Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-04749/USCOURTS-cand-3_14-cv-04749-6/pdf.json

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

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

HONG-NGOC T. DAO,

Plaintiff,

v.

LIBERTY LIFE ASSURANCE COMPANY 

OF BOSTON,

Defendant.

Case No. 14-cv-04749-SI 

ORDER GRANTING IN PART AND 

DENYING IN PART DEFENDANT'S 

MOTION TO WITHDRAW ANSWER 

AND DISMISS THE COMPLAINT

Re: Dkt. No. 44

Defendant's motion to withdraw its answer and dismiss the complaint is scheduled for a

hearing on July 9, 2015. Pursuant to Civil Local Rule 7-1(b), the Court determines that the matter 

is appropriate for resolution without oral argument, and VACATES the hearing. For the reasons 

set forth below, defendant's motion is GRANTED in part and DENIED in part. 

DISCUSSION

Plaintiff filed the original complaint on October 26, 2014, and, after the Court granted 

defendant's motion to set aside the default, defendant filed an answer on February 4, 2015. The 

Court held a case management conference on March 20, 2015, and on March 24, 2015, the Court 

issued a pretrial order setting May 20, 2015 as the deadline for the filing of an amended complaint. 

On April 28, 2015, the parties filed a joint stipulation and proposed order stating, 

In accordance with discussions had at the Initial Case Management 

Conference and discussions between the parties since the Initial 

Case Management Conference, the parties, by and through their 

attorneys of record, hereby stipulate that Plaintiff may file the 

attached Supplemental Complaint without the need to file a noticed 

motion in support thereof and without the need for a hearing. 

Dkt. 38. The Court granted the stipulation, and April 30, 2015, plaintiff filed a first supplemental 

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United States District Court

Northern District of California

complaint.

On May 21, 2015, defendant moved to withdraw its answer and to dismiss and/or strike 

portions of the supplemental complaint. Defendant contends that the supplemental complaint is 

actually an amended complaint because it "introduced 70 new paragraphs of allegations, none of 

which occurred subsequent to the filing of the Complaint." Dkt. 51 at 1:3-5. Defendant contends 

that, notwithstanding the fact that defense counsel expressly stipulated to the filing of the 

supplemental complaint without the need for motion practice, plaintiff should have filed a motion 

seeking leave to file the supplemental complaint. Plaintiff opposes defendant's motion on 

numerous grounds, arguing as an initial matter that defendant stipulated to the filing of the 

supplemental complaint and thus cannot now challenge it. 

The Court finds that the manner in which the parties have litigated the amendment of the 

complaint is inefficient.1 If defendant wished to challenge the supplemental complaint, it is the 

Court's view that defendant should not have stipulated to its filing. However, because the Court 

agrees that the new allegations defeat plaintiff's claim for breach of contract, the Court will permit 

defendant to withdraw its answer and move to dismiss and strike. 

Defendant moves to dismiss the breach of contract claim for failure to allege recoverable 

damages. The supplemental complaint alleges that defendant is paying plaintiff disability 

benefits, and that defendant paid those benefits retroactively such that there has been no gap in 

payments. Thus, defendant argues, plaintiff cannot allege any financial damage related to the 

alleged breach. In response, plaintiff argues that she may seek emotional distress damages. 

However, as defendant notes -- and as the cases cited in both parties' briefs uniformly hold --

while plaintiff may seek tort damages pursuant to her claim for breach of the implied covenant of 

good faith and fair dealing, plaintiff may not seek tort damages, including emotional distress 

damages, in her breach of contract claim. See, e.g. Erlich v. Menezes, 21 Cal. 4th 543, 558 (1999). 

Accordingly, the Court GRANTS defendant's motion to dismiss the breach of contract claim 

 

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 The parties dispute such issues such as who said what at the March 20, 2015 case management 

conference (and thus whether the Court did or did not grant plaintiff leave to file an amended 

complaint), and accusing each other of not following the Federal Rules of Civil Procedure. These 

arguments are not helpful to the Court. 

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United States District Court

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without leave to amend.

The Court finds that the remainder of defendant's motion raises issues that are not suitable 

for resolution at this stage of the litigation. Defendant moves to strike numerous allegations as 

"demonstrably false" based upon documents either attached to or referenced in the supplemental 

complaint. The parties devote much of their papers to quoting from different portions of these 

documents and setting forth competing interpretations of the policy language, defendant's 

brochures and other website materials, or language contained in letters to plaintiff. Similarly, 

defendant moves to dismiss the fraud and misrepresentation claims based upon factual arguments 

about when defendant made certain "promises" (as contained in defendant's brochures). The Court 

finds that these disputes are more appropriately resolved on a fuller factual record. 

Defendant also contends that plaintiff may not seek declaratory relief regarding certain 

provisions in the contract because those provisions are legal. The Court finds it is prudent to 

resolve those questions on summary judgment rather than on a motion to dismiss.

Accordingly, defendant's motion is GRANTED in part and DENIED in part. Plaintiff's 

claim for breach of contract is dismissed without leave to amend. 

IT IS SO ORDERED.

Dated: July 7, 2015 ________________________

SUSAN ILLSTON

United States District Judge

Case 3:14-cv-04749-SI Document 61 Filed 07/07/15 Page 3 of 3