Marie Encar Arnold v. New York Life Insurance Company

• Court: District Court, N.D. California
• Decided: January 28, 2026
• Docket: 5:24-cv-06941
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MARIE ENCAR ARNOLD, Case No. 24-cv-06941-EKL

8 Plaintiff, ORDER GRANTING MOTION TO 9 v. DISMISS SECOND AMENDED COMPLAINT 10 NEW YORK LIFE INSURANCE COMPANY, Re: Dkt. No. 50 11 Defendant.

12 13 Plaintiff Marie Encar Arnold brings this breach of contract and fraud action against 14 Defendant New York Life Insurance Co. based on events that took place between 2015 and 2019. 15 Before the Court is Defendant’s motion to dismiss the second amended complaint. Mot. to 16 Dismiss, ECF No. 50 (“Mot.”).1 Having reviewed and considered the relevant filings in this 17 matter, the Court GRANTS the motion to dismiss without leave to amend. 18 I. BACKGROUND2 19 Plaintiff is, or was, the policyholder of three life insurance policies naming her children as 20 beneficiaries (“Policies”). Second Am. Compl. at 4, ECF No. 49 (“SAC”).3 Plaintiff alleges that 21 she entered a “binding contractual agreement” with Defendant on June 8, 2015. Id. In 2017, 22 Plaintiff demanded that Defendant pay her the $50,000 face value of each of the Policies. Id. at 5. 23 Defendant allegedly “breached the contract” by refusing payments, allowing or causing the 24

25 1 In its discretion, the Court finds this motion suitable for resolution without oral argument. Fed. R. Civ. P. 78(b); Civil L.R. 7-1(b). 26 2 The facts are taken from the operative complaint and assumed to be true for purposes of this 27 motion. 1 Policies to lapse, and canceling or refusing to renew the Policies. Id. at 4-5. Plaintiff further 2 alleges that Defendant breached the implied covenant of good faith and fair dealing in 2017 by 3 “sending a denial correspondence letter,” which seemingly rejected her request for payment under 4 the Policies. Id. at 13-14. On June 13, 2019, Defendant allegedly committed fraud by “lapsing 5 the . . . return bill payment.” Id. at 17. 6 On June 10, 2024, Plaintiff filed a complaint in Santa Clara County Superior Court. 7 Notice of Removal Ex. A, ECF No. 1 (“Compl.”). On October 3, 2024, Defendant removed this 8 action based on diversity jurisdiction. ECF No. 1. On October 10, 2024, Plaintiff moved to 9 remand, ECF No. 9, and Defendant moved to dismiss the complaint for failure to state a claim, 10 ECF No. 12. On February 13, 2025, the Court denied the motion to remand, ECF No. 29, and 11 granted Defendant’s motion to dismiss with leave to amend, finding that the complaint did not 12 comply with Federal Rule of Civil Procedure 8, ECF No. 30 at 3. On March 7, 2025, Plaintiff 13 filed an amended complaint. First Am. Compl., ECF No. 32. On June 24, 2025, the Court granted 14 Defendant’s motion to dismiss with leave to amend, concluding that the amended complaint did 15 not comply with Rule 8, and observing that Plaintiff’s claims “are likely barred by the applicable 16 statute of limitations.”4 ECF No. 48 at 3-4 (“Second MTD Order”). On July 8, 2025, Plaintiff 17 filed a second amended complaint, which Defendant now moves to dismiss. 18 In the second amended complaint, Plaintiff reasserts her claims for breach of contract and 19 breach of the implied covenant of good faith and fair dealing and adds a claim for fraud. To 20 address the timeliness of her claims, Plaintiff reasserts tolling of the statutes of limitations 21 pursuant to California Code of Civil Procedure section 352.5 22 23 24

25 4 Plaintiff asserted claims for negligent infliction of emotional distress and violation of 7 U.S.C. 26 § 6b in her first amended complaint, ECF No. 32, which the Court dismissed with leave to amend, ECF No. 48. Plaintiff has not reasserted these claims in the second amended complaint. 27 5 Plaintiff also asserts tolling based on the delayed discovery rule and fraudulent concealment. 1 II. LEGAL STANDARD 2 Under Federal Rule of Civil Procedure 8, a complaint must contain “a short and plain 3 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To 4 comply with Rule 8, the complaint “must give fair notice and state the elements of the claim 5 plainly and succinctly.” Jones v. Cmty. Redevelopment Agency, 733 F.2d 646, 649 (9th Cir. 1984) 6 (citation omitted) (cleaned up); see also Park v. Lehman Bros. Bank, FSB, 694 F. App’x 602, 603 7 (9th Cir. 2017) (citing Jones, 733 F.2d at 649). “A complaint that is ‘needlessly long, or . . . 8 highly repetitious, or confused, or consisting of incomprehensible rambling’ violates Rule 8.” 9 Hobbs v. M3 Eng’g & Tech. Corp., No. CV-22-00290, 2023 WL 3687789, at *1 (D. Ariz. May 26, 10 2023) (quoting Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1059 (9th Cir. 2011)). 11 Under Federal Rule of Civil Procedure 12(b)(6), a court must dismiss a complaint if it fails 12 to state a claim upon which relief can be granted. To avoid dismissal, the plaintiff must allege 13 “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 14 550 U.S. 544, 570 (2007). A claim is facially plausible when the pleaded facts allow the court 15 “to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 16 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). For purposes of a Rule 12(b)(6) motion, the court 17 generally “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in 18 the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 19 519 F.3d 1025, 1031 (9th Cir. 2008). However, the court need not “assume the truth of legal 20 conclusions merely because they are cast in the form of factual allegations.” Fayer v. Vaughn, 21 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (quoting W. Mining Council v. Watt, 643 F.2d 22 618, 624 (9th Cir. 1981)). 23 III. DISCUSSION 24 Defendant moves to dismiss the operative complaint on the grounds that (1) Plaintiff’s 25 claims are barred by the applicable statutes of limitations, and tolling does not apply; and 26 (2) Plaintiff has not cured the deficiencies identified in the Second MTD Order and fails to state a 27 claim for relief. The Court finds that, even if Plaintiff has sufficiently alleged that the statutes of 1 limitations on her claims should be tolled, her complaint must be dismissed for failure to state a 2 claim. 3 A. Timeliness of Plaintiff’s Claims 4 “A motion to dismiss based on the running of the statute of limitations may be granted 5 only if the assertions in the complaint, read with the required liberality, would not permit the 6 plaintiff to prove that the statute was tolled.” Pisciotta v. Teledyne Indus., Inc., 91 F.3d 1326, 7 1331 (9th Cir. 1996) (per curiam) (citing Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 8 1980)). The statute of limitations for the breach of contract and breach of the implied covenant of 9 good faith and fair dealing claims is four years. Cal. Civ. Proc. Code § 337 (providing four-year 10 limitations period for actions “upon any contract, obligation or liability founded upon an 11 instrument in writing”); see also Frazier v. Metro. Life Ins. Co., 169 Cal. App. 3d 90, 102-03 12 (1985) (concluding that breach of the implied covenant of good faith and fair dealing claims based 13 on written contract have a four-year statute of limitations). The statute of limitations for fraud 14 claims is three years. Cal. Civ. Proc. Code § 338(d). 15 Plaintiff’s claims are untimely. Plaintiff alleges that Defendant breached the implied 16 covenant sometime in 2017, and last breached the Policies on June 13, 2019. See SAC at 9, 13. 17 Based on these allegations, both claims accrued almost five years (or more) before Plaintiff filed 18 her original complaint on June 10, 2024, rendering both untimely. See Compl. Taking into 19 account tolling under California Judicial Council Emergency Rule 9, the statute of limitations for 20 Plaintiff’s breach of the implied covenant claim expired on June 27, 2022,6 and the breach of 21 contract claim expired on December 8, 2023. Cal. R. Ct. App. I, Emergency Rule 9 (suspending 22 the statute of limitations from April 6, 2020, until October 1, 2020, due to the COVID-19 23 pandemic). Because the latest date that Plaintiff’s fraud claim accrued was on June 13, 2019, 24 applying Emergency Rule 9, the statute of limitations for this claim expired on December 8, 2022. 25 See SAC at 17. Thus, all of Plaintiff’s claims are time-barred absent tolling or other relief. 26 27 1 The Court reviews the operative complaint to determine whether any statutory or equitable 2 tolling provision applies. In its prior order, the Court stated that, “[t]o the extent Plaintiff contends 3 that tolling applies to save any untimely claims, any second amended complaint must allege facts 4 showing the time and manner of her discovery of her claims and her inability to have discovered 5 her claims earlier, despite reasonable diligence.” Second MTD Order at 5. 6 In the operative complaint, Plaintiff asserts that her claims were tolled under California 7 Code of Civil Procedure section 352 due to a mental health-related disability. See SAC at 6, 12, 8 16, 19-20. Section 352 provides: “If a person entitled to bring an action, . . . is, at the time the 9 cause of action accrued . . . lacking the legal capacity to make decisions, the time of the disability 10 is not part of the time limited for the commencement of the action.” Cal. Civ. Proc. Code 11 § 352(a); see, e.g., Est. of Stern v. Tuscan Retreat, Inc., 725 Fed. App’x 518, 522 (9th Cir. 2018) 12 (“[I]ncapacity must exist at the time the claims accrue, and tolling lasts only until the plaintiff 13 regains capacity.” (citations omitted)); Alcott Rehab. Hosp. v. Super. Ct., 93 Cal. App. 4th 94, 101, 14 105 (2001) (holding that plaintiff’s mental disability tolled statute of limitations on plaintiff’s 15 claims against health care facility under section 352). 16 Plaintiff alleges that she “is incompetent and lacks knowledge of legal at this time,” noting 17 that she is “on SSA Permanente disability ‘hearing voices,’ and chronic pains.” See, e.g., SAC at 18 12. She states that at the time of the events in the complaint, she was seeking medical help from 19 psychologists and psychiatrists. See, e.g., id. at 12, 16. As support, Plaintiff attaches to the 20 complaint a letter dated March 5, 2018, from her psychiatrist at the Permanente Medical Group, 21 Inc. ECF No. 49-1 at 312. The letter states: “You have been diagnosed with schizophrenia and 22 has been follow [sic] at Kaiser mental health since April 2015. You have been treated with 23 medication management, individual therapy and group therapy. Your last follow[-up] was 2/15/18 24 and next appointment is 3/6/2018.” Id. Plaintiff also alleges that she was “incompetent” during 25 the events alleged in the complaint, and later notes “‘hearing voices of annoyance,’ depressed, . . . 26 [and] psychosis[.]” SAC at 20-21. 27 Reviewing these tolling allegations liberally as it is required to do at the pleading stage, the 1 in or around the time of the allegations in the complaint, including during the time that her claims 2 accrued. See Pisciotta, 91 F.3d at 1331 (discussing “the required liberality” when reviewing the 3 running of the statute of limitations on a motion to dismiss). Given that Plaintiff is self- 4 represented, the Court finds these allegations sufficient for tolling under section 352 at this stage 5 of the litigation. See Sause v. Bauer, 585 U.S. 957, 960 (2018) (pro se complaints construed 6 liberally); see also Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990) (same). 7 Because section 352 tolling applies, the Court finds Plaintiff’s claims are timely at this stage. 8 B. Failure to State a Claim 9 The Court next reviews each of Plaintiff’s claims to determine whether they are 10 sufficiently alleged based on Rule 12(b)(6). In doing so, the Court notes that Plaintiff’s current 11 complaint suffers from many of the same Rule 8 issues that were discussed in the Court’s previous 12 orders. Second MTD Order; Order Granting Mot. to Dismiss Compl., ECF No. 30. Although the 13 complaint is now around 22 pages, the attached declaration and exhibits number hundreds of 14 pages. The operative complaint contains confused, disjointed, and – at times – repetitive 15 allegations, rather than “clear and concise statements.” McHenry v. Renne, 84 F.3d 1172, 1178-80 16 (9th Cir. 1996); see also Hobbs, 2023 WL 3687789, at *1 (“Rule 8 is a frequent barrier 17 encountered by pro se litigants who file inordinately long complaints.” (citation omitted)). With 18 these deficiencies in mind, the Court proceeds to analyze Plaintiff’s causes of action under Rule 19 12(b)(6). 20 1. Breach of Contract 21 A breach of contract claim requires “(1) the existence of the contract, (2) plaintiff’s 22 performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages 23 to the plaintiff.” Oasis W. Realty LLC v. Goldman, 51 Cal. 4th 811, 821 (2011) (citation omitted). 24 A contract must be interpreted “to give effect to the mutual intention of the parties as it existed at 25 the time of contracting.” Cal. Civ. Code § 1636. 26 Here, Plaintiff fails to allege the third element – i.e., Defendant’s breach of the Policies. 27 While Plaintiff asserts that Defendant rejected her insurance claims or caused her Policies to lapse, 1 SAC at 4-5, 10. The complaint does not identify any provision in the Policies that required 2 Defendant to make the payments she seeks under these circumstances. Although Plaintiff cites 3 generally to exhibits containing the alleged Policies, these exhibits are lengthy, and Plaintiff often 4 does not provide specific page numbers or provisions. See id. at 9-11; see also ECF No. 49-1 5 (exhibits). In addition, the cited exhibits are, at times, presented in a disorganized manner. See, 6 e.g., ECF No. 49-1 at 26-27 (displaying page 24 of Ex. A followed by page 100 of Ex. B), 68 7 (containing two different sets of page numbers). Under these circumstances, the Court is unable to 8 discern which provision(s) Plaintiff is referring to, if any, for purposes of her breach of contract 9 claim. 10 In the instances where Plaintiff provides specific page numbers, the cited pages do not 11 permit the Court to reasonably infer that Defendant breached the Policies. See SAC at 8-11. For 12 example, Plaintiff alleges Defendant “committed a breach of contract of return of premiums ROP 13 or Section Three - Premiums an [sic] NYLIC’s contract . . . applying Cash Surrender Value when 14 applying for a policy loan of the Cash Surrender Value of the policy or ROP.” SAC at 10 (citing 15 “[pg. # 28 Ex. A, 3.3] (Optional 1)”). Plaintiff’s citation appears to refer to section 3.3 of policy 16 number 24317671, one of the policies at issue. ECF No. 49-1 at 64. Section 3.3 provides the 17 policy holder with three options for keeping her life insurance coverage in effect in the event 18 premiums are not paid, if certain conditions are met. Id. However, Plaintiff does not allege that 19 she met any of the conditions for any of these options to apply.7 In light of the unsupported and 20 conclusory allegations, the operative complaint does not allow the Court to reasonably infer that 21 22 7 Plaintiff references “Optional 1” in the citation, which the Court assumes is a reference to option 23 1 under section 3.3 of the policy but there are no allegations regarding how Defendant breached this section. SAC at 10. Similarly, in the second amended complaint, Plaintiff cites to “[pg.# 30 24 EX. A, 4.1] and (pg. # 32, EX A, 4.2].” Id. at 8. This appears to be a citation to sections 4.1 and 4.2 of policy number 24317671. ECF No. 49-1 at 66, 68. Plaintiff asserts that Defendant 25 breached sections 4.1 and 4.2 by not fulfilling its duties to “review all bank transactions (Premiums) and verify” and by not “following their book the policy [sic] of . . . Cash Surrender 26 Value of the policy loan or ROP.” SAC at 8. Section 4.1 defines the “Cash Surrender Value” and the process for obtaining it (among other things), while section 4.2 addresses the “Policy Loan 27 Value” and the conditions for borrowing from the policy. ECF No. 49-1 at 66, 68. However, neither section indicates that Defendant had the duties Plaintiff alleges it had. Thus, the Court 1 Defendant breached the Policies. Iqbal, 556 U.S. at 678. Thus, the Court holds that Plaintiff fails 2 to plausibly state a claim for breach of contract. 3 2. Breach of the Covenant of Good Faith and Fair Dealing 4 Breach of the implied covenant of good faith and fair dealing requires “a failure or refusal 5 to discharge contractual responsibilities, prompted not by an honest mistake, bad judgment or 6 negligence but rather by a conscious and deliberate act[.]” VFLA Eventco, LLC v. William Morris 7 Endeavor Ent., LLC, 100 Cal. App. 5th 287, 312-13 (2024) (quoting Careau & Co. v. Sec. Pac. 8 Bus. Credit, Inc., 222 Cal. App. 3d 1371, 1395 (1990)). “[B]reach of a specific provision of [a] 9 contract is not a necessary prerequisite” for a breach of the implied covenant claim. Carma Devs. 10 (Cal.), Inc. v. Marathon Dev. Cal., Inc., 2 Cal. 4th 342, 373 (1992) (citation omitted). However, 11 “the scope of conduct prohibited by the covenant of good faith is circumscribed by the purposes 12 and express terms of the contract.” Id. (collecting cases). 13 Here, Plaintiff’s claim for breach of the implied covenant of good faith and fair dealing 14 fails for the same reason that the breach of contract claim fails. Plaintiff has not plausibly alleged 15 that Defendant failed to discharge any contractual responsibility owed to Plaintiff. Although the 16 complaint asserts that Defendant improperly rejected her insurance claims or caused her Policies 17 to lapse, Plaintiff does not allege any facts permitting an inference that she was entitled to 18 payment under the Policies or that Defendant caused her Policies to lapse, as opposed to her 19 Policies lapsing based on nonpayment.8 Therefore, Plaintiff has not alleged a plausible claim for 20 breach of the implied covenant of good faith and fair dealing. 21 3. Fraud 22 The elements of fraud include “(a) misrepresentation (false representation, concealment, or 23 nondisclosure); (b) knowledge of falsity (or scienter); (c) intent to defraud, i.e., to induce reliance; 24 25 8 Plaintiff attaches Exhibit D to her complaint, which indicates that Defendant sent her a letter, on 26 April 4, 2019, requesting that she submit a new premium payment by April 18, 2019, because her bank returned the previous check she sent, and warning her that her policy may lapse if she does 27 not submit the payment. ECF No. 49-1 at 308-09. Based on the operative complaint, the Court cannot determine whether Plaintiff ever made the requested payment or whether her policy lapsed 1 (d) justifiable reliance; and (e) resulting damage.” Small v. Fritz Cos., 30 Cal. 4th 167, 173 (2003) 2 (internal quotation marks omitted) (quoting Lazar v. Super. Court, 12 Cal. 4th 631, 638 (1996)). 3 Fraud claims are subject to the heightened pleading requirement of Federal Rule of Civil 4 Procedure 9(b). A complaint “must identify the who, what, when, where, and how of the 5 misconduct charged, as well as what is false or misleading about the purportedly fraudulent 6 statement, and why it is false.” Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 964 (9th Cir. 7 2018) (quoting Cafasso, 637 F.3d at 1055). 8 Plaintiff’s allegations are insufficient to state a fraud claim. Plaintiff fails to allege all the 9 elements of fraud, including a misrepresentation and knowledge of falsity. Small, 30 Cal. 4th at 10 173. Nor do Plaintiff’s allegations satisfy Rule 9(b). The operative complaint does not identify 11 any statement or representation Defendant made that was false or misleading, how Plaintiff 12 received the false information, who provided the false information to her, and where the 13 misrepresentation occurred. Accordingly, Plaintiff’s fraud claim fails.9 14 IV. DISMISSAL IS WITHOUT LEAVE TO AMEND 15 The Court concludes that the complaint should be dismissed without leave to amend. In 16 doing so, the Court considers factors such as “undue delay, bad faith or dilatory motive on the part 17 of the [Plaintiff], repeated failure to cure deficiencies by amendments previously allowed, undue 18 prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of 19 amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962). The Court also considers “the number 20 of times the plaintiff has already been allowed to amend.” Schwartz v. Miller, 153 F.4th 918, 932 21 (9th Cir. 2025). 22 Here, the Court finds that dismissal without leave to amend is appropriate because 23 amendment would be futile. The Court previously granted leave to amend twice. See Second 24 MTD Order at 5 (granting dismissal with leave to amend); Order Granting Mot. to Dismiss 25 26 9 In the Second MTD Order, the Court specified that “Plaintiff shall not add any new causes of 27 action without leave of court.” Second MTD Order at 5. Plaintiff included her fraud cause of action in the operative complaint without obtaining leave of Court. This was improper and serves ] Compl. at 4 (same). Plaintiff failed to cure the pleading deficiencies, indicating that further 2 || amendment would be futile. Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981, 1007 (9th 3 || Cir. 2009), as amended (Feb. 10, 2009) (holding that failure to correct pleading deficiencies after 4 || dismissal is a “strong indication” that further amendment would be futile (quoting /n re Vantive 5 Corp. Sec. Litig., 283 F.3d 1079, 1098 (9th Cir. 2002))); see also Salameh v. Tarsadia Hotel, 726 6 || F.3d 1124, 1133 (9th Cir. 2013) (“A district court’s discretion to deny leave to amend is 7 ‘particularly broad’ where the plaintiff has previously amended.” (quoting Sisseton-Wahpeton 8 || Sioux Tribe v. United States, 90 F.3d 351, 355 (9th Cir. 1996))). The Court also finds that leave to 9 || amend would be futile because Plaintiff's claims are legally deficient, and she has not asserted any 10 || other legal theory that could support a claim. Kroessler v. CVS Health Corp., 977 F.3d 803, 815 11 (9th Cir. 2020) (“Ifo amendment would allow the complaint to withstand dismissal as a matter of 12 || law, courts consider amendment futile.” (citation omitted)); Lamoon, Inc. v. Lamour Nail Prods., E 13 || Jnc., 373 F. App’x 795, 797 (9th Cir. 2010) (noting that, when a plaintiff's “claims have 14 || underlying legal deficiencies that cannot be cured, amendment would be futile”). 3 1S |} V. CONCLUSION a 16 For the foregoing reasons, the Court GRANTS Defendant’s motion to dismiss all of 17 || Plaintiff's claims. Considering the Court has granted leave to amend twice before, and because Zz 18 further amendment would be futile, Plaintiff's complaint is DISMISSED with prejudice. 19 IT IS SO ORDERED. 20 || Dated: January 28, 2026 21

umi K. Lee 23 United States District Judge 24 25 26 27 28