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Bruer v. Phillips Law Group PC

United States District Court, D. Arizona

June 19, 2019

Jane Joyce Bruer, Plaintiff,
Phillips Law Group PC, et al., Defendants.


          Honorable John J. Tuchi United States District Judge.

         At issue is Defendant Ritsema and Lyon, P.C.'s (“Ritsema”) Motion to Dismiss (Doc. 54, Mot.), to which pro se Plaintiff Jane Joyce Bruer filed a Response (Doc. 74, Resp.) and Defendant filed a Reply (Doc. 78, Reply).

         I. BACKGROUND

         Plaintiff was terminated from her employment with Phillips Law Group (“PLG”) in June 2017, after which she filed suit against several Defendants. (Doc. 44, Am. Compl. ¶ 228.) At issue here are the three Arizona state law claims that Plaintiff brought against Defendant Ritsema for breach of good faith and fair dealing, invasion of privacy, and breach of fiduciary duty. (Am. Compl. ¶¶ 564-653.)

         Several months before her termination, Plaintiff suffered a work injury to her right knee. (Am. Compl. ¶ 252.) She filed an injury report, and a workers' compensation claim was opened with PLG's insurance carrier, Defendant Sedgwick Claims Management Services (“Sedgwick”). (Am. Compl. ¶ 257.) When Plaintiff was terminated soon after, Sedgwick closed her claim. (Am. Compl. ¶ 258.) Plaintiff believed she was entitled to compensation and thus filed a request for a hearing with the Industrial Commission of Arizona. (Am. Compl. ¶ 260.)

         Defendant Ritsema, a law firm, represented PLG and Sedgwick under the workers' compensation policy held by PLG and adjusted by Sedgwick. (Doc. 50, Ritsema Answ. ¶ 257.) Plaintiff alleges that an attorney at Ritsema refused to produce Plaintiff's personnel file, which Plaintiff needed for her hearing before the Industrial Commission. (Am. Compl. ¶ 259.) Plaintiff filed a motion to compel production of her file with the Industrial Commission and later received it from Defendant, but alleges that Defendant withheld several documents from her file. (Am. Compl. ¶¶ 264-70.) Plaintiff requested additional documents several times but alleged that Defendant “continuously and deliberately used dilatory tactics to stifle and frustrate [her] case momentum.” (Am. Compl. ¶ 277.) Plaintiff also alleges at various points in her Complaint that Defendant attorneys lied about their knowledge of documents pertaining to Plaintiff's case before the Industrial Commission, lied in answers to interrogatories, mispresented Plaintiff's average monthly wage on the employer's required injury report, and “lied or misrepresented information to the [Industrial Commission ALJ].” (Am. Compl. ¶¶ 340-356.)

         Further, Plaintiff alleges that Defendant “caused an unsecure .pdf file, with many pages containing the Plaintiff's social security number, address, phone number, date of birth and or account number, without first applying required redactions, to be transmitted via the internet without password protection.” (Am. Compl. ¶ 603.) Defendant admits that it emailed the file in the course of representing its client during Plaintiff's workers' compensation claim and subsequent Industrial Commission proceeding. (Mot. at 3.) But Defendant only sent the information to Plaintiff's own email address. (Mot. at 3.) It is this transmission of her information to her own email account that Plaintiff relies upon for her invasion of privacy claim. (Am. Compl. ¶¶ 601-35.) Additionally, Plaintiff alleges that Defendant breached its fiduciary duty to her by sending her information via email. (Am. Compl. ¶¶ 636-53.)


         When analyzing a complaint for failure to state a claim for relief under Federal Rule of Civil Procedure 12(b)(6), 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). Legal conclusions couched as factual allegations are not entitled to the assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are insufficient to defeat a motion to dismiss for failure to state a claim. In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010).

         A dismissal under Rule 12(b)(6) for failure to state a claim can be based on either (1) the lack of a cognizable legal theory or (2) insufficient facts to support a cognizable legal claim. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). “While a complaint attacked by a Rule 12(b)(6) motion does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] 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. at 555 (citations omitted). The complaint must thus 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 Twombly, 550 U.S. at 570). “[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that ‘recovery is very remote and unlikely.'” Twombly, 550 U.S. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).

         III. ANALYSIS

         A. Breach of Good Faith and Fair Dealing

         Plaintiff's first claim against Defendant is based on Defendant's alleged hesitance to produce Plaintiff's personnel file and its allegedly false statements made to the Industrial Commission. (Am. Compl. ¶¶ 564-600.) Defendant moves to dismiss this claim for breach of good faith and fair dealing on the basis that Arizona does not recognize such a cause of action against an insurer's attorney. (Mot. at 4.) Defendant asserts that Plaintiff can bring this claim only against her insurer-not the law firm that represents that insurer-because “it is the relationship between the insurer and insured as defined by the terms of the policy and the implied covenant of good faith and fair dealing that allows for a cause of action of bad faith.” (Mot. at 4.) And while Defendant acknowledges that “[t]his relationship can be extended to third-parties, ” it maintains that “Arizona has yet to extend this obligation to the insurer's attorneys.” (Mot. at 4.)

         In response, Plaintiff argues that Defendant acted as Sedgwick's agent and thus entered into a semi-contractual relationship with Plaintiff that could give rise to a claim for breach of good faith and fair dealing. (Resp. at 5.) The part of Plaintiff's argument that discusses the covenant of good faith and fair dealing in contracts is ineffective here, as Plaintiff never entered into a contract with Defendant Ritsema. Under Arizona law, the covenant of good faith and fair dealing is implied in every contract. Rawlings v. Apodaca, 726 P.2d 565, 569 (Ariz. 1986). Plaintiff therefore may be able to sustain this claim against Defendants American Family and ...

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