Ruppert v. Markel American Insurance Company, 3:18-cv-08078

John Ruppert was electrocuted on a houseboat on June 9, 2016; plaintiffs sued various houseboat entities and the Wests in the underlying action and obtained a Damron agreement assigning claims against Markel American Insurance Company to plaintiffs.
Markel American issued the insurance at issue; Markel Corporation is Markel American’s parent and Markel Service is a related subsidiary involved in administration/claims handling.
Plaintiffs sued Markel American for breach of contract and bad faith after Markel American disclaimed coverage; they moved to amend the complaint to (1) add William and Margaret West as plaintiffs and (2) add Markel Corporation and Markel Service as defendants.
The scheduling order’s deadline to join parties/amend pleadings had been extended to March 29, 2019; plaintiffs filed the motion for leave to amend and defendant Markel American opposed as futile.
The court applied Rule 15 liberal amendment standards and Arizona law on third‑party beneficiaries and alter‑ego/joint enterprise liability.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Wests may be added as plaintiffs (third‑party beneficiary)	Wests are intended beneficiaries because they are the sole owners/officers of the insured entities and thus can enforce the policy	Wests are not parties to the insurance contract and lack privity or any showing they were intended beneficiaries	Denied: plaintiffs failed to plead sufficient facts showing the Wests were intended, direct third‑party beneficiaries; leave to amend denied without prejudice (may refile cure motion)
Whether Markel Corp. and Markel Service may be added as defendants (alter ego/joint enterprise)	Plaintiffs allege unity of interest/control, shared profits, use of Markel Service employees for claims handling, and reliance on Markel Corp. backing—supporting alter‑ego liability	Markel American argues lack of privity and that alter‑ego/joint enterprise allegations are unsupported/futile	Granted: court found the amended complaint alleges sufficient factual matter to plausibly plead alter‑ego/joint enterprise claims against Markel Corp. and Markel Service

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (complaint must plead factual content plausibly showing liability)
Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2003) (prejudice to the opposing party is the key consideration in Rule 15 motions)
Bonin v. Calderon, 59 F.3d 815 (9th Cir. 1995) (futility alone can justify denial of leave to amend)
Miller v. Rykoff‑Sexton, Inc., 845 F.2d 209 (9th Cir. 1988) (amendment is futile only if no set of facts would support the claim)
Gatecliff v. Great Republic Life Ins. Co., 821 P.2d 725 (Ariz. 1991) (an insured may sue a parent company under an alter‑ego theory)
Samsel v. Allstate Ins. Co., 19 P.3d 621 (Ariz. Ct. App. 2001) (third‑party beneficiary status requires the contract to show intent to benefit that person)