Haas v. Travelex Ins. Servs. Inc.
| Decision Date | 19 August 2021 |
| Docket Number | Case No. 2:20-cv-06171-ODW (PLAx) |
| Citation | 555 F.Supp.3d 970 |
| Parties | Donna HAAS, on behalf of herself and all others similarly situated, Plaintiff, v. TRAVELEX INSURANCE SERVICES INC., Berkshire Hathaway Specialty Insurance Company, and Does 1 through 100, inclusive, Defendants. |
| Court | U.S. District Court — Central District of California |
Jordan L. Lurie, Ari Yale Basser, Pomerantz LLP, Los Angeles, CA, Zev B. Zysman, Law Offices of Zev B. Zysman, Encino, CA, for Plaintiff.
Julianna Thomas McCabe, Pro Hac Vice, Michael N. Wolgin, Pro Hac Vice, Carlton Fields, PA, Miami, FL, Markham R. Leventhal, Pro Hac Vice, Carlton Fields PA, Washington, DC, Steven Bennett Weisburd, Carlton Fields LLC, Los Angeles, CA, for Defendants Travelex Insurance Services Inc., Berkshire Hathaway Specialty Insurance Company.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS [36]
Plaintiff Donna Haas brought this putative class action against Defendants Travelex Insurance Services, Inc. and Berkshire Hathaway Specialty Insurance Co. seeking to recover "unearned travel insurance premiums for trips that did not occur due to cancellations resulting from [COVID-19] travel restrictions." (Compl. ¶ 1, ECF No. 1.) Defendants move for judgment on the pleadings. (Mot. J. on Pleadings ("Motion" or "Mot."), ECF No. 36.) For the reasons that follow, the Court GRANTS in part and DENIES in part Defendants’ Motion.1
On February 10, 2020, Haas and her husband purchased a Viking River Cruise, which was to take place in mid-May 2020. (Compl. ¶ 25.) Haas concurrently purchased a travel insurance policy for $889, underwritten by Berkshire Hathaway and administered by Travelex. (Id. ) On March 30, 2020, the cruise line cancelled the trip due to COVID-19 and refunded the cost of the cruise. (Id. ¶ 26.)
When Haas purchased her Policy, she received a Confirmation of Coverage delineating the twelve policy benefits she purchased, the coverage limits of each benefit, and the gross premium she paid for the entire package of benefits. (Id. ¶ 53.) The first of these eleven categories is Trip Cancellation coverage. (Id. ¶¶ 53, 56.) Trip Cancellation coverage is "effective at 12:01 a.m. (Standard Time) on the date following payment to the Company of any required plan cost." (Id. ¶ 58.) The parties have used the term "pre-departure coverage" to refer to this benefit, and the Court adopts this convention herein.
Haas was also covered for eleven additional potential occurrences, each with its own expressly defined maximum coverage limit. (Id. ¶ 56.) These eleven additional coverages were to "begin on the later of: (a) 12:01 a.m. (Standard Time) on the Scheduled Departure Date shown on the travel documents; or (2) [sic] the date and time thee [sic] Insured starts his/her trip." (Id. ¶ 58.) The parties have used the term "post-departure coverage" to refer to these benefits, and the Court likewise adopts this convention herein.
The gravamen of Haas's case is her contention that, based on these provisions of coverage, Defendants could neither have assumed the risks covered by, nor provided Haas coverage for, the eleven post-departure coverages until travel took place. (Id. ¶ 59.) Haas contends that, because her trip was cancelled before departure, Defendants assumed no risk of post-departure losses and therefore did not earn the premiums Haas had paid for post-departure coverages. (Id. ¶ 61.) Defendants have offered certain concessions but have failed to issue Haas a refund for post-departure coverage on her cancelled trip. (Id. ¶ 63.) Haas alleges Defendants have wrongfully retained the unearned post-departure premium.
On July 10, 2020, Haas filed the operative Complaint against Defendants asserting five claims for: (1) Violation of California Unfair Competition Law ("UCL"), Business and Professions Code section 17200, et seq. ; (2) Violation of the Consumers Legal Remedies Act ("CLRA"), California Civil Code section 1770, et seq. ; (3) Unjust Enrichment; (4) Money Had and Received; and (5) Conversion. (See Compl. ¶¶ 77–137.) Defendants move for judgment on the pleadings on all five claims. (Mot. 1–2.)2
After the pleadings are closed, but within such time as to not delay the trial, any party may move for judgment on the pleadings. Fed. R. Civ P. 12(c). The standard applied to a Federal Rule of Civil Procedure ("Rule") 12(c) motion is essentially the same as that applied to Rule 12(b)(6) motions; a judgment on the pleadings is appropriate when, even if all the allegations in the complaint are true, the moving party is entitled to judgment as a matter of law. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; Milne ex rel. Coyne v. Stephen Slesinger, Inc. , 430 F.3d 1036, 1042 (9th Cir. 2005).
When ruling on a motion for judgment on the pleadings, a court should construe the facts in the complaint in the light most favorable to the plaintiff, and the movant must clearly establish that no material issue of fact remains to be resolved. McGlinchy v. Shell Chem. Co. , 845 F.2d 802, 810 (9th Cir. 1988). However, "conclusory allegations without more are insufficient to defeat a motion [for judgment on the pleadings]." Id.
If judgment on the pleadings is appropriate, a court has discretion to grant the non-moving party leave to amend, grant dismissal, or enter a judgment. See Lonberg v. City of Riverside , 300 F. Supp. 2d 942, 945 (C.D. Cal. 2004). Leave to amend may be denied when "the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co. , 806 F.2d 1393, 1401 (9th Cir. 1986). Thus, leave to amend "is properly denied ... if amendment would be futile." Carrico v. City & Cnty. of San Francisco , 656 F.3d 1002, 1008 (9th Cir. 2011).
Defendants move for judgment on the pleadings as to each of Haas's five claims. The Court considers each claim in turn.
Haas's Claim One is for violation of the California UCL. The UCL prohibits "any unlawful, unfair, or fraudulent business act or practice." Cal. Bus. & Prof. Code § 17200. The "unlawful" prong prohibits "anything that can properly be called a business practice and that at the same time is forbidden by law." Herskowitz v. Apple Inc. , 940 F. Supp. 2d 1131, 1145 (N.D. Cal. 2013) (quoting Cel-Tech Commc'ns, Inc. v. L.A. Cellular Tel. Co. , 20 Cal. 4th 163, 180, 83 Cal.Rptr.2d 548, 973 P.2d 527 (1999) ). The "unfair" prong "creates a cause of action for a business practice that is unfair even if not proscribed by some other law." In re Adobe Sys., Inc. Priv. Litig. , 66 F. Supp. 3d 1197, 1226 (N.D. Cal. 2014).
Plaintiff asserts that it would be unfair and unlawful for Defendants to keep the unearned premiums, and that Defendants have worked a fraud upon Plaintiff and others by accepting premiums without informing customers that Defendants did not intend to refund post-departure premiums in the event unforeseen circumstances forced the cancellation of the flight. (See Compl. ¶¶ 82–88 (unfair); ¶¶ 89–98 (unlawful); ¶¶ 99–107 (fraudulent)). Defendants argue Claims One fails because the Complaint does not establish a plausible UCL claim; the Complaint does not satisfy the heightened standard for fraud; and the CLRA cannot serve as a predicate offense to a UCL violation. (Mot. 16–20.) Moreover, in opposition to all five claims, including Claim One, Defendants argue that the equitable relief contemplated by the claim is unavailable because Plaintiff has an adequate remedy at law. (Mot. 21.)
Claim One is sufficiently pleaded. The Complaint does not compel the conclusion that Plaintiff has an adequate remedy at law, and at the very least, Plaintiff plausibly claims that insurance law requires Defendants to return the post-departure premiums in this case, making out a claim under the ‘unfair’ or ‘unlawful’ prong of the UCL. Because the UCL claim is sufficiently pleaded under the ‘unfair’ prong, the Court does not address whether a CLRA violation may support Plaintiff's UCL claim, and the Court need not address whether the Complaint satisfies the heightened standard for fraud.
Defendants argue that, because Claim One is for equitable relief, Haas must plausibly allege that she lacks an adequate remedy at law. (Reply 10, ECF No. 43.) The Ninth Circuit recently emphasized this requirement in Sonner v. Premier Nutrition Corporation , 971 F.3d 834 (9th Cir. 2020). In Sonner , the Ninth Circuit affirmed the dismissal of a UCL claim where the sum the plaintiff sought in restitution as a full refund of the purchase price was the very same sum she sought as compensatory damages for the same wrong. Id. at 844.
Here, Haas seeks not only restitution by way of her UCL claim, but also a prospective injunction directing Defendants to provide refunds to Plaintiff and the class, and to cease the taking and keeping of unearned premiums. (Compl. ¶ 107, Prayer ¶ 3.) This injunctive relief is not an available remedy at law; moreover, its presence in the Complaint distinguishes this case from Sonner . See 971 F.3d at 842 () Accordingly, Haas has sufficiently pleaded an inadequate remedy at law. See Zeiger v. WellPet LLC , 526 F.Supp.3d 652, 687 (N.D. Cal. 2021) ().
Defendants argue that Haas lacks Article III standing to pursue prospective injunctive relief because Haas has alleged that she does not...
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