Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-02197/USCOURTS-caed-2_05-cv-02197-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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28 * This motion was determined suitable for decision without oral

argument. L.R. 78-230(h). 

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

DON MAFFEI, Jr.; SHELLY MAFFEI; ) 02:05-cv-2197-GEB-PAN

RODNEY NEW; JUDITH ANN NEW; )

MIKE LUSK; CAROL ANN LUSK; )

JOHN BRICKERHOFF, )

)

Plaintiffs, )

)

v. ) ORDER* 

)

ALLSTATE CALIFORNIA INSURANCE )

COMPANY; ALLSTATE INSURANCE )

COMPANY; ALLSTATE PROPERTY AND )

CASUALTY INSURANCE COMPANY; )

ALLSTATE LIFE INSURANCE COMPANY; )

and Does 1 to 100, inclusive, )

)

Defendants. )

)

Defendants move for dismissal of Defendant Allstate

California Insurance Company (“Allstate California”) from this action

under Federal Rule of Civil Procedure 21, for dismissal of Plaintiffs’

fraud, intentional infliction of emotional distress, and loss of

consortium claims under Federal Rule of Civil Procedure 12(b)(6), and

for dismissal of Plaintiffs’ fraud claim under Federal Rule of Civil

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28 1 Unless otherwise indicated, all references to Rules are to the

Federal Rules of Civil Procedure. 

2

Procedure 9.1 (Defs.’ Notice of Mot. and Mot. to Dismiss (“Defs.’

Mot.”) at 4.) Plaintiffs oppose the motion. 

BACKGROUND

Seven Plaintiffs have brought this action against Allstate

California, Allstate Insurance Company, Allstate Property and Casualty

Insurance Company, and Allstate Life Insurance Company (“Defendants”). 

(Pls.’ Compl. ¶¶ 1-9.) Four of the Plaintiffs, Don Maffei Jr., Rodney

New, Mike Lusk, and John Brinckerhoff, allege they were employed by

Defendants from at least 1998 until 2005 (“Employee Plaintiffs”). 

(Id. ¶¶ 10-13, 39.) The other three Plaintiffs, Shelly Maffei, Judith

Ann New, and Carol Ann Lusk, allege they are each married to an

Employee Plaintiff (“Spousal Plaintiffs”). (Id. ¶¶ 1-3.) 

Employee Plaintiffs allege Defendants initiated “an

aggressive campaign to write automobile insurance policies in higher

mileage bands” in 2001, and continued the campaign through 2002. (Id.

¶¶ 14, 19.) During the campaign, Defendants allegedly instructed

Employee Plaintiffs to use certain practices to achieve mileage band

goals. (Id. ¶¶ 20-22.) Employee Plaintiffs allege Defendants

informed them that failure to meet mileage band goals could result in

termination of their employment. (Id. ¶ 27.) Defendants also

allegedly assured Employee Plaintiffs “that the placement of a

customer into [a higher] mileage band rating [utilizing these

practices] was legal and proper as well as necessary to the success of

the company.” (Id. ¶ 23.) Employee Plaintiffs allege Defendants

subsequently discovered these practices were illegal and/or improper,

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but did not inform them about the illegality or impropriety of these

practices. (Id. ¶ 52.) 

In 2002, a lawsuit was allegedly filed against Defendants

for illegal and/or improper mileage band practices, and the California

Department of Insurance conducted or was requested to conduct an

investigation into the mileage band practices. (Id. ¶¶ 28-29.) In

2004, Defendants’ corporate security allegedly contacted Employee

Plaintiffs about their participation in the mileage band practices. 

(Id. ¶ 30.) Employee Plaintiffs allege they informed corporate

security that they had moved customers from lower to higher mileage

bands using the practices endorsed by Defendants. (Id. ¶ 33.) In

February 2005, Defendants allegedly told Employee Plaintiffs their

employment was terminated “for engaging in improper and/or illegal

mileage band classification procedures, specifically that they were

being terminated for ‘violating company policy regarding mileage

bands.’” (Id. ¶ 39.) 

On September 7, 2005, Plaintiffs filed a Complaint against

Defendants in state court, in which Employee Plaintiffs allege claims

for wrongful termination in violation of public policy, fraud, and

intentional infliction of emotional distress, and Spousal Plaintiffs

allege a claim for loss of consortium. (Id. ¶¶ 41-64.) Defendants

removed the state action to federal court on the basis of diversity

jurisdiction, asserting “Plaintiffs and Defendants, other than those

who are sham parties whose citizenship may be disregarded, are

citizens of different states and the amount in controversy exceeds

$75,000, exclusive of costs and interests.” (Defs.’ Notice of Removal

¶ 4.) Specifically, Defendants contend Plaintiffs are citizens of

California, and Defendants Allstate Insurance Company, Allstate

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4

Property and Casualty Insurance Company, and Allstate Life Insurance

Company are corporations organized and existing under the laws of

Illinois, with their principal place of business in Illinois. (Id.

¶¶ 5-14.) Defendants assert that even though Defendant Allstate

California is a corporation organized and existing under the laws of

California, it “is a sham or nominal party whose citizenship should be

disregarded for purposes of determining jurisdiction.” (Id. ¶ 15.) 

MOTION TO DISMISS ALLSTATE CALIFORNIA

Defendants seek dismissal of Allstate California under the

fraudulent joinder doctrine, arguing it “has nothing to do with the

allegations in the Complaint.” (Defs.’ Mot. at 4-5.) Plaintiffs

counter that the motion should be denied because discovery is needed

on the status of Allstate California, including whether “any employees

of Allstate are assigned to [Allstate California] . . . [and whether

Allstate California] had a role in the mileage band policy and

practice.” (Pls.’ Opp’n to Defs.’ Mot. to Dismiss (“Pls.’ Opp’n”)

at 2.) 

Joinder of a defendant is fraudulent if the defendant cannot

be liable to the plaintiff on any theory alleged in the complaint. 

Richey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998); McCabe

v. General Foods Co., 811 F.2d 1336, 1399 (9th Cir. 1987). When

determining whether a defendant is fraudulently joined, “[t]he court

may pierce the pleadings, consider the entire record, and determine

the basis of joinder by any means available.” Lewis v. Time Inc., 83

F.R.D. 455 (E.D. Cal. 1979) (“it is well settled that upon allegations

of fraudulent joinder . . . federal courts may look beyond the

pleadings to determine if the joinder . . . is a sham or fraudulent

device to prevent removal”); McCabe, 811 F.2d at 1399 (a defendant “is

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entitled to present the facts showing the joinder to be fraudulent”). 

If the facts reveal that joinder is fraudulent, the defendant may be

dismissed from the action under Rule 21, which provides “[p]arties may

be dropped or added by order of the court on motion of any party . . .

at any stage of the action and on such terms as are just.” Gasnik v.

State Farm Ins. Co., 825. F. Supp. 245, 248-49 (E.D. Cal. 1992). 

Defendants submitted the declaration of Jim Jonske,

Assistant Vice President of Product Operations for Allstate Insurance

Company, in support of their motion. Jonske declares that “around the

year 2002, Allstate began considering a business plan to sell

insurance in California under a separate California company. In

anticipation of this possible change, Allstate caused [Allstate

California] to be incorporated in January 2003 . . . . However,

Allstate thereafter abandoned that potential business plan, and

[Allstate California] was never used for anything.” (Jonske Decl.

¶ 2.) As a result, Allstate California “has never been licensed to

sell insurance in California[,] . . . has never conducted any business

of any kind anywhere[,] . . . has never been capitalized[,] . . . has

never had any assets[,] . . . [and] has never had any employees,

offices, or operations of any kind.” (Id. ¶ 3.) Jonske declares

“[i]n short, [Allstate California] is nothing more than an empty

corporate shell created in anticipation of a business plan that was

never carried out.” (Id.) 

In light of these facts, Defendant Allstate California

cannot be liable to Plaintiffs on any theory alleged in their

Complaint. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97

(1921) (joinder was fraudulent where the defendant had “no real

connection [to] the controversy” because the allegations against the

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defendant were “without any reasonable basis in fact”). Therefore,

Defendants’ motion to dismiss Allstate California is granted because

Allstate California has been fraudulently joined. 

RULE 12(b)(6) MOTION TO DISMISS

Defendants seek dismissal of Plaintiffs’ fraud, intentional

infliction of emotional distress, and loss of consortium claims under

Rule 12(b)(6). (Defs.’ Mot. at 4.) When considering a Rule 12(b)(6)

dismissal motion, all material allegations in the complaint must be

accepted as true and construed in the light most favorable to the

plaintiffs. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Cahill v.

Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). In

addition, the plaintiffs are given the benefit of every reasonable

inference that can be drawn from the allegations in the complaint. 

Retail Clerks Int’l Ass’n v. Shermahorn, 373 U.S. 746, 753 n.6 (1963). 

Accordingly, the motion must be denied “unless it appears beyond doubt

that the plaintiff[s] can prove no set of facts in support of [their]

claim which would entitle [them] to relief.” Conley v. Gibson, 355

U.S. 41, 45-46 (1957). 

Dismissal is appropriate under Rule 12(b)(6) if the

plaintiffs fail to state a claim upon which relief may be granted by 

either (1) failing to present a cognizable legal theory, or (2)

failing to plead sufficient facts to support a cognizable legal

theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533-34

(9th Cir. 1984). “If a [claim] is dismissed for failure to state a

[cause of action], leave to amend should be granted unless the court

determines that allegation of other facts . . . could not possibly

cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture

Co., 806 F.2d 1393, 1401 (9th Cir. 1986).

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7

I. Fraud Claim

Defendants argue Employee Plaintiffs’ fraud claim should be

dismissed because “[t]he California Supreme Court has held [in Hunter

v. Upright, Inc., 6 Cal. 4th 1174 (1994)] . . . that an employee

cannot sue in fraud for misrepresentations that lead to the

termination of his employment.” (Defs.’ Mot. at 8.) Employee

Plaintiffs argue “Hunter is distinguishable from the case at bar and

should therefore be disregarded by this court,” and cite to Lazer v.

Rykoff-Sexton, Inc., 12 Cal. 4th 631 (1996) in support of their

argument. (Pls.’ Opp’n at 3-4.) 

In Hunter, the plaintiff was falsely told by his supervisor

that the corporation had decided to eliminate his position. 6 Cal.

4th at 1179. On the basis of that representation, the plaintiff

signed a document setting forth his resignation. Id. At trial, a

jury found in favor of the plaintiff on his fraud claim. Id. at 1180. 

After the Court of Appeal affirmed the jury verdict, the California

Supreme Court granted the defendant’s petition for review to determine

whether the plaintiff could recover “tort damages for fraud and deceit

predicated on a misrepresentation made to effect the termination of

employment.” Id. at 1178. 

The Supreme Court reversed the Court of Appeals, stating

“wrongful termination of employment ordinarily does not give rise to a

cause of action for fraud or deceit, even if some misrepresentation is

made in the course of the employee’s dismissal.” Id. at 1178. The

court explained the defendant “simply employed a falsehood to do what

it otherwise could have accomplished directly.” Id. at 1184. The

court reasoned that as a result, the plaintiff could not establish all

the elements of fraud because plaintiff “did not rely to his detriment

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on the misrepresentation.” Id. at 1184. The court concluded an

employee could maintain an action for fraud “only if the plaintiff can

establish all of the elements of fraud with respect to a

misrepresentation that is separate from the termination of the

employee contract, i.e., when the plaintiff’s fraud damages cannot be

said to result from the termination itself.” Id.

 In Lazer, the defendant asked the plaintiff to leave his

employment in New York and to work for the defendant in Los Angeles. 

12 Cal. 4th at 635. When the plaintiff expressed concern about

relocating, the defendant falsely told the plaintiff his job in Los

Angeles would be secure and would involve significant pay increases. 

Id. at 635-36. Shortly after the plaintiff relocated, he was fired. 

Id. As a result, the plaintiff lost past and future income and

employment benefits and was burdened with payments on Southern

California real estate he could no longer afford. Id. at 380. The

plaintiff subsequently filed a complaint asserting a fraud claim. Id.

at 637. The trial court dismissed his claim relying on Hunter. Id.

The Court of Appeals reversed the trial court, and the California

Supreme Court granted the defendant’s petition for review. Id. at

638. 

The Supreme Court stated “we expressly left open in Hunter

the possibility ‘that a misrepresentation not aimed at effecting

termination of employment, but instead designed to induce the employee

to alter detrimentally his or her position in some other respect,

might form a basis for a valid fraud claim even in the context of

wrongful termination.’” Id. at 641 (citing Hunter, 6 Cal. 4th at 117

1885)). The court explained Hunter “did not call into question

generally the viability of traditional fraud remedies whenever they

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are sought by a terminated employee,” but established that a plaintiff

fails to state a claim for fraud if “the element of detrimental

reliance [is] absent.” Id. at 641, 643. In addition, the court

stated Hunter precludes recovery for fraud “only where the result of

the employer’s misrepresentation is indistinguishable from an ordinary

constructive wrongful termination.” Id. at 643. 

The Supreme Court held the plaintiff had established the

elements of fraud, including detrimental reliance. Id. at 643. The

court reasoned that unlike Hunter, the defendant’s misrepresentations

“were made before the employment relationship was formed, when

[defendant] had no coercive power over [plaintiff] and [plaintiff] was

free to decline the offered position.” Id. at 642. The court

further stated that the misrepresentations were actionable because the

plaintiff’s damages were distinguishable from those incurred as a

result of the termination itself. Id. at 643 (noting that the

plaintiff had sought damages for the costs of uprooting his family,

the expenses incurred in relocation, and the loss of security and

income associated with his former employment). 

Hunter and Lazer reveal employees can maintain a cause of

action for fraud against their employer only if they allege all of the

elements of such a claim, including detrimental reliance, and if they

allege damages distinct from the termination itself. In this action,

Employee Plaintiffs allege Defendants misrepresented the legality

and/or impropriety of mileage band practices and then fired them for

engaging in illegal and/or improper mileage band practices. (Pls.’

Compl. ¶¶ 51-54) Employee Plaintiffs further allege that as a result

of their termination, they have been deprived of compensation and

benefits and have suffered emotional distress. (Id. ¶¶ 55-58.) 

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2 Since Employee Plaintiffs’ fraud claim has been dismissed

under Rule 12(b)(6), the Court need not reach Defendants’ arguments that

the claim should also be dismissed under Rule 9. 

10

Employee Plaintiffs’ fraud claim is distinguishable from

that of the employee in Lazar, and is analogous to that of the

employee in Hunter. Unlike the misrepresentation in Lazar, the

alleged misrepresentation at issue occurred during the employment

relationship, when Defendants had “coercive power” over Employee

Plaintiffs and could terminate their employment. 12 Cal. 4th at 642. 

Thus, like the employer in Hunter, Defendants “simply employed a

falsehood to do what [they] otherwise could have accomplished

directly,” i.e. fire Employee Plaintiffs. 6 Cal. 4th at 1184. 

Therefore, Employee Plaintiffs “did not rely to [their] detriment on

the [alleged] misrepresentation” because Defendants could have fired

them for a reason unrelated to the misrepresentation. Id.

Furthermore, like the employee in Hunter, Employee Plaintiffs seek

damages resulting from the termination itself, i.e. lost wages and

benefits. Id. at 1178. Unlike the employee in Lazar, Employee

Plaintiffs have not alleged they suffered damages distinct from their

wrongful termination claim. 12 Cal. 4th at 643. 

Therefore, Employee Plaintiffs have failed to state a claim

for fraud because they have not alleged detrimental reliance or

damages distinct from the termination itself. Accordingly, Defendants

motion to dismiss Employee Plaintiffs’ fraud claim is granted. 

However, Employee Plaintiffs will be granted leave to amend their

fraud claim.2

////

////

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II. Emotional Distress Claim 

Defendants argue Employee Plaintiffs’ intentional infliction

of emotional distress claim should be dismissed because it “is barred

by California’s exclusive worker’s compensation remedies.” (Defs.’

Mot. at 9.) A claim for emotional distress is barred under the

exclusive remedy provisions of workers compensation “[s]o long as the

basic conditions of compensation are otherwise satisfied, and the

employer’s conduct neither contravenes fundamental public policy nor

exceeds the risks inherent in the employment relationship . . . .” 

Livitsanos v. Superior Court, 2 Cal. 4th 744, 754 (1992). 

Employee Plaintiffs argue their intentional infliction of

emotional distress claim is not barred by the exclusive workers

compensation remedies because “the claims asserted by Plaintiffs are

allegations of conduct that contravenes public policy.” (Pls.’ Opp’n

at 4.) Employee Plaintiffs allege in their Complaint that their

termination violated public policy because (1) they were terminated

“for allegedly engaging in activity which Defendant Allstate

ultimately informed Plaintiffs was improper and/or illegal and/or

contrary to company policy, but upon which Defendant Allstate made

their employment contingent,” (Pls.’ Compl. ¶ 42), (2) “they were

terminated in retaliation for divulging the details of Allstate’s

mileage band campaign to corporate security employees,” (Id. ¶ 45),

and (3) “they were terminated as part of an effort by Defendant[s] to

resolve allegations and/or charges brought against them by the

California Department of Insurance for violations of the California

Code of Regulations and the California Insurance Code,” (Id. ¶ 46).

Since Employee Plaintiffs allege Defendants’ conduct contravened

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3 In their Reply, Defendants argue for the first time that the

“public policy exception” to the exclusive workers compensation remedy

“is of no avail to [Employee] Plaintiffs” because their emotional

distress claim cannot “simply duplicate” their wrongful termination in

violation of public policy claim. (Defs.’ Reply at 7.) However, their

argument lacks merit because Employee Plaintiffs may allege claims for

both intentional infliction of emotional distress and wrongful

termination in violation of public policy. See Phillips v. Gemini

Moving Specialists, 63 Cal. App. 4th 563, 577 (“a plaintiff can recover

for infliction of emotional distress if he or she has a tort cause of

action for wrongful termination in violation of public policy”). 

12

public policy, their intentional infliction of emotional distress

claim is not barred by the exclusive workers compensation remedies.3 

In addition, Defendants argue Employee Plaintiffs’

intentional infliction of emotional distress claim should be dismissed

because “management and termination of an employee is not outrageous

conduct even if . . . improperly motivated.” (Defs.’ Mot. at 11-12.) 

Employee Plaintiffs rejoin “the factual allegations that the

Defendants induced Plaintiffs into engaging in conduct they were

informed was lawful, but which was in fact unlawful . . . is certainly

extreme and outrageous [conduct] sufficient to satisfy the pleading

requirements.” (Pls.’ Opp’n at 5.) 

To state a claim for intentional infliction of emotional

distress, Employee Plaintiffs must allege (1) outrageous conduct by

Defendants, (2) Defendants intentionally caused or recklessly

disregarded the probability of causing emotional distress, (3)

Employee Plaintiffs suffered severe or extreme emotional distress, and

(4) Defendants’ outrageous conduct was the actual and proximate cause

of their emotional distress. Treice v. Blue Cross of Cal., 209 Cal.

App. 3d 878, 883 (1989). Conduct is outrageous if it is “so extreme

as to exceed all bounds of that usually tolerated in a civilized

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4 Although Defendants argue firing an employee is not outrageous

conduct (Defs.’ Mot. at 12), termination may or may not be outrageous

conduct depending on the surrounding circumstances. Compare Jaken v. GM

Hughes Elec., 46 Cal. App. 4th 55, 80 (1996) (employer did not engage in

outrageous conduct when employee was fired because of his age), with

Rulon-Miller v. Int’l Business Machines Corp., 162 Cal. App. 3d 241, 255

(1985) (employer engaged in outrageous conduct when plaintiff was fired

for dating another employee). 

5 Defendants appear to suggest Employee Plaintiffs have not

alleged sufficient facts to satisfy the pleading requirements of Rule 8.

However, this suggestion is unavailing because Rule 8 only requires “a

short and plain statement of the claim showing that the pleader is

entitled to relief.” 

13

society.”4 Id. “[I]f reasonable minds could differ about whether the

conduct is sufficiently outrageous, the issue should be decided by a

jury.” Thompson v. Paul, 2005 WL 3307353, at *4 (D. Ariz. 2005);

Trice, 209 Cal. App. 3d at 883 (“the outrageousness of a defendant’s

conduct normally presents an issue of fact to be determined by the

trier of fact”). 

Employee Plaintiffs allege Defendants knew certain mileage

band practices were inappropriate and illegal but advised Employee

Plaintiffs these practices were appropriate and legal, told Employee

Plaintiffs they would be fired if they did not engage in these

practices, and after Employee Plaintiffs engaged in these practices,

Defendants terminated them as “scapegoats” in an effort to avoid

potential negative repercussions from the California Department of

Insurance.5 (Pls.’ Compl. ¶¶ 60-61.) Viewing these allegations in the

light most favorable to Employee Plaintiffs, it could be reasonably

inferred that Defendants knowingly exposed them to criminal or civil

liability. See Retail Clerks, 373 U.S. at 753 n.6 (the plaintiffs

must be given the benefit of every reasonable inference that can be

drawn from the allegations in the complaint). Since “reasonable minds

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could differ” about whether this alleged conduct is sufficiently

outrageous, Thompson, 2005 WL 3307353 at *4, Defendants’ motion to

dismiss Employee Plaintiffs’ intentional infliction of emotional

distress claim is denied. See Conley, 355 U.S. at 45-46 (court cannot

dismiss a claim unless it appears “beyond doubt that the plaintiff[s]

can prove no set of facts in support of [their] claim which would

entitle [them] to relief”). 

III. Loss of Consortium Claim

Defendants argue Spousal Plaintiffs’ loss of consortium

claim should be dismissed because it is derivative of Employee

Plaintiffs’ “untenable” claim for intentional infliction of emotional

distress. (Defs.’ Mot. at 12.) However, since Employee Plaintiffs’

claim is tenable, (see supra pages 11-14), Defendants’ motion to

dismiss on this ground is denied. 

Defendants also argue the loss of consortium claim should be

dismissed because Spousal Plaintiffs have not alleged their husbands

suffered an injury “sufficiently disabling to raise the inference that

their conjugal relationship has been more than superficially or

temporarily impaired.” (Defs.’ Mot. at 13.) Spousal Plaintiffs

assert that whether the degree of harm suffered by their husbands is

sufficiently severe is a question for the jury. (Pls.’ Opp’n at 5.) 

A loss of consortium claim involves a “loss of

companionship, emotional support, love, felicity, and sexual relations

‘caused by a negligent or intentional injury to the other spouse by a

third party.’” Anderson v. Northrop Corp., 203 Cal. App. 3d 772, 780

(1988) (citing Rodriguez v. Bethleham Steel Corp., 12 Cal. 3d 382, 408

(1974)). To state a claim for loss of consortium, Spousal Plaintiffs

must allege their husbands suffered an injury that is “sufficiently

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serious and disabling to raise the inference that the conjugal

relationship is more than superficially or temporarily impaired.” 

Molien v. Kaiser Foundation Hosp., 27 Cal. 3d 916, 932-33 (1980);

Anderson, 203 Cal. App. 3d at 780 (to state a cause of action for loss

of consortium, the plaintiff must plead facts sufficient to establish

a significant impairment of the marital relationship). The injury may

be physical or psychological, but psychological injury must rise to

the “level of a ‘neurosis, psychosis, chronic depression, or phobia’

[to be] sufficient to substantially disturb . . . [the] marital

relationship on more than a temporary basis.” Anderson, 203 Cal. App.

3d at 780 (quoting Molien, 27 Cal. 3d at 933); see Park v. Standard

Chem Way Co., 60 Cal. App. 3d 47, 50 (1976) (loss of consortium “is

not to be confused with the inevitable physical, mental and emotional

damage normally or usually suffered by one spouse when the other has

been wrongfully injured”). 

Spousal Plaintiffs allege they “have been deprived of the

service, companionship, and consortium” of their husbands because

their husbands “suffered embarrassment, anxiety, humiliation, and

emotional distress” as a result of Defendants’ conduct. (Pls.’ Compl.

¶¶ 64, 67.) These allegations of psychological injury are not

sufficiently serious or disabling as to raise the inference that the

conjugal relationship was more than superficially or temporarily

impaired. See Anderson, 203 Cal. App. 3d at 780 (allegations that

husband became “mentally upset, distressed, and aggravated as a result

of his termination” were not “sufficient to substantially disturb the

marital relationship on more than a temporary basis”). Therefore,

Defendants’ motion to dismiss Spousal Plaintiffs’ loss of consortium

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claim is granted. However, Spousal Plaintiffs will be granted leave

to amend their loss of consortium claim. 

CONCLUSION

For the reasons discussed above, Defendant Allstate

California Insurance Company is dismissed from this action, and the

claims for fraud and loss of consortium are dismissed without

prejudice. If Plaintiffs can cure the deficiencies in these dismissed

claims, they may file and serve an amended complaint within twenty

(20) days from the date this Order is filed. Failure to amend within

the time prescribed will automatically convert the dismissal into a

dismissal with prejudice. 

IT IS SO ORDERED. 

Dated: January 25, 2006

/s/ Garland E. Burrell, Jr.

GARLAND E. BURRELL, JR.

United States District Judge

Case 2:05-cv-02197-GEB-EFB Document 12 Filed 01/26/06 Page 16 of 16