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Calkins v. Bankers Life and Casualty Co.

January 14, 2009

PATRICIA CALKINS, F/N/A/ PATRICIA OETMAN, PLAINTIFF,
v.
BANKERS LIFE AND CASUALTY COMPANY; MICHAEL A. NOWAK; THE BUNKER INSURANCE GROUP, INC., DEFENDANTS.



The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge

MEMORANDUM AND ORDER

This matter is before the court on defendant Bankers Life and Casualty Company's ("Bankers") motion to dismiss plaintiff's complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiff Patricia Calkins' ("Calkins") opposes the motion. For the reasons set forth below,*fn1 defendant Bankers' motion to DISMISS is GRANTED without prejudice.

BACKGROUND

Plaintiff Calkins is a California resident who purchased a Long Term Care Policy (the "Policy") from defendant Bankers in 1999. (Compl., Ex. 1 to Notice of Removal, filed Sept. 17, 2008, ¶ 9.) Plaintiff alleges that at the time she purchased the Policy, she was told that the premiums would never increase. (Id. ¶ 5.) Specifically, plaintiff contends that Bankers, through its agent defendant Michael Nowak ("Nowak"), misrepresented the term "'guaranteed renewable,' which necessarily implies an actuarially sound premium that can be anticipated to remain level throughout the life of the policy." (Id. ¶ 28.) Plaintiff relied on these representations when she purchased the Policy. (Id. ¶ 5.)

Approximately 7 years later, in or about 2006, Bankers raised the premiums on plaintiff's Policy. (Id. ¶ 9.) Plaintiff contends that defendants "unreasonably and intentionally failed to disclose the known and/or reasonably foreseeable risks of rate increases on the subject Policy." (Id. ¶ 18.) Plaintiff also contends that Bankers intentionally sold the Policy at a lower price to increase its long term care market share, knowing that the lapse/termination rates and investment returns used in its actuarial assumptions to price the subject Policy were too high and would lead to subsequent increases in premiums to cover claims. (Id. ¶ 28.)

On July 25, 2008, plaintiff filed a complaint in the Superior Court of California for the County of Placer, alleging claims for (1) Negligent Misrepresentation against all defendants; (2) Intentional Misrepresentation against all defendants; and (3) Professional Negligence against defendant Nowak and The Bunker Insurance Group, Inc. ("Bunker"). (Id.)

STANDARD

On a motion to dismiss, the allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). Thus, the plaintiff need not necessarily plead a particular fact if that fact is a reasonable inference from facts properly alleged. See id.

Nevertheless, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Calif., Inc. v. Calif. State Council of Carpenters, 459 U.S. 519, 526 (1983). Moreover, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986).

Ultimately, the court may not dismiss a complaint in which the plaintiff alleged "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1973 (2007). Only where a plaintiff has not "nudged [his or her] claims across the line from conceivable to plausible," is the complaint properly dismissed. Id. "[A] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002) (quoting Hudson v. King & Spalding, 467 U.S. 69, 73 (1984)).

In ruling upon a motion to dismiss, the court may consider only the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. Of Mary Hospital, 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of United States, Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998).

ANALYSIS

A. California's Regulatory Scheme

Defendant Bankers moves to dismiss plaintiff's complaint on the basis that insurance premiums are subject to comprehensive regulation in California pursuant to the California Insurance Code, and the Department of Insurance (the "DOI") has exclusive original jurisdiction over all matters related to ratemaking. Bankers argues that because an adjudication in favor of plaintiff would have a rate-setting effect, plaintiff's actions are barred to the extent she has failed to exhaust administrative remedies. Plaintiff does not contest the DOI's power to approve premium increases, nor does she claim that Bankers' premiums are excessive. (Pl.'s Opp'n to Def.'s Mot. to Dismiss ("Opp'n"), filed Dec. 30, 2008, at 4.) ...


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