Grundstrom v. Wilco Life Insurance Company

Background

Wilco Life Insurance Company moved for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure. That procedure allows a court to decide a case based on the parties’ pleadings after the pleadings are complete. Wilco sought dismissal of Julie Grundstrom’s first, second, and fourth causes of action. Grundstrom asserted the first and second causes of action for declaratory relief under California law and the federal Declaratory Judgment Act, for herself and a proposed class. Her fourth cause of action alleged a violation of California’s Unfair Competition Law.

Declaratory-Relief Claims

The court ruled that the declaratory-relief claims were subject to dismissal in the ways described in the order. To the extent Grundstrom sought a declaration that California Insurance Code sections 10113.71 and 10113.72 applied to Wilco’s California policies in force on or after January 1, 2013, the court found those claims moot. The California Supreme Court had already held that the statutes applied in that manner, and Wilco acknowledged that holding.

To the extent Grundstrom sought other declaratory relief, the court found that her complaint did not make clear whether an actual controversy remained after the statutes were deemed applicable. An actual controversy must be sufficiently immediate and real to justify a declaratory judgment.

Unfair-Competition Claim

The court also addressed the two forms of relief Grundstrom sought under California’s Unfair Competition Law. It ruled that her request for restitution was subject to dismissal because she alleged, without sufficient supporting facts, that she lacked an adequate legal remedy. The court ruled that her request for injunctive relief was also subject to dismissal because she did not allege facts showing a sufficient likelihood that she herself would be wronged again in a similar way. The possibility of future harm to unnamed class members was not enough to establish her own entitlement to class-wide injunctive relief. The court did not address Wilco’s additional argument concerning restitution after finding the claim inadequately pleaded on the adequate-remedy issue.

Disposition

Judge Maxine M. Chesney granted Wilco’s motion for judgment on the pleadings. The court granted Grundstrom leave to amend because it was not clear that the identified deficiencies could not be cured by amendment. If Grundstrom amended by May 6, 2022, the case would continue according to the amended pleading. If she did not amend, the action would proceed on the third and fifth causes of action. The court also vacated the scheduled hearing.