Connecticut General Life Insurance Company v. Porter et al, No. 2:2009cv02058 - Document 25 (E.D. Cal. 2010)
Court Description: ORDER DENYING dft's 18 Motion to Dismiss, judgment on the pleadings and a more definite statement, signed by Judge Garland E. Burrell, Jr on 1/20/2010. (Suttles, J)
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Connecticut General Life Insurance Company v. Porter et al Doc. 25 1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE EASTERN DISTRICT OF CALIFORNIA 7 8 9 10 11 12 13 14 15 CONNECTICUT GENERAL LIFE INSURANCE COMPANY, ) ) ) Plaintiff, ) ) v. ) ) BRIAN R. PORTER; CHARLES W. ) NICHOLS, as Co-Trustee of the LeAnn) P. Porter Revokable Living Trust; ) BETTY JANE NICHOLS, as Co-Trustee ) of the LeAnn P. Porter Revokable ) Living Trust, ) ) Defendants. ) ) 2:09-cv-02058-GEB-DAD ORDER DENYING DEFENDANT’S MOTION TO DISMISS, FOR JUDGMENT ON THE PLEADINGS, OR, IN THE ALTERNATIVE, A MORE DEFINITE STATEMENT* 16 17 On November 30, 2009, Defendant Brian Porter filed a motion in 18 which he seeks to dismiss Connecticut General Life Insurance Company’s 19 interpleader complaint under Federal Rules of Civil Procedure 12(b)(1) 20 and 12(b)(6). 21 statement under Federal Rule of Civil Procedure 12(e). 22 indicates he is moving for judgment on the pleadings under Federal 23 Rule of Civil Procedure 12(c). 24 the applicable standard governing a Rule 12(c) motion and has made 25 only a conclusory argument that is woefully insufficient to prevail on Defendant alternatively moves for a more definitive Defendant also However, Defendant has not addressed 26 27 28 * argument. This matter is deemed to be suitable for decision without oral E.D. Cal. R. 230(g). 1 Dockets.Justia.com 1 this portion of his motion. 2 is DENIED. 3 I. 4 5 A. Therefore, Defendant’s Rule 12(c) motion LEGAL STANDARDS Federal Rule of Civil Procedure Rule 12(b)(1) Under Federal Rule of Civil Procedure 12(b)(1)(“Rule 12(b)(1)”), 6 a defendant may move to dismiss a complaint for lack of subject matter 7 jurisdiction. 8 federal subject matter jurisdiction exists. 9 Life Ins. Co., 511 U.S. 375, 377 (1994). 10 The plaintiff bears the burden of demonstrating that B. See Kokkonen v. Guardian Federal Rule of Civil Procedure 12(b)(6) 11 In deciding a motion under Federal Rule of Civil Procedure 12 12(b)(6)(“Rule 12(b)(6)”), the material allegations of the complaint 13 are accepted as true and all reasonable inferences are drawn in favor 14 of the plaintiff. 15 Cir. 2009). 16 enough facts to state a claim to relief that is plausible on its 17 face.” 18 claim has facial plausibility when the plaintiff pleads factual 19 content that allows the court to draw the reasonable inference that 20 the defendant is liable for the misconduct alleged.” 21 Iqbal, 129 S. Ct. 1937, 1949 (2009). 22 See al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th To avoid dismissal, the plaintiff must allege “only Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007). C. “A Ashcroft v. Federal Rule of Civil Procedure 12(e) 23 Under Federal Rule of Civil Procedure 12(e) (“Rule 12(e)”), a 24 party may move for a more definite statement where the pleading at 25 issue “is so vague or ambiguous that a party cannot reasonably be 26 required to frame a responsive pleading.” 27 Rule 12(e) motion is proper only if the complaint is so indefinite 28 that the defendant cannot ascertain the nature of the claim being 2 Fed. R. Civ. P. 12(e). “A 1 asserted, i.e., so vague that the defendant cannot begin to frame a 2 response.” 3 3077989, at *6 (E.D. Cal. Sept. 22, 2009)(citation omitted). 4 Therefore, a motion for a more definite statement must be denied if 5 “the complaint is specific enough to notify the defendant of the 6 substance of the claim being asserted.” C.B. v. Sonora Sch. Dist., --- F. Supp. 2d ----, 2009 WL 7 II. Id. BACKGROUND 8 Plaintiff issued a Group Flexible Premium Adjustable Life 9 Insurance Policy No. 596726 to the People’s Bank as Trustee of the 10 Universal Life Insurance Trust for Kraft General Foods (the “Policy”), 11 providing certain categories of Kraft employees with life insurance. 12 (Compl. ¶ 10.) 13 (Id.) 14 Policy in the amount of $200,000. 15 named as LeAnn Porter’s beneficiary under the Policy. 16 Defendant was a covered employee under the Policy. LeAnn Porter, Defendant’s spouse, was also covered under the (Id.) Originally, Defendant was (Id. ¶ 11.) However, on or about February 20, 2009, Plaintiff received a 17 correspondence from LeAnn Porter’s counsel, enclosing a “Stipulation 18 and Order Re: Child Custody, Child Visitation, Counseling and Life 19 Insurance Beneficiary,” (the “Stipulation”) in which Defendant and 20 LeAnn Porter stipulated to designate the LeAnn P. Porter Revokable 21 Living Trust as the beneficiary to one-half of the proceeds under the 22 life insurance policy covering LeAnn Porter. 23 correspondence instructed Plaintiff to “immediately change the 24 beneficiary designation of [the Policy].” 25 Stipulation was adopted by the Sacramento County Superior Court on 26 February 20, 2009. 27 28 (Id. ¶ 12, Ex. B.) (Id., Ex. B.) The The (Id., Ex. B.) Shortly thereafter, on February 24, 2009, LeAnn Porter died. (Id. ¶ 13, Ex. C.) On or about March 20, 2009, Plaintiff received a 3 1 correspondence from Defendant’s counsel, in which he instructed 2 Plaintiff that “[a]ny claim for the proceeds under the [Policy] . . . 3 should be held pending a court determination as to the validity of 4 [the] recent court-ordered change of beneficiary designation.” 5 14, Ex. D.) 6 (Id. ¶ On July 23, 2009, Plaintiff filed a complaint under Federal Rule 7 of Civil Procedure 22 against Defendant and Charles and Betty Nichols, 8 as the Co-Trustees of the LeAnn P. Porter Revokable Living Trust. 9 Plaintiff alleges each Defendant is “asserting some right, title or 10 interest in all or a portion of the proceeds of the Policy” and 11 therefore, “there are conflicting potential demands upon [Plaintiff] 12 regarding the Policy.” 13 “does not know and cannot determine the beneficiaries of the Policy or 14 persons legally entitled to the proceeds of the Policy.” 15 Concurrent with the filing of the complaint, Plaintiff deposited with 16 the Clerk of the Court, $200,347.93, which represents the proceeds of 17 the Policy plus accrued cash value and interest. 18 Plaintiff requests that the court “determine the true and lawful 19 beneficiary(ies) to the proceeds of the Policy, and to subsequently 20 release such proceeds to the true and lawful beneficiary(ies).” 21 (Prayer ¶ 2.) 22 23 24 (Id. ¶ 15.) III. A. Further, [Plaintiff] alleges it (Id. ¶ 16.) (Id. ¶ 23.) DISCUSSION Diversity Jurisdiction Provides Subject Matter Jurisdiction Defendant argues Plaintiff’s complaint should be dismissed under 25 Rule 12(b)(1) since ERISA preempts Plaintiff’s action, and under 26 ERISA, Plaintiff cannot bring an interpleader complaint. 27 argument does not appear to challenge subject matter jurisdiction, 28 federal courts have a duty to establish subject matter jurisdiction 4 While this 1 regardless of whether it is raised by the parties. 2 Investors Life Ins. Co. v. Waddell & Reed Inc., 360 F.3d 960, 966-67 3 (9th Cir. 2004)(stating that “a district court’s duty to establish 4 subject matter jurisdiction is not contingent upon the parties 5 arguments.”) 6 See United Plaintiff’s complaint is brought under Federal Rule of Civil 7 Procedure 22(a). 8 procedural device . . . [and] does not convey [subject matter] 9 jurisdiction on the [district] courts. “Rule 22 interpleader[,] [however,] is only a Accordingly, a party seeking 10 to bring an interpleader action in federal court must establish 11 statutory jurisdiction.” 12 1030, 1033 (9th Cir. 2000)(quotations and citations omitted). 13 Aetna Life Ins. Co. v. Bayona, 223 F.3d Plaintiff alleges there is diversity jurisdiction under 28 U.S.C. 14 § 1332(a)(“Section 1332(a)”). 15 jurisdiction under Section 1332(a), Plaintiff must demonstrate there 16 is “complete diversity” between it and all Defendants and that the 17 amount in controversy exceeds $75,000. 18 Plaintiff alleges it is a corporation organized and existing under the 19 laws of Connecticut with its principal place of business in 20 Connecticut, and each Defendant is a citizen of California. 21 ¶¶ 1-5.) 22 $200,000 plus interest, which represents the proceeds of the Policy at 23 issue. 24 (Compl. ¶ 7.) To establish diversity 28 U.S.C. § 1332(a). (Compl. Further, Plaintiff alleges that the amount in controversy is (Id. ¶¶ 6-7.) Rather than challenging the existence of diversity jurisdiction, 25 Defendant argues federal question jurisdiction also lies under ERISA 26 since ERISA preempts the allegations in Plaintiff’s complaint. 27 argument, however, does not show that the court is without subject 28 matter jurisdiction. This Since Plaintiff has demonstrated the existence 5 1 of diversity jurisdiction, the merits of Defendant’s ERISA preemption 2 argument need not be decided in connection with Defendant’s motion for 3 dismissal for lack of subject matter jurisdiction. 4 Defendant’s Rule 12(b)(1) motion is denied. 5 6 B. Therefore, Plaintiff Has Stated a Claim under Rule (12)(b)(6) Defendant also seeks dismissal of Plaintiff’s complaint under 7 Rule 12(b)(6), arguing that Plaintiff lacks standing to sue “because 8 the threat of future harm averred in the complaint is too abstract, 9 conjectural, and hypothetical.” Plaintiff counters it has standing to 10 bring an interpleader action since it has satisfied the requirements 11 of Rule 22(a)(1). 12 Rule 22(a)(1) provides, in pertinent part, that “[p]ersons having 13 claims against the plaintiff may be joined as defendants and required 14 to interplead when their claims are such that the plaintiff is or may 15 be exposed to double or multiple liability.” 16 22(a)(1). 17 money sues all those who might have claim to the money, deposits the 18 money with the district court, and lets the claimants litigate who is 19 entitled to the money.” 20 1261, 1265 (9th Cir. 1992). 21 “primary purpose is not to compensate, but rather to protect [the] 22 stakeholder[] from multiple liability as well as from the expense of 23 multiple litigation.” 24 action “is appropriate if the stakeholder-plaintiff has a real and 25 reasonable fear of double liability or vexatious, conflicting claims. 26 This danger need not be immediate; any possibility of having to pay 27 more than is justly due, no matter how improbable or remote, will 28 suffice.” Fed. R. Civ. P. “In an interpleader action, the ‘stakeholder,’ of a sum of Cripps v. Life Ins. Co. of N. Am., 980 F.2d Therefore, an interpleader action’s Bayona, 223 F.3d at 1034. An interpleader Prudential Ins. Co. Of Am. v. Wells, No. C09-0132 BZ, 2009 6 1 WL 1457676, at *2 (N.D. Cal. May 21, 2009)(quotations and citations 2 omitted). 3 not dependent upon on the merits of the claims asserted against the 4 stakeholder.” 5 Further, “[t]he availability of the interpleader remedy is Id. Plaintiff alleges LeAnn Porter was covered under a Group Flexible 6 Premium Adjustable Life Insurance Policy that it issued in the amount 7 of $200,000, and that LeAnn died on February 24, 2009. 8 13.) 9 right, title or interest in all or a portion of the proceeds of the (Compl. ¶¶ 10, Further, Plaintiff alleges each Defendant is “asserting some 10 Policy” and as a result, Plaintiff “believes that there are 11 conflicting potential demands upon [it] . . . .” 12 Plaintiff also attached to its complaint a letter from Defendant’s 13 counsel, in which he argues that the Stipulation executed by Defendant 14 and LeAnn Porter, that was adopted by the Sacramento County Superior 15 Court on February 20, 2009, may not have effectuated a change in 16 beneficiaries under the Policy. 17 state a claim under Rule 22(a) since Plaintiff has alleged Defendant 18 and the Co-Trustees of the LeAnn P. Porter Revokable Living Trust are 19 adverse claimants to the proceeds of the Policy. 20 circumstances, [P]laintiff has a bona fide fear of adverse claims 21 arising with regard to the [proceeds of the Policy] . . . .” 22 2009 WL 1457676, at *4. 23 Plaintiff lacks standing to sue is rejected. (Id. ¶ 15.) These allegations are sufficient to “Under the Wells, Therefore, Defendant’s argument that 24 Defendant also argues Plaintiff’s interpleader action is not 25 supported by either a federal or state cause of action and should 26 therefore be dismissed under Rule 12(b)(6). 27 Defendant’s misunderstanding of the interpleader action pled in 28 Plaintiff’s complaint. This argument reflects By bringing an interpleader action against 7 1 Defendants, Plaintiff seeks to have the “[Defendants] litigate who is 2 entitled to the money.” 3 has not shown Plaintiff’s interpleader allegations are insufficient to 4 state an interpleader claim, this portion of the motion is also 5 denied. 6 Cripps, 980 F.2d at 1265. Since Defendant Defendant also argues ERISA preempts Plaintiff’s interpleader 7 action and since Plaintiff may not maintain a claim under ERISA, the 8 complaint should be dismissed under Rule 12(b)(6). 9 has cited no authority suggesting that ERISA precludes Plaintiff from However, Defendant 10 bringing its interpleader action under Rule 22(a)(1) and Section 11 1332(a). 12 directly present here because [P]laintiff . . . brought [the] 13 interpleader action under Fed. R. Civ. P. 22, with federal 14 jurisdiction premised upon diversity of citizenship.” 15 and Trust Co. v. Denman Tire Corp., 240 F.3d 83, 89 n.4 (1st Cir. 16 2001). 17 that issue need not be reached in deciding this portion of Defendant’s 18 motion. 19 Defendants’ claims to the proceeds of the Policy. 20 Gen. Life Ins. Co. v. Riner, 351 F. Supp. 492, 497 (W.D. Va. 21 2005)(discussing ERISA preemption of state law when interpleader 22 action is brought under Rule 22(a)(1) and subject matter jurisdiction 23 is premised upon diversity jurisdiction). 24 potential applicability of ERISA to this action, Defendant has failed 25 to demonstrate any infirmity in Plaintiff’s complaint justifying 26 dismissal. 27 12(b)(6) is denied. 28 // Further, “[t]he limitations on ERISA standing to sue are not State St. Bank While ERISA may subsequently be found to apply to this action, ERISA, if applicable, may dictate the law governing See Connecticut Notwithstanding any Therefore, Defendant’s dismissal motion under Rule 8 1 C. Defendant Is Not Entitled to a More Definite Statement 2 Defendant also argues in a conclusorily manner that he is 3 entitled to a more definite statement because he “cannot reasonably 4 frame a responsive pleading because the complaint is so vague and 5 ambiguous.” 6 Plaintiff’s complaint is vague or ambiguous. 7 specific enough to notify . . . [D]efendant of the substance of the 8 claim being asserted.” 9 Therefore, this portion of Defendant’s motion is also denied. However, Defendant has not articulated in what ways Sonora Sch. Dist., 2009 WL 3077989, at *6. 10 11 “[T]he complaint is IV. CONCLUSION For the stated reasons, Defendant’s motion seeking dismissal, 12 judgment on the pleadings, and a more definite statement, is DENIED. 13 Dated: January 20, 2010 14 15 16 GARLAND E. BURRELL, JR. United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 9
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