United States District Court, D. Nevada
before the court is defendant State Farm Fire and Casualty
Company's (“State Farm”) amended motion to
dismiss. (ECF No. 10). Plaintiff Luz Elena Cuadros filed a
response (ECF No. 32), and State Farm filed a reply (ECF No.
submitted a class action complaint in Nevada state court on
June 23, 2016, in relation to State Farm's alleged
practice of applying a reduced actual cash valuation for
total loss vehicles by roughly 7% to reflect the purported
difference between the sell price and the asking price of an
automobile. (ECF No. 1 at 20, 22). Plaintiff asserts
that “[a] reasonable consumer of ordinary intelligence
would not understand the reduction and would not, in fact, be
able to negotiate approximately 7% off of the ask price of a
vehicle. Accordingly, Defendant's practice is misleading
and deceptive.” (Id. at 25).
also brings this action to address the insurance policy terms
between the two parties. (Id.). The various claims
in her complaint are generally based on allegations that
“State Farm breached the express requirements of the
Policy in settling her total loss claim” and
“that the Policy contains an unconscionable mandatory
appraisal clause.” (ECF No. 32 at 7); see also
(ECF No. 1).
specifically asserts the following claims on behalf of the
purported class: (1) unfair trade practices under Nevada
Revised Statute (“NRS”) § 686A.310(1)(a),
(e), (g), and (n); (2) violations of the Nevada Deceptive
Trade Practices Act (“NDTPA”), NRS 598.0903(8),
598.0915(15), 598.0923(2), and 598.0923(3); (3) breach of
contract; (4) breach of the implied covenant of good faith
and fair dealing; (5) fraudulent misrepresentation, (6)
unjust enrichment; and (7) injunctive and declaratory relief.
(ECF No. 1).
motion first argues that the complaint should be dismissed
because these claims are subject to the Nevada insurance
commissioner's exclusive jurisdiction, and plaintiff has
not administratively exhausted her claims. (ECF No. 10 at 7).
Second, defendant alleges that the complaint should be
dismissed because plaintiff has not alleged damages, though a
named class action plaintiff must identify the same.
(Id. at 12). Next, it argues that plaintiff has not
satisfied the heightened pleading standard as to “[h]er
[f]raud-[b]ased [c]laims” and that plaintiff does not
indicate what part of the insurance policy was violated by
defendant's actions. (Id. at 15, 21).
defendant requests that the contractual bad faith claim be
dismissed because plaintiff's allegations involve the
terms of the contact and the claim processing procedure.
(Id. at 21-22). Finally, defendant posits that the
contract prevents the unjust enrichment claim. (ECF No. 10 at
22). . . . . . . . . . . . . . . .
court may dismiss a plaintiff's complaint for
“failure to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). A properly pled
complaint must provide “[a] short and plain statement
of the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). Although rule 8 does not
require detailed factual allegations, it does require more
than labels and conclusions. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). Furthermore, a
formulaic recitation of the elements of a cause of action
will not suffice. Ashcroft v. Iqbal, 556 U.S. 662,
677 (2009) (citation omitted). Rule 8 does not unlock the
doors of discovery for a plaintiff armed with nothing more
than conclusions. Id. at 678-79.
survive a motion to dismiss, a complaint must contain
sufficient factual matter to “state a claim to relief
that is plausible on its face.” Id. 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. When a complaint pleads facts that are
merely consistent with a defendant's liability, and shows
only a mere possibility of entitlement, the complaint does
not meet the requirements to show plausibility of entitlement
to relief. Id.
Iqbal, the Supreme Court clarified the two-step
approach district courts are to apply when considering a
motion to dismiss. Id. First, the court must accept
as true all of the allegations contained in a complaint.
However, this requirement is inapplicable to legal
conclusions. Id. Second, only a complaint that
states a plausible claim for relief survives a motion to
dismiss. Id. at 678. Where the complaint does not
permit the court to infer more than the mere possibility of
misconduct, the complaint has “alleged - but not shown
- that the pleader is entitled to relief.” Id.
at 679. When the allegations in a complaint have not crossed
the line from conceivable to plausible, plaintiff's claim
must be dismissed. Twombly, 550 U.S. at 570.
Ninth Circuit addressed post-Iqbal pleading
standards in Starr v. Baca, 652 F.3d 1202, 1216 (9th
Cir. 2011). The Starr court held:
First, to be entitled to the presumption of truth,
allegations in a complaint or counterclaim may not simply
recite the elements of a cause of action, but must contain
sufficient allegations of underlying facts to give fair
notice and to enable the opposing party to defend itself
effectively. Second, the factual allegations that are taken
as true must plausibly suggest an entitlement to relief, such
that it is not unfair to require the opposing party to be
subjected to the expense of discovery and continued
Administrative exhaustion and NRS 686A.310 claims
asserts that Allstate Ins. Co. v. Thorpe forecloses
plaintiff's claims because plaintiff has not
administratively exhausted her claims, which are subject to
the Nevada insurance commissioner's exclusive
jurisdiction. See 170 P.3d 989, 996 (Nev. 2007);
see also (ECF No. 10). However, that case explicitly
allows suits “for tortious and contractual bad faith
against first-party insurers.” Thorpe, 170
P.3d at 996 (distinguishing these kinds of actions from those
involving “private actions originating in district
court claiming awards of statutory damages and interest under
NRS 690B.012”); see also Rathnayake v. Farmers Ins.
Exch., No. 2-13-CV-765-JAD-GWF, 2014 WL 3897960, at *1
(D. Nev. Aug. 11, 2014). Moreover, Thorpe did not
mention NRS 686A.310, and the terms of NRS 690B.012 are not
relevant to this case. See 170 P.3d 989; see
also Nev. Rev. Stat. § 690B.012.
it is true that NRS 686A.015 provides that,
“[n]otwithstanding any other provision of
law, the Commissioner has exclusive jurisdiction in
regulating the subject of trade practices in the business of
insurance in this state.” Nev. Rev. Stat. §
686A.015(1) (emphasis added); see also Weaver v. Aetna
Life Ins. Co., 370 F. App'x 822, 824 (9th Cir. 2010)
(citing Nev. Rev. Stat. § 686A.015(1)) (“Any right
to relief for [plaintiff's] claims alleging violation of
the Nevada Insurance Code resides exclusively with the
Insurance Commissioner . . . .”).
defendant cites to both Herrera v. Allstate Fire &
Cas. Ins. Co. and DeCastro v. Progressive N. Ins.
Co. in support of its exclusive-jurisdiction argument.
See (ECF No. 10) (citing Herrera, No.
2:13-cv-00908-MMD, 2015 WL 1951753, at *2 (D. Nev. Apr. 28,
2015) (holding that an action requiring the court to evaluate
the potential violation of an insurance regulation foreclosed
private enforcement of the insurance code));
DeCastro, No. 2:14-cv-0983-APG-VCF, 2015 WL 1809164,
at *2 (D. Nev. Apr. 13, 2015) (“Because all of
Plaintiff's allegations relate to Defendant's alleged
violation of the Total Loss Regulation, any claim of
wrongdoing on the part of Defendant would fall under the
original jurisdiction of the [Nevada Division of
cases are relevant to the instant case because, despite how
plaintiff frames her first two claims for unfair trade
practices and violations of the NDTPA, the factual subject
matter underlying those claims generally involves topics
entrusted by statute to the insurance commissioner. Nev. Rev.
Stat. § 686A.015(1).
the private cause of action contemplated by NRS 686A.310(2)
does not apply to plaintiff's allegations that the
contents of the insurance contract rendered it
unconscionable. See Montes v. Bank of Am. NA, No.
2:13-CV-00660-RCJ, 2014 WL 1494234, at *14 (D. Nev. Apr. 15,
2014) (citing Schumacher v. State Farm Fire & Cas.
Co., 467 F.Supp.2d 1090, 1095 (D. Nev. 2006)) (reasoning
that NRS 686A.310(2) applies to how an insurer has acted to
resolve a party's claim, not the form of the insurance
offer). The title of that statutory provision refers to
“[u]nfair practices in settling claims, ” not the
formation of an insurance contract. See Id. (citing
Albert H. Wohlers & Co. v. Bartgis, 969 P.2d
949, 959 (Nev. 1998) (considering a statute's title to
discern its purpose)). Additionally, “by its own terms,
NRS 686A.310(2) applies only to allegations related to the
handling of an insured's claim.” Id. at
plaintiff's argument that the contract terms-such as the
use of the appraisal dispute resolution process-were
unconscionable cannot be a basis for liability pursuant to
NRS 686A.310(2) because a contract's facial propriety is
an issue that predates the initiation of the insurer's
claim settlement process. See id.
this analysis also clarifies that there is a statutory right
to bring private suit here, depending on whether the claims
involve the insurance settlement process. See Id.
Further, the manner of defendant's alleged calculation or
application of the 7% discount is related to how plaintiff
settled claims because that discount is applied during the
course of resolving an insurance claim.See (ECF
No. 1). ...