Ameritek, Inc v. American Family Mutual Insurance Company

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

W.D. Wash.December 8, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 MOTION TO DISMISS (2:16-cv-01794-JCC) - 1 Davis Wright Tremaine LLP LAW OFFICES 1201 Third Avenue, Suite 2200 Seattle, WA 98101-3045 206.622.3150 main · 206.757.7700 fax The Honorable John C. Coughenour UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE AMERITEK, INC., Plaintiff, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, DAMARCO, INC., PUGET SOUND ABATEMENT, LLC, and ABC COMPANY, Defendants. No. 2:16-cv-01794-JCC DAMARCO INC. AND PUGET SOUND ABATEMENT LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT NOTE ON MOTION CALENDAR: Friday, December 30, 2016 I. INTRODUCTION Plaintiff Ameritek’s hastily amended complaint – filed to avoid remand – fails to state a claim against Damarco, Inc. or Puget Sound Abatement, LLC (collectively, “Servpro”). Ameritek owned an unoccupied rental property that was damaged when a water pipe froze and burst. Defendant Servpro, which provides water remediation services, arranged for asbestos testing of samples from the property by an independent lab, NVL Laboratories, Inc. (“NVL Labs”). The lab conducted the tests in accordance with EPA methods and issued a report that specified the margin of error. Ameritek subsequently contracted with NVL to perform additional testing at a higher resolution. The later testing also found asbestos contamination, but this time at lower levels that did not require specialized asbestos remediation during the cleanup and repair of the Case 2:16-cv-01794-JCC Document 17 Filed 12/08/16 Page 1 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 MOTION TO DISMISS (2:16-cv-01794-JCC) - 2 Davis Wright Tremaine LLP LAW OFFICES 1201 Third Avenue, Suite 2200 Seattle, WA 98101-3045 206.622.3150 main · 206.757.7700 fax property. Ameritek had no need to use the earlier performed test results. Instead, it determined the property’s repair cost based on its own set of test results that did not require asbestos remediation. Ameritek alleges that it sold the property at below fair market value solely because of the cost to repair the water damage, not because of any asbestos remediation. The amended complaint consists of conclusory and “information and belief” allegations of negligence and fraud against Servpro related to NVL Lab’s original lab test results. However, Ameritek’s amended complaint does not challenge the use of EPA testing methods to identify asbestos, contend that Ameritek relied on or used NLV’s original test results, or even identify asbestos-related damages. Servpro has been improperly added to this case and should be dismissed under Rule 12(b)(6) for failure to state a claim. II. BACKGROUND1 A. Frozen Pipes Caused Extensive Damage to Rental Property On November 16, 2014, Dr. Yee discovered that a broken water line in the attic space of a rental home owned by plaintiff Ameritek caused extensive water damage to the property. First Amended Complaint (“FAC”) ¶ 3.4 B. Independent Lab Identifies Asbestos at the Property On November 20, 2014, Dr. Yee ‒ signing all of Servpro’s paperwork in his personal capacity ‒ met with defendant Servpro and other contractors brought in by Servpro at the property. FAC ¶ 3.6. The same date, Servpro took samples of the dry wall and related items for the purpose of asbestos testing, and later that evening advised Dr. Yee that samples taken from one room tested positive for asbestos, and that the full extent of the asbestos would be verified after additional samples taken the next day were tested. Id. The next day, November 20, 2014, Servpro took additional samples and reported to Dr. Yee that all samples tested positive for asbestos. Id.2 1 For the limited purposes of this motion, the Background section adopts the allegations from plaintiff’s First Amended Complaint. 2 Under the doctrine of incorporation by reference, this Court may consider the actual test results without converting the motion to dismiss into a motion for summary judgment because they are extensively referenced in Case 2:16-cv-01794-JCC Document 17 Filed 12/08/16 Page 2 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 MOTION TO DISMISS (2:16-cv-01794-JCC) - 3 Davis Wright Tremaine LLP LAW OFFICES 1201 Third Avenue, Suite 2200 Seattle, WA 98101-3045 206.622.3150 main · 206.757.7700 fax C. Further Tests by the Same Independent Lab Show Asbestos Below Abatement Threshold Subsequently, in the period on or before July 17, 2015 (FAC ¶ 1.16), Ameritek and its legal counsel examined the information and documentation regarding the original asbestos sampling and testing commissioned by Servpro and became concerned regarding the accuracy of the positive test results. FAC ¶ 3.15. Accordingly, Ameritek retained the services of the same testing laboratory to take additional samples and re-test for asbestos. Id. Although most of the samples tested positive for the presence of asbestos under the same testing method used in November 2014, using a more accurate method all samples indicated asbestos levels below 1 percent and below the level requiring abatement procedures during cleanup or repair. Id. D. Ameritek Establishes Repair Costs Without Asbestos Abatement Based on these new test results, Ameritek obtained work proposals for repair work that did not include any asbestos abatement. FAC ¶ 3.15. E. Ameritek Sells Property, Minus the Cost of Repair Undertaken Without Any Asbestos Abatement On August 25, 2015, Ameritek entered into a purchase and sale agreement to sell the property for $450,000. FAC ¶ 3.17. Ameritek sold the house for below market value to reflect the cost of the repair work (without conducing any asbestos abatement), plus the cost to replace the furnace and other repairs necessitated by the water damage. Id. F. Ameritek Adds Claims Against the Servo Pro Parties Based on the Original Lab Test On December 1, 2016, Ameritek amended its complaint to add Damarco and Puget Sound Abatement for the acknowledged purpose to defeat diversity jurisdiction and obtain a remand. Dkt. 13. Ameritek alleges two causes of action against the Servpro defendants. In relevant part, Ameritek alleges they were negligent “in obtaining false or inaccurate asbestos testing results.” ¶ 7.1 (Negligence). Ameritek further alleges that they committed unspecified “fraudulent acts which have caused injury and damages to the plaintiff Ameritek.” ¶ 9.1. Ameritek’s amended complaint and are essential to its claim. McMullen v. JP Morgan Chase Bank, 2013 WL 6096503 *2 (E.D. Wash. Nov. 20, 2013) (citations omitted). Case 2:16-cv-01794-JCC Document 17 Filed 12/08/16 Page 3 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 MOTION TO DISMISS (2:16-cv-01794-JCC) - 4 Davis Wright Tremaine LLP LAW OFFICES 1201 Third Avenue, Suite 2200 Seattle, WA 98101-3045 206.622.3150 main · 206.757.7700 fax III. ARGUMENT A. Ameritek’s Admissions The allegations in Ameritek’s amended complaint establish the following: 1. The original lab tests were performed by an independent laboratory, NVL Labs. Attachment A.1 & A.2. 2. NVL Labs conducted a bulk asbestos fibers analysis using polarized light microscopy consistent with EPA method 600/R-93/116 and 600/M4-82-020. Id. NVL Labs identified the measurement uncertainties for these methods. Id. 3. Unhappy with the test results commissioned by Servpro, Ameritek engaged NVL Labs to conduct its own tests using an unspecified procedure with a higher resolution. FAC ¶ 3.15. The higher resolution test determined that the rental home could be repaired without asbestos abatement. Id. 4. Based on these new test results, Ameritek established the cost to repair the property without any asbestos abatement. Id. 5. Ameritek then sold the house at a reduced price to reflect the cost of repairing the water damage to the property, but without any asbestos abatement. FAC ¶ 3.17. B. Ameritek Fails to State a Claim for Negligence In order to recover for negligence, Ameritek has the burden to show that (1) Servpro owed it a duty, (2) Servpro breached that duty, (3) an injury resulted, and (4) the breach was the proximate cause of the injury. Pacific Boring , Inc. v. Staheli Trenchless Consultants, Inc., 138 F. Supp. 3d 1156 (2015) (citations omitted). Ameritek’s amended complaint does not meet any of these elements. First, Ameritek’s amended complaint fails to reference or identify either a statutory or common law duty owed by Servpro. Pacific Boring, 138 F. Supp. 3d at 1165. Even if arguendo such a duty existed, “to be actionable it must be one owed to the injured plaintiff, and not to the general public.” Id. (citations omitted). Additionally, any such claim by Ameritek would also be barred by the independent duty doctrine. Id. at 1167. Case 2:16-cv-01794-JCC Document 17 Filed 12/08/16 Page 4 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 MOTION TO DISMISS (2:16-cv-01794-JCC) - 5 Davis Wright Tremaine LLP LAW OFFICES 1201 Third Avenue, Suite 2200 Seattle, WA 98101-3045 206.622.3150 main · 206.757.7700 fax Second, there is no breach. The testing was conducted by an independent lab using established EPA testing protocols. Attachment A.1 & A.2. Third, Ameritek admits it avoided any alleged injury because it conducted its own independent testing prior to the sale of the property. FAC ¶ 3.15. Based on this new testing, the house was repaired and sold without any asbestos abatement or use of the original asbestos test conducted by NVL Labs. FAC ¶ 3.17. Ameritek fails to state a claim for negligence. C. Ameritek Fails to State a Claim for Fraud Claims for fraud are subject to the heightened pleading standards. The federal rules require parties to “state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). To satisfy that standard, a plaintiff “must set forth more than the neutral facts necessary to identify the transaction. The plaintiff must set forth what is false or misleading about a statement, and why it is false.” Allstate Ins. Co. v. Lighthouse Law P.S. Inc., 2016 WL 4041198*3 (W.D. Wash. July 28, 2016). Three reasons motivate the particularity requirement: (1) to provide defendants with notice as to the nature of the alleged fraud and deter plaintiffs from filing complaints as a pretext to conduct unwarranted discovery; (2) to protect defendants’ reputations from false accusations; and (3) to prevent plaintiffs from imposing social and economic costs on the court and other parties without justification. Id. The nine elements of a fraud claim under Washington law are: “(1) representation of an existing fact; (2) materiality; (3) falsity; (4) the speaker's knowledge of its falsity; (5) intent of the speaker that it should be acted upon by the plaintiff; (6) plaintiff's ignorance of its falsity; (7) plaintiff's reliance on the truth of the representation; (8) plaintiff's right to rely upon it; and (9) damages suffered by the plaintiff.” Id. Ameritek does not even attempt to meet the heighten pleading standards for alleging fraud, or any of the elements. Ameritek does not dispute that Servpro correctly reported NVL Labs test results that use EPA established methods. FAC ¶¶ 3.6; 3.17 (“most of the samples tested positive for the presence of asbestos under the same testing method used in November 2014”). NVL Labs disclosed the limitations of the testing methods, Attachment A.1 & A.2, Case 2:16-cv-01794-JCC Document 17 Filed 12/08/16 Page 5 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 MOTION TO DISMISS (2:16-cv-01794-JCC) - 6 Davis Wright Tremaine LLP LAW OFFICES 1201 Third Avenue, Suite 2200 Seattle, WA 98101-3045 206.622.3150 main · 206.757.7700 fax and based on this or other information Ameritek decided to undertake its own independent investigation. FAC ¶ 3.15. Ameritek further acknowledges that it undertook this independent investigation and relied on the results – with any reliance on the lab results commissioned by Servpro – prior to conducting any repair or selling the property. FAC ¶¶ 3.16; 3.17 Accordingly, Ameritek attributes and calculates its loss based on the cost to repair the water damage to the property, not based on abatement of asbestos. Id. There are no allegations, not less substantiated facts, establishing falsity, reliance or damages. IV. CONCLUSION For the foregoing reasons, Damarco, Inc. or Puget Sound Abatement, LLC respectfully request dismissal of Ameritek’s amended complaint. DATED this 8th day of December, 2016. Davis Wright Tremaine LLP Attorneys for Defendants Damarco, Inc., and Puget Sound Abatement, LLC By s/ Steven P. Caplow Steven P. Caplow, WSBA #19843 1201 Third Avenue, Suite 2200 Seattle, Washington 98101-3045 Telephone: (206) 757-8018 Fax: (206) 757-7700 E-mail: stevencaplow@dwt.com Case 2:16-cv-01794-JCC Document 17 Filed 12/08/16 Page 6 of 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 MOTION TO DISMISS (2:16-cv-01794-JCC) - 7 Davis Wright Tremaine LLP LAW OFFICES 1201 Third Avenue, Suite 2200 Seattle, WA 98101-3045 206.622.3150 main · 206.757.7700 fax CERTIFICATE OF SERVICE I hereby certify that on December 8, 2016, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system, which will send notification of such filing to those attorneys of record registered on the CM/ECF system in accordance with the Federal Rules of Civil Procedure. DATED this 8th day of December, 2016. Davis Wright Tremaine LLP Attorneys for Defendants Damarco, Inc., and Puget Sound Abatement, LLC By s/ Steven P. Caplow Steven P. Caplow, WSBA #19843 1201 Third Avenue, Suite 2200 Seattle, Washington 98101-3045 Telephone: (206) 757-8018 Fax: (206) 757-7700 E-mail: stevencaplow@dwt.com DWT 30854301v1 0106785-000001 Case 2:16-cv-01794-JCC Document 17 Filed 12/08/16 Page 7 of 7 MOTION TO DISMISS (2:16-cv-01794-JCC) - 8 Case 2:16-cv-01794-JCC Document 17-1 Filed 12/08/16 Page 1 of 7 MOTION TO DISMISS (2:16-cv-01794-JCC) - 9 Case 2:16-cv-01794-JCC Document 17-1 Filed 12/08/16 Page 2 of 7 MOTION TO DISMISS (2:16-cv-01794-JCC) - 10 Case 2:16-cv-01794-JCC Document 17-1 Filed 12/08/16 Page 3 of 7 MOTION TO DISMISS (2:16-cv-01794-JCC) - 11 Case 2:16-cv-01794-JCC Document 17-1 Filed 12/08/16 Page 4 of 7 MOTION TO DISMISS (2:16-cv-01794-JCC) - 12 Case 2:16-cv-01794-JCC Document 17-1 Filed 12/08/16 Page 5 of 7 MOTION TO DISMISS (2:16-cv-01794-JCC) - 13 Case 2:16-cv-01794-JCC Document 17-1 Filed 12/08/16 Page 6 of 7 MOTION TO DISMISS (2:16-cv-01794-JCC) - 14 Case 2:16-cv-01794-JCC Document 17-1 Filed 12/08/16 Page 7 of 7 MOTION TO DISMISS (2:16-cv-01794-JCC) - 15 Case 2:16-cv-01794-JCC Document 17-2 Filed 12/08/16 Page 1 of 5 MOTION TO DISMISS (2:16-cv-01794-JCC) - 16 Case 2:16-cv-01794-JCC Document 17-2 Filed 12/08/16 Page 2 of 5 MOTION TO DISMISS (2:16-cv-01794-JCC) - 17 Case 2:16-cv-01794-JCC Document 17-2 Filed 12/08/16 Page 3 of 5 MOTION TO DISMISS (2:16-cv-01794-JCC) - 18 Case 2:16-cv-01794-JCC Document 17-2 Filed 12/08/16 Page 4 of 5 MOTION TO DISMISS (2:16-cv-01794-JCC) - 19 Case 2:16-cv-01794-JCC Document 17-2 Filed 12/08/16 Page 5 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 [PROPOSED] ORDER GRANTING MOTION TO DISMISS (2:16-cv-01794-JCC) - 1 Davis Wright Tremaine LLP LAW OFFICES 1201 Third Avenue, Suite 2200 Seattle, WA 98101-3045 206.622.3150 main · 206.757.7700 fax The Honorable John C. Coughenour UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE AMERITEK, INC., Plaintiff, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, DAMARCO, INC., PUGET SOUND ABATEMENT, LLC, and ABC COMPANY, Defendants. No. 2:16-cv-01794-JCC [PROPOSED] ORDER GRANTING DAMARCO, INC. AND PUGET SOUND ABATEMENT LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT THIS MATTER came before the Court on Defendants Damarco Inc., and Puget Sound Abatement LLC’s Motion to Dismiss First Amended Complaint. The Court, having considered the papers submitted in support of and opposition to this motion, and the files and records herein, finds that the motion should be granted. Now, therefore, it is hereby ORDERED that Defendants’ Motion to Dismiss Ameritek, Inc.’s First Amended Complaint is granted. DATED this _____ day of ___________, 201__. ____________________________________ The Honorable John C. Coughenour United States District Court Judge Case 2:16-cv-01794-JCC Document 17-3 Filed 12/08/16 Page 1 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 [PROPOSED] ORDER GRANTING MOTION TO DISMISS (2:16-cv-01794-JCC) - 2 Davis Wright Tremaine LLP LAW OFFICES 1201 Third Avenue, Suite 2200 Seattle, WA 98101-3045 206.622.3150 main · 206.757.7700 fax Presented by: Davis Wright Tremaine LLP By /s Steven P. Caplow Steven P. Caplow, WSBA #19843 1201 Third Ave., Ste. 2200 Seattle, WA 98101-3045 Telephone: (206) 622-3150 Fax: (206) 757-7700 Email: stevencaplow@dwt.com Attorneys for defendants Damarco, Inc., and Puget Sound Abatement, LLC Case 2:16-cv-01794-JCC Document 17-3 Filed 12/08/16 Page 2 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 [PROPOSED] ORDER GRANTING MOTION TO DISMISS (2:16-cv-01794-JCC) - 3 Davis Wright Tremaine LLP LAW OFFICES 1201 Third Avenue, Suite 2200 Seattle, WA 98101-3045 206.622.3150 main · 206.757.7700 fax CERTIFICATE OF SERVICE I hereby certify that on December 8, 2016, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system, which will send notification of such filing to those attorneys of record registered on the CM/ECF system in accordance with the Federal Rules of Civil Procedure. DATED this 8th day of December, 2016. Davis Wright Tremaine LLP Attorneys for Defendants Damarco, Inc., and Puget Sound Abatement, LLC By s/ Steven P. Caplow Steven P. Caplow, WSBA #19843 1201 Third Avenue, Suite 2200 Seattle, Washington 98101-3045 Telephone: (206) 757-8018 Fax: (206) 757-7700 E-mail: stevencaplow@dwt.com DWT 30862910v1 0106785-000002 Case 2:16-cv-01794-JCC Document 17-3 Filed 12/08/16 Page 3 of 3