Esquibel v. Kinder Morgan, Inc.

Background

Mark Esquibel brought a promissory-fraud claim against Kinder Morgan, Inc., and others. The claim is based on alleged statements that Esquibel was covered by uninsured or underinsured insurance while driving a vehicle during the course of his employment. The court had previously dismissed the claim but allowed Esquibel to amend it, directing him to provide facts addressing whether the claim was barred by the statute of limitations and explaining the original representations and when he discovered the alleged lack of coverage.

In his Third Amended Complaint, Esquibel alleged that, after receiving a promotion in 2008, he asked about insurance coverage and that two employees confirmed he was covered. He alleged that he relied on those statements in accepting the job and moving his family to the Bay Area. He also alleged that management told him he was insured during annual pilot training and while driving a company vehicle, and that he repeatedly requested but never received the written policy.

The Parties’ Arguments

Esquibel alleged that he was injured and that a company vehicle was damaged in a 2013 accident involving another driver. He paid expenses out of pocket and was told that the supposed uninsured or underinsured coverage did not exist. Kinder Morgan argued that these events should have led Esquibel to discover the lack of coverage in 2013, making his promissory-fraud claim untimely.

Esquibel’s opposition stated that he pursued litigation against the other driver from 2013 through 2019, began an underinsurance claim in 2020, and learned in June 2021 that Kinder Morgan had not provided the claimed coverage. Kinder Morgan argued that this information was not included in the Third Amended Complaint and did not adequately explain why Esquibel could not have discovered the lack of coverage earlier.

Court’s Analysis

The court concluded that the allegations in the Third Amended Complaint generally satisfied the heightened pleading requirements for fraud, including the who, what, where, and when of the alleged statements, as well as the knowledge and reliance elements of promissory fraud. But the court noted that Esquibel had not included facts in that complaint explaining why he did not or could not reasonably discover the lack of coverage after the 2013 accident.

The court nevertheless found that the insurance-related proceedings provided a plausible explanation for the delayed discovery. It stated that it could take judicial notice of the existence and timing of those proceedings, but not disputed facts contested within them. Considering the allegations in Esquibel’s favor and taking notice of the proceedings’ existence and timing, the court found it plausible that he did not or could not reasonably discover the lack of coverage until 2021. The court stated that Kinder Morgan could test that issue later on an evidentiary record.

Disposition

The court denied Kinder Morgan’s motion to dismiss the promissory-fraud claim. It also referred the parties to the court’s alternative-dispute-resolution unit for appointment to a panel mediator.