Bentley v. United of Omaha Life Ins. Co.

• Decision Date: 21 February 2019
• Docket Number: Case No. CV 15-7870-DMG (AJWx)
• Parties: Jennifer BENTLEY, Plaintiff, v. UNITED OF OMAHA LIFE INSURANCE COMPANY, et al., Defendants.
• Court: U.S. District Court — Central District of California

371 F.Supp.3d 723

Jennifer BENTLEY, Plaintiff,

v.UNITED OF OMAHA LIFE INSURANCE COMPANY, et al., Defendants.

Case No. CV 15-7870-DMG (AJWx)

United States District Court, C.D. California.

Signed February 21, 2019

Christopher Pitoun, Hagens Berman Sobol Shapiro LLP, Pasadena, CA, David S. Klevatt, Pro Hac Vice, Klevatt and Associates LLC, Jason A. Zweig, Pro Hac Vice, Hagens Berman Sobol Shapiro LLP, John P. Bjork, Joseph M. Vanek, Matthew T. Slater, Mitchell H. Macknin, Paul E. Slater, Pro Hac Vice, Sperling and Slater PC, Chicago, IL, Steve W. Berman, Pro Hac Vice, Hagens Berman Sobol Shapiro LLP, Seattle, WA, for Plaintiffs.

Jenny H. Wang, Larry Mark Golub, Martin E. Rosen, Hinshaw and Culbertson LLP, Los Angeles, CA, for Defendants.

ORDER RE CROSS-MOTIONS FOR SUMMARY JUDGMENT [147] [148] AND DEFENDANT'S ORDER TO SHOW CAUSE [165]

DOLLY M. GEE, UNITED STATES DISTRICT JUDGE

This matter is before the Court on Plaintiff Jennifer Bentley's motion for summary judgment and Defendant United of Omaha Life Insurance Company's ("United") cross-motion for summary judgment [Doc. ## 147, 148]. Having duly considered the written submissions filed in support of and in opposition to the motions, the Court now renders its decision. For the reasons set forth below, the Court GRANTS Plaintiff's motion for summary judgment and DENIES Defendant's cross-motion for summary judgment.

The central issue presented in these motions is whether United breached its agreement with policyholders when it terminated life insurance policies included in Plaintiff's Class definition because prior to terminating these policies, it failed to provide the requisite notices under Cal. Ins. Code §§ 10113.71 and 10113.72 (the "Statutes"). The Statutes' effective date is January 1, 2013 ("Effective Date").

I.PROCEDURAL HISTORY

On October 7, 2015, United removed this case to federal court from Los Angeles County Superior Court. [Doc. # 1.] During the two and a half years that this case has been pending before this Court, United has filed various motions, all of which the Court denied to varying degrees. See Order Re Defendant's Motion to Dismiss FAC ("June 22, 2016 Order") [Doc. # 27]; Order Re Defendant's Motion for Certification of Court's Order ("Sept. 14, 2016 Order") [Doc. # 46]; Order Re Defendant's Motion to Dismiss TAC ("Aug. 8, 2017 Order") [Doc. # 107]; Order Re Defendant's Motion to Deny Class Certification ("January 4, 2018 Order") [Doc. # 119].

The Court granted class certification on May 1, 2018 ("May 1, 2018 Order"). [Doc. # 132.] The Court then revised the Class definition two subsequent times. Order Re Plaintiff's Motion to Compel ("July 13, 2018 Order") [Doc. # 153]; Order re Plaintiff's Motion for Clarification ("Aug. 8, 2018 Order) [Doc. # 158]. The operative Class definition reads as follows:

All beneficiaries who made a claim, or would have been eligible to make a claim, for the payment of benefits on life insurance policies renewed, issued or delivered by United of Omaha Life Insurance Company ("Omaha") in the State of California that lapsed or were terminated by Omaha for the non-payment of premium after January 1, 2013 (and which were not affirmatively cancelled by the policyholder), and as to which policies the policyholder(s) did not receive one or more of the notices of the right to designate under Section 10113.72 of the California Insurance Code.

Aug. 8, 2018 Order at 1. [Doc. # 158.]

On June 15, 2018, Bentley and United filed cross-motions for summary judgment ("MSJ"). [Doc. ## 147, 148.] The Motions have been fully briefed, including supplemental briefing filed after the October 26, 2018 hearing on the Motions. [Doc. ## 151, 152, 161, 162, 169, 170.]

II.REQUEST FOR JUDICIAL NOTICE

United requests that the Court take Judicial Notice of the following documents:

• Exhibit 8: The internet-based System for Electronic Rate and Form Filing, referred to in the insurance regulatory industry by its acronym, "SERFF," which is found on the website of the California Department of Insurance ("DOI").

• Exhibit 9: Documents produced by the DOI pursuant to United's Public Records Act request for documents relating to the prospective application of Insurance Code statutes enacted pursuant to California Assembly Bill 1747 of 2012.

• Exhibit 10: Letters between the DOI and counsel for Plaintiff regarding the denial of her claim by United, as produced by Plaintiff in this action, setting forth the position of the DOI that the Statutes do not apply to her claim since the life insurance policy United issued to Eric Bentley was issued prior to the effective date of the Statutes.

• Exhibit 11: The First Amended Complaint in Moriarty v. American General , pending in the United States District Court for the Southern District of California, Case No. 3:17-CV-01709-BTM-WVG, filed October 19, 2017.

• Exhibit 12: The First Amended Complaint in McHugh v. Protective Life Insurance Company , San Diego Superior Court, Case No. 37-2014-00019212-CU-IC-CTL, filed on or about January 9, 2015.

• Exhibit 13: The Complaint in Rosen v. Pacific Life Insurance Company , Orange County Superior Court, Case No. 30-2015-00774924, filed March 4, 2015.

• Exhibit 14: The Complaint in Mojgan Gholamnejad v. Pruco Life Insurance Company , United States District Court for the Northern District of California, Case No. 5:16-cv-06151-BLF, filed October 25, 2016.

• Exhibit 15: The Joint Case Management Conference Statement in Mojgan Gholamnejad v. Pruco Life Insurance Company , United States District Court for the Northern District of California, Case No. 5:16-cv-06151-BLF, filed February 15, 2017.

• Exhibit 16: The Second Amended Complaint in Fernando Matos v. Jackson National Life Insurance Company , United States District Court for the Central District of California, Case No. 2:17-cv-04010-AB-SS, filed July 5, 2017.

See United Request for Judicial Notice [Doc. # 148-9]; United App'x of Exhibits [Doc. # 148-4], Exs. 1–8 [Doc. # 148-5], and Exs. 9–16 [Doc. # 148-6].

Federal Rule of Evidence 201 enables a court to take judicial notice of adjudicative facts. A fact may be judicially noticed if it is "not subject to reasonable dispute." Fed. R. Evid. 201(b). "Facts are indisputable, and thus subject to judicial notice, only if they are either ‘generally known’ under Rule 201(b)(1) or ‘capable of accurate and ready determination by resort to sources whose accuracy cannot be reasonably questioned’ under Rule 201(b)(2)." United States v. Ritchie , 342 F.3d 903, 909 (9th Cir. 2003). "Under Rule 201, [a] court can take judicial notice of public records and government documents available from reliable sources on the Internet, such as websites run by governmental agencies." U.S. ex rel. Modglin v. DJO Glob. Inc. , 48 F.Supp.3d 1362, 1381 (C.D. Cal. 2014) (collecting cases).

A court may also take judicial notice of court filings and other matters of public record. Harris v. Cnty. of Orange , 682 F.3d 1126, 1132 (9th Cir. 2012) (noting that a court may take judicial notice of "undisputed matters of public record"); see also Reyn's Pasta Bella, LLC v. Visa USA, Inc. , 442 F.3d 741, 746, n.6 (9th Cir. 2006) (taking judicial notice of pleadings, memoranda, and other court filings). A court can also appropriately take judicial notice of copies of "records and reports of administrative bodies." Ritchie , 342 F.3d at 908.

The Court DENIES United's requests for judicial notice for the reasons set forth below.

The Court DENIES United's request as to Ex. 8 because it is moot. The Court previously granted United's judicial notice request as to Ex. 8.¹ Sept. 14, 2016 Order at 2.

The Court DENIES United's request as to Ex. 9. United previously offered Ex. 9 in its MTD and the Court denied its request because the Court saw "no reason to deem private one-on-one communications between individual DOI employees and members of the public as ‘matters of public record.’ " Aug. 8, 2017 Order at 2; see also Fed. R. Evid. 803(8). Additionally, absent the public records exception to the hearsay rule, the Court sustains Bentley's objection that Ex. 9 is hearsay. The Court disagrees with United's argument that it only cites the document to show that the DOI opinion of the Statutes exists and not for the truth of the matter. See United's Reply at 4. [Doc. 162-1.] To the contrary, United refers to the DOI's application of the Statutes in its MSJ to support its argument that the Statutes should only apply to policies issued or delivered after the Effective Date.

The Court DENIES United's request as to Ex. 10. The Court SUSTAINS Bentley's hearsay objection on the same grounds as it did for Ex. 9.

Ex.11 through Ex. 16 are court filings and therefore matters of public record that are not reasonably disputed. See Ritchie , 342 F.3d at 909. Nonetheless, the Court SUSTAINS Bentley's relevance objection because Exs. 11–16 are complaints, which merely describe the plaintiffs' causes of action, not the courts' reasoning and interpretation of the Statutes and therefore are not relevant here.

III.FACTUAL BACKGROUND²

A. The Bentley Policy

Eric Bentley ("Eric") purchased a term life insurance policy from United, which issued February 28, 2001, with a $ 1,000,000 face amount ("Bentley Policy"). Joint Stipulation of Facts and Evidence ¶ 7. ("Jt. Stip.") [Doc. # 149.] Eric was both the policyholder and the insured under the Bentley Policy. Id. ¶ 7.

Eric paid the Bentley Policy's premium annually for 13 years from 2001 through 2013. Eric made a premium payment of $ 670.80 on or about May 1, 2014. Id. ¶ 8. On May 23, 2014, United emailed Eric confirming that United used his most recent payment "to advance your coverage to August 28, 2014." Id. ¶ 9. United sent Eric a premium notice, dated July 28, 2014, advising him that his next premium payment was due on August 28, 2014. Id. ¶ 10. No premium payment was made for the Bentley Policy by August 28, 2014. Id.

United sent Eric another premium notice, dated September 9, 2014. Id. ¶ 11. No premium payment was made for the...