Sayles et al v. Knight Transportation Company Incorporated

MOTION to Dismiss for Failure to State a Claim

D. Ariz.February 3, 2017

1 55907891.2 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 28 Rebecca N. Cain (#025604) rcain@polsinelli.com POLSINELLI PC CityScape One E. Washington St., Ste. 1200 Phoenix, AZ 85004 Phone: (602) 650-2000 Fax: (602) 264-7033 James C. Sullivan (MO #38318) (motion to admit pro hac vice pending) jsullivan@polsinelli.com 900 West 48th Place, Suite 900 Kansas City, MO 64112 Phone: (816) 753-1000 Fax: (814) 753-1536 Attorneys for Defendant Knight Transportation Company, Inc. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA JAYSAN SAYLES and JAMISON STIRILING, d/b/a SAYLES TRANSPORTATION COMPANY, Plaintiffs, v. KNIGHT TRANSPORTATION COMPANY, INC., Defendant. Case No. CV-16-04235-PHX-JAT KNIGHT TRANSPORTATION’S RULE 12(B)(6) MOTION TO DISMISS (Honorable James A. Teilborg) (ORAL ARGUMENT REQUESTED) Pursuant to Fed. R. Civ. P. 12(b)(6), Defendant Knight Transportation Services, Inc. (“Knight”) moves to dismiss Plaintiffs’ First Amended Complaint (“Amended Complaint”) for failure to state a claim because the Amended Complaint does not satisfy Fed.R.Civ.P. Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 1 of 15 2 55907891.2 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 28 8(a)(2). 1 In support of its Motion, Knight submits the following Memorandum of Points and Authorities. Memorandum of Points and Authorities I. RELEVANT BACKGROUND A. Procedural History On April 15, 2016, Plaintiffs Jasan Sayles and Jamison Stiriling, d/b/a Sayles Transportation Company (collectively “Plaintiffs”) filed a six-count lawsuit against Knight in the Circuit Court of St. Louis County, Missouri, styled Jasan Sayles and Jamison Stiriling d/b/a Sayles Transportation Company v. Knight Transportation Company, Inc., Case No. 16SL-CC013. On May 16, 2016, Knight agreed to accept service by mail pursuant to Mo.R.Civ.P. 54.1. See Doc. Nos. 1 and 1-1 at pp. 31-32. Knight properly removed this case to the U.S. District Court for the Eastern District of Missouri pursuant to 28 U.S.C. § 1332. See Doc. No. 1. Knight then moved to transfer this case to the District of Arizona pursuant to 28 U.S.C. § 1404(a). See Doc. Nos. 14 and 15. The Eastern District of Missouri granted that motion, and the case was transferred. See Doc. 30. On December 27, 2016, Knight filed its Motion for More Definite Statement pursuant to Fed.R.Civ.P. 12(e). See Doc. No. 39. In response, Plaintiffs filed their First Motion to Amend/Correct Complaint and lodged their proposed First Amended Complaint. No leave to amend is necessary pursuant to Rule 15(a), which permits a party to amend as a matter of course in response to a Motion for More Definite Statement. As such, Knight files contemporaneously herewith its Notice of Non-Opposition to Plaintiffs’ Motion for Leave to Amend and its Notice of Withdrawal of its Motion for More Definite Statement. 1 Knight is erroneously identified in Plaintiff’s original Complaint as Knight Transportation Company, Inc. The Amended Complaint newly identifies the defendant as Knight Transportation Services, Inc. Knight reserves the right to raise the issue as to whether Plaintiff has named the appropriate party at a later date. Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 2 of 15 3 55907891.2 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 28 B. Relevant Factual Allegations 2 As per Plaintiffs’ Amended Complaint, on December 5, 2015 through February 28, 2016, Plaintiffs were insured under a contract of insurance issued to Plaintiffs by New York Marine & General Insurance Co. 3 Amended Complaint ¶ 1. New York Marine was Knight’s insurance carrier. Id. at ¶ 12. Knight solicited Plaintiffs to switch to “Knight’s Insurance Program,” offering lower premiums and more incentives. Id. at ¶¶ 17-18. On or about December 4, 2015, Plaintiffs entered into a “written contract for the purchase of general liability insurance and automobile liability insurance with defendant Knight, as the duly authorized agent for Transtar Brokerage, after duly authorized and appointed agents, representatives, and employees of Knight solicited Sayles Transportation Company’s agents and employees to enter said contract of insurance.” Id. at ¶ 19. The “contract [is] between Transtar Insurance Brokerage and the Plaintiffs.” Id. at ¶ 46. Knight, as the agent for Transtar, caused to be issued a Certificate of Insurance naming Plaintiffs as the insured. Id. at ¶ 36. Knight “caused or contributed to cause Transtar to purchase insurance through New York Marine.” Id. ¶ at 37. Knight is not a licensed insurance carrier, producer, or broker as defined under Missouri or Arizona law. Id. at ¶¶ 20-25. Knight acted as an unlicensed producer, broker, and agent for both Transtar Insurance Brokers, Inc. and New York Marine and General Insurance. Id. at ¶ 48. Around February 28, 2015, Plaintiffs were advised by a customer that Sayles Transportation’s insurance coverage had been canceled. Id. at ¶ 26. Plaintiffs contacted 2 While the facts alleged in Plaintiffs’ Amended Complaint must be taken as true for purposes of this Motion, Knight expressly reserves the right to contest the veracity of these factual allegations. 3 Plaintiffs also allege that they were insured by various other non-party insurers through August 11, 2015. Amended Complaint ¶¶ 6-9. The relationship of these allegations to the claims pled against Knight is unclear. Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 3 of 15 4 55907891.2 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 28 Ashley Ostwinkle of Transtar and were advised that Plaintiffs’ insurance had not been canceled. Id. at ¶ 27. From around February 28, 2016 to March 3, 2016, Plaintiffs received repeated “refusals to book” from its customers, who claimed that Plaintiffs had no insurance coverage. Id. at ¶ 28. On or about March 3, 2016, Ostwinkle of Transtar told Plaintiffs that their coverage had been canceled on or about February 28, 2016. Id. at ¶ 29. On or about February 28, 2016, Ostwinkle advised Plaintiffs that Eric Rayburn, “Logistics os&d and claims Manager/United SIP Mngr,” wanted Sayles Transportation out of “Knight’s program” and instructed her to cancel Plaintiffs’ insurance. Id. at ¶ 30. Plaintiffs were not advised that their insurance was cancelled for three or more days after the cancellation. Id. at ¶ 31. Plaintiffs received a Notice of Cancellation of Coverage from Knight. Id. at ¶ 40. Or or about March 22, 2016, Plaintiffs received a “Reinstatement Notice” from New York Marine and General. Id. at ¶ 32. At least five unnamed brokers were given notice of Knight’s purported cancellation of coverage and those brokers refused to enter or remain in business with Plaintiffs. Id. at ¶ 44. II. ARGUMENT A. Legal Standard The Court may dismiss a complaint for failure to state a claim under Rule 12(b)(6) for two reasons: 1) lack of a cognizable legal theory; or 2) insufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.1990). To survive a Rule 12(b)(6) motion for failure to state a claim, a complaint must meet the requirements of Fed.R.Civ.P. 8(a)(2). Rule 8(a)(2) requires a “short and plain statement of the claim showing that the pleader is entitled to relief,” so that the defendant has “fair notice of what the ... claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 4 of 15 5 55907891.2 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 28 Although a complaint does require detailed factual allegations, the pleader's obligation to provide the grounds for relief requires “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (internal citations omitted). A complaint’s factual allegations must be sufficient to raise a right to relief above a speculative level. Id. Rule 8(a)(2) “requires a ‘showing,’ rather than a blanket assertion, of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirement of providing not only ‘fair notice’ of the nature of the claim, but also ‘grounds' on which the claim rests.” Id. (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1202, pp. 94, 95(3d ed.2004)). The pleading standard set forth at Rule 8 demands more than “an unadorned, the- defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 555). To survive a motion to dismiss, a complaint must contain sufficient factual matter, which, if accepted as true, states a claim to relief that is “plausible on its face.” Iqbal, 129 S.Ct. at 1949. Facial plausibility exists if the pleader pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. Plausibility does not equal “probability,” but plausibility requires more than a sheer possibility that a defendant has acted unlawfully. Id. “Where a complaint pleads facts that are ‘merely consistent’ with a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.’” Id. (citing Twombly, 550 U.S. at 557). In deciding a motion to dismiss under Rule 12(b)(6), the Court must construe the facts alleged in the complaint in the light most favorable to its drafter and the Court must accept all well-pleaded factual allegations as true. See Shwarz v. United States, 234 F.3d 428, 435 (9th Cir.2000). But the Court need not accept as true legal conclusions couched facts. Morales v. Forster & Garbus, LLP, No. CV10-1464-PHX-JAT, 2012 WL 78630, at *2 (D. Ariz. Jan. 11, 2012) (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)). Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 5 of 15 6 55907891.2 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 28 B. Plaintiffs’ Complaint Fails to Allege Cognizable Legal Theories and Facts Sufficient to Support Such Theories Plaintiffs plead claims for breach of contract, defamation, declaratory judgment, tortious interference with business expectancy, and fraudulent misrepresentation. However, Plaintiffs fail to allege plausible facts showing an entitlement to relief in support of these claims. As such, these claims should be dismissed. 1. Count I - Breach of Contract Count I of the Amended Complaint alleges breach of contract. Plaintiffs cannot sue Knight for breach of contract because Knight is not a party to the insurance contact that is the subject of Plaintiffs’ Amended Complaint. As such, this claim should be dismissed. A plaintiff asserting a claim for breach of contract must demonstrate the existence of a contract between plaintiff and defendant, breach of that contract by defendant, and resulting damage to plaintiff. Frank Lloyd Wright Found. v. Kroeter, 697 F.Supp.2d 1118, 1125 (D.Ariz.2010); Amburgy v. Express Scripts, Inc., 671 F. Supp. 2d 1046, 1055 (E.D. Mo. 2009).4 Here, the Amended Complaint does not plead the existence of a contract between Plaintiffs and Knight. As such, there can be no claim against Knight for breach of contract. Plaintiffs do not attach a copy of the agreement from which their claims arise to their Amended Complaint. However, it appears from the Amended Complaint that the written contract from which their claims arise is a contract of insurance issued to Plaintiffs by New York Marine & General Insurance Company (“New York Marine”). Amended Complaint at ¶ 11 (“From December 5, 2015 up to and including February 28, 2016, 2016, [sic] Plaintiffs were insured up to $1,000,000.00 under a contract of insurance, policy number 7713-28 issued to Plaintiffs by New York Marine…”). 4 Knight does not engage in a lengthy conflict of laws analysis for purposes of this Motion, but notes that Missouri and Arizona law are in agreement as to this and other substantive issues. Except where otherwise noted, issues addressed in this Motion are procedural. Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 6 of 15 7 55907891.2 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 28 Plaintiffs allege contracts between (1) Plaintiffs and Transtar Insurance Brokerage (2) Plaintiffs and New York Marine and General Insurance Company. Amended Complaint, ¶¶ 46-47. Plaintiffs do not, however, allege a contract between Plaintiffs and Knight. Rather, Plaintiffs allege that they entered into a written contract for the purchase of general liability insurance and automobile liability insurance with Knight as the duly authorized agent for Transtar Brokerage. Id. It appears that Plaintiffs may believe that the alleged agency relationship between Knight and Transtar gives rise to Plaintiffs’ contract claim against Knight. See Amended Complaint ¶ 19. However, one who signs an agreement as the agent of a fully-disclosed principal is not a party to that agreement and thus incurs no personal liability for the principal’s breach of that agreement. Ferrarell v. Robinson, 11 Ariz.App.473, 475, 465 P.2d 610, 612 (Ariz. Ct. App. 1970); Capitol Grp., Inc. v. Collier, 365 S.W.3d 644, 648 (Mo. Ct. App. 2012); Restatement (Second) of Agency Sec. 320 (1958); 3 C.J.S. Agency s 215 (1936); 3 Flectcher, Cyclopedia of the Law of Private Corporations Section 1117-1118 (Perm. Ed. 1965). Thus, even if Knight had signed the agreement between Plaintiffs and Transtar as the authorized agent for Transtar, Plaintiffs would not have a claim against Knight for breach of that contract. 5 As such, Plaintiffs’ first claim should be dismissed. 2. Count II - Defamation Plaintiffs allege insufficient facts to plead plausible claims for defamation. In order to satisfy Rule 8 in pleading a claim for defamation, a plaintiff must “specifically identify who made the statements, when they were made and to whom they were made.” MacKinnon v. Logitech Inc., No. 15-CV-05231-TEH, 2016 WL 541068, at *5 (N.D. Cal. Feb. 11, 2016) (citations omitted). Indeed, numerous district courts have found that the requirements of Rule 8 were not met where the complaint failed to allege the “who, what, where, when” in support of claims 5 It is unclear from the face of the Amended Complaint who Plaintiff contends actually executed the subject agreement. Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 7 of 15 8 55907891.2 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 28 for defamation, or similar claims of libel and slander. See, e.g., White v. Hansen, No. C 05- 784 SBA, 2005 WL 1806367, at *9 (N.D.Cal. July 28, 2005) (holding that allegation that defendant made belittling statements about plaintiff was not sufficient to support slander claim because plaintiff did not identify any specific statements or indicate to whom the statements were made); Harris v. City of Seattle, 315 F.Supp.2d 1112, 1123-24 (D.Wash.2004) (holding that defamation claims failed because the plaintiff alleged only that defendants “fabricated stories” and disseminated reports that “contained falsities” but did not identify what these alleged “falsities” and “stories” were or when the statements occurred); Ahmed v. Gelfand, 160 F.Supp.2d 408, 416 (E.D.N.Y.2001) (holding that to satisfy Rule 8, plaintiff asserting defamation claim must “merely state the substance of the purported communication, who made the communication, when it was made, and to whom it was communicated,” and holding that allegations were insufficient in that case because plaintiff did not identify which defendant made the supposedly defamatory statements, when the statements were made, or to whom they were made); Celli v. Shoell, 995 F.Supp. 1337, 1345-46 (D.Utah 1998) (holding general allegation that defendants had made defamatory statements against the plaintiffs over a period of four years was too vague to satisfy Rule 8 because “the complaint fails to identify any specific defamatory statements made by the defendants or when, where, or to whom any defamatory statements were made”). For example, in Kohli v. San Francisco Police Dep't, No. 13-CV-04305 NC, 2014 WL 342599, at *5 (N.D. Cal. Jan. 28, 2014), the court found that the plaintiff’s complaint lacked sufficient factual specificity to satisfy Rule 8 where the complaint failed to specify when the defendant police department made a statement about him, which officer made the statement, what the officer said, and why the statement injured him. Similarly, in Morris v. United States, the court found that the complaint, which alleged torts against the federal employees of the Phoenix Indian Medical Center, lacked sufficient specificity for the government to properly defend the case because, among other things, it failed to identify the specific government employees who committed the alleged Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 8 of 15 9 55907891.2 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 28 torts. Morris v. United States, No. CIV06-2058-PHX-SMM, 2007 WL 1521716, at *2 (D. Ariz. May 22, 2007) (granting motion for more definite statement where the complaint lacked sufficient specificity for the government to properly defend the case because complaint failed to identify the government employees who committed the alleged torts). Here, in support of their defamation claim, Plaintiffs allege as follows:  “On or about February 28, 2016, defendant Knight caused or contributed to cause the publication to unrelated third parties, the purported cancellation of the aforementioned insurance contract …” and  “Specifically, Knight informed, or caused to be informed, several brokers with whom Plaintiffs had business relationships, that Sayles Transportation Company was not covered by any policy of insurance, when such was not the case and was in fact false.” Amended Complaint at ¶¶ 53-54. Nowhere do Plaintiffs identify either the speaker of the allegedly defamatory remarks or to whom such remarks were made, other than generally alleging that the remarks were made to “unrelated third parties” and “several brokers with whom Plaintiffs had business relationships.” These failures are fatal to Plaintiffs’ defamation claim. As such, Plaintiffs’ second claim should be dismissed. 3. Count III - Declaratory Judgment Count III of Plaintiff’s Complaint asks this Court to make a declaratory judgment that “defendant Knight Transportation company’s [sic] right to sell insurance in the State of Missouri, and for any such further relief this court deems just and proper.” Amended Complaint at 10:3-5. Plaintiffs, however, lack standing to seek such a declaratory judgment. Because this action has been removed to federal court, Plaintiffs’ declaratory judgment claim is converted to a claim brought under the Federal Declaratory Judgment Act, 28 U.S.C. § 2201. See Inst. for Studies Abroad, Inc. v. Int'l Studies Abroad, Inc., 263 F.Supp.2d 1154, 1156 (S.D.Ind.2001) (“The federal, rather than the state, Declaratory Judgment Act controls this litigation, despite the fact that this litigation was brought pursuant to [an] Indiana statute[.]”). Under the Erie doctrine, federal courts sitting in diversity apply state substantive law and federal procedural law, and the Act is a procedural Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 9 of 15 10 55907891.2 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 28 statute. Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938); West Publ'g Co. v.. McColgan, 138 F.2d 320, 324 (9th Cir.1943) (“The Federal Declaratory Judgment Act was not a jurisdiction-conferring statute, but an act to establish a new procedure in the federal courts.... ‘Thus, the operation of the Declaratory Judgment Act is procedural only.’”) (citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240 (1937)); see also Fischer & Porter Co. v. Moorco Int'l, Inc., 869 F.Supp. 323, 326 (E.D.Pa.1994) (“Case law indicates that the Act is procedural in nature, and therefore federal law, not state law, governs whether claims may be heard under it.”) (citation omitted); Carlson Holdings, Inc. v. NAFCO Ins. Co., 205 F.Supp.2d 1069, 1074 (D.Minn.2001) (“[D]eclaratory judgment acts are procedural rules and, thus, in a diversity case, the Federal Declaratory Judgment Act should apply.”) (citing Skelly Oil Co. v. Phillips Petro. Co., 339 U.S. 667, 671 (1950)). The Act provides that “[i]n a case of actual controversy within its jurisdiction, ... any court of the United States ... may declare the rights and other legal relations of any interested party seeking such declaration [.]” 28 U.S.C. § 2201(a) (emphasis added). Thus, the Act incorporates the Article III mandate that federal courts exercise jurisdiction only over an actual case or controversy. See U.S. Const. Art. III, § 2; Aetna Life Ins. Co., 300 U.S. at 240 (“The Declaratory Judgment Act of 1934, in its limitation to ‘cases of actual controversy,’ manifestly has regard to the constitutional provision and is operative only in respect to controversies which are such in the constitutional sense.”); Gov't Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1222 (9th Cir.1998) (“A lawsuit seeking federal declaratory relief must first present an actual case or controversy within the meaning of Article III, section 2 of the United States Constitution.”); see also Fischer & Porter Co., 869 F.Supp. at 326 (“The Act incorporates Article II's requirement that federal courts only entertain cases and controversies.”); Standard Fire Ins. Co. v. Sassin, 894 F.Supp. 1023, 1026 (N.D.Tex.1995) (“The Declaratory Judgment Act does not exempt federal district courts from the constitutional requirements that there be an actual controversy between the parties.”). Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 10 of 15 11 55907891.2 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 28 The analysis of whether an actual controversy exists under the Act addresses whether the facts show that “there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Golden v. Zwickler, 394 U.S. 103, 108 (1969) (quoting Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)). In other words, in order to establish standing for their declaratory relief claims, Plaintiffs must show a favorable decision may redress their injuries. Ctr. for Biological Diversity v. Hagel, 80 F. Supp. 3d 991, 1015 (N.D. Cal. 2015), appeal dismissed (May 29, 2015) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). Plaintiffs must show there is a “direct relationship between the alleged injury” they seek to remedy “and the claim sought to be adjudicated.” Linda R.S. v. Richard D., 410 U.S. 614, 618, 93 S.Ct. 1146, 35 L.Ed.2d 536 (1973). Here, Plaintiffs and Knight have no present adverse legal interests that will be remedied by Plaintiffs’ claim for declaratory judgment. There was no privity of contract between Plaintiffs and Knight as to the contract for insurance. See Section III(B)(1), supra. Further, given that Knight did not enter into a contract for the sale of insurance with Plaintiffs, there is no direct relationship between the alleged injury - the breach of the insurance contract - and the remedy - a declaration as to Knight’s legal right to sell insurance. As such, Plaintiffs lack standing to bring a declaratory judgment action against Knight related to that contract. Further, Plaintiffs do not have a private right of action to seek a declaration regarding Knight’s right to sell insurance. Missouri law provides no such cause of action. See Saunders v. Farmers Ins. Exch., 515 F. Supp. 2d 1009, 1014 (W.D. Mo. 2007), aff'd, 537 F.3d 961 (8th Cir. 2008) (noting that Missouri courts had observed that, in Missouri, there is no private right of action for violations of insurance statutes and regulations, but that insurance companies were still subject to common law claims for fraud, breach of contract, breach of duty of good faith and fair dealing). Similarly, Arizona law provides that the Director of the Department of Insurance shall direct any violation of state insurance law Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 11 of 15 12 55907891.2 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 28 to the state attorney general, who shall bring and prosecute such action. A.R.S. § 20- 152(A). The statute explicitly provides that the attorney general shall prosecute “all proceedings brought” pursuant Arizona statutes regulating the insurance industry. A.R.S. § 20-152(C)(emphasis added). Accordingly, Plaintiffs have no private right of action to a declaratory judgment regarding Knight’s right to sell insurance in either Missouri or Arizona. Plaintiffs’ third claim should be dismissed. 4. Count IV - Tortious Interference with Business Expectancy Plaintiffs also fail to sufficiently plead plausible facts in support of their claim for tortious interference with business expectancy. To state a plausible claim for tortious interference with business expectancy, a plaintiff must be able to “identify a specific relationship with which the defendant interfered.” ThermoLife Int'l, LLC v. Gaspari Nutrition, Inc., 871 F. Supp. 2d 905, 912 (D. Ariz. 2012) (citing Dube v. Likins, 216 Ariz. 406, 414, 167 P.3d 93 (Ct.App.2007)). Further, a party must identify the specific individual who committed the alleged tort. See Morris, 2007 WL 1521716, at *2. Here, Plaintiffs fail to identify any specific relationship with which Knight interfered or the individual who committed the act constituting the interference. Plaintiffs allege only that:  “Sayles Transportation had numerous contracts or “rate confirmations” from Transportation company brokers seeking to do business with, and actually doing business with, Sayles Transportation Company.” Amended Complaint at ¶ 71.  “Knight, in directly and indirectly providing the aforementioned transportation company brokers with false and unlawful information, to-wit: that Sayles transportstion [sic] was not covered by any policy of insurance during the relevant time periods, breach or induced the breach of these contract/“rate confirmations” without legal justification or excuse.” Id. at 72. Accordingly, Plaintiffs’ fourth claim should be dismissed. 5. Count V - Fraudulent Misrepresentation Federal Rule of Civil Procedure 9(b) requires that, when fraud is alleged, “a party must state with particularity the circumstances constituting fraud....” Kearns v. Ford Motor Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 12 of 15 13 55907891.2 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 28 Co., 567 F.3d 1120, 1124 (9th Cir. 2009); Fed.R.Civ.P. 9(b). “Rule 9(b) demands that the circumstances constituting the alleged fraud be specific enough to give defendants notice of the particular misconduct ... so that they can defend against the charge and not just deny that they have done anything wrong.” Id. (internal quotations omitted). Accordingly, “[a]verments of fraud must be accompanied by ‘the who, what, when, where, and how’ of the misconduct charged.” Id. Rule 9(b) serves three purposes. Id. at 1125. First, “to provide defendants with adequate notice to allow them to defend the charge and deter plaintiffs from the filing of complaints as a pretext for the discovery of unknown wrongs.” Id. (internal quotations omitted). Second, to protect those whose reputation would be harmed as a result of being subject to fraud charges. Id. And third, to “prohibit [ ] plaintiff[s] from unilaterally imposing upon the court, the parties and society enormous social and economic costs absent some factual basis.” Id. (internal quotations omitted, brackets in original). In Count V, entitled “Fraudulent Misrepresentation,” Plaintiffs allege that Knight made representations it knew to be false. Plaintiffs do not identify who allegedly made the misrepresentations, other than to say that the misrepresentations were made by Knight’s representatives, “including their attorney and legal counsel.” 6 Amended Complaint at ¶ 81. Such conclusory pleading does not meet the requisite particularity standard. Plaintiffs must identify the person making the alleged misrepresentation (the “who”). Snyder v. HSBC Bank, USA, N.A., 913 F. Supp. 2d 755, 774 (D. Ariz. 2012). Plaintiffs have also failed to identify when or how any of the alleged misrepresentations were made. For example, Plaintiffs allege that “Knight also made at least one representation that Plaintiff’s insurance policy was cancelled which in fact such was not the case.” Amended Complaint at ¶ 78. Again, Plaintiffs have not met the particularity standard because they must plead the time, 6 Plaintiffs do allege that on March 3, 2016, Ostwinkle of Transtar communicated to Plaintiffs that their coverage had been canceled. However, Ostwinkle is not alleged to be a representative of Knight, but rather, a representative of Transtar. See Amended Complaint at ¶ 29. Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 13 of 15 14 55907891.2 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 28 place and nature of the alleged fraud. Id. (citing Moore v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th Cir.1989)). Finally, in Paragraph 64 of the Complaint, Plaintiffs allege that “[a]ttached hereto and incorporated by reference are written email transmissions from Knight agents and employees which support Plaintiffs’ contentions made here.” No e-mails were attached to the Amended Complaint. 7 Because Plaintiffs’ have failed to plead the circumstances constituting fraud with the requisite particularity, Plaintiffs’ fifth claim should be dismissed. III. CONCLUSION Plaintiffs’ Amended Complaint is Plaintiffs’ second attempt to plead their claims with the requisite plausibility and specificity. Plaintiffs have not accomplished that objective. For the reasons set forth herein, Knight respectfully requests this Court to dismiss Plaintiffs’ Complaint in its entirety for failure to state a claim upon which relief may be granted pursuant to Fed. R. Civ. P. 12(b)(6). RESPECTFULLY SUBMITTED this 3rd day of February, 2017. POLSINELLI PC By: s/ Rebecca N. Cain Rebecca N. Cain 1 E. Washington Street, Suite 1200 Phoenix, AZ 85004 James C. Sullivan (motion for admission pro hac vice pending) 900 W. 48th Place, Suite 900 Kansas City, MO 64112 Attorneys for Defendant 7 Plaintiffs made a similar claim in their original “Complaint”, but no emails were attached to that document either, as pointed out in Knight’s Motion for More Definite Statement. See Doc. No. 39. Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 14 of 15 15 55907891.2 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 28 CERTIFICATE OF SERVICE I hereby certify that on February 3, 2017, I electronically transmitted the foregoing document to the U.S. District Court Clerk’s Office by using the CM/ECF System for filing and transmittal of a Notice of Electronic filing to all parties appearing in this matter. I further certify that on February 3, 2017, I served the below listed parties via United States mail, postage prepaid: Jason Sayles 11931 Roseview Lane St. Louis, MO 63138 Jamison Stiriling 11931 Roseview Lane St. Louis, MO 63138 s/ Rebecca N. Cain Case 2:16-cv-04235-JAT Document 49 Filed 02/03/17 Page 15 of 15