Cowan v. Fidelity Interstate Life Ins. Co.
| Decision Date | 28 June 1988 |
| Docket Number | Civ. A. No. 87-4902. |
| Citation | 89 BR 564 |
| Parties | Dorothy COWAN, U.S. Bankruptcy Trustee for the Estate of E.H. "Bert" Rhodes, Plaintiff, v. FIDELITY INTERSTATE LIFE INSURANCE CO. a/k/a Americare Insurance Co., Beneficial Standard Life Insurance Co., and ADCO Ltd. a/k/a Assurance Distributing Co., Ltd. |
| Court | U.S. District Court — Eastern District of Louisiana |
Cummins & White, Barry Van Sickle, Los Angeles, Cal., Roger H. Gray, Landwehr & Hoff, Merrill T. Landwehr, Trial Atty., Darryl Landwehr, New Orleans, La., for plaintiff.
McGlinchey, Stafford, Mintz, Cellini & Lang, Dermot S. McGlinchey, Trial Atty., Stephen W. Rider, Alexander M. McIntyre, Jr., New Orleans, La., for defendants Fidelity Interstate Life and Beneficial Standard Life.
ORDER AND REASONS
This diversity matter is before the Court on motion of defendants Fidelity Interstate Life Insurance Company a/k/a Americare Insurance Company ("Fidelity Life") and Beneficial Standard Life Insurance Company ("Beneficial Life") to dismiss, or, in the alternative, for a more definite statement, and to strike pursuant to Rule 12. By consent of counsel, the Court took the matter under submission without oral argument. For the following reasons, the Court now grants the motion in part and denies it in part.
E.H. "Bert" Rhodes was allegedly a Louisiana insurance sales agent who was under appointment to sell life insurance policies issued by Fidelity Life during a period from 1980 to 1982. Mr. Rhodes has filed bankruptcy proceedings in this District, and Dorothy Cowan, who is plaintiff herein, has been appointed his Bankruptcy Trustee.
On November 24, 1986, Mr. Rhodes sued defendants Fidelity Life and Beneficial Life along with ADCO Ltd. a/k/a Assurance Distributing Company ("ADCO") in the United States District Court for the Central District of California ("the Rhodes matter"). In his complaint, he alleged a slew of tort and contract claims arising out of his apparently unsuccessful dealings with the defendants. As defendants admit, "essentially, the complaint alleges that defendants willfully and fraudulently breached a contract with Elbert Rhodes and conspired with one another to make fraudulent misrepresentations with the intent to destroy Rhodes' present and future business."
In early 1987, the defendants in the Rhodes matter apparently moved for summary judgment on the pleadings. While this Court does not have the record from the Rhodes matter, these defendants apparently moved on the ground (perhaps, among other grounds) that the Bankruptcy Trustee, not the debtor, was the proper person to pursue at least some of the claims alleged in the Rhodes matter. Judge Gadbois, to whom the matter was assigned, granted the motion, but it is unclear exactly which claims he dismissed. On the one hand, an Order Transferring Proceedings, prepared by counsel for Ms. Cowan and Mr. Rhodes and signed on January 7, 1988, states that "plaintiff Bert Rhodes was dismissed as a party plaintiff for certain causes of action." On the other hand, a Notice of Ruling, prepared by counsel for defendants and filed May 21, 1987, states that "the Court ruled that plaintiff's Complaint be dismissed without prejudice" on May 4, 1987. These two texts are obviously ambiguous on the issue of whether Judge Gadbois dismissed all or merely part of the claims in the Rhodes matter.
On June 15, 1987, counsel for Ms. Cowan and Mr. Rhodes filed in the Los Angeles Courthouse a certain pleading, which recites the same counts found in the Rhodes complaint, names the same three defendants, but names Ms. Cowan, instead of Mr. Rhodes, as the sole party-plaintiff. The clerk accepted the pleading (along with a filing fee of $120 and a notice of a related matter, namely the Rhodes matter) as commencing a new matter (namely, the instant matter, occasionally also referred to as "the Cowan matter") and assigned it a new docket number. Suggesting that this pleading was intended merely to amend the Rhodes complaint, counsel for Ms. Cowan and Mr. Rhodes argue that this opening of a second matter was "an error on the part of the clerk at the filing window." Whether the clerk opened a new matter in error or not, no party has moved the court in California to correct any "error."
On July 24, 1987, in lieu of filing an answer, defendants Fidelity Life and Beneficial Life moved in the Cowan matter to dismiss and/or for a more definite statement and/or to strike. Soon thereafter, on July 31, 1987, they further moved for a transfer of venue to this Court under 28 U.S.C. § 1404(a). Without ruling on the former motion and without any explanation for his disposition of the latter motion, Judge Gadbois granted the latter motion on October 8, 1987; pursuant to this order, the matter (which is the instant, Cowan matter) was transferred to this Court on October 14, 1987.
Referring to the above-mentioned Order Transferring Proceedings, counsel for Ms. Cowan and Mr. Rhodes assert that Judge Gadbois also transferred the Rhodes matter to this Court. A close reading of the order, however, belies their argument, for the order states that "the companion case of Rhodes v. Fidelity, U.S.D. C Case No. 87 03834 SVW (GHKx) be and hereby is ORDERED TRANSFERRED to the Eastern District of Louisiana forthwith." In other words, as the docket number indicates, the order purports to transfer the Cowan matter, not the Rhodes matter.1 This conclusion is confirmed by a simple look at the record that was transferred to this Court: the Cowan record was sent to this Courthouse, the Rhodes record was not.
The Cowan complaint alleges diversity jurisdiction and asserts twelve purported causes of action under California law:2 (1) breach of contracts between Fidelity Life and Rhodes, (2) breach of contract between defendants Fidelity Life and ADCO wherein Rhodes was a third-party beneficiary as "an ADCO agent," (3) accounting of the moneys due Rhodes under these contracts, (4) tort breach of the covenant of good faith and fair dealing in the contracts between Fidelity Life and Rhodes, (5) bad faith tort denial of contractual obligations in the contracts between Fidelity Life and Rhodes, (6) fraud and deceit, (7) intentional interference with economic advantage, (8) negligent interference with economic advantage, (9) negligent infliction of emotional distress, (10) intentional infliction of emotional distress, (11) conspiracy among defendants to commit the acts alleged in Counts 1-10, and (12) declaratory relief under 28 U.S.C. § 2201. Plaintiff has demanded a jury.
Having still never filed an answer, defendants Fidelity Life and Beneficial Life3 now reurge their former motion. They raise five points:4 (A) dismiss the entire complaint for impermissible vagueness or, alternatively, require plaintiff to plead a more definite statement; (B) dismiss Count 6 for failure to plead with particularity or, alternatively, require plaintiff to plead fraud with particularity; (C) dismiss Counts 7-8 for lack of standing by plaintiff; (D) dismiss Counts 9-10 and strike the punitive damages claims in Counts 4-6 for lack of standing by plaintiff; and (E) dismiss Counts 4 and 5 for failure to state causes of action upon which relief can be granted.
For the following reasons, the Court (A) DENIES defendants' first ground; (B) DENIES their second ground to dismiss, but GRANTS their second ground for a more particular statement; (C) GRANTS IN PART and DENIES IN PART their third ground, with leave for plaintiff to amend her complaint to add Mr. Rhodes as the plaintiff for the portion now dismissed; (D) DENIES their fourth ground; and (E) GRANTS their fifth ground as to Count 4, but DENIES it as to Count 5.
Defendants argue that plaintiff's complaint is impermissibly vague in that "plaintiff fails to set forth the dates, either generally or specifically, on which the wrongful acts allegedly occurred." They then argue that the complaint's "vagueness precludes defendants from pleading certain affirmative defenses, such as the running of applicable prescription periods of statutes of limitation, or otherwise formulating a responsive pleading." Defendants' memorandum focuses primarily on the counts concerning the contract breaches.
In reply, plaintiff first argues that "even where no dates whatsoever are alleged in a complaint, this does not in any manner preclude defendants from asserting the statute of limitations" and that "defendants will not be prejudiced by being required to plead a defense which later turns out to be meritless." As a secondary point, plaintiff suggests that her complaint does in fact plead the material dates with sufficient particularity.
The Court must reject plaintiff's first position outright. This bold position ignores the mandate of F.R.Civ.P. 9(f), which specifically states that "for purposes of testing the sufficient of a pleading, averments of time and place are material and shall be considered like all other averments of material matters." Professors Wright and Miller emphasize that the primary purpose of the Rule is to "provide a mechanism for the early adjudication or testing of certain claims and defenses — most notably, the statute of limitations." 5 C. Wright & A. Miller, Federal Practice and Procedure § 1308, at 438 (1969). Since Rule 9(f) makes allegations of time material, a defendant may raise the limitation defense on a Rule 12(b)(6) motion in dismiss, before he files any answer to the complaint. See Pierce v. County of Oakland, 652 F.2d 671, 672 (6th Cir.1981) (per curiam) (citing Wright & Miller, supra, § 1308, at 439 & n. 80); Herron v. Herron, 255 F.2d 589, 593 (5th Cir.1958). In other words, a plaintiff is not relieved from having to make specific allegations of time, when such are material, merely because a defendant may have the option to assert an affirmative limitation defense. More distressing, however, is plaintiff's suggestion that defendants should simply...
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