Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-01493/USCOURTS-caed-1_06-cv-01493-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1446 Breach of Contract- Insurance

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

JASVIRO MUNDI, as successor in

interest to Harnam Singh Mundi,

Plaintiff,

v.

UNION SECURITY LIFE INSURANCE

COMPANY and Does 1 to 20,

inclusive,

Defendants.

 

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1:06-cv-1493 OWW NEW

SCHEDULING CONFERENCE ORDER 

Discovery Cut-Off: 10/31/07

Non-Dispositive Motion

Filing Deadline: 2/15/08

Dispositive Motion Filing

Deadline: 3/3/08

Settlement Conference Date:

11/7/07 10:00 Bakersfield

Pre-Trial Conference

Date: 5/19/08 11:00 Ctrm. 3

Trial Date: 7/1/08 9:00

Ctrm. 3 (JT-6 days)

I. Date of Scheduling Conference.

March 1, 2007.

II. Appearances Of Counsel.

The Reich Law Firm by Jeff Reich, Esq., appeared on behalf

of Plaintiff.

LHB Pacific Law Partners, LLP, by Jonathan H. Erb, Esq.,

appeared on behalf of Defendant. 

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III. Summary of Pleadings. 

1. Plaintiff Jasviro D. Mundi is the widow and successor

in interest of Harnam S. Mundi (“Mr. Mundi”) a co-borrower with

the primary borrower, Gurdip S. Gill (“Gill”), on an equity line

of credit account with Wells Fargo Bank, N.A. (“Wells”). 

Defendant Union Security Life Insurance Company (“USLIC”)

provided a group life insurance policy which provided for payment

to Wells in the event of Mr. Mundi’s death. To obtain a 

certificate for this credit life insurance, Mr. Mundi signed a

Medical Application of Borrower and Co-Borrower (“Application”). 

After Mr. Mundi’s death, USLIC denied payment based on the

application. 

2. Plaintiff alleges breach of contract and breach of the

implied covenant of good faith and fair dealing for refusal to

pay. USLIC asserts that the application entitled it to rescind

and deny the claim. USLIC will file a motion to compel

arbitration of the dispute, and stay or dismiss this action,

based on an arbitration provision in the agreement between Wells

and both Mr. Mundi and Gill. Plaintiff will oppose the motion.

IV. Orders Re Amendments To Pleadings.

1. The parties do not currently contemplate amendments to

the pleadings, except to the extent necessary to effectuate

remand to State Court based on the issues discussed in Section

12. 

V. Factual Summary.

A. Admitted Facts Which Are Deemed Proven Without Further

Proceedings. 

1. USLIC provided a group life insurance policy that

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provided for payment of the death benefit to Wells under an

equity line of credit previously extended to the decedent, Mr.

Mundi, and a borrower, Gill. 

2. The purpose of the policy was to pay off or reduce

the amount of the outstanding line of credit in the event of any

borrower’s death. 

3. On May 25, 2004, Gill, as primary borrower, and

Mr. Mundi, as a co-borrower, obtained a line of credit from Wells

secured by real property in an amount in excess of $50,000.

4. During this transaction, an application for

insurance was signed by Mr. Mundi and Mr. Gill. 

5. The credit life insurance certificate in the

amount of $50,000 was issued pursuant to this application.

6. The application contained this language:

MEDICAL APPLICATION OF BORROWER AND CO-BORROWER

You are applying for the credit insurance marked above

and authorizing the Creditor to add charges for

insurance to your loan each month as they become due...

I. Have you, during the last five years, had or been

advised to have, treatment for heart disease, stroke,

cancer, leukemia, diabetes, disease of the kidney or

liver, AIDS or AIDS Related Complex (ARC)?

7. In the “Yes/No” brackets for debtor and co-debtor

opposite this question, the “no” brackets are checked.

8. Mr. Mundi was diagnosed with Hepatitis C before

the application was signed. 

9. Documents provided by Plaintiff’s counsel from the

Wells line of credit transaction (the parties seek Wells’

documents from this event) also include an unsigned Credit

Insurance Borrower Disclosure and Authorization which reads in

part: “Credit Life Insurance: If I choose to buy credit life

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insurance, it will provide a death benefit to help repay my

Account if I die, up to the maximum shown on the certificate

schedule provided to me (us) with these documents and subject to

the terms of the insurance certificate. Certain loan documents

also include a provision for arbitration (though the parties

dispute whether or not said provision applies to the parties in

this case). The arbitration provision in question states in

part:

“SECTION 25: ARBITRATION

RESOLVING DISPUTES-ARBITRATION ...

However, if the Bank and I are not able to resolve our

differences informally, I agree that any dispute

between me and the Bank...will be settled using the

following procedures. I UNDERSTAND AND AGREE THAT THE

BANK AND I ARE WAIVING THE RIGHT TO JURY TRIAL...

DISPUTES

A dispute is any unresolved disagreement between the

bank and me that relates in any way to accounts, loans,

services or agreements subject to this Arbitration

provision. It includes any claims or controversy of

any kind, which arise out of or are in any way related

to these accounts, loans, services or agreements. It

includes claims based on broken promises or contracts,

tort...A dispute also includes any disagreement about

the meaning of this Arbitration Section and whether a

disagreement is a ‘dispute’ subject to binding

arbitration as provided for in this Arbitration

Section.”

10. In these same documents appear a provision for

American Arbitration Association (“AAA”) arbitration and the

words: “Each arbitration will be governed by the provisions of

the Federal Arbitration Act...”

11. On September 12, 2005, Mr. Mundi was the victim of a

homicide. On or about September 27, 2005, a claim was reported. 

Plaintiff’s counsel’s firm sent the death certificate on October

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10, 2005. USLIC requested and obtained medical records from

treating physicians. On or about December 12, 2005, USLIC

asserted rescission and denied the claim.

12. On September 11, 2006, Plaintiff filed a state court

action against USLIC and does not agree to arbitration.

B. Contested Facts.

1. Plaintiff contends that Mr. Mundi did not have

sufficient knowledge of the English language, as was known to

defendant USLIC, to understand and answer the application

question concerning his health. Additionally, Plaintiff contends

the operative question was vague, ambiguous, and uncertain and

would not be understood in the manner asserted by USLIC by an

English speaking lay person. Further, USLIC set up a situation

where such personal and private questions were asked in the

presence of Gill, Mr. Mundi’s business partner, without any

provision for privacy. Plaintiff also maintains that Mr. Mundi’s

own understanding of the nature and extent of his condition as

well as its status at the time of the insurance application, are

relevant to this action.

2. Defendant contends that the application question

concerning disease of the liver was understood by Mr. Mundi. 

Defendant contends that at least as early as May 2002, Mr. Mundi

was diagnosed with the liver disease of Hepatitis C, after

extensive tests by physicians who effectively communicated with

him concerning the nature of his disease and kept him informed

during regular visits for treatment continuing up to and after

the application on May 25, 2004.

3. Plaintiff claims damages, as follows: (1) $50,000

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for the amount of the life insurance certificate; (2) payments on

the line of credit’s outstanding balance that exceeds $50,000;

(3) interest; (4) attorneys fees to pursue and defend litigation

over a business partnership with Gill to the extent caused by

Defendant’s failure to pay under the policy; (5) attorneys fees

to obtain policy benefits; (6) other consequential damages; and

(7) punitive damages. Defendant disputes damages.

VI. Legal Issues.

A. Uncontested.

1. Jurisdiction exists under 28 U.S.C. § 1332 based

on diversity of citizenship and the amount in controversy. 

2. USLIC asserts that jurisdiction to adjudicate the

dispute, including the jurisdiction to decide whether the dispute

is subject to arbitration, is itself arbitrable. 

3. Venue is proper under 28 U.S.C. § 1391.

4. The parties do not agree what jurisdiction

provides the rule of decision. Defendant believes there is a

choice of law policy in bank documents.

B. Contested. 

1. Plaintiff maintains that true diversity no longer

exists due to the fact that, subsequent to removal, a California

resident filed a cross-complaint against Plaintiff based upon the

loan account in question as stated in section 12; Plaintiff

intends to request that this case be remanded to state court and

consolidated with that action.

2. As to arbitration, Defendant USLIC contends Mr.

Mundi agreed to arbitrate “any claims or controversy of any kind,

which arise out of or are in any way related to these accounts,

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loans, services or agreements,” which “includes any disagreement

about the meaning of this Arbitration Section and whether a

disagreement is a ‘dispute’ subject to binding arbitration.” 

Defendant contends, under the agency and estoppel principles of

law governing arbitration pursuant to the Federal Arbitration Act

(Title 9), arbitration should be compelled. Plaintiff disagrees.

3. On the arbitration issue, Plaintiff contends that

Mr. Mundi did not agree to arbitration with Defendant. To the

extent that any agreement to arbitrate might exist with the Bank,

it does not include any dispute with USLIC. The arbitration

provision relied on by Defendant, even if operative, only relates

to the Bank (Wells) by its own terms and was not a part of the

insurance contract.

4. Defendant contends that the statement in the

application regarding Mr. Mundi’s health entitles USLIC to

rescind and deny the claim.

5. Plaintiff contends that rescission is unavailable

under applicable law.

VII. Consent to Magistrate Judge Jurisdiction.

1. The parties have not consented to transfer the 

case to the Magistrate Judge for all purposes, including trial.

VIII. Corporate Identification Statement.

1. Any nongovernmental corporate party to any action in

this court shall file a statement identifying all its parent

corporations and listing any entity that owns 10% or more of the

party's equity securities. A party shall file the statement with

its initial pleading filed in this court and shall supplement the

statement within a reasonable time of any change in the

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information. 

IX. Motion to Compel Arbitration.

1. The parties have agreed to have a motion to compel

arbitration heard on May 14, 2007. The moving party shall file

the motion on or before April 16, 2007. The responding party

shall file any response by April 30, 2007. The reply shall be

filed by May 7, 2007. 

X. Discovery Plan and Cut-Off Date.

1. As cleared with Plaintiff’s counsel, Defendant USLIC

seeks relevant records of Wells by subpoena, but has not received

them yet. Plaintiff produced Mr. Mundi’s copy of the documents

surrounding the transaction. 

2. The Court accepts the Defendant’s concern that any

discovery not be construed or inferred to the prejudice of its

motion to compel arbitration. No discovery will be interpreted

or construed as an admission or to the prejudice of the

Defendant’s claim that the case should be arbitrated.

3. The parties are ordered to complete all discovery on

or before October 31, 2007.

4. The parties are directed to disclose all expert

witnesses, in writing, on or before August 1, 2007. Any rebuttal

or supplemental expert disclosures will be made on or before

September 3, 2007. The parties will comply with the provisions

of Federal Rule of Civil Procedure 26(a)(2) regarding their

expert designations. Local Rule 16-240(a) notwithstanding, the

written designation of experts shall be made pursuant to F. R.

Civ. P. Rule 26(a)(2), (A) and (B) and shall include all

information required thereunder. Failure to designate experts in

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compliance with this order may result in the Court excluding the

testimony or other evidence offered through such experts that are

not disclosed pursuant to this order.

5. The provisions of F. R. Civ. P. 26(b)(4) shall 

apply to all discovery relating to experts and their opinions. 

Experts may be fully prepared to be examined on all subjects and

opinions included in the designation. Failure to comply will

result in the imposition of sanctions. 

XI. Pre-Trial Motion Schedule.

1. All Non-Dispositive Pre-Trial Motions, including any

discovery motions, will be filed on or before February 15, 2008,

and heard on March 21, 2008, at 9:00 a.m. before Magistrate Judge

NEW in Courtroom 8. 

2. In scheduling such motions, the Magistrate

Judge may grant applications for an order shortening time

pursuant to Local Rule 142(d). However, if counsel does not

obtain an order shortening time, the notice of motion must comply

with Local Rule 251. 

3. All Dispositive Pre-Trial Motions are to be

filed no later than March 3, 2008, and will be heard on April 7,

2008, at 10:00 a.m. before the Honorable Oliver W. Wanger, United

States District Judge, in Courtroom 3, 7th Floor. In scheduling

such motions, counsel shall comply with Local Rule 230. 

XII. Pre-Trial Conference Date.

1. May 19, 2008, at 11:00 a.m. in Courtroom 3, 7th Floor,

before the Honorable Oliver W. Wanger, United States District

Judge. 

2. The parties are ordered to file a Joint PreCase 1:06-cv-01493-OWW -GSA Document 21 Filed 03/08/07 Page 9 of 13
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Trial Statement pursuant to Local Rule 281(a)(2). 

3. Counsel's attention is directed to Rules 281 

and 282 of the Local Rules of Practice for the Eastern District

of California, as to the obligations of counsel in preparing for

the pre-trial conference. The Court will insist upon strict

compliance with those rules.

XIII. Trial Date.

1. July 1, 2008, at the hour of 9:00 a.m. in Courtroom 3,

7th Floor, before the Honorable Oliver W. Wanger, United States

District Judge. 

2. This is a jury trial.

3. Counsels' Estimate Of Trial Time:

a. 6 days.

4. Counsels' attention is directed to Local Rules

of Practice for the Eastern District of California, Rule 285. 

XIV. Settlement Conference.

1. A Settlement Conference is scheduled for November 7,

2007, at 10:00 a.m. in Bakersfield before the Honorable Theresa

A. Goldner, United States Magistrate Judge. 

2. Unless otherwise permitted in advance by the

Court, the attorneys who will try the case shall appear at the

Settlement Conference with the parties and the person or persons

having full authority to negotiate and settle the case on any

terms at the conference. 

3. Permission for a party [not attorney] to attend

by telephone may be granted upon request, by letter, with a copy

to the other parties, if the party [not attorney] lives and works

outside the Eastern District of California, and attendance in

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person would constitute a hardship. If telephone attendance is

allowed, the party must be immediately available throughout the

conference until excused regardless of time zone differences. 

Any other special arrangements desired in cases where settlement

authority rests with a governing body, shall also be proposed in

advance by letter copied to all other parties. 

4. Confidential Settlement Conference Statement. 

At least five (5) days prior to the Settlement Conference the

parties shall submit, directly to the Magistrate Judge's

chambers, a confidential settlement conference statement. The

statement should not be filed with the Clerk of the Court nor

served on any other party. Each statement shall be clearly

marked "confidential" with the date and time of the Settlement

Conference indicated prominently thereon. Counsel are urged to

request the return of their statements if settlement is not

achieved and if such a request is not made the Court will dispose

of the statement.

5. The Confidential Settlement Conference

Statement shall include the following: 

a. A brief statement of the facts of the 

case.

b. A brief statement of the claims and 

defenses, i.e., statutory or other grounds upon which the claims

are founded; a forthright evaluation of the parties' likelihood

of prevailing on the claims and defenses; and a description of

the major issues in dispute.

c. A summary of the proceedings to date.

d. An estimate of the cost and time to be

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expended for further discovery, pre-trial and trial.

e. The relief sought.

f. The parties' position on settlement,

including present demands and offers and a history of past

settlement discussions, offers and demands. 

XV. Request For Bifurcation, Appointment Of Special Master, 

Or Other Techniques To Shorten Trial. 

1. The amount, if any, of punitive damages will be phased

before the same jury in a second phase of the trial.

XVI. Related Matters Pending.

1. Plaintiff contends that Jasviro Mundi v. Gurdip Gill,

Fresno County Superior Court action 06CECG03023 is a related

matter. Gurdip Gill, a California resident, filed a crosscomplaint in that action maintaining, among other things, that,

as between Plaintiff and Mr. Gill, Plaintiff is responsible for

paying the line of credit which the insurance in this action

would cover if paid. Plaintiff maintains that said action is

fundamentally intertwined with this action. 

2. Defendant contends that Mundi v. Gill, filed by

Plaintiff after Mr. Mundi’s death, involves a business dispute

between Gill and Mr. Mundi over events that pre-dated Mr. Mundi’s

death unrelated to USLIC. It also involves a business dispute

between Plaintiff and Gill over an alleged partnership that postdated Mr. Mundi’s death. The only pleading reference in that

action to any party or event in the instant action is that Gill’s

cross-complaint states that he and Plaintiff dispute who should

pay the Wells’ line of credit.

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XVII. Compliance With Federal Procedure.

1. The Court requires compliance with the Federal

Rules of Civil Procedure and the Local Rules of Practice for the

Eastern District of California. To aid the court in the

efficient administration of this case, all counsel are directed

to familiarize themselves with the Federal Rules of Civil

Procedure and the Local Rules of Practice of the Eastern District

of California, and keep abreast of any amendments thereto.

XVIII. Effect Of This Order.

1. The foregoing order represents the best

estimate of the court and counsel as to the agenda most suitable

to bring this case to resolution. The trial date reserved is

specifically reserved for this case. If the parties determine at

any time that the schedule outlined in this order cannot be met,

counsel are ordered to notify the court immediately of that fact

so that adjustments may be made, either by stipulation or by

subsequent scheduling conference. 

2. Stipulations extending the deadlines contained

herein will not be considered unless they are accompanied by

affidavits or declarations, and where appropriate attached

exhibits, which establish good cause for granting the relief

requested. 

3. Failure to comply with this order may result in

the imposition of sanctions. 

IT IS SO ORDERED

Dated: March 6, 2007 /s/ Oliver W. Wanger

UNITED STATES DISTRICT JUDGE

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