Kelly v. Provident Life & Accident Insurance, 082007 FED09, 04-56605

Docket Nº:04-56605, 05-55270
Party Name:RICHARD HOWARD KELLY, an individual, Plaintiff - Appellant, v. PROVIDENT LIFE & ACCIDENT INSURANCE, an insurance corporation; et al., Defendants - Appellees. RICHARD HOWARD KELLY, an individual, Plaintiff - Appellee, v. PROVIDENT LIFE & ACCIDENT INSURANCE, an insurance corporation, Defendant - Appellant, and DOES, 1-50, Defendant.
Judge Panel:Before: FISHER and CLIFTON, Circuit Judges, and FOGEL, District Judge.
Case Date:August 20, 2007
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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RICHARD HOWARD KELLY, an individual, Plaintiff - Appellant,

v.

PROVIDENT LIFE & ACCIDENT INSURANCE, an insurance corporation; et al., Defendants - Appellees.

RICHARD HOWARD KELLY, an individual, Plaintiff - Appellee,

v.

PROVIDENT LIFE & ACCIDENT INSURANCE, an insurance corporation, Defendant - Appellant,

and

DOES, 1-50, Defendant.

Nos. 04-56605, 05-55270

United States Court of Appeals, Ninth Circuit

August 20, 2007

         NOT FOR PUBLICATION

          Argued and Submitted May 16, 2007 Pasadena, California

         Appeal from the United States District Court for the Southern District of California William Q. Hayes, District Judge, Presiding Nos. CV-04-00807-WQH, CV-04-00807-WQH

          Before: FISHER and CLIFTON, Circuit Judges, and FOGEL[**], District Judge.

          MEMORANDUM[*]

         Richard Howard Kelly appeals the district court’s dismissal of his complaint against Provident Life & Accident Insurance Company. We reverse and remand for further proceedings.

         Rule 12(b)(6) dismissals are reviewed de novo . See Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). All material allegations in the complaint are assumed to be true. Id. The district court’s application of state substantive law in diversity actions is reviewed de novo . Prieto v. Paul Revere Life Ins. Co., 354 F.3d 1005, 1010 (9th Cir. 2004).

         The district court erred in two ways in dismissing Kelly’s rescission claim as inadequate under California law. The first was in concluding that Kelly failed to state a claim for undue influence because his complaint did not include some or all of the seven factors from Odorizzi v. Bloomfield School Dist., 246 Cal.App. 2d 123, 133 (Cal.App. 1966). Odorizzi did not hold that undue influence can be found only if some of the seven factors are present. Rather, the California court suggested that most, but not necessarily all, situations constituting undue influence involve those factors. Id. at 133 (“[O]verpersuasion is generally accompanied by certain characteristics which tend to create a pattern. The pattern usually involves several of the following elements.”) (emphasis added). The Odorizzi list was not described as exhaustive. Some contracts might be formed through undue influence even if most or all of the Odorizzi factors are absent. For example, if a contract is the sort for which undue influence must be presumed, the contract would be presumed illegal even if no Odorizzi factors were present. See O’Neil v. Spillane, 45 Cal.App.3d 147, 154 (Cal.App. 1975) (the...

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