djcheburashka
Contributor
Sounds basically like what I expected. If someone sends me a link to the court's order I'll analyze the whole thing.
PADI getting sued over Insurance Program
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ItsBruce
Contributor
Now, I've read the order regarding Vicencia & Buckley's motion to dismiss.
As to the two claims that V & B breached a contract, the Court ruled that the plaintiff had not adequately set forth the contract it claims V & B breached. The Court says that although the plaintiff alleged a contract, it did not set out the terms such that the Court could assess whether the other allegations show they were breached.
As to the claim that V & B breached a fiduciary duty to the plaintiff, the Court said that the plaintiff had not pled facts, which if believed, would establish damage as the result of any such breach.
As to the claim that V & B was negligent, the Court said: "Plaintiff’s FAC [First Amended Complaint] fails to allege that it has suffered actual loss, let alone loss because of the Defendant V&B’s allegedly negligent conduct." The Court noted: that what the plaintiff had alleged as damages was "predicated on the allegation that PADI is acting as an unlicensed primary insurer and that “'in an event of a major disaster of multiple dive shops, PADI does not and will not have sufficient funds to cover multiple losses at once.'” It then held that this was too speculative to amount to an allegation of actual damage.
The Court granted V & B's motion as to other claims, largely on the basis that the allegations were not specific enough
It is interesting to note that PADI did not challenge the legal sufficiency of the plaintiff's claims.
As to the two claims that V & B breached a contract, the Court ruled that the plaintiff had not adequately set forth the contract it claims V & B breached. The Court says that although the plaintiff alleged a contract, it did not set out the terms such that the Court could assess whether the other allegations show they were breached.
As to the claim that V & B breached a fiduciary duty to the plaintiff, the Court said that the plaintiff had not pled facts, which if believed, would establish damage as the result of any such breach.
As to the claim that V & B was negligent, the Court said: "Plaintiff’s FAC [First Amended Complaint] fails to allege that it has suffered actual loss, let alone loss because of the Defendant V&B’s allegedly negligent conduct." The Court noted: that what the plaintiff had alleged as damages was "predicated on the allegation that PADI is acting as an unlicensed primary insurer and that “'in an event of a major disaster of multiple dive shops, PADI does not and will not have sufficient funds to cover multiple losses at once.'” It then held that this was too speculative to amount to an allegation of actual damage.
The Court granted V & B's motion as to other claims, largely on the basis that the allegations were not specific enough
It is interesting to note that PADI did not challenge the legal sufficiency of the plaintiff's claims.
ItsBruce
Contributor
I can't send you a link as the orders are on the Court's PACER system, which requires an account and a password. However, I have downloaded the orders and if you send me your e-mail address, I'll e-mail you copies.
Bruce -- Thank you for the info.
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The truly interesting thing will be to see if the California Insurance Commissioner takes any action. I suspect that was what Lessor was really trying to do.
djcheburashka
Contributor
It sounds to me like challenging the legal sufficiency of the claims is *exactly* what PADI did, and successfully.
When I read the complaint I thought "well, ok, so what's any of this to the plaintiff? what exactly was done to them that makes them think they are entitled to get paid?"
That seems to be the reason the court dismissed the case. You can say that it was just that the allegations weren't "specific" enough, or you could say that the complaint didn't actually allege any wrongful conduct or provide a basis for relief. Same thing.
I'll comment more once I've read the opinion.
ItsBruce
Contributor
PADI was not one of the moving parties. My recollection is that it answered the complaint.
The Court did not dismiss the lawsuit. It dismissed various of the causes of action in the lawsuit, but is allowing the plaintiff to try to correct those. We will see if the Court throws out anything permanently. We will also have to see what PADI itself does.
I still want to know why the plaintiff has not sued Lexington for breach of the implied covenant of good faith and fair dealing. I've been involved in several such cases against Lexington.
The Court did not dismiss the lawsuit. It dismissed various of the causes of action in the lawsuit, but is allowing the plaintiff to try to correct those. We will see if the Court throws out anything permanently. We will also have to see what PADI itself does.
I still want to know why the plaintiff has not sued Lexington for breach of the implied covenant of good faith and fair dealing. I've been involved in several such cases against Lexington.
djcheburashka
Contributor
Thanks for sending me the materials. My recollection is that PADI was threatening a motion for sanctions. The way a sanction motion works, is that if that's what PADI did, there wouldn't be a public record of it yet.
I suspect what they did was stay their time to respond to the complaint pending resolution of the motion to disqualify Lesser -- which PADI won.
The Court dismissed ALL claims against the moving defendants. Under U.S. procedure, following a motion to dismiss plaintiffs ordinarily get at least one opportunity to amend their complaint. At the moment there are no claims pending against the moving defendants. This is not different from dismissing the case against these defendants. The Plaintiffs have until April 6 to file an amended complaint. If the plaintiff fails to do so, the Court will enter a judgment in the defendants' favor.
That is a very short amount of time, three weeks, to prepare a new complaint -- especially when the law firm has been disqualified and has to be replaced!
I don't think you want to underestimate what the court said here. The problems identified by the Court are fundamental as to each claim. For example with the breach of contract claim, the Court said "what part of the contract was breached?" So its true the plaintiff gets to amend, and maybe they will fix it. But one would think that if they could answer these questions, they would have done so in one of their first two complaints.
I think what you are referring to is the concept of "bad faith breach" by an insurance company. That's far out of my area of practice -- we don't allow those claims (with a narrow exception) in New York.
My recollection, though, is that a "bad faith breach" occurs when someone has a loss under the policy, and the insurance company knows it has to pay but denies coverage and drags its feet to try to negotiate paying less than it owes.
There's no allegation here that Lexington denied coverage to any insurance for a loss that was actually covered. Nor, actually, is there any allegation of any loss at all.
I could be wrong about bad faith breach though -- its been a few years.
ItsBruce
Contributor
I agree and much earlier noted that I saw a huge problem with alleging actual damages resulting from anything that was allegedly done wrong. I forget the Latin, but it is something about "wrong without injury."
If my background facts are right, this whole thing arose out of a delay in the payment of the dive shop's loss.
At the risk of oversimplifying, California law allows an insured to recover tort damagers against an insurer that unreasonably withholds benefits due. Liability requires more than a mere negligent withholding. However, if there is liability, then the insured can recover damages far beyond those recoverable for an ordinary breach of contract, including certain attorney's fees and possibly punitive damages. (The area of law constituted 99% of my practice for about 20 years and now constitutes about 85% of it.)
My recollection is that Hawaii allows "bad faith" actions against insurers. So, if there was an unreasonable withholding or unreasonable delay, I would expect to see an action against Lexington for "bad faith." ... I know I'd do that (and I know where some of the bones are buried).
Why that sort of claim is not stated, I have no clue.
If my background facts are right, this whole thing arose out of a delay in the payment of the dive shop's loss.
At the risk of oversimplifying, California law allows an insured to recover tort damagers against an insurer that unreasonably withholds benefits due. Liability requires more than a mere negligent withholding. However, if there is liability, then the insured can recover damages far beyond those recoverable for an ordinary breach of contract, including certain attorney's fees and possibly punitive damages. (The area of law constituted 99% of my practice for about 20 years and now constitutes about 85% of it.)
My recollection is that Hawaii allows "bad faith" actions against insurers. So, if there was an unreasonable withholding or unreasonable delay, I would expect to see an action against Lexington for "bad faith." ... I know I'd do that (and I know where some of the bones are buried).
Why that sort of claim is not stated, I have no clue.
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