United States District Court, D. Oregon, Eugene Division
M. COFFIN UNITED STATES MAGISTRATE JUDGE.
seeks recovery in this action for property damage caused by a
fire. There is diversity of citizenship between the parties.
original complaint, plaintiff asserted one claim for relief
entitled "reckless misrepresentation" and defendant
brought a motion to dismiss for failure to state a claim. The
court noted at oral argument that the motion appeared
meritorious, but allowed plaintiff its request to amend the
amended complaint, plaintiff adds a second claim for relief
entitled "negligent misrepresentation." The parties
provided supplemental briefing and defendant's motion to
dismiss the amended complaint for failure to state a claim is
presently before the court.
is Ohio Security Insurance Company (Ohio Insurance). Ohio
Insurance provided property insurance to its insured Ehler
Enterprises Oregon, LLC (Ehler) for Ehler's building.
leased a suite in its building to Bend Trend Homes (BTH).
allegedly entered into a Client Agreement with defendant
Watchdog Security, LLC (Watchdog Security). In the Client
Agreement between BTH and Watchdog Security, Watchdog
Security agreed to provide monitoring services for a burglar
alarm inside the BTH suite. In the event a burglar alarm was
received, Watchdog allegedly promised to transmit such alarm
to the police or fire department. Plaintiff clarified at oral
argument that the Client Agreement was intended for burglar
alarm services and not for fire.
2013, BTH decided to replace its telephone system, and as a
result of the change, the telephone connection between the
burglar alarm for the suite and Watchdog Security's
central monitoring system was severed. Ohio Insurance alleges
that because the telephone line was severed, Watchdog
Security lost the ability to monitor the system in 2013, and
that BTH paid Watchdog Security a quarterly fee to monitor
the alarm for two years up to the time of the fire in 2015.
30, 2015, an intruder, who was suffering from the delusion
that he was being chased by marauding ninjas, broke into the
suite to save himself. The burglar alarm for the suite was
triggered. However, to hasten a response from the police
department, the intruder started a fire in the suite. Ohio
Insurance alleges that the fire started in the BTH suite
spread from its initial area in origin, and proceeded to do
damage throughout the entire building.
Insurance alleges as its first claim a claim for
"reckless misrepresentation." Ohio Insurance
alleges that Watchdog Security promised BTH that it would
communicate the information of a triggered burglar alarm to
authorities, failed to notify BTH that it had lost its
ability to moniter the burglar alarm, and that by accepting a
fee, its conduct amounted to a reckless disregard by Watchdog
Security for the fact it could not notify the Bend Police
Department of an unlawful entry into the suite.
Ohio Insurance has not alleged the existence of a contract
between itself and defendant Watchdog Security. Nor has Ohio
Insurance alleged the existence of a contract between its
insured Ehler and defendant Watchdog Security.
amended complaint, Ohio Insurance asserts a second claim
entitled negligent misrepresentation. Ohio Insurance alleges
that its insured, Ehler, the building owner, was an intended
beneficiary of the Client Agreement for burglar ...