Suzanne M. Curtis v. Transamerica Premier Life Insurance Company et al, No. 2:2023cv01413 - Document 30 (C.D. Cal. 2023)
Court Description: ORDER RE: PLAINITFF'S MOTION TO REMAND 16 AND DEFENDANT MOTION TO DISMISS 15 by Judge Mark C. Scarsi:The parties have 75 days from the date of this Order to complete jurisdictional discovery. Defendants shall file a surreply addressing the ju risdictional question no later than 90 days from the date of this Order. Plaintiff may file a sur-surreply within 14 days of Defendants' surreply. The matter will stand submitted upon Plaintiff's filing of the sur-surreply or the expiration of her time to do so. For administrative purposes only, the Court directs the Clerk to terminate the motion to remand (ECF No. 16) during the jurisdictional discovery period. Accordingly, Defendants' motion to dismiss is DENIED without prejud ice. Should the Court conclude it has subject-matter jurisdiction, Defendants shall respond to Plaintiffs Complaint within 14 days of the Court's order denying Plaintiffs motion to remand. Defendants are entitled to move to dismiss Plaintiffs Complaint on any basis identified in the Federal Rules of Civil Procedure, including those raised in the instant motion to dismiss. (ECF No. 15). (lc)
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Suzanne M. Curtis v. Transamerica Premier Life Insurance Company et al Doc. 30 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 SUZANNE M. CURTIS, Case No. 2:23-cv-01413-MCS-AGR 11 Plaintiff, 12 v. 13 14 ORDER RE: PLAINITFF’S MOTION TO REMAND (ECF No. 16) AND DEFENDANTS’ MOTION TO DISMISS (ECF No. 15) TRANSAMERICA PREMIER LIFE INSURANCE COMPANY et al., 15 16 Defendants. 17 18 19 Plaintiff Suzanne M. Curtis, appearing pro se, filed a motion to remand this case 20 to state court. (Mot. to Remand, ECF No. 16.) Defendants Transamerica Premier Life 21 Insurance Company and Transamerica Life Insurance Company (collectively, 22 “Defendants”) 1 opposed the motion, (Mot. to Remand Opp’n, ECF No. 20), and 23 Plaintiff replied, (Mot. to Remand Reply, ECF No. 25). Separately, Defendants filed a 24 motion to dismiss Plaintiff’s claims. (Mot. to Dismiss, ECF No. 15.) Plaintiff opposed 25 26 27 28 1 Defendants note that Transamerica Premier Life Insurance Company merged with and into Transamerica Life Insurance Company “effective October 1, 2020 and is now known (n/k/a) as TLIC.” (Mot. to Remand Opp’n 2 n.2.) For the purposes of this Order, the Court refers to them as separate entities. 1 Dockets.Justia.com 1 the motion to dismiss, (Mot. to Dismiss Opp’n, ECF No. 21), and Defendants replied, 2 (Mot. to Dismiss Reply, ECF No. 24). The Court heard oral argument on May 1, 2023. 3 I. BACKGROUND 4 According to the Complaint, Plaintiff purchased a home in October 1988. (Not. 5 of Removal 35, ECF No. 1.)2 When Plaintiff purchased her home, she also took out a 6 mortgage disability policy (the “Policy”), which she alleges had a forty-year term set to 7 expire in October 2028. (Id.) Plaintiff states that at some point, her monthly premiums 8 were increased from $10.89 per month to $24.41 per month. (Id. at 35, 37, 39–40.) The 9 Complaint also alleges that the insurer for the Policy changed over the years and that at 10 some unknown point, American General Assurance Company (“AGAC”) and then 11 Transamerica Premier Life Insurance Company took over the Policy. (Id. at 36–37, 73– 12 74.) Plaintiff continued making monthly payments after the premiums were raised, but 13 she alleges that because of the improper increase, the Policy was paid in full by 2018. 14 (Id. at 37.) 15 In March 2018, Plaintiff stopped receiving invoices for the Policy, although she 16 continued remitting payment using old invoices. (Id. at 41.) On May 19, 2018, Plaintiff 17 called AGAC to request her monthly invoices so she could remit payment. (Id. at 45.) 18 “The clerk who answered stated that the policy had been cancelled retroactively as of 19 2011,” and refused to send an invoice. (Id. (emphasis removed).) On May 25, 2018, 20 Plaintiff sent a letter to AGAC documenting the call. (Id. at 45, 114.) The letter stated, 21 “If I don’t receive IMMEDIATELY a statement from you clarifying that this policy has 22 not been cancelled, and if I do not receive IMMEDIATELY the premium invoice for 23 the month of May of 2018 (and also June of 2018), I will take action against you.” (Id. 24 at 114.) 25 On June 11, 2018, Luann Dorais, a former Transamerica Life Insurance Company 26 27 28 2 For ease of reference, the Court uses the pagination supplied by the CM/ECF system for citations of the Notice of Removal. 2 1 (“TLIC”) employee, sent Plaintiff a letter stating that the Policy terminated in 2011, the 2 year that Plaintiff turned 65. (Id. at 42; see Mot. to Dismiss 1.) Plaintiff filed the instant 3 action in Los Angeles County Superior Court on November 23, 2022, claiming breach 4 of contract and fraud. (Id. at 28–29.) Plaintiff seeks damages of $7,758.87, interest 5 thereon in the amount of $42,177.04, attorney’s fees, mailing costs of $470.50, and 6 exemplary damages. (Id. at 29.) On February 24, 2023, Defendants removed the case 7 to this Court. 8 II. 9 LEGAL STANDARDS A. Removal Jurisdiction 10 “Federal courts are courts of limited jurisdiction” and “possess only that power 11 authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 12 511 U.S. 375, 377 (1994). A defendant may remove an action to federal court if the 13 federal court could exercise original jurisdiction over the action. 28 U.S.C. § 1441(a). 14 “The removal statute is strictly construed against removal jurisdiction,” and “[t]he 15 defendant bears the burden of establishing that removal is proper.” Provincial Gov’t of 16 Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009). If a defendant 17 fails to meet its burden of establishing subject-matter jurisdiction, the suit is remanded. 18 28 U.S.C. § 1447(c). 19 To invoke diversity jurisdiction, a party must demonstrate that there is complete 20 diversity of citizenship between the parties and that the amount in controversy exceeds 21 the sum or value of $75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a). 22 “[W]here it is unclear or ambiguous from the face of a state-court complaint whether 23 the requisite amount in controversy is pled,” the removing defendant must establish by 24 a preponderance of the evidence that the amount in controversy “more likely than not” 25 exceeds $75,000. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 26 2007) (internal quotation marks omitted). In this inquiry, courts may consider “facts 27 presented in the removal petition as well as any summary-judgment-type evidence 28 relevant to the amount in controversy at the time of removal.” Matheson v. Progressive 3 1 Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (internal quotation marks 2 omitted). 3 B. 4 Federal Rule of Civil Procedure 12(b)(6) allows an attack on the pleadings for 5 “failure to state a claim upon which relief can be granted.” “A complaint may be 6 dismissed for failure to state a claim only when it fails to state a cognizable legal theory 7 or fails to allege sufficient factual support for its legal theories.” Caltex Plastics, Inc. 8 v. Lockheed Martin Corp., 824 F.3d 1156, 1159 (9th Cir. 2016). “To survive a motion 9 to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state 10 a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 11 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has 12 facial plausibility when the plaintiff pleads factual content that allows the court to draw 13 the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Motion to Dismiss 14 The determination of whether a complaint satisfies the plausibility standard is a 15 “context-specific task that requires the reviewing court to draw on its judicial 16 experience and common sense.” Id. at 679. Reviewing a motion to dismiss, a court 17 must accept the factual allegations in the pleadings as true and view them in the light 18 most favorable to the non-moving party. Park v. Thompson, 851 F.3d 910, 918 (9th 19 Cir. 2017). At the same time, a court is “not bound to accept as true a legal conclusion 20 couched as a factual allegation.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 21 555). 22 III. ANALYSIS 23 Because “[t]he requirements of subject matter jurisdiction are absolute, and 24 federal courts cannot act where there is no subject matter jurisdiction,” Trader Joe’s 25 Co. v. Hallatt, No. C13-768 MJP, 2013 WL 12073233, at *2 (W.D. Wash. Oct. 28, 26 2013) (citing Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006)), the Court begins its 27 analysis by examining whether Defendants have shown the Court has original 28 jurisdiction over this case, see 28 U.S.C. § 1441(a). 4 1 Defendants made a sufficient showing that complete diversity between the parties 2 is present. (See Mot. to Remand Opp’n 3–5; Not. of Removal 2–5.) Plaintiff only 3 disputes the citizenship of Transamerica Premier Life Insurance Company and 4 American International Group. (Mot. to Remand 4.) Plaintiff resides in California, 5 (Not. of Removal 35), and is thus presumptively domiciled in and a citizen of California, 6 Anderson v. Watt, 138 U.S. 694, 706 (1891). Transamerica Premier Life Insurance 7 Company merged with and into TLIC effective October 1, 2020. (Mot. to Remand 8 Opp’n 2 n.2.) Defendants supplied sufficient evidence to conclude that at the time this 9 suit was commenced, TLIC “was incorporated in Iowa with its principal address in 10 Cedar Rapids, Iowa,” (Mot. to Remand Opp’n 3–4; see Murray Decl. ¶ 2 & Ex. 1, ECF 11 No. 1-1), and that American International Group is incorporated under the laws of 12 Delaware with its principal place of business in New York, New York, (Not. of 13 Removal 4; Murray Decl. ¶ 5 & Ex. 4.) As a result, the Court concludes that the parties 14 are completely diverse. 15 Defendants have not demonstrated that the amount in controversy exceeds the 16 jurisdictional threshold. Defendants argue that “where the validity of an insurance 17 policy containing disability benefit provisions is involved in a diversity action in a 18 federal district court, future potential benefits may be considered in computing the 19 requisite jurisdictional amount.” (Mot. to Remand Opp’n 7 (quoting Mass. Cas. Ins. 20 Co. v. Harmon, 88 F.3d 415, 416 (6th Cir. 1996)).) Defendants assert that “the monthly 21 disability benefit is $1,000” under the Policy, meaning “the face value of the disability 22 benefits in dispute from August 2011 (the date the Policy was allegedly improperly 23 cancelled) through October 2028 (the date Plaintiff claims the Policy should remain in 24 force), or 260 months, is $260,000.” (Id. at 11.) In the alternative, Defendants argue 25 that “the amount of future disability benefits in dispute as of the date of the filing of the 26 Complaint in November of 2022 through October 2028, or 71 months, is $71,000.” (Id.) 27 At the hearing, Plaintiff disputed that the monthly benefit under the Policy is 28 $1,000. On June 11, 2018, in response to Plaintiff’s May 25, 2018 letter, Transamerica 5 1 Premier Life Insurance Company sent a copy of what it claimed was Plaintiff’s policy. 2 (Not. of Removal 116.) Although the proffered policy includes Plaintiff’s name and 3 states the “Insured Mo. Payment” is $1,000.80, the effective date is listed as 4 “10/01/1995.” (Id. at 117.) The proffered policy also reflects a monthly premium of 5 $16.75. 6 employee, clarifying that he does not claim the proffered policy appended to the June 7 11, 2018 letter was the one Plaintiff had agreed to, but he instead states the proffered 8 policy “contained the same terms and conditions as the group policy issued to Plaintiff 9 before Transamerica Premier Life Insurance Company (‘TPLIC’) assumed the 10 mortgage disability insurance business from American General Insurance Company.” 11 (Forsyth Decl. ¶ 2, ECF No. 20-2.) (Id.) Defendants submitted a declaration from Brian Forsyth, a TLIC 12 Defendants cite no binding authority suggesting that a defendant’s employee’s 13 declaration is sufficient, without more, to establish the face value of an insurance policy 14 in a case removed from state court. (See Mot. to Remand Opp’n 11 n.5 (citing cases 15 from the Tenth and Seventh Circuits).) The Forsyth declaration notwithstanding, there 16 are also reasons a person might reasonably question the validity of the proffered policy. 17 First, the October 1995 effective date appears arbitrary. Defendants do not explain why 18 a policy taken out in 1988 would reflect an “effective date” beginning in 1995. Further, 19 Defendants make no effort to explain the inconsistency between the monthly premium 20 listed on the proffered policy and the monthly premiums Plaintiff claims she paid. The 21 proffered policy reflects a monthly premium of $16.75, (Not. of Removal 117), which 22 does not accord with the $10.89 or $24.41 monthly payments Plaintiff alleges she was 23 charged, (id. at 35, 37, 39–40). 24 Accordingly, Defendants’ evidence concerning the face value of the Policy is 25 insufficient to establish the jurisdictional threshold has been satisfied. At the hearing, 26 Plaintiff vehemently disputed that the proffered policy contained the same terms as the 27 Policy she agreed to when purchasing her home. Defendants’ counterargument is 28 supported by a single, half-page declaration from a TLIC employee attesting to the 6 1 proffered policy’s applicability to this case. (See generally Forsyth Decl.) In essence, 2 Defendants ask the Court to take their word over Plaintiff’s. As the party asserting 3 jurisdiction, Defendants have an obligation to provide sufficient support to overcome 4 the strong presumption against removal jurisdiction. See Placer Dome, 582 F.3d at 5 1087. Given there is a dispute as to the applicability of the proffered policy, and the 6 information contained in the proffered policy gives rise to reasonable questions as to its 7 applicability, the Court concludes that Defendants have not met their burden of 8 establishing by a preponderance of the evidence that the amount in controversy “more 9 likely than not” exceeds $75,000. Guglielmino, 506 F.3d at 699 (internal quotation 10 marks omitted). 11 This conclusion is not altered by the fact that Plaintiff requested compensatory 12 and punitive damages in her Complaint.3 “[T]he mere possibility of a punitive damages 13 award is insufficient to prove that the amount-in-controversy requirement has been met. 14 Defendant must present evidence that punitive damages will more likely than not exceed 15 the amount needed to increase the amount in controversy to $75,000.” Burk v. Med. 16 17 18 19 20 21 22 23 24 25 26 27 28 3 Plaintiff argues the Court should not consider her request for punitive damages as part of the jurisdictional analysis “because the Fraud claim has passed the three year statute of limitation.” (Mot. for Remand 8.) This argument is unavailing. “The amount in controversy represents only the amount at stake in the underlying litigation, not the likely liability.” Greene v. Harley-Davidson, Inc., 965 F.3d 767, 774 (9th Cir. 2020) (internal quotation marks omitted). Further, “[i]t is well-settled that statutes of limitations are affirmative defenses.” Ayala v. Frito Lay, Inc., 263 F. Supp. 3d 891, 913 (E.D. Cal. 2017) (internal quotation marks omitted). At most, “the strength of any defenses indicates the likelihood of the plaintiff prevailing; it is irrelevant to determining the amount that is at stake in the litigation.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 928 (9th Cir. 2019). Accordingly, “just because a defendant might have a valid defense that will reduce recovery to below the jurisdictional amount does not mean the defendant will ultimately prevail on that defense.” Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. Lhotka, 599 F.3d 1102, 1108 (9th Cir. 2010). Even though Plaintiff concedes the merits of Defendants’ affirmative defense, the Court does not consider the applicability of any statute of limitations defense in its jurisdictional analysis. 7 1 Sav. Ins. Co., 348 F. Supp. 2d 1063, 1069 (D. Ariz. 2004) (citation omitted) (emphasis 2 added). In their notice of removal, Defendants cite five cases for the proposition “that 3 exemplary damage awards in insurance disputes can be significant and often well 4 exceed $75,000.” (Not. of Removal 7–8.) None of the cases cited by Defendants 5 involve analogous facts and are thus unpersuasive evidence that “punitive damages will 6 more likely than not” exceed the jurisdictional threshold. Burk, 348 F. Supp. 2d at 1069. 7 Further, at oral argument, Defendants’ counsel acknowledged that the prayer for 8 damages, without more, was unlikely to satisfy the jurisdictional threshold in this case. 9 Even factoring in compensatory and punitive damages, Defendants must still present 10 evidence of the actual face value of the policy to establish the jurisdictional amount-in- 11 controversy threshold has been satisfied by a preponderance of the evidence. 12 Guglielmino, 506 F.3d at 699. 13 Defendants request that 14 [t]o the extent there is any doubt in the Court’s mind as to the 15 value of the monthly benefit under the Policy, the removing 16 Defendants request that the Court permit limited discovery to 17 obtain this evidence (either from Plaintiff directly or from the 18 prior insurer or bank that may hold a copy of the original 19 application and schedule of benefits). 20 (Mot. to Remand Opp’n 12 n.6.) “Jurisdictional discovery is permissible when the 21 Court is unable to determine, on the existing record, whether it has jurisdiction.” Rippee 22 v. Bos. Mkt. Corp., 408 F. Supp. 2d 982, 985 (S.D. Cal. 2005); see also Laub v. U.S. 23 Dept. of Interior, 342 F.3d 1080, 1093 (9th Cir. 2003) (“Although a refusal to grant 24 discovery to establish jurisdiction is not an abuse of discretion when it is clear that 25 further discovery would not demonstrate facts sufficient to constitute a basis for 26 jurisdiction, discovery should be granted when, as here, the jurisdictional facts are 27 contested or more facts are needed.” (internal quotation marks omitted)). 28 /// 8 1 The Court finds that additional discovery could provide evidence to establish the 2 jurisdictional amount-in-controversy threshold is satisfied prior to remand. 3 Accordingly, the Court GRANTS Defendants’ request for limited jurisdictional 4 discovery. 5 IV. CONCLUSION 6 The parties have 75 days from the date of this Order to complete jurisdictional 7 discovery. Discovery is limited only to the narrow issue of the amount in controversy. 8 The 75-day deadline is not the date by which discovery requests must be served; it is 9 the date by which all discovery, including all hearings on any related motions, must be 10 completed. Thus, all discovery-related matters must begin sufficiently in advance of 11 the jurisdictional discovery cutoff date to permit the discovering party enough time to 12 challenge via motion practice responses deemed to be deficient. Given the requirements 13 to meet and confer and to give notice, in most cases a planned motion to compel must 14 be discussed with opposing counsel at least six weeks before the cutoff. The parties are 15 reminded that in the absence of “compelling factual support, requests to continue dates 16 set by this Court will not be approved.” (Initial Standing Order § 4, ECF No. 8 17 (emphasis added).) 18 Defendants shall file a surreply addressing the jurisdictional question no later 19 than 90 days from the date of this Order. Plaintiff may file a sur-surreply within 14 20 days of Defendants’ surreply. The matter will stand submitted upon Plaintiff’s filing of 21 the sur-surreply or the expiration of her time to do so. For administrative purposes only, 22 the Court directs the Clerk to terminate the motion to remand (ECF No. 16) during the 23 jurisdictional discovery period. 24 /// 25 /// 26 /// 27 28 9
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