Pennington v. US Assure Insurance Services of Florida, Inc.
4:24-cv-06813
N.D. Cal.Apr 30, 2025Background
- Plaintiffs Thomas and Kelli Pennington allege they sought a builder’s risk insurance policy for remodeling their home, but received a policy covering only new construction.
- The policy was provided by Brown Insurance Agency via US Assure Insurance Services; Zurich issued the policy but is not a defendant.
- After fire damage to their garage, Zurich denied the insurance claim because the policy didn't cover remodeling, leading to the plaintiffs being uninsured.
- Plaintiffs bring California state law claims against both US Assure and Brown: negligent failure to obtain insurance, negligent misrepresentation, and violations of California’s Unfair Competition Law (UCL) and False Advertising Law (FAL).
- US Assure sought to dismiss all claims and to strike parts of the complaint referring to certain types of damages; Brown answered the complaint.
- The court held a hearing and ruled on motions to dismiss and to strike.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Negligent failure to obtain insurance | US Assure owed a duty to provide proper coverage | Only Brown dealt directly; no facts support a duty | Dismissed with leave to amend |
| Negligent misrepresentation | US Assure was central in issuing misleading policy | No false statements or representations by US Assure | Dismissed with leave to amend |
| UCL (Unlawful and Unfair Practices) | Cited claims under UCL “unlawful”/“unfair” prongs | No law violated; no causal link to US Assure conduct | Dismissed with leave to amend |
| FAL (False Advertising) | US Assure responsible for misleading advertising | US Assure made no false statements or ads | Dismissed with leave to amend |
| Strike references to damages | Rule 12(f) not for legal/factual determination | Certain damages unavailable as a matter of law | Denied; damages not struck |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard for facial plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 554 (pleading standard beyond formulaic recitation)
- Erickson v. Pardus, 551 U.S. 89 (allegations in complaint taken as true on 12(b)(6))
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requirements under Article III)
- Lee v. City of Los Angeles, 250 F.3d 668 (judicial notice of public records)
- Fantasy, Inc. v. Fogerty, 984 F.2d 1524 (Rule 12(f) motions to strike immaterial/impertinent matter)
- Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970 (Rule 12(f) does not allow striking damages claims as matter of law)