Pitt v. Metropolitan Tower Life Insurance Company

[5] 6 UNITED STATES DISTRICT COURT 7 FOR THE SOUTHERN DISTRICT OF CALIFORNIA [8] SUSAN A. PITT, Individually, as Case No. 20-cv-00694-BAS-DEB 9 Successor-In-Interest to MICHAEL A. PITT, Decedent, on Behalf of the Estate ORDER DENYING DEFENDANT’S 10 of MICHAEL A. PITT, and on Behalf MOTION TO STAY of the Class, 11 [ECF No. 10] Plaintiff, 12 v. 13 METROPOLITAN TOWER LIFE INSURANCE COMPANY, [14] Defendant. [15] 16 Plaintiff Susan Pitt (“Plaintiff”) brings this putative class action lawsuit against 17 Metropolitan Tower Life Ins. Co. (MetLife) claiming that it violated various California 18 insurance statutes (Calif. Ins. C. §§10113.71 and 10113.72) (“the Statutes”) that came into 19 effect January 1, 2013, when it terminated life insurance policies without proper notice. 20 (Compl., ECF No. 1.) The success of the lawsuit largely depends on the application of 21 the Statutes to life insurance policies originally issued before January 1, 2013 outside 22 California. This has been a hotly contested issue in both the California state and federal 23 courts. Several cases addressing this issue are currently pending on appeal. 24 Defendant moves to stay the case pending the result of these appellate decisions. 25 (Mot., ECF No. 10.) Plaintiff opposes and Defendant replies. (Resp., ECF No. 15; Reply, 26 ECF No. 16.) The Court finds this motion suitable for determination on the papers 27 submitted and without oral argument. See Civ. L.R. 7.1(d)(1). For the reasons stated 28 below, the Court DENIES WITHOUT PREJUDICE the Motion to Stay. (ECF No. 10.). 1 I. BACKGROUND 2 According to the Complaint, Michael Pitt purchased a $2,000,000 term life 3 insurance policy (“the Policy”) in October 2003 in Illinois. (Compl. ¶ 35; Ex. A to Compl, 4 ECF No. 1-2.) His wife was the sole beneficiary. (Id.) The Policy was renewed on a 5 yearly basis. (Compl. ¶ 39.) In 2014, the Pitts moved to California and continued to renew 6 the Policy from California. (Id. ¶ 41.) In January 2016, Mr. Pitt inadvertently missed a 7 payment and the Policy was terminated for non-payment of premium. (Id. ¶ 48.) Plaintiff 8 alleges this termination violated the Statutes effective as of January 1, 2013. Plaintiff 9 filed this Complaint for Declaratory Relief, Breach of Contract, Bad Faith, Unfair 10 Competition and Financial Elder Abuse on her own behalf as well as on behalf of other 11 similarly-situated plaintiffs who allege their life insurance policies were terminated in 12 violation of the Statutes. 13 In October 2019, the California Court of Appeal held that the Statutes at issue in 14 this case did not apply retrospectively to life insurance policies entered into before January 15 1, 2013. McHugh v. Protective Life Ins., 40 Cal. App. 5th 1166 (2019). The California 16 Supreme Court granted the plaintiff’s petition for review and denied the request for an 17 order directing depublication of the Court of Appeal decision. McHugh v. Protective Life 18 Ins., 456 P.3d 933 (Jan. 29, 2020.) 19 In the meantime, several federal courts held that, although the Statutes may not be 20 applied retroactively to life insurance policies entered into before January 1, 2013, the 21 Statutes did apply to policies renewed after the effective date. See Thomas v. State Farm 22 Ins. Co., 424 F. Supp. 3d 1018 (S.D. Cal. Dec. 10, 2019); Bentley v. United of Omaha Life 23 Ins. Co., 371 F. Supp. 3d 723 (C.D. Cal. Feb. 21, 2019). These two cases are also on 24 appeal before the Ninth Circuit. 25 Finally, several district courts have held that the Statutes did not apply to policies 26 issued and delivered out of the state of California. Elmore v. Hartford Life and Accid. Ins. 27 Co., 2020 WL 1276106 (C.D. Cal. Jan. 6, 2020); Shaff v. Farmers New World Life Ins. 28 Co., 2019 WL 4570014 (C.D. Cal. Aug. 5, 2019). However, in Bentley, the Court held 1 the issue was irrelevant when the policy was issued out-of-state but renewed in-state. 371 2 F. Supp. 3d at 735. The Court in Bentley held that the Statutes did apply to policies 3 renewed in state. Id. The appeals in Elmore and Shaff have both been stayed pending the 4 appeals in Bentley, Thomas and McHugh. 5 II. LEGAL STANDARD 6 “A district court has inherent power to control the disposition of the causes on its 7 docket in a manner which will promote economy of time and effort for itself, for counsel 8 and for litigants.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). However, 9 “[w]hile it is the prerogative of the district court to manage its workload, case management 10 standing alone is not necessarily a sufficient ground to stay proceedings.” Dependable 11 Highway, Exp., Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007). 12 A court considering a stay should weigh competing interests including “damage 13 which may result from the granting of a stay, the hardship or inequity which a party may 14 suffer in being required to go forward, and the orderly course of justice measured in terms 15 of simplifying or complicating issues, proof and questions of law which could be expected 16 to result from a stay.” CMAX, 300 F.2d at 268 . The party requesting the stay “‘must make 17 out a clear case of hardship or inequity in being required to go forward, if there is even a 18 fair possibility that the stay for which he prays will work damage to someone else.’” Id. 19 (quoting Landis v. North American Co., 299 U.S. 248, 255 (1936)). “‘[B]eing required to 20 defend a suit, without more, does not constitute a clear case of hardship or inequity within 21 the meaning of Landis.’” Montez v. Chase Home Finance, LLC, No. 11-cv-530 JLS 22 (WMC), 2011 WL 2729445 , at *1 (S.D. Cal. July 13, 2011) (quoting Lockyer v. Mirant 23 Corp., 398 F.3d 1098, 1112 (9th Cir. 2005)). 24 “Generally stays should not be indefinite in nature.” Dependable Highway, 498 25 F.3d at 1066. However, a stay that is “not immoderate in extent and not oppressive in its 26 consequences” may be warranted “if the public welfare or convenience will thereby be 27 promoted.” Landis, 299 U.S. at 256 . [28] 1 III. ANALYSIS 2 Plaintiff claims she would be damaged from the stay. First, she argues that she and 3 many of the potential class members are elderly and that the lawsuit aims to protect this 4 more vulnerable class of persons. (Resp. at 9.) Second, she argues that the “claims at 5 issue are remedial in nature and address an important public policy, especially for a 6 protected class[] or persons.” (Id. at 8.) Additionally, she argues that the fact the she is 7 seeking injunctive relief weighs against granting the stay. (Id.) And, finally, she argues 8 that a potentially substantial delay could increase the difficulty of reaching class members 9 and could increase the risk that evidence from these class members will dissipate. (Id. at 10 10.) At the very least she has shown a “fair possibility” the she would be damaged by the 11 stay. 12 To counter this, Defendant claims that staying the case until the various appellate 13 cases are decided “may establish that the Statutes do not apply to Plaintiff’s policy” and 14 that Defendant will be prejudiced if it is forced to spend time and resources on discovery. 15 (Mot. at 12–13.) Defendant also argues that the pending decisions could impact whether 16 Plaintiff is an adequate class member. (Id. at 16.) The Court finds this is an insufficient 17 showing of hardship at this stage of the proceedings. See Landis, 299 U.S. at 255 (“[O]nly 18 in rare circumstances will a litigant in one cause be compelled to stand aside while a 19 litigant in another settles the rule of law that will define the rights of both.”) 20 As the Court in Lockyer pointed out, being required to defend a suit, without more, 21 is an insufficient showing of hardship or inequity, particularly when faced with the damage 22 outlined by Plaintiff from the stay. Additionally, resolution of McHugh alone is not likely 23 to resolve any outstanding appellate issues with the rulings of Bentley and Thomas also on 24 appeal. It is unclear at this point how long it will take for all the outstanding appellate 25 decisions that could apply to this case to resolve. Hence, the Court concludes a stay is 26 inappropriate at this stage of the proceedings. [28] 1 ||IV. CONCLUSION 2 For the foregoing reasons, the Court DENIES WITHOUT PREJUDICE 3 ||Defendant’s Motion to Stay (ECF No. 10). 4 IT IS SO ORDERED. [5] 6 || DATED: October 20, 2020 (yitlug | Aiphan □ 7 United States District Judge