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Arvon v. Liberty Mutual Fire Insurance Co.

United States District Court, D. Maryland

March 1, 2019

BIEJAN ARVON, Plaintiff,
v.
LIBERTY MUTUAL FIRE INSURANCE CO., Defendant/Third-Party Plaintiff,
v.
MARC SELDIN ROSEN, ESQ. and THE LAW OFFICES OF MARC SELDIN ROSEN, LLC, Third-Party Defendants.

          MEMORANDUM OPINION

          BETH P. GESNER, CHIEF UNITED STATES MAGISTRATE JUDGE

         Currently pending before the court are third-party defendants Marc Seldin Rosen, Esq., and the Law Offices of Marc Seldin Rosen's (“Rosen”) Motion to Dismiss Third-Party Complaint (“Motion to Dismiss”) (ECF No. 70), Liberty Mutual Fire Insurance Company's (“Liberty” or “defendant's”) Opposition to Motion to Dismiss the Third-Party Complaint (“Opposition”) (ECF No. 71), and Rosen's Reply in Support of Rosen's Motion to Dismiss Third-Party Complaint (“Reply”) (ECF No. 74). The issues are fully briefed, and no hearing is necessary. Loc. R. 105.6. For the reasons stated below, Rosen's Motion to Dismiss (ECF No. 70) is granted in part and denied in part.

         I. BACKGROUND

         This case arises out of a car accident that occurred on July 8, 2011 between plaintiff and two individuals, Alireza Gol (“Gol”) and Hamed Khodaparasti Dehboneh (“Khodaparasti”). (ECF No. 2 at 3). Plaintiff was taken from the scene by medical professionals without exchanging information with the other individuals. (ECF No. 2 at 2). After the accident, plaintiff was contacted by defendant, ostensibly on behalf of one of its insureds, Puya Shakiba (“Shakiba”), who, unbeknownst to plaintiff, was not involved in the accident. Id. Plaintiff alleged that he “was led to believe through many written communications by [defendant] that Mr. Shakiba was the insured party at fault.” Id. Plaintiff further alleged that defendant paid for plaintiff's property damage claims under Shakiba's name, requested plaintiff's medical records on Shakiba's behalf, “repeatedly identified Mr. Shakiba as the responsible insured, ” and “repeatedly offer[ed] to negotiate a settlement on behalf of Mr. Shakiba” without ever mentioning Gol or Khodaparasti. (ECF No. 2 at 2-3). Plaintiff also alleged that his counsel, Marc Rosen, attempted to negotiate a settlement with defendant, but defendant's misrepresentations continued in its conversations with Rosen, and defendant “delayed in responding to Rosen's demands in order to allow the limitations period to pass.” (ECF No. 70-1 at 3).

         Plaintiff filed suit against Shakiba in the Baltimore County Circuit Court before the expiration of the statute of limitations. Id. After the statute of limitations expired, however, defendant allegedly “disclosed for the first time that the wrong person had been named in their previous communications and in [plaintiff's] Complaint.” Id. Defendant identified the driver of the vehicle as Gol, and the owner and passenger of the vehicle as Khodaparasti. Id. Shakiba, the roommate of Gol and Khodaparasti, was not involved in the accident. (ECF No. 2 at 2). Plaintiff filed an amended complaint adding Gol and Khodaparasti as defendants, but all defendants were granted summary judgment. (ECF No. 70-1 at 3). Plaintiff appealed to the Maryland Court of Special Appeals, arguing that his amended complaint related back to his original complaint, and that he was misled by false representations made by Liberty, in an effort to delay him from correcting the named defendants until after the limitations period passed. (ECF No. 24 at 5-8). The Court of Special Appeals affirmed the Circuit Court's decision and held that summary judgment was proper as to Shakiba because he was not involved in the accident and therefore breached no duty he owed the plaintiff. (ECF No. 10-3 at 6). The court also held that summary judgment was proper as to Gol and Khodaparasti based on the expiration of the statute of limitations. (ECF No. 10-3 at 7). Applying the doctrine of equitable tolling, the court held that plaintiff's limitations period was not tolled because the plaintiff failed to exercise reasonable care and due diligence by not obtaining the police report from the accident, which identified Gol and Khodaparasti as the responsible parties. (ECF No. 10-3 at 9-10). Regardless of whether Liberty's conduct was intentional or mistaken, the court noted that plaintiff had access to the necessary information and Liberty was under no duty to tell plaintiff who to sue. Id.

         Plaintiff then filed the present lawsuit against defendant alleging both negligent and intentional misrepresentation. (ECF No. 2 at 8-10). Defendant sought leave to file a third-party complaint against plaintiff's former attorney, Rosen, alleging that any injury suffered by the plaintiff was due to the negligent acts and/or omissions of Rosen, as plaintiff's attorney, in failing to obtain the police report from the underlying accident which would have identified the driver of the other vehicle. (ECF No. 40-1 at 1-6). This request was granted (ECF No. 50), and defendant filed a third-party complaint against Marc Seldin Rosen, Esq., and the Law Offices of Marc Seldin Rosen (“Rosen”) (ECF No. 51). This third-party complaint contains two counts seeking indemnification and contribution from Rosen in the event that defendant is held liable. Id. at 6-7. Rosen then filed the instant motion to dismiss. (ECF No. 70).

         II. STANDARD OF REVIEW

         The purpose of a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) is to test the legal sufficiency of a complaint. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). When ruling on such a motion, the court must “accept[] all well-pleaded allegations in the plaintiff's complaint as true” and “draw[] all reasonable factual inferences from those facts in the plaintiff's favor.”[1] Id. at 244. Nonetheless, “[t]he mere recital of elements of a cause of action, supported only by conclusory statements, is not sufficient to survive a motion made pursuant to Rule 12(b)(6).” Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Rather, “a complaint must contain sufficient factual matter . . . to state a claim to relief that is plausible on its face.” Ashcroft, 556 U.S. at 678 (internal citation and quotation marks omitted). A plaintiff satisfies this standard not by forecasting evidence sufficient to prove the elements of the claim, but by alleging sufficient facts to establish those elements. Walters, 684 F.3d at 439. Accordingly, “while a plaintiff does not need to demonstrate in a complaint that the right to relief is ‘probable,' the complaint must advance the plaintiff's claim ‘across the line from conceivable to plausible.'” Id. (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

         III. DISCUSSION

         A. Count I-Indemnification

         The parties agree that “[a] party may be entitled to receive indemnification where his own conduct, although negligent, is considered to be passive or secondary.” Pyramid Condo. Ass'n v. Morgan, 606 F.Supp. 592, 596 (D. Md. 1985). “The determination of whether a tortfeasor's negligence is active or passive must be made by referring to the plaintiff's complaint against the defendant seeking to implead the third party.” Id. (citing Tesch v. United States, 546 F.Supp. 526, 529 (E.D. Pa. 1982)). “If the plaintiff's complaint alleges conduct by the third-party plaintiff that would constitute active negligence, or if it is clear from the circumstances revealed by the plaintiff's complaint that the defendant's (third-party plaintiff) liability would only arise, if at all, from proof of active negligence, there is no basis for an indemnity claim and dismissal of the claim is appropriate.” Id. (citations omitted).

         Rosen argues that defendant's claim for indemnification fails because indemnification is only available for passive negligence and plaintiff's claims against defendant allege active negligence. (ECF No. 70-1 at 4). Specifically, Rosen argues that plaintiff alleges “a series of active steps by [defendant] to wrongfully identify Puya Shakiba as the driver of the vehicle, including: communicating with [plaintiff] on his behalf, requesting medical records, settling a property damage claim on behalf of Shakiba, and repeatedly identifying Shakiba as the only party of interest to the dispute.” (ECF No. 70-1 at 6 (citing ECF No. 2 at ¶¶ 5-16)). Defendant argues that it is entitled to indemnification because plaintiff alleged facts as to defendant's conduct that could be considered passive, specifically, that defendant failed to correct misstatements made by Rosen regarding Shakiba's participation in the accident. (ECF No. 71 at 11). Defendant further argues that Rosen's actions and his related duties to his client “differ substantially to those of [defendant], and should be considered active negligence.” Id. at 12.

         Here, it is clear from the complaint that plaintiff alleges conduct by the third-party plaintiff that would constitute active negligence. This court addressed a similar situation in Renick et al. v. Sperau et al., Civil No. CCB-12-1627, 2013 WL 1314417 (D. Md. Mar. 29, 2013). There, the plaintiffs bought a house that contained lead paint hazards from the defendants and sued the defendants for violations of the Residential Lead-Based Paint Hazard Reduction Act (“RLPHRA”), intentional misrepresentation, and negligent misrepresentation, based on defendants' initialing of affirmative statements “and thereby affirmatively representing that no lead paint hazards existed in the house.” Id. at *6. The defendants then filed a third-party complaint, seeking indemnity from their realtor and its agent as third-party defendants. Id. at *1. The court granted the third-party defendants' motion to dismiss, finding that, for the plaintiffs to succeed on any of their counts, the defendants “must be found to have committed active negligence, ” and “a reasonable jury could not determine that [defendants] were only passively negligent and grant indemnity” to defendants on that basis. Id. Similarly, here, plaintiff alleges that defendant made “many misrepresentations of fact pertaining to the identity of its insured driver, including its settlement of the property damage claim in the name of someone other than the driver at fault.” (ECF No. 2 at ¶ 27). Accordingly, as in Renick, plaintiff alleges that defendant committed active negligence, rather than passive negligence.

         Defendant's additional arguments that indemnification is proper are without merit. While plaintiff has “alleged that [defendant] failed to correct misstatements made by [Rosen] regarding Mr. Shakiba's participation in the accident, ” as noted by defendant (ECF No. 71 at 11), this occurred after defendant allegedly made affirmative misrepresentations of fact. Accordingly, for the trier of fact to determine that defendant was passively negligent by failing to correct these misstatements, it would have to first find that defendant was actively negligent by making the misstatements, which would preclude defendant from receiving indemnity from Rosen. Defendant also argues that Rosen's actions should be considered active negligence because “Mr. Rosen's actions and the related duties Mr. Rosen held towards his client differ substantially to those of Liberty.” (ECF No. 71 at 12). This argument fails, however, because plaintiff alleges that ...


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