Grundstrom v. Wilco Life Insurance Company

Background

Wilco Life Insurance Company moved for summary judgment, asking the court to rule in its favor on Julie Grundstrom’s claims for declaratory judgment, breach of contract, and financial elder abuse. The court decided the motion based on the parties’ written submissions and vacated the scheduled hearing.

The dispute concerned California Insurance Code sections 10113.71 and 10113.72, including the requirement to provide written notice of the annual right to designate a third party to receive certain notices before an insurance policy is terminated or lapses. The opinion states that Grundstrom asserted two declaratory-relief claims: one under California law and one under the federal Declaratory Judgment Act.

Declaratory Relief

The court granted Wilco’s motion on Grundstrom’s declaratory-judgment claims. It found persuasive authority holding that beneficiaries of policies insuring deceased individuals are not entitled to forward-looking declaratory relief because they have a fully accrued breach-of-contract claim. The court also rejected Grundstrom’s argument that her declaratory-relief claims sought declarations about past and future rights distinct from her claim for damages, noting that the motion addressed her individual claims.

Breach of Contract

The court denied Wilco’s motion on the breach-of-contract claim. Wilco argued that Grundstrom had not shown a triable issue—a genuine factual dispute requiring a trial—about whether any failure to provide the required notice caused the policy to lapse. The court found that argument unpersuasive.

Relying on cited authority, the court concluded that an insurer’s failure to comply with the third-party-designee notice requirement could support a breach-of-contract claim even without proof that the missing notice caused the lapse. The court also found unpersuasive Wilco’s argument, raised for the first time in its reply, that section 10113.72 did not apply retroactively to the universal life insurance policy at issue.

Financial Elder Abuse

The court granted Wilco’s motion on the financial elder-abuse claim. It found that neither the allegations in the operative complaint nor the evidence presented with the motion established a triable issue on any element of that claim.

The opinion explains that a financial elder-abuse claim requires facts showing both that the defendant engaged in statutorily defined abuse, including taking or retaining an elder’s property for a wrongful use or with intent to defraud or through undue influence, and that the defendant acted with recklessness, malice, oppression, or fraud. The court rejected Grundstrom’s argument that Wilco’s alleged failure to provide notice and termination of the policy constituted wrongful use. It reasoned that, until 2021, there was a genuine legal dispute about whether sections 10113.71 and 10113.72 applied to policies issued before 2013.

Disposition

The court granted in part and denied in part Wilco’s motion for summary judgment: it granted the motion on the declaratory-judgment claims and the financial elder-abuse claim, and denied it on the breach-of-contract claim. The court set Grundstrom’s motion for class certification for a hearing on November 3, 2023.