Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-00819/USCOURTS-caed-2_07-cv-00819-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

CONNECTICUT GENERAL LIFE 

INSURANCE COMPANY, 

 Plaintiff, 

 v. 

OWEN J. RAMSEY III and DIANE 

RAMSEY, 

 Defendants. /

No. Civ. S-07-0819 RRB EFB 

Memorandum of Opinion

and Order

Defendants Owen J. Ramsey III and Diane Ramsey move to 

dismiss plaintiff Connecticut General Life Insurance Company’s 

claim for declaratory and injunctive relief. Connecticut 

General seeks to enjoin the Ramseys from proceeding with a 

California state court action alleging illegal activity related 

to “vanishing premium” insurance policies.1 For the following 

reasons, the court DISMISSES Connecticut General’s action.2

 

 

1

 On May 16, 2007, the Ramseys filed a motion to dismiss the 

complaint for declaratory relief. On June 27, 2007, Connecticut 

General filed a motion to apply the Spitz anti-suit injunction. 

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I. 

 In Spitz v. Connecticut Gen. Life Ins. Co., a class of 

plaintiffs alleged that Connecticut General made improper 

charges to and fraudulent statements regarding certain 

“vanishing premium” or “interest sensitive” policies.3

 See In re 

Connecticut Gen. Life Ins. Co., CV-95-3566, 1997 WL 910387, at 

*22-23 (C.D. Cal. Feb. 13, 1997). The Spitz case was 

consolidated with a similar action by the Panel on Multidistrict 

Litigation and transferred to the Central District of 

California. Id. at *2. On September 11, 1996, the parties 

entered into a settlement agreement. Id at *1-2. The agreement 

included an anti-suit injunction under which the class members 

gave up “the right to assert any and all claims, known or 

 

With this order, the court addresses the largely duplicative 

analysis of both motions. 

2

 Inasmuch as the Court concludes the parties have submitted 

memoranda thoroughly discussing the law and evidence in support 

of their positions, it further concludes oral argument is 

neither necessary nor warranted with regard to the instant 

matter. See Mahon v. Credit Bureau of Placer County, Inc., 171 

F.3d 1197, 1200 (9th Cir. 1999) (explaining that if the parties 

provided the district court with complete memoranda of the law 

and evidence in support of their positions, ordinarily oral 

argument would not be required). 

3

 The Spitz plaintiffs alleged that Connecticut General 

and/or its agents represented to life insurance purchasers that, 

after a certain date, the income from variable-interest policies 

would be sufficient to cover the cost of premium payments, 

freeing costumers from out-of-pocket premium payments. The 

plaintiffs further alleged that Connecticut General failed to 

disclose that they would be required to make premium payments if 

a policy’s interest income was insufficient to cover its costs. 

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unknown, that they currently posses, may possess or may have 

possessed against [Connecticut General] . . . relating in any 

way to the life insurance policies that are the subject of this 

lawsuit.” Id. at *25. On February 13, 1997, the Central 

District granted final approval of the class settlement. Id. at 

*1-2. Although a class member challenged the sufficiency of the 

class notice on appeal, the Ninth Circuit affirmed the court’s 

ruling. Spitz v. Connecticut Gen. Life Ins. Co., 172 F.3d 876 

(9th Cir. 1999). 

The settlement expressly covered three policies owned by 

the Ramseys, which they purchased in 1986. Connecticut General 

argues that the Ramseys are, therefore, barred under the terms 

of the settlement and anti-suit injunction from bringing any 

claim based upon the polices. The Ramseys, however, allege that 

they never received notice related to the 1997 settlement and 

only learned about it in January 2004, after their policies 

lapsed without prior notice. The Ramseys also allege that, 

following the 1997 settlement, Connecticut General continued 

prior illegal practices and engaged in new ones. 

On June 20, 2005 the Ramseys filed a California state 

action against Connecticut General. In its answer, Connecticut 

General raised defenses based upon the Spitz settlement. On 

January 30, 2006, Connecticut General filed a motion in the 

Central District of California to enforce the Spitz settlement 

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against the Ramseys. The court, finding that almost ten years 

had passed since the final order, denied the motion and divested 

itself of jurisdiction over the case. On April 7, 2006, 

Connecticut General filed a motion in California state court to 

enforce the Spitz settlement. The state court denied the motion 

on May 5, 2006, finding that Connecticut General had neither 

complied with the procedural requirements of a res judicata 

defense nor provided sufficient grounds for injunctive relief. 

After conducting discovery in the state action, the Ramseys 

filed an amended complaint on November 3, 2006. On January 26, 

2007, Connecticut General filed another motion in the Central 

District to enforce the Spitz settlement against the Ramseys. 

The Ramseys filed a motion to transfer venue to the Eastern 

District, in which they live. On April 26, 2007 the Central 

District granted the Ramseys’ motion. Connecticut General now 

moves for this court to apply the Spitz anti-suit injunction to 

protect and effectuate the Spitz settlement. 

II. 

 “A court of the United States may not grant an injunction 

to stay proceedings in a state court except as expressly 

authorized by Congress, or where necessary in aid of its 

jurisdiction, or to protect or effectuate its judgments.” 28 

U.S.C. § 2283; see California v. Randtron, 284 F.3d 969, 975 

(9th Cir. 2002) (applying the Act “to declaratory judgments if 

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those judgments have the same effect as an injunction”). “Any 

doubts regarding the appropriateness of an injunction ‘should be 

resolved in favor of permitting the state courts to proceed.’” 

Amwest Mortgage Corp. v. Grady, 925 F.2d 1162, 1164 (9th Cir. 

1990) (quoting Atl. Coast Line R.R. Co. v. Brotherhood of 

Locomotive Eng’rs, 398 U.S. 281, 297 (1970)). “Because of the 

sensitive nature of interfering with an ongoing state action, 

courts require a strong and unequivocal showing of relitigation” 

to enjoin a state court to protect an earlier federal judgment. 

Amwest, 925 F.2d at 1164 (quotation marks and citation omitted). 

 Connecticut General argues that the court must protect the 

Spitz judgment from the Ramseys’ efforts to relitigate 

previously decided issues. The court, however, declines to 

exercise its discretionary power to enjoin the state court 

because “state courts are just as capable as federal courts in 

applying applicable law.” Merle Norman Cosmetics, Inc. v. 

Victa, 936 F.2d 466, 468 (9th Cir. 1991). Nothing has prevented 

Connecticut General from raising a collateral estoppel defense 

in state court. To the contrary, the state court has expressed 

its willingness to hear such defenses so long as Connecticut 

General complies with relevant procedural guidelines. See

Ramsey, et al. v. Lincoln Financial Group, et al., No. 05-AS03190, at 1-2 (Cal. Super. Ct. May 5, 2006). 

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Moreover, analysis of the Ramseys’ claims and Connecticut 

General’s collateral estoppel defense is better left to courts 

with jurisdiction over the Spitz action or the state action than 

a court lacking experience with the disputed issues. Here, 

since the Spitz court has divested itself of jurisdiction over 

claims concerning the settlement, the court finds that the state 

court is the proper forum to resolve the alleged issues of 

collateral estoppel.4

 Therefore, the court refuses to exercise 

its discretion to enjoin the state court. 

III. 

 For these reasons, the court DENIES the motion to enforce 

the Spitz anti-suit injunction and GRANTS the motion to dismiss. 

IT IS SO ORDERED. 

 ENTERED this 30th day of July, 2007. 

 s/RALPH R. BEISTLINE 

 United States District Judge 

 

4

 This case differs from In re Prudential Ins. Co. of Am. 

Sales Practice Litig., 261 F.3d 355 (3rd Cir. 2001), relied upon 

by Connecticut General. The Prudential court expressly retained 

jurisdiction over the class action after settlement, giving it 

an interest in the protection of its judgment as “an ongoing 

order.” Id. at 367-68. Here, however, the Spitz court divested 

itself of jurisdiction, ending the express retention of 

authority, despite knowledge of the threats to its judgment 

alleged by Connecticut General. See Arata v. Nu Skin Int’l, 

Inc., 96 F.3d 1265, 1268-69 (9th Cir. 1996) (discussing the 

district court’s discretion to terminate previously retained 

jurisdiction). 

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