Walker et al v. American National Insurance Company et al

MOTION for Summary Judgment or Partial Summary Judgment and Summary Adjudication of Issues; Memorandum of Points and Authorities in Support Thereof

N.D. Cal.March 21, 2018

Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SEAN P. NALTY, CA Bar No. 121253 sean.nalty@ogletreedeakins.com Ogletree, Deakins, Nash, Smoak & Stewart, P.C. Steuart Tower, Suite 1300 One Market Plaza San Francisco, CA 94105 Telephone: 415.442.4810 Facsimile: 415.442.4870 Attorneys for Defendant AMERICAN NATIONAL INSURANCE COMPANY UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ANTHONY WALKER, PAMELA WALKER, Plaintiffs, v. AMERICAN NATIONAL INSURANCE COMPANY, RAJESHVAR SINGH, DOES 1 to 10, Defendant. Case No. 4:16-cv-06255-HSG AMERICAN NATIONAL INSURANCE COMPANY’S NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT OR PARTIAL SUMMARY JUDGMENT AND SUMMARY ADJUDICATION OF ISSUES; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Hearing Date: April 26, 2018 Time: 2:00 p.m. Courtroom: 2 Complaint Filed: August 17, 2016 Trial Date: August 6, 2018 Judge: Hon. Haywood S. Gilliam Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 1 of 33 i Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS I. SUMMARY OF ARGUMENTS ..................................................................................... 4 II. PERTINENT FACTS ....................................................................................................... 5 A. The Status of the Policies at Issue ........................................................................ 5 1. Pamela Walker Policy 1 - #740 is in Force .............................................. 5 2. Pamela Walker Policy 2 - #288 is in Force .............................................. 6 3. Granddaughter VW Policy 1 - # 970 was Cash Surrendered by Walker ...................................................................................................... 7 4. Granddaughter VW Policy 2 - #437is in Force ........................................ 8 5. Granddaughter JW Policy - #023 was Cashed Surrendered by Walker ...................................................................................................... 8 B. Plaintiffs’ Version of Events ................................................................................ 8 1. Walker Claims that Policies 740, 288, 437, 970 and 023 were “Stolen” by American National ................................................................ 8 2. Walker Claims that He Learned 10 Years Ago that Granddaughter VW Policy 1 - # 970, Pamela Walker Policy 2 - #288, and Pamela Walker Policy 1 - #740 Had Been Stolen by American National ............ 9 3. Walker was Forced to Buy Granddaughter VW Policy 2 - #437 Because American National Could Not Find Granddaughter VW Policy 1 - # 970 ......................................................................................... 9 4. Walker Admits that Everything Went Haywire 10 Years Ago ................ 9 5. Mrs. Walker learned Eight Years Ago that She Had No Policies with American National .................................................................................. 10 6. Walker had Difficulty Recalling Events Because They Took Place 10 Years Ago .......................................................................................... 10 III. LEGAL ANALYSIS ...................................................................................................... 10 A. Policy Ownership ............................................................................................... 10 B. Statute of Limitations Bars Each Claim Based On Plaintiffs’ Facts. ................. 11 Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 2 of 33 ii Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. Here, The Application of the Statute of Limitations Is a Question of Law ......................................................................................................... 11 2. Governing Time Periods ......................................................................... 11 3. Accrual of the Claims for Relief ............................................................ 11 4. Discovery Rule ....................................................................................... 12 5. Presumptive Knowledge ......................................................................... 13 6. The Complaint brought by Mrs. Walker is Time-Barred ....................... 13 7. Walker’s Claims for Relief also Are Time-Barred ................................. 14 C. Breach of Contract Claims Are Nonexistant ...................................................... 15 1. Granddaughter VW Policy 2 - #437, Pamela Walker Policy 2 - #288, & Pamela Walker Policy 1 - #740 Still Are In Force and No Claim For Benefits has Been Made Under These Policies. .............................. 15 2. Granddaughter JW Policy - #023 & Granddaughter VW Policy 1 - #970 ........................................................................................................ 16 D. Breach of Implied In Fact Contract Claim Is Legally Insupportable ................. 16 E. Plaintiffs’ Contract Claims Fail Because They Have No Recoverable Damages ............................................................................................................. 18 F. Breach of Implied Covenant of Good Faith and Fair Dealing Claims Fail ........ 19 1. There Were No Benefits Withheld under the Policies ........................... 19 2. There is a Genuine Dispute Over Coverage Precluding Bad Faith ........ 20 G. The Relationship Between an Insurer and an Insured is Contractual; There is No Claim for Negligent Handling or Denial of an Insurance Claim .............. 21 H. There Is No Private Right of Action under Insurance Code § 790.03 ............... 22 I. Violation of B.P. 17200 ...................................................................................... 22 J. Declaratory Relief .............................................................................................. 24 K. Plaintiffs’ Claim for Punitive Damages Must Be Dismissed ............................. 24 IV. CONCLUSION .............................................................................................................. 25 Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 3 of 33 iii Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) CASES Adams v. Allstate Ins. Co., 187 F. Supp. 2d 1207 (C.D. 2002) ......................................................................................... 20 Alexander v. Codemasters Group Limited, 104 Cal.App.4th 129 (2002) ................................................................................................... 17 Am. Med. Int’l v. Nat’l Union Fire Ins. Co., 244 F.3d 715 (2001) ............................................................................................................... 19 American Airlines v. Sheppard, Mullin, 96 Cal. App. 4th 1017 (2002) ................................................................................................. 25 Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) ............................................................................................................... 25 Archdale v. American International Specialty Lines Ins. Co., 154 Cal. App. 4th 449 (2007) ................................................................................................. 11 Badell v. Celtic Life Ins. Co., 159 F. Supp. 2d 1186 (N.D. Cal. 2001) .................................................................................. 12 Barrilleaux v. Mendocino County, 61 F. Supp. 3d 906 (N.D. Cal. 2014) ...................................................................................... 23 Bay Area Roofers Health v. Sun Life Assur. Co., 73 F. Supp. 3d 1154 (N.D. Cal. 2014) .................................................................................... 23 Bayes v. State Farm Gen. Ins. Co., 2017 U.S. Dist. LEXIS 170195 (C.D. Cal 2017) ................................................................... 20 Brehm v. 21st Century Ins. Co., 166 Cal. App. 4th 1225 (2008) ............................................................................................... 20 Britz Fertilizers, Inc. v. Bayer Corp., 665 F. Supp. 2d 1142 (E.D. Cal. 2009) .................................................................................. 24 Broberg v. The Guardian Life Ins. Co. of America, 171 Cal. App. 4th 912 (2009) ........................................................................................... 11, 12 Brown v. Guarantee Insurance Co., 155 Cal. App.2d 679, 319 P.2d 69 (Cal. Ct. App.1957) ......................................................... 22 Bustamante v. Intuit, Inc., 141 Cal.App.4th 199 (2006) ................................................................................................... 17 Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 4 of 33 iv Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Cal. Fair Plan Ass’n v. Political, 220 Cal. App. 3d 1612 (1990) ................................................................................................ 18 Cates Construction, Inc. v. Talbot Partners, 21 Cal. 4th 28 (1999) .............................................................................................................. 21 Chase v. Leiter, 96 Cal. App. 2d 439 (1950) .................................................................................................... 11 Cheske v. Waring, 2010 U.S. Dist. LEXIS 130506, 2010 WL 4916611 (C.D. Cal. 2010) .................................. 12 College Hospital, Inc. v. Sup. Ct., 8 Cal.4th 704 (1994) ............................................................................................................... 24 Cortez v. Purolator Air Filtration Prods. Co., 23 Cal. 4th 163 (2000) ............................................................................................................ 23 County of Solano v. Vallejo Redevelopment Agency, 75 Cal. App. 4th 1262 (1999) ................................................................................................. 15 Dane-Elec Corp. USA v. Bodokh, 2015 U.S. Dist. LEXIS 186843 (C.D. Cal. 2015) .................................................................. 16 Dao v. Liberty Life Assur. Co., 2015 U.S. Dist. LEXIS 137899 (N.D. 2015) .......................................................................... 18 Davis v. Farmers Ins. Exchange, 245 Cal. App. 4th 1302 (2016) ............................................................................................... 23 Diamond v. State Farm Mut. Auto. Ins. Co., 2010 U.S. Dist. LEXIS 75074, 2010 WL 2904640 (E.D. Cal. 2010) .................................... 21 Division of Labor Law Enforcement v. Transpacific Transportation Co., 69 Cal. App. 3d 268 (1977) .................................................................................................... 16 Ersa Grae Corp. v. Fluor Corp., 1 Cal.App.4th 613 (1991) ....................................................................................................... 17 Feldman v. Allstate, 322 F.3d 660 (9th Cir. 2003) .................................................................................................. 20 Estate of Fincher, 119 Cal. App. 3d 343 (1981) .................................................................................................. 12 First Commercial Mortg. Co. v. Reece, 89 Cal.App.4th 731 (2001) ..................................................................................................... 17 Flyer’s Body Shop Profit Sharing Plan v. Ticor Title Ins. Co., 185 Cal.App.3d. 1149 (1986) ................................................................................................. 24 Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 5 of 33 v Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Fortyune v. Am. Multi-Cinema, Inc., 364 F.3d 1075 (9th Cir. 2004) ................................................................................................ 23 Ginsberg v. Gamson, 205 Cal. App. 4th 873 (2012) ................................................................................................. 11 Grebow v. Mercury Ins. Co., 241 Cal. App. 4th 564 (2015) ................................................................................................. 20 Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566 (1973) ............................................................................................................... 21 Guebara v. Allstate Ins. Co., 237 F.3d 987 (9th Cir. 2001) .................................................................................................. 20 Gutierrez v. Mofid, 39 Cal. 3d 892 (1985) ............................................................................................................. 12 Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc., 115 Cal. App. 4th 1145 (2004) ............................................................................................... 11 Imperial Irrigation Dist. v. Cal. Indep. Sys. Operator Corp., 2016 U.S. Dist. LEXIS 101258 (S.D. Cal. 2016) ................................................................... 17 Ivy v. Pacific Auto. Ins. Co., 156 Cal. App. 2d 652 (1958) .................................................................................................. 22 John Hancock Mut. Life Ins. Co. v. Cohen, 254 F.2d 417 (9th Cir. 1958) .................................................................................................. 16 Jolly v. Eli Lilly & Co. (1988) 44 Cal. 3d 1103 ..................................................................................................... 11, 12 Khalsa v. Hali, 2014 U.S. Dist. LEXIS 108685, 2014 WL 3883713 (N.D. Cal. 2014) .................................. 24 Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 (2003) .......................................................................................................... 23 Love v. Fire Ins. Exch., 221 Cal.App.3d 1136 (1990) .................................................................................................. 19 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025 (9th Cir. 2008) ................................................................................................ 19 Marentes v. State Farm Mut. Auto. Ins. Co., 224 F. Supp. 3d 891 (N.D. Cal. 2016) .................................................................................... 19 McCoy v. Gustafson, 180 Cal. App. 4th 56 (2004) ............................................................................................. 13, 15 Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 6 of 33 vi Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Moradi-Shalal v. Fireman’s Fund Ins. Companies, 46 Cal. 3d 287 (1988) ............................................................................................................. 22 Mutual Ben. Life Ins. Co. v. Clark, 81 Cal. App. 546 (1927) ......................................................................................................... 11 Napolean Banks v. GMAC Mortg. Corp., 2004 U.S. Dist. LEXIS 32022 (C.D. Cal. 2004) .................................................................... 23 Nguyen v. Western Digital Corp., 229 Cal. App. 4th 1522 (2014) ......................................................................................... 12, 15 O’Shea v. Littleton, 414 U.S. 488, 94 S. Ct. 669 (1974) ........................................................................................ 23 Oasis West Realty, LLC v. Goldman, 51 Cal. 4th 811 (2011) ...................................................................................................... 15, 18 Olson v. Arnett, 113 Cal. App. 3d 59 (1980) .................................................................................................... 18 Pooshs v. Philip Morris USA, Inc., 51 Cal. 4th 788 (2011) ............................................................................................................ 11 Romano v. Rockwell International Inc., 14 Cal. 4th 479 (1996) ...................................................................................................... 11, 12 Saari v. Jongordon Corp., 5 Cal. App. 4th 797 (1992) ..................................................................................................... 18 Sanchez v. South Hoover Hospital, 18 Cal. 3d 93 (1976) ............................................................................................................... 13 Sateriale v. R.J. Reynolds Tobacco Co., 697 F.3d 777 (9th Cir. Cal. 2012) .......................................................................................... 17 Schwarz v. Meinberg, 2016 U.S. Dist. LEXIS 189704 (C.D. Cal. 2016) .................................................................. 23 Secard Pools, Inc. v. Kinsale Ins. Co., 2017 U.S. Dist. LEXIS 47871 (C.D. Cal. 2017) .................................................................... 19 Selden v. Dinner, 17 Cal. App. 4th 166 (1993) ................................................................................................... 18 Stella v. Asset Management Consultants, Inc., 8 Cal. App. 5th 181, 192 (2017) ................................................................................. 12, 13, 15 Stevens v. Harper, 213 F.R.D. 358 (E.D. Cal. 2002) ............................................................................................ 24 Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 7 of 33 vii Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Tetravue Inc. v. St. Paul Fire & Marine Ins. Co., 2018 U.S. Dist. LEXIS 36744 (S.D. Cal. 2018) ..................................................................... 19 Waller v. Truck Ins. Exchange, Inc., 11 Cal. 4th 1 (1995) .......................................................................................................... 19, 22 White v. Ultramar, 21 Cal.4th 563 (1999) ............................................................................................................. 24 Wilson v. 21st Century Ins. Co., 42 Cal. 4th 713 (2007) ............................................................................................................ 21 Zephyr Park v. Superior Court, 213 Cal. App. 3d 833 (1989) .................................................................................................. 22 STATUTES California Business & Professions Code § 17200 ....................................................................................................................... 11, 12, 23 § 17203 ................................................................................................................................... 23 California Code of Civl Procedure § 337(1) .................................................................................................................................. 11 § 338(a) ................................................................................................................................... 11 § 339 ....................................................................................................................................... 11 California Civil Code § 1550 ..................................................................................................................................... 17 § 1565 ..................................................................................................................................... 17 § 1580 ..................................................................................................................................... 17 § 1620 ..................................................................................................................................... 17 § 1621 ..................................................................................................................................... 17 California Insurance Code § 790.03 ........................................................................................................................... passim § 790.03(h) ............................................................................................................................. 22 Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 8 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION NOTICE OF MOTION AND MOTION TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on April 26, 2018, at 2:00 p.m., or as soon thereafter as this matter can be heard, before the Honorable Haywood S. Gilliam, Courtroom 2, 4th Floor, located at 1301 Clay Street, Oakland, California, defendant American National Insurance Company (“American National”) will and hereby does move the Court for summary judgment on the complaint (“the Complaint”) filed by Pamela Walker (“Mrs. Walker”) and Anthony Walker (“Walker”) (collectively “plaintiffs”) in this matter as there is no genuine issue as to any material fact as to the claims for relief brought by Ms. Walker and separately there is no genuine issue as to any material fact as to the claims for relief brought by Mr. Walker and American National is entitled to judgment on the Complaint as a matter of law, as to each of them, on the grounds set forth below. Alternatively, if Summary Judgment is not granted on the Complaint, American National will and hereby does move the Court, on the date and at the time stated above, for partial summary judgment as to each claim for relief brought by Mrs. Walker and as to each for relief brought by Walker on the grounds that, based on the reasons set forth below, there is no genuine issue as to any material fact and that American National is entitled to judgment on each claim for relief brought by Ms. Walker and separately that there is no genuine issue as to any material fact and that American National is entitled to judgment on each claim for relief brought by Mr. Walker on the grounds set forth below. Finally, American National moves for summary adjudication of the issues set forth below. American National’s motion for summary judgment, partial summary judgment, and summary adjudication of issues is based on this Notice and Memorandum of Points and Authorities as well as the declarations of Sean P. Nalty and Wynne Smith, and the exhibits attached thereto, on all the papers in the Court’s file, and on the oral argument that will be presented in this matter. I. BACKGROUND Plaintiffs allege against American National claims for relief for breach of written contract, breach of implied in fact contract, breach of the implied covenant of good faith and fair dealing Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 9 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION (“bad faith”), negligence, violation of California Insurance Code Section 790.03 (“IC § 790.03”), violation of California Business and Professions Code Section 17200 (“B.P. 17200”), and declaratory relief (“the Complaint”). These claims for relief are based on the following five American National whole life insurance policies purchased by plaintiffs from 1986 through 2009: Policy XXXXXX0740 (“Pamela Walker Policy 1 - #740”); Policy XXXXXX7288 (“Pamela Walker Policy 2 - #288”); Policy XXXXXX970 (“Granddaughter VW Policy 1 - #970”); Policy XXXXXX437 (“Granddaughter VW Policy 2 - #437”); and Policy XXXXXX023 (“Granddaughter JW Policy - #023”)(collectively “the Policies”). These are the Policies that are the basis of plaintiffs’ claims for relief for breach of contract. American National’s interrogatories served on Walker, Declaration of Sean P. Nalty (“Nalty Decl.”), Exhibit (“Ex.”) 19, interrogatory 7; American National’s interrogatories served of Ms. Walker, Ex. 21 to the Nalty Decl., interrogatory 7; Walker’s response to interrogatory 7, Ex.20 to the Nalty Decl., and Mrs. Walker’s response to interrogatory 7, Ex. 22 to the Nalty Decl. II. GROUNDS FOR THE MOTION The claims for relief brought by Mrs. Walker are time-barred. Similarly, the claims for relief brought by Walker also are time-barred. Each of plaintiffs’ claims for relief are time-barred as the events that are the subject of the lawsuit arose as early as 2008. Mrs. Walker’s claim for breach of contract has no merit because Pamela Walker Policy 1 - #740 and Pamela Walker Policy 2 - #288 have not been breached so there is no basis for a claim for breach of contract. Walker’s claim for breach of contract as no merit because Granddaughter VW Policy 1 - #970 and Policy Granddaughter JW Policy - #023, which are contracts that are the basis for Walker’s breach of contract claim, were surrendered by Walker and are no longer in force. In addition, Walker’s breach of contract claim is meritless because Policy Granddaughter VW Policy 2 - #437 still is in force and has not been breached. Finally, plaintiffs’ breach of contract claims, and each of them, fail as a matter of law because there are no damages that plaintiffs, and each of them, can recover under a breach of contract claim. Plaintiffs’ second claim for breach of an implied contract fails as a matter of law, as to each Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 10 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION of them, because there is no evidence that an implied contract was entered into between Ms. Walker and American National or Mr. Walker and American National. This claim also fails as a matter of law, as to each of them, because Mrs. Walker and Walker have no damages that they can recover under a breach of an implied contract. Mrs. Walker’s bad faith claim fails as a matter of law because Pamela Walker Policy 1 - #740 and Pamela Walker Policy 2 - #288, issued to Mrs. Walker, have not been breached and no policy benefits have been withheld from Mrs. Walker. Walker’s claim for bad faith has no merit as a matter of law because Granddaughter VW Policy 2 - #437, issued to Walker, has not been breached and no policy benefits have been withheld from him. In addition, Granddaughter VW Policy 1 - #970 and Granddaughter JW Policy - #023, issued to Walker, were surrendered by Walker and are no longer in force so they cannot be the basis for a bad faith claim. Finally, plaintiffs’ claims for bad faith, and each of them, are meritless because, as a matter of law, there is a genuine dispute over the existence of coverage under the Policies. Plaintiffs’ fourth claim for negligence fails as a matter of law, as to each of them, because an insured cannot bring a negligence claim against an insurance company. Plaintiffs’ fifth claim for relief, for breach of IC § 790.03, fails as a matter of law as to each of them because there is no private right of action under IC § 790.03. Plaintiffs’ six claim for relief for violation of B.P. 17200 fails as a matter of law as to each of them because Mrs. Walker and Walker cannot recover damages under this claim and the undisputed facts establish that each of them are not entitled to injunctive relief. Plaintiffs’ seventh claim for relief, for declaratory relief, is defective as a matter of law as to each of them because the undisputed facts establish that there is no likelihood of imminent injury. Finally, plaintiffs’ claim for punitive damages is defective as a matter of law as to each of them because there is no clear and convincing evidence of malice, oppression, or fraud and they do not have a viable claim for relief under which they can recover punitive damages. III. SUMMARY ADJUDICATION Finally, American National seeks summary adjudication of the following issues as to Mrs. Walker: 1. Mrs. Walker is the owner and insured under American National insurance policy Pamela Walker Policy 2 - #288; 2. American National insurance policy Pamela Walker Policy 2 - Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 11 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION #288 currently is in full force and effect; 3. American National insurance policy Pamela Walker Policy 2 - #288 has not been breached by American National; 4. Mrs. Walker is the owner and insured under American National insurance policy Pamela Walker Policy 1 - #740; 5. American National insurance policy Pamela Walker Policy 1 - #740 currently is in full force and effect; 6. American National insurance policy Pamela Walker Policy 1 - #740 has not been breached by American National. 7. Mrs. Walker’s claim for punitive damages has no merit as a matter of law because there is no clear and convincing evidence of malice, oppression, or fraud by American National. American National seeks summary adjudication of the following issues as to Mr. Walker: 1. Mr. Walker is the owner of American National insurance policy Granddaughter VW Policy 2 - #437; 2. American National insurance policy Granddaughter VW Policy 2 - #437 currently is in full force and effect; 3. American National insurance policy Granddaughter VW Policy 2 - #437 has not been breached by American National; 4. American National insurance policy Granddaughter VW Policy 1 - #970 was surrendered by Mr. Walker and is not in force; 5. American National insurance policy Granddaughter JW Policy - #023 was surrendered by Mr. Walker and is not in force; 6. Mr. Walker’s claim for punitive damages has no merit as a matter of law because there is no clear and convincing evidence of malice, oppression, or fraud by American National. MEMORANDUM OF POINTS AND AUTHORITIES I. SUMMARY OF ARGUMENTS Each of plaintiffs’ claims for relief are time-barred as the events that are the subject of the lawsuit arose as early as 2008. Mrs. Walker admits that she was told 8 years ago that the two policies she owned, Pamela Walker Policy 1 - #740 and Pamela Walker Policy 2 - #288, were not in force. She has been injured since that time by not having life insurance coverage in force. Walker testified that the Policies were stolen by American National 10 years ago. Moreover, Mrs. Walker cannot maintain a claim for relief for breach of contract as Pamela Walker Policy 1 - #740 and Pamela Walker Policy 2 - #288, the two that she owns, are in force and have not been breached. Similarly, Walker cannot maintain a breach of contract claim because Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 12 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION Granddaughter VW Policy 2 - #437, which he owns, still is in force and has not been breached. It is undisputed that the other policies that Walker owned, Granddaughter VW Policy 1 - # 970 and Granddaughter JW Policy - #023, he surrendered in 2011and stopped paying premium so they too cannot be the basis for a claim for relief for breach of contract. Each of plaintiffs’ claims for breach of implied contract fail because there is no evidence that establishes the existence of the contractual elements necessary for such a claim. These contractual claims also fail because plaintiffs have no contractual damages. Plaintiffs cannot maintain a claim for relief for bad faith as no benefits were withheld under the Policies and, were Plaintiffs to argue the existence of a coverage issue, at the very least, there would be a genuine coverage dispute under the Policies. Since the relationship between American National and plaintiffs is contractual, plaintiffs cannot, as a matter of law, state a claim for negligence against American National. The claim for violation for IC § 790.03 fails because there is no private right of action under IC § 790.03. Plaintiffs’ claim under B.P. 17200 fails because they cannot recover damages under B.P. 17200 and they cannot obtain injunctive relief based on past conduct. Plaintiffs’ declaratory relief claim fails because there is no likelihood of imminent injury. Finally, plaintiffs’ claims for punitive damages fail as there is no clear and convincing evidence of malice, oppression, or fraud and there is no viable claim for relief through which plaintiffs can recover punitive damages. II. PERTINENT FACTS A. The Status of the Policies at Issue 1. Pamela Walker Policy 1 - #740 is in Force Pamela Walker Policy 1 - #740 was issued on October 16, 1986 to Mrs. Walker as the owner and insured. This Policy currently is in force. Declaration of Wayne Smith, (“Smith Decl.”) ¶ 3 & Ex. 1. It also is on disability premium waiver and no benefit claim has been submitted under this Policy. Id. American National received a Cash Loan Request on Pamela Walker Policy 1 - #740 dated November 4, 2010. Smith Decl., ¶ 4 & Ex. 2. Walker admits that he signed the Cash Loan Request. Deposition of Anthony Walker (“Walker Depo.”), Declaration of Sean P. Nalty (“Nalty Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 13 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION Decl.”), Ex. 12, 99:14-19 & Defendant’s Exhibit E to the Deposition of Pamela Walker (“Ms. Walker Depo.”), the “Policy Loan or Cash Surrender Request,” attached to the Nalty Decl. as Ex. 15, pg. 4. Walker does not recall if the Cash Loan Request was filled out when he signed it. Walker Depo., Nalty Decl., Ex. 12, 99:14-100:3. He does not recall if anyone was in the room when he signed it because it was back in 2010. Id. at 100:1-6. Mrs. Walker remembers signing the Cash Loan Request for Pamela Walker Policy 1 - #740 in November 2010. Mrs. Walker Depo., Ex. 17 to the Nalty Decl., 56:19-20 & 57:22-58:12 & Exhibit E to her deposition, attached to the Nalty Decl. as Ex. 15, pg. 4. In response to this Cash Loan Request, a loan was extended on Pamela Walker Policy 1 - #740 and a check dated November 15, 2010 was issued to Mrs. Walker in the amount of $1,600.00. Smith Decl., ¶ 4 & Ex. 3. There is no dispute that the check was cashed by the Walkers. Id. Mr. Walker testified that his wife probably cashed it. Walker Depo., Ex. 12 to the Nalty Decl., 101:18-24. Mrs. Walker recalls cashing the check. Mrs. Walker Depo., Ex. 17 to the Nalty Decl., 60:5-24 & Ex. E, pg. 5, attached to the Nalty Decl. as Ex. 15. Plaintiffs failed to make the payment on this loan which led to the lapse of Pamela Walker Policy 1 - #740. Smith Decl., ¶ 4. Plaintiffs now insist that they did not want a loan on Pamela Walker Policy 1 - #740 back in November 2010, but did not refund the $1600.00 loan proceeds and still have those funds to this day. Id. Nonetheless, American National forgave the loan and placed Pamela Walker Policy 1 - #740 back in force. Id. 2. Pamela Walker Policy 2 - #288 is in Force Pamela Walker Policy 2 - #288 was issued on October 18, 2001 to Mrs. Walker as the owner and the insured. Smith Decl., ¶ 5. This policy has been in force since its issuance and remains in force today. Id. American National received a Cash Loan Request on Pamela Walker Policy 2 - #288 dated November 4, 2010. Id. at ¶ 5 & Ex. 5. Walker does not recall signing it. Walker Depo., Ex. 12 to the Nalty Decl., 34:16-36:5; 120:25-121:4; Defendant’s Exhibit D to Mrs. Walker’s Depo., Ex. 14 to the Nalty Decl., pg. 1. Mrs. Walker recalls signing it on November 4, 2010. Mrs. Walker Depo., Ex.17 to the Nalty Decl., 46:25-47:23 & Ex. D to the Mrs. Walker’s Depo, Ex. 14 to the Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 14 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION Nalty Decl., pg. 1. A loan was granted on Pamela Walker Policy 2 - #288 and a $1,700.00 loan check, dated November 23, 2010, was sent to Mrs. Walker. Smith Decl., ¶ 5 & Ex. 6. It is undisputed that the $1,700.00 check was cashed by the Walkers. Id. Mrs. Walker testified that she cashed the check. Mrs. Walker’s Depo., Ex. 17 to the Nalty Decl., 49:24-50:2 & Ex. D to Mrs. Walker’s Depo, Ex. 14 to the Nalty Decl., pg. 2. She also saw the explanation of benefits associated with the check on November 25, 2010. Id. at 51:8-20 and pg. 3 of Ex. D to Mrs. Walker’s Depo. Now, plaintiffs claim that they did not want this loan but failed to refund the $1,700.00 loan proceeds to American National. Smith Decl., ¶ 5. Nonetheless, American National forgave the loan and the policy remains active. Id. 3. Granddaughter VW Policy 1 - # 970 was Cash Surrendered by Walker Granddaughter VW Policy 1 - # 970 was issued on April 23, 2008 to Walker as the owner with his granddaughter V.W. the insured. Smith Decl., ¶ 6 & Ex. 7. American National received a Cash Surrender Request on Granddaughter VW Policy 1 - # 970 dated January 14, 2011. Id. at Ex. 8. Walker admits that he signed the Request. Walker Depo., Ex. 12 to the Nalty Decl., 30:21- 31:19; Defendant’s Ex. A to Mrs. Walker’s depo., Ex. 13 to the Nalty Decl., pg. 1; Defendant’s Ex. H to the Walker Depo., Ex. 23 to the Nalty Decl., pg. 1. He does not recall if he signed the Request in the presence of insurance agent Mr. Singh and he cannot recall if the Request was filled out when he signed it; he does remember receiving a copy of it. Walker Depo., Ex. 12 to the Nalty Decl., 32:10-33:1. American National District Manager Rajeshvar Singh (“Singh”) testified that he filled out the Cash Surrender Requests in front of Walker and Walker signed them. Deposition of Rajeshvar Singh (“Singh Depo.”), Ex. 18 to the Nalty Decl., 9:6-10; 10:5-8; 23:18-24:23. No premium was paid on Granddaughter VW Policy 1 - # 970 after the Cash Surrender Request was submitted to American National. Smith Decl., ¶ 6. Singh testified that the surrender closes the policy and there is no further obligation to pay premium on the policy. Ex.18 to the Nalty Decl., Singh Depo., 34:22-35:7 & 36:6-8. Walker received no cash on surrender as no cash was owed under the terms VW Policy 1 - # 970. Smith Decl., ¶ 6. Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 15 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION 4. Granddaughter VW Policy 2 - #437is in Force Granddaughter VW Policy 2 - #437 was issued on December 2, 2010 to Walker as the owner with his granddaughter V.W. the insured. Smith Decl., ¶ 7 & Ex. 9. Granddaughter VW Policy 2 - #437 is in force now and has been since its issuance. Id. Mr. Walker claims he bought Granddaughter VW Policy 2 - #437 for granddaughter V. W.to replace Granddaughter VW Policy 1 - # 970 because American National could not find Granddaughter VW Policy 1 - # 970. Walker Depo., Ex. 12 to the Nalty Decl., 16:9-20. In replacing VW Policy 1 - # 970 with VW Policy 2 - #437, there was no material gap in coverage and Walker paid no additional premium for the replacement coverage. Smith Decl., ¶ 7. 5. Granddaughter JW Policy - #023 was Cashed Surrendered by Walker Granddaughter JW Policy - #023 was issued on May 26, 2009 to Walker as owner and his granddaughter J.W. the insured. Smith Decl., ¶ 8 & Ex. 10. American National received a Cash Surrender Request on Granddaughter JW Policy - #023 dated January 14, 2011. Id. at Ex. 11. Walker signed this Request. Ex. I to the Walker Depo., attached to the Nalty Decl. as Ex. 16, pg. 1; Walker Depo., Ex. 12 to the Nalty Decl., 93:24-94:11. He cannot remember if the Request was filled out when he signed it. Id. at 94:9-14. District Manager Singh testified that he filled out the Cash Surrender Requests in front of Walker and Walker signed them. Singh Depo., Ex. 18 to the Nalty Decl., 23:18-24:23. No premium was paid on Granddaughter JW Policy - #023 after the Cash Surrender was submitted to American National. Smith Decl., ¶ 8. Walker received no cash on surrender as no cash was owed under the terms of JW Policy - #023. Id. B. Plaintiffs’ Version of Events 1. Walker Claims that Policies 740, 288, 437, 970 and 023 were “Stolen” by American National Walker contends that American National stole the Policies from him. Walker Depo., Ex. 12 to the Nalty Decl., 39:20-40:5; 42:1-24; 45:1-9. Walker testified at his deposition that American National stole: Granddaughter VW Policy 1 - # 970; Granddaughter VW Policy 2 - #437; Policy XXXXX513; Policy XXXXX585 issued to Mr. Walker (“Anthony Walker Policy - #585”) issued to him; another Policy issued to a granddaughter; Mrs. Walker’s Pamela Walker Policy 2 - #288 Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 16 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION and Pamela Walker Policy 1 - #740; and Granddaughter JW Policy - #023. Walker Depo., Ex. 12 to the Nalty Decl., 39:20-40:5; 42:1-24; 45:1-9; 46:10-21; 51:21-53:15; 72:8-15. Walker claims that American National stole six policies by telling him that he had not paid for them, even though he had his receipts, as he always paid the premium on time. Id at Ex. 12, 42:22-43:1-3. They were in his view stolen because they no longer existed. Id. at 50:12-19. He believed that “somebody in your company doing some fraud.” Id. at 43:15-17. 2. Walker Claims that He Learned 10 Years Ago that Granddaughter VW Policy 1 - # 970, Pamela Walker Policy 2 - #288, and Pamela Walker Policy 1 - #740 Had Been Stolen by American National Walker testified that he learned that Granddaughter VW Policy 1 - # 970 and Anthony Walker Policy - #585 were stolen 10 years ago from the date of the deposition. Id. at 47:13-20; 49:4-11; 50:20:51:17; 72:8-15. He learned that Mrs. Walker’s Pamela Walker Policy 2 - #288 and Pamela Walker Policy 1 - #740 were stolen 10 years ago from the date of the deposition. Id. at 48:8-12; 49:4-11. 3. Walker was Forced to Buy Granddaughter VW Policy 2 - #437 Because American National Could Not Find Granddaughter VW Policy 1 - # 970 Walker testified that American National could not find Granddaughter VW Policy 1 - # 970. Walker Depo., Nalty Decl., Ex. 12, 47:12-16, 49:7-11, 50:12-19; & 53:5-15. He believed that Granddaughter VW Policy 1 - # 970 was stolen by American National. Id. As a result, he was forced to purchase Granddaughter VW Policy 2 - #437. Id. at 16:9-20 & 53:5-15. Granddaughter VW Policy 2 - #437 was issued on December 2, 2010. Smith Decl., ¶ 7. 4. Walker Admits that Everything Went Haywire 10 Years Ago Walker testified that: “When the company first made a mistake ten years ago it all went haywire.” Walker Depo., Ex. 12 to the Nalty Decl., 48:14-15. He explained that all he wanted to do was surrender four life insurance policies on his children: Anthony Walker, Junior; Nicole Walker; Jamarie Walker; and Joshua Walker. Id. at 43:12-14 & 95:4-15. However, American National made a mistake 10 years ago when the Company surrendered his policy. Id. at 56:4-18. When deposed, Mr. Walker also raised a second mistake the Company made 10 years ago relating to surrender of Policy XXXXX179 which covered his son Jamarie Walker. Id. at 57:6-16. He Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 17 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION explained that agent Singh made a mistake and that he had been trying to correct the paperwork since 2010. Id. at 101:3-7. Walker recalls that, after not getting any help from Singh, he contacted American National in March 2011 to try to learn why Mrs. Walker’s Pamela Walker Policy 1 - #740 and Pamela Walker Policy 2 - #288 disappeared. Walker Depo., Ex. 12 to the Nalty Decl., 84:16-85:5. 5. Mrs. Walker learned Eight Years Ago that She Had No Policies with American National Mrs. Walker testified that she does not have life insurance with American National. Mrs. Walker Depo., Ex. 17 to the Nalty Decl., 18:18-19:15. She learned eight (8) years ago in a conversation with Mr. Singh that her Pamela Walker Policy 1 - #740 and Pamela Walker Policy 2 - #288 were not in force. Id. at 20:4-22:9. Mr. Walker admits that Walker was present during this conversation with Singh. Id. at 30:2-13 &55:22-56:7. From 8 years ago forward it was Mrs. Walker’s understanding that she did not have life insurance with American National. Id. at 30:19- 22. She felt that she was placed in hardship by not having life insurance policies. Id. at 34:8-18. 6. Walker had Difficulty Recalling Events Because They Took Place 10 Years Ago Walker had difficulty recalling events because they took place 10 years ago. Walker testified that he was having difficulty remembering what was enclosed in a letter “because it’s been over 10 years, man. I’m 55 years old. My memory is not what it used to be.” Walker Depo., Ex. 12 to the Nalty Decl., 71:7-13. He stated again that “It’s too late for that man. It’s ten years ago. It’s hard to remember stuff ten years ago.” Id. at 76:2-4. III. LEGAL ANALYSIS A. Policy Ownership It is undisputed that Pamela Walker Policy 2 - #288 and Pamela Walker Policy 1 - #740 are owned by Mrs. Walker. Smith Decl., ¶¶ 3 & 5. Therefore, any claims for relief that arise out of these Policies belong to her as the owner of the contract. Similarly, it is undisputed that Mr. Walker is the owner of Granddaughter VW Policy 2 - #437, Granddaughter VW Policy 1 - # 970, and Granddaughter JW Policy - #023. Id. at ¶¶ 6-8. Any claims for relief that arise out of these Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 18 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION policies belong to him. Mutual Ben. Life Ins. Co. v. Clark, 81 Cal. App. 546, 554 (1927) (“The beneficiary is not a party to the contract and is not the owner thereof.”); Chase v. Leiter, 96 Cal. App. 2d 439, 456 (1950) (“An insurance policy in legal contemplation is property, which can be sold, assigned or bequeathed by the owner thereof.") B. Statute of Limitations Bars Each Claim Based On Plaintiffs’ Facts. 1. Here, The Application of the Statute of Limitations Is a Question of Law The application of the statute of limitations is a question of law when undisputed evidence establishes that a claim for relief is time-barred. Romano v. Rockwell International Inc., 14 Cal. 4th 479, 487 (1996) (“As we declared in Jolly v. Eli Lilly & Co. (1988) 44 Cal. 3d 1103, 1112 ‘While resolution of the statute of limitations issue is normally a question of fact, where the uncontradicted facts established through discovery are susceptible of only one legitimate inference, summary judgment is proper’”). Here, the statute of limitations is applied based on plaintiffs’ deposition testimony. 2. Governing Time Periods The breach of a written contract, declaratory relief based on a written contract, and a claim for relief under B.P. 17200 are governed by the 4-year limitation period under California Code of Civil Procedure (“C.C.P.”) § 337(1). Ginsberg v. Gamson, 205 Cal. App. 4th 873, 883 (2012) (Declaratory Relief); Broberg v. The Guardian Life Ins. Co. of America, 171 Cal. App. 4th 912, 920 (2009) (Section 17200). Plaintiffs’ fifth claim for relief, for violation of I.C. § 790.03, is a statutory liability governed by a 3-year limitation period. C.C.P. § 338(a). Claims for relief for implied contract, bad faith, and negligence are governed by a two-year limitation period under C.C.P. 339. Romano v. Rockwell International, Inc., supra, 14 Cal. 4th at 486 (Implied Contract); Archdale v. American International Specialty Lines Ins. Co., 154 Cal. App. 4th 449, 453 (2007)(“Bad Faith); Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc., 115 Cal. App. 4th 1145, 1154 (2004)(Negligence). 3. Accrual of the Claims for Relief A cause of action accrues “when it is complete with all of its elements—those elements being wrongdoing, harm, and causation.” Pooshs v. Philip Morris USA, Inc., 51 Cal. 4th 788, 797 Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 19 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION (2011). This is true even when the plaintiff is ignorant of any wrong doing. Gutierrez v. Mofid, 39 Cal. 3d 892, 899 (1985). The limitation periods for breach of contract, breach of an implied contract, and declaratory relief accrue at the time of the breach. Romano v. Rockwell Internat., Inc., supra, 14 Cal. 4th at 488 (“A cause of action for breach of contract does not accrue before the time of breach (cites omitted).”); Estate of Fincher, 119 Cal. App. 3d 343, 352 (1981) (“The general rule is that a suit for breach of an implied agreement accrues at the time of the breach.”); Cheske v. Waring, 2010 U.S. Dist. LEXIS 130506, *4, 2010 WL 4916611 (C.D. Cal. 2010). The claim for relief for bad faith accrues when the insurer unreasonably denies a claim for benefits. Badell v. Celtic Life Ins. Co., 159 F. Supp. 2d 1186, 1192 (N.D. Cal. 2001) (“Thus, plaintiff’s bad faith cause of action accrued when Celtic unreasonably denied her benefits). Plaintiff’s claim for violation of B.P. § 17200, since it is based on an alleged misrepresentation, accrues “only when a reasonable person would have discovered the factual basis for a claim.” Broberg v. The Guardian Life Ins. Co. of America, supra, 171 Cal. App. 4th at 920-921. 4. Discovery Rule “The most important exception to the general rule regarding accrual of a cause of action is the discovery rule.” Nguyen v. Western Digital Corp., 229 Cal. App. 4th 1522, 1538 (2014). Under this rule, “it is the discovery of facts, not their legal significance that starts the statute.” Jolly v. Eli Lilly & Co., supra, 44 Cal. 3d at 1113. Thus, “[i]t is irrelevant that the plaintiff is ignorant of his legal remedy or the legal theories underlying his cause of action.” Gutierrez v. Mofid, supra, 39 Cal. 3d at 898; Stella v. Asset Management Consultants, Inc., 8 Cal. App. 5th 181, 192 (2017) (“Under the discovery rule, the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her”). The “discovery rule” is generous to a plaintiff in that it postpones the accrual date. Nguyen v. Western Digital Corp., supra, 229 Cal. App. 4th at 1538 (“The most important exception to [the] general rule regarding accrual of a cause of action is the ‘discovery rule,’ under which accrual is postponed until the plaintiff discovers, or has reason to discover, the cause of action. Discovery of the cause of action occurs when the plaintiff has reason to suspect a factual basis for Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 20 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION the action (Cites & Quotes Omitted).”) 5. Presumptive Knowledge “A plaintiff is charged with ‘presumptive’ knowledge so as to commence the running of the statute once he or she has notice or information of circumstances to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to his investigation.” McCoy v. Gustafson, 180 Cal. App. 4th 56, 59 (2004). “Possession of ‘presumptive’ as well as ‘actual’ knowledge will commence the running of the statute. The applicable principle has been expressed as follows: when the plaintiff has notice or information of circumstances to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to his investigation the statute commences to run (Quotes & Cites Omitted).” Sanchez v. South Hoover Hospital, 18 Cal. 3d 93, 101 (1976). 6. The Complaint brought by Mrs. Walker is Time-Barred It is undisputed that Mrs. Walker is the owner of Pamela Walker Policy 2 - #288 and Pamela Walker Policy 1 - #740 and is insured under these Policies. Her claims for relief against American National are based on the contention that she still should have coverage under the Policies and that they still are in force. The Complaint, ¶¶ 11, 12, 21 & 81. Mrs. Walker’s claims for relief accrued eight (8) years ago, February 2010. She testified on February 9, 2018 that she learned 8 years ago from Mr. Singh that she did not have coverage under Pamela Walker Policy 2 - #288 or Pamela Walker Policy 1 - #740. Mr. Walker was present when she had this conversation with Singh. Mrs. Walker felt injured because she had no life insurance coverage. Clearly, 8 years ago, she suspected or should have suspected that she had been injured; the coverage she wanted under Pamela Walker Policy 2 - #288 and Pamela Walker Policy 1 - #740 did not exist. It is undisputed that she claims she knew 8 years ago that someone had done something wrong to her. Stella v. Asset Management Consultants, Inc., supra, 8 Cal. App. 5th at 192. Her claims for breach of a written contract, violation of B.P. 17200, and declaratory relief are governed by a 4-year limitation period; her claim for violation of I.C. § 790.03 is subject to a 3-year limitation period; and her claims for breach of an implied contract, bad faith, and negligence are subject to a 2-years limitation period. She was required to file the Complaint on or before Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 21 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION February 10, 2014 to comply with the longest limitation period of 4 years. Her complaint is time- barred because it was not filed until August 17, 2016. 7. Walker’s Claims for Relief also Are Time-Barred Mr. Walker is the owner of Granddaughter VW Policy 1 - #970, Granddaughter VW Policy 2 - #437, and Granddaughter JW Policy #023. He testified that all of the Policies that are the subject of the Complaint were stolen by American National because he was told that they did not exist. Walker claims that American National stole six policies. Walker admitted in his deposition testimony that he learned 10-years ago that, in his view, American National stole Granddaughter VW Policy 1 - # 970 in addition to Pamela Walker Policy 2 - #288 and Pamela Walker Policy 1 - #740 which were issued to Mrs. Walker. Walker further testified that Granddaughter JW Policy - #023 was stolen by American National. Walker submitted a Cash Surrender Request for Granddaughter JW Policy - #023 on January 14, 2011 so the claimed theft, if at all, took place in January 2011. Finally, Walker testified that he was forced in December 2010 to purchase Granddaughter VW Policy 2 - #437 for his granddaughter V.W because American National could not find Granddaughter VW Policy 1 - # 970. Walker also testified that all he wanted to do was surrender the four life insurance policies on his children. However, according to Walker, “[w]hen the company first made a mistake ten years ago it all went haywire.” Walker Depo., Ex. 12 to the Nalty Decl., 48:14-15. He testified about mistake after mistake American National made 10 years ago. He signed a January 2011 Cash Surrender Request for Granddaughter JW Policy - #023 and Granddaughter VW Policy 1 - # 970 covering his grandchildren even though he only wanted to surrender the policies covering his children. He believed that “somebody in your company doing some fraud.” Id. at 43:15-17. Based on this undisputed evidence, Walker’s claims for relief on Granddaughter VW Policy 1 - # 970 accrued in February 2008 as he testified in February 2018 that he learned that Granddaughter VW Policy 1 - # 970 was stolen 10 years ago. Any claims for relief based on Granddaughter VW Policy 2 - #437 accrued in December 2010 when Walker was forced, as he claims, to purchase Granddaughter VW Policy 2 - #437 to replace Granddaughter VW Policy 1 - # 970 which had been stolen. Any claims for relief based on Granddaughter JW Policy - #023 Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 22 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION accrued, if at all, no later than January 2011 when Granddaughter JW Policy - #023 was allegedly “stolen” by American National when Walker submitted a Cash Surrender Request for the Granddaughter JW Policy - #023. Moreover, during the period February 2008 through January 2011, Walker concluded that American National had committed fraud and stolen policies from him and his wife. Walker suspected or should have suspected that he had been injured by American National’s wrongdoing. Stella v. Asset Management Consultants, Inc., supra, 8 Cal. App. 5th at 192. He certainly had “reason to suspect a factual basis’ for the action.” Nguyen v. Western Digital Corp., supra, 229 Cal. App. 4th at 1538. He, himself, claims actual and presumptive knowledge of wrong doing in that he had information that would put a reasonable person on inquiry notice. McCoy v. Gustafson, supra, 180 Cal. App. 4th at 59. Walker’s claims for breach of a written contract, violation of B.P. 17200, and declaratory relief are governed by a 4-year limitation period; his claim for violation of I.C. § 790.03 is subject to a 3-year limitation period; and his claims for breach of an implied contract, bad faith, and negligence are subject to a 2-years limitation period. Using the longest limitation period of 4 years, and the January 2011 accrual date, Walker was required to file his complaint by January 2015. Walker’s complaint is time-barred as he did not file it until August 17, 2016. C. Breach of Contract Claims Are Nonexistant 1. Granddaughter VW Policy 2 - #437, Pamela Walker Policy 2 - #288, & Pamela Walker Policy 1 - #740 Still Are In Force and No Claim For Benefits has Been Made Under These Policies. The elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff. Oasis West Realty, LLC v. Goldman, 51 Cal. 4th 811, 821 (2011). A contract cannot be breached unless the time of performance has arrived or there is an anticipatory breach. County of Solano v. Vallejo Redevelopment Agency, 75 Cal. App. 4th 1262, 1275-1276 (1999) (“While an actual breach of contract cannot occur until the time for performance has arrived, an anticipatory repudiation of the contract, or anticipatory breach, occurs before performance is due under the contract and results in a total breach”). Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 23 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION However, a life insurance policy is a unilateral contract in that the insurer has a future obligation to pay money and is the only contractual party who can breach the contract for the failure to pay this future benefit. The insured has no contractual obligation to pay the premium as the failure to pay the premium simply causes the policy to lapse. There can be no anticipatory breach of a unilateral contract. John Hancock Mut. Life Ins. Co. v. Cohen, 254 F.2d 417, 426 (9th Cir. 1958) (“We conclude the general rule to be that the doctrine of anticipatory breach has no application to suits to enforce contracts for future payment money only, in installments or otherwise.”); Dane-Elec Corp. USA v. Bodokh, 2015 U.S. Dist. LEXIS 186843, *5 (C.D. Cal. 2015) (“As to the first argument, the Court agrees with Defendant that under California law, there can be no anticipatory breach of a unilateral contract.”). Here, no claim for benefits has been made under Granddaughter VW Policy 2 - #437 owned by Walker and Pamela Walker Policy 2 - #288 and Pamela Walker Policy 1 - #740 owned by Mrs. Walker. Any of American National’s contractual obligations to pay a death benefits have not materialized. Accordingly, there can be no breach of contract action based on Granddaughter VW Policy 2 - #437, Pamela Walker Policy 2 - #288, and Pamela Walker Policy 1 - #740 as the Policies have not been breached. 2. Granddaughter JW Policy - #023 & Granddaughter VW Policy 1 - #970 Walker submitted Cash Surrender Requests on Granddaughter JW Policy - #023 and Granddaughter VW Policy 1 - #970 and thereafter stopped paying the premium on these Policies. In each instance, Walker submitted to American National a Cash Surrender Request and the Policies subsequently lapsed as Walker decided not to pay the premium. Walker cannot state a claim for relief for breach of contract on insurance policies that are not in force, due to his admitted decision to surrender them. Accordingly, no breach of contract claim for relief can be based on Granddaughter JW Policy - #023 and Granddaughter VW Policy 1 - #970. D. Breach of Implied In Fact Contract Claim Is Legally Insupportable Plaintiff’s second claim for relief is for implied-in-fact contract. The court in Division of Labor Law Enforcement v. Transpacific Transportation Co., 69 Cal. App. 3d 268, 275 (1977) explained that “[a]s to the basic elements, there is no difference between an express and implied Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 24 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION contract. While an express contract is defined as one, the terms of which are stated in words (Civ. Code, § 1620), an implied contract is an agreement, the existence and terms of which are manifested by conduct (Civ. Code, § 1621).” See also, Imperial Irrigation Dist. v. Cal. Indep. Sys. Operator Corp., 2016 U.S. Dist. LEXIS 101258, *28 (S.D. Cal. 2016) (“An implied-in-fact contract shares the same elements as an express contract, except that offer and acceptance are implied from the parties’ conduct.”). Therefore, plaintiffs’ evidence of an implied in fact contract must establish (1) the existence of a contract; (2) performance by the plaintiff or excuse for nonperformance; (3) breach by the defendant; and (4) damages. First Commercial Mortg. Co. v. Reece, 89 Cal.App.4th 731, 745, (2001). Contract formation requires mutual consent, which cannot exist unless the parties agree on the same thing in the same sense. Bustamante v. Intuit, Inc., 141 Cal.App.4th 199, 208 (2006); Cal. Civ. Code §§ 1580, 1550, 1565, Sateriale v. R.J. Reynolds Tobacco Co., 697 F.3d 777, 789 (9th Cir. Cal. 2012). “Mutual assent is determined under an objective standard applied to the outward manifestations or expressions of the parties, i.e., the reasonable meaning of their words and acts, and not their unexpressed intentions or understandings (Emphasis Added).” Alexander v. Codemasters Group Limited, 104 Cal.App.4th 129, 141 (2002). Moreover, “[u]nder California law, a contract will be enforced if it is sufficiently definite (and this is a question of law) for the court to ascertain the parties’ obligations and to determine whether those obligations have been performed or breached.” Ersa Grae Corp. v. Fluor Corp., 1 Cal.App.4th 613, 623 (1991). Finally, plaintiffs must establish that there was consideration for the implied in fact contract. Cal. Civ. Code §§ 1550 & 1565. There is no evidence that there was an implied in fact contract between American National and either Mrs. Walker or Walker. In fact, it is undisputed that the only contracts between plaintiffs and American National are the insurance policies issued by American National. Plaintiffs allege that the implied in fact contract arose by plaintiffs paying premiums and American National agreed to provide the insurance policies referred to in the Complaint. The Complaint, ¶¶ 50-52. However, it is undisputed that the payment of premium was the consideration for the written insurance policies and the insurance was provided under the written insurance policies. Accordingly, plaintiffs’ second cause of action must be dismissed with prejudice. Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 25 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION E. Plaintiffs’ Contract Claims Fail Because They Have No Recoverable Damages Plaintiffs admit in their response to interrogatory 17 that they are making the following damage claims: “Plaintiffs paid over $102,000 in life insurance policy payments for the past 30 years, emotional distress, attorney’s fees, and punitive damages.” In response to interrogatory 19, plaintiffs’ state that “[t]he insurance policies set forth above, receipts for payment on the policies for the past 30 + years.” American National’s interrogatories served on Walker, Nalty Decl., Ex. 19, interrogatories 17 & 19; American National’s interrogatories served of Ms. Walker, Ex. 21 to the Nalty Decl., interrogatories 17 & 19; Walker’s response to interrogatories 17 & 19, Ex.20 to the Nalty Decl., and Mrs. Walker’s response to interrogatories 17 & 19, Ex. 22 to the Nalty Decl. Even if plaintiffs somehow were able to prove breach of the life insurance policies at issue, they would not be entitled to these damages. A contractual breach entitles them only to the life insurance benefit owed under these policies. Plaintiffs cannot recover all the premium they allegedly paid to American National for 30 years based on the alleged breach of five insurance policies. Emotional distress damages are not recoverable under a breach of contract claim for relief. Saari v. Jongordon Corp., 5 Cal. App. 4th 797, 803 (1992) (“Thus, a rule has evolved that damages for emotional distress are generally not recoverable in an action for breach of contract.”); Selden v. Dinner, 17 Cal. App. 4th 166, 172 (1993) (“We begin our analysis of the issues raised in this case by agreeing with the trial court’s ruling preventing Selden from recovering emotional distress damages as part of her breach of contract claim.”); Dao v. Liberty Life Assur. Co., 2015 U.S. Dist. LEXIS 137899, *6-7 (N.D. 2015). In addition, attorney’s fees and punitive damages are not recoverable under a claim for breach of contract. Olson v. Arnett, 113 Cal. App. 3d 59, 67 (1980) (“However, to allow respondents to recover their attorney’s fees would be contrary to the well- established rule that in the absence of a special statute or a contractual provision for attorney’s fees, the prevailing party is not entitled to recover attorney’s fees from his opponent.”); Cal. Fair Plan Ass’n v. Political, 220 Cal. App. 3d 1612, 1617 (1990). To state a claim for relief for breach of contract and breach of an implied in fact contract, plaintiffs must have evidence of damages caused by the breach that are legally recoverable. Oasis West Realty, LLC v. Goldman, 51 Cal. 4th 811, 821 (2011). As a matter of law, the damages Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 26 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION plaintiffs’ claim in this action are not recoverable under a breach of contract claim. Accordingly, plaintiffs first and second claims for relief must be dismissed with prejudice. F. Breach of Implied Covenant of Good Faith and Fair Dealing Claims Fail 1. There Were No Benefits Withheld under the Policies Plaintiff’s third claim for relief is for bad faith. To maintain this claim, plaintiffs must prove two elements: “(1) benefits due under the policy must have been withheld; and (2) the reason for withholding benefits must have been unreasonable or without proper cause.” Love v. Fire Ins. Exch., 221 Cal.App.3d 1136, 1151 (1990); Tetravue Inc. v. St. Paul Fire & Marine Ins. Co., 2018 U.S. Dist. LEXIS 36744, *12 (S.D. Cal. 2018) (“Bad faith occurs where the insurer withholds insurance benefits unreasonably and without proper cause.”) Moreover, there can be no bad faith unless benefits are owed under the insurance policy. The California Supreme Court in Waller v. Truck Ins. Exchange, Inc., 11 Cal. 4th 1, 36 (1995) held that: It is clear that if there is no potential for coverage and, hence, no duty to defend under the terms of the policy, there can be no action for breach of the implied covenant of good faith and fair dealing because the covenant is based on the contractual relationship between the insured and the insurer. (Love v. Fire Ins. Exchange, supra, 221 Cal. App. 3d 1136, 1151-1153.) As the Love court observed, its “conclusion that a bad faith claim cannot be maintained unless policy benefits are due is in accord with the policy in which the duty of good faith is [firmly] rooted.” (Id. at p. 1153.) The legal principle is based on general contract law and the long-standing rule ‘that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.’ Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1034 (9th Cir. 2008) (“California law is clear, that without a breach of the insurance contract, there can be no breach of the implied covenant of good faith and fair dealing.”); Am. Med. Int’l v. Nat’l Union Fire Ins. Co., 244 F.3d 715, 719 (2001) (“However, the California Supreme Court’s holding in Waller provided that where there is no coverage of any kind under an insurance contract, the insured may not hold the insurer liable for breach of the implied covenant of good faith and fair dealing.”); Secard Pools, Inc. v. Kinsale Ins. Co., 2017 U.S. Dist. LEXIS 47871, *16 (C.D. Cal. 2017) (“Likewise, where there is no breach of the contract, there can be no breach of the implied covenant.”); Marentes v. State Farm Mut. Auto. Ins. Co., 224 F. Supp. 3d 891, 917 (N.D. Cal. 2016) (“Indeed, the implied Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 27 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION covenant of good faith and fair dealing only prevents a party from acting in bad faith to frustrate the contract’s actual benefits.”); Grebow v. Mercury Ins. Co., 241 Cal. App. 4th 564, 581 (2015) (“We have held that the Grebows were not entitled to benefits. Thus, the requirements for a breach of the implied covenant of good faith and fair dealing have not been met.”); Brehm v. 21st Century Ins. Co., 166 Cal. App. 4th 1225, 1235 (2008) (“As a general rule, as the trial court recognized, there can be no breach of the implied covenant of good faith and fair dealing if no benefits are due under the policy.”) Plaintiffs cannot maintain a bad faith claim against American National. Mrs. Walker’s Pamela Walker Policy 1 - #740 and Pamela Walker Policy 2 - #288, and Walker’s Granddaughter VW Policy 2 - #437, still are in force and American National’s obligations to pay life insurance benefits under these policies has not arisen. Similarly, Walker signed Cash Surrender Requests for Granddaughter JW Policy - #023 and Granddaughter VW Policy 1 - #970. These policies are no longer in force at Walker’s express request. Therefore, these policies cannot be the basis for a claim for relief for bad faith. Accordingly, Plaintiffs’ third claim for relief must be dismissed with prejudice. 2. There is a Genuine Dispute Over Coverage Precluding Bad Faith The Ninth Circuit has long recognized that the existence of a genuine coverage dispute precludes an insured from pursuing a claim for bad faith. Guebara v. Allstate Ins. Co., 237 F.3d 987, 992 (9th Cir. 2001) (“The key to a bad faith claim is whether or not the insurer’s denial of coverage was reasonable. Under California law, a bad faith claim can be dismissed on summary judgment if the defendant can show that there was a genuine dispute as to coverage.”); Feldman v. Allstate, 322 F.3d 660, 669 (9th Cir. 2003) (“Allstate correctly asserts that, under the Ninth Circuit’s interpretation of California law, a genuine dispute may concern either a reasonable factual dispute or an unsettled area of insurance law.”); Bayes v. State Farm Gen. Ins. Co., 2017 U.S. Dist. LEXIS 170195, *14-15 (C.D. Cal 2017); Adams v. Allstate Ins. Co., 187 F. Supp. 2d 1207, 1214 (C.D. 2002) (“The ‘genuine dispute’ doctrine is well settled and often used in insurance bad faith actions brought under California law. The Ninth Circuit has frequently affirmed summary judgment orders in bad faith claims where the trial court’s ruling was based on a genuine dispute over insurance coverage.”) Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 28 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION The California Supreme Court, in Wilson v. 21st Century Ins. Co., 42 Cal. 4th 713, 723 (2007), held that the genuine issue rule in the context of bad faith claims allows a trial court to grant summary judgment when it is undisputed or indisputable that the basis for the insurer’s denial of benefits was reasonable. Wilson v. 21st Century Ins. Co., supra, 42 Cal. 4th at 724. Pamela Walker Policy 1 - #740, Pamela Walker Policy 2 - #288, and Granddaughter VW Policy 2 - #437 still are in force and have no loans against them. American National forgave all policy loans even though plaintiffs did not refund the loan amounts. There is no dispute concerning these policies let alone a genuine dispute. It is undisputed that Walker signed Cash Surrender Requests for Granddaughter JW Policy - #023 and Granddaughter VW Policy 1 - #970, these were submitted to American National, and no additional premium was paid on these policies. Certainly, these facts create a genuine issue concerning the status of these policies, precluding plaintiffs from bringing a claim for relief for bad faith based on these polices. According, under the genuine dispute doctrine, plaintiffs’ third claim for relief for bad faith must be dismissed with prejudice. G. The Relationship Between an Insurer and an Insured is Contractual; There is No Claim for Negligent Handling or Denial of an Insurance Claim The relationship between plaintiffs and American National is governed by the terms of the life insurance policies that are in force and the implied covenant of good faith and fair dealing that gives rise to a tort claim. No other tort claims arise out of the contractual relationship between the insurer and the insured. Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566, 573 (1973) (“We explained that this duty [of good faith and fair dealing], the breach of which sounds in both contract and tort. . .”). The Court, in Cates Construction, Inc. v. Talbot Partners, 21 Cal. 4th 28, 43-44 (1999), held that: Because the covenant of good faith and fair dealing essentially is a contract term that aims to effectuate the contractual intentions of the parties, compensation for its breach has almost always been limited to contract rather than tort remedies. At present, this court recognizes only one exception to that general rule: tort remedies are available for a breach of the covenant in cases involving insurance policies (quotes and cites omitted). Accordingly, the Court, in Diamond v. State Farm Mut. Auto. Ins. Co., 2010 U.S. Dist. LEXIS 75074, *19-20, 2010 WL 2904640 (E.D. Cal. 2010), quoting Unical Enterprises, Inc. v. The American Insurance Co., et al., No. CV 05-3511 CBM (PJWx), 2005 WL 6133910 (C.D. Cal. Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 29 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION Sept. 12, 2005), held that: Under California law negligence is not among the theories of recovery generally available against insurers” Sanchez v. Lindsey Morden Claims Services, Inc., 72 Cal. App.4th 249, 254, 84 Cal. Rptr. 2d 799 (Cal. Ct. App.1999) (emphasis in original); Tento Int’l, Inc., v. State Farm Fire & Cas. Co., 222 F.3d 660, 664 (9th Cir.2000) (noting unlikely viability of claim for negligent handling of insurance claim because California courts do not generally recognize a claim of negligence against insurers). Since the relationship between the insured and the insurer under such circumstances closely approximates that of principal and agent or beneficiary and trustee, most courts have based liability upon bad faith rather than upon negligence. Brown v. Guarantee Insurance Co., 155 Cal. App.2d 679, 687, 319 P.2d 69 (Cal. Ct. App.1957). Brown v. Guarantee Ins. Co., 155 Cal. App. 2d 679, 687 (1957) (“Because the relationship between the insured and the insurer under such circumstances closely approximates that of principal and agent or beneficiary and trustee, most courts have based liability upon had faith rather than upon negligence.”); Ivy v. Pacific Auto. Ins. Co., 156 Cal. App. 2d 652, 659 (1958) (“There is some conflict as to whether liability in such cases is predicated on negligence or upon bad faith. (Cite Omitted). California has recently aligned itself with the jurisdictions that apply the bad faith test.”) Here, the relationship between plaintiffs and American National is governed by the contractual terms of the life insurance policies that are in force. Accordingly, plaintiffs’ fourth claim for relief for negligence must be dismissed with prejudice. H. There Is No Private Right of Action under Insurance Code § 790.03 It has been the law in California for almost 30 years that there is no private right of action under Insurance Code Section 790.03. Moradi-Shalal v. Fireman’s Fund Ins. Companies, 46 Cal. 3d 287, 313 (1988) (“Pending the finality of this opinion, no private action may be brought under section 790.03, subdivision (h), unless a final judicial determination of the insured’s liability has been first obtained. Effective upon finality of this opinion, Royal Globe [Royal Globe Ins. Co. v. Superior Court, 23 Cal. 3d 880 1979)] is overruled.”); Waller v. Truck Ins. Exchange, Inc., supra, 11 Cal. 4th at 35; Zephyr Park v. Superior Court, 213 Cal. App. 3d 833, 840 (1989). Accordingly, plaintiffs’ fifth claim for relief for violation of I.C § 790.03(h) must be dismissed with prejudice. I. Violation of B.P. 17200 Plaintiffs’ sixth cause of action, for violation of B.P., also fails as a matter of law. The remedies under B.P. 17200 are limited to equitable relief, including injunctive relief, and the Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 30 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION restoration to “any person in interest of any money or property which may have been acquired by means of such unfair competition.” Cal. Bus. & Prof. Code § 17203. California courts have held repeatedly that a claim under § 17200 is “not an all-purpose substitute for a tort or contract action,” and that “[d]amages are not available under section 17203.” Cortez v. Purolator Air Filtration Prods. Co., 23 Cal. 4th 163, 173 (2000); see also Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1150 (2003) (“We reaffirm that an action under the UCL [§ 17200] is not an all-purpose substitute for a tort or contract action.”); Napolean Banks v. GMAC Mortg. Corp., 2004 U.S. Dist. LEXIS 32022, *16 (C.D. Cal. 2004) (“Under §17200, monetary damages aside from restitution are not authorized unless the case is a class action.”); Bay Area Roofers Health v. Sun Life Assur. Co., 73 F. Supp. 3d 1154, 1172 (N.D. Cal. 2014). Moreover, since the alleged conduct that is the subject of the Complaint is past conduct, 10 years in the past in fact, plaintiffs are not entitled to injunctive relief. Plaintiffs cannot obtain injunctive relief based on past conduct. O’Shea v. Littleton, 414 U.S. 488, 495-496, 94 S. Ct. 669, 676 (1974) (“Past exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief, however, if unaccompanied by any continuing, present adverse effects.”). “If there is not any reasonable possibility of future impending harm based on the challenged conduct, then a plaintiff lacks standing to pursue injunctive relief.” Schwarz v. Meinberg, 2016 U.S. Dist. LEXIS 189704, *9 (C.D. Cal. 2016); Davis v. Farmers Ins. Exchange, 245 Cal. App. 4th 1302, 1326-1327 (2016) (“In order to grant injunctive relief under the UCL, there must be a threat that the wrongful conduct will continue. ‘Injunctive relief will be denied if, at the time of the order of judgment, there is no reasonable probability that the past acts complained of will recur.”) In addition, to have standing to seek injunctive relief with a case and controversy in District Court, plaintiff must show “real and immediate threat of repeated injury.” See also, Fortyune v. Am. Multi-Cinema, Inc., 364 F.3d 1075, 1081 (9th Cir. 2004); Barrilleaux v. Mendocino County, 61 F. Supp. 3d 906, 917 (N.D. Cal. 2014) (“To seek injunctive relief, a plaintiff must also demonstrate a real and immediate threat of repeated injury in the future.”) Here, the injury that Walker complains of is that the policies were stolen 10 years ago. Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 31 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION Ms. Walker testified that she lost her policies eight years ago. In both cases, there is absolutely no evidence to support the existence of a real or immediate threat of repeated injury in the future. Plaintiffs’ cannot recover damages. According, their B.P. 17200 claim must be dismissed with prejudice. J. Declaratory Relief “Plaintiffs must also establish a likelihood of imminent injury to present a ripe claim for declaratory relief.” Stevens v. Harper, 213 F.R.D. 358, 366 (E.D. Cal. 2002). Plaintiffs cannot base their claim for declaratory relief on past conduct. Khalsa v. Hali, 2014 U.S. Dist. LEXIS 108685, *4, 2014 WL 3883713 (N.D. Cal. 2014) (“Because no basis for declaratory relief exists where only past wrongs are involved and one single judgment will likely resolve the parties’ dispute without any impact on future conduct, and a declaratory relief action is not the proper procedure to determine the sufficiency of a party’s legal defenses, dismissal of Defendants’ claim is warranted.”); Britz Fertilizers, Inc. v. Bayer Corp., 665 F. Supp. 2d 1142 (E.D. Cal. 2009) (“The requested declarations all deal with purported breaches by Bayer which occurred in the past. Britz’s declaratory relief is thus not prospective, would not enable the parties to shape their conduct so as to avoid a breach, and is not appropriate (for declaratory relief).”) Here, the claimed conduct at issue is very much in the past. Walker’s policies were allegedly stolen from him 10 years ago and Ms. Walker lost her policies 8 years ago. They both state consistently in their deposition testimony that the issues that are the subject of this matter arose 10 years ago according to Walker and eight years ago according the Ms. Walker. Accordingly, there is no basis for a declaratory relief claim for relief. K. Plaintiffs’ Claim for Punitive Damages Must Be Dismissed Punitive damages are a windfall recovery. College Hospital, Inc. v. Sup. Ct., 8 Cal.4th 704, 712 (1994). Conduct that warrants punitive damages is akin to criminal conduct that must be punished for the good of society. White v. Ultramar, 21 Cal.4th 563, 569 (1999). Thus, plaintiffs only can prove entitlement to punitive damages when “the defendant’s acts are reprehensible, fraudulent or in blatant violation of law or policy. The mere carelessness or ignorance of the defendant does not justify the imposition of punitive damages.” Flyer’s Body Shop Profit Sharing Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 32 of 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25 Case No. 4:16-cv-06255-HSG NOTICE OF MOTION AMD MEMO. IN SUPPORT OF AMERICAN NATIONAL‘S MOTION FOR SUMMARY JUDGMENT, PARTIAL SUMMARY JUDGMENT, AND SUMMARY ADJUDICATION Plan v. Ticor Title Ins. Co., 185 Cal.App.3d. 1149, 1154 (1986) (citations omitted). On summary judgment, plaintiffs ultimately must establish by clear and convincing evidence that they are entitled to punitive damages. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986); see also American Airlines v. Sheppard, Mullin, 96 Cal. App. 4th 1017, 1049 (2002) (“[W]here the plaintiff’s ultimate burden of proof will be by clear and convincing evidence, the higher standard of proof must be taken into account in ruling on a motion for summary judgment or summary adjudication. . .”) Pamela Walker Policy 1 - #740, Pamela Walker Policy 2 - #288, and Granddaughter VW Policy 2 - #437 still are in force and have no loans against them. It is undisputed that Walker signed Cash Surrender Requests for Granddaughter JW Policy - #023 and Granddaughter VW Policy 1 - #970, these were submitted to American National, and no additional premium was paid on these policies. There is no clear and convincing evidence of malice, oppression, or fraud that can support a claim for punitive damages in this matter. According, plaintiffs’ claim for punitive damages must be dismissed with prejudice. IV. CONCLUSION American National is entitled to summary judgment in this matter for all the reasons stated above. DATED: March 21, 2018 OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. By: /s/ Sean P. Nalty Sean P. Nalty Attorneys for Defendant AMERICAN NATIONAL INSURANCE COMPANY 33269950.1 Case 4:16-cv-06255-HSG Document 54 Filed 03/21/18 Page 33 of 33