North American Company for Life and Health Insurance v. Porshe Page

• Court: District Court, E.D. California
• Decided: March 26, 2026
• Docket: 2:25-cv-01972
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 NORTH AMERICAN COMPANY FOR Case No. 2:25-cv-01972-CSK LIFE AND HEALTH INSURANCE, 12 ORDER AND FINDINGS AND Plaintiff, RECOMMENDATIONS GRANTING 13 PLAINTIFF’S MOTION FOR DEFAULT v. JUDGMENT 14 PORSHE PAGE, (ECF No. 9) 15 Defendant. 16 17 Pending before the Court is Plaintiff’s motion for default judgment pursuant to 18 Federal Rules of Civil Procedure 55(b)(2). (ECF No. 9.) This motion was set for hearing 19 for December 29, 2025. (ECF No. 9) Defendant did not file a response to the motion, nor 20 has she appeared in this case in any way. On December 8, 2025, the undersigned 21 vacated the hearing, granted Defendant additional time to respond to the motion, and 22 cautioned her that failure to respond may result in the imposition of a default judgment 23 against her. (ECF No. 10.) When the time period for briefing was complete, the motion 24 was taken under submission without argument pursuant to Local Rule 230(g). (Id.) For 25 the reasons stated below, the Court recommends Plaintiff’s motion for default judgment 26 be GRANTED, and that judgment be entered in favor of Plaintiff. 27 / / / 28 / / / 1 I. BACKGROUND 2 A. Factual Background 3 Plaintiff North American Company for Life and Health Insurance (“North 4 American”) is an Iowa corporation with its headquarters and principal place of business 5 in Iowa. (ECF No. 1 (“Compl.”), ¶ 5.) Defendant is an individual who resides in California. 6 (Id., ¶ 6.) Plaintiff filed this action on July 15, 2025 seeking a declaratory judgment that a 7 life insurance policy it issued for Defendant in 2024 is void due to Defendant’s alleged 8 failure to disclose a material change in health prior to the issuance of the policy and/or 9 material misrepresentations in her application for the policy. (Id., ¶¶ 1, 20, 50.) 10 In May and June 2024, Defendant completed and submitted an application to 11 Plaintiff for a $100,000 life insurance policy on her life. (Id., ¶¶ 11-13; see ECF No. 1-1, 12 Ex. A.) The application required her to accurately disclose whether “[o]ther than tests 13 related to the HIV virus, in the past 24 months, [you have] been advised by a licensed 14 medical professional to see a medical specialist, have surgery, or a diagnostic test or 15 procedure, which has not been completed or results are unknown?” (Id., ¶ 16.) 16 Defendant represented that she had not. (Id., ¶ 17.) The application also required 17 Defendant to “agree to immediately advise the Company of any change to any of the 18 responses on this application . . . that arise after completing this application, but before 19 the policy is effective.” (Id., ¶ 18.) Defendant signed the application, acknowledging her 20 agreement. (Id., ¶ 19.) On July 8, 2024, in reliance upon Defendant’s representations, 21 Plaintiff issued a life insurance policy for Defendant with the effective date of July 8, 22 2024. (Id., ¶ 20; see ECF No. 1-2, Ex. B.) 23 On July 19, 2024, Defendant e-signed a Statement of Health and Insurability that 24 required her to accurately represent, in part, whether 25 [s]ince the date of the original application . . . ., has the person to be covered by the policy: 26 A. Received medical advice or treatment by a member of the 27 medical profession for any change in health (list any exceptions)? 28 1 B. Consulted, been examined, or treated by a physician or medical practitioner (list any exceptions)? 2 3 (Id., ¶¶ 24, 26; see ECF No. 1-3. Ex. C.) To both questions, Defendant represented that 4 she had not. (Id., ¶¶ 25, 27.) Defendant further indicated that “the above statements are 5 complete and true, to the best of my knowledge and belief” and that “[u]nless all 6 questions are truthfully answered No, it is understood that no coverage will take effect 7 until the statement of Health is reviewed and accepted by the company.” (Id., ¶ 28.) 8 On October 1, 2024, Defendant submitted an application for accelerated death 9 benefits due to critical illness and sought to accelerate $25,000 of the policy’s death 10 benefit (“the Claim”). (Id., ¶ 30; see ECF No. 1-4, Ex. D.) On November 18, 2024, 11 Plaintiff sent a letter to Defendant stating that Plaintiff would be conducting a standard 12 review of the Claim because it was made within two years of the issuance of the policy. 13 (Id., ¶ 32; see ECF No. 1-6, Ex. F.) 14 During its review of the Claim, Plaintiff learned that Defendant misrepresented her 15 medical history in the application and failed to disclose a material change in health prior 16 to the issuance of the policy as required. (Id., ¶ 33.) Defendant’s medical records reveal 17 that, prior to her submission of the application, a right breast mass was identified, with a 18 doctor recommending a diagnostic test that had not been completed. (Id., ¶ 34. ) Also, 19 on or about June 12, 2024, approximately six days after Defendant e-signed part of the 20 application and one month before the policy issued, another doctor recommended that 21 she undergo additional medical imaging because of fibrocystic breast changes and a 22 family history of breast cancer. (Id., ¶ 35. ) Defendant never disclosed this information to 23 Plaintiff. (Id., ¶ 36.) Had Defendant truthfully represented her medical history as to the 24 recommended additional diagnostic testing and medical imaging, Plaintiff alleges the 25 policy would not have issued. (Id., ¶ 38.) 26 On April 30, 2025, Plaintiff sent a letter to Defendant requesting to rescind the 27 policy based on the material misrepresentations and/or omissions and requesting her 28 mutual agreement to do so. (Id., ¶ 42; see ECF No. 1-7, Ex. G.) Defendant did not 1 respond to the letter. (Id., ¶ 43.) 2 B. Procedural Background 3 Plaintiff filed a complaint for declaratory judgment against Defendant on July 15, 4 2025 seeking rescission of Defendant’s life insurance policy. (Compl.) The docket 5 reflects that the summons was returned executed on Defendant at her last known 6 address on July 30, 2025. (ECF No. 4.) 7 On September 19, 2025, the Clerk entered default as to Defendant. (ECF No. 6.) 8 On November 19, 2025, Plaintiff moved for default judgment against Defendant. 9 After Defendant did not timely respond, the Court vacated the hearing on the motion set 10 for December 29, 2025 and provided Defendant “one additional, final opportunity to 11 oppose the motion.” (ECF No. 10 at 1.) After the time period for briefing ended with no 12 response from Defendant, Plaintiff’s motion for default judgment was submitted on the 13 papers. (Id. at 2.) 14 II. LEGAL STANDARDS 15 Under Federal Rule of Civil Procedure 55, default may be entered against a party 16 against whom a judgment for affirmative relief is sought who fails to plead or otherwise 17 defend against the action. See Fed. R. Civ. P. 55(a). However, this default does not 18 automatically entitle the plaintiff to a judgment. PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. 19 Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citations omitted). The decision to grant or deny 20 the entry of default judgment is within the district court’s discretion. NewGen, LLC v. 21 Safe Cig, LLC, 840 F.3d 606, 616 (9th Cir. 2016). 22 In determining whether to enter default judgment, courts consider the following 23 factors: 24 1. the possibility of prejudice to the plaintiff; 25 2. the merits of the substantive claim(s); 26 3. the sufficiency of the complaint; 27 4. the amount of money at stake in the lawsuit; 28 5. whether there are any disputes of material fact; 1 6. whether the defendant’s default was due to excusable neglect; and 2 7. the strong policy favoring decisions on the merits. 3 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). The Ninth Circuit has long 4 disfavored default judgments, counseling that cases be decided on the merits “whenever 5 reasonably possible.” Id. at 1472. 6 Once a default is entered, all well-pled allegations in the complaint regarding 7 liability are deemed true. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 8 2002). “On the other hand, a defendant is not held to admit facts that are not well- 9 pleaded or to admit conclusions of law.” United States v. Cathcart, 2010 WL 1048829, at 10 *4 (N.D. Cal. Feb. 12, 2010) (citation omitted). “[I]t follows from this that facts which are 11 not established by the pleadings of the prevailing party, or claims which are not well- 12 pleaded, are not binding and cannot support the judgment.” Danning v. Lavine, 572 F.2d 13 1386, 1388 (9th Cir. 1978). Necessary facts not contained in the pleadings and claims 14 which are legally insufficient are not established by default. DIRECTV, Inc. v. Hoa 15 Huynh, 503 F.3d 847, 854 (9th Cir. 2007). Further, a plaintiff’s allegations regarding 16 damages are not deemed true at default, and the plaintiff bears the burden to prove 17 damages with evidence. See Fed. R. Civ. P. 55(b)(2)(C); Geddes v. United Fin. Grp., 18 559 F.2d 557, 560 (9th Cir. 1977). 19 III. DISCUSSION 20 Plaintiff moves for default judgment seeking an order declaring the life insurance 21 policy No. ******7345, issued to Defendant on July 8, 2024, void or rescinded due to 22 Defendant’s material misrepresentations. 23 A. Jurisdiction and Service 24 As a preliminary matter, a court considering whether to enter default judgment 25 must first determine whether it has jurisdiction over both the subject matter and the 26 parties to the case. In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). 27 1. Subject Matter Jurisdiction 28 In its complaint, Plaintiff asserted the existence of diversity jurisdiction. (Compl., 1 ¶¶7-9, citing 28 U.S.C. § 1332.) In declaratory judgment actions concerning whether an 2 insurance policy is in effect or has been terminated, the policy’s face amount is the 3 measure of the amount in controversy. Elhouty v. Lincoln Benefit Life Co., 886 F.3d 752, 4 756 (9th Cir. 2018). Plaintiff alleges the policy’s face amount is $100,000. (Id., ¶ 8.) 5 Accordingly, plaintiff has properly alleged that the amount in controversy exceeds 6 $75,000. Plaintiff also alleges it is an Iowa corporation with a principal place of business 7 in Iowa, while defendant is a citizen of California. (Id., ¶ 9.) Accordingly, there is 8 complete diversity among the parties and the court has subject matter jurisdiction. 9 2. Existence of A “Case of Actual controversy” 10 The Declaratory Judgment Act allows a federal court to “declare the rights and 11 other legal relations” of parties to a “case of actual controversy.” 28 U.S.C. § 2201; see 12 also Spokane Indian Tribe v. U.S., 972 F.2d 1090, 1091 (9th Cir.1992). “First, the court 13 must inquire whether there is a case of actual controversy within its jurisdiction.” Am. 14 States Ins. Co. v. Kearns, 15 F.3d 142, 143 (9th Cir.1994) (citations omitted). The test is 15 “whether ‘there is a substantial controversy, between parties having adverse legal 16 interests, of sufficient immediacy and reality to warrant the issuance of a declaratory 17 judgment.’” Principal Life Ins. Co. v. Robinson, 394 F.3d 665, 671 (9th Cir. 2004) 18 (quoting Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)). 19 As set forth above, Plaintiff seeks to void or rescind a life insurance policy 20 allegedly based on material misrepresentations by Defendant about the state of her 21 health prior to the policy’s effective date. Defendant has not agreed to rescind the policy 22 nor has she responded to Plaintiff’s allegations. The Court finds that there is more than 23 “an abstract or hypothetical disagreement” over the issues of whether the policy should 24 be declared rescinded. Thus, there exists a case of actual controversy. 25 3. Exercise of Discretion 26 “[I]f there is a case or controversy within its jurisdiction, the court must decide 27 whether to exercise that jurisdiction. The statute gives discretion to courts in deciding 28 whether to entertain declaratory judgments; it states that the court ‘may declare the 1 rights ... of any interested party.’” Am. States Ins., 15 F.3d at 144-45 (quoting 28 U.S.C. 2 § 2201(a) (emphasis added)). However, “when other claims are joined with an action for 3 declaratory relief (e.g., ... rescission ...), the district court should not, as a general rule, 4 remand or decline to entertain the claim for declaratory relief. If a federal court is 5 required to determine major issues of state law because of the existence of non- 6 discretionary claims, the declaratory action should be retained to avoid piecemeal 7 litigation.” Gov’t Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225-26 (9th Cir. 1998). 8 Here, Plaintiff seeks declaratory relief rescinding the policy and the undersigned is 9 unaware of any pending state court litigation. Accordingly, the undersigned finds it 10 proper to exercise jurisdiction over the recission claim. 11 B. Eitel Factors 12 For the following reasons, the Court finds that the Eitel factors weigh in favor of 13 granting default judgment against Defendant. 14 1. Factor One: The Possibility of Prejudice to the Plaintiff 15 The first Eitel factor considers whether the plaintiff would suffer prejudice if default 16 judgment were not entered, and such potential prejudice to the plaintiff weighs in favor of 17 granting a default judgment. See PepsiCo, 238 F. Supp. 2d at 1177. Here, the Clerk of 18 Court entered default against Defendant on September 19, 2025 (ECF No. 6), and 19 Defendant has not participated in the litigation despite being served with the Complaint, 20 default judgment motion, and the Court’s December 8, 2025 order. (See ECF Nos. 4 & 21 11.) Plaintiff would suffer prejudice if the Court did not enter a default judgment because 22 it would be without recourse for recovery. Accordingly, the first Eitel factor favors the 23 entry of default judgment. 24 2. Factors Two and Three: The Merits of the Claims and the 25 Sufficiency of the Complaint 26 The Court considers the merits of Plaintiff’s substantive claims and the sufficiency 27 of the complaint together below because of the relatedness of the two inquiries. The 28 court must consider whether the allegations in the complaint are sufficient to state a 1 claim that supports the relief sought. See Danning, 572 F.2d at 1388; PepsiCo, Inc., 238 2 F. Supp. 2d at 1175. 3 Plaintiff seeks rescission of the life insurance policy based on material 4 misrepresentations in the policyholder’s application. California Insurance Code § 359 5 provides that “[i]f a representation is false in a material point, whether affirmative or 6 promissory, the injured party is entitled to rescind the contract from the time the 7 representation becomes false.” With regard to Defendant’s life insurance, insureds are 8 bound by statements made in an application when the application is attached to or 9 endorsed on a policy when issued. See Cal. Ins. Code §§ 10113, 10381.5. 10 Under California law, “a material misrepresentation or concealment in an 11 insurance application, whether intentional or unintentional, entitles the insurer to rescind 12 the insurance policy ab initio.” W. Coast Life Ins. Co. v. Ward, 132 Cal. App. 4th 181, 13 186–87 (2005) (citing O’Riordan v. Fed. Kemper Life Assurance, 36 Cal.4th 281, 286-87 14 (2005)). This rule has been codified in the California Insurance Code. See Cal. Ins. Code 15 § 331. “Materiality is determined solely by the probable and reasonable effect which 16 truthful answers would have had on the insurer.” Thompson v. Occidental Life Ins. Co., 9 17 Cal.3d 904, 916 (1973); see also Cal. Ins. Code § 334. The fact that an insurer has 18 demanded answers to specific questions on an application for insurance is usually 19 sufficient to establish the materiality of that information as a matter of law. W. Coast Life 20 Ins. Co., 132 Cal. App. 4th at 187 (quoting Old Line Life. Ins. Co. v. Superior Court, 229 21 Cal. App. 3d 1600, 1603-04 (1991)). 22 Here, Defendant indicated in her 2024 application for a life insurance policy that 23 she had not been advised by a medical professional to have a diagnostic test; yet, her 24 medical records revealed that a doctor had identified a right breast mass and 25 recommended a diagnostic test which had not been completed. (Compl., ¶¶ 16-17, 34.) 26 In her application, Defendant also agreed to “immediately advise [Plaintiff] of any change 27 to the responses on this application . . . that arise after completing this application, but 28 before the policy is effective.” (Id., ¶ 18.) Her medical records revealed that, one month 1 before the policy issued, another doctor recommended that she undergo additional 2 medical imaging because of fibrocystic breast changes and a family history of breast 3 cancer.” (Id., ¶ 35.) Defendant never disclosed this information to Plaintiff. (Id., ¶ 36.) 4 Had she truthfully represented her medical history as to the recommended additional 5 diagnostic testing and medical imaging, Plaintiff would not have issued the policy. (Id., 6 ¶ 38.) These factual allegations are sufficient to support Plaintiff’s claim that it 7 reasonably relied on material misrepresentations/omissions in Defendant’s life insurance 8 application, and that it is entitled to rescission of the policy. Accordingly, the second and 9 third Eitel factors favor the entry of a default judgment. 10 3. Factor Four: The Sum of Money at Stake in the Action 11 Under the fourth Eitel factor, the Court considers the amount of money at stake in 12 relation to the seriousness of Defendant’s conduct. PepsiCo, 238 F. Supp. 2d at 1176. 13 Here, Plaintiff seeks declaratory relief in the form of recission. No money damages are 14 sought. Accordingly, the fourth Eitel factor favors the entry of default judgment. 15 4. Factor Five: The Possibility of Dispute Concerning Material Facts 16 The facts of this case are straightforward, and Plaintiff has provided the Court with 17 well-pleaded allegations and documentation supporting its claims. Here, the Court may 18 assume the truth of well-pleaded facts in the complaint (except as to damages) following 19 the Clerk’s entry of default, and thus, there is no likelihood that any genuine issue of 20 material fact exists. See, e.g., Elektra Entm't Group Inc. v. Crawford, 226 F.R.D. 388, 21 393 (C.D. Cal. 2005) (“Because all allegations in a well-pleaded complaint are taken as 22 true after the court clerk enters default judgment, there is no likelihood that any genuine 23 issue of material fact exists.”); accord PepsiCo, 238 F. Supp. 2d at 1177. Accordingly, 24 the fifth Eitel factor favors the entry of default judgment. 25 5. Factor Six: Whether Default was Due to Excusable Neglect 26 Upon review of the record before the Court, there is no indication that the default 27 was the result of excusable neglect. See PepsiCo, 238 F. Supp. 2d at 1177. Plaintiff 28 served Defendant with the summons and the Complaint. (ECF No. 3.) Plaintiff also 1 served Defendant with its motion for default judgment and the Court’s December 8, 2025 2 order. (ECF No. 11.) Despite notice of this lawsuit and Plaintiff’s intention to seek a 3 default judgment, Defendant has failed to participate in this action or to defend herself. 4 Accordingly, the sixth Eitel factor favors the entry of default judgment. 5 6. Factor Seven: The Strong Policy Favoring Decisions on the Merits 6 “Cases should be decided upon their merits whenever reasonably possible.” Eitel, 7 782 F.2d at 1472. Although the Court is cognizant of the policy favoring decisions on the 8 merits, that policy does not, by itself, preclude the entry of default judgment where a 9 defendant fails to appear or defend itself in an action. See PepsiCo, 238 F. Supp. 2d at 10 1177; see also Craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039, 1061 (N.D. 11 Cal. 2010). 12 7. Conclusion 13 Upon consideration of the Eitel factors, the Court concludes that Plaintiff is 14 entitled to the entry of default judgment against Defendant. The Court next determines 15 the terms of judgment. 16 C. Terms of Judgment 17 Plaintiff seeks declaratory relief in the form of rescission. The Court determines 18 this relief is appropriate. 19 IV. CONCLUSION 20 For the reasons set forth above, it is HEREBY ORDERED that the Clerk of Court 21 assign a district judge to this action. 22 IT IS HEREBY RECOMMENDED that: 23 1. Plaintiff’s motion for default judgment against Defendant (ECF No. 9) be 24 GRANTED; 25 2. The district court enter judgment against Defendant and order that North 26 American Life Insurance Policy No. ******7345, issued to Defendant on July 8, 27 2024, is rescinded and set aside as null and void ab initio; and 28 3. The Clerk of the Court close this case. 1 These findings and recommendations are submitted to the United States District 2 || Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within 3 | 14 days after being served with these findings and recommendations, any party may file 4 | written objections with the Court and serve a copy on all parties. This document should 5 || be captioned “Objections to Magistrate Judge’s Findings and Recommendations.” Any 6 || reply to the objections shall be served on all parties and filed with the Court within 14 7 | days after service of the objections. Failure to file objections within the specified time 8 || may waive the right to appeal the District Court's order. Turner v. Duncan, 158 F.3d 449, 9 | 455 (9th Cir. 1998); Martinez v. Yist, 951 F.2d 1153, 1156-57 (9th Cir. 1991). 10 11 Dated: March 26, 2026 C iy S \U 12 CHI SOO KIM 43 UNITED STATES MAGISTRATE JUDGE 14 15 16 17 || 6/nort1972.default.grant.f&r 18 19 20 21 22 23 24 25 26 27 28 11