CHRISTOPHER FRENCH PLAINTIFFS v. AMAZON COM INC DEFENDANTS (2025)

ORDER

Before the Court is separate defendant Amazon.com, Inc.'s (“Amazon”) motion to dismiss separate plaintiff Technology Insurance Company, Inc.'s (“Technology Insurance”) complaint (Dkt. No. 13). Technology Insurance responded to the motion (Dkt. No. 16). Amazon filed a reply (Dkt. No. 22). For the following reasons, the Court denies Amazon's motion to dismiss Technology Insurance's complaint (Dkt. No. 13).

I. Background

Unless otherwise noted, the following facts are taken from plaintiffs Christopher French and Technology Insurance's (collectively “Plaintiffs”) amended complaint (Dkt. No. 8). For purposes of resolving the pending motion to dismiss, the Court accepts as true Plaintiffs' factual allegations and views those factual allegations in the light most favorable to Plaintiffs.

Plaintiffs bring this action pursuant to the Arkansas Products Liability Act, Arkansas Code Annotated §§ 16-116-201 to 207, against defendants Amazon, Viowind USA, Zhejiang Mingfeng Industry & Trade Co. Ltd., Wolfwise Inc., New Eastwest Co. Ltd., Eastwest Electronic Commerce Co. US Ltd., and John Does 1-2 (collectively “Defendants”) (Id., ¶ 14). Plaintiffs allege that a 15.5-foot aluminum telescoping ladder (hereafter referred to as the “Amazon ladder”) failed during normal, reasonable, and foreseeable use, thereby causing Mr. French's injuries (Id., ¶ 15). Defendants, some or all of them, are joint tortfeasors and are jointly and severally liable to Plaintiffs for their damages (Id., ¶ 16).

The Amazon ladder was purchased from separate defendant Amazon in Arkansas, and that purchase order was fulfilled in Arkansas (Id., ¶ 17). The Amazon ladder was purchased by Anthony I. French using a debit card with a card number that ended in 9297 (Id., ¶ 18). The Amazon ladder was purchased on January 16, 2021, and was assigned Amazon Order #114-1165282-2423468 (Id., ¶ 19). The Amazon ladder carried model number LP230011EPE (Id., ¶ 20). The Amazon ladder was manufactured in November 2020 (Id., ¶ 21). The Amazon ladder was shipped on January 18, 2021 (Id., ¶ 22). Amazon identified the seller of the Amazon ladder as Viowind (Id., ¶ 23). The Amazon ladder was designed, manufactured, produced, marketed, assembled and/or distributed by Defendants either individually and/or collectively in one or more relevant respects (Id., ¶ 24).

On January 25, 2021, Mr. French arrived at a residential property located at 406 E. Vine Ave., Searcy, Arkansas (the “subject property”) (Id., ¶ 25). Mr. French was part of a two-person crew that was set to perform work on a structure at the subject property (Id., ¶ 26). The Amazon ladder was extended and placed so that the top of the ladder leaned against the exterior wall of the structure while the base of the Amazon ladder was placed on the ground a few feet away from the base of the exterior wall of the structure (Id., ¶ 27). Mr. French and his crew partner also leaned two other ladders against the structure in the same or similar manner (Id., ¶ 28). Mr. French and his crew partner attached ladder jacks to ladders and placed a “walkboard” across the ladder jacks (Id., ¶ 29). Mr. French and his crew partner then climbed the ladders and got on top of the “walkboard” to begin attaching fascia to the structure (Id., ¶ 30). Suddenly, and without warning, the Amazon ladder failed, causing Mr. French and his crew partner to fall to the ground (the “subject incident”) (Id., ¶ 31). Mr. French sustained serious and severe bodily injuries and damages as a result of the subject incident (Id., ¶ 32).

Based on an examination of the Amazon ladder, the failure of the Amazon ladder involved one of the legs of the Amazon ladder breaking in half (Id., ¶ 33). At the time of manufacture, distribution, marketing, and sale of the Amazon ladder, the Amazon ladder was unreasonably dangerous and defectively manufactured in that the material used and/or the design of the ladder would cause it to fail under normal, reasonable, and foreseeable use (Id., ¶ 34). Because of its negligent design and/or manufacturing, the Amazon ladder failed to support Mr. French and his crew partner under normal, reasonable, and foreseeable use and thereby caused Mr. French to sustain serious and permanent injuries (Id., ¶ 35). At no time was the Amazon ladder altered or modified by Mr. French, his employer, or any third party after it was received from Amazon (Id., ¶ 36). The Amazon ladder had never been used prior to its use in the subject incident (Id., ¶ 37). Mr. French did not cause or contribute to any of his injuries and damages (Id., ¶ 38). Mr. French was also not in any way contributorily negligent relative to his injuries and damages (Id.). Mr. French was acting within the course and scope of his employment when the subject incident occurred (Id., ¶ 39).

As a result of the subject incident, Mr. French filed a workers' compensation claim with Technology Insurance (Id., ¶ 40). All medical care and treatment for Mr. French's injuries that he sustained as a result of the subject incident has occurred via the workers' compensation claim (Id., ¶ 41). All of the expenses for the medical care and treatment for Mr. French's injuries that he sustained as a result of the subject incident have been paid by Technology Insurance (Id., ¶ 42). Technology Insurance may incur additional covered expenses in the future (Id.). Technology Insurance alleges that Defendants are indebted to Technology Insurance for the payments made by Technology Insurance to Mr. French as a result of the January 25, 2021, accident (Id., ¶ 43). Technology Insurance paid workers' compensation benefits that would not have been necessary but for the culpability of the Defendants (Id.). Pursuant to the workers' compensation policy and Arkansas law, Technology Insurance has the first money right of subrogation, recovery, and reimbursement to recover all workers' compensation benefits paid in the past and in the future as a result of the Defendants' acts and omissions, from any recovery or judgment against Defendants, and for a future credit in the amount of any net recovery by Mr. French (Id., ¶ 44).

II. Legal Standard

A Rule 12(b)(6) motion tests the legal sufficiency of the claim or claims stated in the complaint. See Peck v. Hoff, 660 F.2d 371, 374 (8th Cir. 1981). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). Although a complaint “does not need detailed factual allegations” to survive a Rule 12(b)(6) motion to dismiss, the “[f]actual allegations must be enough to raise a right to relief above the speculative level ․” Twombly, 550 U.S. at 555. Stated differently, the allegations pleaded must show “more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678.

A court considering a motion to dismiss must accept as true all well-pleaded facts in the complaint and draw all reasonable inferences from those facts in favor of the non-moving party. See Farm Credit Servs. of Am., FLCA v. Haun, 734 F.3d 800, 804 (8th Cir. 2013); Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir. 2005); Abels v. Farmers Commodities Corp., 259 F.3d 910, 914 (8th Cir. 2001). However, a court need not credit conclusory allegations or “naked assertion[s] devoid of further factual enhancement.” Retro Television Network, Inc. v. Luken Commc'ns, LLC, 696 F.3d 766, 768 (8th Cir. 2012) (alteration in original) (quoting Iqbal, 556 U.S. at 678).

III. Analysis

Plaintiffs' amended complaint alleges several causes of action: (1) negligence; (2) strict products liability; and (3) breach of implied warranty (Dkt. No. 8, at 7–11). Technology Insurance asserts a subrogation claim against Amazon (Id., ¶ 44).

Under Arkansas law, “[s]ubrogation is the substitution of one party for another.” Riley v. State Farm Mut. Auto. Ins. Co., 381 S.W.3d 840, 848 (Ark. 2011) (citing S. Farm Bureau Cas. Ins. Co. v. Tallant, 207 S.W.3d 468, 471 (Ark. 2005)). “The party asserting subrogation is making a demand under the right of another.” Tallant, 207 S.W.3d at 471 (citing Cooper v. Home Owners' Loan Corp., 126 S.W.2d 112 (Ark. 1939); Chaffe v. Oliver, 39 Ark. 531 (Ark. 1882)). When an insurer pays the obligations of the insured, a right in equity to subrogation for the insurer arises. Id. The made-whole doctrine prevents the insured from being unjustly enriched. Id. Under the made-whole doctrine, “an insurer is not entitled to subrogation unless the insured has been made whole for his loss.” Riley, 381 S.W.3d at 848 (citing Tallant, 207 S.W.3d at 472). “An insured should not recover more than that which fully compensates, and an insurer should not recover any payments that should rightfully go to the insured so that he or she is fully compensated.” Id. (citing Tallant, 207 S.W.3d at 472).

Amazon moves to dismiss Technology Insurance's complaint (Dkt. No. 13). First, Amazon argues that Technology Insurance's complaint fails to state facts establishing that Technology Insurance made Mr. French whole, which Amazon claims is an essential element of a subrogation claim (Id., at 2–5). Second, Amazon claims that any requests by Technology Insurance to amend its complaint to add the necessary factual allegations to assert sufficiently a subrogation claim would be futile (Id., at 5). The Court addresses Amazon's arguments in turn.

A. Failure To State A Claim

To state a subrogation claim, an insurer must allege that it is: (1) making a demand under the right of the insured; (2) for insurance obligations paid to the insured by the insurer; (3) that resulted, or will, in net recovery by the insured. Ryder v. State Farm Mut. Auto. Ins. Co., 268 S.W.3d 298, 301 (Ark. 2007).

Amazon makes several arguments in support of its contention that Technology Insurance's complaint fails to state sufficient facts to state a claim. First, Amazon claims that Technology Insurance's complaint should be dismissed because Technology Insurance does not allege facts establishing an essential element of the subrogation claim—that Technology Insurance made Mr. French whole (Dkt. No. 14, at 3). Amazon asserts that “made whole” does not appear in the complaint, and that Technology Insurance “cannot claim that [Mr. French] has been made whole because he alleges the same facts, the same claims, and the same damages that Technology [Insurance] seeks in the same amended complaint ․” (Id., at 3–4).

Second, Amazon claims that Mr. French could not have been made whole through Technology Insurance's workers' compensation payments because those benefits do not compensate Mr. French for all the damages Mr. French and Technology Insurance seek (Id., at 4).

In response, Technology Insurance asserts that Arkansas law does not require that an insurer make an insured whole before filing a subrogation claim; rather, Technology Insurance contends that Arkansas law requires that an insurer make the insured whole before recovering in subrogation (Dkt. No. 16, at 3 (citing EMC Ins. Cos. v. Entergy Ark., Inc., 924 F.3d 483, 487 (8th Cir. 2019); Riley v. State Farm Mut. Auto. Ins. Co., 381 S.W.3d 840, 848 (Ark. 2011)). Technology Insurance further claims that it intends to “properly preserve the made whole issue” and will “establish it has complied with the made whole rule by either 1) executing a made whole agreement with its insured or 2) seeking a judicial determination that its insured has been made whole.” (Dkt. 16, at No. 5–6).

The Court agrees with Technology Insurance that, under Arkansas law, an insurer need not establish that the insured was made whole before bringing suit. In EMC Insurance Companies, the Eighth Circuit held that an insurer had standing to assert a subrogation claim against an alleged tortfeasor without first obtaining the insured's agreement or a determination that the insured was made whole; the Eighth Circuit noted that the Arkansas Supreme Court had not decided “whether the issue must be resolved before rather than during the prosecution of a subrogation lawsuit,” and the Eighth Circuit noted that it did not need to decide the unresolved issue because the insurer failed to provide that it made the insured whole either before or during the lawsuit. EMC Insurance Cos., 924 F.3d at 488. Because an insurer had standing to bring a subrogation claim as the Eighth Circuit held, and because the Arkansas Supreme Court has not addressed when a made whole determination must be made, it follows that an insurer need not establish that it made the insured whole before bringing the subrogation claim to survive a motion to dismiss.

While under Arkansas law, “[a]bsent an agreement or settlement between the parties, an insurer's right to subrogation does not accrue until there has been a legal determination by a court that the insured has been made whole,” the determination of “whether the insured has been made whole can occur after a settlement is reached but must occur before the insurance company is entitled to recover in subrogation.” Riley, 381 S.W.3d at 848 (citing Tallant, 207 S.W.3d at 472). Therefore, the Court finds that Arkansas law does not preclude an insurer from bringing suit on a subrogation claim before the insured is made whole.

As noted by Amazon, a party must plead facts sufficient to state a claim upon which relief can be granted. See Ashcroft v. Iqbal, 556 U.S. 662 (2009). Here, Technology Insurance has stated facts sufficient to state a subrogation claim. In its amended complaint, Technology Insurance alleges, in pertinent part:

As a result of the subject incident, French filed a [w]orkers' [c]ompensation claim with Plaintiff, Technology Insurance. All medical care and treatment for French's injuries that he sustained as a result of the subject incident has occurred via the said [w]orkers' [c]ompensation claim. All of the expenses for the medical care and treatment for French's injuries that he sustained as a result of the subject incident have been paid by Technology Insurance. Technology Insurance may incur additional covered expenses in the future. Defendants are indebted to Technology Insurance for the payments made by Technology Insurance to French as a result of the January 25, 2021, accident. Technology Insurance paid workers['] compensation benefits that would not have been necessary but for the culpability of the Defendants. Pursuant to the workers['] compensation policy and Arkansas law, Technology Insurance has the first money right of subrogation, recovery, and reimbursement to recover all workers['] compensation benefits paid in the past and in the future as a result of the Defendants' acts and omissions, from any recovery or judgment against Defendants; and for a future credit in the amount of any net recovery by French.

(Dkt. No. 8, ¶¶ 40–44).

Technology Insurance has sufficiently alleged that it is: (1) making a demand under Mr. French's right; (2) for insurance obligations paid to Mr. French by Technology Insurance; (3) that are, or will be, net recovery by Mr. French. Ryder, 268 S.W.3d at 301. Therefore, accepting all well-pleaded facts as true and drawing all reasonable inferences in Technology Insurance's favor, the Court finds that Technology Insurance has alleged facts sufficient to state a subrogation claim against Amazon.

B. Amending The Complaint Would Be Futile

Amazon also claims that Technology Insurance might ask to file an amended complaint to add factual allegations establishing its standing to assert a subrogation claim (Dkt. No. 14, at 5). Amazon further claims that any requests to do so would be futile, and such a request should be denied (Id.). Because the Court finds that Technology Insurance alleged facts sufficient to state a subrogation claim against Amazon, and because there is not currently a motion to file an amended complaint before the Court, the Court declines to address this argument.

IV. Conclusion

For the foregoing reasons, the Court denies Amazon's motion to dismiss Technology Insurance's complaint (Dkt. No. 13).

It is so ordered this 24th day of February, 2025.

Kristine G. Baker Chief United States District Judge