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Goertzen v. Great American Life Insurance Co.

United States District Court, N.D. California

June 1, 2017

Joyce Goertzen, Plaintiff,
v.
Great American Life Insurance Company, Defendant.

          ORDER DENYING SUMMARY JUDGMENT DKT. NO. 36

          Yvonne Gonzalez Rogers, United States District Court Judge

         Plaintiff Joyce Goertzen brings the instant putative class action alleging claims for violation of California Business & Professions Code section 17200 et seq., California's Unfair Competition Law (“UCL”), and the financial elder abuse provisions of California Welfare and Institutions Code section 15600 et seq. Plaintiff alleges that defendant Great American Life Insurance Company (“Great American”) engaged in systematic unlawful sales practices in connection with sales of individual life insurance and annuity contracts to senior purchasers in California. Plaintiff alleges that Great American policies contain hidden penalties associated with surrender of the policy prior to maturity, which were not disclosed consistent with California Insurance Code sections 10127.10 and 10127.13. The complaint herein was originally filed in the Superior Court of the State of California, County of Alameda, and defendants removed to this Court on the grounds that original jurisdiction under 28 U.S.C. section 1332 and the Class Action Fairness Act (CAFA).

         Defendant Great American now moves for summary judgment on both claims, contending that plaintiff cannot establish that she has standing either under Article III of the United States Constitution or under section 17204 of the UCL because she cannot show that the alleged unlawful conduct caused her alleged injuries.

         Having carefully considered the papers submitted, the admissible evidence[1], and the pleadings in this action, and for the reasons set forth below, the Court Denies the Motion for Summary Judgment.

         I. Summary of Facts

         In 2011, when plaintiff Joyce Goertzen was 80 years old, she purchased a Great American fixed indexed deferred annuity from an independent insurance agent, Michel Hollender. (Thomas Evans Decl., Exh. 2.) A deferred annuity is a financial insurance product with a long-term maturation period. The Great American fixed indexed deferred annuity Goertzen purchased included surrender charges, or penalties, if the owner “surrenders, ” i.e., withdraws more than 10% of the account value of the annuity in any one year during the first ten years. The surrender charges decrease incrementally each year, but apply throughout the period.

         Here, Goertzen made a withdrawal from her deferred annuity policy in 2015 and was assessed a surrender penalty of $136.88. (Ingrid Evans Decl., Exh. C at No. 22 and Exh. E.) The disclosure found on the policy jacket for Goertzen's annuity did not reference “surrender charges, ” but did mention “early withdrawal charges, ” stating:

Please refer to your disclosure document for the Safe Return early withdrawal charge schedule. Charges are applied during the early withdrawal charge period to amounts withdrawn in excess of the 10% penalty-free withdrawal allowance; to amounts annuitized, where payments are made for less than 10 years; and to full surrenders.

(Ingrid Evans Decl., Exh. F.) The cover page of her annuity included a paragraph headed “TWENTY DAY EXAMINATION - RIGHT TO CANCEL, ” which stated that the contract could be cancelled with written notice until midnight of the twentieth day following receipt of the contract, “or such later date as may be required by law.” (Thomas Evans, Exh. 2.) It also included the following statement:

IMPORTANT: YOU HAVE PURCHASED AN ANNUITY CONTRACT. CAREFULLY REVIEW IT FOR LIMITATIONS. IF ON THE DATE OF ISSUE YOU ARE AGE 60 OR OLDER, THIS CONTRACT MAY BE RETURNED WITHIN THIRTY (30) DAYS FROM THE DATE YOU RECEIVED IT FOR A FULL REFUND BY RETURNING IT TO THE INSURANCE COMPANY OR PRODUCER WHO SOLD YOU THIS CONTRACT. AFTER THIRTY (30) DAYS, CANCELLATION MAY RESULT IN A SUBSTANTIAL PENALTY, KNOWN AS A SURRENDER CHARGE.

(Id., formatting and emphasis in original.)

         Hollender declares that he reviewed and explained the surrender charges that applied to the Great American annuity he sold to Goertzen. (October 24, 2016 Hollender Decl. at ¶¶ 4, 5, 8.) Goertzen testified that she did not recall Hollender explaining surrender charges. (Ingrid Evans Decl., Exh. B. [Goertzen Depo.] at 28:3-17, 34:17-35:21; 14:5-7.) Indeed, she testified that she did not recall Hollender visiting her in relation to the Great American annuity or discussing any of its terms with her. (Thomas Evans Decl., Exh. 1 [Goertzen Depo.] at 25:6-27:6.) For his part, Hollender was unable to locate the notes for Goertzen's sale, though he normally kept such notes on all his clients.[2]

         II. Applicable Standard

         Summary judgment is appropriate when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Any party seeking summary judgment bears the initial burden of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Material facts are those that might affect the outcome of the case. Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is “genuine” if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id.

         On an issue where the nonmoving party will bear the burden of proof at trial, as here, the moving party can prevail merely by pointing out to the district court that there is an absence of evidence to support the nonmoving party's case. Celotex, 477 U.S. at 324-25. 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, 477 U.S. 242, 250; Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007); see also Fed. R. Civ. P. 56(c), (e). A court may only consider admissible evidence in ruling on a motion for summary judgment. See Fed.R.Civ.P. 56(c)(2); Beyene v. Coleman Sec. Servs., Inc., 854 F.2d 1179, 1181 (9th Cir.1988) (“It is well settled that only admissible evidence may be considered by the trial court in ruling on a motion for summary judgment.”). However, when deciding a summary judgment motion, “the court does not make credibility determinations or weigh conflicting evidence.” Soremekun, 509 F.3d at 984. Instead, the court must view the evidence in the light most favorable to the nonmoving party and draw all justifiable inferences in its favor. Anderson, 477 U.S. at 255; Hunt v. City of Los Angeles, 638 F.3d 703, 709 (9th Cir.2011).

         III. ...


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