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EFG Bank AG, Cayman Branch v. Transamerica Life Insurance Co.

United States District Court, C.D. California

November 4, 2019

EFG BANK AG, CAYMAN BRANCH
v.
TRANSAMERICA LIFE INSURANCE COMPANY

          Attorneys Present for Plaintiffs: Khai LeQuang, David Gomez

          Attorneys Present for Defendants: Hutson Smelley

          Present: The Honorable CHRISTINA A. SNYDER, Judge

          CIVIL MINUTES - GENERAL

         Proceedings: PLAINTIFFS' MOTION TO MODIFY SCHEDULING ORDER AND FOR LEAVE TO FILE FOURTH AMENDED COMPLAINT (Dkt [ 132 ], filed September 27, 2019)

         I. INTRODUCTION AND BACKGROUND

         Presently before the Court is plaintiffs' motion to modify the scheduling order and for leave to file a fourth amended complaint. Given the parties' familiarity with this case, the Court recites only the factual and procedural background that gives rise to the motion.

         A. The EFG Bank Action

         Plaintiffs filed this action against defendant Transamerica Life Insurance Company ("Transamerica") on October 31, 2016. Dkt. 1. Plaintiffs thereafter filed a first amended complaint against Transamerica on March 30, 2017. Dkt. 24. The first amended complaint asserted claims for: (1) breach of contract; (2) contractual breach of the implied covenant of good faith and fair dealing; (3) tortious breach of the implied covenant of good faith and fair dealing; and (4) declaratory relief. Id. Transamerica moved to dismiss the plaintiffs first amended complaint on May 15, 2017, dkt. 31, and the Court denied Transamerica's motion on July 10, 2017, dkt. 44.

         The parties stipulated to allow plaintiffs to file a second amended complaint, dkt. 47, and the plaintiffs did so on August 24, 2017, dkt. 49. Transamerica filed an answer to plaintiffs' second amended complaint on September 25, 2017. Dkt. 51.

         The Court issued a scheduling order on December 5, 2017, Dkt. 66. The scheduling order set the following relevant deadlines: January 29, 2018, as the last day to request leave to file amended pleadings or to add parties; January 12, 2019, as the fact discovery cut-off; and May 14, 2019, as the last day to file motions. Id. The parties stipulated to allow plaintiffs to file a third amended complaint, dkt. 86, and the plaintiffs filed the operative third amended complaint on August 22, 2018, dkt. 88 ("TAC"). The TAC alleges claims for: (1) breach of contract; (2) contractual breach of the implied covenant of good faith and fair dealing; (3) tortious breach of the implied covenant of good faith and fair dealing; and (4) declaratory relief. See generally TAC. Transamerica subsequently filed an answer to the TAC on September 21, 2018. Dkt. 90.

         In light of the parties' stipulations on November 14, 2018, and May 22, 2019, the Court modified the scheduling order on November 15, 2018, and again on May 22, 2019. Dkt. 93, 94, 106, 107. The Court's operative May 22, 2019 scheduling order set November 1, 2019, as the fact discovery cut-off and March 6, 2020, as the last day to file motions for summary judgment. Dkt. 107. No trial date has yet been set. Id.

         B. The Brighton Action

         On May 15, 2019, a different set of institutional plaintiffs filed suit against Transamerica asserting claims substantially similar to those in this action. See Brighton Trustees, LLC et al. v. Transamerica Life Insurance Company, No. 2:19-cv-04210-CAS-GJS (CD. Cal) ("Brighton"). Dkt. 1. The Brighton plaintiffs filed a first amended complaint on June 10, 2019, asserting claims for: (1) breach of contract; (2) contractual breach of the implied covenant of good faith and fair dealing; (3) tortious breach of the implied covenant of good faith and fair dealing; and (4) declaratory relief. Brighton, Dkt 14 ("Brighton FAC"). Transamerica moved to dismiss the Brighton FAC on July 10, 2019. Brighton. Dkt. 28.

         On August 28, 2019, the Court granted, in part, and denied, in part, Transamerica's motion. Brighton, Dkt. 37 ("Brighton Order"). The Court found that the Brighton plaintiffs had stated claims for breach of contract and contractual breach of the implied covenant of good faith and fair dealing based on allegations that Transamerica instituted MDR increases despite generally improving mortality rates. Brighton Order at 17-18, 20-21. The Court, however, dismissed the Brighton plaintiffs' tortious breach of the implied covenant claim without prejudice. Id. at 21-23. The Court noted that, in other cases involving Transamerica's MDR increases, "[t]he Court has previously sustained, at the pleading stage, similar claims for tortious breach based on allegations that Transamerica's MDR increases deprived policyholders and owners benefits in the form of the Accumulation Value and monthly accrual of guaranteed interest." Id. at 22. The Court noted that "[s]ince the Court decided those cases, however, . . . caselaw has developed differentiating benefits arising under the insurance component from benefits arising under the savings component of a universal life insurance policy." Brighton Order at 22. In particular, the Court relied on EFG Bank AG. Cayman Branch v. AXA Equitable Life Ins. Co.,309 F.Supp.3d 89 (S.D.N.Y. 2018) ("AXA Equitable Life Ins. Co."). ...


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