Yearby v. American National Insurance Company

• Court: District Court, N.D. California
• Decided: August 30, 2021
• Docket: 3:20-cv-09222
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JOE S YEARBY, Case No. 20-cv-09222-EMC

8 Plaintiff, ORDER DENYING DEFENDANT’S 9 v. MOTION TO TRANSFER, AND GRANTING IN PART AND DENYING 10 AMERICAN NATIONAL INSURANCE IN PART DEFENDANT’S MOTION TO COMPANY, DISMISS 11 Defendant. Docket Nos. 39, 43 12 13 14 Pending before the Court are Defendant American National Insurance Company’s 15 (ANICO’s) motion to transfer this case to the Southern District of Texas pursuant to 28 U.S.C. § 16 1404(a), or to dismiss this action pursuant to Federal Rules of Civil Procedure 12(b)(2) and 17 12(b)(6). See Docket Nos. 39 (“Dismiss Mot.”); 43 (“Transfer Mot.”). 18 For the following reasons, the Court DENIES the motion to transfer. The Court also 19 DENIES in part and GRANTS in part the motion to dismiss with leave to amend. 20 I. BACKGROUND 21 A. Factual Allegations in the Complaint 22 Plaintiff Joe S. Yearby’s first amended complaint (FAC) alleges as follows. Plaintiff 23 purchased life insurance policy number UL090652 (the “Policy”) from ANICO on June 9, 1986, 24 while he was a resident of Oakland, California. See Docket Nos. 31 (First Am. Compl. (FAC)) ⁋ 25 12; 43-1 (Decl. of Bruce Pavelka in Supp. of Mot. to Transfer (“Pavelka Decl.”), Ex. A-1 26 (“Policy”). The Policy application, which was part of the Policy, was signed by the parties in 27 California. Policy at 31, 33. ANICO allegedly sought and obtained approval from California state 1 In or around October 1995, Plaintiff notified ANICO that he had relocated from Oakland 2 to Glendale, Arizona. Pavelka Decl. ¶ 9. In 2005, Plaintiff again changed his address on file with 3 ANICO to his current address in Monroe, Louisiana. Id. The FAC thus states that Plaintiff 4 currently “is an individual and citizen of the state of Louisiana.” FAC ¶ 12. ANICO is an 5 insurance company organized and existing under the laws of Texas with a principal place of 6 business in Galveston, which is in the Southern District of Texas. FAC ¶ 13; Pavelka Decl. ¶ 5. 7 The gravamen of Plaintiff’s FAC is that, starting in 2010, ANICO considered factors 8 beyond the terms of the Policy to determine the cost of insurance (COI) rates it charged Plaintiff 9 under the Policy. Id. ¶ 11. More specifically, Plaintiff alleges ANICO failed to decrease its COI 10 charges, as was required by the Policy. Id. Plaintiff brings a single cause of action for common 11 law breach of contract to recover the alleged COI overcharges. Id. 12 Plaintiff seeks to represent a class of ANICO policyholders who purchased life insurance 13 policies from ANICO in California and “who have been forced since January 1, 2010 to pay 14 unlawful and excessive COI rates, deducted from their account values on a monthly basis that are 15 not, as the policies require, determined from time to time by ANICO based on its expectations as 16 to future mortality experience.” FAC ⁋ 1, 33. According to the FAC, venue is proper in this 17 District because “the events giving rise to Plaintiff’s cause of action occurred in this District and 18 because ANICO transacts business and has transacted business during the relevant time period 19 within the Northern District of California.” Id. ¶ 16. ANICO is licensed to transact insurance in 20 California. Id. ¶ 13. Additionally, “a substantial part of the acts and omissions giving rise to the 21 claims on behalf of the Class set forth herein, including ANICO’s issuance of Plaintiff’s life 22 insurance policy, occurred in this judicial district and/or in the San Francisco Division.” Id ¶ 16. 23 B. Procedural History 24 Plaintiff filed his initial class action complaint on December 18, 2020 and his FAC on 25 April 23, 2021. See Docket No. 1 (“Compl.”); FAC. ANICO filed a motion to dismiss the FAC 26 on May 7, 2021 and a motion to transfer this case to the Southern District of Texas on May 13, 27 2021. See Dismiss Mot.; Transfer Mot. 1 II. MOTION TO TRANSFER 2 Under 28 U.S.C. § 1404(a), a district court has discretion to transfer a case to another 3 district where it might have been brought. Defendant seeks to transfer this case to the Southern 4 District of Texas, where it is incorporated and has its principal place of business. Transfer Mot. at 5 3. “The party seeking transfer has the burden of showing that transfer is appropriate.” Kaur v. 6 U.S. Airways, Inc., No. C-12-5963 EMC, 2013 WL 1891391, at *2 (N.D. Cal. May 6, 2013) 7 (citing Commodity Futures Trading Comm’n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979)). 8 “Section 1404(a) provides for transfer to a more convenient forum, not to a forum likely to prove 9 equally convenient or inconvenient.” Mainstay Bus. Sols. v. Indus. Staffing Servs., No. ICVS-10- 10 3344 KJM GGH, 2012 WL 44643, at *1 (E.D. Cal. Jan 9, 2012) (citing Van Dusen v. Barrack, 11 376 U.S. 612, 645–46 (1964)). A court considering a motion to transfer venue must determine 12 whether venue is proper in this District; whether plaintiff could have brought the action in the 13 transferee district; and whether the transfer will promote convenience and fairness. Stewart Org., 14 Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988); Hoffman v. Bilaski, 363 U.S. 335, 343–44 (1960). 15 Because the parties do not dispute that this action could be brought in this District or in the 16 Southern District of Texas, see Transfer Mot. at 7–8, Docket No. 46 (“Transfer Opp’n”), the only 17 question is whether this Court should transfer this action “for the convenience of the parties and 18 witnesses, and in the interest of justice.” 28 U.S.C. § 1404(a). 19 Courts engage in an “individualized, case-by-case consideration of convenience and 20 fairness” to determine if transfer is appropriate. Stewart Org., 487 U.S. at 29 (quoting Van Dusen, 21 376 U.S. at 622). This individualized inquiry requires the Court to consider the following factors: 22 (1) plaintiff’s choice of forum, (2) convenience of the parties, (3) convenience of the witnesses, (4) 23 ease of access to the evidence, (5) familiarity of each forum with the applicable law, (6) feasibility 24 of consolidation with other claims, (7) any local interest in the controversy, and (8) the relative 25 court congestion and time to trial in each forum. See, e.g., Gonzales v. Charter Commc’ns, LLC, 26 No. 20-CV-02689-EMC, 2020 WL 5074024, at *2 (N.D. Cal. Aug. 24, 2020). “Weighing of the 27 factors for and against transfer involves subtle considerations and is best left to the discretion of 1 Savage, 611 F.2d at 279). “A district court is not restricted to the pleadings on a motion to 2 transfer and may consider, inter alia, undisputed facts supported by affidavits, depositions, 3 stipulations, or other relevant documents.” Esquer v. StockX, LLC, No. 19-CV-05933-LHK, 2020 4 WL 3487821, at *2 (N.D. Cal. June 6, 2020). 5 The Court will evaluate each of these factors in order of relative importance to decide the 6 transfer motion.1 7 A. Plaintiff’s Choice of Forum (First Factor) 8 “The defendant must make a strong showing of inconvenience to warrant upsetting the 9 plaintiff’s choice of forum,” which is generally “accorded significant deference.” See Decker 10 Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). FAC ⁋ 12; Policy at 11 31, 33. In Lou v. Belzberg, the Ninth Circuit explained that

12 [i]n judging the weight to be accorded [plaintiff’s] choice of forum, consideration must be given to the extent of both [plaintiff’s] and the 13 [defendants’] contacts with the forum, including those relating to [plaintiff’s] cause of action. . . . If the operative facts have not 14 occurred within the forum and the forum has no interest in the parties or subject matter, [plaintiff’s] choice is entitled to only 15 minimal consideration. 16 834 F.2d 730, 739 (9th Cir. 1987) (emphasis added) (citations omitted). Applying Lou, courts in 17 this district have given a plaintiff’s choice of forum varying levels of deference depending on 18 whether there is evidence of forum shopping, the plaintiff resides in the forum, and the plaintiff 19 chose a forum with no connection to the underlying dispute. See e.g., Doe v. Epic Games, Inc., 20 435 F. Supp. 3d 1024, 1041 (N.D. Cal. 2020) (“A Plaintiff’s choice of forum receives only 21 minimal deference if the operative facts did not occur within the forum and the forum has no 22 interest in the parties or subject matter.”); Gonzales, 2020 WL 5074024, at *2 (“[W]here plaintiffs 23 have engaged in forum shopping or chosen a forum with no connection to the underlying dispute, 24 ‘the burden on the defendant is reduced and it is easier for the defendant to show that the balance 25 of convenience favors transfer.’” (quoting Gupta v. Perez, No. 5:14–cv–01102 HRL, 2014 WL 26 2879743, *3 (N.D. Cal. June 24, 2014)); Kaur, 2013 WL 1891391, at *3 (“To be sure, ‘[w]here a 27 1 plaintiff does not reside in the forum, the Court may afford plaintiff’s choice considerably less 2 weight.’” (quoting Vu v. Ortho–McNeil Pharm., Inc., 602 F.Supp.2d 1151, 1156 (N.D. Cal. 3 2009)); Inherent.com v. Martindale–Hubbell, 420 F. Supp. 2d 1093, 1100 (N.D. Cal. 2006) 4 (“[T]he degree to which courts defer to the plaintiff’s chosen venue is substantially reduced when 5 the plaintiff’s choice is not its residence or where the forum lacks a significant connection to the 6 activities alleged in the complaint.”). Although Plaintiff no longer resides here, his choice of 7 forum is nonetheless entitled to significant deference because there is no evidence of forum 8 shopping and this District has a strong connection to the underlying dispute given that all the 9 policies in the proposed class were issued in California. 10 ANICO first argues that Plaintiff’s choice of forum is entitled to little deference because he 11 moved out of this District long before ANICO allegedly failed to reduce the COI charges in 12 violation of the Policy. Indeed, some courts in this district have afforded less deference to a 13 plaintiff’s choice of forum when the plaintiff does not reside in the District, and especially when 14 the plaintiff did not reside in the district when the alleged underlying conduct occurred. See e.g., 15 Kaur, 2013 WL 1891391, at *3; Vu, 602 F. Supp. 2d at 1156 (N.D. Cal. 2009)); Inherent, 420 F. 16 Supp. 2d at 1100. But a plaintiff’s residency at the time a defendant files a transfer motion is not 17 dispositive. In Kaur—a labor dispute—the court held that even though the plaintiff moved to 18 Arizona after filing suit, that was “not a case where a plaintiff has no ties to a district is engaging 19 in forum shopping” because the plaintiff “resided in this District during the entire time that the 20 events in question took place” and “many of the events at issue can be said to have occurred in this 21 District.” 2013 WL 1891391, at *3. Similarly, the court in Jimenez v. Haxton Masonry Inc., held 22 that the parties’ “connections to this district, which give rise to the Amended Complaint, warrant 23 deference to the Plaintiff’s choice of forum,” even though the named Plaintiff was always an 24 Arizona resident. No. 18-CV-07109-SVK, 2019 WL 9573762, at *3 (N.D. Cal. May 10, 2019). 25 In that case—also a labor dispute—although the named plaintiff had never resided in California, 26 he alleged the defendant failed to compensate him and other similarly situated employees who 27 traveled to work on the defendant’s California job sites. Id. That Plaintiff moved out of the 1 and the parties have “contacts with [this District], including those relating to [Plaintiff’s] cause of 2 action.” Lou, 834 F.2d at 739. 3 This leads to ANICO’s second argument, which is that Plaintiff’s choice of forum is 4 entitled to little deference because the FAC’s alleged operative facts—namely, that ANICO failed 5 to reduce the COI rates in accordance with the Policy—took place at ANICO’s Galveston 6 headquarters in the Southern District of Texas. See Transfer Mot. at 13–14; Docket No. 26-2 7 (Decl. of Dustin Dusek (“Dusek Decl.”) ¶¶ 9–11. According to ANICO, “[m]ost, if not all, the 8 current or former employees of [ANICO] who were involved in the [policies] and, in particular, 9 their COI rates and COI charges work in Galveston, Texas.” Id. ¶ 11. Indeed, there is no 10 indication in the FAC that the decision not to decrease the COI charges was made through 11 ANICO’s California contacts; to the contrary, ANICO insists, and Plaintiff does not dispute, that 12 decision was made from ANICO’s headquarters in Galveston. Furthermore, by the time ANICO 13 decided to increase the COI charges in 2010, the Plaintiff had been living outside of California for 14 fifteen years. Pavelka Decl. ¶¶ 9–12, 17. As a result, the present case is somewhat distinguishable 15 from Kaur and Jimenez because not all the operative facts at the core of Plaintiff’s claim took 16 place in this District. 17 Admittedly, other courts facing similar fact patterns have transferred cases to the insurer’s 18 home forum despite involving insurance policies issued in California. The court in EFG Bank AG, 19 Cayman Branch v. Lincoln National Life Insurance Company, for example, transferred the case to 20 the Eastern District of Pennsylvania after concluding that “Plaintiffs’ choice of forum [was] 21 entitled to minimal deference because . . . the operative facts (i.e., the decision to make the COI 22 Adjustment) occurred outside of California at Defendant’s offices in North Carolina, Indiana, and 23 Pennsylvania.” See No. CV 17-817-JFW(KSX), 2017 WL 5635022, at *3 (C.D. Cal. June 8, 24 2017). In that case, like here, the plaintiffs alleged that “Lincoln regularly conducts and transacts 25 business in California, including having issued the life insurance policies at issue in this complaint 26 in California,” and that “a substantial part of the events giving rise to the claims occurred in [the 27 Central District], including Lincoln’s issuance of some of the policies at issue in this Complaint.” 1 2–3. The EFG Bank court nonetheless held that the fact that Lincoln issued insurance policies in 2 California—included those at issue in the lawsuit—did not merit affording the plaintiffs’ choice of 3 forum significant deference because the operative facts took place elsewhere. 4 Plaintiff correctly points out, however, that the facts of EFG Bank are materially different 5 because other plaintiffs had previously filed an identical action in the Eastern District of 6 Pennsylvania. 2017 WL 5635022, at *3. Therefore, “the question for the Court [was] not 7 ‘whether [that] action would be more conveniently litigated in [the alternative forum], but whether 8 it would be more convenient to litigate the [two] actions separately or in a coordinated 9 fashion.’” Id. (quoting Elecs. For Imaging, Inc. v. Tesseron. Ltd., No. C 07-05534 CRB, 2008 10 WL 276567, *2 (N.D. Cal. Jan. 29, 2008)). The impetus to transfer the case in EFG Bank was 11 therefore not that the operative facts took place outside the plaintiff’s chosen forum, but “that, 12 given the substantial overlap in issues, witnesses, and documents, the interest of justice requires 13 that this action and the Pennsylvania Consolidated Action should be litigated together, and that 14 these considerations strongly outweigh Plaintiffs’ choice of forum.” Id. 15 Defendant also cites Smithson v. Jackson National Insurance Companies, where the court 16 was facing similar facts to the instant case: although the plaintiff did not reside in the Central 17 District of California, “he assert[ed] that the ‘forum has a substantial nexus to the subject matter of 18 this lawsuit’ because [he] purchased the insurance policy at issue in California, and lived in 19 California for 13 years after purchasing the policy.” No. CV177485FMORAOX, 2018 WL 20 5099510, at *2 (C.D. Cal. May 29, 2018). The Smithson court nonetheless transferred the case to 21 the Western District of Michigan after concluding that the plaintiff’s choice of forum was entitled 22 to “little deference” because “[w]hile the location of where an agreement was formed and 23 executed is often viewed as a neutral factor . . . here plaintiff’s claims center not on the formation 24 of the insurance policies, but instead [on] whether Jackson, acting through its employees in 25 Michigan, breached its contracts with policyholders.” Id. Other courts have transferred similar 26 cases where the operative facts involve adjustments of COI rates, which usually take place in the 27 forum where the insurance company is headquartered. See e.g. Wenokur v. AXA Equitable Life 1 (“Although the Wenokur Policy was issued in Arizona, Plaintiffs’ claims center not on the 2 formation of the policies, but instead whether AXA, acting through employees in New York City, 3 breached its contracts with policyholders when it increased COI rates.”); Saunders v. USAA Life 4 Ins. Co., 71 F. Supp. 3d 1058, 1061 (N.D. Cal. 2014) (transferring case to Western District of 5 Texas “because Defendant has little connection with California outside of the presence of 6 policyholders in this state, and all of the conduct underlying the premium increase occurred in 7 Texas”); Burnett v. Conseco Life Ins. Co., No. ED12CV01715VAPSPX, 2018 WL 4945523, at *3 8 (C.D. Cal. Jan. 24, 2018) (“Plaintiffs are entitled to less deference because . . . the case is filed 9 outside of Plaintiffs’ home district, and . . . the majority of the facts giving rise to the case took 10 place in the Southern District of Indiana.”) 11 These cases are distinguishable, however, because they involved plaintiffs seeking to 12 represent a nationwide class, not a California-only class. See 2018 WL 5099510, at *2 13 (“[P]laintiff does not reside in the Central District of California . . . and he seeks to represent a 14 nationwide class.”); Wenkour, 2017 WL 4357916, at *3 (“Although this factor is generally given 15 significant weight, it is afforded less deference when, as here, the action is brought as a nationwide 16 putative class action.”); Saunders, 71 F. Supp. 3d at 1061 (“But while this factor can sometimes be 17 a weighty one under other circumstances, it is afforded less deference when, as here, the action is 18 brought as a class action on behalf of a representative class.”); Burnett, 2018 WL 4945523, at *3 19 (“Plaintiffs are entitled to less deference because this is a nation-wide class action.”). Here, by 20 contrast, the FAC defines the “California COI Overcharge Class” as:

21 All owners of universal life (including variable universal life) insurance policies issued in California by American National 22 Insurance Company, or its predecessors in interest, that provide that cost of insurance rates are determined based on expectations as to 23 future mortality experience, and that were subjected to monthly cost of insurance deductions on or after January 1, 2010. 24 25 FAC ⁋ 33 (emphasis added). Plaintiff does not seek to represent any class members who 26 purchased their policies outside of California. 27 The fact that this is a California-only class action militates strongly in favor of Plaintiff’s 1 treated fairly. All the policies that are potentially at issue in this case were issued in California 2 and are therefore—absent a choice of law clause to the contrary—subject to California contract 3 law. Mosier v. Phoenix Life Ins. Co., No. SACV12227PSGEX, 2013 WL 12132065, at *3 (C.D. 4 Cal. Jan. 15, 2013) (“[I]n the absence of an effective choice of law by the parties, the law of the 5 state where the insured is domiciled at the time the policy is applied for usually determines the 6 validity of a life insurance contract and the rights created under it.” (citing 2 Witkin, Summary of 7 Cal. Law (10th), Insurance § 26 (citing Restatement (Second) of Conflict of Laws § 192))). 8 Therefore, the Plaintiff’s choice of forum is “not purely fortuitous” because, although he is 9 bringing a class action, the class is limited to owners of life insurance policies issued by AMICO 10 in California. Sonoda v. Amerisave Mortg. Corp., No. C-11-1803 EMC, 2011 WL 2653565, at *4 11 (N.D. Cal. July 6, 2011). In Sonoda, Mr. Sonoda’s choice of forum was not fortuitous because 12 “Mr. Sonoda [was] not just seeking to represent a nationwide class; he [was] also seeking to 13 represent a California subclass.” Id. (emphasis added). That meant that the defendant “had 14 contacts with California . . . which gave rise to Mr. Sonoda’s claims.” Id at *4. Numerous other 15 courts have likewise so held. See also Olosoni v. HRB Tax Grp., Inc., No. 19-CV-03610-SK, 16 2019 WL 7576681, at *4 (N.D. Cal. Nov. 27, 2019) (“[T]he proposed class is comprised 17 exclusively of California plaintiffs. The Court finds that Plaintiffs’ choice of this forum is not 18 largely fortuitous, and thus the Court affords great weight to Plaintiffs’ choice of forum.”); 19 Yeomans v. World Fin. Grp. Ins. Agency, Inc., No. 19-CV-00792-EMC, 2019 WL 5789273, at *8 20 (N.D. Cal. Nov. 6, 2019) (“[T]he proposed class in this case is limited to people ‘who performed 21 work for Defendants in the State California,’ . . . so there is little reason to give less weight to the 22 named Plaintiffs’ choice of forum here.” (citations omitted)); Jimenez, 2019 WL 9573762, at *3 23 (“Given the particular circumstances of this action, the fact that Plaintiff seeks to bring a class 24 action does not undermine the deference this Court gives to his choice of forum. . . . Here, 25 Plaintiff’s claims relate to work conducted by Plaintiff and other potential class members in this 26 District and in California.”); Holliday v. Lifestyle Lift, Inc., No. C 09-4995 RS, 2010 WL 3910143, 27 at *6 (N.D. Cal. Oct. 5, 2010) (“[T]he California subclass advances claims grounded upon 1 elsewhere or where the “forum has no interest in the parties or subject matter.”); Evancho, 2007 2 WL 1302985, at *2 (“[T]he Court accords plaintiffs’ choice of forum some weight. While the 3 putative class members are scattered across the country, one of the named plaintiffs resides in this 4 District and another resides elsewhere in California.”). Even more than the plaintiffs in Sonoda, 5 Holliday, and Evancho, the Court should defer to Plaintiff’s choice of forum because all the 6 putative class members’ policies were also issued in California, and ANICO continues to issue 7 policies in California, such that “there are strong contacts between [this District] and the dispute.” 8 Chen v. Pioneer Oil, LLC, 472 F. Supp. 3d 704, 710 (N.D. Cal. 2020) (quoting Lou, 834 F.2d at 9 739). 10 Accordingly, the Court affords Plaintiff’s choice of forum significant deference because, 11 although Plaintiff does not live here anymore, there is no evidence of forum shopping and this 12 District has a strong connection to the underlying dispute given that all the policies in the 13 proposed class were issued in California. 14 B. Other Factors 15 Because the Court gives Plaintiff’s choice of forum significant deference, ANICO must 16 “make a strong showing of inconvenience to warrant upsetting [P]laintiff’s choice of 17 forum.” Decker Coal, 805 F.2d at 843; see also Chesapeake Climate Action Network v. Exp.-Imp. 18 Bank of the U.S., No. C 13-03532 WHA, 2013 WL 6057824, at *2 (N.D. Cal. Nov. 15, 2013) (“As 19 deference to a plaintiff's choice of forum decreases, a defendant’s burden to upset the plaintiff's 20 choice of forum also decreases.”). ANICO fails to meet its substantial burden of showing that the 21 other factors weigh in favor of transfer. 22 1. Convenience of the Parties and Witnesses (Second and Third Factors) 23 Convenience of the parties and witnesses is neutral. Convenience of the witnesses is 24 “often recognized as the most important factor to be considered.” Metz v. The United States Life 25 Ins. Co., 674 F. Supp. 2d 1141, 1147 (C.D. Cal. 2009). However, this factor turns primarily on the 26 convenience of non-party witnesses and places particular focus on whether the court has subpoena 27 power to compel a particular witness’s testimony. United States v. Acad. Mortg. Corp., No. 16- 1 consideration to the convenience of party witnesses or witnesses employed by a party because 2 these witnesses can be compelled by the parties to testify regardless of where the litigation will 3 occur.” Id. (quoting Hendricks v. StarKist Co., No. 13-cv-729 YGR, 2014 WL 1245880, at *3 4 (N.D. Cal. Mar. 25, 2014)); see also Sonoda, 2011 WL 2653565, at *6 (finding that the defendant 5 will likely be able to arrange to have its former and current employee testify at trial). 6 Defendant argues that the Southern District of Texas is more convenient because all the 7 witnesses it identifies as having information relevant to this dispute are located there. Transfer 8 Mot. at 3–4, 14–15. But as Plaintiff points out, ten of the eleven individuals ANICO identified are 9 party witnesses—i.e., current ANICO employees—who could be compelled to testify in this 10 District. Transfer Opp’n at 14–15. The only third-party witness that either party has identified is 11 Ron Welch, a retired ANICO employee, who may or may not reside in the Southern District of 12 Texas. Mot. at 14–15. It is therefore unclear which forum is more convenient to Mr. Welch. 13 Accordingly, it is equally convenient for the parties and the witnesses to litigate this case 14 in either district. 15 2. Ease of Access to Evidence (Fourth Factor) 16 It is undisputed that access to most—if not all—of the relevant evidence in this case is 17 slightly easier in the Southern District of Texas, where ANICO has its Galveston headquarters. 18 See Dusek Decl. ¶¶ 8–10, 16; see Smith v. Oakley Transp., Inc., No. 19-cv-05854-EMC, 2020 WL 19 563076, at *2 (N.D. Cal. Jan. 30, 2020) (transferring proceeding to Florida because “the evidence 20 is far more focused in Florida than in California”); Schlesinger v. Collins, No. 19-cv-03483-EMC, 21 2019 WL 4674396, at *5 (N.D. Cal. Sept. 25, 2019) (transferring proceeding to Florida where “the 22 bulk of documentary evidence will likely be in Florida, where [defendant] resides”). It is 23 important not to overstate the importance of this factor, however, as most of the documentary 24 evidence in this case is likely available electronically and will thus be equally accessible in either 25 forum. Stribling v. Picazo, No. 15-CV-03337-YGR, 2018 WL 620146, at *4 (N.D. Cal. Jan. 30, 26 2018) (“[W]ith technological advances in document storage and retrieval, transporting documents 27 does not generally create a burden.”) (quoting Friends of Scot. Inc. v. Carroll, No. C-12-01255- 1 No. C-13-3440 EMC, 2013 WL 6155618, at *4 (N.D. Cal. Nov. 22, 2013) (“When the evidence is 2 in electronic form, this factor is neutral or carries minimal weight.”); Sarinara v. DS Waters of 3 Am. Inc., No. C–13–0905 EMC, 2013 WL 3456687 at *2 (N.D. Cal. July 9, 2013) (“Ease of 4 access to evidence is neutral, given the availability of digital records.”). Still, Plaintiff does not 5 identify any key evidence that is located in this District. See, e.g., Metz, 674 F. Supp. 2d at 6 1149 (ease of access weighs in favor of transfer where plaintiff failed to specify sufficient 7 evidence in his chosen venue). It is thus slightly easier to access evidence in the Southern District 8 of Texas. 9 Accordingly, this factor weighs only slightly in favor of transfer. 10 3. Familiarity With the Applicable Law (Fifth Factor) 11 This Court’s familiarity with California law slightly weighs against transferring this case. 12 California law applies to this dispute even if this Court transfers the case to Texas. See Nelson v. 13 Int’l Paint Co., 716 F.2d 640, 643 (9th Cir. 1983) (holding that the law of the transferor court is 14 applied by the transferee court in cases transferred for the convenience of the parties under § 15 1404(a)); Smithson, 2018 WL 5099510, at *4 (“The law of the transferor court is applied by the 16 transferee court in § 1404(a) transfers” (quoting Barnstormers, Inc. v. Wing Walkers, LLC, No. 17 09cv2367 BEN (RBB), 2010 WL 2754249, *3 (S.D. Cal. July 9, 2010)); Mosier, 2013 WL 18 12132065, at *3 (“[I]n the absence of an effective choice of law by the parties, the law of the state 19 where the insured is domiciled at the time the policy is applied for usually determines the validity 20 of a life insurance contract and the rights created under it.” (citing 2 Witkin, Summary of Cal. Law 21 (10th), Insurance § 26)). Courts in this district likely have more experience deciding questions of 22 California law than federal courts in Texas. See Jonathan Browning, Inc. v. Venetian Casino 23 Resort, LLC, No. C 07-3983JSW, 2007 WL 4532214, at *6 (N.D. Cal. Dec. 19, 2007) (“The 24 Northern District of California is more familiar with the relevant California state laws that govern 25 the state claims.”). That being said, “[r]egardless of which state’s law governs the contract 26 dispute, federal judges routinely interpret other states’ laws during their tenure on the bench.” 27 Hunt v. Ameritas Life Ins. Corps., No. 4:19-CV-01657-JSW, 2019 WL 7666755, at *4 (N.D. Cal. 1 Accordingly, this factor only weighs slightly against transferring this case. 2 4. Local Interest in the Controversy (Seventh Factor) 3 Plaintiff argues that “[t]his is a local controversy” because “[to] issue Plaintiff’s policy and 4 the putative class’s policies, ANICO was required to, and did, obtain a license and form approval 5 from the California Department of Insurance.” Transfer Opp’n at 11–12. This argument is not 6 very persuasive because Plaintiff does not explain how that licensing and approval process bears, 7 in any way, on his claims that ANICO violated the terms of the Policy by failing to reduce the 8 COI rates. To the contrary, he admits the process of negotiating or issuing the Policy is not at 9 issue in this lawsuit. Transfer Opp’n at 20 (“These form contracts [i.e. the policies] are not subject 10 to negotiation.”). On the other hand, California’s regulatory interests over insurers who do not 11 abide by their legal obligations would presumably be of interest to this state. 12 Plaintiff also contends this District has an interest in this action because ANICO argues in 13 its motion to dismiss, among other things, that res judicata bars this action because a court in this 14 District approved a class settlement in a previous action brought by another person on behalf of a 15 class that included Plaintiff (the “Albanoski Action”). See Transfer Mot. at 4–6, 19–22 (citing 16 Albanoski v. Am. Nat’l Ins Co., No. 5:06-cv-02310-JF (N.D. Cal. Sept. 22, 2006) (final order 17 approving the class action settlement)). The fact that the prior Albanoski Action was decided in 18 this District is not enough to create a local interest in the instant action, however, because the 19 district court in Texas has the same ability as this Court to determine whether the Albanoski 20 Action involved the same claim, the same parties, and whether it was decided on the merits, i.e., 21 whether res judicata applies. See Glob. Indus. Inv. Ltd. v. Chung, No. 19-CV-07670-LHK, 2020 22 WL 5355968, at *4 (N.D. Cal. Sept. 7, 2020) (laying out the elements of res judicata). 23 That being sad, the State of California does have an interest in this dispute because it 24 involves insurance policies issued in California to California residents. Cf. Smithson, 2018 WL 25 5099510, at *4 (“None of the parties are California residents and therefore California has very 26 little interest in the controversy.”). Again, because Plaintiff seeks to represent a California-only 27 class, there is local interest in this controversy. 1 5. Relative Court Congestion and Time to Trial in Each Forum (Eight Factor) 2 The parties dispute whether it takes longer to get to trial in this District or the Southern 3 District of Texas. Mot. at 16–17; Transfer Opp’n at 18. This Court refuses to balance this factor 4 “because ongoing application of this doctrine could have the unintended consequence of 5 penalizing efficiency by effectively placing more cases in the districts with the shortest time to 6 trial.” Adam v. Barone, No. 20-CV-00761-EMC, 2020 WL 4584182, at *7 (N.D. Cal. Aug. 10, 7 2020) (quoting Perez v. Performance Food Grp., Inc., No. 15-CV-02390-HSG, 2017 WL 66874, 8 at *2 (N.D. Cal. Jan. 6, 2017)). This Court is also skeptical that it is even possible to accurately 9 and meaningfully capture a given district’s time to trial as of today, which is the only relevant time 10 period. Id. Accordingly, the Court will not weigh this factor in determining whether to transfer 11 this case. 12 In sum, the Court concludes that transferring this case to the Southern District of Texas is 13 not “in the interest of justice.” 28 U.S.C. 1404(a). 14 III. MOTION TO DISMISS 15 A. Legal Standards 16 1. Rule 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction 17 Under Rule 12(b)(2), a court must dismiss an action where it does not have personal 18 jurisdiction over a defendant. Fed. R. Civ. P. 12(b)(2). “[T]he plaintiff bears the burden of 19 establishing that jurisdiction is proper.” Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 20 1223 (9th Cir. 2011). However, “[w]here, as here, the defendant’s motion is based on written 21 materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of 22 jurisdictional facts to withstand the motion to dismiss.” Id. In addition, “[u]ncontroverted 23 allegations in the complaint must be taken as true, and factual disputes are construed in the 24 plaintiff’s favor.” Freestream Aircraft (Berm.) Ltd. v. Aero Law Grp., 905 F.3d 597, 602 (9th Cir. 25 2018). 26 2. Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim 27 Federal Rule of Civil Procedure 8(a)(2) requires a complaint to include “a short and plain 1 complaint that fails to meet this standard may be dismissed pursuant to Rule 12(b)(6). See Fed. R. 2 Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) motion to dismiss after the Supreme Court’s 3 decisions in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atlantic Corporation v. Twombly, 550 4 U.S. 544 (2007), a plaintiff’s “factual allegations [in the complaint] ‘must . . . suggest that the 5 claim has at least a plausible chance of success.’” Levitt v. Yelp! Inc., 765 F.3d 1123, 1135 (9th 6 Cir. 2014). The court “accept[s] factual allegations in the complaint as true and construe[s] the 7 pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & 8 Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But “allegations in a complaint . . . may not 9 simply recite the elements of a cause of action [and] must contain sufficient allegations of 10 underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” 11 Levitt, 765 F.3d at 1135 (quoting Eclectic Props. E., LLC v. Marcus & Millichap Co., 751 F.3d 12 990, 996 (9th Cir. 2014)). “A claim has facial plausibility when the Plaintiff pleads factual 13 content that allows the court to draw the reasonable inference that the Defendant is liable for the 14 misconduct alleged.” Iqbal, 556 U.S. at 678. “The plausibility standard is not akin to a 15 ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted 16 unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). 17 B. Discussion 18 Because a court must dismiss the action if it determines that it lacks personal jurisdiction 19 as to the plaintiff’s claim, see Fed. R. Civ. P. 12(b)(2), this order first addresses ANICO’s 20 arguments under Rule 12(b)(2) before turning to its request for relief under Rule 12(b)(6). 21 1. Rule 12(b)(2) Motion to Dismiss For Lack of Personal Jurisdiction 22 Where no federal statute authorizes personal jurisdiction, the district court applies the law 23 of the forum state where it sits. See Freestream Aircraft, 905 F.2d at 602. California’s long-arm 24 statute reaches the limits of due process set by the United States Constitution. Cal. Civ. Proc. 25 Code § 410.10 (“A court of this state may exercise jurisdiction on any basis not inconsistent with 26 the Constitution of this state or of the United States.”); Mavrix Photo, 647 F.3d at 1223 (“[Section 27 410.10] is coextensive with federal due process requirements, so the jurisdictional analyses under 1 defendant ‘have certain minimum contacts’ with the forum state ‘such that the maintenance of the 2 suit does not offend traditional notions of fair play and substantial justice.’” Freestream Aircraft, 3 905 F.2d at 602 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 315 (1945)). 4 There are two types of personal jurisdiction: (1) general jurisdiction and (2) specific 5 jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413–15 6 (1984). Neither party argues that this Court has general jurisdiction, so this order will address 7 only specific jurisdiction. To determine whether it has specific jurisdiction, the Court applies the 8 “minimum contacts test,” which has the following three prongs:

9 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or 10 resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, 11 thereby invoking the benefits and protections of its laws;

12 (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and 13 (3) the exercise of jurisdiction must comport with fair play and 14 substantial justice, i.e., it must be reasonable. 15 Freestream Aircraft, 905 F.2d at 603 (quoting Schwarzenegger v. Fred Martin Motor Co., 374 16 F.3d 797, 802 (9th Cir. 2004)). The minimum contacts test “ensures that a defendant will not be 17 haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts.” Id. 18 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). 19 Here, the Court has specific jurisdiction over ANICO because, under the minimum 20 contacts test, “[ANICO] has sufficient contacts with [California] to warrant the court’s exercise of 21 jurisdiction.” Id. 22 a. Purposeful Availment 23 In contract claims, including insurance disputes, courts apply a “purposeful availment 24 standard’” to determine if a defendant satisfies the first prong of the minimum contacts test. 25 Boschetto v. Hansing, 539 F.3d 1011, 1016 (9th Cir. 2008). Under that standard, a defendant 26 “purposefully avail[s] itself of the privilege of doing business in the forum” if it “performed some 27 type of affirmative conduct which allows or promotes the transaction of business within the forum 1 Circuit has counseled that “the evaluation of the jurisdictional significance of a defendant’s 2 contract or other business in the forum is not rigid or formalistic, but rather practical and 3 pragmatic.” Id. In other words, “the formation of a contract with a nonresident defendant is not, 4 standing alone, sufficient to create jurisdiction.” Id. Instead, the court “must look to ‘prior 5 negotiations and contemplated future consequences, along with the terms of the contract and the 6 parties’ actual course of dealing’ to determine if the defendant’s contacts are ‘substantial’ and not 7 merely ‘random, fortuitous, or attenuated.’” Sher, 911 F.2d at 1362 (quoting Burger King, 471 8 U.S. at 479, 480). 9 Here, Plaintiff’s FAC alleges that ANICO purposefully availed itself of the privilege of 10 doing business in California because it (1) “issued the life insurance policies at issue in 11 California;” (2) “insur[ed] the lives of California residents;” (3) “serviced approximately 1,500 12 active life insurance policies issued in California;” (4) “receive[d] premium payments from 13 California residents, including from Plaintiff while he resided in California and currently other 14 members of the proposed class;” (5) “market[ed] its class and other policies to California 15 residents;” (6) “maintain[ed] a network of insurance agents in California who sell ANICO life 16 insurance policies;” and (7) “was required to make submissions to and seek approval from the 17 California insurance regulator before issuing and selling Plaintiff’s policy and the other class 18 members’ policies in California.” FAC ⁋ 15. 19 The Ninth Circuit and several other courts have correctly held that these and other similar 20 actions on the part of out-of-state insurers constitute “affirmative conduct which allow[ed] or 21 promote[d] the transaction of business within the forum state.” U.S. Bank, N.A. v. Sun Life 22 Assurance Co. of Can., No. CV1700670BROASX, 2017 WL 5957644, at *6 (C.D. Cal. June 16, 23 2017) (quoting Sher, 911 F.2d at 1362). For example, in Hirsch v. Blue Cross, Blue Shield of 24 Kansas City, the Ninth Circuit held that Blue Cross—an out-of-state insurer—had purposefully 25 availed itself of the privilege of doing business in California because it “freely negotiated the 26 Enrollment Agreement with Southwest, to cover all of its employees, knowing that Southwest 27 employed people nationwide,” which obviously included California. 800 F.2d 1474, 1479 (9th 1 Plaintiff was, at the time, a California resident, such that “[ANICO] not only could foresee that its 2 actions would have an effect in California, but also that the effect ‘was contemplated and 3 bargained for.’” Id. (quoting Haisten v. Grass Valley Med. Reimbursement Fund, Ltd., 784 F.2d 4 1392, 1396 (9th Cir. 1986)). More importantly, the panel in Hirsch relied on “the nature of Blue 5 Cross’s ongoing commitment to the Hirsches to honor contractual obligations and pay for needed 6 medical care” in California. Id. at 1480, n.3. ANICO also made an ongoing commitment to 7 Plaintiff and the other putative California class members that it would insure their lives wherever 8 they reside, including, of course, California. Id. at 1480 n.3. Therefore, ANICO—like Blue Cross 9 in Hirsch—“through its own actions in agreeing to provide coverage to [Plaintiff], created a 10 continuing obligation to [him], and a substantial connection with California.” Id. at 1480. 11 Similarly, in U.S. Bank the out-of-state insurer—Sun Life—issued a life insurance policy 12 to a California resident who later sold the policy to U.S. Bank, who was not a California resident. 13 2017 WL 5957644, at *1. When Sun Life refused to pay on the policy, U.S Bank sued them in the 14 Central District of California. Id. Applying Hirsch, the U.S. Bank court concluded Sun Life had 15 purposefully availed itself of the privilege of doing business in California because it—like ANICO 16 here—“was aware that by working with [a local insurance broker], who was licensed in California, 17 it could receive applications from California residents” and that “it was issuing an insurance policy 18 against the life of a California resident.” Id. at *6. That the California resident later sold the 19 policy to an out-of-state third party did not matter because “the effect [of issuing the policy] in 20 California was not only foreseeable, it was contemplated and bargained for.” Id. (quoting Haisten, 21 784 F.2d at 1398). Here too, the fact that Plaintiff moved out of California after the Policy issued 22 does not change the fact that, at the time the Policy was issued, ANICO foresaw, contemplated, 23 and bargained for the issuance of an insurance policy on behalf of a California resident that had 24 effect in California. 25 Accordingly, the Court concludes that ANICO purposefully availed itself of the privilege 26 of doing business in California by voluntarily obtaining regulatory approval for and issuing the 27 Policy to, Plaintiff—then a California resident— in California, and by knowingly committing to 1 b. Arising Out of Forum-Related Activities 2 “To determine whether a plaintiff’s claims arise out of the defendant’s local conduct, the 3 Ninth Circuit asks whether the defendant’s forum-related activities were a ‘but-for’ cause of the 4 plaintiff’s claims.” In re Volkswagen “Clean Diesel” Mktg., Sales Pracs., & Prod. Liab. Litig., 5 No. 7347, 2020 WL 4905093 (N.D. Cal. Aug. 20, 2020) (quoting Ballard v. Savage, 65 F.3d 1495, 6 1500 (9th Cir. 1995)). The “but-for” standard is plainly met here because Plaintiff’s claims that 7 ANICO failed to decrease its COI rates as required by the Policy would not have incurred “but 8 for” ANICO’s issuance of the Policy in California to a California resident. See Hirsch, 800 F.2d 9 at 1480 (“The Hirsches claims against Blue Cross arise out of Blue Cross’s alleged breach of the 10 contract to provide health care coverage to them. Because this contract constitutes Blue Cross’s 11 contacts with California, the Hirsches satisfy this element of the limited jurisdiction test.”); U.S. 12 Bank, 2017 WL 5957644, at *7 (“If Defendant had never issued the Wilhelm Policy to Mr. 13 Wilhelm—a California resident—then Plaintiff could not have ultimately purchased the Wilhelm 14 Policy, Defendant would never have refused to pay Plaintiff’s claim, and the instant action would 15 not have arisen.”); Flintkote Co. v. Gen. Accident Assurance Co. of Can., No. C 04-01827 MHP, 16 2004 WL 1977220, at *4 (N.D. Cal. Sept. 7, 2004) (“[T]he purposeful contacts—the insurance 17 policies—are the sine qua non prompting plaintiff’s action alleging defendant’s breach of 18 contractual duty in failing to defend plaintiff against the underlying asbestos claims.”). 19 c. Reasonableness 20 In deciding whether an exercise of specific jurisdiction is “reasonable,” the Court can 21 examine several factors, including:

22 the extent of the defendant’s purposeful interjection into the forum state’s affairs; the burdens on the defendant; the forum state’s 23 interest in adjudicating the dispute; the plaintiff’s interest in obtaining convenient and effective relief, the interstate judicial 24 system’s interest in obtaining the most efficient resolution of controversies; and the shared interest of the several states in 25 furthering fundamental substantive social policies. 26 Hirsch, 800 F.3d at 1481. Although “a strong showing of reasonableness may lessen the required 27 showing of minimum contacts . . . once purposeful direction is documented, there exists a 1 reasons why jurisdiction would be unreasonable.” Id. (emphases added); see also Roth v. Garcia 2 Marquez, 942 F.2d 617, 625 (9th Cir. 1991) (“Once purposeful availment has been established, the 3 forum’s exercise of jurisdiction is presumptively reasonable.”). Therefore, because ANICO 4 purposefully availed itself of the privilege of doing business in California, see supra Part III.B.1.a, 5 it “bears the burden of presenting compelling reasons why jurisdiction would be unfair in this 6 instance.” Hirsch, 800F.3d at 1481; Roth, 942 F.2d at 625 (“To rebut that presumption, a 7 defendant ‘must present a compelling case’ that the exercise of jurisdiction would, in fact, be 8 unreasonable.” (quoting Shute v. Carnival Cruise Lines, 897 F.2d 377, 386 (9th Cir. 1990)). 9 ANICO does not present any reasons, let alone “compelling reasons,” why it would be 10 unreasonable for the Court to exercise personal jurisdiction in the instant case. Nor could it, given 11 that it has both filed and defended numerous cases involving California-issued policies in 12 California federal courts. See e.g., Complaint, Am. Nat. Ins. Co. v. Estate of Teresa Hughes, No. 13 3:15-cv-03508-WHA (N.D. Cal. July 30, 2015), ECF No. 1 (suit for interpleader and declaratory 14 relief against insured); Walker v. Am. Nat. Ins. Co., No. 4:16-cv-06255-HSG (N.D. Cal. Oct. 28, 15 2016) (ANICO defended for two years with no motion to transfer). 16 The Court therefore concludes that its exercise of specific jurisdiction over this action is 17 entirely reasonable without examining the aforementioned Hirsch factors.2 18 2. Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim 19 Having determined it is appropriate to exercise personal jurisdiction over Plaintiff’s 20 claims, the Court can then turn to ANICO’s arguments that Plaintiff failed to state a claim under 21 Rule 12(b)(6) because his claims are untimely, barred by res judicata, and implausible. None of 22 these arguments has merit. 23 a. Statute of Limitations 24 The statute of limitations for a breach of contract claim in California is four years. Rich v. 25 Shrader, 823 F.3d 1205, 1208 (9th Cir. 2016) (citing Cal. Civ. Proc. Code § 337). California also 26 applies the “discovery rule,” whereby “a cause of action . . . accrues when . . . plaintiff either (1) 27 1 actually discovered his injury and its negligent cause or (2) could have discovered injury and 2 cause through the exercise of reasonable diligence.” Bally v. State Farm Life Ins. Co., No. 18-CV- 3 04954-CRB, 2019 WL 3891149, at *3 (N.D. Cal. Aug. 19, 2019) (quoting Apr. Enters., Inc. v. 4 KTTV, 147 Cal. App. 3d 805, 826 (Ct. App. 1983)). Therefore, to raise a statute of limitations 5 defense, ANICO must establish that Plaintiff discovered—or could have discovered through the 6 exercise of reasonable diligence—that ANICO failed to decrease the COI rates before December 7 18, 2016, four years before Plaintiff filed his initial complaint. 8 i. January 1, 2010 through December 16, 2018 9 The FAC alleges that ANICO began deducting excessive COI charges on January 1, 2010. 10 FAC ¶ 1. The FAC also alleges that Plaintiff was “unaware that ANICO was engaging in 11 wrongdoing” because (1) “[o]nly ANICO possesses its internal expectations as to future mortality 12 experience on which COI rates are supposed to be based”; (2) “ANICO does not disclose this 13 information to policyholders”; (3) ANICO’s annual statements “conceal[ed] its internal, annually 14 updated mortality expectations”; and (4) a reasonable policy holder would not have known of 15 ANICO’s breaches “[w]ithout disclosure by ANICO of its mortality expectations each year, or the 16 methodology through which COI rates are being calculated and applied as compared to those new 17 and improved mortality expectations.” FAC ¶¶ 31–32. Based on these allegations, Plaintiff also 18 contends in its opposition that he did not discover ANICO was deducting excessive COI charges 19 “until he retained counsel in 2020, who in turn had actuarial experts” with access to “special 20 NAIC filings”3 that are only accessible with a NAIC registration and for a fee. Opp’n at 10, 13, 13 21 n.5. Therefore, according to Plaintiff, the discovery rule tolls the statute of limitations on any 22 claims based on excessive deductions that took place between January 1, 2010 and the fall of 23 2020, when he discovered the factual basis for his claims. 24 The problem with this tolling argument is that the FAC does not include Plaintiff’s 25 allegation that he first discovered ANICO was deducting excessive COI charges from his 26

27 3 “NAIC” stands for National Association of Insurance Commissioners. See FAC ¶ 3; Financial 1 counsel’s actuarial experts in the fall of 2020. See Opp’n at 10, n. 3 (“This timing detail is not 2 pleaded in the FAC.”). Without this key allegation as to more precise timing, the Court cannot 3 determine when the statute of limitations began to accrue—i.e., when Plaintiff alleges he first 4 learned ANICO was deducting excessive COI charges—for purposes of tolling the statute of 5 limitations. 6 Thus, the Court dismisses any claims based on facts that took place before December 18, 7 2016, with leave to amend so that Plaintiff can add this allegation to plausibly allege that he 8 discovered ANICO failed to decrease the COI rates in the fall of 2020. 9 ii. December 18, 2016 to The Filing of the Complaint 10 ANICO also argues that all of Plaintiff’s claims are barred by the statute of limitations, 11 including those based on deductions of excessive COI charges that took place after December 18, 12 2016, because the statute of limitations began to accrue even before the four-year limitations 13 period commenced. This argument is meritless for two reasons. 14 First, as explained in the previous section, Plaintiff contends in his opposition that he 15 discovered ANICO was deducting excessive COI charges in the fall of 2020. If he adds that 16 allegation to the complaint, he could plausibly plead that the statute of limitations for all his 17 claims began to accrue mere months before he filed the initial complaint. 18 Second, and more importantly, each deduction of an excessive COI charge in violation of 19 Plaintiff’s policy constitutes a separate breach of contract claim for which the statute of 20 limitations begins to accrue. Opp’n at 13. California law is clear that “[w]hen an obligation or 21 liability arises on a recurring basis, a cause of action accrues each time a wrongful act occurs, 22 triggering a new limitations period.” Aryeh v. Canon Bus. Sols., Inc., 292 P.3d 871, 880 (Cal. 23 2013) (quoting Hogar Dulce Hogar v. Cmty. Dev. Comm’n, 2 Cal. Rptr. 3d 497, 502 (Ct. App. 24 2003)); see also Jenni Rivera Enters., LLC v. Latin World Ent. Holdings, Inc., 249 Cal. Rptr. 3d 25 122, 137 (Ct. App. 2019) (“[S]uccessive causes of action for breach of contract may arise from a 26 single contract with continuing obligations.”). This “continuous accrual” doctrine applies to 27 insurance policies because they create “a continuing obligation by the insurance company to pay 1 Haisten v. Grass Valley Med. Reimbursement Fund, Ltd., 784 F.2d 1392, 1399 (9th Cir. 1986) 2 (“An insurance contract creates continuing obligations between the insurer and the insured.”). In 3 other words, any deduction that occurred after December 16, 2018, is timely because every 4 deduction has its own four-year statute of limitations. Id. 5 In Dean v. United Omaha Life Insurance, the court applied the doctrine of continuous 6 accrual under California law to successive breaches in a very similar COI overcharge case. No. 7 CV 05-6067-GHK (FMOx), 2007 WL 7079558, at *9–*11 (C.D. Cal. Aug. 27, 2007). The 8 plaintiff there—as here—alleged “that United ha[d] continuously violated the terms of the Policy 9 by including expenses in the COI charge on a monthly basis.” Id. at *9 (emphasis added). The 10 Court rejected United’s argument that the breach occurred only when United first set the COI rates 11 at the inception of the policy because “United fails to explain why the subsequent applications of 12 the inflated rate would not also constitute breaches.” Id. at *10. The Dean court therefore held 13 that because the plaintiff’s complaint “alleges multiple breaches of contract, . . . if [the plaintiff] 14 proves at trial that United breached the Policy within the limitations period, any such breach or 15 breaches will not be foreclosed by the statute of limitations.” Id. at *11. Other courts around the 16 country have similarly held in COI overcharge cases. See e.g., Adv. Tr. & Life Escrow Servs., LTA 17 v. Protective Life Ins. Co., No. 2:18-CV-1290-KOB, 2020 WL 2198955, at *4 (N.D. Ala. May 6, 18 2020) (“[Advance Trust’s] claims survive the application of the statute of limitations . . . [because] 19 at this stage of the litigation Advance Trust plausibly alleges that Protective Life breached a duty 20 to review and adjust COI tables every month.” (emphasis added)); Fradianni v. Protective Life Ins. 21 Co., 73 A.3d 896, 903 (Conn. App. Ct. 2013) (“[D]efendant charged [the plaintiff] for a cost of 22 insurance that was in excess of the maximum amount allowed under the terms of the contract . . . . 23 These actions, if found to be true, would constitute separate breaches . . ., several of which 24 occurred within the statute of limitations period.”); Lee v. Allstate Life Ins. Co., 838 N.E.2d 15, 23 25 (Ill. App. Ct. 2005) (“Allstate ignores its continuous duty to abide by the terms of its insurance 26 policies. ‘[B]ecause each breach of a continuous duty has its own accrual date, a plaintiff may sue 27 on any breach which occurred within the limitations period, even if earlier breaches occurred 1 N.E.2d 1136, 1140 (Ill. App. Ct. 1997))). 2 In the present case, Plaintiff also plausibly alleges that ANICO continuously violated the 3 terms of the Policy by deducting excessive COI charges on a monthly basis. The FAC explains 4 that “ANICO is required to periodically review the COI rates to confirm that they correctly reflect 5 the insurer’s current mortality expectations.” FAC ¶ 3 (emphasis added). Indeed, ANICO’s 2019 6 Annual Report to the NAIC states that “[t]he process of redetermination of nonguaranteed policy 7 elements begins with a review of company experience. If there is a material change in expected 8 experience, a redetermination of the rates based on the new experience factors is done.” Id.; see 9 also id. ¶ 5 (“If an annual review shows that mortality rates are projected to decline, the monthly 10 COI rates that ANICO used to calculate the monthly COI charges must be reduced.”). According 11 to Plaintiff, this duty to adjust COI charges comes directly from “the policies at issue in this case, 12 each of which expressly states that ‘Monthly Cost of Insurance Rates will be determined by the 13 Company from time to time based on the Company’s expectations as to future mortality 14 experience.’” FAC ¶ 5 (quoting Policy at 21); see also Policy at 30 (“The Cost of Insurance is 15 determined on a monthly basis.”). Based on this duty, the FAC therefore plausibly alleges that 16 “Plaintiff, along with numerous other ANICO policyholders, have been subjected to unlawful 17 monthly calculations and deductions from their account value and forced to pay inflated COI 18 charges that are not allowed by the plain language of their insurance contracts.” FAC ¶ 6. In sum, 19 as in Dean, Plaintiff’s complaint “alleges multiple breaches of contract,” such that under the 20 continuous accrual doctrine “any such breach or breaches [that occurred after December 18, 2016] 21 will not be foreclosed by the statute of limitations.” 2007 WL 7079558, at *11. 22 Accordingly, the Court concludes that Plaintiff’s claims based on deductions of excessive 23 COI charges that occurred after December 16, 2018, are timely. 24 b. Res Judicata 25 “Res judicata, also known as claim preclusion, bars litigation in a subsequent action of any 26 claims that were raised or could have been raised in the prior action.” W. Radio Servs. Co. v. 27 Glickman, 123 F.3d 1189, 1192 (9th Cir. 1997). Claim preclusion “applies when the earlier suit 1 the merits, and (3) involved identical parties or privies.” Mpoyo v. Litton Electro-Optical Sys., 2 430 F.3d 985, 987 (9th Cir. 2005) (quoting Sidhu v. Flecto Co., 279 F.3d 896, 900 (9th Cir. 3 2002)). ANICO argues that claim preclusion bars Plaintiff’s claims because he was a class 4 member in the Albanoski Action, a previously settled class action lawsuit against ANICO that 5 supposedly raised the same claims. See Albanoski v. Am. Nat. Ins. Co., No. 5:06-cv-02310-JF 6 (N.D. Cal. Sept. 22, 2006 ) (final judgment). Only the first prong of claim preclusion is at issue 7 here because Plaintiff does not dispute that the second and third prongs are satisfied. 8 Claim preclusion does not bar the instant action for several reasons. First, the plain 9 language of the Albanoski release does not cover Plaintiff’s claims here:

10 Except for the terms of the Release discussed herein, nothing in this Release shall be deemed to . . . (ii) release a Class Member’s right to 11 assert any claims that arise from acts, facts, or circumstances arising exclusively after the end of the Class Period. 12 13 Albanoski, No. 5:06-cv-02310-JF (N.D. Cal. Sept. 22, 2006) (final order approving the class 14 action settlement) at 7. Plaintiff’s claims here “arise from” ANICO’s failure to adjust its COI 15 charges based on improved mortality rates, as well as its deduction of those excessive COI 16 charges, all of which occurred after January 1, 2010, i.e., “after the end of the Class Period” in 17 Albanoski. Id. The Alabanoski release therefore does not—by its plain terms—cover the claims 18 alleged in the present case. 19 Second, a basic element of res judicata does not apply because the Albanoski Action did 20 not involve the same claims at issue here. Both actions are based on entirely separate factual 21 predicates: the conduct alleged in the instant action began occurring on January 1, 2010, three- 22 and-a-half years after the Albanoski Action settled on September 22, 2006. Compare FAC ¶ 1, 23 with Albanoski, No. 5:06-cv-02310-JF (N.D. Cal. Sept. 22, 2006) (final order approving the class 24 action settlement). The Supreme Court recently reaffirmed that “[c]laim preclusion generally 25 ‘does not bar claims that are predicated on events that postdate the filing of the initial complaint.’” 26 Lucky Brand Dungarees, Inc. v. Marcel Fashions Grp., Inc., 140 S. Ct. 1589, 1596 (2020) 27 (emphasis added) (quoting Whole Woman’s Health v. Hellerstedt, 136 S.Ct. 2292, 2305 (2016)); 1 were not “based on the same cause of action,” because “[t]he conduct presently complained of was 2 all subsequent to” the prior judgment”). The reasoning for this rule is that “[e]vents that occur 3 after the plaintiff files suit often give rise to new ‘[m]aterial operative facts’ that ‘in themselves, or 4 taken in conjunction with the antecedent facts,’ create a new claim to relief.” Lucky Brand 5 Dungarees, 140 S. Ct. at 1596 (quoting Restatement (Second) § 24, Comment f). 6 To be sure,

7 [a] settlement agreement may preclude a party from bringing a related claim in the future “even though the claim was not presented 8 and might not have been presentable in the class action,” but only where the released claim is “based on the identical factual predicate 9 as that underlying the claims in the settled class action.” 10 Hesse v. Sprint Corp., 598 F.3d 581, 590 (9th Cir. 2010) (emphasis added) (quoting Williams v. 11 Boeing Co., 517 F.3d 1120, 1133 (9th Cir.2008)); see also Williams, 517 F.3d at 1134 (“While 12 Boeing may have drafted the settlement agreement to include as broad a release as possible, the 13 release would have only been enforceable as to subsequent ‘claims relying upon a legal theory 14 different from that relied upon in the class action complaint, but depending upon the same set of 15 facts.’” (emphasis added) (quoting 5 Alba Conte & Herbert Newberg, 4 Newberg on Class 16 Actions § 12:15 (4th ed. 2007))). The same is true under California law. See Feller v. 17 Transamerica Life Ins. Co., No. 216CV01378CASAJWX, 2016 WL 6602561, at *7 (C.D. Cal. 18 Nov. 8, 2016) (“Where the parties [are] in a continuing relationship, a previous action cannot 19 immunize a defendant from liability for continuous or repeated misconduct.” (citing Nakash v. 20 Sup. Ct., 241 Cal. Rptr. 578, 584 (Ct. App. 1987))); Neil Norman Ltd. V. William Kasper & Co., 21 197 Cal. Rptr. 198, 202 (Ct. Ap. 1983) (“Under well settled law, the doctrine of res judicata does 22 not apply where there are changed conditions and new facts which were not in existence at the 23 time of the prior judgment, and upon which such judgment was based.”). 24 Under this “identical factual predicate” doctrine, “numerous courts have accepted the 25 general proposition that a class action settlement’s release is unenforceable against claims 26 predicated on the defendant’s post-settlement conduct.” Feller v. Transamerica Life Ins. Co., No. 27 216CV01378CASAJWX, 2016 WL 6602561, at *6 (C.D. Cal. Nov. 8, 2016) (emphasis added). 1 5678842, at *7 (C.D. Cal. Apr. 26, 2005) (release in Dupell case cannot bar claims of excessive 2 COI charges because they “involve actions by Defendants that first occurred years after 3 the Dupell settlement and that therefore could not have been asserted in the Dupell litigation” 4 (emphasis added)). 5 As in Feller and Conseco, the Albanoski settlement could not have released Plaintiff’s 6 claims here because the claims settled in the Albanoski Action depended on facts that took place 7 before September 2006, whereas the FAC alleges claims that depend on entirely different facts 8 that took place after January 2010. Indeed, the FAC alleges not only that ANICO has been 9 deducting excessive COI charges since January 1, 2010, FAC ¶ 1, but that every year since 2010 it 10 has failed to adjust those COI charges based on reduced mortality expectations, as required by the 11 Policy, FAC ¶ 8 (“It is now well-documented that nationwide mortality expectations have 12 improved significantly since January 1, 2010.”); id. ¶ 10 (“Despite these annual reviews conducted 13 which changed (that is, for ANICO, resulted in improved) mortality expectations every year and 14 corresponding decrease in mortality risk, ANICO never determined its COI rates based on its 15 updated, annual, refreshed mortality assumptions, which would have resulted in far lower rates 16 than those charged each year.”); id. ¶ 26 (“[T]he monthly COI charges deducted during the Class 17 Period calculated anew each month and charged by ANICO in 2021, 2020, 2019, 2018, 2017, 18 2016, 2015, 2014, 2013, 2012, 2011, and 2010 were not calculated using rates based on ANICO’s 19 then-current expectations as to future mortality experience.”). Neither the reduced annual 20 mortality expectations, nor ANICO’s subsequent failure to reduce the COI rates based on those 21 expectations, existed at the time of the Albanoski settlement. In the words of Lawlor, the 22 Albanoski release “cannot be given the effect of extinguishing claims which did not even then 23 exist and which could not possibly have been sued upon in [Albanoski].” 349 U.S. at 327–328; 24 see also Hesse, 598 F.3d at 590 (“[F]ederal district courts properly released claims not alleged in 25 the underlying complaint where those claims depended on the same set of facts as the claims that 26 gave rise to the settlement.”); Perkins v. Linkedin Corp., No. 13-CV-04303-LHK, 2016 WL 27 613255, at *6 (N.D. Cal. Feb. 16, 2016) (“Claims based upon LinkedIn’s theoretical future 1 of the Release.”). The present action therefore does not involve the “same claims” as Albanoski 2 for purposes of claim preclusion. 3 In its reply, ANICO argues that the Eleventh Circuit’s recent decision in TVPX ARS, Inc. v. 4 Genworth Life and Annuity Insurance Company, 959 F.3d 1317 (11th Cir. 2020), should compel 5 this Court to conclude that the settlement in Albanoski covered the claims in this case. Quite the 6 opposite. TVPX’s amended complaint—like Plaintiff’s complaint here—alleged that Genworth’s 7 failure to properly calculate COI charges began years after the settlement in the prior McBride 8 action. Id. at 1327 (“TVPX’s amended complaint alleges that from 2013 through 2018, Genworth 9 calculated COI in a way not consistent with mortality expectations. The operative complaint says 10 nothing about whether Genworth’s COI charges were similarly untethered to mortality 11 expectations prior to the class period.” (emphasis added)). The panel therefore vacated “[t]he 12 district court’s grant of Genworth’s motion to enjoin on res judicata grounds” and remanded for 13 further factual development precisely because “the record [was] not sufficient to support a finding 14 that Genworth’s COI-related practices have remained unchanged since the McBride action.” Id. at 15 1324, 1328 (emphasis added). In other words, res judicata did not apply because TVPX’s 16 complaint did not allege that is claims against Gensworth “ar[ose] out of the same operative 17 nucleus of fact” or “same factual predicate, as” the claims in the McBride action. Thus, if 18 anything, under TVPX’s reasoning, it would be an abuse of discretion for this Court to dismiss on 19 res judicata grounds because “the record is not sufficient to support a finding that [ANICO’s] COI 20 [overcharges] have remained unchanged since the [Alabanoski] action.” Id. at 1328. 21 Accordingly, Plaintiff’s claims are not barred by res judicata. 22 c. Plausibility 23 ANICO argues that Plaintiff’s interpretation of the Policy is implausible because the 24 Policy’s instruction that the COI charges must be “based on” mortality rates does not mean “solely 25 based on.” Mot. at 22–23. To support this interpretation, it contends that COI rates under the 26 Policy are based on the “Company’s expectations as to future mortality experience” and, 27 separately, “the sex, attained age, and rating class of the person insured,” such that the “based on” 1 It is true that the FAC alleges that, under the Policy, “the carrier can and must consider 2 when determining monthly COI rates is ‘expectations as to the future mortality experience.’ 3 Nothing else.” FAC ⁋ 23. It is also true that the Policy indicates that “[t]he monthly [COI] is 4 based on the sex, attained age, and rating class of the person insured,” and, in a separate sentence, 5 that “[m]onthly [COI] will be determined by the Company from time to time based on the 6 Company’s expectations as to future mortality experience.” Policy at 21. 7 There are two problems with this argument. For one, Plaintiff points out that, “sex, 8 attained age, and rating class” are mortality factors that ANICO is supposed to consider when 9 establishing a given policyholder’s mortality rate. Opp’n at 24. In other words, the mortality rate 10 is not separate from, but rather inclusive of, factors like the policyholder’s sex, age, and smoking 11 status. See Vogt v. State Farm Life Ins. Co., 963 F.3d 753, 761 (8th Cir. 2020), cert. denied, 209 12 L. Ed. 2d 577 (Apr. 19, 2021) (“These enumerated factors are so-called ‘mortality factors’ because 13 they relate to a policyholder’s mortality risk, which allows the insurer to determine the projected 14 mortality estimate of a policyholder based on his specific circumstances.’”). Therefore, Plaintiff’s 15 allegation that the Policy requires ANICO to calculate COI rates based solely on a policyholder’s 16 mortality rate can fairly be read to include, by definition, considering the policyholder’s sex, age, 17 and other risk factors as part of that rate. 18 Plaintiff’s proposed interpretation of the contract is reasonable. At the very least, the 19 contract is ambiguous. “If a contract is ambiguous, it presents a question of fact inappropriate for 20 resolution on a motion to dismiss.” Hicks v. PGA Tour, Inc., 897 F.3d 1109, 1118 (9th Cir. 21 2018)). In fact, “for [P]laintiff to survive a 12(b)(6) motion to dismiss, [P]laintiff’s complaint 22 must set forth a ‘reasonable interpretation’” of the contract at issue. Glancy v. Carl Zeiss, Inc., 23 No. 2:15-CV-08265-CAS-KS, 2015 WL 7755995, at *4 (C.D. Cal. Nov. 30, 2015) (quoting Klein 24 v. Chevron U.S.A., Inc., 202 Cal. App. 4th 1342, 1385 (2012)). Therefore, because Plaintiff has 25 offered an entirely reasonable interpretation of the phrase “based on,” the Court cannot determine 26 at the pleadings stage that Plaintiff’s reading of the Policy is implausible, let alone incorrect, as a 27 matter of law. 1 state a claim pursuant to Rule 12(b)(6). 2 IV. CONCLUSION 3 For the foregoing reasons, the Court DENIES ANICO’s motion to transfer. 4 The Court also GRANTS in part and DENIES in part ANICO’s motion to dismiss as 5 follows: (1) claims based on facts that occurred before December 18, 2016, are dismissed with 6 leave to amend; (2) claims based on facts that occurred after December 18, 2016, are not 7 dismissed. Plaintiff shall have thirty (30) days from the date of this order to amend the complaint. 8 This order disposes of Docket Nos. 39 and 43. 9 10 IT IS SO ORDERED. 11 12 Dated: August 30, 2021 13 14 ______________________________________ EDWARD M. CHEN 15 United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27