Phan v. Transamerica Premier Life Insurance Company

Background

Dung Phan asserted five causes of action: declaratory relief under California law, declaratory relief under federal law, breach of contract, violation of California’s Unfair Competition Law, and financial elder abuse under California law. The declaratory-relief claims sought a declaration that California Insurance Code sections 10113.71 and 10113.72 applied, beginning January 1, 2013, to Transamerica’s California policies that were in force on or after that date.

Phan’s original proposed class covered owners or beneficiaries of California life-insurance policies issued before 2013 that Transamerica lapsed or terminated for nonpayment of premiums in or after 2013 without complying with the statutory notice and grace-period requirements. She also proposed an elder-abuse subclass for class members who were at least 65 when their policies lapsed or terminated. She sought certification under Federal Rule of Civil Procedure 23(b)(2), which addresses classes seeking primarily injunctive or declaratory relief, and Rule 23(b)(3), which addresses certain damages classes.

Changed Class-Certification Theory

In her reply brief, Phan stated for the first time that she sought a partial damages class covering the small percentage of policies that might be entitled to benefits under claims allowing damages. She said she was not seeking damages for class members whose insureds were still alive. She also described the proposed declaratory relief as including a declaration that the statutes applied to the policies and that Transamerica’s attempted terminations were ineffective.

Transamerica applied for permission to file supplemental briefing. It argued that Phan had changed her position and that Transamerica had not had a sufficient opportunity to respond. The court agreed that Phan had significantly altered her class-certification theory in the reply. But it concluded that supplemental briefing would not be useful because Phan’s complaint and original certification motion did not define a damages subclass, and because the declaration that the terminations were ineffective was not requested in the complaint.

Ruling

The court denied Transamerica’s application for leave to file a supplemental brief. It denied Phan’s motion for class certification without prejudice to refiling a new motion consistent with the position stated in her reply. “Without prejudice” means the order did not bar Phan from filing a renewed motion. The court further stated that, if the changed theory required an amended complaint, Phan had to seek leave to amend before filing a renewed certification motion.

The court modified the case schedule to allow a renewed motion for class certification by May 19, 2023, and stated that it would later decide whether the rest of the schedule needed to be postponed.