1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 THAO NGOC TRAN TON, an individual, Case No.: 3:23-cv-02200-W-AHG

11 Plaintiff,

ORDER GRANTING IN PART AND

12 v. DENYING IN PART MOTION TO DISMISS [Doc. 9] 13 NEW YORK LIFE INSURANCE COMPANY; and DOES 1 through 10, 14 inclusive, 15 Defendants. 16 17 18 Pending before the Court is defendant New York Life Insurance Company’s 19 (“NYLIC”) motion to dismiss the first amended complaint ([Doc. 8], “FAC”) under 20 Federal Rule of Civil Procedure 12(b). ([Doc. 9], “Motion”.) Plaintiff Thao Ngoc Tran 21 Ton opposes ([Doc. 10], “Opposition”) and NYLIC has replied ([Doc. 12], “Reply”.) 22 The Court decides the matter on the papers submitted and without oral argument. 23 See CivLR 7.1(d)(1). For the following reasons, the Court GRANTS IN PART and 24 DENIES IN PART the Motion. 25 26 1 I. RELEVANT BACKGROUND 2 The FAC is certainly no model of clarity. It contains numerous incomplete 3 sentences, grammatical issues, and typographical errors that make it difficult for the 4 Court to comprehend. Accordingly, the Court begins by summarizing—to the best of its 5 ability—what it understands the FAC’s factual allegations to be: 6 1. NYLIC issued two annuities to Tam Thi Minh Thai (“Decedent”) as owner 7 and annuitant. (FAC at ¶ 1.) 8 2. Both annuities listed five individuals as equal beneficiaries, each entitled to 9 an equal 20% share of the annuities. (Id. at ¶ 8.) Those individuals were 10 Lan T. Swayze (“Swayze”); Hue Thi Thai (“Hue”); Than Thuan Thai 11 (“Than”); Tien Thuan Thai (“Tien”); and Tuan Ngoc Thai (“Ngoc”). (Id.) 12 3. Plaintiff alleges that she is the daughter beneficiary Swayze; as well as the 13 executor and trustee of “the Living Trust[s]” of the Decedent, beneficiary 14 Than, and beneficiary Swayze. (Id. at ¶ 13.) 15 4. Decedent passed away on January 1, 2019—at which point the annuities’ 16 death benefits became payable. (Id. at ¶ 9.) 17 5. On March 20, 2019, beneficiaries Swayze and Than sent NYLIC “signed, 18 notarized statements relinquishing any claims they may have had to the 19 death benefits under the Policies.” (Id. at ¶ 9 [emphasis added].) And while 20 not entirely clear from the FAC, subsequent briefing suggests that the 21 “notarized statements” ended with “Please transfer all of these benefits 22 directly to the Trustee.” ([9-2] at 80, 83.) However, Plaintiff does not allege 23 that the notices defined what they meant by “Trustee,” nor does she allege 24 that the annuities mentioned “[t]he Living Trust” of Decedent or its trustee 25 (Plaintiff) in any way. (See [9-2] at 7-88.) 26 1 6. NYLIC seems to have interpreted these notices as beneficiaries Swayze and 2 Than disclaiming their interests in the annuities and directing their shares to 3 be divided between the three remaining beneficiaries. (FAC at ¶¶ 9–12.) As 4 such, NYLIC ultimately paid out the remaining three beneficiaries (Hue, 5 Tien, and Ngoc) at 33% each instead of the original 20% each. (Id.) 6 7. Plaintiff asserts this was incorrect for NYLIC to do, and that the notices 7 were actually asking NYLIC to transfer beneficiaries Swayze and Than’s 8 respective 20% shares to the trustee of Decedent’s “Living Trust” (i.e., to 9 Plaintiff). (See id. at ¶¶ 16, 18.) Although, the FAC does not make clear if 10 this was so the trustee (Plaintiff) could continue to hold the money on their 11 behalf as trustee (possibly to defer tax liability), or if they were attempting to 12 personally give Plaintiff their 20% shares of the annuities. 13 8. Confusingly, on August 26, 2019, Plaintiff alleges that beneficiaries Swayze 14 and Than sent another letter to NYLIC, in which they stated that “they now 15 wanted to claim the benefit which they had already disclaimed.” (Id. at ¶ 16 10.) Perhaps unsurprisingly, NYLIC “mailed rejection letters for the claims 17 . . . as they were no longer the beneficiaries due to disclaiming the benefits 18 in March 2019.” (Id. at ¶ 10.) 19 9. Plaintiff now sues NYLIC for “Breach of Insurance Contract,” “Insurance 20 Bad Faith,” and for “Declaratory Relief” that “Plaintiff is the sole intended 21 beneficiary on the” annuities and that she is owed the respective 20% shares 22 of beneficiaries Swayze and Than. (Id. at ¶¶ 28–39.) 23 II. LEGAL STANDARD 24 Federal Rule of Civil Procedure 12(b)(6) allows a defendant to file a motion to 25 dismiss for failing “to state a claim upon which relief can be granted.” Fed. R. Civ. P. 26 12(b)(6) (“Rule 12”). A motion to dismiss under Rule 12(b)(6) tests the complaint’s 1 sufficiency. See N. Star Int’l v. Ariz. Corp. Comm’n., 720 F.2d 578, 581 (9th Cir. 1983). 2 A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory 3 or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, 4 Inc., 749 F.2d 530, 534 (9th Cir. 1984). Additionally, in evaluating the motion, the Court 5 must assume the truth of all factual allegations and must “construe them in light most 6 favorable to the nonmoving party.” Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir. 7 2002). 8 To survive a motion to dismiss, a complaint must contain “a short and plain 9 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 10 8(a)(2) (“Rule 8”). The Supreme Court has interpreted this rule to mean that “[f]actual 11 allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. 12 Corp. v. Twombly, 550 U.S. 554, 555 (2007). The allegations in the complaint must 13 “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is 14 plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 15 550 U.S. at 570). While well-pled allegations in the complaint are assumed true, a court 16 is not required to accept legal conclusions couched as facts, unwarranted deductions, or 17 unreasonable inferences. Papasan v. Allain, 478 U.S. 265, 286 (1986); Sprewell v. 18 Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). 19 III. DISCUSSION 20 A. Standing 21 The fundamental problem with Plaintiff’s FAC is that it is unclear in what capacity 22 and under what theory she is suing. Is she suing as the trustee of Decedent’s “Living 23 Trust” arguing that the benefits were improperly distributed? Is she suing as the trustee 24 of beneficiaries Swayze and Than’s “Living Trust[s]” arguing that something should 25 have been done with their respective 20% shares other than being redistributed to the 26 three remaining beneficiaries? Is she suing in her personal capacity, arguing that 1 beneficiaries Swayze and Than’s somehow assigned or transferred their interests in the 2 annuities to Plaintiff personally? None of this is clear from the FAC. 3 Either way, California law only provides standing to file suite regarding a policy to 4 those who are in “[p]rivity of contract” with the insurer. Seretti v. Superior Nat. Ins. Co., 5 71 Cal. App. 4th 920, 929 (1999) (emphasis added) (quoting Austero v. National Cas. Co. 6 62 Cal. App. 3d 511, 516–517, (1976)) (“Whether for better or worse . . . liability for 7 ‘bad faith’ has been strictly tied to the implied-in-law covenant of good faith and fair 8 dealing arising out of an underlying contractual relationship. Where no such relationship 9 exists, no recovery for ‘bad faith’ may be had. [Thus], an insurer's duty of good faith and 10 fair dealing is owed solely to its insured and, perhaps, any express beneficiary of the 11 insurance policy.”). 12 Here, Plaintiff does not allege that she, or any of the “Living Trust[s]” she asserts 13 to be the trustee of, were in privity with NYLIC regarding the annuities at issue—as 14 opposed to the individuals themselves. Nor has she provided the Court with any 15 authority showing that these positions, absent some direct privity with NYLIC, provide 16 her standing to sue here. Simply put, the Court needs Plaintiff to allege facts showing 17 more clearly: (1) what capacity she is suing in; and (2) how that capacity gives her 18 standing to sue. 19 Accordingly, the FAC must be dismissed because Plaintiff has not alleged 20 sufficient facts showing she even has standing to bring these claims against NYLIC. 21 B. Statute of Limitation 22 Even if Plaintiff did have standing, NYLIC argues that the FAC must be dismissed 23 because this case was filed beyond California’s four-year statute of limitations for breach 24 of contract claims and two-year statute of limitations for tortious insurance bad faith 25 claims. ([9-2] at 9–10.) 26 1 Under California law, “a cause of action accrues [until] ‘when the plaintiff 2 discovers or should have discovered all facts essential to the cause of action.’” State 3 Farm Fire & Cas. Co. v. Superior Ct., 210 Cal. App. 3d 604, 608 (1989) (emphasis in 4 original) (quoting Abari v. State Farm Fire & Cas. Co., 205 Cal. App. 3d 530, 535 5 (1988)). 6 Here, Plaintiff alleges that her claims accrued until September 5, 2019, when 7 NYLIC denied beneficiaries Swayze and Than’s claims, stating in a letter that they were 8 “no longer beneficiaries.” (FAC at ¶ 16; Opposition at 2.) In its Motion, NYLIC points 9 to a July 10, 2019 letter in which it claims it notified beneficiaries Swayze and Than that 10 it had followed their requests to disclaim their interests in the annuities. ([9-1] at 9; [9-2] 11 at 86.) Unfortunately for NYLIC, the Court at this stage cannot consider this extrinsic 12 evidence and must accept the well-pled allegations in the FAC as true. As alleged in the 13 FAC, the first time beneficiaries Swayze and Than had notice of the 14 “misunderst[anding]” was when it received the September 5, 2019 letter. Accordingly, 15 the statute of limitations accrued until September 5, 2019—which is within four years but 16 beyond two years of when this case was filed on August 29, 2023. Thus, only Plaintiff’s 17 “Insurance Bad Faith Claim” falls outside the statute of limitations. 18

IV. Leave to Amend

19 In its Opposition, Plaintiff asks the Court for leave to amend the FAC if the Motion 20 is granted. (Opposition at 5.) Under Federal Rule of Civil Procedure 15(a)(2), courts 21 “should freely give leave [to amend] when justice so requires.” Furthermore, leave to 22 amend “should be granted with ‘extreme liberty’” and only be denied when “it is clear . . 23 . that the complaint could not be saved by any amendment.” Moss v. U.S. Secret Serv., 24 572 F.3d 962, 972 (9th Cir. 2009). 25 26 1 Considering this circuit’s preference for permitting amendment where not futile, 2 Court cannot conclude that Plaintiff could not possibly allege additional facts to 3 || demonstrating in what capacity she is suing and how that capacity gives her standing to 4 ||sue. As such, the Court grants Plaintiff leave to amend her FAC. 5 If Plaintiff opts to amend her FAC, the factual allegations in her second amended 6 || complaint must be “consistent with” and may “not contradict the allegations in the 7 || original complaint.” United States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 8 2011). 9||V. CONCLUSION & ORDER 10 For the reasons stated above, the Court GRANTS IN PART AND DENIES IN 11 |} PART NYLIC’s Motion to Dismiss [Doc. 9]. The FAC [Doc. 8] is DISMISSED WITH 12 || LEAVE TO AMEND. If Plaintiff opts to file a second amended complaint, it must do 13 on or before November 4, 2024. 14 15 IT IS SO ORDERED. 16 7 Dated: October 21, 2024 \

19 Hn. 1 omas J. Whelan United States District Judge 20 21 22 23 24 25 26 27