Morneau v. Protective Life Insurance Company

Background

Plaintiffs Cristin Morneau and Kelly Strange are siblings. In 1996, their mother, Carolyn Morneau, purchased a $250,000 life-insurance policy from a predecessor of Protective Life Insurance Company. The annual premium was $382.50 for the first 20 years. The policy provided for substantially higher premiums beginning in the 21st year.

The insured lived in El Cajon, California, in San Diego County. The policy was applied for and delivered there, and communications from the insurer or its predecessors were sent to her home address. In January 2017, the insurer sent a notice stating that the annual premium had increased to $4,355 and was due February 1, 2017, to prevent the policy from lapsing. After the premium was not paid, the insurer sent additional notices and later stated that the policy had expired. The insurer offered reinstatement without evidence of insurability if payment was received by April 4, 2017, but it did not receive payment.

The insured died in January 2022 while under a physician’s care at a nursing and rehabilitation center in La Jolla, in San Diego County. Plaintiffs then contacted the insurer, which told them that the policy had been cancelled for nonpayment nearly five years earlier. Plaintiffs sued in San Francisco Superior Court, alleging that the policy remained legally in force because the insurer had not complied with California Insurance Code sections 10113.71 and 10113.72. The insurer removed the case to federal court and moved to transfer it under 28 U.S.C. § 1404(a).

Legal standard

Section 1404(a) permits a federal district court to transfer a civil action, for the convenience of the parties and witnesses and in the interest of justice, to another district where the case could have been brought or to a district to which all parties consented. The court considered the convenience of the parties and witnesses, the interest of justice, the location where relevant agreements were negotiated and executed, which state was most familiar with the governing law, the plaintiffs’ choice of forum, the parties’ contacts with each forum, litigation costs, the availability of compulsory process, access to evidence, local interest, possible consolidation, and court congestion.

Discussion

The court explained that modern travel and electronic communications can reduce the hardship of litigating in one forum rather than another. It also stated that a plaintiff’s choice of forum receives little deference when no party resides there and the subject matter is not otherwise connected to that forum.

Neither plaintiff nor Protective Life Insurance Company was located in the Northern District. Plaintiffs argued that the case was connected to that district and that potential witnesses or future parties might be located there or in the Eastern District. They also alleged that the insurer participated with other insurance-related entities and individuals in a broad scheme involving California’s policy-cancellation protections.

The court found that the claims for relief did not turn on whether that alleged scheme existed. It also found that the plaintiffs’ suggestions about possible future witnesses or parties did not establish that witnesses or parties in the Northern District made transfer inconvenient. The court concluded that the operative events were clearly centered in the Southern District and that the case had little genuine connection to the Northern District. The other relevant factors were neutral or favored transfer, and docket-congestion statistics also appeared to favor transfer.

Disposition

The court granted the motion to transfer venue to the Southern District of California. It did not rule on the merits of plaintiffs’ allegations concerning the insurance policy or the California insurance statutes.