John v. Nationwide Mutual Insurance Company
- William Orrick
- 3:23-cv-06507
- U.S. District Court · Northern District of California
- 5
In John v. Nationwide, Judge Orrick granted Nationwide’s dismissal motion without prejudice and denied John’s motions to join EBART and return the case to state court.
Jordan William John’s claims against Nationwide were dismissed without prejudice; his motions to join East Bay Auto Repair and Towing and remand the case to state court were denied. He may pursue EBART in state court and may refile against Nationwide after obtaining a judgment against or assignment from EBART.
What happened
Jordan William John alleged that East Bay Auto Repair and Towing failed to repair his vehicle properly, causing a crash and damage. He sued Nationwide Mutual Insurance Company, EBART’s insurer, after Nationwide refused coverage for his claim.
The court said John could not recover directly from Nationwide as an injured third-party claimant unless he first obtained a judgment against EBART or received an assignment of the claim. The court also said John could not add EBART to this lawsuit to avoid that requirement. The court found that it had authority to hear the case because the parties were citizens of different states and the amount sought was $120,000.
In Jordan William John v. Nationwide Mutual Insurance Company, Judge William Orrick granted Nationwide’s motion to dismiss without prejudice and denied John’s motions for joinder and remand. John may refile claims against Nationwide after obtaining a judgment against or an assignment from EBART, and the dismissal does not affect his right to sue EBART in state court.
The detailed version
- John v. Nationwide Mutual Insurance Company · No. 3:23-cv-06507
- William Orrick
- Apr. 10, 2024
Background
Jordan William John alleged that East Bay Auto Repair and Towing (EBART) did not properly repair his vehicle. He alleged that the repair failure damaged the vehicle’s brakes, caused a crash, and resulted in damages. John alleged that EBART was insured by Nationwide Mutual Insurance Company and that Nationwide refused to provide coverage for his claim. John then sued Nationwide in state court.
Nationwide removed the case to federal court and moved to dismiss. John filed motions seeking to join EBART as a party and to send the case back to state court. The opinion states that John was representing himself. The court gave him additional time and instructions for responding, but he did not file a response to the motion to dismiss as of the date of the order.
Claims and legal standard
The court liberally construed John’s amended complaint as asserting claims for breach of contract and negligence against Nationwide. Nationwide argued that John could not sue it for breach of contract because he was not its insured and did not have a final judgment against one of its insureds. Nationwide also argued that John could not sue the insurer for negligence and could not join EBART in this case.
The court applied Federal Rule of Civil Procedure 12(b)(6), which requires dismissal when a complaint does not state a legally sufficient claim for relief. The court also considered the rule that a self-represented plaintiff generally must be given an opportunity to amend unless the complaint’s defects cannot be cured by adding more facts.
Court’s analysis
The court held that John’s claims against Nationwide failed at this point. John’s theory was that EBART damaged him, EBART was insured by Nationwide, and Nationwide therefore had to pay his damages. Under the California law discussed by the court, an injured third-party claimant who is not a third-party beneficiary may recover from an insured’s insurer only after obtaining a judgment against the insured and then suing the insurer under California Insurance Code section 11580. Alternatively, EBART could assign the claim to John, allowing him to sue Nationwide directly for breach of contract.
The court concluded that John had not alleged either a judgment against EBART or an assignment from EBART. Because John sought to add EBART to this lawsuit, the court found that he could not make those necessary allegations in an amended complaint and that amendment would be futile.
The court also rejected John’s proposed joinder of EBART. It explained that, under California law, an insurer generally may not be joined as a defendant in the injured person’s underlying action against the insured. Allowing John to join EBART in this case would circumvent the requirement that he first obtain a judgment against EBART before suing Nationwide.
Finally, the court denied remand. It found that John was a citizen of California, Nationwide was not a citizen of California, and John sought $120,000 in damages. The court therefore concluded that diversity jurisdiction existed.
Disposition
Nationwide’s motion to dismiss was granted without prejudice. The court stated that John may refile his claims against Nationwide if he first obtains a judgment against EBART or an assignment from EBART. The dismissal was also without prejudice to John’s right to sue EBART for the alleged damages in state court. John’s motions for joinder and remand were denied.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.