Singer v. Paul Revere Life Ins. Co., CASE NO. CV 14-08700 MMM (MRWx)

• Decision Date: 30 June 2015
• Docket Number: CASE NO. CV 14-08700 MMM (MRWx)
• Court: U.S. District Court — Central District of California
• Parties: BERNARD J. SINGER, by TAMARA SINGER, Guardian Ad Litem, Plaintiff, v. THE PAUL REVERE LIFE INSURANCE COMPANY; and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, TRUSTEE OF THE AICPA INSURANCE TRUST, Defendants.

BERNARD J. SINGER,by TAMARA SINGER, Guardian Ad Litem, Plaintiff, v. THE PAUL REVERE LIFE INSURANCE COMPANY;and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,TRUSTEE OF THE AICPA INSURANCE TRUST, Defendants.

CASE NO. CV 14-08700 MMM (MRWx)

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

June 30, 2015

ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS

On November 17, 2014, Tamara Singer, guardian ad litem for Bernard Singer, filed this action against The Paul Revere Life Insurance Company ("Paul Revere") and The Prudential Life Insurance Company of America, Trustee of the AICPA Insurance Trust ("Prudential") (collectively, "defendants").¹ The complaint alleges claims for declaratory relief, tortious breach of contract/breach of the covenant of good faith and fair dealing, and breach of contract.²

On December 16, 2014, Paul Revere filed a motion to dismiss Singer's complaint on thebasis that his claims are barred by the statute of limitations.³ On March 24, 2015, the court granted the motion with leave to amend.⁴ On April 7, 2015, Singer filed a first amended complaint.⁵ Prudential moved to dismiss the first amended complaint on April 24, 2015,⁶ and Paul Revere filed a separate motion to dismiss on April 28, 2015.⁷ Both motions assert that Singer's claims are time-barred. Singer opposes the motions.⁸ Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the court finds the matter appropriate for decision without oral argument; the hearings calendared for July 6, 2015, are therefore vacated, and the matter taken off calendar.

I. FACTUAL BACKGROUND

A. Facts Alleged in the Complaint

Plaintiff alleges that on or about March 1, 1997, Bernard Singer purchased a disability insurance policy from Paul Revere.⁹ On January 26, 2006, Singer was involved in a motor vehicle accident that purportedly left him mentally disabled and unable to work.¹⁰ As a result, in June 2006, he filed a claim for disability benefits under the Revere policy.¹¹ Paul Revere initially approved the claim and paidbenefits to Singer; on June 1, 2009, however, it purportedly ceased benefits payments, concluding that Singer "was not disabled as defined by the terms of the [policy]."¹²

In approximately March 1993, Singer obtained an insurance policy from the AICPA Insurance Trust,¹³ and on March 22, 2009, he filed a separate claim for disability benefits under this policy.¹⁴ Prudential is the trustee of the AICPA Insurance Trust, and makes benefits determinations.¹⁵ Singer alleges that Prudential denied his claim.¹⁶

B. Defendants' Requests for Judicial Notice

Prudential and Paul Revere both ask that the court take judicial notice of various documents in deciding their motions to dismiss. Because Rule 12(b)(6) review is confined to the complaint, the court typically does not consider material outside the pleadings (e.g., facts presented in briefs, affidavits, or discovery materials) in deciding such a motion. In re American Continental Corp./Lincoln Sav. & Loan Securities Litig., 102 F.3d 1524, 1537 (9th Cir. 1996). It may, however, properly consider exhibits attached to the complaint and documents whose contents are alleged in the complaint but not attached, if their authenticity is not questioned. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001).

In addition, the court can consider matters that are proper subjects of judicial notice under Rule 201 of the Federal Rules of Evidence. Id. at 688-89; Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002); Hal Roach Studios, Inc. v. Richard Feiner and Co., Inc., 896 F.2d 1542, 1555 n. 19 (9th Cir. 1990); see also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) ("[C]ourts must consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documentsincorporated into the complaint by reference, and matters of which a court may take judicial notice").¹⁷ The court is "not required to accept as true conclusory allegations which are contradicted by documents referred to in the complaint" or proper subjects of judicial notice. Steckman v. Hart Brewing Inc., 143 F.3d 1293, 1295 (9th Cir. 1998); see also Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) ("The court need not, however, accept as true allegations that contradict matters properly subject to judicial notice or by exhibit").

Prudential asks the court to consider an August 13, 2010 letter advising Singer that his claim for long term disability benefits had been denied.¹⁸ Paul Revere similarly requests that the court consider a June 1, 2009 letter discontinuing his disability insurance benefits.¹⁹ The court cannot judicially notice the letters, because their contents are neither generally known nor capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. FED.R.EVID. 201. However, "[a] district court ruling on a motion to dismiss may consider a document the authenticity of which is not contested, and upon which the plaintiff's complaint necessarily relies." Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998), superseded by statute on other grounds as recognized in Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 681 (9th Cir. 2006). This is so even if the plaintiff does not "explicitly allege the contents of th[e] document[s] in the complaint." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) ("We have extended the 'incorporation by reference' doctrine to situations in which the plaintiff's claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not dispute the authenticity of the document, even though the plaintiff does not explicitly allege the contents of that document in the complaint"). Here, the letters are essential to Singer's claims, because each is based on the fact Prudential denied, and Paul Revere discontinued, disability benefits. Because Singer does not dispute the authenticity of thedocuments, the court will consider the denial letters under the incorporation by reference doctrine.²⁰ See Marez v. County of Stanilaus, No. 14-CV-00662 KJM, 2015 WL 135890, *3 (E.D. Cal. Jan. 9, 2015) (considering a letter from the county jail to one plaintiffs' lawyers because "the authenticity of the letter [wa]s not disputed, and [it wa]s essential to the plaintiffs' claims").

II. DISCUSSION

A. Legal Standard Governing Motions to Dismiss Under Rule 12(b)(6)

A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in the complaint. A Rule 12(b)(6) dismissal is proper only where there is either a "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). The court must accept all factual allegations pleaded in the complaint as true, and construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996); Mier v. Owens, 57 F.3d 747, 750 (9th Cir. 1995).

The court need not, however, accept as true unreasonable inferences or conclusory legal allegations cast in the form of factual allegations. See Bell Atlantic Corp. v. Twombly, 540 U.S. 544, 555 (2007) ("While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do"). Thus, a plaintiff's complaint must "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' . . . A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Twombly, 550 U.S. at 555 ("Factual allegations must be enough to raise a rightto relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)" (citations omitted)); Moss v. United States Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) ("[F]or a complaint to survive a motion to dismiss, the non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief," citing Iqbal and Twombly).

B. Whether Singer's Claims Must Be Dismissed as Time-Barred

In diversity cases alleging state law claims, the state statute of limitations governs. Olympic Sports Products, Inc. v. Universal Athletic Sales Co., 760 F.2d 910, 913 (9th Cir. 1985) ("York held that a state statute of limitations controlled in a diversity suit based on a state-created right. If the suit would be barred in state court when filed, it must be barred in federal court," citing Guaranty Trust Company of New York v. York, 326 U.S. 99, 109-10 (1945)). "An action upon any contract . . . founded upon an instrument in writing" must be brought within four years. See CAL. CODE CIV. PROC. § 337; Snyder v. California Ins. Guarantee Ass'n, 229 Cal.App.4th 1196, 1213 (2014). Singer's breach of the covenant of good faith and fair dealing/tortious bad faith claim is also subject to a four-year limitations period to the extent "it rests on [an] implied contractual promise." See Love v. Fire Ins. Exch., 221 Cal.App.3d 1136, 1144 n. 4 (1990) (citing Comunale v. Traders & General Ins. Co., 50 Cal.2d 654, 662 (1958) ("Traders contends that an action on an implied obligation arising out of contract is not on the written instrument and that therefore the four-year term prescribed in section 337,...