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Commerce and Industry Insurance Co. v. Hr Staffing, Inc.

United States District Court, D. Oregon

October 1, 2014

COMMERCE AND INDUSTRY INSURANCE COMPANY, Plaintiff,
v.
HR STAFFING, INC., Defendant.

Britta E. Warren, BLACK HETLERLIN, LLP, Portland, OR, Courtney A. Hasselberg, Ashley Schawang, SHOOK, HARDY, & BACON L.L.P., Irvine, CA, Attorneys for Plaintiff.

Robert A. Kerr, KERR LAW OFFICE P.C., Oregon City, OR, Attorney for Defendants.

OPINION & ORDER

MARCO A. HERNNDEZ, District Judge.

Plaintiff Commerce and Industry Insurance Company ("Commerce & Industry") brings this action, alleging breach of contract and unjust enrichment. Defendant HR Staffing, Inc. ("HR Staffing") counterclaims, also alleging breach of contract and unjust enrichment. Commerce & Industry moves to dismiss for failure to state a claim upon which relief can be granted. Because HR Staffing's counterclaims are pled with insufficient facts to determine its right to relief, the motion is granted.

BACKGROUND

In June of 2011, HR Staffing and Commerce & Industry entered into two contracts for workers compensation insurance. Complaint ¶¶ 1-2, Ex. A & Ex. B. Commerce & Industry alleges these contracts provided that HR Staffing would initially pay an estimated premium and, after Commerce & Industry audited its employee records, subsequently pay a final premium. Complaint ¶¶ 8 & 9. Commerce & Industry further alleges that it provided HR Staffing with insurance coverage, but HR Staffing failed to pay the final premiums, totaling $268, 469.00. Complaint ¶¶ 10, 25. In the alternative, Commerce & Industry claims that HR Staffing's conduct amounts to unjust enrichment. Complaint ¶¶ 26-36.

HR Staffing counterclaims, also alleging breach of contract and unjust enrichment. Answer ¶¶ 18-28. HR Staffing claims it paid at least $88, 507.20 to an injured employee who was covered by one of the two contracts. Answer ¶ 20. HR Staffing further alleges that it "initiated" a claim with Commerce & Industry, but Commerce & Industry "failed and refused" to provide reimbursement. Answer ¶ 20. HR Staffing asserts it fully performed under the contracts, and requests damages in the amount $88, 507.20 plus pre-judgment and post-judgment interest. Answer ¶¶ 22 & 23. HR Staffing also argues that the workers compensation claim it paid to its employee constitutes a "benefit" to Commerce & Industry. Answer ¶ 25 & 26. Therefore, HR Staffing alleges, Commerce & Industry "would be unjustly enriched if it did not reimburse defendant for the amounts [HR Staffing] paid on claims that were covered by" Commerce & Industry. Answer ¶ 27 & 28.

STANDARDS

A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc. , 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept all material facts alleged in the complaint as true and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co. , 668 F.3d 1136, 1140 (9th Cir. 2012). However, the court need not accept conclusory allegations as truthful. Holden v. Hagopian , 978 F.2d 1115, 1121 (9th Cir. 1992).

A motion to dismiss under Rule 12(b)(6) will be granted if plaintiff alleges the "grounds" of his "entitlement to relief" with nothing "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action...." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555 (2007). "Factual allegations must be enough to raise a right to relief above the speculative level, ... on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id . (citations and footnote omitted).

To survive a motion to dismiss, the complaint "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face, " meaning when the plaintiff must plead "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, 678 (2009) (internal quotation omitted). Additionally, "only a complaint that states a plausible claim for relief survives a motion to dismiss." Id . The complaint must contain "well-pleaded facts" which "permit the court to infer more than the mere possibility of misconduct." Id. at 679.

DISCUSSION

I. Breach of Contract Claim

The sole question to resolve is whether HR Staffing's counterclaims provide sufficient factual allegations to state plausible claims for relief. HR Staffing insists that its pleading provides sufficient facts to place Commerce & Industry on notice of "the basis of the claim[s] and the grounds for recovery." Defendant's Response at 2. Under Oregon law, to state a claim for a breach of contract a party "must allege the existence of a contract, its relevant terms, plaintiff's full performance and lack of breach and defendant's breach resulting in damage to plaintiff." Arnett v. Bank of America, N.A. , 874 F.Supp.2d 1021, 1029 (D. Or. 2012) (citations omitted). HR Staffing has failed to identify the relevant contractual ...


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