Hoffman v. Life Insurance Company of the Southwest

Background

This order resolves a discovery dispute in a proposed class action. Plaintiff Krimbow sought to compel Life Insurance Company of the Southwest to produce documents concerning fees charged for deferred indexed annuity products. The operative complaint alleged violations of the California Education Code and California’s Unfair Competition Law based on undisclosed fees.

A prior order on the defendant’s motion to dismiss left only Krimbow’s claim involving an undisclosed rider fee on a registered indexed annuity. Krimbow alleged that she selected a Guaranteed Lifetime Income Rider for the SecurePlus Platinum product and was charged an annual rate of 0.90%, although the defendant’s website stated that the rider’s annual fee would range from 0.65% to 0.75%. The prior order rejected treating caps, participation rates, and spreads as “fees” for this claim and concluded that Krimbow adequately alleged that she was charged an undisclosed fee associated with a registered 403(b) product.

Rider-fee discovery

Krimbow’s requests for production defined “Rider Fees” as charges related to an indexed annuity 403(b) product that directly reduce an investor’s account balance. The court found that definition too broad because the prior dismissal order made only direct fees relevant, and the complaint described a direct fee as a fee that provides additional features in the contract.

The court did not limit discovery to the specific rider Krimbow purchased. It ordered that “Rider Fees” be limited to fees that provide additional features in the contract.

Products covered by discovery

The parties agreed that only registered products remained at issue and that there were 18 such products, including the SecurePlus Platinum annuity. The defendant argued that discovery should be limited to the annuity Krimbow purchased. The court overruled that objection and ordered that all 18 indexed annuity 403(b) products were properly included in the requests for production.

Relevant time period

Krimbow’s requests sought documents from June 26, 2018, to the present. The joint statement described her investment period as September 2019 through 2023, while the defendant asserted a different four-year period. The court ordered that discovery be limited to the period of Krimbow’s investment in the SecurePlus Platinum annuity. The parties were ordered to meet and confer about the exact beginning and ending dates.

Other discovery requests

The defendant also objected that Requests for Production 7, 13, and 14 were disproportionate to the needs of the case. The court stated that its rulings on those issues were contained in an attached Exhibit A. The opinion text provided here does not include that exhibit, so the specific treatment of those requests cannot be stated from the available text.

Disposition

The court resolved the discovery dispute by issuing the stated limits and scope instructions. It did not decide the ultimate merits of Krimbow’s underlying claims in this order.