ase 5:20-cv-O2663 Document 1 Filed 12/29/20 Page 1 of 12 Page ID #:1
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`KRIST J. SMITH (SBN 120218)
`Interim Ci Attorne
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`1
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`2 Assistant Ci Attorne
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`gawgggygggm FEES
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`REBECCthyMCKEEISBN 279485)
`DEBRA K. OOK (SiéN 250114)
`3 De “8/ CitjfiAttome
`OPITI DO THE CITY ATTORNEY
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`3750 Unlver31t¥ Avenue Snite 250
`RiverSIde, Call ornIa 92501
`5 Telephone 951) 826—5567
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`FaCSImIIe ( 51) 826-5540
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`Attorne s for Plaintiff
`7 CITY F RIVERSIDE, A Califorma charter City and munICIpal corporation
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`12 CITY OF RIVERSIDE, a municipal
`corporation,
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`CASE NO: 5:20-CV—02663
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`Plaintiff,
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`V.
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`BIRD RIDES INC. a Delaware
`co oration; CERTAIN
`UNIDERWRITERS AT LLOYD’S
`“3 LONDON; and DOES 1 through 20
`19
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`COMPLAINT FOR DAMAGES:
`(1; Breach of Contract
`2
`, Breach of the-Implied
`Coyenantof Good Faith and
`Fair Dealing
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`[DEMAND FOR JURY TRIAL]
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`Defendants.
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`PARTIES
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`1.
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`Plaintiff CITY OF RIVERSIDE (“City” or “P1aintifi”) brings this
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`action seeking compensatory damages against Defendants BIRD RIDES, INC.
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`(“Bird”) and CERTAIN UNDERWRITERS AT LLOYD’S LONDON
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`(“Underwriters”) (together, “Defendants”) for breach of contract and breach of the
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`Implied Covenant Of Good Faith and Fair Dealing.
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`~1"
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`COMPLAINT
`[Demand for Jury Trial]
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`2.
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`Plaintiff CITY is and was at the time of the transactions complained
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`of in this action a California charter city and municipal corporation organized and
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`existing under the laws of the State of California, and operating as a California
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`public entity located at 3900 Main Street, Riverside, California 92501. The City is
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`governed by a City Council with seven members and a Mayor.
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`3.
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`Defendant BIRD is and was at the time of the transactions complained
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`of in this action a Delaware corporation with its principal office located at 406
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`Broadway #369, Santa Monica, California 90401.
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`4.
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`On or about April 17, 2019 CITY and BIRD entered into a contract to
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`establish interim rules and regulations governing the operation of Stand-up electric
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`scooters sharing systems within the City of Riverside (“Interim Agreement”). A
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`true and correct copy of the Interim Agreement is attached as Exhibit “1” and is
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`incorporated by reference into this Complaint.
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`5.
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`On information an belief, Defendant UNDERWRITERS, are
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`individuals who are individuals who are citizens of, and/or business entities created
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`under the laws of England or other foreign nations and are members of a syndicate
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`subscribing to that Commercial General Liability Policy Number
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`B05 95XN5846019 issued to Defendant BIRD with Plaintiff CITY as an additional
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`insured (“Policy”).
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`6.
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`On or about April 17, 2019 CITY and UNDERWRITERS entered into
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`a contract of insurance pursuant to the Policy. A true and correct copy of the
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`Policy certificates and endorsements are attached as Exhibit “2” and are
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`incorporated by reference into this Complaint.
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`7.
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`Defendants, DOES 1 through 20, inclusive, are individuals and/or
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`business entities. The true names and capacities of the parties identified as DOES
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`1 through 20 are unknown to Plaintiff, who will seek the Court’s permission to
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`amend this pleading in order to allege the true names and capacities as soon as they
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`-3-
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`COMPLAINT
`[Demand for Jury Trial]
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`

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`ase 5:20-cv-O2663 Document 1 Filed 12/29/20 Page 3 of 12 Page ID #:3
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`are ascertained. Plaintiff is informed and believes and therefore alleges that each
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`of the fictitiously named Defendants is responsible in some manner for the
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`occurrences alleged in this Complaint and that Plaintiffs damages as alleged were
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`proximately caused by said Defendants.
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`JURISDICTION AND VENUE
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`8.
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`Jurisdiction is proper in this Court because there is complete diversity
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`between Plaintiff and Defendants, and the amount in controversy exceeds $75,000
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`exclusive of interest pursuant to 28 U.S.C. §§ 1332.
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`9.
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`Venue is proper in the Central District of California under 28 U.S.C. §
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`1391 because the acts giving rise to the claims against Defendant occurred in this
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`District.
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`FACTUAL ALLEGATIONS
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`10.
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`On April 17, 2019, the CITY entered into the Interim Agreement with
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`BIRD.
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`11.
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`Pursuant to the Interim Agreement, BIRD was permitted to operate its
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`Stand-up Electric Scooter Sharing Systems (“Scooters”) in the City of Riverside
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`subject to the rules and regulations set forth in the Interim Agreement.
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`12.
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`There are two relevant terms of the Interim Agreement that are at
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`issue in this action: (1) Insurance and (2) Indemnification.
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`13.
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`The relevant portions of the Insurance term are as follows:
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`“1 1. Insurance
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`11.1 General Provisions. Prior to the City’s
`execution of this Agreement, Company shall procure at
`its own expense, and provide satisfactory evidence of,
`and shall thereafter maintain, during the term of this
`Agreement, such insurance policies and coverages I the
`types, limits, forms and ratings required herein. The
`rating and required insurance policies and coverages may
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`'3'
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`COMPLAINT
`[Demand for July Trial]
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`be modified in writing by the City’s Risk Manager or
`City Attorney, or a designee, unless such modification is
`prohibited by law.
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`11.3 Commercial General Liability and
`Automobile Insurance. Prior to the City’s execution of
`this Agreement, Company shall obtain, and shall
`thereafter maintain during the term of this Agreement,
`commercial general liability insurance and automobile
`insurance as required to insure Company against
`damages for personal injury, including accidental death,
`as well as from claims for property damage, which may
`arise from or which may concern operations by anyone
`directly or indirectly employed by, connected with,
`acting for or on behalf of Company, and/or anyone
`using/renting/riding Company’s equipment. The City,
`and its officers, employees and agents, shall be named as
`additional insured under the Company’s insurance
`policies.
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`11.3.1 Company’s Commercial General
`Liability (CGL) insurance policy shall be on an
`occurrence basis and shall cover both bodily injury
`(including death) and property damage (including, but
`not limited to, premises, products and completed
`operations, independent contractor’s liability, personal
`and advertising injury, and contractual liability) in an
`amount not less than $5,000,000 per occurrence and
`$5,000,000 aggregate, which may be a combination of
`general liability and umbrella/excess liability insurance.
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`11.3. 1 .a. The City of Riverside, its
`officers, employees and agents are to be added as
`additional insureds on the CGL policy, which can be
`done by endorsement. The City will accept endorsement
`forms CG 20101185, or CG 20 10 / CG 20 26/ CG 20
`33 CG 20 38 with CG 2037.”
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`COMPLAINT
`[Demand for Jury Trial]
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`17.
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`The CITY tendered indemnity and defense of the Liability Action to
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`both BIRD and UNDERWRITERS by written demand beginning on July 23, 2019
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`and continuing through December 2020 pursuant to the notice terms of the Interim
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`Agreement and/or Policy. All tenders for defense and indemnity were either
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`unanswered or denied.
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`18.
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`The Liability Action against the CITY was eventually dismissed after
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`considerable law and motion challenges.
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`19.
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`The CITY incurred attorneys’ fees in excess of $150,000 to defend the
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`Liability Action to a final resolution.
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`20.
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`The CITY has made several good faith and reasonable attempts to
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`informally resolve this matter, but BIRD and UNDERWRITERS failed to
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`cooperate and defeated such efforts.
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`FIRST CLAIM
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`Breach of Contract
`Against DEFENDANT BIRD, UNDERWRITERS mam-Es 1-20
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`21.
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`Plaintiff re-alleges and incorporates each allegation in Paragraphs 1
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`through 20 of this Complaint as though fully set forth here.
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`22. Under the Interim Agreement, BIRD owes a duty to defend and
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`indemnify the CITY for the Liability Action. The CITY timely, pursuant to the
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`written terms of the Interim Agreement tendered the defense of the Liability
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`Action to BIRD. BIRD never responded to the tender of defense and the CITY
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`incurred in excess of $150,000 in attorneys’ fees to defend the Liability Action.
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`CITY performed all of its duties under the Interim Agreement and all conditions
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`precedent have been fulfilled except those duties and conditions for which
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`performance has been waived or excused.
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`23. Under the Policy, UNDERWRITERS owes the CITY a defense to the
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`Liability Action. The CITY timely, pursuant to the written terms of the Policy.
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`'6'
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`COMPLAINT
`[Demand for Jury Trial]
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`ase 5:20-cv-02663 Document 1 Filed 12/29/20 Page 7 of 12 Page ID #:7
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`UNDERWRITERS either never responded or untimely responded to the tendered
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`action and the CITY incurred $150,000 in attorneys’ fees to defend the Liability
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`Action. CITY performed all of its duties under the Policy and all conditions
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`precedent have been fulfilled except those duties and conditions for which
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`performance has been waived or excused.
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`24. As a direct and proximate result of BIRD’S breaches of its contractual
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`duties, CITY has sustained economic damages, including attorney’s fees, in
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`amounts according to proof.
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`25. As a direct and proximate result of UNDERWRITER’S breaches of its
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`contractual duties, CITY has sustained economic damages, including attorney’s
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`fees, in amounts according to proof.
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`26. UNDERWRITER’S breaches of the Policy were committed-
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`knowingly, unreasonably, and maliciously with the intent to wrongfully deprive
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`CITY of the benefits due under the Policy, and due to UNDERWRITER’S tortious
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`breaches of the Policy, CITY has been forced to incur attorney’s fees to assist it in
`obtaining Policy benefits that are being unreasonably withheld by
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`UNDERWRITERS.
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`27. Upon information and belief, the CITY alleges that BIRD may be
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`partially self-insured for the Policy. Therefore, BIRD’s breaches of the Policy
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`were committed knowingly, unreasonably, and maliciously with the intent to
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`wrongfully deprive CITY of the benefits due under the Policy, and due to BIRD’s
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`tortious breaches of the Policy, CITY has been forced to incur attorney’s fees to
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`assist it in obtaining Policy benefits that are being unreasonably withheld by BIRD.
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`SECOND CLAIM
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`Breach of the Implied Covenant of Good Faith and Fair Dealing
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`Against DEFENDANT BIRD, UNDERWRITERS and DOES 1-20
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`28.
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`Plaintiff re-alleges and incorporates each allegation in Paragraphs 1
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`through 27 of this Complaint as though fully set forth here.
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`-7-
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`COMPLAINT
`[Demand for Jury Trial]
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`ase 5:20-cv-O2663 Document 1 Filed 12/29/20 Page 8 of 12 Page ID #:8
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`29. UNDERWRITER’S and BIRD’s fraudulent, oppressive, unreasonable
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`and wrongful withholding of benefits due to CITY without proper cause, and their
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`fraudulent, oppressive, unreasonable, inadequate and result—oriented investigation
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`into CITY’S request for Policy benefits due and owing, and their intentional and
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`knowingly improper misrepresentations of the Policy and the law, and their
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`wrongful failure to defend CITY against third-party claims all constitute breaches
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`of the implied covenant of good faith and fair dealing, which conduct includes, but
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`is not limited to:
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`a.
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`Refusing and failing to promptly provide a coverage
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`determination despite being aware of CITY’S financial hardship
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`and the litigation threatened by the class-action lawsuit against
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`the CITY;
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`RefiJsing and filing to defend CITY against the Liability Action
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`despite the actual or alleged facts and extrinsic evidence known
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`by or available to UNDERWRITERS and BIRD that other cities
`in Southern California were being alleged in the Liability
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`Action, and they were being defended by BIRD and its insurers;
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`Refusing and failing to adequately investigate and evaluate the
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`actual or alleged facts and extrinsic evidence known by or ,
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`available to UNDERWRITERS and BIRD BIRD that other
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`cities in Southern California were being alleged in the Liability
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`Action, and they were being defended by BIRD and its insurers;
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`Intentionally misrepresenting certain provision and their
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`obligations under the Policy and/or the Interim Agreement, such
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`as disavowing their contractual obligations of any kind;
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`Refusing and failing to reconsider their constructive denial
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`(through nonresponse) to the CITY tender of defense under the
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`Policy, including consideration of the information and
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`-8~
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`COMPLAINT
`[Demand for Jury Trial]
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`documentation that demonstrates, or at least potentially gives
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`rise to, coverage under the Policy as outlined in the City’s
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`various tenders;
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`f.
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`Unreasonably withholding payments owed to CITY without
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`proper cause for its attorneys’ fees incurred to defend the
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`Liability Action.
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`30. UNDERWRITER’S and BIRD’s breaches constitute violations of the
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`Unfair Settlement Practices Act under California Insurance Code section
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`790.03(h), as promulgated on January 15, 1993 through the California Code of
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`Regulations section 2695.1, et seq.
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`31. UNDERWRITER’S and BIRD’s tortious breaches of the Policy were
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`and are intended by them to cause pecuniary harm to the CITY for
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`UNDERWRITER’S and BIRD’s own pecuniary gain and they have actually and
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`proximately caused harm to the CITY. UNDERWRITER’S and BIRD’s acts were
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`and are being committed with reckless indifference toward the CITY’S rights and
`with an knowing disregard of the harmful consequences oftheir actions such that
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`UNDERWRITER’S and BIRD’s actions complained of were and are fraudulent,
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`malicious and oppressive toward the CITY as defined under California Civil Code
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`§ 3294.
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`32. UNDERWRITER’S and BIRD’s actions were performed by their
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`officers, directors or managing agents, or were performed with the prior approval
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`of, or were subsequently ratified by said officers, directors or managing agents.
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`33. As a proximate result of UNDERWRITER’S and BIRD’s actions, the
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`CITY has incurred general and special damages in amounts to be proven at trial
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`that are in excess of the jurisdictional minimum of this Court. These damages
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`include, but are not limited to, Policy benefits owed and interest thereon, attorneys’
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`fees and costs in seeking to obtain benefits due and owing to CITY under the
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`Policy, and other consequential damages. CITY also seeks an award of punitive
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`-9-
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`COMPLAINT
`[Demand for Jury Trial]
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`ase 5:20-cv-O2663 Document 1 Filed 12/29/20 Page 10 of 12 Page ID #:10
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`damages that is sufficient to deter UNDERWRITER and BIRD from future
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`misconduct of the nature complained of in this action.
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`PRAYER FOR RELIEF
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`Wherefore, CITY demands judgment against Defendants, and each of them,
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`as follows:
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`trial;
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`A.
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`B.
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`C.
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`D.
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`E.
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`F
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`G.
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`Contract damages in an amount to be proven at trial;
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`Other consequential damages in an amount to be proven at trial;
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`Reasonable attorneys’ fees and costs in an amount to be proven at
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`Costs of suit incurred;
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`Pre-judgment interest;
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`Punitive Damages; and
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`Such other and further relief as the Court deems proper.
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`DATED: December 29, 2020
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`KRISTI J. SMITH, Interim City Attorney
`REBECCA MCKEE, Asst. City Attorney
`DEBRA K. COOK, Deputy City Attorney
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`By:_/s/ Debra K. Cook
`DEBRA K. COOK
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`Attorneys for Plaintiff,
`CITY OF RIVERSIDE
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`COMPLAINT
`[Demand for Jury Trial]
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`DEMAND FOR JURY TRIAL
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`Pursuant to Federal Rule of Civil Procedure 38(b), CITY demands atrial by
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`jury of all issues so triable.
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`DATED: December 29, 2020
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`KRISTI J. SMITH, Interim City Attorney
`REBECCA MCKEE, Asst. City Attorney
`DEBRA K. COOK, Deputy City Attorney
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`By:_ls/ Debra K. Cook
`DEBRA K. COOK
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`Attorneys for Plaintiff,
`CITY OF RIVERSIDE
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`-11-
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`COMPLAINT
`[Demand for Jury Trial]
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`se 5:20-cv-O2663 Document 1 Filed 12/29/20 Page 12 of 12 Page ID #:12
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`SIGNATURE ATTESTATION
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`Pursuant to Civil L.R. 5—4.3.4(a)(2)(i), I hereby attest that all other
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`signatories listed, and on whose behalf the filing is submitted, concur in this
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`document's content and have authorized the filing of this document with the use of
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`their electronic signature.
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`DATED: December 29, 2020
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`KRISTI J. SMITH, Interim City Attorney
`REBECCA MCKEE, Asst. City Attorney
`DEBRA K. COOK, Deputy City Attorney
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`By:_/s/ Debra K. Cook
`DEBRA K. COOK
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`Attorneys for Defendants,
`CITY OF RIVERSIDE and JAMES PERRY
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`-12-
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`COMPLAINT
`[Demand for Jury Trial]
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