Mario Bonilla v. American General Life Insurance Company

Opinion

MARIO BONILLA, Case No. 25-cv-05203-DMR

Plaintiff, ORDER ON DEFENDANT’S MOTION v. FOR JUDGEMNT ON THE PLEADINGS INSURANCE COMPANY, Re: Dkt. No. 9 Defendant. Plaintiff Mario Bonilla brings this complaint against Defendant American General Life Insurance Company (“American General”) alleging a violation of 42 U.S.C. § 1981 and breach of contract. [Docket No. 1-2 (Compl.).] American General now moves for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). [Docket No. 9 (Mot.).] This matter is suitable for determination without oral argument. Civ. L.R. 7-1(b). For the following reasons, American General’s motion is GRANTED. I. BACKGROUND A. Factual Background The following allegations in the complaint are taken as true for the purposes of the motion.1 Plaintiff is a lawful permanent resident of the United States who was born in Colombia. Compl. ¶¶ 1, 8. On July 22, 2020, Plaintiff applied for a life insurance policy with American General in the amount of $100,000. Id. ¶ 7. During the initial telephone interview with American 1 “Analysis under Rule 12(c) is ‘substantially identical’ to analysis under Rule 12(b)(6) because, under both rules, ‘a court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy.’” Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (quoting Brooks v. Dunlop Mfg. Inc., No. C 10–04341 CRB, 2011 WL 6140912, at *3 (N.D. General Agent Brenda Pelayo, Plaintiff disclosed that he was born in Colombia and had misplaced his permanent resident card (green card), but was in the process of obtaining a replacement. Id. ¶ 8. Plaintiff asked if alternative documentation would be acceptable to prove his lawful permanent resident status if his replacement green card did not arrive in time, and Agent Pelayo confirmed that it would be. Id. ¶ 9. Plaintiff’s girlfriend, Deborah Stevenson, who is not of Colombian origin, also applied for an identical life insurance policy through Agent Pelayo at the same time. Id. ¶ 11. On September 29, 2020, Plaintiff was informed by Agent Pelayo that his insurance application had been denied due to a positive test result for Hepatitis C. Id. ¶ 13. Plaintiff had never been diagnosed with Hepatitis C, and on November 12, 2020, obtained lab test results from his physician at Marin Community Clinics which showed that Plaintiff did not have Hepatitis C. Id. ¶¶ 13-15. Plaintiff submitted the lab results to American General for reconsideration of his application. Id. ¶ 16. On December 15, 2020 and January 4, 2021, Plaintiff received additional inquiries from American General, including a request for Plaintiff’s physician’s office notes and questions about a doctor’s appointment that Plaintiff had never attended. Id. ¶¶ 18-19. American General also requested a copy of Plaintiff’s green card. Id. ¶ 21. Plaintiff explained that his green card was still being replaced, and he sent alternative documentation to American General to verify his lawful permanent resident status. Id. ¶¶ 22-23. On January 11, 2021, Plaintiff received a voicemail from Agent Pelayo which stated: “Your green card is going to expire in six months, if so, American General cannot accept your application, if not true, call me back.” Id. ¶ 24. Plaintiff attempted to contact Agent Pelayo through voicemail and email to clarify that his permanent resident status was not expiring; he was only replacing his physical card. Id. ¶ 25. Plaintiff did not receive a response. Id. ¶ 26. On January 14, 2021, Plaintiff sent a written notice to American General that he was canceling his application due to lost faith and trust in the company. Id. On May 20, 2021, Plaintiff filed a complaint with the California Department of Insurance (CDI) regarding American General’s handling of his application. Id. ¶ 27. On June 10, 2021, in response to the CDI investigation, American General claimed that Plaintiff’s application was at least 6 months remaining on it,” even though such requirement was never communicated to Plaintiff before his application was denied and was not stated in the written application materials. Id. ¶ 28. American General also claimed that it had sent Plaintiff a denial letter on January 8, 2021, but Plaintiff never received this letter. Id. ¶ 30. On August 13, 2021, American General provided a different explanation to the CDI, now claiming that Plaintiff’s lab tests were insufficient because they lacked a specific Hepatitis C antibody test—despite Plaintiff having submitted antibody tests to American General. Id. ¶ 31. On September 28, 2021, American General “definitively reject[ed]” both Plaintiff’s lab work and USCIS documentation. Id. ¶ 32. As of May 2021, Plaintiff’s Medical Information Bureau report still showed inaccurately that he had abnormal Hepatitis C lab results, potentially affecting Plaintiff’s ability to obtain insurance from other companies. Id. ¶ 35. Plaintiff’s girlfriend was approved for the American General life insurance policy without issue. Id. ¶ 33. Plaintiff alleges that he was discriminated against “based on Plaintiff’s national origin (Colombian).” Id. ¶ 34. B. Procedural History Plaintiff initially brought the case in state court on May 5, 2025, alleging two claims. His first claim is for “Violation of 42 U.S.C. § 1981 (National Origin Discrimination),” alleging discrimination against Plaintiff on the basis of his status as a lawful permanent resident from Colombia in the making and enforcement of his insurance contract. Compl. ¶ 46. His second claim is for breach of contract, alleging that he entered into a “valid and enforceable contract for life insurance on or about August 20, 2020, when Plaintiff completed and submitted his application and American General began the underwriting process.” Id. ¶ 55. American General removed the case to federal court on June 20, 2025 and subsequently filed an answer. [Docket Nos. 1 (Removal Notice); 5 (Answer).] On July 7, 2025, American General filed this motion for judgment on the pleadings. Plaintiff failed to meet his deadline to oppose or file a non-opposition to the motion. [Docket No. 10.] The court issued two orders to show cause, and Plaintiff twice failed to provide a satisfactory response to the orders to show for failure to respond to the court’s second order to show cause. [Docket No. 14.] Plaintiff later filed a motion to set aside dismissal, which the court ultimately granted on September 29, 2025. [Docket No. 25.] Pursuant to court order, American General’s motion for judgment on the pleadings was deemed submitted on September 29, 2025. Plaintiff filed an opposition. [Docket No. 30 (Opp’n).] American General filed a reply. [Docket No. 31 (Reply).] “After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). “Judgment on the pleadings is properly granted when, accepting all factual allegations in the complaint as true, there is no issue of material fact in dispute, and the moving party is entitled to judgment as a matter of law.” Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012). The court must construe all factual allegations “in the light most favorable to the non-moving party.” Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). “Rule 12(c) is functionally identical to Rule 12(b)(6) and . . . the same standard of review applies to motions brought under either rule.” U.S. ex. rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011). Accordingly, the court “must assess whether the complaint ‘contains sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.’” Chavez, 683 F.3d at 1108 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “Mere conclusory statements in a complaint and ‘formulaic recitations of the elements of a cause of action’ are not sufficient.” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Although Rule 12(c) does not mention leave to amend, courts have the discretion in appropriate cases to grant a Rule 12(c) motion with leave to amend, or to simply grant dismissal of the action instead of entry of judgment.” Barone v. Dep't of Motor Vehicles, No. 3:23-CV-00858- WHO, 2024 WL 333887, at *3 (N.D. Cal. Jan. 29, 2024) (quoting Cagle v. C & S Wholesale Grocers Inc., 505 B.R. 534, 538 (E.D. Cal. 2014)). “Indeed, granting a Rule 12(c) motion and ‘[d]ismiss[ing] with prejudice and without leave to amend is not appropriate unless it is clear . . . 682 F.3d 1126, 1131 (9th Cir. 2012)). A. Breach of Contract The court first addresses the parties’ breach of contract arguments, as it affects the court’s section 1981 analysis. American General argues that no breach occurred because no contract with Plaintiff was ever formed since Plaintiff merely applied for an insurance policy. Mot. 16. In anticipation of American General’s argument, Plaintiff’s complaint cites Smith v. Westland Life Ins. Co., 15 Cal. 3d 111 (1975) for the proposition that submission of an insurance application is sufficient to establish a contractual relationship until the insurer “both communicates notice of rejection and refunds any premium payment to the applicant.” Compl. ¶ 56. In opposition to the 12(c) motion, Plaintiff further argues that American General’s letters to Plaintiff referred to a “policy number” and “coverage concepts like a ‘Limited Temporary Life Insurance Agreement,’” suggesting there was a contractual relationship between Plaintiff and American General. Opp’n 5. Plaintiff attached additional evidence to his opposition, including his declaration and eight exhibits. [Docket Nos. 30-1 (Mario Bonilla Decl., Oct. 14, 2025); 30-2 (Bonilla Decl. Exhibits).] “Under California law, a contract of temporary insurance may arise from completion of an application for insurance and payment of the first premium, if the language of the application would lead an ordinary layperson to conclude that coverage was immediate.” State Farm Mut. Auto. Ins. Co. v. Khoe, 884 F.2d 401, 405 (9th Cir. 1989). Plaintiff has not alleged that he paid any premium, nor has he alleged that the language of the American General application would lead an ordinary layperson to conclude that coverage was immediate. Instead, Plaintiff vaguely asserts that the allegations “raise at least a plausible formation/offer-and-acceptance dispute and, alternatively, support implied-in-fact or promissory-estoppel theories that can be pled if necessary” because American General spent multiple months processing Plaintiff’s application and made alternative policy offers to Plaintiff. Opp’n 10. Plaintiff does not cite any authority to support his argument that American General’s conduct created a contractual obligation under any theory, including implied-in-fact or promissory-estoppel theories. Plaintiff provides no case law more. Plaintiff’s reliance on Smith is misplaced. The case is readily distinguishable because the policyholder had paid the first month’s premium along with his application for insurance. Smith v. Westland Life Ins. Co., 15 Cal. 3d at 113-14. The court cannot consider the additional evidence submitted by Plaintiff to determine this motion. “[A] court generally is confined to the pleadings on a Rule 12(c) motion.” Gov't Emps. Ins. Co. v. Nadkarni, 391 F. Supp. 3d 917, 924 (N.D. Cal. 2019). The “incorporation by reference” doctrine permits the court to take into account documents “whose contents are alleged in a complaint and whose authenticity no party questions.” Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (quoting In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999)). Here, Plaintiff’s declaration was not referenced in the complaint. Furthermore, American General disputes the authenticity of all of Plaintiff’s exhibits except Exhibit 1 (which consists of excerpts from Plaintiff’s insurance application with American General). [Docket No. 31-1 (Evidentiary Objections).] As a result, the court cannot consider the declaration or Exhibits 2-8. Plaintiff has not alleged that a contract was formed under any theory, including implied-in- fact or promissory-estoppel. As the court cannot say with certainty that amendment would be futile, the court grants Plaintiff leave to amend his complaint to state a contract claim. B. Section 1981 American General argues that Plaintiff’s section 1981 claim fails because 1) section 1981 does not apply to discrimination based on national origin, 2) section 1981 is reverse preempted by California state law, and 3) the claim is barred by the statute of limitations. The court finds that the statute of limitations issue is dispositive, and therefore does not reach the remaining arguments because they are moot. “[A] section 1981 claim is governed by either: (i) the two-year statute of limitations for personal injury actions in California (if [the plaintiff’s] claim would have been possible prior to the 1991 amendments to section 1981); or (ii) the federal four-year statute of limitations set forth in 28 U.S.C. section 1658 (if [the plaintiff’s] claim was made possible by the 1991 amendments to section 1981).” Fair v. Rosen, No. CV 24-378-HDV(E), 2024 WL 4800693, at *4 (C.D. Cal. Lucent Technologies, Inc., 653 F.3d 1000, 1006 (9th Cir. 2011)). “As first enacted, § 1981 provided in relevant part that ‘all persons [within the jurisdiction of the United States] shall have the same right, in every State and Territory . . . to make and enforce contracts . . . as is enjoyed by white citizens.’” Jones, 541 U.S. at 372 (quoting § 1 of the Civil Rights Act of 1866, 14 Stat. 27). In 1991, Congress expanded section 1981 to include the “termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.” Id. at 373 (quoting 42 U.S.C. § 1981(b)). Plaintiff attempts to plead that a contract was formed and that American General’s discriminatory conduct relates to “the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.” Opp’n 5 (quoting 42 U.S.C. § 1981(b)). The four-year statute of limitations would apply in this scenario. The last date identified by Plaintiff as being within the actionable period is September 28, 2021, which is within four years of the date that Plaintiff filed the complaint on May 5, 2025. As discussed above, Plaintiff has not alleged the formation of a contract. At most, Plaintiff’s allegations relate to the making of a contract, which is a claim that would have been possible prior to the 1991 amendments. As pleaded, the two-year statute of limitations applies. September 28, 2021 is more than two years before the date that Plaintiff filed the complaint. The section 1981 claim is barred by the statute of limitations and is dismissed with leave to amend to the extent Plaintiff is able to amend his complaint to plausibly allege that a contract was formed. The court grants American General’s 12(c) motion and dismisses both of Plaintiff’s claims with leave to amend. This is Plaintiff’s final opportunity to amend his complaint; Plaintiff must plead his best case. The amended complaint is due by January 9, 2026. Dated: December 19, 2025 ______________________________________