Law Street Media

City of Riverside Sues Bird Scooters

Dockless electric scooters on a street corner.

On Tuesday, the City of Riverside, California filed a complaint against Bird Rides, Inc., certain underwriters at Lloyd’s London, and 20 unnamed defendants for breach of contract and breach of the implied covenant of good faith and fair dealing. The complaint was filed in the Central District of California.

Bird Rides, Inc., is a Delaware corporation. According to the company’s website, Bird “is a reliable last mile electric scooter rental service.” Bird’s mission statement is “to make cities more livable by reducing car usage, traffic, and congestion.”

According to the complaint, the defendants violated two terms of their interim agreement with the city: “insurance” and “indemnification.”  The plaintiff alleged that the insurance term required Bird to procure and maintain, “at its own expense,” “commercial general liability and automobile insurance” against “damages for personal injury.” The complaint also alleged that the indemnification term requires Bird to “indemnify, protect and hold harmless the City” “from and against any claim for damage” “which arise(s) out of (or) pertain(s) to” the performance of the agreement. 

The city stated that it was sued in the Central District of California in June of 2019 “for personal injury damages throughout” the year, “arising from a dangerous condition on public property,” and that “the Scooters were the dangerous condition” that caused those damages. The complaint alleged that the “city tendered indemnity and defense of the liability action to both Bird and (the) underwriters by written demand,” “pursuant to the notice terms of the Interim Agreement.” The city claimed that “all tenders for defense and indemnity were either unanswered or denied” by Bird and the underwriters. The complaint stated that the suit “was eventually dismissed,” but the city “incurred attorneys’ fees in excess of” $150,000.

The plaintiff claimed that Bird “owe(d) a duty to defend and indemnify the city for the Liability Action.” The complaint further alleged that the underwriters owed “the city a defense to the Liability Action” as well.  The plaintiff stated that the underwriters’ and Bird’s breaches of their contractual duties caused the city to sustain economic damages, including their attorney’s fees.

The City of Riverside also claimed that the defendants’ “wrongful failure to defend (the) city against third-party claims” “constitute breaches of the implied covenant of good faith and fair dealing.”  The plaintiff alleged that Bird and the underwriters “refus(ed) and fail(ed) to promptly provide a coverage determination despite being aware of” the city’s “financial hardship” and the class-action lawsuit against the city. The plaintiff also stated that the defendants refused “to defend (the) city against the Liability Action,” while Bird and its insurers defended other Southern California cities that were a part of the liability action. The complaint alleged that these actions “constitute violations of the Unfair Settlement Practices Act under California Insurance Code section 790.03(h).”

The City of Riverside is seeking “contractual damages,” “other consequential damages,” and “reasonable attorney’s fees and costs,” all “in an amount to be proven at trial.” The city is also seeking “costs of (the) suit incurred,” “pre-judgment interest,” “punitive damages,” and all other relief that the court may deem proper. The plaintiff demanded a jury trial for “all issues so triable.”

The City of Riverside, California, is being represented by Interim City Attorney Kristi J. Smith, Assistant City Attorney Rebecca McKee, and Deputy City Attorney Debra K. Cook.

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