Bonilla v. American General Life Insurance Company

Background

Mario Bonilla alleged that he applied for a $100,000 life-insurance policy from American General on July 22, 2020. He told the company’s agent that he was born in Colombia, was a lawful permanent resident, and was replacing a misplaced permanent-resident card. According to the complaint, the agent said alternative documents would be acceptable.

Bonilla alleged that American General later denied the application after a positive Hepatitis C test, although testing from his physician showed that he did not have Hepatitis C. He also alleged that the company requested additional medical and immigration documents and later told the California Department of Insurance that his application could not be accepted because his permanent-resident card had less than six months remaining before expiration. Bonilla said the company later gave another explanation involving the Hepatitis C testing. His girlfriend, who was not of Colombian origin, allegedly received an identical policy without difficulty.

Bonilla asserted a claim under 42 U.S.C. § 1981 for discrimination in making and enforcing a contract, and a breach-of-contract claim. American General removed the case from state court and filed a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). That motion asks whether the pleadings, accepting the complaint’s factual allegations as true, show that the moving party is entitled to judgment as a matter of law.

Breach of Contract

The court held that Bonilla had not alleged facts showing that a contract was formed. Under California law, temporary insurance may arise from an application and payment of the first premium when the application’s language would lead an ordinary person to believe coverage was immediate. Bonilla did not allege that he paid a premium or that the application promised immediate coverage.

The court rejected Bonilla’s reliance on a California case involving an insurance applicant who had paid the first premium. The court also declined to consider most of the additional evidence Bonilla submitted with his opposition because a Rule 12(c) motion generally is decided from the pleadings, and the disputed materials were not properly incorporated into the complaint. Because the court could not say that amendment would certainly be futile, it granted Bonilla leave to amend the contract claim.

Section 1981 Claim

American General argued that Section 1981 did not cover the alleged national-origin discrimination, that California law displaced the federal claim, and that the claim was untimely. The court decided the statute-of-limitations issue and did not reach the other arguments because it considered them moot.

The court explained that a Section 1981 claim generally has either a two-year California limitations period or a four-year federal period, depending on whether the claim was made possible by the 1991 amendments to Section 1981. Bonilla argued that his claim involved the benefits and terms of an already formed contractual relationship, which would support the four-year period. The court concluded, however, that Bonilla had not alleged that a contract was formed and that his allegations concerned, at most, the making of a contract. The court therefore applied the two-year period and held that the claim was untimely because the last alleged discriminatory act, September 28, 2021, occurred more than two years before the complaint was filed on May 5, 2025.

Disposition

Judge Donna Ryu granted American General’s Rule 12(c) motion and dismissed both of Bonilla’s claims with leave to amend. The court stated that this was Bonilla’s final opportunity to amend and ordered that an amended complaint be filed by January 9, 2026.