United States District Court, D. Arizona
Douglas L. Rayes United States District Judge.
issue is the motion to dismiss filed by Defendants Geico
General Insurance Company (“Geico General”),
Government Employees Insurance Company (“Government
Employees”), and Geico Casualty Insurance Company
(“Geico Casualty”), collectively referred to as
GEICO Defendants, which is fully briefed. (Docs. 25, 30, 35.)
For the reasons stated below, the motion is granted in part
and denied in part.
approximately 2008, Plaintiffs purchased a GEICO policy
through geico.com, without knowing the differences between
the various GEICO entities. (Doc. 13 at 19.) On September 6,
2018, a vehicle driven by Plaintiffs' teenage daughter
was damaged in a collision with another driver. (Id.
at 5-6.) Plaintiffs were insured by Geico General and the
at-fault driver in the collision was insured by Geico
Casualty. (Id. at 6.) Soon after the accident,
Plaintiffs contacted Geico and notified it about the accident,
seeking to recover for their daughter's medical bills and
the costs to repair the vehicle. (Id.) A Government
Employees adjuster, Jessie Baranek, asked Plaintiffs whether
they wanted their car repaired using their own policy or the
at-fault driver's policy. Ms. Baranek explained that
Plaintiffs would not have to pay the deductible if they used
the at-fault driver's policy, which persuaded Plaintiffs
to submit a third-party claim. (Id.)
then submitted a third-party claim to Geico Casualty under
the at-fault driver's policy. (Id.) Geico
Casualty's guarantee gave Plaintiffs the option to get
their own estimates, after which Geico Casualty would pay the
reasonable costs to correct the covered repairs, or to take
the car directly to a GEICO Auto Repair Xpress Service Center
(“ARX”). (Id. at 7.) Plaintiffs chose to
receive an estimate from a GEICO ARX, and Geico Casualty
directed Plaintiffs to Service King Paint & Body, LLC
(“Service King”) for repairs. (Id. at
8.) On September 10, 2018, Plaintiffs took their vehicle to
Service King. Another Government Employees adjuster, Kevin
Dorsch, produced an estimate for $1, 525.88. Service King
made the repairs, totaling $1, 525.88, and returned the
vehicle to Plaintiffs on September 11, 2018. (Id. at
9.) The same day, Ms. Baranek emailed Plaintiffs, noting the
apparent discrepancy between their daughter's injuries
and the low repair estimate and lack of structural damage to
the vehicle. (Id. at 12.)
of the low estimate and limited work performed, Plaintiffs
took the vehicle to Coach Works Auto Body (“Coach
Works”) on September 17, 2018 to receive a second
opinion. (Id.) Matt Radman of Coach Works noted
evidence of deficient repairs and began dissembling the
vehicle. That day, Plaintiffs contacted Geico Casualty to
advise it that the vehicle had not been properly repaired by
Service King. (Id.) On September 18, 2018, Mr.
Radman sent an email to David Edgar, a Geico General and
Geico Casualty Auto Damage Supervisor and employee of
Government Employees, informing him about the deficient
repairs and requesting a meeting for September 21, 2018.
(Id. at 13.) Mr. Edgar met with Plaintiffs and Mr.
Radman on September 21, 2018 and performed an inspection on
the vehicle. (Id.) On September 25, 2018, Geico
Casualty provided Plaintiffs with a new estimate, stating it
would pay $4, 689.65 for repairs. (Id. at 14.)
October 11, 2018, Coach Works provided Geico Casualty with an
updated repair estimate which totaled $8, 982.80.
(Id.) Geico Casualty only paid $4, 990.85 to Coach
Works. (Id.) In response, Plaintiffs asked Geico
General to open a first-party claim under their policy.
(Id.) Geico General explained that it could not open
a claim because the repairs in question were already
completed. However, on October 16, 2018, Geico General
assigned Plaintiffs a first party claim number, but informed
Plaintiffs that it would not pay the outstanding amount.
(Id. at 14.) On October 19, 2018, Coach Works
generated a final estimate for $8, 944.91. (Id. at
15.) After deducting Geico Casualty's payment of $4,
990.85, Plaintiffs still owed $3, 954.06 before Coach Works
would return the vehicle. On October 19, 2018, Geico Casualty
made an additional payment of $209.99 to Coach works but
refused to pay the remainder of the balance. (Id.)
On October 26, 2018, Plaintiffs paid Coach Works $4,
763.52 to get their vehicle back.
February 15, 2019, Plaintiffs filed suit in Maricopa County
Superior Court. (Doc. 1-3.) On March 21, 2019, the GEICO
Defendants removed to this Court. On April 3, 2019,
Plaintiffs filed their amended complaint (Doc. 13), which is
the operative complaint. Importantly, the amended complaint
asserts that all GEICO Defendants are alter egos of each
other or were engaged in a joint venture, and therefore any
claim against one equally applies to the others. The amended
complaint alleges four counts: (1) breach of the covenant of
good faith and fair dealing (against GEICO Defendants), (2)
violations of the Arizona Consumer Fraud Act
(“ACFA”) (against GEICO Defendants and Service
King), (3) breach of contract (against GEICO Defendants and
Service King), and (4) aiding and abetting tortious conduct
(against GEICO Defendants).
GEICO Defendants move to dismiss all claims against them,
except for the breach of contract claim against Geico
Casualty. (Doc. 25.) The motion is now ripe.
survive dismissal for failure to state a claim pursuant to
Federal Rule of Civil Procedure 12(b)(6), a complaint must
contain factual allegations sufficient to “raise a
right to relief above the speculative level.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The
task when ruling on a motion to dismiss “is to evaluate
whether the claims alleged [plausibly] can be asserted as a
matter of law.” See Adams v. Johnson, 355 F.3d
1179, 1183 (9th Cir. 2004); see also Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). When analyzing the
sufficiency of a complaint, the well-pled factual allegations
are taken as true and construed in the light most favorable
to the plaintiff. Cousins v. Lockyer, 568 F.3d 1063,
1067 (9th Cir. 2009). However, legal conclusions couched as
factual allegations are not entitled to the assumption of
truth, Iqbal, 556 U.S. at 680, 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. 2008).
Joint Venture and Alter-Ego Theories
their complaint, Plaintiffs assert that the GEICO Defendants
were engaged in a joint venture. (Doc. 13 at 23-25.) To
adequately plead a joint venture, Plaintiffs' complaint
must allege the existence of (1) a contract; (2) a common
purpose; (3) a community of interest; (4) an equal right of
control; and (5) participation in profits and losses.
Tanner Companies v. Superior Court, 696 P.2d 693,
695 (Ariz. 1985) (citation omitted). Plaintiffs'
complaint fails to adequately plead a joint venture theory
because it does not assert that each of the GEICO Defendants
exercised an equal right of control. Equal right of control
means that each entity “must share, to some extent, in
the control of the venture. In other words, it is sufficient
that a venturer has some voice or right to be heard in the
control or management of the venture.” Estate of
Hernandez by Hernandez-Wheeler v. Flavio, 930 P.2d 1309,
1313 (Ariz. 1997). Here, Plaintiffs do not contend that ...