Joseph v. Am. Gen. Life Ins. Co.

495 F.Supp.3d 953

Joel D. JOSEPH, Plaintiff,

v.AMERICAN GENERAL LIFE INSURANCE COMPANY, Defendant.

Case No.: 20-cv-00831-GPC-DEB

United States District Court, S.D. California.

Signed October 20, 2020

Joel D. Joseph, La Jolla, CA, pro se.

Jodi K. Swick, McDowell Hetherington LLP, Oakland, CA, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS WITH PREJUDICE

[ECF No. 6]

Gonzalo P. Curiel, United States District Judge Before the Court is Defendant American General Life Insurance Company's Motion to Dismiss Plaintiff's Complaint pursuant to Federal Rules of Civil Procedure ("FRCP") 12(b)(6). ECF No. 6. Based on the Complaint, moving papers, related documents, and applicable law, the Court GRANTS Defendant's Motion WITH PREJUDICE .

I. BACKGROUND

A. Relevant Factual Allegations

Plaintiff's father, Mr. Harold Joseph ("Mr. H. Joseph"), had purchased life insurance policy number A10107470L ("Policy") from Defendant on November 15, 1993—when Mr. H. Joseph was seventy-two years old and suffering from Alzheimer's Disease. Compl., ECF No. 1, ¶¶ 7, 8. The face amount of the policy was $3,261,392.00 when issued, which decreased to $2,086,044.00 at the time Plaintiff filed the Complaint. Id. ¶ 9. While Mr. H. Joseph understood that the Policy would pay the beneficiaries on his death, such was not the case—both Mr. H. Joseph and his wife, Ms. Bea Joseph ("Ms. B. Joseph"), must pass away. Id. ¶ 10. Further, if either live to be over 100 years old, the Policy would never pay off. Id. ¶ 11. Mr. H. Joseph passed away on January 29, 2009, and Ms. B. Joseph passed away on August 26, 2018. Id. ¶¶ 12, 13.

Since Mr. H. Joseph's passing, the Harold Joseph Life Insurance Trust ("Trust") has paid more than $300,000.00 in premium payments, some from the Policy's cash value and some from Plaintiff's personal funds. Id. ¶ 14. On or around November 7, 2013, Plaintiff made a "timely" $15,000 premium payment toward the Policy from his personal assets. Id. ¶ 23, 24. However, Defendant "cashed the payment and then sent a ‘refund’ check to [P]laintiff." Id. ¶¶ 24. Defendant then canceled the Policy.¹ See id. ¶¶ 3, 42.

In general, Plaintiff alleges that Defendant employs a "common and regular practice" of omitting and concealing the option of a "life settlement." Id. ¶ 16. A life settlement is when the seller of an insurance policy receives more than the policy's cash surrender value but less than its death benefit, an "attractive option" for elder citizens (including Plaintiff) who do no wish to continue the insurance. Id. ¶ 15.

B. Prior Lawsuits

Prior to this action, Plaintiff filed two other lawsuits: first in Florida ("Florida Action"), then in California ("California Action"). On December 2, 2013, Plaintiff initiated a complaint in the U.S. District Court for the Southern District of Florida, Joseph v. Bernstein , No. 1:13-cv-24355-CMA (S.D. Fla.). Def.’s Req. for Judicial Notice ("RJN")² Ex. 10, ECF No. 7-11. In the Florida Action, Plaintiff asserted claims for: (1) violating the Racketeer Influenced and Corrupt Organizations Act ("RICO") and the Securities and Exchange Act when Plaintiff could not sell the insurance policy in 2009 and 2010; (2) violating the Florida Unfair Trade Practices Act for failing to explain that the policy would become worthless if the insureds survived past 100, and that the policy is difficult (if not impossible) to sell; (3) elder abuse in violation of Florida's Social Welfare Law by selling Mr. H. Joseph a policy that he did not understand nor want; and (4) fraud for misrepresenting to Mr. H. Joseph that his children would receive benefits on his death. RJN Ex. 12, ECF No. 7-13 at 4–14.

The court dismissed the case, which was affirmed by the U.S. Court of Appeals for the Eleventh Circuit, RJN Ex. 14, ECF No. 7-15, with the petition for en banc hearing denied. Joseph v. Bernstein , No. 14-13989 (11th Cir.). The U.S. Supreme Court denied Plaintiff's petition for a writ of certiorari, Joseph v. Bernstein , 577 U.S. 1103, 136 S. Ct. 902, 193 L.Ed.2d 792 (2016). RJN Ex. 15, ECF No. 7-16.

Subsequently, on January 20, 2016 Plaintiff filed a complaint in the Superior Court of California, County of Los Angeles, which Defendant filed for removal to the U.S. District Court for the Central District of California on February 23, 2016, Joseph v. Am. Gen. Life Ins. Co. , No. 2:16-cv-01245-SJO-GJS (C.D. Cal.). RJN Ex. 16, ECF No. 7-17. In the California Action, Plaintiff asserted claims for: (1) violating the California Consumer Legal Remedies Act ("CLRA") as Defendant "inserted unconscionable provisions in the insurance contract"; (2) financial abuse of an elder, in which "Defendants took, secreted, appropriated, obtained, or retained Plaintiff's personal property for a wrongful use and with intent to defraud[ b]y accepting insurance premiums and then canceling the policy for no stated reason"; and (3) unlawful, unfair, and fraudulent business practices "by discouraging, failing to inform and/or concealing from Plaintiff the option of a life settlement when presenting them with options regarding their life insurance policies." Id. at 25–28.

Ultimately, the court dismissed Plaintiff's California complaint without leave to amend because the court found that Plaintiff's claims were "barred by the doctrine of res judicata, the applicable statute of limitations, or both." RJN Ex. 17, ECF No. 7-18 at 17. The court entered a judgment against Plaintiff pursuant to the dismissal with prejudice. RJN Ex. 18, ECF No. 7-19. Plaintiff appealed, and on May 31, 2017, the U.S. Court of Appeals for the Ninth Circuit affirmed the court's order dismissing the case, Joseph v. Kaye , No. 16-56151 (9th Cir.), RJN Ex. 19, ECF No. 7-20.

C. Procedural History in This Court

On May 1, 2020, Plaintiff filed this Complaint. ECF No. 1. Here, Plaintiff has asserted claims of: (1) violating the CLRA "by inserting unconscionable provisions in the insurance contract"; (2) financial abuse of an elder, in which Plaintiff alleges that "Defendant took, secreted, appropriated, obtained, or retained Plaintiff's personal property for a wrongful use and with intent to defraud[ b]y accepting insurance premiums and then canceling the policy for no stated reason"; (3) unlawful, unfair, and fraudulent business practices "by discouraging, failing to inform and/or concealing from Plaintiff the option of a life settlement when presenting them with options regarding their life insurance policies"; (4) wrongfully refusing to reinstate policy based on the allegations made previously; (5) wrongfully canceling the policy based on the allegations made previously and by failing to provide "proper and legal notice of cancellation"; and (6) unjust enrichment for Defendant's "misappropriation of all payments made on the policy," "wrongful cancellation[,] and wrongful refusal to reinstate the policy." Compl., ECF No. 1 at 6–10.

On July 7, 2020, Defendant moved to dismiss the case pursuant to FRCP 12(b)(6), based in part on the doctrine of res judicata, the statute of limitations, or both—similar to what was argued in the California Action. ECF No. 6. The RJN was filed in support of Defendant's Motion to Dismiss as well. ECF No. 7. Plaintiff responded in opposition, both to the Motion and the RJN. ECF Nos. 12, 13. Defendant filed a Reply to Plaintiff's Response to the Motion to Dismiss. ECF No. 14.

II. LEGAL STANDARD

A motion to dismiss pursuant to FRCP 12(b)(6) tests the sufficiency of a complaint. Navarro v. Block , 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted if the complaint lacks a cognizable legal theory or fails to plead essential facts under a cognizable legal theory. Robertson v. Dean Witter Reynolds, Inc. , 749 F.2d 530, 534 (9th Cir. 1984).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 547, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Determining the plausibility of the claim for relief is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679, 129 S.Ct. 1937. In reviewing the motion to dismiss under FRCP 12(b)(6), the court must assume the truth of all factual allegations and construe all inferences from them in the light most favorable to the non-moving party. Thompson v. Davis , 295 F.3d 890, 895 (9th Cir. 2002). However, assertions that are mere "legal conclusions" need not be taken as true just because they are cast in the form of factual allegations. Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ; Adams v. Johnson , 355 F.3d 1179, 1183 (9th Cir. 2004) (discussing that "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss").

If a court finds that plaintiff's claims are barred by res judicata,³ then plaintiff has not stated a claim for relief and the court may dismiss the claim under FRCP 12(b)(6). See Scott v. Kuhlmann , 746 F.2d 1377, 1378 (9th Cir. 1984). Dismissal is also appropriate if it is "apparent on the face of the complaint" that a claim is barred by the applicable statute of limitations.

Von Saher v. Norton Simon Museum of Art at Pasadena , 592 F.3d 954, 969 (9th Cir. 2010).

When ruling on the motion to dismiss, the court may consider the facts alleged in the complaint, documents attached to the complaint, documents relied upon but not attached to the complaint when authenticity is not contested, and matters of which the court takes judicial notice. Lee v. Los Angeles , 250 F.3d 668, 688–89 (9th Cir. 2001). The court need not accept as true "allegations that contradict exhibits attached to the Complaint or matters properly subject to judicial notice, or allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Daniels-Hall v. Nat'l Educ. Ass'n , 629 F.3d 992,...