Kathleen O'Neill v. California Physicians' Service, et al.

• Court: District Court, N.D. California
• Decided: November 17, 2025
• Docket: 3:25-cv-00876
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 KATHLEEN O'NEILL, Case No. 25-cv-00876-JSC

8 Plaintiff, ORDER RE: MOTION TO DISMISS v. 9 Re: Dkt. No. 43 10 CALIFORNIA PHYSICIANS' SERVICE, et al., 11 Defendants.

12 13 Kathleen O’Neill sues California Physicians’ Services, dba Blue Shield of California, and 14 Blue Shield of California Life and Health Insurance Company (collectively, “Defendants”) 15 alleging Defendants operated a “sustained criminal enterprise” from 2015 to the present that 16 deprived her of insurance coverage while extracting premiums and federal subsidies. (Dkt. No. 34 17 ¶ 1.)1 Plaintiff asserts claims under the Racketeer Influenced and Corrupt Organizations Act 18 (“RICO”), fraud and deceit, and breach of fiduciary duty. Before the Court is Defendants’ Motion 19 to Dismiss Plaintiff’s First Amended Complaint (“FAC”). (Dkt. No. 43.) For the reasons 20 explained below, the FAC is DISMISSED with leave to amend. 21 BACKGROUND 22 A. First Amended Complaint Allegations 23 Plaintiff enrolled in Blue Shield’s “Silver 87 PPO health insurance plan” in 2015. (Dkt. 24 No. 34 ¶ 9.) Over the course of several years, Defendants misappropriated funds and “failed to 25 provide any of the substantive insurance benefits it guaranteed under [Plaintiff’s] policy number.” 26 (Id. ¶ 2.) Defendants’ misrepresentations about Plaintiff’s coverage include: 27 1 • In July 2016, Defendants sent Plaintiff a letter stating her coverage had been cancelled 2 effective April 30, 2016. (Id. at ¶ 11.) 3 • In 2016 and 2017, Defendants repeatedly denied coverage for specific visits despite 4 Plaintiff’s timely payment of premiums. (Id. ¶¶ 15–16, 24 (denying payment for 5 acupuncture and chiropractic treatments)); (Id. ¶ 18 (denying payment for treatment at 6 Sutter Health for expenses related to a shattered tibia)); (Id. ¶ 58 (denying payment for 7 treatment at Good Samaritan Hospital in Corvallis, Oregon).) 8 • In October 2023, Defendants asserted Plaintiff remained covered through December 9 31, 2017, but admitted her policy had been terminated and reinstated four times 10 between 2015 and 2017 before ending on December 31, 2017. (Id. ¶¶ 10, 13.) 11 • From 2015 to 2018, Defendants submitted IRS Form 1095-A filings certifying full-year 12 coverage, despite Plaintiff’s gaps in coverage, allegedly allowing Blue Shield to 13 misappropriate premiums and Advance Premium Tax Credits (“APTC”) funds. (Id. ¶¶ 14 56, 57, 58, 59.) 15 Throughout this period, Plaintiff continued paying her premiums because Defendants 16 issued “false certifications of coverage and fabricated records,” leading her to believe her policy 17 remained in effect. (Id. ¶ 96.) Defendants’ repeated denials of medical coverage caused several 18 forms of injury. Plaintiff suffered “loss of earning capacity, reputational damage, harm to credit, 19 and time lost managing a fraudulent insurance relationship.” (Id. ¶ 107.) She also experienced 20 “severe emotional distress resulting from denied coverage during medical crises . . . delayed 21 medical services, and debt collection resulting from denied claims.” (Id. ¶ 108.) 22 B. Procedural Background 23 On December 17, 2024, Plaintiff filed her complaint in the San Francisco County Superior 24 Court. (Dkt. No. 1-2.) Plaintiff brought claims against Defendants for (1) fraud and deceit, (2) tax 25 fraud, (3) wire fraud, (4) phone fraud, (5) mail fraud, (6) embezzlement, (7) conspiracy to defraud, 26 and (8) a Racketeer Influenced and Corrupt Organizations Act (RICO) claim under 18 U.S.C. § 27 1962. (Id.) Defendants removed the action to this federal court based on federal question and 1 lack of federal question jurisdiction, and to strike affirmative defenses, which the Court denied. 2 (Dkt. Nos. 8, 12, 23.) Defendants thereafter moved for judgment on the pleadings under Federal 3 Rule of Civil Procedure 12(c). (Dkt. No. 33.) The Court granted the motion after Plaintiff filed a 4 118-page amended complaint in lieu of an opposition brief and deemed the First Amended 5 Complaint the operative complaint. (Dkt. No. 38.) The now operative First Amended Complaint 6 pleads claims for civil RICO, fraud and deceit, and breach of fiduciary duty. (Dkt. No. 34.) 7 Defendants have again moved to dismiss. (Dkt. No. 43.) 8 DISCUSSION 9 Defendants move to dismiss Plaintiff’s claims for failure to state a claim and as barred by 10 the statute of limitations. 11 I. FAILURE TO STATE A CLAIM 12 A. FRAUD AND DECEIT 13 Under California law, “[t]he elements of fraud, which give rise to a tort action for deceit, 14 are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of 15 falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) 16 resulting damage.” Lazar v. Sup. Ct., 12 Cal. 4th 631, 638 (1996) (internal quotation marks and 17 citation omitted). Additionally, under Federal Rule of Civil Procedure 9(b), “in alleging fraud or 18 mistake, a party must state with particularity the circumstances constituting fraud or mistake.” See 19 also Lazar, 12 Cal. 4th at 638 (“[F]raud must be pled specifically; general and conclusory 20 allegations do not suffice.”) (internal citations omitted). 21 Plaintiff’s fraud claim is based on the following allegations: Defendants “systematically 22 and repeatedly misrepresented [Plaintiff’s] insurance coverage status” by certifying her coverage 23 as active while terminating her policy, collecting premiums, and issuing false certifications in 24 “official tax forms, provider communications, and internal records.” (Dkt. No. 34 ¶ 93.) 25 Defendants “fabricated policy reinstatements,” ignored a court order, and “misclassif[ied] 26 withheld funds” to conceal liability, which she describes as “calculated deception.” (Id. ¶ 95.) 27 Further, Defendants intended to defraud Plaintiff by issuing “false certifications and fabricated 1 concealing the truth through “mislabeling funds and issuing nominal refunds.” (Id. ¶ 96.) 2 Plaintiff relied on “official documents filed under penalty of perjury, monthly premium invoices, 3 and direct communications,” which no reasonable insured would doubt. (Id. ¶ 97.) Finally, 4 Plaintiff paid “over $20,000 in premiums and nearly $19,000 in federal subsidies” without 5 receiving coverage, incurred “thousands of dollars in unpaid medical bills” sent to collections, was 6 denied “treatment for a broken leg,” and suffered “profound emotional, physical, and financial 7 harm.” (Id. ¶ 98.) 8 While Plaintiff’s allegations reference each element of a fraud claim, they are too 9 conclusory to satisfy Rule 9(b)’s strict pleading requirements. Plaintiff must allege the “who, 10 what, when, where, and how of the fraud.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 11 (9th Cir. 2003). Plaintiff’s allegations do not include enough information to enable Defendants to 12 know what misrepresentations are attributable to them and what fraudulent conduct they are 13 charged with. See Tenet Healthsystem Desert, Inc. v. Blue Cross of California, 245 Cal. App. 4th 14 821, 838–39 (2016) (finding plaintiff sufficiently pled fraud because the complaint identified “the 15 dates, times, and names of the individuals who initiated [the] communications . . . the identities of 16 certain individuals acting as [defendant’s] agents . . . [and] the basis for the allegation those 17 individuals had authority to act on [defendant’s] behalf”). For example, Plaintiff’s allegation 18 Defendants continued collecting premiums after terminating her policy does not identify which 19 Defendant accepted her payments, the specific date, month, or billing cycle when any certification 20 falsely represented coverage, or how Defendants knew the coverage certifications were false when 21 they issued them. See Fortaleza v. PNC Fin. Serv. Grp., Inc., 642 F. Supp, 2d 1012, 1021 (N.D. 22 Cal. 2009) (dismissing plaintiff’s fraud claim, in part, because the complaint failed to allege 23 particularized facts describing “the circumstances [of] each misrepresentation, such as the time, 24 place and nature of the allegedly fraudulent representations”). And while she alleges Defendants’ 25 conduct “exploited [Plaintiff’s] reliance, inducing [Plaintiff] to act to her detriment while 26 [Defendants] conceal[ed] the truth” (Dkt. No. 34 ¶ 96), Plaintiff does not identify what the truth 27 was, what the documentation said, or explain why it was reasonable for her to rely on Defendants’ 1 pleading actual reliance, the plaintiff must set forth facts to show that his or her actual reliance on 2 the representations was justifiable, so that the cause of the damage was the defendant’s wrong and 3 not the plaintiff’s fault.”) (internal quotation marks and citation omitted). 4 So, Plaintiff’s Complaint fails to meet the requirements of Rule 9(b). Plaintiff has not 5 specifically alleged the circumstances constituting the fraud, such as who made the 6 misrepresentations, as well as when, where, how they were made, and why the representations 7 were false. Accordingly, Plaintiff’s fraud claim is DISMISSED. 8 B. CIVIL RICO 9 Defendants move to dismiss Plaintiff’s RICO claim on the grounds Plaintiff lacks standing 10 to assert a RICO claim, fails to plead sufficient predicate acts, and fails to satisfy Rule 9(b). (Dkt. 11 No. 43 at 13, 15–16.) Plaintiff’s RICO claims fails for essentially the same reasons as her 12 common law fraud claim. Plaintiff does not allege facts sufficient to plausibly allege the predicate 13 acts of mail and wire fraud under Rule 9(b)’s particularity requirement. 14 1. RICO Standing 15 To establish standing under Section 1964(c), a civil RICO plaintiff must show an “injury to 16 his business or property.” Shulman v. Kaplan, 58 F.4th 404, 410 (9th Cir. 2023); see also Glob. 17 Master Int’l Grp., Inc. v. Esmond Nat., Inc., 76 F.4th 1266, 1274 (9th Cir. 2023) (requiring the 18 plaintiff to demonstrate “harm to a specific property interest cognizable under state law” and the 19 injury produced a “concrete financial loss.”). “Without a harm to a specific business or property 20 interest—a categorical inquiry typically determined by reference to state law—there is no injury to 21 business or property within the meaning of RICO.” Diaz v. Gates, 420 F.3d 897, 900 (9th Cir. 22 2005); see also In re Mendenhall’s Estate, 182 Cal. App. 2d 441, 444 (1960) (“An insurance 23 policy is property. It can be sold, assigned or bequeathed by the owner. Its pecuniary value is the 24 same as though the owner held a promissory note of the insurance company payable on condition. 25 Upon payment, the title to the money paid follows the title to the policy.”) (internal citation 26 omitted). 27 Although Plaintiff does not specifically address RICO standing, her allegations support a 1 misappropriation of her premium payments. See Canyon Cnty. v. Syngenta Seeds, Inc., 519 F.3d 2 969, 976 (9th Cir. 2008) (“In the ordinary context of a commercial transaction, a consumer who 3 has been overcharged can claim an injury to her property, based on a wrongful deprivation of her 4 money. . . . Money, of course, is a form of property.”) (internal citation omitted). The FAC alleges 5 Plaintiff “suffered multiple concrete injuries to her business and property” because “Defendants’ 6 fraudulent practice of falsely certifying active insurance coverage while terminating policies 7 without notice, [and] denying valid medical claims . . . caused [Plaintiff] to incur substantial 8 financial loss, credit harm, and lost business opportunities.” (Dkt. No. 34 ¶ 86.) Alternatively, 9 Plaintiff claims an injury to property based on Defendants’ “secret deposit” with the California 10 State Controller as a “further deprivation of her property rights.” (Id. ¶ 89.) 11 By contrast, Plaintiff’s alleged damages based on an “intangible property interest,” such as 12 “the right to control one’s time and the opportunity to engage in gainful employment” (Id. ¶ 87), 13 represent “personal injur[ies] . . . excluded from the requirement of injury to ‘business or property’ 14 under section 1964(c).” Berg v. First State Ins. Co., 915 F.2d 460, 464 (9th Cir. 1990). Further, 15 Plaintiff’s assertion Defendants “misappropriat[ed] . . . federal subsidy payments” (Dkt. No. 34 ¶ 16 86) is too remote to confer standing because “there are more direct victims of the alleged wrongful 17 conduct”—in this case, the government. Oregon Laborers-Emps. Health & Welfare Tr. Fund v. 18 Philip Morris, Inc., 185 F.3d 957, 963 (9th Cir. 1999) (“A direct relationship between the injury 19 and the alleged wrongdoing, although not the sole requirement of RICO . . . has been one of its 20 central elements.”) (internal quotation marks and citations omitted). 21 2. RICO Predicate Acts 22 To maintain a civil RICO claim, Plaintiff “must allege (1) conduct (2) of an enterprise (3) 23 through a pattern (4) of racketeering activity (5) causing injury to plaintiffs’ ‘business or 24 property.’” Ove v. Gwinn, 264 F.3d 817, 825 (9th Cir. 2001) (quoting 18 U.S.C. § 1964(c)). 25 Federal Rule of Civil Procedure 9(b)’s heightened pleading requirements apply to RICO claims. 26 See Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 541 (9th Cir. 1989). “[R]acketeering 27 activity is any act indictable under several provisions of Title 18 of the United States Code, and 1 includes the predicate acts of mail fraud, wire fraud and obstruction of justice.” Sanford v. 2 MemberWorks, Inc., 625 F.3d 550, 557 (9th Cir. 2010) (cleaned up). 3 Plaintiff alleges predicate acts of mail and wire fraud. “[A] wire fraud violation consists of 4 (1) the formation of a scheme or artifice to defraud; (2) use of the United States wires or causing a 5 use of the United States wires in furtherance of the scheme; and (3) specific intent to deceive or 6 defraud.” Schreiber Distrib. Co. v. Serv-Well Furniture Co., Inc., 806 F.2d 1393, 1399–1400 (9th 7 Cir. 1986) (internal citations omitted). Any “mailing that is incident to an essential part of the 8 scheme satisfies the mailing element,” Schmuck v. United States, 489 U.S. 705, 712 (1989) 9 (internal quotation marks and citations omitted), even if the mailing itself “contain[s] no false 10 information.” Id. at 715 (internal citation omitted). Plaintiff alleges Defendants “engaged in a 11 systematic and multi-year scheme involving numerous predicate acts of mail and wire fraud, all 12 committed in furtherance of their racketeering enterprise.” (Dkt. No. 34 ¶ 79.) 13 According to the FAC, “[f]rom 2015 through 2021, the Defendant repeatedly transmitted 14 false and misleading documents and communications to both Ms. O’Neill and federal agencies, 15 including IRS Forms 1095-A, falsely certifying active health insurance coverage throughout the 16 entire year and premium payments that the Defendant was not entitled to retain.” (Id.) Plaintiff 17 identifies four exhibits which she alleges were false and “sent via mail and electronic 18 transmissions to Covered California and the IRS, constituting separate predicate acts.” (Id. (citing 19 Ex. 1 at ECF 57–58; Ex. 3 at ECF 63–66; Ex. 4 at ECF 68; Ex. 6 at ECF 76–81).) In an October 20 2023 letter, Defendants confirmed Plaintiff’s coverage from February 2015 through December 21 2017, noting one-day terminations and reinstatements before coverage ended on December 31, 22 2017. (Id. ¶ 79 (citing Ex. 1 at ECF 57–58).) Defendants later issued refund checks for 23 overpayments following termination. (Id. ¶ 83 (citing Ex. 3 at ECF 63–66).) Plaintiff also 24 received notice from the California State Controller’s Office for a refund, which she characterizes 25 as “fraudulent concealment and misappropriation.” (Id. ¶ 82 (citing Ex. 4 at ECF 68).) Lastly, 26 Plaintiff references “false IRS filings,” presumably referring to Defendants’ IRS Form 1095-A 27 submissions. (Id. ¶ 83 (see Ex. 6 at ECF 63–66).) 1 content of the false representations as well as the identities of the parties to the misrepresentation.” 2 Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004). While the letters Plaintiff 3 identifies describe the termination and reinstatement of her coverage, Plaintiff fails to allege facts 4 that plausibly support an inference of wire or mail fraud beyond the conclusory allegations that 5 they were part of a larger scheme of defrauding Plaintiff. First, Plaintiff does not identify any 6 false statement in Defendants’ October 2023 letter or make allegations supporting an inference 7 the letter contained false information when issued. Second, Plaintiff fails to identify a false 8 statement in the refund correspondence or make allegations supporting an inference Defendants 9 acted with fraudulent intent when they issued the refund checks. Third, the letter from the 10 California State Controller’s Office is a state-issued notice, not a statement by Defendants, and 11 Plaintiff offers no allegations supporting an inference it satisfies any fraud element. Finally, 12 Plaintiff’s reference to Defendants’ IRS Form 1095-A submissions does not explain which 13 certification is false or how Defendants knew the information contained inaccuracies at the time of 14 filing. See, e..g, RJ v. Cigna Health and Life Ins. Co., 625 F. Supp. 3d 951, 963 (N.D. Cal. 2022) 15 (finding mail and wire fraud sufficiently pled because plaintiffs identified the individuals who 16 made the alleged representations, described the false statements about coverage and 17 reimbursement rates, and alleged omissions regarding repricing). Conclusory allegations such as 18 those here fall short of the specificity Rule 9(b) requires. See Sun Savings & Loan Assoc. v. 19 Dierdorff, 825 F.2d 187, 195–96 (9th Cir. 1987) (“[S]pecific intent under the mail fraud statute is 20 satisfied by the existence of a scheme which was reasonably calculated to deceive persons of 21 ordinary prudence and comprehension and this intention is shown by examining the scheme 22 itself.”) (internal citations omitted); see also Desoto v. Condon, 371 Fed. App’x. 822, 824 (9th Cir. 23 2010) (holding allegations of mail and wire fraud failed to satisfy Rule 9(b)’s particularity 24 requirement because of “vague and conclusory” allegations). Even construing Plaintiff’s claims 25 liberally because she is an unrepresented litigant, Plaintiff has not alleged facts to plausibly 26 support an inference of fraudulent intent by any agent or representative of Defendants because she 27 does not offer facts identifying the “who, what, when, where, and how of [Defendants’] fraud.” 1 Thus, while Plaintiff has adequately alleged injury, she fails to plead particularized facts to 2 meet Rule 9(b)’s heightened standard for the alleged predicate acts of mail and wire fraud. 3 Therefore, Plaintiff’s RICO claim is DISMISSED. 4 C. BREACH OF FIDUCIARY DUTY 5 Under California law, “[t]he elements of a cause of action for breach of fiduciary duty are 6 the existence of a fiduciary relationship, breach of fiduciary duty, and damages.” Oasis W. Realty, 7 LLC v. Goldman, 51 Cal. 4th 811, 820 (2011). “The insurer-insured relationship, however, is not 8 a true ‘fiduciary relationship’ in the same sense as the relationship between a trustee and 9 beneficiary, or attorney and client.” Vu v. Prudential Property & Casualty Ins. Co., 26 Cal. 4th 10 1142, 1150–51 (2001). “This characteristic has led the courts to impose ‘special and heightened’ 11 duties but while these special duties are akin to, and often resemble, duties which are also owed by 12 fiduciaries, the fiduciary-like duties arise because of the unique nature of the insurance contract, 13 not because the insurer is a fiduciary.” (Id. at 1151) (internal quotation marks and citation 14 omitted); see also Almon v. State Farm Fire & Cas. Co., 724 F. Supp. 765, 766 (S.D. Cal. 1989) 15 (“[A]lthough the duty between the plaintiff and defendants is fiduciary in nature, there is no 16 independent cause of action for breach of fiduciary duty.”). 17 “[A]n insurer’s breach of its fiduciary-like duties is adequately redressed by a claim for 18 breach of the covenant of good faith and fair dealing implied in the insurance contract.” Tran v. 19 Farmers Grp., Inc., 104 Cal. App. 4th 1202, 1212 (2002) (internal quotation marks omitted); see 20 also Butler v. Clarendon America Ins. Co., 494 F. Supp. 2d 1112, 1136 (N.D. Cal. 2007) (internal 21 quotation marks omitted) (“[T]he sounder approach is for courts to analyze an insurer’s alleged 22 breach of its fiduciary-like duties as a claim for breach of the covenant of good faith and fair 23 dealing.”). Here, Plaintiff has not alleged any facts showing a fiduciary relationship beyond 24 Defendants’ role as her insurer. (Dkt. No. 34 ¶ 101.) 25 Accordingly, the Court GRANTS Defendants’ Motion to dismiss Plaintiff’s breach of 26 fiduciary duty claim. 27 II. STATUTE OF LIMITATIONS 1 No. 43 at 14–16.) Plaintiff’s opposition brief contends “each claim is timely” without further 2 discussion and mentions the “discovery rule” in passing. (Dkt. No. 44 at 4.) The statute of 3 limitations defense “may be raised by a motion for dismissal . . . [i]f the running of the statute is 4 apparent on the face of the complaint . . ..” Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th 5 Cir. 1980). And the defendant bears the burden of proving the action is untimely. ASARCO, LLC 6 v. Union Pac. R. Co., 765 F.3d 999, 1004 (9th Cir. 2014). “When a motion to dismiss is based on 7 the running of the statute of limitations, it can be granted only if the assertions of the complaint, 8 read with the required liberality, would not permit the plaintiff to prove that the statute was 9 tolled.” Jablon, 614 F.2d at 682 (internal citation omitted). Here, Defendants have shown all of 10 Plaintiff’s claims are time-barred under the applicable statute of limitations. 11 A. Plaintiff’s Claims are Time-Barred. 12 The statute of limitations for a civil RICO claim is four years. Pincay v. Andrews, 238 13 F.3d 1106, 1108 (9th Cir. 2001). Under the “injury discovery rule,” the RICO statute of 14 limitations “begins to run when a plaintiff knows or should know of the injury that underlies his 15 cause of action.” Grimmett v. Brown, 75 F.3d 506, 510 (9th Cir. 1996) (internal quotation marks 16 and citation omitted); see also State Farm Mut. Auto. Ins. Co. v. Ammann, 828 F.2d 4, 5 (9th Cir. 17 1987) (explaining the rule of “separate accrual” provides a new limitations period for each distinct 18 injury arising from a RICO violation, beginning when the plaintiff knew or should have known of 19 the injury). So, a plaintiff need not discover the injury is part of a “pattern of racketeering” for the 20 statute to begin to run. Klehr v. A.O. Smith Corp., 521 U.S. 179, 187 (1997). California fraud 21 claims carry a three-year statute of limitations. Cal. Civ. Proc. Code § 338(d); Platt Elec. Supply, 22 Inc. v. EOFF Elec., Inc., 522 F.3d 1049, 1054 (9th Cir. 2008). A fraud claim accrues when the 23 last essential element of the cause of action occurs. California Sansome Co. v. U.S. Gypsum, 55 24 F.3d 1402, 1406 (9th Cir. 1995). “The statute of limitations for breach of fiduciary duty is three 25 years or four years, depending on whether the breach is fraudulent or nonfraudulent.” Am. Master 26 Lease LLC v. Idanta Partners, Ltd., 225 Cal. App. 4th 1451, 1479 (2014). 27 Here, Plaintiff alleges by 2016 she “chose to forgo additional care” after being told no 1 (Dkt. No. 34 ¶¶ 15, 16.) She further alleges she received a questionnaire from “The Rawlings 2 Company LLC” about treatment for her broken leg at “Palo Alto Medical Foundation,” which she 3 contends “falsely suggest[ed] there were ‘benefits provided,’ when in fact none were.” (Id. ¶ 20.) 4 By 2017, “despite consistently paying her premiums, [Plaintiff] had received no actual coverage 5 for three consecutive years,” and her unpaid medical bills had been sent to collections while an 6 urgent appeal for medical care was denied. (Id. ¶¶ 22, 25, 26.) In 2018, Plaintiff filed a small 7 claims action, obtained a judgment requiring reinstatement and payment of benefits, and alleges 8 Defendants “defied the court order outright.” (Id. ¶ 30.) Accordingly, drawing all reasonable 9 inferences in Plaintiff’s favor, the basis for her claims accrued no later than 2018. Because she 10 filed her complaint in December 2024 (Id. at 1), all claims based on those alleged injuries are 11 barred by the applicable statutes of limitations. 12 B. Possible Statute of Limitations Extensions 13 There are two extensions to the statute of limitations that could be relevant here: (1) the 14 delayed discovery rule, and (2) equitable tolling. The delayed discovery rule tolls accrual until the 15 plaintiff actually discovers or reasonably should have discovered the claim. Pooshs v. Philip 16 Morris USA, Inc., 51 Cal. 4th 788, 797 (2011). To invoke delayed discovery, a plaintiff must 17 plead “(1) the time and manner of discovery and (2) the inability to have made earlier discovery 18 despite reasonable diligence.” Fox v. Ethicon Endo-Surgery, Inc., 35 Cal. 4th 797, 808 (2005). 19 Equitable tolling pauses the limitations period when a litigant diligently pursues his rights, but 20 extraordinary circumstances prevent timely filing. Lozana v. Montoya Alvarez, 572 U.S. 1, 10 21 (2014). Plaintiff has not alleged facts plausibly supporting either extension. 22 “California courts have long applied the delayed discovery rule to claims involving fraud, 23 difficult-to-detect injuries, or the breach of a fiduciary relationship.” Perez-Encinas v. AmerUS 24 Life Ins. Co., 468 F. Supp. 2d 1127, 1134 (N.D. Cal. 2006). The delayed discovery rule tolls 25 accrual until the plaintiff actually discovers or reasonably should have discovered the claim. 26 Pooshs v. Philip Morris USA, Inc., 51 Cal. 4th 788, 797 (2011). Once aware of an injury, 27 plaintiffs must conduct a reasonable investigation and are charged with knowledge a reasonable 1 plead “(1) the time and manner of discovery and (2) the inability to have made earlier discovery 2 despite reasonable diligence.” Id. Conclusory allegations of diligence cannot suffice. Id.; see 3 also E-Fab, Inc. v. Accts., Inc. Servs., 153 Cal. App. 4th 1308, 1324–26 (2007) (holding the 4 plaintiff adequately pled delayed discovery and reversing the trial court’s order sustaining the 5 defendant’s demurrer). 6 Equitable tolling pauses the limitations period when a litigant diligently pursues his rights, 7 but extraordinary circumstances prevent timely filing. Lozana v. Montoya Alvarez, 572 U.S. 1, 10 8 (2014). Courts have long recognized “the defendant’s fraud in concealing a cause of action 9 against him tolls the applicable statute of limitations, but only for the period during which the 10 claim is undiscovered by plaintiff or until such time as plaintiff, by the exercise of reasonable 11 diligence, should have discovered it.” Sanchez v. South Hoover Hospital, 18 Cal. 3d 93, 99 12 (1976). A plaintiff must plead with particularity facts showing “(1) the defendant took affirmative 13 acts to mislead the plaintiff; (2) the plaintiff did not have ‘actual or constructive knowledge of the 14 facts giving rise to its claim’; and (3) the plaintiff acted diligently in trying to uncover the facts 15 giving rise to its claim.” Ryan v. Microsoft Corp., 147 F. Supp. 3d 868, 885 (N.D. Cal. 2015) 16 (citing Hexcel Corp v. Ineos Polymers, Inc., 681 F.3d 1055, 1060 (9th Cir. 2012)). 17 But as Plaintiff does not allege facts plausibly supporting either statute of limitations 18 extension, Defendants have shown the applicable statute of limitations bars all of Plaintiff’s 19 claims. This is an additional reason the Court GRANTS Defendants’ Motion to dismiss Plaintiff’s 20 claims. 21 III. LEAVE TO AMEND 22 Defendants seek dismissal with prejudice, arguing amendment would be futile. (Dkt. No. 23 43 at 24.) “Absent prejudice [to the opposing party], or a strong showing [by the party opposing 24 amendment] of any of the [discretionary] factors, there exists a presumption under Rule 15(a) in 25 favor of granting leave to amend.” Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th 26 Cir. 2003). Given Plaintiff’s unrepresented status, the Court GRANTS her leave to amend, except 27 as to the breach of fiduciary duty claim. 1 CONCLUSION 2 For the reasons stated above, Defendants’ Motion to Dismiss is GRANTED. Plaintiff does 3 || not allege facts sufficient to satisfy Rule 9(b)’s pleading requirements for her RICO and common- 4 || law fraud claims. Additionally, her claims are time-barred by the applicable statutes of limitations. 5 The breach of fiduciary duty claim is dismissed without leave to amend, but she may attempt to 6 || allege a claim for breach of the duty of good faith and fair dealing. Plaintiff may not add any new 7 defendants without further leave of court. 8 Plaintiff’s amended complaint must be filed by December 18, 2025. In light of the 9 || holidays, Defendants’ response is due January 15, 2026. If Plaintiff does not file an amended 10 || complaint, by that date, judgment will be entered in Defendants’ favor. 11 This Order disposes of Docket No. 43. IT IS SO ORDERED. 5 13 Dated: November 17, 2025

2 JACQUELINE SCOTT CORLEY = 16 United States District Judge

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