Heidingsfelder v. Ameriprise Auto & Home Insurance
3:19-cv-08255
| N.D. Cal. | Sep 24, 2020Background
- Plaintiffs Robert and Ann Heidingsfelder bought a homeowners policy offered by Ameriprise through Costco and lost their home and personal property in the 2017 Tubbs Fire.
- During purchase and follow-up, plaintiffs were told coverage was sufficient, received a state notice about "demand surge" and replacement-cost language, and were told defendants "may" send an independent inspector.
- Plaintiffs asked defendants to evaluate adequacy of coverage; defendants allegedly performed an internal analysis and provided reconstruction estimates indicating sufficiency.
- After the fire, the policy did not cover full replacement costs; plaintiffs sued in California state court alleging professional negligence, fraud, breach of contract, breach of fiduciary duty, bad faith, negligent misrepresentation, reformation, and UCL violations.
- Defendants removed under diversity jurisdiction and moved to dismiss under Fed. R. Civ. P. 12(b)(6) and 9(b); the Court dismissed the complaint with leave to amend for pleading deficiencies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraud/Rule 9(b) particularity | Defendants misrepresented coverage and analysis supporting sufficiency | Plaintiffs fail to plead fraud with required particularity or attribute statements to specific defendants | Dismissed for failure to satisfy Rule 9(b); must identify who, what, when, where, how; leave to amend |
| Lumping multiple defendants | All defendants acted jointly/agency or in concert, so group pleading is sufficient | Different defendants are differently situated; roles must be alleged | Dismissed as pleaded; complaint must specify each defendant's role (identify acts by each) |
| Breach of contract / policy terms (esp. Costco) | Policy and related communications created contractual obligations breached by defendants | Complaint fails to plead express contract terms, policy limits, or parties to contract—Costco not shown to be contracting party | Dismissed for failure to plead essential contractual elements; amend to allege specific terms/parties |
| Fiduciary/duty to advise | Defendants owed heightened duties to evaluate and advise on adequate coverage | Insurers/agents generally owe limited duties; insureds must determine coverage; no facts showing special relationship or reliance | Dismissed; allegations insufficient to establish fiduciary duty or expanded agent duty absent express agreement, special expertise, misrepresentation, or specific request |
| Bad faith / implied covenant | Defendants breached implied covenant by understating coverage and failing proper valuation | No factual pleading of policy terms, claims handling, or insurer-insured relationship to support covenant/bad faith | Dismissed for lack of factual pleading; leave to amend if factual predicate exists |
| Consideration of extrinsic evidence | Plaintiffs cited extrinsic declarations/exhibits to support claims | Defendants filed extra declarations; court should not consider matters beyond complaint on Rule 12(b)(6) motion | Court declined to consider extra-record declarations at pleading stage; parties warned not to rely on them in future motions |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading plausibility standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading plausibility standard)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (Rule 9(b) applies to claims that sound in fraud)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (fraud pleading must plead the who, what, when, where, how)
- United States v. United Healthcare Ins. Co., 848 F.3d 1161 (Rule 9(b) does not demand absolute particularity)
- United States ex rel. Anita Silingo v. WellPoint, 904 F.3d 667 (fraud suits must identify each defendant's role)
- Swartz v. KPMG LLP, 476 F.3d 756 (fraud claims against multiple defendants must allocate responsibility)
- Hamilton v. Greenwich Inv'rs XXVI, LLC, 195 Cal. App. 4th 1602 (breach of contract pleading requirements)
- Everett v. State Farm Gen. Ins. Co., 162 Cal. App. 4th 649 (insured bears responsibility to determine adequate coverage)
- Wallman v. Suddock, 200 Cal. App. 4th 1288 (agent duties limited; greater duty only upon express agreement, special expertise, misrepresentation, or specific request)
- Vu v. Prudential Prop. & Cas. Ins. Co., 33 P.3d 487 (insurers generally not fiduciaries)