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Hall v. National Union Fire Insurance Company of Pittsburgh

July 1, 2010

MILES HALL, PLAINTIFF,
v.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, ET AL., DEFENDANT.



The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge

ORDER: (1) GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT; (2) REQUESTING SUPPLEMENTAL BRIEFING (Doc. Nos. 63, 95.)

Presently before the Court is Defendants' motion for summary judgment or, in the alternative, partial summary judgment. (Doc. No. 63.) Also before the Court is Plaintiff's motion for partial summary judgment. (Doc. No. 95.) For the reasons stated below, the Court GRANTS Plaintiff's motion for partial summary judgment of the first cause of action for declaratory relief. In light of this declaratory judgment, the Court orders SUPPLEMENTAL BRIEFING as to Defendants' motion for summary judgment, as set forth below.

BACKGROUND*fn1

I. Factual Background

This action arises out of a dispute regarding distribution of benefits payable for accidental death under an occupational accident insurance policy, Policy No. TRK 9102718, sold to decedent Robert Hall by Defendant National Union Fire Insurance Company of Pittsburgh, PA ("National Union"). The policy is a purported group policy which provides insurance benefits to members of participating organization, including United Truckers Association ("UTA"). UTA is characterized by Defendants as a trucking association. Defendant Associated Underwriters "(AUI") is allegedly UTA's policy "Administrator" or, according to Plaintiff, the managing general agent for National Union, marketing occupational accident insurance nationally and in California.

On February 15, 2006, Plaintiff's father, Robert Hall, applied for coverage under the occupational accident insurance policy with combined single limits of $1 million as an employee of Fred Williams Trucking Co.*fn2 (See Pl. NOL Ex. 10; Stineman Decl. ISO Def. MSJ, Ex. 3 (hereinafter "Application").) The Application provided for the insurance policy contained options for $300,000, $500,000 or $1 million in coverage, and Robert Hall selected the $1 million option (Option 1). (Id.) Further, Robert Hall identified his son, Plaintiff Miles Hall, as the sole beneficiary under the policy on the Application. (Id.) The benefits due under this selected option is a matter of dispute between the parties for which both parties seek declaratory judgment and is discussed at length below.

Robert Hall's Application was processed that same day, and a Certificate of Insurance was faxed back to the facsimile number provided on the Application. The Certificate sets forth the policy limitations upon Accidental Death and Dismemberment ("AD&D") as: "$250,000; $50,000 Lump Sum. Survivor Benefits of $2,000 monthly for 8 years and 4 months." (See Certificate). The Certificate also sets forth the medical expense coverage of $1 million with a $0 deductible, as well as other limitations not at issue. (Id.) No other documentation was sent to Robert Hall or the motor carrier. On March 5, 2007, the first premium on the policy was paid by Fred Williams on Robert Hall's behalf. . On March 6, 2007, Robert Hall suffered a fatal truck accident while in the course of providing occupational services for Fred Williams Trucking Co. Subsequently, Plaintiff filed a timely claim for policy benefits. In response, National Union paid Plaintiff a Lump Sum Accidental Death Benefit of $50,000 as beneficiary of the policy.*fn3 National Union also began paying, and continues to pay, a $200,000 Survivor Benefit to Robert Hall's wife Phyllis Benjamin in monthly installments. However, Plaintiff contends that he is entitled to all policy benefits and that he is entitled to $1 million in coverage under the policy.

II. Procedural Background

Plaintiff initiated this action against National Union, UTA and AUI in San Diego Superior Court on June 2, 2008, and Defendant removed the action to federal court on July 3, 2008. (Doc. No. 1.) On April 13, 2009, this Court granted Plaintiff's motion for leave to file a First Amended Complaint. (Doc. No. 23; see also Doc. No. 14.) The operative First Amended Complaint ("FAC") alleges six causes of action: (1) Declaratory Relief; (2) Breach of Contract; (3) Breach of Duty of Good Faith and Fair Dealing; (4) Intentional Misrepresentation and Concealment; (5) Negligent Misrepresentation; and (6) Violation of California Business and Profession's Code § 17200, et seq. (Doc. No. 27.)

On April 30, 2009, Defendants filed a Rule 12(b)(6) motion to dismiss the fourth, fifth, and sixth causes of action asserted in the FAC. (Doc. No. 33.) Plaintiff filed an opposition on July 16, 2009 and Defendants replied on July 23, 2009. (Doc. Nos. 37, 39.) The Court thereafter granted in part and denied in part Defendants' motion to dismiss on December 8, 2009. (Doc. No. 51.) The Court granted Defendants' motion to dismiss the fourth cause of action for intentional misrepresentation and concealment and fifth cause of action for negligent misrepresentation. (Id.) The Court denied the motion to dismiss the sixth cause of action for violation of California Business and Profession's Code § 17200 ("UCL"). (Id.) The Court gave Plaintiff leave to amend the dismissed causes of action within 30 days of the Order. (Id.) Plaintiff did not file a second amended complaint. Accordingly, the remaining causes of action are for declaratory relief, breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of California's Unfair Competition law. All remaining causes of action are asserted against National Union only, except for the UCL claim which is also filed against AUI. UTA is no longer a defendant in the action. (See id.; see also Doc. No. 33.)

On April 16, 2010, Defendants filed the present motion for summary judgment or, in the alternative, partial summary judgment. (Doc. No. 63.) Three days later, on April 19, 2010, Plaintiff filed a motion for partial summary judgment. (Doc. No. 95.) Pursuant to the Court ordered briefing schedule, both parties filed their respective oppositions on June 7, 2010 (Doc. Nos. 130, 131) and their replies on June 14, 2010. (Doc. Nos. 137, 142.) Oral argument on both motions was heard on June 24, 2010 and the matter was thereafter taken under submission.

LEGAL STANDARD

I. Motion for Summary Judgment

Federal Rule of Civil Procedure 56 permits a court to grant summary judgment where (1) the moving party demonstrates the absence of a genuine issue of material fact and (2) entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "Material," for purposes of Rule 56, means that the fact, under governing substantive law, could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). For a dispute to be "genuine," a reasonable jury must be able to return a verdict for the nonmoving party. Anderson, 477 U.S. at 248.

The initial burden of establishing the absence of a genuine issue of material fact falls on the moving party. Celotex, 477 U.S. at 323. The movant can carry his burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party "failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Id. at 322--23. "Disputes over irrelevant or unnecessary facts will not ...


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