Edd King v. National General Insurance Company

Background

Diedre King and Edd King brought a class action against National General Insurance Company, Integon National Insurance Company, Integon Preferred Insurance Company, and MIC General Insurance Corporation. They alleged that the insurers violated California Insurance Code section 1861.16(b) by failing to offer policyholders the lowest Good Driver Discount rate available from an insurer within the insurers’ common ownership, management, or control group. The Kings alleged that they qualified as good drivers, purchased a policy from National General Insurance Company, and were not offered a lower-rate policy from another insurer in the group.

The remaining claims were damages for breach of the implied covenant of good faith and fair dealing and restitution under the unlawful and unfair prongs of California’s Unfair Competition Law. On May 5, 2025, the court certified a class for the Unfair Competition Law claim but denied class certification for the implied-covenant claim because the plaintiffs had not shown a method of proving causation and damages on a class-wide basis.

Motion and Arguments

The defendants moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) or, alternatively, summary judgment under Rule 56. They argued that the court lacked equitable jurisdiction—the authority to award an equitable remedy such as restitution—because the plaintiffs had an adequate legal remedy through their implied-covenant damages claim.

The plaintiffs argued that the two claims were based on different theories. They also argued that the implied-covenant claim required additional proof of reliance or causation and therefore was more difficult to establish than the Unfair Competition Law claim. The plaintiffs further argued that the implied-covenant claim was not an adequate remedy for the class because the court had not certified that claim for class treatment.

Because the defendants presented evidence outside the pleadings concerning the identical monetary relief sought under both claims, the court treated the motion as one for summary judgment under Rule 56.

Ruling

The court held that the implied-covenant and Unfair Competition Law claims were based on the same underlying theory and facts: the alleged failure to cross-offer the lowest Good Driver Discount rates. The court also found that the claims sought the same monetary relief. Different elements or a greater difficulty of proof did not make the legal remedy inadequate.

The court rejected the argument that failure to certify the implied-covenant claim as a class action made that remedy inadequate. It explained that the plaintiffs’ failure to provide common proof for class certification did not establish that the legal remedy itself was inadequate.

The court therefore held that the implied-covenant claim was an adequate legal remedy and that it lacked equitable jurisdiction over the Unfair Competition Law restitution claim. It granted the defendants’ motion and dismissed the Unfair Competition Law claim without prejudice to refiling somewhere other than federal court. The court stated that it could not decide the merits of that claim. The plaintiffs’ individual implied-covenant claim remains pending. The court also denied as moot a joint discovery letter concerning data needed for class notice, and scheduled a case management conference for October 29, 2025.