United States District Court, N.D. California
LINCOLN D. FINLEY, Plaintiff,
TRANSAMERICA LIFE INSURANCE COMPANY, et al., Defendants.
ORDER GRANTING MOTION TO DISMISS Re: Dkt. No. 12
WILLIAM H. ORRICK, District Judge.
Pro se plaintiff Lincoln Finley accuses defendant Transamerica Premier Life Insurance Company ("Transamerica") of failing to pay the life insurance policy benefit owed to his mother upon his father's death, thereby breaching the express terms of the policy and the implied covenant of good faith and fair dealing. Neither Finley nor his mother notified Transamerica of his father's death, a condition precedent to Transamerica's payment. Lacking such notice, Transamerica escheated the policy proceeds to the California State Controller as required by law. Finley later obtained the proceeds from the Controller. He states no plausible claim against Transamerica, and this case is DISMISSED.
Finley alleges that Transamerica issued a life insurance policy listing his father as the insured and his mother as the sole beneficiary in 1964. Compl. ¶¶ 5-6, Ex. A (Dkt. No. 1); Puig Decl. Ex. A (Dkt. No. 13-1). In 1987, his father died. Id. ¶ 7. Finley states that his mother "was not made aware" of the policy at that time and did not receive the policy benefit. Id. ¶¶ 7, 15. He also asserts that Transamerica did not check the Social Security Death Index at the time of his father's death or at any time thereafter. Id. ¶ 7.
Finley learned of the policy at an unspecified time after his father's death, "when the states did their shakedown on insurance companies, who were failing to pay heirs after the death of their love[d] ones." Id. ¶ 8. He contends that he became entitled to the benefits owed under the policy when his mother died in 2004 without having been paid by Transamerica. Id. ¶ 22. Finley contacted Transamerica on or around November 13, 2014 seeking payment of the policy benefits plus $75, 000 for "unconscionable insurance practices, " but Transamerica refused to pay. Id. ¶¶ 9-11. He states that Transamerica had already "submitted payment to [the] California State Controller." Id. ¶ 9; see also Opp. at 3.
Finley filed this action on February 13, 2015, alleging two causes of action against Transamerica for breach of contract and breach of the implied covenant of good faith and fair dealing. Compl. ¶¶ 13-23. I heard argument on June 10, 2015. Dkt. No. 23.
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). 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 (2009) (internal quotation marks omitted). A claim is facially plausible when it "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. In considering whether a claim satisfies this standard, the court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). However, the court need not accept as true "allegations that contradict matters properly subject to judicial notice." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (internal quotation marks omitted). "Nor is the court required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Id.
I. FIRST CAUSE OF ACTION: BREACH OF CONTRACT
The elements of a claim for breach of contract under California law are: (1) the existence of a contract; (2) plaintiff's performance or excuse for nonperformance; (3) defendant's breach; and (4) damages to plaintiff as a result of the breach. CDF Firefighters v. Maldonado, 158 Cal.App.4th 1226, 1239 (2008); accord Buschman v. Anesthesia Bus. Consultants LLC, No. 13-cv-01787-EMC, 2014 WL 1911430, at *5 (N.D. Cal. May 13, 2014). Finley alleges that Transamerica breached the terms of his father's life insurance policy by "fail[ing] to pay the policy benefit upon the death of [his father] to [his mother] in 1987." Compl. ¶ 15. Transamerica contends that Finley fails to state a claim for breach of contract because he does not allege that his mother submitted "due proof of death, " as required under the policy. Mot. at 5-7.
Transamerica is right. "An insurance policy is, fundamentally, a contract between the insurer and the insured;" accordingly, a court must "look to the language of that contract to determine the obligations which the parties have assumed." Stein v. Int'l Ins. Co., 217 Cal.App.3d 609, 613, (1990); accord Abifadel v. Cigna Ins. Co., 8 Cal.App.4th 145, 159 (1992). "Interpretation of an insurance policy is a question of law and follows the general rules of contract interpretation." MacKinnon v. Truck Ins. Exch., 31 Cal.4th 635, 647 (2003). Under California law, "the mutual intention of the parties at the time the contract is formed governs interpretation. Such intent is to be inferred, if possible, solely from the written provisions of the contract." Id. at 647-48 (internal quotation marks and citations omitted). "The clear and explicit meaning of these provisions, interpreted in their ordinary and popular sense, unless used by the parties in a technical sense, or [unless] a special meaning is given to them by usage, controls judicial interpretation." Id. (internal quotation marks and citations omitted).
In the paragraph titled "Death Benefit, " Finley's father's policy states that "[i]n the event of the death of the Insured..., the Company will pay the Amount of Insurance specified in the Schedule to the Beneficiary designated herein upon receipt of due proof of death and upon surrender of this policy. " Puig Decl. Ex. A (emphasis added). The paragraph titled "Accidental Death Benefit" likewise provides that "the Company will pay an additional death benefit... upon receipt of due proof of accidental death. " Id. (emphasis added). The plain import of this language is that Transamerica was not obligated to pay Finley's mother the policy benefit until she provided "due proof" of Finley's father's death. Finley does not allege that she did so. To the contrary, he claims that she was unaware of the policy when his father died, and that he did not learn of the ...