United States District Court, D. Nevada
MY LEFT FOOT CHILDREN'S THERAPY, LLC; JOHN GOTTLIEB AND ANN MARIE GOTTLIEB, Plaintiffs,
CERTAIN UNDERWRITER'S AT LLOYD'S LONDON SUBSCRIBING TO POLICY NO. HAH15-0632, Defendant.
MIRANDA M. DU, UNITED STATES DISTRICT JUDGE
an insurance dispute related to coverage for Plaintiffs'
defense in a qui tam action. Before the Court is Defendant
Certain Underwriters at Lloyd's London Subscribing to
Policy No. HAH15-0632's (“Underwriters” or
“Defendant”) motion to dismiss
(“Motion”) (ECF No. 105). The Court has reviewed
Plaintiffs My Left Foot Children's Therapy, LLC
(“MLF”); Jon Gottlieb; and Ann Marie
Gottlieb's (collectively, “Plaintiffs”)
response (ECF No. 106) as well as Defendant's reply (ECF
following reasons, the Court denies Defendant's Motion
except as to the portion of Plaintiffs' bad faith claim
based on Defendant's conduct prior to June 1, 2018, which
following facts are taken from the First Amended Complaint
(“FAC”) (ECF No. 100) unless otherwise indicated.
Jon Gottlieb and Ann Marie Gottlieb own MLF, a business that
provides speech, physical, and occupational therapy services
to children in the Las Vegas Valley. (Id. at 2.)
Plaintiffs purchased an insurance policy
(“Policy”) from Defendant for the period April
15, 2015, through April 15, 2016. (Id.) The Policy
limits Defendant's liability to $2 million per claim and
$4 million in the aggregate and carries a $2, 500 deductible.
(Id.) An endorsement (“Billing Errors
Endorsement”) to the Policy indemnifies Plaintiffs up
to $25, 000 for losses related to qui tam suits alleging that
Plaintiffs submitted false claims to government health
benefit payers. (Id.) The Policy requires Defendant
to defend Plaintiffs in connection with any qui tam suit,
with defense limits of up to $2 million per claim and $4
million in the aggregate. (Id.)
the Policy period, Plaintiffs were named as defendants in a
qui tam suit, Welch v. My Left Foot Children's
Therapy, LLC, No. 2:14-cv-01786-MMD-GWF (“Qui Tam
Action”). (Id.) Plaintiffs timely notified
Defendant about the Qui Tam Action, but Defendant extended
only $25, 000 of coverage. (Id.) Plaintiffs filed
this action (ECF No. 1), and this Court eventually granted
summary judgment in favor of Defendant, finding that the
Billing Errors Endorsement limited Defendant's liability
to $25, 000 in connection with its duty to defend Plaintiffs
in the Qui Tam Action. (ECF No. 52 at 8.) Plaintiffs
appealed, and the Ninth Circuit reversed, finding that the
Policy provided up to $2 million per claim to defend the Qui
Tam Action. (ECF No. 71 at 3-4.)
then filed the FAC asserting the following claims: (1) breach
of contract; (2) violation of Unfair Claims Settlement
Practices Act, NRS Ch. 686A; and (3) breach of the implied
covenant of good faith and fair dealing. (ECF No. 100 at
6-10.) Plaintiffs seek to recover attorney's fees related
to the Qui Tam Action; attorney's fees related to this
action; lost profits; damages related to mental suffering and
emotional distress; and punitive damages. (Id. at
may dismiss a plaintiffs 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); Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007). While Rule 8 does not require detailed factual
allegations, it demands more than “labels and
conclusions” or a “formulaic recitation of the
elements of a cause of action.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing Papasan v.
Allain, 478 U.S. 265, 286 (1986)). “Factual
allegations must be enough to rise above the speculative
level.” Twombly, 550 U.S. at 555. Thus, to
survive a motion to dismiss, a complaint must contain
sufficient factual matter to “state a claim to relief
that is plausible on its face.” Iqbal, 556
U.S. at 678 (internal citation omitted).
Iqbal, the Supreme Court clarified the two-step
approach district courts are to apply when considering
motions to dismiss. First, a district court must accept as
true all well-pled factual allegations in the complaint;
however, legal conclusions are not entitled to the assumption
of truth. Iqbal, 556 U.S. at 679. Mere recitals of
the elements of a cause of action, supported only by
conclusory statements, do not suffice. Id. at 678.
Second, a district court must consider whether the factual
allegations in the complaint allege a plausible claim for
relief. Id. at 679. A claim is facially plausible
when the plaintiffs complaint alleges facts that allow a
court to draw a reasonable inference that the defendant is
liable for the alleged misconduct. 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 claims in a complaint have not
crossed the line from conceivable to plausible, the complaint
must be dismissed. Twombly, 550 U.S. at 570.
complaint must contain either direct or inferential
allegations concerning “all the material elements
necessary to sustain recovery under some viable
legal theory.” Twombly, 550 U.S. at 562
(quoting Car Carriers, Inc. v. Ford Motor Co., 745
F.2d 1101, 1106 (7th Cir. 1989)).
moves to dismiss each of Plaintiffs' claims as well as
certain of the remedies Plaintiffs seek. (See
generally ECF No. 105.) The Court addresses
Plaintiffs' claims before turning to the remedies.
Breach of ...