Arnold v. Metlife Auto & Home Insurance Agency, Inc.

• Court: District Court, N.D. California
• Decided: November 12, 2019
• Docket: 5:19-cv-03920
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 MARIE A. ARNOLD, Case No. 19-cv-03920-VKD

9 Plaintiff, ORDER GRANTING METLIFE AUTO 10 v. & HOME INSURANCE AGENCY, INC.’S MOTION TO DISMISS 11 METLIFE AUTO & HOME INSURANCE AMENDED COMPLAINT AGENCY, INC., et al., 12 Re: Dkt. No. 24 Defendants.

13 14 Defendant MetLife Auto & Home Insurance Agency, Inc. (“MAHIA”) moves to dismiss 15 all claims asserted against it by plaintiff Marie A. Arnold. Dkt. No. 24. The Court held a hearing 16 on the motion on November 12, 2019. Upon consideration of the moving and responding papers, 17 as well as the oral arguments presented, the Court grants the motion to dismiss, and gives Ms. 18 Arnold leave to file a second amended complaint. 19 I. BACKGROUND 20 Ms. Arnold, proceeding pro se, originally filed this action against defendants MAHIA and 21 MetLife Group, Inc. (“MetLife Group”), asserting claims for negligence and negligent 22 misrepresentation, as well as a claim under the Fourth Amendment of the U.S. Constitution for 23 alleged invasion of privacy. Ms. Arnold says that, at defendants’ suggestion and with their 24 agreement, she subsequently amended her complaint to include an additional defendant, 25 Brighthouse Life Insurance Company (“Brighthouse”).1 Dkt. No. 13. 26

27 1 All parties have expressly consented that all proceedings in this matter may be heard and finally 1 Ms. Arnold’s operative amended complaint (Dkt. No. 19) asserts claims for fraudulent 2 concealment, misrepresentation, breach of fiduciary duty, and violation of the Fourth Amendment 3 (invasion of privacy). Although the allegations of the amended complaint are not stated clearly, 4 Ms. Arnold seems to allege that she obtained some sort of insurance coverage through her prior 5 employment with Kaiser Permanente (“Kaiser”). Dkt. No. 19 at ECF 2. Ms. Arnold says that she 6 voluntarily terminated her employment with Kaiser on May 13, 2012, and was experiencing 7 emotional distress and financial hardship. Id. She further alleges that she was given “an option[] 8 to continue Metlife life [i]nsurance” through an “arrangement with [an] Insurance Agent,” and 9 either Ms. Arnold or the insurance agent “insisted [o]n [a] ‘Promise Whole Life’ Plan.” Id. 10 Appended as Exhibit A to the amended complaint is a letter that appears to summarize a “Promise 11 Whole Life” plan Policy Number 21216479 UT, issued by Metropolitan Life Insurance Company. 12 Dkt. No. 19 at ECF 11. The identified insured is “Marie A. Dantes,” which Ms. Arnold represents 13 was her (former) married name. Id.; Dkt. No. 27-1 ¶ 3. That letter identifies a June 14, 2012 14 “Policy Issue Date of Original Policy” and a “Face Amount of Insurance” of $50,000. Id. The 15 letter also states that “[f]urther details about the policy and benefits will be furnished upon 16 request.”2 Id. Elsewhere in the amended complaint, Ms. Arnold alleges that “Brighthouse and 17 Metlife are stated to be Plaintiff’s individual plan with same policy number.” Dkt. No. 19 at ECF 18 3. Appended to the amended complaint as Exhibit B is what appears to be a brochure providing 19 an overview of a Kaiser benefits package. Id. at ECF 13-20. 20 Ms. Arnold says she “informed Metlife about her hardship,” and seems to claim that, due 21 to a chronic illness or disability, she was entitled to “withdraw” money under her policy. Id. at 22 ECF 4, 5. According to the amended complaint, defendants failed to disclose, and made false 23 representations about, Ms. Arnold’s alleged entitlement to payment of a “whole life policy 24 amount.” Id. As a result, Ms. Arnold says that she suffered humiliation and mental anguish, and 25 became homeless. Id. at ECF 3. She seeks $500,000 in compensatory damages, plus $1,000,000 26 in punitive damages. Id. at ECF 9. 27 1 The amended complaint seems to acknowledge that Ms. Arnold’s claims may be time- 2 barred. Nonetheless, Ms. Arnold alleges that she is entitled to tolling, noting “[t]he general rule 3 [that] the statu[t]es of limitation begins to run when Plaintiff discovers that a fraud occurred or 4 exercise of reasonable diligence.” Id. at 3. 5 Defendant MAHIA moves to dismiss the amended complaint for failure to state a claim for 6 relief, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. In sum, MAHIA argues 7 that the amended complaint fails to allege sufficient facts demonstrating that MAHIA had any 8 involvement in the matters on which Ms. Arnold bases her claims.3 Ms. Arnold opposes the 9 motion, and has separately requested that she be permitted to file a second amended complaint to 10 include venue and intra-district assignment allegations that she says she inadvertently omitted 11 from her amended complaint. 4 12 II. LEGAL STANDARD 13 A motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) tests the legal 14 sufficiency of the claims in the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). 15 Dismissal is appropriate where there is no cognizable legal theory or an absence of sufficient facts 16 alleged to support a cognizable legal theory. Id. (citing Balistreri v. Pacifica Police Dep’t, 901 17 F.2d 696, 699 (9th Cir. 1990)). In such a motion, all material allegations in the complaint must be 18 taken as true and construed in the light most favorable to the claimant. Id. 19 However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere 20 conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Moreover, 21 “the court is not required to accept legal conclusions cast in the form of factual allegations if those 22 conclusions cannot reasonably be drawn from the facts alleged.” Clegg v. Cult Awareness 23 Network, 18 F.3d 752, 754-55 (9th Cir. 1994). 24 3 MAHIA also argues that Ms. Arnold’s claims are time-barred and that the discovery rule does 25 not save her claims. Insofar as these arguments were raised for the first time in MAHIA’s reply brief, the Court will not consider them here. 26

4 MAHIA correctly notes that exhibits and a declaration submitted by Ms. Arnold with her 27 opposition papers cannot properly be considered on the present motion. Nevertheless, MAHIA 1 Rule 8(a)(2) requires only “a short and plain statement of the claim showing that the 2 pleader is entitled to relief.” This means that the “[f]actual allegations must be enough to raise a 3 right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 4 (2007) (citations omitted). However, only plausible claims for relief will survive a motion to 5 dismiss. Iqbal, 556 U.S. at 679. A claim is plausible if its factual content permits the court to 6 draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. A plaintiff 7 does not have to provide detailed facts, but the pleading must include “more than an unadorned, 8 the-defendant-unlawfully-harmed-me accusation.” Id. at 678. 9 Documents appended to or incorporated into the complaint or which properly are the 10 subject of judicial notice may be considered along with the complaint when deciding a Rule 11 12(b)(6) motion. Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010). 12 III. DISCUSSION 13 A. Fraudulent Concealment and Misrepresentation 14 Ms. Arnold’s first two claims for relief are both based on fraud.5 To state a claim for fraud 15 under California law, a plaintiff must allege: (1) a misrepresentation (false representation, 16 concealment, or non-disclosure); (2) knowledge of falsity (or scienter); (3) intent to defraud (i.e., 17 to induce reliance); (4) justifiable reliance; and (5) resulting damage. Lazar v. Super. Ct., 12 Cal. 18 4th 631, 638 (1996). Additionally, a claim for fraud “must state with particularity the 19 circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). However, “[m]alice, intent, 20 knowledge, and other conditions of a person’s mind may be alleged generally.” Id. “A pleading is 21 sufficient under [R]ule 9(b) if it identifies the circumstances constituting fraud so that a defendant 22 can prepare an adequate answer from the allegations. While statements of the time, place and 23 nature of the alleged fraudulent activities are sufficient, mere conclusory allegations of fraud are 24 insufficient.” Moore v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th Cir. 1989). “To 25

26 5 The amended complaint indicates that Ms. Arnold’s misrepresentation claim is based on 33 U.S.C. § 931, which concerns penalties for “knowing[] and willful[]” misrepresentation under the 27 Longshore and Harbor Workers’ Compensation Act. That statute has no apparent bearing on the 1 comply with Rule 9(b), allegations of fraud must be specific enough to give defendants notice of 2 the particular misconduct which is alleged to constitute the fraud charged so that they can defend 3 against the charge and not just deny that they have done anything wrong.” Bly-Magee v. 4 California, 236 F.3d 1014, 1019 (9th Cir. 2001) (internal quotations and citation omitted). 5 With respect to Ms. Arnold’s concealment claim, the amended complaint alleges that 6 “Metlife and Brighthouse committed concealment and cover-up, falsifying to [sic] Plaintiff’s 7 entitlement to withdraw in her policy,” and that a “[d]efendant employee was concealing 8 information and material[] facts” and “made false statement of deny” regarding Ms. Arnold’s 9 insurance claim. Dkt. No. 19 at ECF 3-4. As for the misrepresentation claim, the amended 10 complaint alleges that a “Defendant Agent” made misrepresentations and “concealed facts about 11 whole life [i]nsurance protects employee in the events of early accident, chronic illness or 12 disability and take loan before age[] 65 and provide cash value with penalties surrender charges.” 13 Id. at 5. Ms. Arnold further alleges that “Defendant and Brighthouse failed to pay pension 14 benefits to tens of thousand[s] of employee[s] covered by its group annuit[y] contracts.” Id. 15 Broadly construing the allegations of Ms. Arnold’s amended complaint, and viewing those 16 allegations in a light most favorable to Ms. Arnold, she seems to claim that she was wrongfully 17 denied payment under a whole life insurance policy. Nevertheless, Ms. Arnold’s allegations are 18 vague and conclusory as to “the who, what, when, where, and how of the misconduct charged” 19 required for fraud claims. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) 20 (internal quotations and citation omitted). Indeed, the amended complaint groups all defendants 21 together, and it is unclear what involvement, if any, MAHIA had in the events underlying Ms. 22 Arnold’s claims. Accordingly, MAHIA’s motion to dismiss this claim is granted. 23 The Court will give Ms. Arnold leave to file a second amended complaint. In addition to 24 the venue and intra-district assignment allegations she wishes to assert, Ms. Arnold should include 25 allegations clearly stating what insurance policy is at issue. If it is the “Promise Whole Life” plan, 26 Policy Number 21216479 UT, referenced in Exhibit A to her complaint (Dkt. No. 19 at ECF 11), 27 Ms. Arnold should clearly say so. To the extent she has a copy of that policy, Ms. Arnold may 1 additional policy at issue, then Ms. Arnold should clearly say so in her second amended complaint 2 and append a copy of the policy (if she has one) and provide the information she has about that 3 policy, including the policy number, name of the insured, and date the policy was issued. As for 4 the alleged fraud, to the extent she can truthfully do so, Ms. Arnold must also state, in as much 5 detail as possible: (1) which defendant(s) concealed information or made false or misleading 6 statements, (2) what specific information was concealed, (3) what specific statements were made, 7 (4) why those statements were false or misleading, and (5) how she has been harmed by the false 8 or misleading statements or by the concealment of information. 9 B. Breach of Fiduciary Duty 10 To state a claim for breach of fiduciary duty under California law, a plaintiff must plead 11 facts establishing “‘the existence of a fiduciary relationship, its breach, and damage proximately 12 caused by that breach.’” Abbit v. ING USA Annuity & Life Ins. Co., 252 F. Supp. 3d 999, 1019 13 (S.D. Cal. 2017) (quoting Pierce v. Lyman, 1 Cal. App. 4th 1093, 1101 (1991). “‘[B]efore a 14 person can be charged with a fiduciary obligation, he must either knowingly undertake to act on 15 behalf and for the benefit of another, or must enter into a relationship which imposes that 16 undertaking as a matter of law.’” Id. at 1022 (quoting City of Hope Nat. Med. Ctr. v. Genentech, 17 Inc., 43 Cal. 4th 375, 386 (2008)). 18 Here, Ms. Arnold alleges that a fiduciary relationship exists based on an insurer-insured 19 relationship with defendants. Dkt. No. 19 at ECF 6. As discussed above, however, the amended 20 complaint does not allege sufficient facts establishing that MAHIA was the insurer on any policy 21 issued to Ms. Arnold. Moreover, courts have held that, “as a matter of California law, no true 22 fiduciary duty arises from the insurer-insured relationship and an insured therefore cannot 23 maintain a claim for breach of fiduciary duty based solely on the insurer-insured relationship.” In 24 re Conseco Ins. Co. Annuity Mktg. & Sales Practices Litig., No. C-05-04726 RMW, 2007 WL 25 486367, at *7 (N.D. Cal. Feb. 12, 2007); see also Abbitt, 252 F. Supp. 3d at 1020-21 (same) 26 (citing Vu v. Prudential Prop. & Cas. Ins. Co., 26 Cal. 4th 1142, 1150-51 (2001)). Accordingly, 27 Ms. Arnold’s claim for breach of fiduciary duty is dismissed as to defendant MAHIA. Ms. Arnold 1 an insurer-insured relationship, establishing that MAHIA knowingly undertook to act on her 2 behalf and for her benefit, and then breached that obligation. Abbitt, 252 F. Supp. 3d at 1022. 3 C. Fourth Amendment Claim for Invasion of Privacy 4 Ms. Arnold alleges that defendants violated her constitutional right to privacy by “us[ing] 5 video surveillance to watch insured for investigations and employments” and “intercepti[ng] radio 6 frequency” to eavesdrop on her private affairs. Dkt. No. 19 at ECF 7. “The Fourth Amendment 7 limits searches conducted by the government, not by a private party, unless the private party acts 8 as an instrument or agent of the government.” United States v. Young, 153 F.3d 1079, 1080 (9th 9 Cir. 1998) (internal quotations and citation omitted). “Whether a search is governmental or 10 private depends on: (1) whether the government knew of and acquiesced in the intrusive conduct; 11 and (2) whether the party performing the search intended to assist law enforcement efforts or 12 further the party’s own ends.” Id. 13 Ms. Arnold’s amended complaint alleges no facts establishing that any of the defendants, 14 all of whom are private entities, acted as an instrument or agent of the government. In her 15 opposition, Ms. Arnold asserts that MAHIA “contracts with Private Investigator and law 16 enforcement to monitor[] employees who purchased their Group Insurance policy with Insurance 17 company with the Government Agency.” Dkt. No. 27 at ECF 9-10. However, there are no such 18 facts alleged in the amended complaint. Moreover, as discussed above, there are no facts 19 demonstrating that MAHIA issued any policy to Ms. Arnold or otherwise had any involvement in 20 the matters underlying her claims. At the hearing, the Court inquired whether Ms. Arnold could 21 allege facts supporting her assertion that MAHIA conducted a search or surveillance of her in 22 conjunction with or at the direction of any government agency. In response, she posited that 23 insurance companies work with law enforcement for surveillance purposes, but offered nothing 24 more than speculative assertions that anything of that nature occurred in this case. As it appears 25 that Ms. Arnold cannot plausibly allege facts to support a violation of the Fourth Amendment, the 26 Court dismisses Ms. Arnold’s claim for invasion of privacy under the Fourth Amendment without 27 leave to amend. 1 U.S.C. § 1331. Accordingly, to the extent Ms. Arnold contends that there is another basis for this 2 || Court’s jurisdiction over this matter, she must clearly allege facts establishing such jurisdiction in 3 || her second amended complaint. For example, federal courts also have original jurisdiction over 4 || civil actions between citizens of different States and where the amount in controversy exceeds 5 $75,000, exclusive of interest and costs. 28 U.S.C. § 1332. 6 || IV. CONCLUSION 7 Based on the foregoing, defendant MAHIA’s motion to dismiss is granted, with leave to 8 amend as to her claims for concealment, misrepresentation, and breach of fiduciary duty. To the 9 extent Ms. Arnold has a plausible basis to believe that an entity other than the named defendants is 10 || responsible for the conduct alleged, she may amend her complaint to name the responsible entity 11 or entities. IfMs. Arnold chooses to amend, her amended pleading should be titled “Second 12 || Amended Complaint.” That amended pleading should also state the basis for federal jurisdiction. 5 13 The Second Amended Complaint must be filed no later than November 29, 2019. 14 Ms. Arnold is encouraged to contact the Federal Pro Se Program for assistance. The Pro 3 15 Se Program is located on the Second Floor of the Federal Courthouse in San Jose. Help is 16 || provided by appointment and on a drop-in basis Monday to Thursday, 9:00 a.m. to 4:00 p.m. 3 17 || Appointments may be made by signing up in person at the Program’s office (Room 2070) at the 18 || San Jose Federal Courthouse, or by calling 408-297-1480. Additionally, if she has not already 19 || done so, Ms. Arnold is encouraged to obtain a copy of the Court’s Handbook for Pro Se Litigants, 20 || available on the Court’s website (https://www.cand.uscourts.gov/prosehandbook) or from the 21 Clerk’s Office. 22 IT IS SO ORDERED. 23 Dated: November 12, 2019 24

6 VIRGINIA K. DEMARCHI United States Magistrate Judge 27 28