1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 JULIE GRUNDSTROM, Case No. 20-cv-03445-MMC
8 Plaintiff, ORDER GRANTING DEFENDANT’S 9 v. MOTION TO DISMISS FOURTH CLAIM FOR RELIEF IN FIRST 10 WILCO LIFE INSURANCE COMPANY, AMENDED COMPLAINT; DISMISSING FOURTH CLAIM FOR RELIEF 11 Defendant. WITHOUT FURTHER LEAVE TO AMEND; VACATING HEARING
12 Re: Doc. Nos. 59, 61, 62 13
14 Before the Court is defendant Wilco Life Insurance Company’s (“Wilco”) motion, 15 filed June 3, 2022, to dismiss, pursuant to Rule 12(b)(6) of the Federal Rules of Civil 16 Procedure, the Fourth Cause of Action asserted in plaintiff Julie Grundstrom’s 17 (“Grundstrom”) First Amended Complaint (“FAC”). Grundstrom has filed opposition, to 18 which Wilco has replied. Having read and considered the papers filed in support of and 19 in opposition to the motion, the Court deems the matter suitable for determination on the 20 parties’ respective written submissions, VACATES the hearing scheduled for July 8, 21 2022, and rules as follows. 22 BACKGROUND 23 In the FAC, Grundstrom alleges she was the “primary beneficiary” of a “flexible 24 premium adjustable life insurance policy” (hereinafter, “the Policy”), which her father, 25 Richard I. Appleton (“Appleton”), purchased from a life insurance company that was 26 27 1 subsequently “acquired and subsumed by” Wilco. (See FAC ¶¶ 21, 23.)1 As alleged in 2 the FAC, the Policy “provide[d] a 61-day grace period” for quarterly premium payments 3 and required Wilco to provide, before any lapse or termination of coverage for 4 nonpayment, at least 31 days’ written notice to Appleton and “any assignee of record.” 5 (See FAC ¶¶ 23, 25, 59.) 6 Grundstrom alleges that Wilco, on July 17, 2018, sent Appleton “a letter indicating 7 [the Policy] had lapsed as of July 14, 2018,” and that Appleton, on September 27, 2018, 8 passed away. (See FAC ¶ 26.) Grundstrom further alleges that Wilco did not, in 9 purporting to terminate the Policy, comply with the notice requirements of the Policy or of 10 sections 10113.71 and 10113.72 of the California Insurance Code (see FAC ¶¶ 24, 59), 11 and, in addition, violated section 10113.72 by failing to give Appleton “annual notice of his 12 right to designate a third party to receive notices of pending lapse or termination of 13 coverage” (see FAC ¶ 67; see also FAC ¶ 15). 14 Based on the above allegations, Grundstrom asserts, individually, as Appleton’s 15 successor-in-interest, and on behalf of a putative class, the following five causes of 16 action: (1) “Declaratory Judgment or Relief (Cal[.] Civ. Code § 1060 et seq.)”; 17 (2) “Declaratory Judgment or Relief (Federal Declaratory Judgment Act – 28 U.S.C. 18 §§ 2201, et seq.)”; (3) “Breach of Contract”; (4) “Unfair Competition (California Business 19 & Professions Code §§ 17200, et seq.)” (“UCL”); and (5) “Financial Elder Abuse (Cal[.] 20 Welf. & Inst. Code § 15610.30).” 21 LEGAL STANDARD 22 Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure “can be 23 based on the lack of a cognizable legal theory or the absence of sufficient facts alleged 24 under a cognizable legal theory.” See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 25 699 (9th Cir. 1990). Rule 8(a)(2), however, “requires only 'a short and plain statement of 26
27 1 At the time of the acquisition, Wilco was known as “Conseco Life Insurance 1 the claim showing that the pleader is entitled to relief.’” See Bell Atl. Corp. v. Twombly, 2 550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2)). Consequently, “a complaint 3 attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations.” 4 See id. Nonetheless, “a plaintiff's obligation to provide the grounds of his entitlement to 5 relief requires more than labels and conclusions, and a formulaic recitation of the 6 elements of a cause of action will not do.” See id. (internal quotation, citation, and 7 alteration omitted). 8 In analyzing a motion to dismiss, a district court must accept as true all material 9 allegations in the complaint and construe them in the light most favorable to the 10 nonmoving party. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). “To 11 survive a motion to dismiss, a complaint must contain sufficient factual material, accepted 12 as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 13 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “Factual allegations must be 14 enough to raise a right to relief above the speculative level[.]” Twombly, 550 U.S. at 555. 15 Courts “are not bound to accept as true a legal conclusion couched as a factual 16 allegation.” See Iqbal, 556 U.S. at 678 (internal quotation and citation omitted). 17 DISCUSSION 18 By order filed April 15, 2022, the Court dismissed, with leave to amend, 19 Grundstrom’s First, Second, and Fourth Causes of Action as alleged in the Complaint, 20 after which Grundstrom filed the FAC, wherein, with the exception of the Fourth Cause of 21 Action to the extent based on injunctive relief, her five initial claims are reasserted. 22 By the instant motion, Wilco contends Grundstrom’s Fourth Cause of Action, by 23 which Grundstrom seeks restitution in the form of “un-refunded premiums, withheld 24 benefits, and diminution [in] value” of the Policy (see FAC ¶ 71), is again subject to 25 dismissal. As set forth below, the Court agrees that Grundstrom has failed to state a 26 claim for restitution under the UCL. 27 A plaintiff “must establish that she lacks an adequate remedy at law before 1 Nutrition Corp., 971 F.3d 834, 844 (9th Cir. 2020).2 2 Here, Grundstrom alleges she lacks an adequate remedy at law for the asserted 3 reason that “[p]otential breach of contract damages, alone, will not fully and fairly 4 compensate” her for Wilco’s alleged misconduct. (See FAC ¶ 74.) As Wilco points out, 5 however, the restitution Grundstrom seeks is “necessarily less than or equal to the policy 6 benefits she seeks” under her breach of contract claim (see Mot. at 5:20-23 (emphasis 7 omitted); see also FAC ¶¶ 63-64), and Grundstrom offers no argument to the contrary, 8 see Nguyen v. Nissan N. Am., Inc., Case No. 16-cv-05591-LHK, 2017 WL 1330602, at 9 *4-5 (N.D. Cal. Apr. 11, 2017) (granting motion to dismiss UCL claim where plaintiff 10 “fail[ed] to explain how damages [were] inadequate to compensate” for the “exact same 11 alleged harm that form[ed] the basis of [his] request[] for . . . restitutionary” relief (internal 12 quotation and citation omitted)). 13 Although Grundstrom alleges that, in the event her breach of contract claim were 14 to fail on its merits, her UCL claim would be her “only avenue of recovery” (see FAC 15 ¶ 74), “the relevant test” for equitable jurisdiction “is whether an adequate damages 16 remedy is available, not whether the plaintiff elects to pursue it, or whether she will be 17 successful in that pursuit,” see Mullins v. Premier Nutrition Corp., Case No. 13-cv-01271- 18 RS, 2018 WL 510139, at *2 (N.D. Cal. Jan. 23, 2018), aff’d sub nom. Sonner, 971 F.3d 19 834 (9th Cir. 2020); see also Axelrod v. Lenovo (U.S.), Inc., Case No. 21-cv-06770-JSW, 20 2022 WL 976971, at *3 (N.D. Cal. Mar.
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1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 JULIE GRUNDSTROM, Case No. 20-cv-03445-MMC
8 Plaintiff, ORDER GRANTING DEFENDANT’S 9 v. MOTION TO DISMISS FOURTH CLAIM FOR RELIEF IN FIRST 10 WILCO LIFE INSURANCE COMPANY, AMENDED COMPLAINT; DISMISSING FOURTH CLAIM FOR RELIEF 11 Defendant. WITHOUT FURTHER LEAVE TO AMEND; VACATING HEARING
12 Re: Doc. Nos. 59, 61, 62 13
14 Before the Court is defendant Wilco Life Insurance Company’s (“Wilco”) motion, 15 filed June 3, 2022, to dismiss, pursuant to Rule 12(b)(6) of the Federal Rules of Civil 16 Procedure, the Fourth Cause of Action asserted in plaintiff Julie Grundstrom’s 17 (“Grundstrom”) First Amended Complaint (“FAC”). Grundstrom has filed opposition, to 18 which Wilco has replied. Having read and considered the papers filed in support of and 19 in opposition to the motion, the Court deems the matter suitable for determination on the 20 parties’ respective written submissions, VACATES the hearing scheduled for July 8, 21 2022, and rules as follows. 22 BACKGROUND 23 In the FAC, Grundstrom alleges she was the “primary beneficiary” of a “flexible 24 premium adjustable life insurance policy” (hereinafter, “the Policy”), which her father, 25 Richard I. Appleton (“Appleton”), purchased from a life insurance company that was 26 27 1 subsequently “acquired and subsumed by” Wilco. (See FAC ¶¶ 21, 23.)1 As alleged in 2 the FAC, the Policy “provide[d] a 61-day grace period” for quarterly premium payments 3 and required Wilco to provide, before any lapse or termination of coverage for 4 nonpayment, at least 31 days’ written notice to Appleton and “any assignee of record.” 5 (See FAC ¶¶ 23, 25, 59.) 6 Grundstrom alleges that Wilco, on July 17, 2018, sent Appleton “a letter indicating 7 [the Policy] had lapsed as of July 14, 2018,” and that Appleton, on September 27, 2018, 8 passed away. (See FAC ¶ 26.) Grundstrom further alleges that Wilco did not, in 9 purporting to terminate the Policy, comply with the notice requirements of the Policy or of 10 sections 10113.71 and 10113.72 of the California Insurance Code (see FAC ¶¶ 24, 59), 11 and, in addition, violated section 10113.72 by failing to give Appleton “annual notice of his 12 right to designate a third party to receive notices of pending lapse or termination of 13 coverage” (see FAC ¶ 67; see also FAC ¶ 15). 14 Based on the above allegations, Grundstrom asserts, individually, as Appleton’s 15 successor-in-interest, and on behalf of a putative class, the following five causes of 16 action: (1) “Declaratory Judgment or Relief (Cal[.] Civ. Code § 1060 et seq.)”; 17 (2) “Declaratory Judgment or Relief (Federal Declaratory Judgment Act – 28 U.S.C. 18 §§ 2201, et seq.)”; (3) “Breach of Contract”; (4) “Unfair Competition (California Business 19 & Professions Code §§ 17200, et seq.)” (“UCL”); and (5) “Financial Elder Abuse (Cal[.] 20 Welf. & Inst. Code § 15610.30).” 21 LEGAL STANDARD 22 Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure “can be 23 based on the lack of a cognizable legal theory or the absence of sufficient facts alleged 24 under a cognizable legal theory.” See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 25 699 (9th Cir. 1990). Rule 8(a)(2), however, “requires only 'a short and plain statement of 26
27 1 At the time of the acquisition, Wilco was known as “Conseco Life Insurance 1 the claim showing that the pleader is entitled to relief.’” See Bell Atl. Corp. v. Twombly, 2 550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2)). Consequently, “a complaint 3 attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations.” 4 See id. Nonetheless, “a plaintiff's obligation to provide the grounds of his entitlement to 5 relief requires more than labels and conclusions, and a formulaic recitation of the 6 elements of a cause of action will not do.” See id. (internal quotation, citation, and 7 alteration omitted). 8 In analyzing a motion to dismiss, a district court must accept as true all material 9 allegations in the complaint and construe them in the light most favorable to the 10 nonmoving party. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). “To 11 survive a motion to dismiss, a complaint must contain sufficient factual material, accepted 12 as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 13 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “Factual allegations must be 14 enough to raise a right to relief above the speculative level[.]” Twombly, 550 U.S. at 555. 15 Courts “are not bound to accept as true a legal conclusion couched as a factual 16 allegation.” See Iqbal, 556 U.S. at 678 (internal quotation and citation omitted). 17 DISCUSSION 18 By order filed April 15, 2022, the Court dismissed, with leave to amend, 19 Grundstrom’s First, Second, and Fourth Causes of Action as alleged in the Complaint, 20 after which Grundstrom filed the FAC, wherein, with the exception of the Fourth Cause of 21 Action to the extent based on injunctive relief, her five initial claims are reasserted. 22 By the instant motion, Wilco contends Grundstrom’s Fourth Cause of Action, by 23 which Grundstrom seeks restitution in the form of “un-refunded premiums, withheld 24 benefits, and diminution [in] value” of the Policy (see FAC ¶ 71), is again subject to 25 dismissal. As set forth below, the Court agrees that Grundstrom has failed to state a 26 claim for restitution under the UCL. 27 A plaintiff “must establish that she lacks an adequate remedy at law before 1 Nutrition Corp., 971 F.3d 834, 844 (9th Cir. 2020).2 2 Here, Grundstrom alleges she lacks an adequate remedy at law for the asserted 3 reason that “[p]otential breach of contract damages, alone, will not fully and fairly 4 compensate” her for Wilco’s alleged misconduct. (See FAC ¶ 74.) As Wilco points out, 5 however, the restitution Grundstrom seeks is “necessarily less than or equal to the policy 6 benefits she seeks” under her breach of contract claim (see Mot. at 5:20-23 (emphasis 7 omitted); see also FAC ¶¶ 63-64), and Grundstrom offers no argument to the contrary, 8 see Nguyen v. Nissan N. Am., Inc., Case No. 16-cv-05591-LHK, 2017 WL 1330602, at 9 *4-5 (N.D. Cal. Apr. 11, 2017) (granting motion to dismiss UCL claim where plaintiff 10 “fail[ed] to explain how damages [were] inadequate to compensate” for the “exact same 11 alleged harm that form[ed] the basis of [his] request[] for . . . restitutionary” relief (internal 12 quotation and citation omitted)). 13 Although Grundstrom alleges that, in the event her breach of contract claim were 14 to fail on its merits, her UCL claim would be her “only avenue of recovery” (see FAC 15 ¶ 74), “the relevant test” for equitable jurisdiction “is whether an adequate damages 16 remedy is available, not whether the plaintiff elects to pursue it, or whether she will be 17 successful in that pursuit,” see Mullins v. Premier Nutrition Corp., Case No. 13-cv-01271- 18 RS, 2018 WL 510139, at *2 (N.D. Cal. Jan. 23, 2018), aff’d sub nom. Sonner, 971 F.3d 19 834 (9th Cir. 2020); see also Axelrod v. Lenovo (U.S.), Inc., Case No. 21-cv-06770-JSW, 20 2022 WL 976971, at *3 (N.D. Cal. Mar. 31, 2022) (rejecting argument that plaintiffs “may 21 lack an adequate remedy at law” because “their legal claims w[ould] be harder to prove”); 22 Barrett v. Apple, Inc., 523 F. Supp. 3d 1132, 1157 (N.D. Cal. 2021) (noting the Ninth 23 2 Although the Court agrees with Grundstrom that Sonner is “not a pleadings 24 decision” (see Opp. at 4:16), a claim for equitable relief is nevertheless subject to dismissal at the pleading stage if the “availability of an adequate legal remedy is clear 25 from the face of the [complaint],” see In re MacBook Keyboard Litig., Case No. 5:18-cv- 02813-EJD, 2020 WL 6047253, at *4 (N.D. Cal. Oct. 13, 2020); cf. Rivera v. Peri & Sons 26 Farms, Inc., 735 F.3d 892, 902 (9th Cir. 2013) (holding, although plaintiff “ordinarily need not plead on the subject of an anticipated affirmative defense,” dismissal is appropriate 27 where the defense is “apparent on the face of the complaint” (internal quotation and 1 Circuit, in Sonner, “rejected . . . wait-and-see approach’). 2 Likewise unavailing is Grundstrom’s argument that her UCL claim is appropriately 3 || pled “in the alternative.” (See Opp. at 5:7-21.) “The question is not whether or when 4 [Grundstrom is] required to choose between two available inconsistent remedies,” but, 5 || rather, “whether equitable remedies are available to [Grundstrom] at all.” See Shuman v. 6 SquareTrade, Inc., Case No. 20-cv-02725-JCS, 2021 WL 5113182, at *10 (N.D. Cal. 7 Nov. 3, 2021) (citation omitted); see also In re Apple Processor Litig., Case No. 18-cv- 8 || 00147-EJD, 2022 WL 2064975, at *11 (N.D. Cal. June 8, 2022) (noting argument that 9 || “equitable claims may be pled in the alternative to otherwise inconsistent legal 10 claims . . . d[id] not address” question of whether plaintiffs lacked adequate remedy at 11 law). 12 Accordingly, Grundstrom’s UCL claim will be dismissed without further leave to 5 13 amend. See □□ re MacBook, 2020 WL 6047253, at *4 (dismissing UCL claim without 14 || further leave to amend where “availability of . . . adequate legal remedy [was] clear’; 8 15 || noting “further amendment . . . would be futile”).° é 16 CONCLUSION G 17 For the reasons stated above, Wilco’s motion to dismiss is hereby GRANTED, and 5 18 || Grundstrom’s Fourth Claim for Relief is hereby DISMISSED without further leave to 19 || amend. 20 21 IT IS SO ORDERED. 22 23 || Dated: July 1, 2022 babel, Chat INE M. CHESNEY 24 United States District Judge 25 26 27 3 In light of this finding, the Court does not address herein Wilco’s additional 2g || argument that Grundstrom’s “grounds for restitution . . . are invalid.” (See Mot. at 7:8-9.)