
covered by EMC. (Id.) Based on Mireles's
representations, Raygarr signed the contracts with
Abracadabra and ATI for the flood remediation of Building
842. (Id. at 12.) Raygarr used all of its cash,
credit, and resources to perform the remediation and
restoration work for Building 842. (Id.) Despite
Mireles's representations, EMC refused and failed to pay
Raygarr for the costs of the flood remediation and
restoration. (Id.) As a direct consequence of
EMC's conduct, Raygarr was suspended and then terminated
from performing additional work as a general contractor for
upon the above allegations, Raygarr asserts claims for
negligent misrepresentation, negligence, equitable estoppel,
insurance bad faith, and breach of contract. (Id. at
12-17.) Raygarr seeks compensatory and punitive damages as
well as costs, attorneys' fees, and interest.
(Id. at 17.)
moves for dismissal under Rule 12(b)(6) of the Federal Rules
of Civil Procedure for “failure to state a claim upon
which relief can be granted.” Fed.R.Civ.P. 12(b)(6).
Dismissal under Rule 12(b)(6) “can be based on the lack
of a cognizable legal theory or the absence of sufficient
facts alleged under a cognizable legal theory.”
Balistreri v. Pacifica Police Dep't, 901 F.2d
696, 699 (9th Cir. 1988), as amended. To survive a
Rule 12(b)(6) motion to dismiss, “a complaint must
contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). In other words, the complaint's
“non-conclusory factual content, and reasonable
inferences from that content, must be plausibly suggestive of
a claim entitling the plaintiff to relief.” Moss v.
U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009)
(internal quotation omitted). “A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678. “Threadbare recitals
of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id.
evaluating a motion to dismiss must view the allegations of a
complaint “in the light most favorable to the
plaintiff.” Abramson v. Brownstein, 897 F.2d
389, 391 (9th Cir. 1990). All well-pleaded factual
allegations of the complaint must be accepted as true,
although the same does not apply to legal conclusions couched
as factual allegations. Iqbal, 556 U.S. at 678-79.
court ordinarily may not consider evidence outside the
pleadings in ruling on a Rule 12(b)(6) motion to dismiss.
See United States v. Ritchie, 342 F.3d 903, 907 (9th
Cir. 2003). “A court may, however, consider certain
materials-documents attached to the complaint, documents
incorporated by reference in the complaint, or matters of
judicial notice-without converting the motion to dismiss into
a motion for summary judgment.” Id. at 908. A
document is considered incorporated by reference into a
complaint “if the plaintiff refers extensively to the
document or the document forms the basis of the
plaintiff's claims.” Id.
seeks dismissal of Raygarr's claims for breach of
contract, negligent misrepresentation, negligent claim
handling, and equitable estoppel. (Doc. 7 at 1.) EMC argues
that the claims for negligent claim handling and equitable
estoppel are not cognizable under Arizona law, and that the
claims for breach of contract and negligent misrepresentation
are not supported by the factual allegations of Raygarr's