MEMORANDUM **
Paul Tufano appeals the district courts order granting State Farm Mutual Automobile Insurance Companys (“State Farm”) motion to dismiss his first amended complaint for failure to state any plausible claims. We have jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.
This case concerns State Farms refusal to pay Tufano for the diminished value of his car after it was fully repaired. In 2017, Tufano was involved in a collision with another driver, Rosalio Acero. Both Tufano and Acero were insured by State Farm. Tufanos policy includes collision coverage that gave State Farm the choice between repairing or replacing the car, and State Farm elected to, and did, repair Tufanos car. Tufanos policy coverage excluded recovery for “any reduction in the value of the covered vehicle after it has been repaired, as compared to its value before it was damaged.” Nonetheless, Tufano filed an insurance claim for the diminished value of his repaired car, which State Farm denied. Tufano then brought this putative class action, alleging breach of contract (on both his own and Aceros policies) and various state and federal fraud claims. The district court dismissed Tufanos complaint because the claims under his own policy were precluded by applicable case law, he had no basis to bring claims under Aceros policy, and the fraud claims lacked the requisite particularity.
We review de novo the district courts order granting the motion to dismiss for failure to state a claim. Whitaker v. Tesla Motors, Inc., 985 F.3d 1173, 1175 (9th Cir. 2021). We may affirm the district courts dismissal on “any ground supported by the record.” Canyon Cnty. v. Syngenta Seeds, Inc., 519 F.3d 969, 975 (9th Cir. 2008).
Tufano argues that his policys exclusion of coverage for the diminished value of his car violates California law and public policy. But California courts have consistently held that such insurance policies are permissible. See Baldwin v. AAA N. Cal., Nev. & Utah Ins. Exch., 1 Cal.App.5th 545, 204 Cal. Rptr. 3d 433, 441–42 (2016); Carson v. Mercury Ins. Co., 210 Cal.App.4th 409, 148 Cal. Rptr. 3d 518, 533 (2012); Ray v. Farmers Ins. Exch., 200 Cal.App.3d 1411, 246 Cal. Rptr. 593, 596 (1988). Our nonprecedential decision in Copelan v. Infinity Insurance Co., 728 F. Appx 724 (9th Cir. 2018), did not suggest otherwise. See id. at 726 (holding that insurers “ ‘election to repair is conclusive,’ regardless of any diminution in value” (quoting Ray, 246 Cal. Rptr. at 595)).
Tufano further contends that State Farm breached the implied covenant of good faith and fair dealing. But in Baldwin, the court explained that “[a]n insurer does not act in bad faith by repairing, as promised in the policy, the insureds vehicle,” and rejected the plaintiffs argument that his insurer improperly excluded coverage for his cars diminished value. 204 Cal. Rptr. 3d at 444 (citing Carson, 148 Cal. Rptr. 3d at 533–34). Thus, Tufano has not plausibly alleged bad faith here. Because Tufanos claim under his own policy is based on the contract (and there is no bad faith), California Civil Jury Instruction No. 3903J, which allows litigants to recover the diminished value of a car in tort actions, is irrelevant. See id. at 445 n.6.
Tufano also attempts to recover diminished value from State Farm under Aceros liability coverage. However, to directly sue State Farm based on Aceros policy, Tufano must first obtain a court judgment against Acero. Cal. Ins. Code § 11580(b)(2). Otherwise, he is a stranger to Aceros insurance policy with State Farm and lacks standing to enforce Aceros contractual rights. See Coleman v. Republic Indem. Ins. Co., 132 Cal.App.4th 403, 33 Cal. Rptr. 3d 744, 746 (2005) (“[T]he coincidental fact that plaintiffs are insured by the same insurer as the other party does not change plaintiffs’ position as strangers to the other partys insurance policy․”). Here, there is no evidence that Tufano has obtained a judgment against Acero. Rather, Tufano contends that he does not need a judgment, because his position is like that of an excess insurer in an equitable subrogation action, who can proceed without a judgment against a primary insurer. But “actions between liability insurers are not based on contract,” so insurers may resolve disputes between themselves “without the limits imposed in other contexts by the direct-action proscription.” Fortman v. Safeco Ins. Co. of Am., 221 Cal.App.3d 1394, 271 Cal. Rptr. 117, 119 (1990). Because Tufanos action against State Farm is based on Aceros insurance contract, he lacks standing to sue based on Aceros policy.
Finally, Tufano alleges that State Farm misrepresented its products as “insurance,” which led him to think he was purchasing coverage for the diminished value of his car. Based on these allegations, he contends that State Farm violated Californias Unfair Competition Law (“UCL”), False Advertising Law (“FAL”), and Consumer Legal Remedies Act (“CLRA”), as well as the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”).
The UCL and FAL claims are implausible under the “reasonable consumer” standard. See Ebner v. Fresh, Inc., 838 F.3d 958, 965 (9th Cir. 2016). The reasonable consumer would not think the term “insurance” means that the policy will always cover diminished value, because consumers know that insurance policies are customizable and contain all types of exclusions. The CLRA claim fails because the CLRA applies only to transactions involving tangible goods and services, and insurance is neither a tangible good nor a service. See Fairbanks v. Superior Ct., 46 Cal.4th 56, 92 Cal.Rptr.3d 279, 205 P.3d 201, 202 (2009). The RICO claim is predicated on Tufanos allegation that State Farms advertising of its products as “insurance” constitutes mail fraud or wire fraud. Tufano has not plausibly alleged that State Farms advertising was misleading, so he has not shown that State Farm formed a scheme to defraud him, as required to establish mail or wire fraud. See Rothman v. Vedder Park Mgmt., 912 F.2d 315, 316–17 (9th Cir. 1990). Without plausible allegations of mail or wire fraud, there is no predicate racketeering activity, and Tufanos RICO claim fails. See 18 U.S.C. §§ 1961(1), 1962.
AFFIRMED.