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Davis v. Liberty Life Assurance Co. of Boston

United States District Court, S.D. California

February 20, 2018

LAUREL DAVIS, Plaintiff,



         Pending before the Court is Defendant Liberty Life Assurance Company of Boston's (“Defendant”) motion to dismiss Plaintiff Laurel Davis' (“Plaintiff”) second amended complaint. The Court decides the matter on the papers submitted and without oral argument. See Civ. L. R. 7.1(d.1). For the reasons stated below, the Court GRANTS Defendant's motion.

         I. Background

         This case arises out of the denial of a long-term disability insurance policy. Plaintiff started working for the University of California, San Diego (“UCSD”) in 1983. At that time, Plaintiff enrolled in a benefits package that included short term (“STD”) and long term (“LTD”) disability insurance plans. Defendant is the administrator of both disability insurance plans.

         On January 18, 2010, Plaintiff sustained a serious knee injury from a slip and fall at work. Because of her injury, Plaintiff has had to undergo multiple surgeries and has been unable to return to work. In June of 2011, Plaintiff filed a claim for benefits under the STD policy. Defendant accepted Plaintiff's STD claim and paid on the claim until it exhausted on July 29, 2012. Because her injuries persisted, Defendant converted Plaintiff's STD claim into a LTD claim on January 17, 2012. On June 26, 2012, Defendant sent Plaintiff a letter informing her that it had denied her LTD claim. (Denial Letter [Doc. 18-1 Ex. 2].) The Denial Letter informed Plaintiff that she had sixty days to submit a written request for a review of the decision.

         Plaintiff does not allege to have submitted a timely written request for review. Rather, Plaintiff alleges that she called Defendant on July 20, 2012, and informed an insurance adjuster that she was undergoing additional surgery in early November, 2012. Per Plaintiff, the insurance adjuster told her “that [Defendant] was reevaluating her claim for long-term benefits under [the LTD policy], would keep her informed, and would be in contact with her if it required additional information.” (SAC [Doc. 18] ¶ 31.)

         In February or March of 2012, Plaintiff also submitted a claim for disability benefits under a separate plan (“the UCRP Plan”) administered directly by the University of California. On August 27, 2012, the University of California accepted her claim for benefits under the UCRP Plan. The University of California ended up handing over administration of the UCRP Plan to Defendant. On October 2013 Defendant sent Plaintiff a letter asking that she provide any medical information she had and execute an authorization for the release of medical records. Plaintiff signed and returned the authorization.

         Plaintiff alleges she subsequently became confused about the status of her benefits and therefore called Defendant on September 29 2014. During the conversation, she asked why she was approved for benefits under the UCRP policy but not the LTD policy. (SAC ¶ 40.) Defendant replied it was because the plans had different eligibility standards.

         Plaintiff's confusion allegedly persisted for some time. In June of 2016, she claims to have requested all documents relating to her disability claims, but states Defendant never fully responded to this request. Eventually, on March 2, 2017, Plaintiff filed a complaint with the Superior Court of California, County of San Diego, alleging (1) breach of contract; (2) fraud; (3) breach of the implied covenant of good faith and fair dealing; and (4) violation of Cal. Bus. & Prof. Code § 12000 et seq. (Compl. [Doc. 1 Ex. A].) Defendant timely removed to this Court and moved to dismiss. (Rem Not. [Doc. 1]; First MTD [Doc. 2].) Plaintiff did not oppose Defendant's first motion to dismiss. Rather, Plaintiff mooted the first motion to dismiss when she filed a First Amended Complaint alleging the same four causes of action. (FAC [Doc. 7].) Defendant then filed a second motion to dismiss. (Second MTD [Doc. 8].) The Court granted Defendant's second motion to dismiss, finding Plaintiff's claims barred by the applicable statutes of limitations. (August 3, 2017 Order [Doc. 14].) Given the liberal amendment policy enshrined in Fed.R.Civ.P. 15(a), the Court granted Plaintiff leave to file a second amended complaint. (Id.) After Plaintiff filed her Second Amended Complaint, Defendant filed a third motion to dismiss. (Third MTD [Doc. 19].) Plaintiff opposes. (Opp'n [Doc. 20].)

         II. Legal Standard

         The court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the complaint's sufficiency. See N. Star Int'l v. Ariz. Corp. Comm'n., 720 F.2d 578, 581 (9th Cir. 1983). The court must assume the truth of all factual allegations and “construe them in the light most favorable to [the nonmoving party].” Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir. 2002); see also Walleri v. Fed. Home Loan Bank of Seattle, 83 F.2d 1575, 1580 (9th Cir. 1996).

         As the Supreme Court explained, “[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007) (internal citations and quotation marks omitted). Instead, the allegations in the complaint “must be enough to raise a right to relief above the speculative level.” Id. at 1965. A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

         III. Statute of Limitations

         Defendant contends that all of Plaintiff's claims are barred by the statute of limitations. The statute of limitations clock starts to run when a cause of action accrues, meaning all the elements of the claim are present. Fox v. Ethicon Endo-Surgery, Inc., 35 Cal.4th 797, 806-07 (2005). Breach of written contract claims carry a four-year statute of limitations. Cal. Code Civ. P. § 337. The elements of a breach of contract claim are (1) existence of a contract; (2) plaintiff's performance; (3) defendant's breach; and (4) resulting damages. Oasis West Realty, LLC v. Goldman, 51 Cal.4th 811, 821 (2011). Construing as true Plaintiff's allegation that defendant's denial of LTD benefits constituted breach, it follows that her breach of contract claim accrued no later than June 26, 2012, the date Defendant sent Plaintiff the Denial Letter. The distance between ...

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