Deutsch v. American Century Investments

D. Arizona

Deutsch v. American Century Investments

DecidedSeptember 18, 2024

Docket3:21-cv-08136

StatusUnknown

This text of Deutsch v. American Century Investments (Deutsch v. American Century Investments) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Deutsch v. American Century Investments, (D. Ariz. 2024).

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Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Robert Deutsch, No. CV-21-08136-PCT-DLR

10 Plaintiff, ORDER

11 v.

12 American Century Investments, et al.,

13 Defendants. 14 15 At issue is Plaintiff Robert Deutsch’s renewed motion for default judgment. (Doc. 16 48.) Whether to enter a default judgment is discretionary. Aldabe v. Aldabe, 616 F.2d 1089, 17 1092 (9th Cir. 1980). The Court may consider the following factors when deciding whether 18 default judgment is appropriate: (1) the possibility of prejudice to the plaintiff, (2) the 19 merits of the claims, (3) the sufficiency of the complaint, (4) the amount of money at stake, 20 (5) the possibility of factual disputes, (6) whether default is due to excusable neglect, and 21 (7) the policy favoring decisions on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471- 22 72 (9th Cir. 1986). In considering the merits and sufficiency of the complaint, the Court 23 accepts as true the complaint’s well-pled factual allegations. See Geddes v. United Fin. 24 Grp., 559 F.2d 557, 560 (9th Cir. 1977). Although the Court should consider and weigh 25 relevant factors as part of the decision-making process, it “is not required to make detailed 26 findings of fact.” Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). 27 Mr. Deutsch is the personal representative of the Estate of Mark Day, Jr. In 1996, 28 Mr. Day designated Mr. Janowitz as the beneficiary of an Individual Retirement Account 1 (“IRA”). Mr. Day died 21 years later, having lost contact with Mr. Janowitz for at least 13 2 years before his death. Since Mr. Day’s death, the IRA assets have remained with the 3 custodian, American Century Investments (“ACI”), because Mr. Janowitz has not made a 4 claim to the IRA, despite receiving letters from ACI in 2018 and 2019 informing him of 5 Mr. Day’s passing. Mr. Deutsch brings this action against Mr. Janowitz seeking a 6 declaratory judgment that Mr. Janowitz has disclaimed his interest in the IRA by failing to 7 make a claim to it. (Doc. 30.) Mr. Janowitz failed to appear or respond to the amended 8 complaint, despite being served, resulting in the entry of default against him. (Docs. 41, 9 42, 44.) 10 Mr. Deutsch previously moved for entry of a default judgment in the form of a 11 declaration that Mr. Janowitz has disclaimed his interest in the IRA and permitting Mr. 12 Deutsch to invoke a provision of Arizona law to revert the IRA assets to the Estate. (Doc. 13 46.) In ruling on that motion, the Court found several factors favor entry of default 14 judgment. (Doc. 47.) If default judgment is not granted, Mr. Deutsch “will likely be without 15 other recourse for recovery.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 16 (C.D. Cal. 2002). Given Mr. Janowitz’s default, there likely are no genuine factual disputes 17 that would preclude granting the motion. Id. There is no evidence that Mr. Janowitz’s 18 default was the result of excusable neglect. The IRA is valued at upward of $150,000, 19 which, though not insignificant, also is not so high as to counsel against default judgment. 20 And although cases “should be decided on their merits whenever reasonably possible” 21 Eitel, 782 F.2d at 1472, the existence of Federal Rule of Civil Procedure 55(b) “indicates 22 that this preference, standing alone, is not dispositive.” PepsiCo, 238 F. Supp. 2d at 1177 23 (citation omitted). 24 The Court struggled, however, with the merits of the claim and the sufficiency of 25 the complaint. Mr. Deutsch seeks a declaratory judgment that Mr. Janowitz has de facto 26 disclaimed his interest in the IRA by failing to file a claim for roughly the past 5 years. Mr. 27 Deutsch’s original motion cited no law regarding de facto disclaimers. Instead, he candidly 28 admitted that although “IRA rules and policies abound on competing beneficiary claims, 1 but there is no ERISA law about what should happen when an IRA beneficiary never makes 2 a claim.” (Doc. 46 at 8.) What’s more, Mr. Deutsch had not provided the Court with the 3 IRA plan documents, and the Court wanted assurances that nothing in those plan 4 documents governs what should happen if a named beneficiary fails to make a claim. The 5 Court therefore denied Mr. Deutch’s motion for default judgment without prejudice and 6 permitted him to renew his motion with (1) copies of the relevant plan documents and (2) 7 argument—and, if available, supporting authority—regarding the elements of a de facto 8 disclaimer. (Doc. 47.) 9 Mr. Deutsch has renewed his motion, attaching the relevant plan documents. (Doc. 10 48.) The Court has reviewed those documents and finds nothing in them that governs what 11 should happen if a named beneficiary fails to make a claim. Rather, the “Beneficiaries” 12 section of the ACI Disclosure Statement and Custodial Agreement contemplates only four 13 scenarios: (1) no beneficiary is named, (2) a named beneficiary makes a claim, (3) a named 14 beneficiary pre-deceases the account owner, or (4) a named beneficiary disclaims his 15 interest. (Id. at 49.) On the law front, Mr. Deutsch makes two arguments that the Court 16 finds persuasive. First, Mr. Deutsch analogizes a disclaimer to a waiver, which is “the 17 intentional relinquishment of a known right.” Gordon v. Deloitte & Touche, LLP Grp. Long 18 Term Disability Plan, 749 F.3d 746, 752 (9th Cir. 2014). A waiver may be found when a 19 “party’s acts are so inconsistent with an intent to enforce the right as to induce a reasonable 20 belief that such right has been relinquished.” Intel Corp. v. Hartford Acc. & Indem. Co., 21 952 F.2d 1551, 1559 (9th Cir. 1991). Second, Mr. Deutsch contends that the factual 22 allegations in the complaint—which the Court accepts as true in this posture—reveal acts 23 (or, more accurately, the lack thereof) by Mr. Janowitz that are inconsistent with an intent 24 to enforce a right to the IRA assets. Mr. Janowitz has not made a claim to the IRA, despite 25 receiving letters from ACI in 2018 and 2019 informing him of Mr. Day’s passing. Mr. 26 Janowitz received notice of this lawsuit, in which Mr. Deutsch claims that Mr. Janowitz 27 has disclaimed his interest in the IRA, yet he has failed to appear or respond to the amended 28 complaint or the two motions of default judgment. The Court agrees that this conduct is inconsistent with an intent to enforce a known right to the IRA assets, such that Mr. || Janowitz can be deemed to have disclaimed his interest. Accordingly, 3 IT IS ORDERED that Mr. Deutsch’s renewed motion for default judgment (Doc. 4|| 48) is GRANTED. Mr. Janowitz is deemed to have disclaimed his interest in the IRA 5 || accounts of Mr. Day. Mr. Deutsch may therefore invoke applicable provisions of Arizona || law to permit the IRA assets to revert to the estate. The Clerk shall enter judgment || accordingly and terminate this case. 8 Dated this 17th day of September, 2024. 9 10 ll {Z, 12 {UO 13 Sout United Sites District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Robert Deutsch, No. CV-21-08136-PCT-DLR

10 Plaintiff, ORDER

11 v.

12 American Century Investments, et al.,

13 Defendants. 14 15 At issue is Plaintiff Robert Deutsch’s renewed motion for default judgment. (Doc. 16 48.) Whether to enter a default judgment is discretionary. Aldabe v. Aldabe, 616 F.2d 1089, 17 1092 (9th Cir. 1980). The Court may consider the following factors when deciding whether 18 default judgment is appropriate: (1) the possibility of prejudice to the plaintiff, (2) the 19 merits of the claims, (3) the sufficiency of the complaint, (4) the amount of money at stake, 20 (5) the possibility of factual disputes, (6) whether default is due to excusable neglect, and 21 (7) the policy favoring decisions on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471- 22 72 (9th Cir. 1986). In considering the merits and sufficiency of the complaint, the Court 23 accepts as true the complaint’s well-pled factual allegations. See Geddes v. United Fin. 24 Grp., 559 F.2d 557, 560 (9th Cir. 1977). Although the Court should consider and weigh 25 relevant factors as part of the decision-making process, it “is not required to make detailed 26 findings of fact.” Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). 27 Mr. Deutsch is the personal representative of the Estate of Mark Day, Jr. In 1996, 28 Mr. Day designated Mr. Janowitz as the beneficiary of an Individual Retirement Account 1 (“IRA”). Mr. Day died 21 years later, having lost contact with Mr. Janowitz for at least 13 2 years before his death. Since Mr. Day’s death, the IRA assets have remained with the 3 custodian, American Century Investments (“ACI”), because Mr. Janowitz has not made a 4 claim to the IRA, despite receiving letters from ACI in 2018 and 2019 informing him of 5 Mr. Day’s passing. Mr. Deutsch brings this action against Mr. Janowitz seeking a 6 declaratory judgment that Mr. Janowitz has disclaimed his interest in the IRA by failing to 7 make a claim to it. (Doc. 30.) Mr. Janowitz failed to appear or respond to the amended 8 complaint, despite being served, resulting in the entry of default against him. (Docs. 41, 9 42, 44.) 10 Mr. Deutsch previously moved for entry of a default judgment in the form of a 11 declaration that Mr. Janowitz has disclaimed his interest in the IRA and permitting Mr. 12 Deutsch to invoke a provision of Arizona law to revert the IRA assets to the Estate. (Doc. 13 46.) In ruling on that motion, the Court found several factors favor entry of default 14 judgment. (Doc. 47.) If default judgment is not granted, Mr. Deutsch “will likely be without 15 other recourse for recovery.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 16 (C.D. Cal. 2002). Given Mr. Janowitz’s default, there likely are no genuine factual disputes 17 that would preclude granting the motion. Id. There is no evidence that Mr. Janowitz’s 18 default was the result of excusable neglect. The IRA is valued at upward of $150,000, 19 which, though not insignificant, also is not so high as to counsel against default judgment. 20 And although cases “should be decided on their merits whenever reasonably possible” 21 Eitel, 782 F.2d at 1472, the existence of Federal Rule of Civil Procedure 55(b) “indicates 22 that this preference, standing alone, is not dispositive.” PepsiCo, 238 F. Supp. 2d at 1177 23 (citation omitted). 24 The Court struggled, however, with the merits of the claim and the sufficiency of 25 the complaint. Mr. Deutsch seeks a declaratory judgment that Mr. Janowitz has de facto 26 disclaimed his interest in the IRA by failing to file a claim for roughly the past 5 years. Mr. 27 Deutsch’s original motion cited no law regarding de facto disclaimers. Instead, he candidly 28 admitted that although “IRA rules and policies abound on competing beneficiary claims, 1 but there is no ERISA law about what should happen when an IRA beneficiary never makes 2 a claim.” (Doc. 46 at 8.) What’s more, Mr. Deutsch had not provided the Court with the 3 IRA plan documents, and the Court wanted assurances that nothing in those plan 4 documents governs what should happen if a named beneficiary fails to make a claim. The 5 Court therefore denied Mr. Deutch’s motion for default judgment without prejudice and 6 permitted him to renew his motion with (1) copies of the relevant plan documents and (2) 7 argument—and, if available, supporting authority—regarding the elements of a de facto 8 disclaimer. (Doc. 47.) 9 Mr. Deutsch has renewed his motion, attaching the relevant plan documents. (Doc. 10 48.) The Court has reviewed those documents and finds nothing in them that governs what 11 should happen if a named beneficiary fails to make a claim. Rather, the “Beneficiaries” 12 section of the ACI Disclosure Statement and Custodial Agreement contemplates only four 13 scenarios: (1) no beneficiary is named, (2) a named beneficiary makes a claim, (3) a named 14 beneficiary pre-deceases the account owner, or (4) a named beneficiary disclaims his 15 interest. (Id. at 49.) On the law front, Mr. Deutsch makes two arguments that the Court 16 finds persuasive. First, Mr. Deutsch analogizes a disclaimer to a waiver, which is “the 17 intentional relinquishment of a known right.” Gordon v. Deloitte & Touche, LLP Grp. Long 18 Term Disability Plan, 749 F.3d 746, 752 (9th Cir. 2014). A waiver may be found when a 19 “party’s acts are so inconsistent with an intent to enforce the right as to induce a reasonable 20 belief that such right has been relinquished.” Intel Corp. v. Hartford Acc. & Indem. Co., 21 952 F.2d 1551, 1559 (9th Cir. 1991). Second, Mr. Deutsch contends that the factual 22 allegations in the complaint—which the Court accepts as true in this posture—reveal acts 23 (or, more accurately, the lack thereof) by Mr. Janowitz that are inconsistent with an intent 24 to enforce a right to the IRA assets. Mr. Janowitz has not made a claim to the IRA, despite 25 receiving letters from ACI in 2018 and 2019 informing him of Mr. Day’s passing. Mr. 26 Janowitz received notice of this lawsuit, in which Mr. Deutsch claims that Mr. Janowitz 27 has disclaimed his interest in the IRA, yet he has failed to appear or respond to the amended 28 complaint or the two motions of default judgment. The Court agrees that this conduct is inconsistent with an intent to enforce a known right to the IRA assets, such that Mr. || Janowitz can be deemed to have disclaimed his interest. Accordingly, 3 IT IS ORDERED that Mr. Deutsch’s renewed motion for default judgment (Doc. 4|| 48) is GRANTED. Mr. Janowitz is deemed to have disclaimed his interest in the IRA 5 || accounts of Mr. Day. Mr. Deutsch may therefore invoke applicable provisions of Arizona || law to permit the IRA assets to revert to the estate. The Clerk shall enter judgment || accordingly and terminate this case. 8 Dated this 17th day of September, 2024. 9 10 ll {Z, 12 {UO 13 Sout United Sites District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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