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Apodaca v. Young American Insurance Co.

United States District Court, D. New Mexico

January 16, 2019

YVONNE APODACA, on behalf of herself and all others similarly situated, Plaintiff,
v.
YOUNG AMERICA INSURANCE COMPANY, LOYA INSURANCE COMPANY, and EP LOYA GROUP, LP, Defendants.

          MEMORANDUM OPINION AND ORDER

          ROBERT C. BRACK SENIOR U.S. DISTRICT JUDGE.

         This matter is before the Court on the Motion of Defendants to Dismiss Plaintiff's First Amended Complaint, filed on August 6, 2018. (Doc. 14.) Jurisdiction arises under 28 U.S.C. § 1332. In this putative class action, Ms. Apodaca (Plaintiff) alleges that Defendants misrepresented the terms of her underinsured motorist coverage. Defendants argue that Plaintiff does not have standing to bring suit against either Loya Insurance Company (Loya) or EP Loya Group, LP (EP Loya), and that she has otherwise failed to state a claim. Having considered the submissions of counsel and the relevant law, the Court will GRANT IN PART the motion.

         I. Background[1]

         In 2017, Plaintiff sustained bodily injuries and damages to her car in an automobile accident with Mr. Ben Shriver. (Doc. 9 (Am. Compl.) at 3 ¶¶ 8, 10.) Mr. Shriver, who was arrested for aggravated driving while under the influence, was at fault in the accident. (Id. ¶¶ 8, 11-12.) Plaintiff had an auto insurance policy with Young America Insurance Company (Young America). (Id. ¶¶ 15, 18; see also Doc. 14-1.) Plaintiff carried the New Mexico minimum auto insurance liability amounts, which provide bodily injury coverage of $25, 000 per person and $50, 000 per accident (25/50 coverage), and property damage coverage of $10, 000. (Am. Compl. ¶ 23; see also Doc. 14-A at 1.) She had also purchased uninsured/underinsured (UM/UIM) motorist coverage in the same amounts. (Am. Compl. ¶ 23; see also Doc. 14-A at 1.)

         Plaintiff “received the full extent of [bodily injury] liability coverage carried by [Mr. Shriver], $25, 000.00.” (Am. Compl. ¶ 17.) Plaintiff believed that she was also entitled to bodily injury coverage benefits from her own UM/UIM policy and filed a claim with Young America after the accident.[2] (Am. Compl. ¶¶ 30-31, 34.) Young America denied her claim for UM/UIM bodily injury coverage benefits, however, on the basis that it was “entitled to a full offset of [Mr. Shriver's] Policy payments.” (See Doc. 1-1 at 45 (Ex. 2); see also Am. Compl. ¶ 34.)

         When Plaintiff purchased the UM/UIM coverage, Young America told her that it would benefit her in the event of an accident with an underinsured driver. (Id. ¶ 24.) Plaintiff avers that Young America misrepresented information about the UM/UIM coverage, and that it knew or should have known that the 25/50 UM/UIM coverage was meaningless. (Id.) Young America failed to inform Plaintiff that, due to New Mexico's “offset” law, the 25/50 UM/UIM coverage would not necessarily result in a payment of benefits if triggered by an accident with a motorist who also has 25/50 coverage. (See Id. ¶¶ 38, 40.) Additionally, Young America did not tell Plaintiff about premium costs for higher amounts of UM/UIM coverage or give her a fair opportunity to select a higher amount of coverage. (Id. ¶ 37.)

         Plaintiff asserts that Defendants “worked together as a joint venture to sell automobile policies to New Mexico residents” and are “jointly and severally liable for the acts and resulting damages” alleged in her Amended Complaint. (Id. at 2 ¶ 10.) Plaintiff purports to bring this claim on behalf of herself and other New Mexico insureds “who have been deceived by Defendants' practices.” (Id. ¶ 3.)

         II. Legal Standard

         In reviewing a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the Court “must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff.” In re Gold Res. Corp. Sec. Litig., 776 F.3d 1103, 1108 (10th Cir. 2015) (citation omitted). “To survive a motion to dismiss, ” the complaint does not need to contain “detailed factual allegations, ” but it “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). Plausibility does not equate to probability, but there must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S. at 556).

         “[W]hile ordinarily, a motion to dismiss must be converted to a motion for summary judgment when the court considers matters outside the complaint, see Fed. R. Civ. P. 12(d), matters that are judicially noticeable do not have that effect . . . .” Genesee Cty. Emps.' Ret. Sys. v. Thornburg Mortg. Sec. Tr. 2006-3, 825 F.Supp.2d 1082, 1122 (D.N.M. 2011) (citing Duprey v. Twelfth Judicial Dist. Court, 760 F.Supp.2d 1180, 1192-93 (D.N.M. 2009) (internal citation omitted)).

Exhibits attached to a complaint are properly treated as part of the pleadings for purposes of ruling on a motion to dismiss. . . . [F]acts subject to judicial notice may be considered in a Rule 12(b)(6) motion without converting the motion to dismiss into a motion for summary judgment. This allows the court to take judicial notice of its own files and records, as well as facts which are a matter of public record. However, the documents may only be considered to show their contents, not to prove the truth of matters asserted therein.

Id. at 1122-23 (quoting Tal v. Hogan, 453 F.3d 1244, 1264 n.24 (10th Cir. 2006) (internal quotation marks, alterations, and citations omitted)). Thus, the Court may consider the letter and Declarations pages Plaintiff attached to her Complaint and referenced in her Amended Complaint. (See Doc. 1-1 at 41-45 (Exs. 1, 2); Am. Compl. ¶¶ 32-34.)

         The Court may also consider the insurance policy Young America attached to its motion to dismiss, as the policy “is referred to in the complaint and is central to the plaintiff's claim . . . .” Radian Asset Assurance Inc. v. Coll. of the Christian Bros. of N.M., No. CIV 09-0885 JB/DJS, 2011 WL 10977180, at *17 (D.N.M. Jan. 24, 2011) (quotation and subsequent citations omitted). Young America submitted a certified copy of Plaintiff's insurance policy (see Docs. 14 at 2 n.1; 14-A), and Plaintiff cites to the exhibit without disputing its authenticity (see Doc. 21 at 16).

         III. Analysis

         A. Plaintiff fails to state a claim against Loya and EP Loya.

         Defendants contend that because Plaintiff's insurance contract is solely with Young America and she has not alleged a relationship with the other two defendants, she has failed to plead facts sufficient to confer standing to sue Loya or EP Loya. (Doc. 14 at 12-13.) Plaintiff argues that she has standing to sue because she alleges that Defendants are involved in a joint venture. (See Doc. 21 at 14-21.)

         “In New Mexico, a party may be liable for the negligence of its joint venturers.” MS through Harris v. E. N.M. Mental Retardation Servs., No. CIV 13-628 RB-GBW, 2015 WL 13662789, at *15 (D.N.M. June 16, 2015) (citing Schall v. Mondragon, 393 P.2d 457, 460 (N.M. 1964)).

         A joint venture exists when two or more parties (1) enter into an agreement, (2) to combine their money, property or time in the conduct of some particular business deal, (3) agree to share in the profits and losses of the venture jointly, and (4) have the right of mutual control over the subject matter of the enterprise or over the property.

Wilger Enters., Inc. v. Broadway Vista Partners, 115 P.3d 822, 824-25 (N.M. Ct. App. 2005) (quotation omitted).

         Plaintiff summarily concludes in her Amended Complaint that Defendants, who acknowledge that they are “members of the same corporate family”[3] (Doc. 14 at 13), “worked together as a joint venture to sell automobile policies to New Mexico residents, including” Plaintiff, and thus are “jointly and severally liable for the acts and resulting damages” alleged (Am. Compl. ¶ 10). In her response to Defendants' motion to dismiss, Plaintiff asserts that while she “does not yet have access to discovery . . ., a cursory look at [Defendants'] self-promotion indicates that some joint venture does, in fact, exist between” the three. (Doc. 21 at 15.) She goes on to describe certain indicators she found on Defendants' websites that purportedly support her legal theory, but the facts she discusses in her response are not detailed in the Amended Complaint. (See Id. at 15-16.)

         “While Rule 12(b)(6) does not require” Plaintiff to establish each element of her joint venture claim “at this stage of the litigation, reference to these elements is ‘help[ful] to determine whether [she has] set forth a plausible claim.'” Hitch Enters., Inc. v. Cimarex Energy Co., 859 F.Supp.2d 1249, 1266 (W.D. Okla. 2012) (quoting Khalik v. United Air Lines, 671 F.3d 1188, 1192 (10th Cir. 2012) (internal citations omitted)). In Hitch Enterprises, the district court found that the plaintiffs had failed to sufficiently plead that the defendants were engaged in a joint venture where the complaint alleged that one defendant “receive[d] the benefit of all of the revenue from its subsidiaries, . . . and that the defendants together receive[d] revenues and profits, . . . because they ‘are the type of conclusory and formulaic recitations disregarded by the [Supreme] Court in Iqbal.'” Id. (quoting Khalik, 671 F.3d at 1193 (citing Iqbal, 129 S.Ct. at 1949)).

         Similarly, in MS through Harris, the plaintiff alleged that two of the defendants (the Spencer Foundation and ENMRSH) shared “a number of officers and board members[, ] . . . that the Spencer Foundation's Articles of Incorporation state[d] that it was organized exclusively for charitable and educational purposes including . . . the making of distributions to ENMRSH[, ] . . . that the Spencer Foundation distributed just $47, 000 to ENMRSH” from 2007-2011, and that “ENMRSH funneled funds and resources to the Spencer Foundation.” 2015 WL 13662789, at *15 (internal quotation marks and citations omitted). Despite these allegations of “suspicious activity, ...


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