Perez v. Indian Harbor Insurance Company

Background

A jury in a related case awarded each class member $500 for each call violating the Telephone Consumer Protection Act, for an aggregate award exceeding $267 million. The court later approved an assignment of Rash Curtis & Associates’ bad-faith claim against its insurer, Indian Harbor Insurance Company. In this action, Perez sued Indian Harbor, XL America, Inc., and XL Group Ltd. on one breach-of-contract claim based on the duty of good faith and fair dealing. He sought the prior jury award plus interest.

Personal jurisdiction over XL America and XL Group

The court granted the motion to dismiss XL America and XL Group for lack of personal jurisdiction, meaning the court lacked sufficient legal authority over those defendants. The court found no specific jurisdiction because the XL entities did not issue or underwrite the insurance policy, participate in Rash Curtis’s defense, conduct business or own property in California, employ people there, or register to do business there. The record identified Indian Harbor—not the XL entities—as the policy’s issuer and insurer and as the company involved in the earlier litigation.

The court rejected Perez’s arguments that an employee of the XL entities controlled the earlier defense, that “XL Catlin” or references to “XL America” in the policy created jurisdiction, and that Indian Harbor acted as the XL entities’ agent. The court also denied Perez’s request for jurisdictional discovery because he did not identify what additional facts he expected to uncover. The order noted that, if later discovery showed personal jurisdiction over either XL entity, Perez could seek permission to amend to add that entity as a party.

Motion to dismiss or stay

The court denied the motion to dismiss the complaint or, alternatively, stay the case. The court concluded that a final judgment had been entered in the earlier federal action and that a federal judgment is treated as final when entered even while an appeal is pending. The court therefore found that Perez’s claim was sufficiently stated and that dismissal or a stay was not warranted.

Motion to strike mediation materials

The court granted in part and denied in part the motion to strike, which sought to remove allegedly confidential mediation allegations and exhibits from the complaint. The court applied California’s mediation-confidentiality rules because the parties’ agreement adopted them. It held that the rules protect communications and writings made for mediation, but do not automatically protect every fact mentioned near a mediation or every noncommunicative act.

The court denied the requests to strike paragraphs 1 and 15 of the complaint; paragraph 15 and Exhibit I of Exhibit 1; paragraphs 20, 21, 22, and 23 and Exhibits M and N; and paragraphs 26 and 27 of Exhibit 1. It granted in part and denied in part the requests concerning paragraphs 16, 17, 18, 30, and 32 of Exhibit 1 and Exhibits J and K. The court struck specified mediation briefs, statements of settlement offers made during mediation, and descriptions of statements made during mediation, while leaving other facts and nonprivileged conduct in place.

Disposition and next steps

The court ordered Perez to file an amended complaint consistent with the order, without substantive changes, and directed Indian Harbor to answer. It scheduled a case-management conference and terminated the three motions addressed by the order.