United States District Court, D. Oregon, Portland Division
CHARTIS SPECIALTY INSURANCE COMPANY f/k/a American International Specialty Lines Insurance Company, Plaintiff,
AMERICAN CONTRACTORS INSURANCE COMPANY RISK RETENTION COMPANY RISK RETENTION GROUP, HOFFMAN CORPORATION and HOFFMAN CONSTRUCTION COMPANY OF OREGON, Defendants.
Matthew J. Fink (pro hac vice), Charles A. Hafner (pro hac vice), Nicolaides Fink Thorpe, Michaelides Sullivan, LLP, 71 S. Wacker Drive, Suite 4400, Chicago, IL 60625, Christopher J. Nye, Reed McClure, Two Union Square, 601 Union Street, Suite 1500, Seattle, WA 98101-1363, Attorneys for Plaintiff.
Michael E. Farnell, Parson Farnell & Grein, LLP, 1030 SW Morrison Street, Portland, Oregon 97205, Patrick J. Wielinski, Cokions, Bosien & Young, 105 Decker Court, Suite 800, Irving, Texas 75062, Attorneys for Defendants.
OPINION AND ORDER
GARR M. KING, District Judge.
This is an insurance coverage dispute in which I allowed Hoffman Corporation and Hoffman Construction Company of Oregon (collectively, "Hoffman") to intervene as a defendant. Before the court is Chartis Specialty's 12(b)(1) and 12(b)(6) Motion to Dismiss Hoffman's Counterclaims .
Plaintiff Chartis Specialty Insurance Company issued a commercial umbrella liability insurance policy to Hoffman and a group of developers of a mixed-use, multi-unit condominium complex, the Meriwether Condominiums ("Developers"). Defendant American Contractors Insurance Company Risk Retention Group ("ACIC") issued a commercial general liability policy to Hoffman and the developers for the same project.
The Meriwether Condominium Owners Association ("Association") sued the Developers for building defects. ACIC undertook defense of the case. Chartis and ACIC disagreed on whether more than one occurrence took place; the ACIC policy has a $2 million each occurrence limit of liability and a $4 million aggregate limit of liability, inclusive of retentions owed. To settle the underlying case, ACIC paid $1.8 million and Chartis paid $1.6 million, subject to a reservation of rights. Chartis then filed the federal case to determine the number of occurrences and, if successful in proving multiple occurrences took place, obtain a refund of the amount it paid in settlement.
In its counterclaim, Hoffman alleges the ACIC policy requires payment of a $500, 000 indemnity retention and a $250, 000 allocated loss adjustment expense (primarily defense costs), both on a per occurrence basis. Hoffman is solely responsible for paying these retentions for each occurrence under the ACIC policy.
Hoffman alleges Chartis breached the contract by wrongfully asserting it was not responsible for any portion of the settlement because the claims involved multiple occurrences. Hoffman alleges it was damaged because it is responsible for the payment of an additional $750, 000 in retentions if there were multiple occurrences, as Chartis insisted when negotiating its reservation of rights in the settlement.
To establish standing under Article III of the Constitution, a party must show "(1) injury in fact; (2) causation; and (3) likelihood that the injury will be redressed by a favorable decision." Native Vill. of Kivalina v. ExxonMobil Corp. , 696 F.3d 849, 867 (9th Cir. 2012) (internal quotation omitted), cert. denied, 133 S.Ct. 2390 (2013). When analyzing a motion to dismiss for lack of standing, the court accepts as true all factual allegations in the complaint and draws all reasonable inferences in the nonmoving party's favor. Id.
Although a plaintiff need not allege detailed facts, a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) will be granted if the pleading fails to provide "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570 (2007). A claim rises above the speculative level "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009). The Court is required to "assume the veracity" of all well-pleaded factual allegations. Id. at 678. Thus, "for a complaint to survive a motion to dismiss, the non-conclusory factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Serv. , 572 F.3d 962, 929 (9th Cir. 2009) (citing Iqbal , 129 S.Ct. at 1949).
Chartis argues Hoffman has no standing because its claims rest on the rights of other parties, namely the Developers to whom Chartis allegedly breached duties to defend and indemnify. Chartis relies on the fact that the Association sued only the Developers and not Hoffman. Because Hoffman was not even potentially liable in connection with the underlying claims, Chartis argues Hoffman has no standing to assert any claims against Chartis in connection with the settlement of those claims. Chartis characterizes Hoffman's interests as indirect pecuniary interests arising solely out of a separate contractual agreement with ACIC. Chartis additionally argues Hoffman's damages are derivative of ...