United States District Court, D. Arizona
honorable Susan M. Brnovich, United States District Judge.
S&C Claims Services, Inc. and Randi Kerner filed a Motion
to Dismiss All Claims Against Defendants S&C Claims
Services and Randi Kerner pursuant to Fed. R. Civ. Pro.
12(b)(6) and/or 12(c). Oral argument was held on January 18,
2019. The Court has now considered the Motion (Doc. 16,
“Mot.”), Response (Doc. 17, “Resp.”)
and Reply (Doc. 20, “Reply”) along with arguments
of counsel and relevant case law.
case arises out of Plaintiff Jeanette Centeno's
workers' compensation claim filed with American Liberty
Insurance Company (“ALIC”). Plaintiff alleged to
have tripped and injured her back on or about August 5, 2016
while providing services at a patient's house in the
course of her employment. The claim was initially accepted by
ALIC, but the acceptance was later rescinded and the claim
was denied. ALIC alleged that the incidents did not occur
on-the-job. Plaintiff initiated litigation before the
Industrial Commission of Arizona (“ICA”), which
ruled in Plaintiff's favor awarding medical and financial
April 6, 2018, Plaintiff initiated this action by filing a
complaint against defendants ALIC, S&C Claims Services,
Inc. (“S&C”), and Randi Kerner. (Doc. 1, the
“Complaint”). Plaintiff claims that the ICA
“retains jurisdiction to determine medical and
disability benefits payable under the Arizona Workers'
Compensation Act, ” but that jurisdiction of
“general damages arising from the wrongful conduct of
Defendants is wholly separate from the relief accorded”
by the ICA. (Mot. at 6). In regard to the handling of her
workers' compensation claim, Plaintiff alleges that the
wrongful conduct of ALIC, S&C, and Kerner includes
failing to conduct a reasonable investigation, failing to
timely recognize Plaintiff's compensable injury, failing
to accept undisputed medical evidence, denying the existence
and/or extent of injury without input of competent
individuals, creating pretextual reasons to deny and/or delay
payment, ignoring and refusing to consider information
favorable to Plaintiff, and failing to ensure that the
industry's best practices were applied consistently.
(Mot. at 5).
S&C and Kerner now move to dismiss all claims against
them. Plaintiff's first claim rests on the “breach
of the duty of good faith and fair dealing” as to
defendants ALIC and S&C. Plaintiff's second and third
claims are for “aiding and abetting American
Liberty's breach of duty of good faith & fair
dealing” as to S&C and Kerner respectively.
Plaintiff's fourth claim is for punitive damages.
survive a Rule 12(b)(6) motion for failure to state a claim,
a complaint must meet the requirements of Rule 8(a)(2). Rule
8(a)(2) requires a “short and plain statement of the
claim showing that the pleader is entitled to relief, ”
so that the defendant has “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, 47 (1957)).
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).
ruling on a Rule 12(b)(6) motion to dismiss, the well-pled
factual allegations are taken as true and construed in the
light most favorable to the nonmoving party. Cousins v.
Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). However,
legal conclusions couched as factual allegations are not
given a presumption of truthfulness, and “conclusory
allegations of law and unwarranted inferences are not
sufficient to defeat a motion to dismiss.” Pareto
v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998).
Breach of the Duty of Good Faith and Fair Dealing
allege that “S&C cannot be held liable for breach
of the duty of good faith and fair dealing for the simple
reason that S&C is not an insurance carrier, ” but
is rather a “third party administrator.” (Mot. at
3-4). Defendants further contend that the Complaint
“does not plead that S&C had any
contractual relationship with Plaintiff[.]” (Mot. at 4)
(emphasis in original).
duty of good faith and fair dealing is implied in every
contract. Rawlings v. Apodaca, 726 P.2d 565, 569
(Ariz. 1986). “The essence of that duty is that neither
party will act to impair the right of the other to receive
the benefits which flow from their agreement or contractual
relationship.” Id. A claim for breach of the
duty of good faith and fair dealing requires a contractual
relationship. Without a contract, there is no duty of good
faith and fair dealing. See, e.g., Walter v. F.J. Simmons
& Others, 818 P.2d 214, 222 (Ariz.Ct.App. 1991)
(agent dismissed from bad faith claim “because he owed
no contractual duty to act in good faith or deal
case, there is no contractual relationship between Plaintiff
and Defendants S&C or Kerner. Plaintiff provided no case
law or analysis to support this claim in her response (Doc.
17). Accordingly, Plaintiff's claim for breach of duty of
good faith and fair dealing against S&C ...