1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 9 MINERVA CHAVEZ, individually and Case No.: 22-cv-00166-AJB-DEB on behalf of all others similarly situated, 10 Plaintiff, ORDER GRANTING DEFENDANT’S 11 MOTION FOR SUMMARY v. JUDGMENT 12

ALLSTATE NORTHBROOK

13 INDEMNITY COMPANY, (Doc. No. 121) 14 Defendant. 15 16 17 18 19 Presently pending before the Court is Defendant Allstate Northbrook Indemnity 20 Company’s (“Allstate”) Motion for Summary Judgment. (Doc. No. 121.) Allstate’s motion 21 for summary judgment has been fully briefed. (Doc. Nos. 121; 131; 133.) Pursuant to Civil 22 Local Rule 7.d.1, the Court finds the matter suitable for determination on the papers 23 without oral argument and vacates the hearing on Allstate’s motion for summary judgment. 24 For the reasons set forth below, the Court GRANTS Allstate’s motion for summary 25 judgment. 26 I. BACKGROUND 27 Plaintiff filed the original complaint against Allstate in this Court on February 4, 28 2022. (See Doc. No. 1.) On January 3, 2023, the Court granted in part and denied in part 1 Allstate’s motion to dismiss Plaintiff’s Complaint, (Doc. No. 33), and on January 13, 2023, 2 Plaintiff filed the operative FAC, (Doc. No. 34). On April 13, 2023, the Court granted in 3 part and denied in part Allstate’s motion to dismiss Plaintiff’s FAC. (Doc. No. 42.) 4 Plaintiff’s single remaining claim is for violation of the implied covenant of good faith and 5 fair dealing. (See generally id. (dismissing Plaintiff’s California Unfair Competition Law 6 (“UCL”) claim).) On June 25, 2024, the Court certified a class of “all California residents 7 who purchased personal automobile insurance from Allstate covering any portion of the 8 time period from March 1, 2020 to June 11, 2021[,]” and appointed Plaintiff Minerva 9 Chavez as class representative. (Doc. No. 83.) Allstate’s motion for summary judgment on 10 Plaintiff’s remaining claim follows. 11 A. Plaintiff’s Allstate Private Passenger Automobile Insurance Policy 12 Plaintiff first purchased a 6-month Private Passenger Automobile (“PPA”) insurance 13 policy from Allstate (the “Policy”) in the fall of 2019, covering the period of October 26, 14 2019, to April 26, 2020. (Doc No 121-11 ¶ 2.) Plaintiff subsequently renewed her Policy 15 several times, such that her Policy remained effective through at least October 26, 2023. 16 (Id. ¶¶ 7, 18, 26, 31, 33, 41, 48.) 17 B. COVID-19 and Allstate’s Shelter-In-Place Payback Program 18 At the onset of COVID-19, on March 4, 2020, California Governor Newsom issued 19 an executive order, proclaiming a State of Emergency. (Doc. No. 121-22 at 2.) On March 20 19, 2020, he issued a “stay-at-home” order, directing “all individuals living in the State of 21 California to stay at home or at their place of residence” with limited exceptions. (Id.) 22 In response to the stay-at-home order, on April 6, 2020, Allstate announced its 23 Shelter-In -Place Payback (“SIPP”) program “to help its personal auto insurance customers 24 in these challenging times.” (Doc. No. 121-23 at 2.) In its press release, Allstate stated that 25 its customers would receive “15% of their monthly premium in April and May, [2020,] 26 totaling more than $600 million [nationwide].” (Id. at 3.) The day prior to announcing its 27 SIPP program, Allstate submitted a rate filing with the California Department of Insurance 28 (“CDI”), seeking authorization to implement the program. CDI responded that the 1 California rate filing process did not have a mechanism to permit COVID related refunds, 2 and CDI requested that Allstate withdraw its filing. (Doc. No. 121-12 at 56:1–58:8.) 3 C. CDI Orders Insurers to Provide COVID-19 Premium Relief 4 One week later, on April 13, 2020, CDI issued Bulletin 2020-3 to all property, 5 casualty, and workers compensation insurers. (Doc. No. 121-26.) Bulletin 2020-3 6 recognized that reduced driving during the “stay-at-home” order “resulted in fewer 7 accidents, injuries, and fatalities on public highways and roads[,]” and 8 “projected loss exposures of many insurance policies have become overstated or 9 misclassified.” (Id. at 2.) Accounting for this reduction in risk, CDI ordered insurers to 10 make premium refunds for March and April 2020 to California private passenger 11 automobile insurance holders “as quickly as practicable.” (Id. at 3.) Bulletin 2020-3 granted 12 “each insurer reasonable flexibility in determining how best to quickly and fairly 13 accomplish the refund of premium to policyholders” and permitted insurers to refund 14 premium without prior approval by CDI if the insurers applied a uniform premium 15 reduction for all policyholders in an individual line of insurance. (Id.) It also required 16 insurers to report to the Department of Insurance “an explanation and justification for the 17 amount and duration of any premium refund, and how those measures reflect the actual or 18 expected reduction of exposure to loss.” (Id. at 4.) As the pandemic continued, on May 15, 19 2020, and December 3, 2020, CDI issued two additional bulletins, Bulletins 2020-4 and 20 2020-8, respectively, (see Doc. Nos. 121-27; 121-28), which extended the directions and 21 reporting requirements set forth in Bulletin 2020-3 (collectively, “CDI Bulletins”), and 22 ordered insurers to continue providing premium relief through May and June 2020, as well 23 as subsequent months “as conditions warrant.” (See Doc. Nos. 121-27; 121-28 at 2.) 24 Following the issuance of the CDI Bulletins, Allstate subsequently provided 25 additional refunds to California customers in 2020 and 2021, by issuing 15% premium 26 refunds for March through May 2020, 7% premium refunds for June through August 2020, 27 5.5% premium refunds for September through December 2020, and 3.5% premium refunds 28 1 for January through March 2021. (Doc. No. 121-12 at 122:3–20, 123:13–17 ; see also Doc. 2 No. 131-5 at 3.) Allstate asserts, and Plaintiff does not dispute, that Allstate returned over 3 $190.5 million in premium to over one million California personal automobile insurance 4 policyholders for the period March 2020 through March 2021. (See Doc. No. 121-1 at 12; 5 Doc. No. 131 at 3.) 6 D. CDI’s Investigation into Allstate’s Premium Relief 7 On March 11, 2021, CDI Commissioner Ricardo Lara issued Bulletin 2021-03 8 which found, “based on extensive analysis of data received, the Department’s review of 9 this loss data demonstrates the premium relief that insurance companies provided to their 10 policyholders was insufficient, leaving consumers paying inflated premiums while they 11 continue to experience reduced risk of loss.” (Doc. No. 121-29 at 2.) Bulletin 2021-03 12 directed insurance companies to “continue to provide premium relief information to the 13 Department on a quarterly basis” and to justify if no premium was returned. (Id. at 5.) 14 In a similar vein, on October 6, 2021, CDI issued a press release, titled, 15 “Commissioner Lara orders Allstate, Mercury, and CSAA to ‘close the gap’ on auto 16 insurance refunds owed to drivers who drove less during the pandemic[.]” (Doc. No. 121- 17 31 at 2.) The press release stated that CDI’s analysis of data “received directly from auto 18 insurance companies shows these three auto insurance companies have the greatest gap 19 between what they initially refunded drivers, and what they should have refunded, to 20 provide proper premium relief to their policyholders since the start of the COVID-19 21 pandemic.” (Id.) Specifically, CDI’s analysis “found that from March to September 2020, 22 insurance company groups returned on average 9 percent of auto premiums, but the 23 Department’s analysis found they should have refunded nearly double that amount—17 24 percent—over the seventh month period.” (Id.) The press release provided Allstate and the 25

26 1 Allstate’s 30(b)(6) witness, Alexander DeWitt, at one point testified that Allstate provided 7.5% premium relief refunds from June through August 2020. (See Doc. No. 121-12 at 122:5–7.) However, he 27 also testified the premium refund for that time period was 7%, (id. at 102), and the parties do not dispute that Allstate provided 7% premium refunds for June through August 2020. (See Doc. No. 121-1 at 13; 28 1 other two insurance companies 30 days to respond to CDI prior to facing legal action. (Id. 2 at 3.) 3 On November 5, 2021, CDI issued a follow-up press release, indicating that Allstate, 4 Mercury, and CSAA complied with Commissioner Lara’s order to submit additional data 5 to CDI about auto premium refunds provided to customers during the pandemic. (See Doc. 6 No. 121-32.) CDI indicated that it would “evaluate the data and determine how much in 7 additional premiums each insurance company owes their policyholders.” (Id. at 2.) 8 Commissioner Lara expressed that his “goal is to have an accurate and fair determination 9 of what each insurance company’s appropriate amount of premium should be.” (Id.) 10 In response to CDI’s orders, Allstate reports that it made at least fifteen submissions 11 to CDI, supporting the amount of premium it returned through its SIPP program. (Doc. No. 12 121-1 at 14; see also Doc. Nos. 121-16; 121-17; 121-18.) Actuaries within CDI’s Rate 13 Regulation Branch, the entity responsible for evaluating insurers’ compliance with CDI’s 14 bulletins relating to premium relief due to the pandemic, reviewed insurer-submitted data 15 from 2020 to 2023 in response to CDI’s orders. (Doc. No. 121-33 at 3 ¶ 4.) 16 Ultimately, on January 23, 2023, CDI’s Deputy Commissioner of the Rate 17 Regulation Branch, Ken Allen, informed Allstate that CDI determined that Allstate’s 18 premium relief refunds were sufficient, and that Allstate did not need to return any 19 additional premium to its California personal automobile policy insurance holders. (Doc. 20 No. 121-34 at 4.) Mr. Allen stated that CDI’s determination was “based on data and other 21 information submitted to [CDI] by Allstate [], the PPA premium previously returned to its 22 California PPA policyholders, and the methodology utilized by [CDI] to calculate whether 23 insurers returned a sufficient amount of PPA premium to account for the lower risk of loss 24 during the COVID pandemic period[.]” (Id.) While CDI established that Allstate’s 25 premium relief refunds were sufficient, it found that other insurance companies failed to 26 distribute adequate premium refunds, and required those companies to provide additional 27 premium relief. (See Doc. Nos. 121-35; 121-36; 121-37.) 28 1 Plaintiff does not dispute that she received Allstate’s premium relief payments in 2 2020 and 2021 under its SIPP program. (Doc. No. 121-1 at 12; Doc. No. 131 at 11.) Rather, 3 Plaintiff asserts “it was far from enough.” (Doc. No. 131 at 3.) Plaintiff alleges Allstate 4 failed to issue adequate refunds, and that she and other class members should have received 5 “at least a 30% average refund of paid premiums” to compensate for the windfall Allstate 6 received by individuals staying at home and not driving during the pandemic. (FAC ¶ 4.) 7 II. REQUEST FOR JUDICIAL NOTICE 8 In support of its motion for summary judgment, Allstate requests judicial notice of 9 eighteen exhibits. (See Doc. No. 121-21 ¶¶ 1–18.) Plaintiffs have not objected. Under 10 Federal Rule of Evidence 201, a court may take judicial notice of a fact that is “not subject 11 to reasonable dispute because it: (1) is generally known within the trial court’s territorial 12 jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy 13 cannot reasonably be questioned.” Fed. R. Evid. 201(b). The Court evaluates Allstate’s 14 request for judicial notice by grouping the eighteen exhibits in the following categories: 15 A. Government announcements regarding the COVID-19 pandemic (Exhibit 15) 16 17 Exhibit 15 is a copy of Executive Order N-33-20 of the Executive Department of the 18 State of California, dated March 19, 2020. (Doc. No. 121-22.)2 Exhibit 15 is the California 19 “stay-at-home” order issued in response to COVID-19 and signed by California Governor 20 Gavin Newsom. (Id.) “The Court may take judicial notice of public records and 21 government documents available from reliable sources, including government websites.” 22 Day v. GEICO Cas. Co., No. 21-CV-02103-BLF, 2024 WL 251408, at *2 (N.D. Cal. Jan. 23 23, 2024). Accordingly, the Court GRANTS Allstate’s request to take judicial notice of 24 Exhibit 15. See id. (taking judicial notice of “state and federal announcements regarding 25 the COVID-19 pandemic”). 26 / / / 27 2 Exhibit 15 is available at https://www.gov.ca.gov/wp-content/uploads/2020/03/3.19.20-attested-EO-N- 28 1 B. Allstate’s Press Release (Exhibit 16) 2 Exhibit 16 is a copy of Allstate’s April 6, 2020, press release titled, “Allstate is 3 Providing More Than $600 Million to Auto Insurance Customers Amid Pandemic[,]” 4 which remains accessible on Allstate’s website. (Doc. No. 121-23.) “Courts may take 5 judicial notice of publications introduced to indicate what was in the public realm at the 6 time, not whether the contents of those articles were in fact true.” Von Saher v. Norton 7 Simon Museum of Art at Pasadena, 592 F.3d 954, 960 (9th Cir. 2010) (internal quotations 8 and citations omitted). Here, the Court finds it proper to judicially notice Allstate’s press 9 release, accessible on Allstate’s website. (Doc. No. 121-22 ¶ 2); see also Romero v. Securus 10 Techs., Inc., 216 F. Supp. 3d 1078, 1085 (S.D. Cal. 2016) (taking judicial notice of press 11 releases issued by defendant that remain readily available on defendant’s website); see also 12 In re Sorrento Therapeutics, Inc. Sec. Litig., No. 20-CV-00966-AJB-DEB, 2021 WL 13 6062943, at *4 (S.D. Cal. Nov. 18, 2021) (taking judicial notice of company-issued press 14 release but not for the truth of the matters asserted therein). 15 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of Exhibit 16 16, but not for the truth of the matters asserted therein. 17 C. California Department of Insurance website pages (Exhibits 17, 18) 18 Exhibit 17 is a copy of the “About the Department” page of the CDI website, (Doc. 19 No. 121-24), and Exhibit 18 is a copy of the “Rate Regulation Branch” page of CDI’s 20 website, (Doc. No. 121-25). It is appropriate to take judicial notice of information available 21 online if the information “was made publicly available by [a] government entit[y] . . . and 22 neither party disputes the authenticity of the web sites or the accuracy of the information 23 displayed therein.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010); 24 see also Day, 2024 WL 251408, at *2. Here, CDI’s website is a reliable government agency 25 website, and neither party disputes the authenticity of the CDI website pages. Accordingly, 26 the Court GRANTS Allstate’s request to take judicial notice of Exhibits 17 and 18. 27 / / / 28 / / / 1 D. California Department of Insurance Bulletins (Exhibits 19, 20, 21, 22) 2 Exhibits 19–22 are copies of CDI’s bulletins dated April 13, 2020, May 15, 2020, 3 December 3, 2020, and March 11, 2021, respectively, which are publicly available online. 4 (See Doc. Nos. 121-26; 121-27; 121-28; 121-29.) Because the Court “may take judicial 5 notice of public records and government documents available from reliable sources, 6 including government websites[,]” Day, 2024 WL 251408, at *2, the Court finds it proper 7 to take judicial notice of these CDI bulletins. See id. (taking judicial notice of CDI 8 bulletins); see also Drawdy v. Nationwide Ins. Co. of Am., No. 222CV00271JAMKJN, 9 2022 WL 3020050, at *1 (E.D. Cal. July 29, 2022) (taking judicial notice of CDI bulletins). 10 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of Exhibits 19– 11 22. 12 E. California Department of Insurance Press Releases (Exhibits 24, 25) 13 Exhibits 24 and 25 are CDI-issued press releases dated October 6, 2021, and 14 November 5, 2021, respectively, which are publicly available online on CDI’s website. 15 (See Doc. Nos. 121-31; 121-32.) Because the Court “may take judicial notice of public 16 records and government documents available from reliable sources, including government 17 websites[,]” Day, 2024 WL 251408, at *2, the Court finds it proper to take judicial notice 18 of these CDI press releases. See id. (taking judicial notice of CDI press releases); see also 19 In re Outlaw Lab’ys, LP Litig., 352 F. Supp. 3d 992, 1006 n.5 (S.D. Cal. 2018) (taking 20 judicial notice of a U.S. Department of Justice press release); see also DeHoog v. Anheuser- 21 Busch InBev SA/NV, 899 F.3d 758, 763 (9th Cir. 2018) (taking judicial notice of 22 “government documents, court filings, press releases, and undisputed matters of public 23 record”). 24 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of 25 Exhibits 24 and 25. 26 F. California Department of Insurance Correspondence (Exhibits 23, 27) 27 Exhibits 23 and 27 are both pieces of correspondence from CDI to Allstate. (See 28 Doc. Nos. 121-30; 121-34.) “A court may . . . take judicial notice of self-authenticating 1 documents, including those that bear ‘a seal purporting to be that of the United States . . . 2 or a department [or] agency’ and ‘a signature purporting to be an execution or attestation.’” 3 Blain v. Liberty Mut. Fire Ins. Co., No. 22-CV-00970-AJB-MMP, 2024 WL 948020, at *2 4 (S.D. Cal. Feb. 12, 2024) (quoting Fed. R. Evid. 902(1)). 5 Exhibit 23 is a copy of CDI’s October 5, 2021, letter from Kenneth B. Schnoll, CDI’s 6 General Counsel & Deputy Commissioner, to Allstate titled, “Additional Premium 7 Refunds, Credits, and Reductions in Response to COVID-19 Pandemic.” (Doc. No. 121- 8 30.) The letter is signed by Kenneth B. Schnoll. (Id.) The Court finds Exhibit 23 to be self- 9 authenticating because the letter is signed by CDI’s General Counsel & Deputy 10 Commissioner. See Blain, 2024 WL 948020, at *2 (taking judicial notice of the self- 11 authenticating CDI’s Settled Order for Liberty Mutual because it was “signed by the 12 Deputy Commissioner of [the California Department of Insurance].”) 13 Exhibit 27 is a CDI-certified copy of a January 23, 2023, email from Ken Allen, 14 Deputy Commissioner of the Rate Regulation Branch at CDI, to Gerald Zimmerman, then 15 Senior Vice President and Deputy General Counsel of Government and Industry Relations 16 at Allstate, with the subject line, “Allstate Northbrook Indemnity Company.” (Doc. No. 17 121-34.) On October 25, 2024, Destiny S. Youn, Custodian of Records at CDI, certified 18 under CDI’s seal that the January 23, 2023, email is a true and correct copy from the official 19 records of CDI. (Id. at 3.) The Court finds Exhibit 27 to be self-authenticating because 20 CDI’s Custodian of Records certified the email correspondence with the CDI seal along 21 with the signature of Destiny S. Youn, the Custodian of Records at CDI. See See Blain, 22 2024 WL 948020, at *2. 23 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of 24 Exhibits 23 and 27. 25 G. Declaration Filed in Different Case (Exhibit 26) 26 Exhibit 26 is a copy of the June 14, 2023, Declaration of Jack C. Nick filed in support 27 of CDI and Ken Allen’s Motion to Quash Subpoena, or in the Alternative, Motion for 28 Protective Order in Day v. GEICO Cas. Co., N.D. Cal. Case No. 2:23-mc-00091-FMO- 1 RAO, filed on June 20, 2023 under Docket No. 1. (Doc. No. 121-33.) A court may take 2 judicial notice of court filings and other matters of public record. See Reyn’s Pasta Bella, 3 LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006). Additionally, declarations 4 filed in connection with another case can be used to support a motion for summary 5 judgment. See Campbell v. Nat’l Passenger R. Corp., No. C05-05434 MJJ, 2008 WL 6 930992, at *14–15 (N.D. Cal. Apr. 3, 2008) (overruling evidentiary objection of the 7 plaintiff’s use of “declarations of witnesses that were taken for the purposes of a different 8 lawsuit” in evaluating summary judgment motion). “However, while the authenticity and 9 existence of a particular order, motion, pleading or judicial proceeding, which is a matter 10 of public record, is judicially noticeable, veracity and validity of its contents are 11 not.” Esparza v. Kohl’s, Inc., 723 F. Supp. 3d 934, 940 (S.D. Cal. 2024) (internal 12 punctuation and citation omitted). 13 Because Exhibit 26 is a court filing in a different case and publicly available, the 14 Court GRANTS Allstate’s request to take judicial notice of the existence of Exhibit 26. 15 See Reyn’s Pasta Bella, LLC, 442 F.3d at 746 n.6. However, the Court declines to grant 16 judicial notice of the factual allegations included in Jack C. Nick’s declaration. See Wheeler 17 v. Home Depot U.S.A., Inc., No. 15-CV-2236-CAB-AGS, 2020 WL 12835895, at *8 (S.D. 18 Cal. Nov. 23, 2020). 19 H. Settlement Stipulations (Exhibits 28, 29, 30) 20 Exhibits 28, 29, and 30 are copies of three different settlement stipulations that have 21 been publicly filed in other cases: Exhibit 28 is a copy of the August 1, 2023 Settlement 22 Stipulation in In the Matter of the COVID Refund of Liberty Mutual Fire Ins. Co., (Doc. 23 No. 121-35); Exhibit 29 is a copy of the April 24, 2023 Stipulation in In the Matter of the 24 COVID Refund of Mercury Ins. Co. & Cal. Auto. Ins. Co., (Doc. No. 121-36); and Exhibit 25 30 is a copy of the May 24, 2023 Settlement Stipulation in In the Matter of the COVID 26 Refund of Farmers Ins. Exch. and Mid-Century Ins. Co., (Doc. No. 121-37). A court may 27 take judicial notice of court filings and other matters of public record. See Reyn’s Pasta 28 Bella, LLC, 442 F.3d at 746 n.6. “However, while the authenticity and existence of a 1 particular order, motion, pleading or judicial proceeding, which is a matter of public record, 2 is judicially noticeable, veracity and validity of its contents are not.” Esparza, 723 F. Supp. 3 3d at 940. 4 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of 5 Exhibits 28, 29, and 30, but not the veracity of their content. 6 I. Professional Standards Published by Professional Standards Boards (Exhibits 31, 32) 7 8 Exhibits 31 and 32 are copies of Actuarial Standard of Practice No. 1 and No. 17, 9 respectively, of the Actuarial Standards Board that are publicly available online. (See Doc. 10 Nos. 121-38; 121-39.) Courts may take judicial notice of publicly available standards 11 published by professional standards boards, including actuarial standards of practice. See 12 e.g., Sec. & Exch. Comm'n v. Life Partners Holdings, Inc., 854 F.3d 765, 776 n.6 (5th Cir. 13 2017) (taking judicial notice of the adoption of Actuarial Standard of Practice No. 48); see 14 also Garcia v. J2 Glob., Inc., No. 2:20-CV-06096-FLA (MAAX), 2021 WL 1558331, at 15 *10 (C.D. Cal. Mar. 5, 2021) (taking judicial notice of accounting standards from the 16 Financial Accounting Standards Boards in part because “[c]ourts . . . regularly take judicial 17 notice of published accounting standards.”) Because the Actuarial Standard of Practices 18 Nos. 1 and 7 are publicly available and neither party disputes their accuracy, the Court 19 finds judicial notice of Exhibits 31 and 32 to be proper. 20 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of 21 Exhibits 31 and 32. 22 III. MOTION FOR SUMMARY JUDGMENT 23 A. Legal Standard 24 A court may grant summary judgment when it is demonstrated that there exists no 25 genuine dispute as to any material fact, and that the moving party is entitled to judgment 26 as a matter of law. See Fed. R. Civ. P. 56(a); Adickes v. S.H. Kress & Co., 398 U.S. 144, 27 157 (1970). The party seeking summary judgment bears the initial burden of informing a 28 court of the basis for its motion and of identifying the portions of the declarations, 1 pleadings, and discovery that demonstrate an absence of a genuine dispute of material fact. 2 See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A fact is “material” if it might 3 affect the outcome of the suit under the governing law. See Anderson v. Liberty Lobby, 4 Inc., 477 U.S. 242, 248–49 (1986). A dispute is “genuine” as to a material fact if there is 5 sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See 6 Long v. Cnty. of Los Angeles, 442 F.3d 1178, 1185 (9th Cir. 2006). 7 Where the moving party will have the burden of proof on an issue at trial, the movant 8 must affirmatively demonstrate that no reasonable trier of fact could find other than for the 9 movant. See Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). Where 10 the nonmoving party will have the burden of proof on an issue at trial, the movant may 11 prevail by presenting evidence that negates an essential element of the nonmoving party’s 12 claim or by merely pointing out that there is an absence of evidence to support an essential 13 element of the nonmoving party’s claim. See Nissan Fire & Marine Ins. Co. v. Fritz Cos., 14 210 F.3d 1099, 1102–03 (9th Cir. 2000). If a moving party fails to carry its burden of 15 production, then “the nonmoving party has no obligation to produce anything, even if the 16 nonmoving party would have the ultimate burden of persuasion at trial.” Id. If the moving 17 party meets its initial burden, the burden then shifts to the opposing party to establish that 18 a genuine dispute as to any material fact actually exists. See Matsushita Elec. Indus. Co. v. 19 Zenith Radio Corp., 475 U.S. 574, 586 (1986). The opposing party cannot “rest upon the 20 mere allegations or denials of the adverse party’s pleading but must instead produce 21 evidence that sets forth specific facts showing that there is a genuine issue for trial.” See 22 Estate of Tucker ex rel. Tucker v. Interscope Records, Inc., 515 F.3d 1019, 1030 (9th Cir. 23 2008) (internal quotation marks, alterations, and citation omitted). 24 The evidence of the opposing party is to be believed, and all reasonable inferences 25 that may be drawn from the facts placed before a court must be drawn in favor of the 26 opposing party. See Stegall v. Citadel Broad. Co., 350 F.3d 1061, 1065 (9th Cir. 2003). 27 However, “[b]ald assertions that genuine issues of material fact exist are insufficient.” See 28 Galen v. Cnty. of Los Angeles, 477 F.3d 652, 658 (9th Cir. 2007); see also Day v. Sears 1 Holdings Corp., 930 F. Supp. 2d 1146, 1159 (C.D. Cal. 2013) (“Conclusory, speculative 2 testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and 3 defeat summary judgment.”). Further, a motion for summary judgment may not be defeated 4 by evidence that is “merely colorable, or is not significantly probative . . . .” See Anderson, 5 477 U.S. at 249–50 (citations omitted); see also Hardage v. CBS Broad. Inc., 427 F.3d 6 1177, 1183 (9th Cir. 2006) (same). If the nonmoving party fails to produce evidence 7 sufficient to create a genuine dispute of material fact, the moving party is entitled to 8 summary judgment. See Nissan Fire & Marine, 210 F.3d at 1103. 9 B. Implied Covenant of Good Faith and Fair Dealing 10 Allstate moves for summary judgment on the single remaining cause of action— 11 Plaintiff’s implied covenant of good faith and fair dealing claim. (Doc. No. 121.) Plaintiff 12 alleges that Allstate breached the implied covenant by failing to utilize its discretion to 13 return sufficient premiums to California insurance holders in response to the changed 14 circumstances precipitated by the COVID-19 pandemic. (Doc. No. 34 ¶¶ 47–56.) The 15 parties disagree as to whether Plaintiff’s insurance policies provided Allstate with 16 discretion to make downward adjustments to premiums based on generalized changed 17 circumstances, or to limit premium to no more than a fair rate of return. (Doc. No. 121-1 18 at 18–19; Doc. No. 131 at 2, 11.) 19 “[T]he implied covenant of good faith and fair dealing . . . is based on the contractual 20 relationship between the insured and the insurer.” Waller v. Truck Ins. Exch., Inc., 11 Cal. 21 4th 1, 36 (1995), as modified on denial of reh’g (Oct. 26, 1995) (citation omitted). The 22 covenant exists “to prevent one contracting party from unfairly frustrating the other party’s 23 right to receive the benefits of the agreement actually made.” Guz v. Bechtel Nat. Inc., 24 24 Cal. 4th 317, 349 (2000). The implied covenant of good faith and fair dealing “cannot 25 impose substantive duties or limits on the contracting parties beyond those incorporated in 26 the specific terms of their agreement.” Id. at 349–50. Rather, the implied covenant “is 27 limited to assuring compliance with the express terms of the contract, and cannot be 28 extended to create obligations not contemplated by the contract.” Pasadena Live v. City of 1 Pasadena, 114 Cal. App. 4th 1089, 1094 (2004) (citing 1 Witkin, Summ. of Cal. Law (2003 2 supp.) Contracts § 743) (emphasis in original). Within this framework, “to establish the 3 insurer’s ‘bad faith’ liability, the insured must show that the insurer has (1) withheld 4 benefits due under the policy, and (2) that such withholding was ‘unreasonable’ or ‘without 5 proper cause.’” Major v. W. Home Ins. Co., 169 Cal. App. 4th 1197, 1209 6 (2009) (quoting Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566, 573–74 (1973)). 7 1. Implied Covenant of Good Faith & Fair Dealing—Withholding of Benefits Analysis 8 9 With respect to the first element, “a bad faith claim cannot be maintained unless 10 policy benefits are due . . . [.]” Waller, 11 Cal. 4th at 36 (quotation omitted); see also 11 OneWest Bank v. Houston Cas. Co., 676 F. App’x 664, 666 (9th Cir. 2017) (claim for 12 breach of the implied covenant fails absent showing that an insurer “withheld benefits due 13 under the policy”). This is because “[a]bsent that contractual right, . . . the implied covenant 14 has nothing upon which to act as a supplement, and ‘should not be endowed with an 15 existence independent of its contractual underpinnings.’” Waller, 11 Cal. 4th at 16 36 (quoting Love v. Fire Ins. Exchange, 221 Cal. App. 3d 1136, 1153 (1990)). In other 17 words, for Plaintiff’s claim to stand, Plaintiff “must tie [Allstate’s] alleged discretionary 18 power to a specific contractual provision.” Day v. GEICO Cas. Co., No. 21-CV-02103- 19 BLF, 2022 WL 2135746, at *2 (N.D. Cal. June 14, 2022). 20 Plaintiff fails to demonstrate how any provision in her Allstate policy either confers 21 Allstate discretion to downwardly adjust premiums in response to generalized changed 22 circumstances due to a pandemic like COVID-19 or grants policyholders the right to limit 23 premium to no more than a fair rate of return. (See generally Doc. No. 131); see also Nissan 24 Fire & Marine, 210 F.3d at 1103. In fact, Plaintiff rejects that such a requirement exists. 25 (Doc. No. 131 at 22 (“The Court should reject Allstate’s argument that Plaintiff’s claim 26 must be tied to a specific provision of its auto insurance contract.”))3 The law necessitates 27 3 Plaintiff appears to mistakenly conflate the need to tie Allstate’s discretion to a specific provision of the 28 1 that the Court decline Plaintiff’s invitation. This Court has consistently recognized that it 2 is well-settled California law that courts “cannot impose substantive duties or limits on the 3 contracting parties beyond those incorporated in the specific terms of their agreement.” 4 (See Doc. No. 33 at 16 (quoting Guz, 24 Cal 4th at 349–50)); see also Openshaw v. FedEx 5 Ground Package Sys., Inc., 576 F. App’x 685, 688 (9th Cir. 2014) (holding implied 6 covenant “protects against one party interfering with another party’s contract rights; it does 7 not obligate a party to help another party” or “waive” its own rights) (emphasis in 8 original)). 9 As Allstate suggests, there are good reasons why an implied covenant claim must be 10 tied to a specific contractual provision. (Doc. No. 121-1 at 23.) The Court finds the 11 reasoning in the analogous case, Day v. GEICO Cas. Co., No. 21-CV-02103-BLF, 2022 12 WL 2135746 (N.D. Cal. June 14, 2022), persuasive. There, the Day court stated: 13 If an insured could claim that generic economic or environmental circumstances had changed and force a reduction in their 14 insurance premium, then insurance companies could not with 15 any certainty establish insurance rates within the marketplace. Indeed, if Day’s theory worked, GEICO too would have the 16 inherent discretion to increase her rate in the face of more 17 challenging economic or environmental circumstances for the company. Without a specific contractual provision authorizing 18 this practice, the implied covenant of good faith and fair dealing 19 cannot impose such a duty by itself.

20 21 Day, No. 21-CV-02103-BLF, 2022 WL 2135746, at *2. The same reasoning holds true 22 here. 23 24

25 2135746, at *2, with the proposition that “breach of a specific provision of the contract is not a necessary prerequisite” to a good faith and fair dealing claim. (See Doc. No. 131 at 22 (quoting Carma Devs. (Cal.), 26 Inc. v. Marathon Dev. California, Inc., 2 Cal. 4th 342, 372 (1992)).) Allstate does not argue that that a claim for breach of the implied covenant of good faith and fair dealing requires Plaintiff to prove the 27 breach of a specific contract provision. (Doc. No. 133 at 9.) Accordingly, the Court agrees with Allstate that “Plaintiff’s entire digression on this point misses the mark . . . [.]” (Id.) 28 1 Rather than tethering Allstate’s alleged discretionary power to a specific term or 2 provision in the insurance policies, Plaintiff’s evidence demonstrating Allstate’s “inherent 3 discretion” under its California auto insurance contracts to make downward premium 4 adjustments is Allstate’s “own conduct[.]” (See Doc. No. 131 at 9 (“Allstate 5 unquestionably had the discretion to adjust premiums and issue premium relief. Its own 6 conduct proves as much.”); id. at 20 (“Allstate plainly had the discretion under its 7 California auto insurance contracts to make downward premium adjustments in response 8 to the changed circumstances of the COVID-19 pandemic. Allstate’s own actions refute 9 any claim to the contrary.”); id. at 21 (“As a California state manager testified, Allstate 10 knew that it could [make downward premium adjustments] even though it ‘wasn’t an 11 obligation of a typical insurance contract.’”) (quoting Doc. No. 129-2 at 33:13-34:13).)4 12 Plaintiff’s circular, conclusory argument fails to carry the day at summary judgment 13 for an implied covenant claim. See Shirley v. Allstate Ins. Co., 392 F. Supp. 3d 1185, 1191 14 (S.D. Cal. 2019), aff’d, 825 F. App’x 472 (9th Cir. 2020) (“rhetorical questions and 15 conclusory assertions are not enough to survive summary judgment.”) That Allstate issued 16 premium relief through its SIPP program does not imply that its discretion to do so 17 originated through contract. While both Plaintiff and Allstate recognize that Allstate may 18 waive its contractual rights under California Civil Code §§ 3268 and 3513 and return 19 credits, savings, and dividends under California Insurance Code §§ 1420 and 1860, such 20 statutory authorization does not demonstrate that Allstate breached the implied covenant 21 of good faith and fair dealing, which “is based on the contractual relationship between the 22 insured and the insurer.” Waller, 11 Cal. 4th at 36 (emphasis added). Additionally, other 23 courts have recognized that insurance companies may issue premium refunds for extra- 24 contractual reasons such as “marketing or competitive purposes.” Roby v. Liberty Mut. 25

26 4 In its Reply, Allstate stipulates that “Allstate’s California manager did not testify Allstate ‘knew’ it had such discretion.” (Doc. No. 133 at 7 n.2.) Rather, Allstate asserts that he “testified premium relief 27 ‘wasn’t an obligation’ of the contract, he ‘d[id]n’t know the specifics of how—or why [Allstate would have been allowed to do this,’ and it had never ‘been seen within the industry.’” (Id. (citing Doc. No. 28 1 Pers. Ins. Co., No. 20 C 6832, 2022 WL 204610, at *4 (N.D. Ill. Jan. 24, 2022) (dismissing 2 implied covenant claim “[b]ecause [plaintiff] has not pointed to express terms in the policy 3 establishing that Liberty Mutual possessed the contractual discretion to lower premium 4 rates based upon change in overall driving habits” during COVID-19). Here, Allstate 5 asserts, and Plaintiff does not dispute, that Allstate initiated the SIPP program out of 6 goodwill to its customers during a health and economic crisis. (See Doc. No. 121-11 at 11, 7 19; Doc. No. 131 at 12.) Rather than having contractual discretion to issue the premium 8 refunds, CDI ordered insurers to make premium refunds in its bulletins. (See Doc. Nos. 9 121-26; 121-27; 121-28.) 10 While Plaintiff does not assert that Allstate’s discretion to downwardly adjust 11 premiums is tied to any provision in the contract, (see Doc. No. 131 at 22), for 12 completeness, the Court will address the only portion of Allstate’s insurance policy which 13 explicitly authorizes Allstate to alter a policyholder’s premium: the “Changes” provision. 14 (See Doc. No. 121-1 at 9.) The “Changes” provision includes two relevant subsections: the 15 “Premium Changes” section and the “Duty to Report Policy Changes” section. The 16 “Premium Changes” section provides: 17 The premium for each auto which Allstate agrees to insure [is] based on information Allstate has received from you or other 18 sources. You agree to cooperate with us in determining if this 19 information is correct, if it is complete, and if it changes during the policy period. You agree that if this information changes or 20 is incorrect or incomplete, we may adjust your premium 21 accordingly during the policy period. 22 (Doc. No. 121-4 at 25.) The “Duty to Report Policy Changes” provision provides, in part: 23 “Your policy was issued in reliance on the information you provided concerning autos and 24 persons insured by the policy.” (Id.) 25 Allstate argues that the insurance policy limits premium adjustments to only when 26 Plaintiff reports changes in information concerning autos and persons insured by the policy, 27 rather than grant Allstate discretion to alter premium due to generalized changed 28 circumstances in the environment. (Doc. No. 121-1 at 9.) Conversely, Plaintiff asserts that 1 the inclusion of “other sources” in the “Premium Changes” section reveals that the purpose 2 of the auto insurance contract as a whole is “to ensure that the premium is commensurate 3 with the risk to the insurer, which, as Allstate notes, may either increase or decrease[,]” 4 and which Plaintiff argues includes reductions in risk caused by the COVID-19 pandemic. 5 (Doc. No. 131 at 27.) 6 The Court agrees with Allstate that the insurance policy limits premium adjustments 7 to changes in Plaintiff’s information concerning autos and persons insured by the policy. 8 In interpreting a contract under California law, “[t]he whole of a contract is to be taken 9 together, so as to give effect to every part, if reasonably practicable, each clause helping to 10 interpret the other.” Cal. Civ. Code § 1641. Here, reading the entire “Changes” provision 11 in context “makes clear that [Allstate’s] discretionary power to adjust Plaintiff’s policy 12 premiums is based on changes in ‘information’ in Plaintiff’s insurance file.” Day v. GEICO 13 Cas. Co., 580 F. Supp. 3d 830, 840 (N.D. Cal. 2022). That “information” is data or 14 circumstances that a customer provides, “perhaps a new address or correction of existing 15 information—not general changed circumstances like COVID-19.” Id. The emphasis on 16 “you,” the Allstate customer, in both the “Premium Changes” and “Duty to Report Policy 17 Changes” reinforces this interpretation. (Id.) The policy states, “You agree to cooperate 18 with us in determining if this information is correct, if it is complete, and if it changes 19 during the policy period.” (Doc. No. 121-4 at 25 (emphasis added).) “You agree that if this 20 information changes or is incorrect or incomplete, we may adjust your premium 21 accordingly during the policy period.” (Id. (emphasis added).) “You agree to cooperate 22 with us in determining if this information is correct . . . [.]” (Id. (emphasis added).) Because 23 “[t]he general circumstances of the COVID-19 pandemic are not ‘information’ that would 24 be provided by Plaintiff to [Allstate], as the ‘Changes’ section contemplates, . . . [Allstate’s] 25 discretionary power to adjust premiums under that provision is not triggered.” See Day v. 26 GEICO Cas. Co., 580 F. Supp. 3d 830, 840 (N.D. Cal. 2022) (dismissing implied covenant 27 of good faith and fair dealing claim brought under similar GEICO auto insurance policy); 28 see also Boobuli’s LLC v. State Farm Gen. Ins. Co., 712 F. Supp. 3d 1300, 1317–18 (N.D. 1 Cal. 2024) (granting summary judgment on implied covenant claim where “changes” 2 provision “simply provides discretion for adjustments, and only in the case of changed 3 circumstances for the insured party”); see also Siegal v. GEICO Cas. Co., 523 F. Supp. 3d 4 1032, 1040 (N.D. Ill. 2021) (dismissing breach of implied covenant claim under Illinois 5 law based on “Changes” provision in GEICO insurance policy because the “Changes” 6 provision “clearly relates to plaintiff’s specific information underlying her policy[,]” not 7 generalized changed circumstances like a pandemic). 8 Because no evidence has been proffered showing that Plaintiff’s Allstate policies 9 contained an express provision providing Allstate the discretion to reduce premium due to 10 generalized changed circumstances or granting a right to policyholders to limit premium 11 to a fair rate of return, Allstate is entitled to summary judgment of Plaintiff’s implied 12 covenant claim. See OneWest Bank, 676 F. App’x at 666 (“Because [insured] cannot 13 establish that [insurer] has withheld benefits due under the policy, its implied-covenant 14 claim must fail as a matter of law.”) 15 2. Implied Covenant of Good Faith & Fair Dealing—Reasonable 16 Withholding Analysis 17 Because Plaintiff does not prevail on demonstrating that Allstate withheld benefits 18 due under Allstate’s PPA policy, the Court finds that Allstate is entitled to summary 19 judgment on this first ground. Accordingly, the analysis of whether any withholding by 20 Allstate was reasonable is rendered moot. 21 * * * 22 The Court has reviewed all evidence submitted in support of, and in opposition to, 23 Defendant’s Motion for Summary Judgment. (Doc. Nos. 121; 131; 133.) To the extent this 24 evidence has not been discussed above or is not duplicative of the evidence submitted in 25 relation to Allstate’s Motion for Summary Judgment, the Court finds it does not alter the 26 conclusions reached above. For the reasons discussed above, Allstate is entitled to summary 27 judgment as to the breach of the implied covenant of good faith and fair dealing claim. 28 Accordingly, Allstate’s Motion for Summary Judgment is GRANTED. 1 || VII. CONCLUSION 2 Based on the foregoing, the Court GRANTS Allstate’s motion for □□□□□□ 3 ||judgment. The Clerk of Court is ORDERED TO CLOSE the case. 4 IT IS SO ORDERED. 5 © Dated: June 25, 2025 C Lo Avex □ 7 Hon, Anthony J. attaglia 8 United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20