Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_18-cv-01778/USCOURTS-casd-3_18-cv-01778-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

FRANK L. PAVEL, an individual, 

Plaintiff,

vs.

UNUM LIFE INSURANCE COMPANY 

OF AMERICA, a Maine Corporation; and 

DOES 1-20, inclusive,

Defendants.

CASE NO. 3:18-cv-01778-LAB-KSC

ORDER GRANTING IN PART AND 

DENYING IN PART DEFENDANT’S 

MOTION TO DISMISS [Dkt. 6]

Defendant Unum Life Insurance Company has filed a motion to dismiss, arguing 

that Plaintiff Frank Pavel’s bad faith claim is time barred by a two-year statute of limitation. 

Pavel says that Unum wavered on his disability claim for years, never giving him a 

definitive rejection and thus never triggering the statute of limitations. For the reasons 

below, the Court GRANTS IN PART and DENIES IN PART Unum’s motion to dismiss. 

According to his complaint, Dr. Frank Pavel is a doctor specializing in dental 

surgery. In 1988, he applied for disability insurance with Unum, a policy he has held ever 

since. The policy provides lifetime benefits if a covered disability is the result of an 

accident, and to age 65 if the disability is due to a sickness. In September 2014, Dr. 

Pavel began suffering from symptoms of paralysis. Dr. Pavel claims the paralysis was 

the result of a boating accident; Unum says it was the manifestation of a degenerative 

illness. One month later, in October 2014, Dr. Pavel submitted a disability claim to Unum, 

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who requested further information. After several months of back-and-forth, Unum sent 

Dr. Pavel a letter in March 2015, providing:

We have determined that your disability is the result of a 

sickness, and not caused by an injury. Therefore, we will be 

providing benefits under the sickness provision of this policy. 

. . . Benefits for this disability can be paid for a maximum 

period of to [sic] age 65 provided you remain disabled under 

the terms of the policy. . . . For disabilities that begin before 

age 65 and are due to a sickness, benefits can be paid to age 

65. . . . We have concluded that your disability is the result of 

a sickness, and not an injury. . . . The Maximum Benefit Period 

is to age 65 policy anniversary (November 2, 2019). Benefits 

can be paid to this date . . . .”

See Dkt. 6-2, Ex. B.1 The result of this determination was that Dr. Pavel was to receive 

benefits until he turned 65, but not afterwards. The letter gave Pavel 180 days to submit 

new information and to request a reevaluation, which Dr. Pavel did. In September 2015 

and again in October 2015, Unum notified Dr. Pavel that it was still evaluating the new 

information. In November 2015, Unum notified Dr. Pavel that it had again determined his 

condition was the result of sickness. Pavel then appealed the decision and, in January 

2016, Unum notified him that the claim “had been submitted to its appeals department for 

further evaluation.” Dkt. 1 ¶ 37. Over the next several months, Unum communicated 

directly with Dr. Pavel’s counsel regarding obtaining medical records from his treating 

physicians. On June 22, 2016, Unum informed him that its decision on appeal was 

unchanged. But Dr. Pavel continued to pursue reconsideration of his claim. Between 

June 22, 2016 and December 2017, Unum continued to request additional information 

and Dr. Pavel continued to provide it. On January 4, 2018, Unum wrote to Pavel and 

indicated that its initial determination would stand and that it had determined his injury 

 

1 On a Motion to Dismiss, the Court may consider the insurance policy and other 

documents referenced in the complaint. This is true even though these documents are 

provided by the Defendant as part of its Motion to Dismiss. See In re Stac Elecs. Sec. 

Litig., 89 F.3d 1399, 1405 n. 4 (9th Cir. 1996)

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was the result of sickness, not injury. Dr. Pavel filed this suit for breach of contract, bad 

faith, and declaratory relief on August 1, 2018. 

This resolution of this motion turns on whether Dr. Pavel’s bad faith claim is barred 

by California’s two-year statute of limitations. See Cal. Code Civ. Proc. § 339(1). Under 

California law, a claim for breach of the covenant of good faith and fair dealing accrues 

“upon the date of unconditional denial.” State Farm Fire & Cas. Co. v. Superior Court, 

210 Cal. App. 3d 604, 609 (Cal. Ct. App. 1989). It is well settled that “[a] statement of 

willingness to reconsider does not render a denial equivocal.” Migliore v. Mid-Century 

Ins. Co., 97 Cal. App. 4th 592, 605 (Cal. Ct. App. 2002); see also Dudra v. Fairfield Ins. 

Co., 2008 WL 683387, at *4 (C.D. Cal. 2008) (“The statute of limitations for a bad faith 

claim is not tolled if the insured appeals the denial with the insurance company.”). 

Unum argues its denial of benefits occurred—and thus Dr. Pavel’s claim accrued—

in March 2015 when it sent Dr. Pavel the initial determination letter. In Unum’s view, the

subsequent communications, appeals, and possible reconsiderations do not serve to toll 

the statute of limitations. The Court agrees. At first blush, it seems overly punitive to bar 

Dr. Pavel’s bad faith claim when Unum’s internal appeal and reconsideration process 

dragged on for more than two years, but the Ninth Circuit has explained the rationale 

behind this rule:

“[Reopening tolling upon a request to reconsider claim denial] 

would contravene a strong public policy to encourage an 

insurance company to reconsider its original denial when 

confronted with potentially new facts. If insurance companies 

were saddled with the situation that whenever [they] 

reconsidered an earlier decision it would inaugurate a new 

limitations period, companies would be reluctant to offer policy 

holders the luxury of a second evaluation.” Wagner v. Federal 

Emergency Mgmt. Agency, 847 F.2d 515, 521 (9th Cir.1988).

Dr. Pavel’s argument in response is that the initial determination letter was 

equivocal, and that references throughout the appeals process suggested to him the 

determination process was ongoing. See, e.g., Complaint, Dkt. 1 ¶ 45 (In September 

2017, Defendant “stated that it would complete a ‘comprehensive’ medical review of Dr. 

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Pavel’s information in order to make a determination on his claim.”). The Court is not 

unsympathetic to Dr. Pavel’s situation, but concludes that the initial letter was an 

unequivocal denial on the part of Unum. See Dkt. 6-2, Ex. B (“We have determined that 

your disability is the result of a sickness, and not caused by an injury. Therefore, we will 

be providing benefits under the sickness provision of this policy.”). As numerous other 

courts in California have found, Unum’s decision to entertain appeals or additional 

information does not affect this conclusion. See, e.g., Heighley v. J.C. Penney Life Ins. 

Co., 257 F. Supp. 2d 1241, 1257 (C.D. Cal. 2003) (“Plaintiff argues that [Defendant’s] 

letter ‘equivocated the denial’ because it invited him to submit further information. 

However, it is well-established in California that an invitation to provide further information 

does not render a denial equivocal.”) (internal citations omitted); Migliore, 97 Cal. App. 

4th at 605 (“A statement of willingness to reconsider does not render a denial

unequivocal.”). The Court also rejects Dr. Pavel’s equitable estoppel and equitable tolling 

arguments. In this case, applying these doctrines would, in effect, nullify California’s 

unequivocal denial rule and run afoul of the policy rationales laid out by the Ninth Circuit. 

For these reasons, the Court finds Dr. Pavel’s second claim for breach of the covenant of 

good faith and fair dealing time-barred and therefore GRANTS Unum’s motion to dismiss 

this claim. 

The only remaining issue is what to do with Dr. Pavel’s third claim for declaratory 

relief.2 Unum argues that the claim is duplicative of Dr. Pavel’s claim for breach of 

contract, because both seek to establish that he is entitled to lifetime benefits under the 

policy. See, e.g., United Safeguard Distribs. Ass'n v. Safeguard Bus. Sys., 145 F. Supp. 

3d 932, 960-61 (C.D. Cal. 2015) (dismissing declaratory judgment claim because it was

“nothing more than a duplication of [the] breach of contract claim.”). Dr. Pavel counters 

that there may come a time before his 65th birthday when Unum will argue there has 

been no injury because payment is not yet due under the Lifetime Accident Benefit Rider 

 

2 Dr. Pavel’s first claim for breach of contract is not at issue in this motion to dismiss. 

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of the policy. In that case, the claim for declaratory relief would be necessary to determine 

the respective rights of the parties as of Dr. Pavel’s 65th birthday. The Court agrees with 

Unum that there is some overlap, but in this case finds that the overlap is insufficient to 

warrant dismissing Dr. Pavel’s declaratory relief claim. The Court DENIES Unum’s 

motion to dismiss as to Dr. Pavel’s third claim for declaratory relief.

For the reasons above, the Court GRANTS Unum’s motion to dismiss as to Dr. 

Pavel’s second claim for breach of the covenant of good faith and fair dealing, and 

DENIES Unum’s motion to dismiss as to Dr. Pavel’s third claim for declaratory relief. 

IT IS SO ORDERED.

Dated: December 10, 2018

HONORABLE LARRY ALAN BURNS

United States District Judge

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