Negrete v. Allianz Life Ins. Co. of N. Am.

926 F.Supp.2d 1143

Vida F. NEGRETE, as Conservator for Everett E. Ow, an individual and on behalf of all other similarly situated persons, Plaintiff,

v.ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant.

Carolyn B. Healey, an individual, and on behalf of all other similarly situated persons,

v.Allianz Life Insurance Company of North America, Defendant.

Case Nos. CV 05–6838 CAS (MANx), CV 05–8908 CAS (MANx).

United States District Court,

C.D. California,

Western Division.

Feb. 25, 2013.

Andrew S. Friedman, Elaine A. Ryan, Kimberly C. Page, Patricia N. Syverson, Tonna Kaye Farrar, Bonnett Fairbourn Friedman and Balint PC, Phoenix, AZ, Christa L. Collins, Christa L. Collins LLC, J. Andrew Meyer, John A. Yanchunis, Morgan & Morgan, PA, Tampa, FL, Evangeline F. Grossman, Joel A. Cohen, William M. Shernoff, Shernoff Bidart Darras Echeverria LLP, Claremont, CA, Howard David Finkelstein, Mark L. Knutson, Finkelstein & Krinsk, Stephen R. Basser, Barrack Rodos and Bacine, John J. Stoia, Jr., Phong L. Tran, Rachel L. Jensen, Steven M. Jodlowski, Theodore J. Pintar, Robbins Geller Rudman & Dowd LLP, San Diego, CA, Ingrid M. Evans, The Evans Law Firm, San Francisco, CA, Jason Beckerman, Eisner and Frank, Beverly Hills, CA, Michael D. Thamer, Michael D. Thamer Law Offices, Callahan, CA, Wilson F. Green, Battle Fleenor Green Winn and Clemmer LLP, Tuscaloosa, AL, Plaintiff.

Arthur G. Boylan, Elizabeth Wiet Reutter, Lawrence J. Field, Leonard Street and Deinard, Minneapolis, MN, C. Todd Willis, Christopher G. Barnes, Denise A. Fee, Jason A. Morris, Kristin A. Shepard, Roland C. Goss, Raul A. Cuervo, Jorden Burt LLP, Washington, DC, Eric C. Schaffer, Kurtis J. Kearl, Linda B. Oliver, Reed Smith, Thomas Jerome Nolan, Lance A. Etcheverry, Skadden Arps Slate Meagher and Flom LLP, Los Angeles, CA, Frank G. Burt, James F. Jorden, Jeffrey L. Williams, Michael Valerio, Stephen J. Jorden, Jorden Burt LLP, Simsbury, CT, Stephen R. Basser, Barrack Rodos and Bacine, San Diego, CA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S THIRD MOTION FOR SUMMARY JUDGMENT

CHRISTINA A. SNYDER, District Judge.

I. INTRODUCTION

In these related class action cases, plaintiffs Vida F. Negrete (“Negrete”), as conservator for Everett Ow (“Ow”), and Carolyn B. Healey (“Healey”) (collectively, “plaintiffs”), on behalf of themselves and a nationwide class of an estimated 200,000 senior citizens, allege that defendant Allianz Life Insurance Company of North America, Inc. (“Allianz”) conspired with a network of affiliated Field Marketing Organizations (“FMOs”) to induce class members to purchase deferred annuities issued by Allianz by means of misleading statements and omissions regarding the value of those annuities.

Negrete filed suit against Allianz on September 19, 2005, alleging the following claims for relief: (1) violation of the Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. § 1961, et seq. (“RICO”); (2) elder abuse under Cal. Welf. & Inst.Code §§ 15610 et seq. (“§ 15610”); (3) unlawful, unfair and fraudulent business practices under California's Unfair Competition Law (“the UCL”), Cal. Bus. & Prof. Code §§ 17200, et seq.; (4) false and misleading advertising under Cal. Bus. & Prof. Code §§ 17500, et seq. (the “False Advertising Law” or “FAL”); (5) breach of fiduciary duty; (6) aiding and abetting breach of fiduciary duty; and (7) unjust enrichment and imposition of constructive trust. On December 22, 2005, Healey filed suit against Allianz, alleging similar claims for relief. The Court ordered coordination of the two actions as related cases (collectively, “ Negrete ”). On November 21, 2006, 238 F.R.D. 482 (C.D.Cal.2006) the Court granted plaintiffs' motion for class certification as to their nationwide RICO claim, as well as a California-only subclass asserting statutory violations, including the UCL. Negrete Dkt. No. 134 (“Class Order”).

On March 12, 2010, Allianz moved for summary judgment on the RICO claims of certain Negrete class members which it contended were barred by the doctrine of claim preclusion as a result of the final judgment entered in Allianz's favor on January 29, 2010 in Mooney v. Allianz Life Ins. Co. of N. Am., Case No. CV 06–00545, 2010 WL 419962 (D.Minn.) (“Mooney ”). In an order issued August 18, 2010, 2010 WL 4116852 (the “Claim Preclusion Order”), the Court denied Allianz's motion for summary judgment and granted plaintiffs' cross-motion for partial summary judgment on Allianz's affirmative defense of claim preclusion. Claim Preclusion Order at 24.

On June 10, 2011, Allianz filed a renewed motion for summary judgment on the RICO claims. On October 13, 2011, 2011 WL 4852314, the Court denied the motion, finding that disputed issues of material fact precluded summary judgment on the required elements of (1) a RICO enterprise; (2) an injury “by reason of” the conduct constituting the alleged RICO violation; and (3) a RICO conspiracy. Dkt. No. 805 (“MSJ Order No. 2”).

On May 30, 2012, Allianz filed a motion to decertify the nationwide class, a third motion for summary judgment, and a motion for judgment on the pleadings. Dkt. Nos. 828–830. Plaintiffs filed their oppositions on August 14, 2012, Dkt. Nos. 849–851, and defendant replied on October 15, 2012, Dkt. Nos. 885–887. In an order issued December 27, 2012, the Court denied Allianz's motion to decertify the class in full. Dkt. No. 929. Allianz's third motion for summary judgment is presently before the Court. Because the facts underlying this dispute are well-known to the parties and discussed at length in the Court's prior orders, the Court sets forth below only those facts pertinent to this motion, in conjunction with the parties' arguments.

II. LEGAL STANDARDA. Summary Judgment

Summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party has the initial burden of identifying relevant portions of the record that demonstrate the absence of a fact or facts necessary for one or more essential elements of each claim upon which the moving party seeks judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

If the moving party meets its initial burden, the opposing party must then set out specific facts showing a genuine issue for trial in order to defeat the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see alsoFed.R.Civ.P. 56(c), (e). The nonmoving party must not simply rely on the pleadings and must do more than make “conclusory allegations [in] an affidavit.” Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990); see also Celotex, 477 U.S. at 324, 106 S.Ct. 2548. Summary judgment must be granted for the moving party if the nonmoving party “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Id. at 322, 106 S.Ct. 2548;see also Abromson v. Am. Pac. Corp., 114 F.3d 898, 902 (9th Cir.1997).

In light of the facts presented by the nonmoving party, along with any undisputed facts, the Court must decide whether the moving party is entitled to judgment as a matter of law. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 & n. 3 (9th Cir.1987). When deciding a motion for summary judgment, “the inferences to be drawn from the underlying facts ... must be viewed in the light most favorable to the party opposing the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation omitted); Valley Nat'l Bank of Ariz. v. A.E. Rouse & Co., 121 F.3d 1332, 1335 (9th Cir.1997). Summary judgment for the moving party is proper when a rational trier of fact would not be able to find for the nonmoving party on the claims at issue. See Matsushita, 475 U.S. at 587, 106 S.Ct. 1348.

III. ANALYSIS

Allianz argues that partial summary judgment should be granted in its favor for four independent reasons. First, Allianz argues that plaintiffs fail as a matter of law to prove as a matter of law that it is a “person” distinct from the alleged “Senior Annuity Enterprise,” such that there is no “enterprise” to which RICO liability can attach. Second, Allianz contends that it is entitled to judgment on the RICO claims of any class member who purchased annuities from field marketing organizations (“FMOs”) that are not part of the alleged Senior Annuity Enterprise, because class members who bought an annuity from these “non-enterprise FMOs” were not injured because of the alleged RICO violation. Third, Allianz seeks partial final judgment on all claims released by the Iorio class settlement, pursuant to the parties' stipulation. Fourth, Allianz asserts that California's parol evidence rule bars the application of plaintiffs' RICO claims, to the extent that these claims are based upon a theory of promissory fraud. Each argument is discussed in turn.

B. RICO Claims

As noted in this Court's prior orders, plaintiffs allege RICO violations pursuant to 18 U.S.C. §§ 1962(c) and (d). Section 1962, subpart c, makes it unlawful “unlawful for any person employed by or associated with any enterprise ... to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity....” The essential elements of a claim premised upon a violation of § 1962(c) are thus (1) conduct (2) of an enterprise (3) through a pattern of (4) racketeering activity. Sanford v. MemberWorks, Inc., 625 F.3d 550, 557 (9th Cir.2010). Racketeering activity is defined to include a number of predicate acts, including mail and wire fraud. 18 U.S.C. § 1961(1). Mail fraud, in turn, requires proof that a defendant (1) formed a scheme to defraud, (2) used the mails in furtherance of...