1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 MARIA BADIN, an individual, on behalf Case No.: 25-cv-163-RSH-AHG of herself and all others similarly 11 situated, ORDER ON DEFENDANTS’ MOTION 12 TO DISMISS

13 Plaintiff,

14 v. [ECF No. 28] 15 LIBERTY MUTUAL INSURANCE 16 COMPANY, et al., 17 18 Defendants. 19 20 Pending before the Court is Defendants’ motion to dismiss Plaintiff’s Amended 21 Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). ECF No. 22 28. For the reasons below, the Court grants in part and denies in part the motion. 23 I. BACKGROUND 24 A. Factual Background 25 The instant case is a putative class action filed against Liberty Mutual Fire Insurance 26 Company (“LMFIC”), Liberty Mutual Insurance Company (“LMIC”), Liberty Insurance 27 Corporation (“LIC”), and Doe defendants for the alleged breach of homeowners’ insurance 28 policies. 1 Plaintiff’s operative complaint alleges as follows. On or around August 2024, 2 Plaintiff received a notice from Defendants stating that her homeowners’ insurance policy 3 would not be renewed. ECF No. 22 ¶ 12. The notice stated the reason for nonrenewal was 4 the presence of “algae/mildew/mold/moss” on the roof of her house. Id. Plaintiff made 5 efforts to resolve the matter with Defendants but was unsuccessful. Id. ¶ 13-14. In 6 September 2024, Plaintiff hired an independent, licensed roofing company to inspect her 7 roof. Id. ¶ 16. Plaintiff’s roofing company reported that her roof was “‘in incredible shape’ 8 with no evidence of algae, mold, moss, or mildew.” Id. Plaintiff emailed this report to 9 Defendants, and Defendants responded to Plaintiff, stating that “the nonrenewal decision 10 remains valid for this policy.” Id. ¶ 18. Thereafter, Plaintiff made “repeated requests” for 11 Defendants to consider the findings of Plaintiff’s inspection report. Id. ¶ 19. Nonetheless, 12 Defendants informed Plaintiff that they concluded that algae, mold, moss, or mildew was 13 on her roof. Id. Plaintiff then made numerous unsuccessful attempts to find a new insurer 14 and ultimately obtained coverage through the California FAIR plan, where she pays higher 15 costs and receives a reduced quality of coverage. Id. ¶ 20. 16 B. Procedural History 17 On December 19, 2024, Plaintiff filed the instant putative class action in the Superior 18 Court of California, County of San Diego, against LMFIC, LMIC, and Doe defendants. 19 ECF No. 1-2 (the “Complaint”). On January 23, 2025, defendants LMFIC and LMIC 20 removed the case to this Court under the Class Action Fairness Act (“CAFA”). ECF No. 21 1. 22 On February 24, 2025, Plaintiff filed a motion to remand this action to state court. 23 ECF No. 8. The Court thereafter denied the motion. ECF No. 18. 24 Also on February 24, 2025, Defendants filed a motion to dismiss the complaint. ECF 25 No. 9. On April 11, 2025, Plaintiff filed a motion for leave to amend her Complaint. ECF 26 No. 20. On April 15, 2025, the Court granted Plaintiff’s motion for leave to amend and 27 denied Defendants’ motion to dismiss as moot. ECF No. 21. 28 // 1 On April 18, 2025, Plaintiff filed an Amended Complaint adding LIC as a defendant. 2 ECF No. 22. The Amended Complaint brings claims for: (1) breach of contract; (2) 3 violation of the California Unfair Competition Law (“UCL”),

17200 et seq.; and (3) breach of the implied covenant of good faith and fair dealing. 5 Plaintiff seeks to represent a class consisting of “all owners of Liberty Mutual 6 homeowners’ insurance policies who were denied renewal based on a condition of their 7 property that was misrepresented by Liberty Mutual.”

. The Amended Complaint 8 seeks damages, disgorgement, and injunctive relief. 9 On May 12, 2025, defendants LIC, LMIC, and LMFIC (collectively “Defendants”) 10 filed the instant motion to dismiss and to strike.1 ECF No. 28. The motion is fully briefed. 11 ECF Nos. 30, 32. 12 II. LEGAL STANDARD 13 A. Lack of Article III Standing Under 12(b)(1) 14 “Federal courts are courts of limited jurisdiction. They possess only that power 15 authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511

, 377 (1994). Article III, Section 2 of the U.S. Constitution requires that a plaintiff 17 have standing to bring a claim. See Lujan v. Defenders of Wildlife,

, 560 18 (1992). Article III standing requires that a plaintiff show that he or she has (1) “suffered an 19 injury in fact” that is “concrete and particularized” and “actual or imminent,” (2) “that is 20 fairly traceable to the challenged conduct of the defendant,” and (3) “that is likely to be 21 redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins,

, 338-39 22 (2016) (citing Lujan,

). The plaintiff has the burden to establish standing, 23 and at the pleading stage, “the plaintiff must clearly allege facts demonstrating each 24 element.”

(cleaned up). “[L]ack of Article III standing requires dismissal for lack of 25 26 27 1 In the alternative to seeking dismissal of all claims, Defendants’ motion seeks to 28 1 subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1).” Maya v. 2 Centex Corp.,

(9th Cir. 2011). 3 B. Failure to State a Claim under Rule 12(b)(6) 4 A motion to dismiss under Rule 12(b)(6) “tests the legal sufficiency of a claim.” 5 Navarro v. Block,

(9th Cir. 2001). A pleading must contain “a short and 6 plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 7 8(a)(2). However, a plaintiff must also plead “enough facts to state a claim to relief that is 8 plausible on its face.” Bell Atl. Corp. v. Twombly,

(2007); see Fed. R. 9 Civ. P. 12(b)(6). The plausibility standard demands more than a “formulaic recitation of 10 the elements of a cause of action,” or “‘naked assertions’ devoid of ‘further factual 11 enhancement.’” Ashcroft v. Iqbal,

(2009) (quoting Twombly,

). Instead, a complaint “must contain sufficient allegations of underlying facts 13 to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. 14 Baca,

(9th Cir. 2011). 15 When reviewing a motion to dismiss under Rule 12(b)(6), courts assume the truth of 16 all factual allegations and construe them in the light most favorable to the nonmoving party. 17 Cahill v. Liberty Mut. Ins. Co.,

, 337–38 (9th Cir. 1996) (citing Nat’l Wildlife 18 Fed’n v. Espy,

, 1340 (9th Cir. 1995)). But a court “disregard[s] ‘[t]hreadbare 19 recitals of the elements of a cause of action, supported by mere conclusory statements.’” 20 Telesaurus VPC, LLC v. Power,

(9th Cir. 2010) (quoting Iqbal, 556 21 U.S. at 678–79). Likewise, “conclusory allegations of law and unwarranted inferences are 22 not sufficient to defeat a motion to dismiss.” Pareto v. FDIC,

(9th Cir. 23 1998) (citing In re Syntex Corp. Sec. Litig.,

(9th Cir. 1996)). “After 24 eliminating such unsupported legal conclusions, [courts] identify ‘well-pleaded factual 25 allegations,’ which [are] assume[d] to be true, ‘and then [courts] determine whether they 26 plausibly give rise to an entitlement to relief.’” Telesaurus VPC,

. 27 Dismissal under Rule 12(b)(6) is proper where there is no cognizable legal theory to 28 support the claim or when there is an absence of sufficient factual allegations to support a 1 facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc.,

1035, 1041 (9th Cir. 2010). 3 III. ANALYSIS 4 A. Standing 5 Defendants argue that: (1) Plaintiff lacks Article III standing as to defendants LMIC 6 and LMFIC because Plaintiff “was not insured by either entity,” but rather by LIC; and (2) 7 Plaintiff lacks standing to seek injunctive relief because she is no longer an LIC insured 8 and will not benefit from an injunction. ECF Nos. 28-1 at 10-11, 22. 9 Defendants’ first argument is effectively that Plaintiff has sued the wrong entities. 10 Even if true, this argument would not reflect a lack of injury to Plaintiff or deprive Plaintiff 11 of standing. See Acosta v. Perez, No. 1:19-cv-01224-AWI-EPG,

80096, at *17-18 (E.D. Cal. May 6, 2020) (a defendant’s contention that another party is 13 legally responsible for the plaintiff’s harm does not deprive the plaintiff of standing); Davis 14 v. Wells Fargo,

(3d Cir. 2016) (the “you’ve got the wrong party” 15 defense is not a standing issue but rather a merits issue that should be considered under 16 Rule 12(b)(6) or Rule 56)). 17 As to Defendants’ second argument, a plaintiff seeking injunctive relief must proffer 18 evidence that there is “a sufficient likelihood that [she] will be wronged in a similar way” 19 in the future. Los Angeles v. Lyons,

(1983); Bates v. UPS,

, 20 985 (9th Cir. 2007) (holding that a plaintiff must establish a “real and immediate threat of 21 repeated injury” to demonstrate Article III standing to seek injunctive relief). “Past 22 exposure to illegal conduct does not in itself show a present case or controversy regarding 23 injunctive relief . . . if unaccompanied by any continuing, present adverse effects.” O’Shea 24 v. Littleton,

(1974). 25 Here, Plaintiff seeks to enjoin Defendants from engaging in the alleged “unlawful, 26 unfair, and fraudulent practice[]” of refusing to renew Liberty Mutual homeowners’ 27 insurance policies for pretextual reasons. ECF No. 22 ¶ 5. But she does not allege facts to 28 indicate a sufficient likelihood that she will be wronged in a similar way in the future. 1 Plaintiff is no longer a Liberty Mutual policyholder, and she has not established she is at 2 risk of future nonrenewal of a Liberty Mutual policy. See Hamelin v. Allstate Ins. Co., No. 3 01-CV-7954,

, at *3 (C.D. Cal. Mar. 12, 2002) (stating that where the 4 plaintiff was no longer a policyholder of the defendant, there was no likelihood of future 5 injury). The Court therefore grants Defendants’ 12(b)(1) motion to dismiss Plaintiff’s claim 6 for injunctive relief, but denies the remainder of the 12(b)(1) motion. 7 B. Failure to State a Claim 8 1. Breach of Contract 9 To successfully bring a breach of contract claim in California, a plaintiff must show: 10 “(1) the existence of the contract, (2) plaintiff’s performance or excuse for 11 nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” 12 Oasis W. Realty, LLC v. Goldman,

(2011). In an action for breach of 13 a written contract, a plaintiff “must identify with specificity the contractual obligations 14 allegedly breached by the defendant.” Kaar v. Wells Fargo Bank, N.A., No. C 16-01290 15 WHA,

, at *3 (N.D. Cal. June 1, 2016) (citing Misha Consulting Group, 16 Inc. v. Core Educ. & Consulting Solutions, Inc., No. 13-04262-RMW,

, 17 at *1 (N.D. Cal. Nov. 15, 2013)). 18 Defendants argue that Plaintiff fails to state a claim for breach of contract against 19 LIC because Plaintiff “has not pointed to any policy provision that was breached.” ECF 20 No. 28-1 at 13. However, Plaintiff’s theory of breach is based on a violation of Section 678 21 of the California Insurance Code, which is incorporated as a matter of law into the 22 insurance contract. See California Fair Plan Assn. v. Garnes,

, 1305 23 (Ct. App. 2017) (“The obligations under an insurance policy are measured and defined by 24 the pertinent statute, and the statute and the policy together form the insurance contract.”). 25 Section 678 provides that insurers who intend to not renew a policy must provide a notice 26 of nonrenewal with “[t]he specific reason or reasons for the nonrenewal.”

678. Plaintiff alleges that Defendants breached this requirement by failing to provide the 28 specific reason or reasons for non-renewal, and instead providing false and pretextual 1 reasons. ECF No. 22 ¶ 43. The Amended Complaint adequately indicates the term of the 2 alleged agreement that is the subject of the alleged breach. 3 Defendants also argue that Plaintiff’s claims for breach of contract against LMIC 4 and LMFIC fail because Plaintiff did not have a contractual relationship with them, and 5 only had a contractual relationship with LIC. ECF No. 28-1 at 13. It is true that the notice 6 of non-renewal, attached to the Amended Complaint, is on letterhead of “Liberty Insurance 7 Corporation,” that is, LIC. ECF No. 24 at 4. But the document contains, at the signature 8 line, the business name “Liberty Mutual Insurance” and also includes a logo with the words 9 “Liberty Mutual Insurance,” which is a distinct name from LIC.

Other official 10 communications to Plaintiffs from “Liberty Mutual Insurance,” also attached to the 11 Complaint, refer variously to “Liberty Mutual,” “Liberty Mutual Group,” or “Liberty 12 Mutual Insurance Company,” that is, LMIC.

. Additionally, such documents 13 define “Liberty Mutual” to mean, collectively, “Liberty Mutual Group and its affiliates, 14 subsidiaries, and partners.”

. 15 Defendants do not explain the relationship between the three entities, or deny their 16 affiliation. In connection with their earlier motion to dismiss, Defendants filed what they 17 asserted are the policy documents applicable to Plaintiff. ECF No. 9-2. These include 18 declarations that reference “Liberty Mutual Insurance,” “Liberty Mutual,” and “Liberty 19 Insurance Corporation.” See

. They also include a “California Residential Property 20 Insurance Bill of Rights” and an “Inflation Protection Endorsement” with the name 21 “Liberty Mutual Fire Insurance Company”—that is, LMFIC—at the bottom.

. 22 Similar to Defendants’ own documents, the Amended Complaint uses “Liberty 23 Mutual” to refer collectively to LIC and its affiliates, and alleges that the three Defendants 24 “are comprised of affiliated corporate entities, with a principal place of business in Boston, 25 Massachusetts.” ECF No. 22 at p. 1 & ¶ 9. The Amended Complaint continues, “[t]hese 26 entities, individually or collectively, through an integrated corporate structure (the details 27 of which Plaintiff is presently unaware) are engaged in a business involving the advertising, 28 marketing, sale, and administration of casualty property insurance, including homeowners’ 1 insurance throughout the United States and other territories.”

. The Amended 2 Complaint further alleges that Plaintiff is a customer and policyholder of “Liberty Mutual.” 3

. The Court concludes that Plaintiff has adequately alleged the collective action of 4 Defendants, and the ambiguity of their corporate relationships, in a manner that warrants 5 denial of Defendants’ motion to dismiss the contract claim as to any Defendant. 6 2. Implied Covenant of Good Faith and Fair Dealing 7 “[E]very contract imposes upon each party a duty of good faith and fair dealing in 8 its performance and its enforcement.” Moore v. Wells Fargo Bank, N.A.,

(Ct. App. 2019). This covenant provides that “no party to the contract will do 10 anything that would deprive another party of the benefits of the contract.” Miller v. Zurich 11 Am. Ins. Co.,

, 257 (Ct. App. 2019) (citing Digerati Holdings, LLC v. 12 Young Money Entertainment, LLC

(Ct. App. 2011)), “Like an 13 express contract claim, the elements of an implied-in-fact contract claim are [1] a valid 14 implied-in-fact contract, [2] the plaintiff’s performance or excuse for nonperformance, [3] 15 the defendant’s breach of the agreement, and [4] the resulting damages to plaintiff.” Soil 16 Retention Prods., Inc. v. Brentwood Indus., Inc.,

, 952–53 (S.D. Cal. 17 2021) (quoting Iconlab Inc. v. Valeant Pharm. Int’l, Inc., No. 8:16-cv-01321-JLS-KES, 18

, at *6 (C.D. Cal. Apr. 25, 2017)). 19 Defendants argue that Plaintiff fails to state a claim for breach of implied covenant 20 because “LIC had no contractual or statutory duty to renew, and therefore, a failure to do 21 so cannot constitute bad faith.” ECF No. 28-1 at 21. However, Plaintiff’s theory of breach 22 of implied covenant is not—as Defendants argue—that Defendants breached a statutory 23 duty to renew the policy, but rather than they acted in bad faith in providing false and 24 pretextual reasons for not renewing the policy. ECF No. 22 ¶¶ 59-60. The Court declines 25 to reframe Plaintiff’s theory, and denies Defendant’s motion to dismiss the implied 26 covenant claim. 27 3. Unfair Competition Law 28 The Amended Complaint alleges that Defendants engaged in unlawful, unfair, and 1 fraudulent practices in violation of the UCL. See Doe v. CVS Pharm., Inc.,

, 2 1214 (9th Cir. 2020) (“The UCL prohibits unlawful, unfair or fraudulent business acts or 3 practices. Each of these three adjectives captures a separate and distinct theory of 4 liability.”) (cleaned up). 5 Defendants argue that the Amended Complaint fails to state a claim under any of 6 these three prongs. Their arguments that the Amended Complaint fails to allege “unlawful” 7 or “unfair” conduct largely rest on their assertion that there was no violation of Section 8 678. As discussed above, the Court disagrees with Defendants and concludes that Plaintiff 9 has adequately alleged a violation of this statute. The Court therefore denies Defendant’s 10 motion as to the “unlawful” or “unfair” prongs of Plaintiff’s UCL claim. 11 Defendants argue that the Amended Complaint fails to state a claim under the 12 “fraudulent” prong because Plaintiff has failed to plead reliance on any alleged fraud. In 13 In re Tobacco II Cases,

(2009), the California Supreme Court held that, as 14 a matter of standing, there is “an actual reliance requirement on plaintiffs prosecuting a 15 private enforcement action under the UCL’s fraud prong.”

. The court explained 16 that “while a plaintiff must allege that the defendant’s misrepresentations were an 17 immediate cause of the injury-causing conduct, the plaintiff is not required to allege that 18 those misrepresentations were the sole or even the decisive cause of the injury-producing 19 conduct.”

. Thus, a plaintiff “is not required to necessarily plead and prove 20 individualized reliance on specific misrepresentations or false statements where, as here, 21 those misrepresentations and false statements were part of an extensive and long-term 22 advertising campaign.”

; see also Key v. Qualcomm Inc.,

, 1141 23 (9th Cir. 2025) (“[A]ny plaintiff relying on a UCL fraud theory must demonstrate actual 24 reliance on the allegedly deceptive or misleading statements, in accordance with well- 25 settled principles regarding the element of reliance in ordinary fraud actions.”) (cleaned 26 up). Plaintiff does not appear to contest the applicability of such a reliance requirement, 27 but argues that she duly pleads that she has suffered economic harm as a result of 28 Defendants’ actions. ECF No. 30 at 18. Be that as it may, Plaintiff has not adequately 1 pleaded the reliance required for a claim under the “fraudulent” prong of the UCL. The 2 Court therefore dismisses Plaintiff’s UCL claim to the extent that it is based on the 3 “fraudulent” prong. 4 IV. LEAVE TO AMEND 5 Plaintiff requests leave to amend if the Court grants Defendants’ motion to dismiss. 6 ECF No. 30 at 26. Defendants have not opposed the request. At this stage, the Court cannot 7 determine that such amendment would be futile. See Knappenberger v. City of Phx., 566

(9th Cir. 2009) (“Leave to amend should be granted unless the district court 9 determines that the pleading could not possibly be cured by the allegation of other facts.”) 10 (internal quotation marks omitted). Accordingly, the Court grants Plaintiff leave to amend 11 to address the deficiencies identified herein. 12 V. MOTION TO STRIKE 13 Defendants argue that Plaintiff’s class allegations should be stricken for pleading a 14 “fail-safe” class. ECF No. 28-1 at 22. The Court determines that these arguments are 15 premature at the motion to dismiss stage. See Avina v. Patenaude & Felix, APC, No. 20- 16 cv-0166-BAS-MDD,

, at *41 (S.D. Cal. Dec. 17, 2021) (“The Ninth 17 Circuit has stated that Rule 12(b)(6) is an inappropriate vehicle for challenging class claims 18 because a class action is a procedural device and not a claim for relief subject to the 19 authority of that Rule; other Rules (namely, Rule 23) exist to address the fitness of claims 20 for class certification, and differing standards of review govern orders on motions to 21 dismiss than orders on class certification motions.”) (citing Whittlestone, Inc. v. Handi- 22 Craft Co.,

(9th Cir. 2010)). 23 Additionally, in the course of arguing that Plaintiff lacks standing, Defendants make 24 a passing request to “strike the improper references to Doe Defendants.” ECF No. 28-1 at 25 12. The request is beyond the scope of the notice of motion, ECF No. 28, and in the Court’s 26 view is not presented in a manner sufficient to give Plaintiff adequate reason to fully 27 respond. The Court denies this request without prejudice to Defendants seeking to strike 28 certain language or to dismiss claims against the Doe defendants in a future motion. 1 |} VI. CONCLUSION 2 For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART 3 || Defendants’ motion [ECF No. 28]. Specifically, the Court DISMISSES Plaintiff's request 4 ||for injunctive relief as well as Plaintiff's claim based on the “fraudulent” prong of the 5 || Unfair Competition Law, but denies the motion in all other respects. 6 Plaintiff is GRANTED leave to file a Second Amended Complaint within fourteen 7 days of the date of this Order, limited to addressing the deficiencies identified in this 8 || Order. If Plaintiff chooses not to file an amended pleading, the Amended Complaint will 9 remain her operative pleading. Defendants’ time to respond to the operative pleading will 10 |/begin to run on the earlier of the date Plaintiff files a Second Amended Complaint or 11 || fourteen (14) days from the date of this Order. 12 IT SO ORDERED. feke 7 ¢ Lowe 13 Dated: August 13, 2025 14 Hon. Robert S. Huie United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28