Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-02478/USCOURTS-casd-3_12-cv-02478-1/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

SOUTHERN DISTRICT OF CALIFORNIA

MARY GROSS, Trustee of Kathryn B.

Gross Irrevocable Life Insurance Trust,

Dated December 20, 2005,

Plaintiff,

CASE NO. 12-CV-2478 H (JMA)

ORDER GRANTING JOHN

HANCOCK’S MOTION FOR

GOOD FAITH SETTLEMENT

DETERMINATION

[Doc. No. 36]

vs.

METROPOLITAN LIFE

INSURANCE COMPANY, N.Y.,

N.Y., a business entity form unknown;

et. al.,

Defendants.

On April 8, 2013, Defendants John Hancock Life Insurance Company, John

Hancock USA, and John Hancock Variable Life Insurance (collectively “John

Hancock”) filed a motion for a good faith settlement determination pursuant to

California Code of Civil Procedure § 877.6. (Doc. No. 36.) On May 6, 2013,

Defendants Metropolitan Life Insurance Company, N.Y., N.Y. and MetLife, Inc.

(collectively “MetLife”) and Defendant Joseph Langlois, Jr. filed non-oppositions to

John Hancock’s motion. (Doc. Nos. 40-41.) A hearing on the matter is currently

scheduled for May 20, 2013 at 10:30 a.m. The Court, pursuant to its discretion under

Local Rule 7.1(d)(1), determines this matter is appropriate for resolution without oral

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argument, submits the motion on the parties’ papers, and vacates the hearing. For the

reasons below, the Court grants John Hancock’s motion for a good faith settlement

determination.

Background

Plaintiff alleges that she is the trustee of the Kathryn B. Gross Irrevocable

Insurance Trust (the “Trust”), and she is the daughter of Kathryn B. Gross, the deceased

Trustor of the Trust, and Sam Gross. (Doc. No. 17, FAC ¶ 1, 16.) Plaintiff alleges that

in the early 1990’s, her parents, Kathryn and Sam, formed a relationship with Joseph

Langlois, Jr., a successful MetLife agent. (Id. ¶ 16.) Plaintiff alleges that by 1996, her

parents relied almost entirely on Langlois and MetLife for their financial planning. (Id.

¶ 18.) 

Plaintiff alleges that on September 2, 2002, her father, Sam Gross, passed away,

and in late 2005, Kathryn Gross–based on the recommendation of Mr. Langlois–used

the proceeds from policies covering Mr. Gross’s life and other assets to purchase a

$695,789.84 immediate annuity from MetLife and a separate life insurance policy with

John Hancock. (FAC ¶ 19.) The John Hancock policy carried a death benefit of

$1,373,420 and a policy premium of $88,000 per year. (Id.) Plaintiff alleges that

because the MetLife annuity paid a lifetime annual income of $88,000, Mrs. Gross was

able to use her income from the MetLife annuity to pay the annual premium on the John

Hancock life insurance policy; thereby, allowing her children to essential double their

money when she passed away. (Id.) 

Plaintiff alleges that each year there was only a small window of time to collect

the annuity distributions and pay the life insurance premium. (FAC ¶ 20.) Plaintiff

alleges as a result, the John Hancock policy would already be in delinquent status by

the time the payments were made. (Id.) Plaintiff alleges that due to this small window

of time, it was Mr. Langlois’s custom and practice, which Plaintiff relied on, to call

Plaintiff and inform her when and where to send the premium and in what amount. (Id.

¶ 21.) 

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Plaintiff alleges that between January and June of 2010, Mr. Langlois was in and

out of the MetLife downtown San Diego office due to unknown medical issues or

disability, and that this situation led to his ultimate termination or separation from

MetLife in June 2010. (FAC ¶ 22.) Plaintiff alleges that after Mr. Langlois left the

company, MetLife failed to place someone else in charge of her mother’s account. (Id.

¶¶ 24, 27.) Plaintiff alleges that in December 2010, the John Hancock policy was

cancelled, thereby, causing the Trust to lose the $1,373,420 death benefit after making

premium payments of nearly $450,000. (Id. ¶ 21.) Plaintiff alleges that prior to the

time she received the cancellation notice, she was unaware that Langlois and his staff

were no longer employed at MetLife or that the John Hancock policy was about to be

cancelled. (Id. ¶ 23.) Plaintiff alleges that she attempted to reinstate the John Hancock

policy, but was unable to do so because of delays cause by MetLife. (Id. ¶ 26.) 

Plaintiff alleges that on May 10, 2012, Kathryn Gross passed away, and to date, no

death benefit has been paid to Plaintiff, nor has any premium been refunded. (Id. ¶ 31.)

On September 11, 2012, Plaintiff filed a complaint in San Diego superior court

against Defendants MetLife and John Hancock asserting causes of action for: (1)

negligence; (2) negligent misrepresentation; (3) breach of contract; and (4) breach of

the implied covenant of good faith and fair dealing. (Doc. No. 1, Compl.) On October

12, 2012, Defendants removed Plaintiff’s action from state court to this Court pursuant

to 28 U.S.C. § 1441 on the basis of diversity jurisdiction. (Doc. No. 1, Notice of

Removal.) On November 8, 2012, Defendants MetLife and John Hancock moved to

dismiss Plaintiff’s complaint. (Doc. Nos. 7, 9.) On January 9, 2013, Plaintiff filed a

first amended complaint (“FAC”), mooting the motions to dismiss. (Doc. No. 17.) The

FAC contains the same four causes of action as the original complaint and adds John

Langlois, Jr. as a Defendant. (Id.)

On March 11, 2013, Plaintiff and John Hancock filed a joint notice of settlement,

stating that they had reached an agreement to resolve any and all claims against the John

Hancock Defendants. (Doc. No. 29.) Plaintiff and John Hancock agreed to settle the

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claims for $20,000. (Doc. No. 36-2, Declaration of H. Joseph Escher III ¶ 3.) By the

present motion, John Hancock moves for the Court to make a good faith settlement

determination pursuant to California Code of Civil Procedure § 877.6. (Doc. No. 36.)

Discussion

I. Legal Standards

A district court sitting in diversity jurisdiction may determine that a settlement

is in good faith pursuant to California Code of Civil Procedure § 877.6. See Mason &

Dixon Intermodal, Inc. v. Lapmaster Int’l LLC, 632 F.3d 1056, 1060-64 (9th Cir. 2011). 

Under section 877.6(a)(1), “[a]ny party to an action wherein it is alleged that two or

more parties are joint tortfeasors or co-obligors on a contract debt shall be entitled to

a hearing on the issue of the good faith of a settlement entered into by the plaintiff or

other claimant and one or more alleged tortfeasors or co-obligors . . . .” Cal. Civ. Proc.

Code § 877.6(a)(1). When a settlement is determined by a court to have been made in

good faith pursuant to section 877.6, the settlement “bar[s] any other joint tortfeasor or

co-obligor from any further claims against the settling tortfeasor or co-obligor for

equitable comparative contribution, or partial or comparative indemnity, based on

comparative negligence or comparative fault.” Id. § 877.6(c).

“To determine whether a settlement has been made in good faith, California

courts consider (1) ‘a rough approximation of plaintiffs’ total recovery and the settlor’s

proportionate liability’; (2) ‘the amount paid in settlement’; (3) ‘the allocation of

settlement proceeds among plaintiffs’; and (4) ‘a recognition that a settlor should pay

less in settlement than he would if he were found liable after a trial.’” Mason & Dixon

Intermodal, 632 F.3d at 1064 (quoting Tech-Bilt, Inc. v. Woodward-Clyde &

Associates, 38 Cal. 3d 488, 499 (1985)). “Other relevant considerations include the

financial conditions and insurance policy limits of settling defendants, as well as the

existence of collusion, fraud, or tortious conduct aimed to injure the interests of

non-settling defendants.” Tech-Bilt, 38 Cal. 3d at 499. These factors are to be assessed

“on the basis of the information available at the time of settlement.” Id. at 499. The

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burden of proving that a settlement between the parties was not made in good faith is

on the non-settling tortfeasor. See Cal. Civ. Pro. § 877.6(d).

II. Analysis

The Court has reviewed the terms of the settlement and concludes that the

settlement is in good faith. The settlement amount paid by the John Hancock

Defendants is reasonable in light of their defenses to Plaintiff’s claims1

 and the stage

of this litigation. In addition, there is no evidence of collusion, fraud, or tortious

conduct aimed to injure the interests of the other Defendants. The other named

Defendants received notice of John Hancocks motion and filed non-oppositions to the

motion. (Doc. Nos. 40-41.) Accordingly, the Court concludes that the settlement

agreement is in good faith.

Conclusion

For the reasons above, the Court grants John Hancock’s motion for a good faith

settlement determination pursuant to California Code of Civil Procedure § 877.6. The

settlement reached between Plaintiff and the John Hancock Defendants is found to be

in good faith within the meaning of California Code of Civil Procedure § 877.6, and the

Non-Settling Defendants (MetLife and John Langlois, Jr.) are barred from pursing any

claims against the John Hancock Defendants as a joint tortfeasor or co-obligor for

equitable comparative contribution or comparative indemnity based on comparative

negligence or comparative fault.

IT IS SO ORDERED. 

DATED: May 13, 2013

______________________________

MARILYN L. HUFF, District Judge

UNITED STATES DISTRICT COURT

1

 John Hancock presented evidence, as part of its motion to dismiss or in the alternative for summary judgment, showing that it had provided Plaintiff with notice that the policy would lapse due to the non-payment of premiums prior to cancelling the policy. (Doc. No. 21-4, Declaration of Brian Latcham ¶¶ 4-11 Exs. 2-7; Doc. No. 21-5, Declaration of J.J. Hian-Cheong ¶¶ 3-8; see also Doc. No. 21 at 3-6.)

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