Motion to Dismiss Record Insufficient to Make “Related Claims” Determination

A federal district court in California has denied an insurer’s motion to dismiss based on a “related claims” argument because the coverage litigation pleadings did not contain sufficient information to resolve the dispute as a matter of law. Rancho Tehama Ass’n v. Federal Ins. Co., 2015 WL 3454610 (E.D. Cal. May 29, 2015). The insurer denied coverage for a lawsuit on the basis that it was deemed related to a claim made before the start of the insured’s claims-made policy and moved to dismiss the insured’s coverage action seeking coverage for the lawsuit on that basis. The court concluded, however, that the issue of whether the underlying lawsuit and the prior matter are “related claims” “necessarily entails a factual inquiry, which is premature for the Court to conduct on a motion to dismiss.”

The court found that it could not “determine the scope of each claim” because the insured’s complaint alleged only that the claimant “requested a meeting” prior to the policy period and that the insured “met with [the claimant].” The court refused the insurer’s request to consider letters between the claimant and the insured because they were not properly before the court as documents referenced in or “central” to the insured’s complaint. The court also determined that a dispute in the motion to dismiss briefing about the content of the underlying lawsuit was “entirely extra-record, and perfectly encapsulates why the relatedness of claims is not properly addressed on a motion to dismiss.”