Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-00944/USCOURTS-caed-2_07-cv-00944-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 12:635 Breach of Insurance Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

RONALD HAMILTON,

No. 2:07-cv-00944-MCE-DAD

Plaintiff,

v. MEMORANDUM AND ORDER

PRUDENTIAL FINANCIAL; THE

PRUDENTIAL INSURANCE

COMPANY OF AMERICA; JP

MORGAN CHASE BANK as 

TRUSTEE of the AMERICAN

INSTITUTE of CERTIFIED PUBLIC

ACCOUNTANTS INSURANCE TRUST;

THE AMERICAN INSTITUTE OF 

CERTIFIED PUBLIC ACCOUNTANTS

TRUST; DOES 1-50 inclusive,

Defendants.

----oo0oo----

In bringing the present action, Plaintiff Ronald Hamilton

seeks damages based upon claims arising from an insurance policy

issued by Defendant The Prudential Insurance Company of America

(“Defendant”). Defendant removed Plaintiff’s lawsuit, initially

filed in state court, to this Court based upon diversity of

citizenship under 28 U.S.C. § 1332. 

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 Because oral argument will not be of material assistance, 1

the Court orders this matter submitted on the briefs. E.D. Cal.

Local Rule 78-230(h).

2

In his First Amended Complaint, Plaintiff alleges breach of

contract (Count I), breach of the covenant of good faith and fair

dealing (Count II), and intentional infliction of emotional

distress (Count III).

Defendant now moves to dismiss the claim for intentional

infliction of emotional distress (Count III) for failure to state

a claim upon which relief can be granted pursuant to Federal Rule

of Civil Procedure 12(b)(6).

For reasons set forth below, Defendant’s Motion to Dismiss

Count III will be GRANTED, without leave to amend.1

 

BACKGROUND

Plaintiff entered into a written contract for a long term

disability insurance policy (Policy) with Defendant sometime

before 1998. Plaintiff alleges that he succumbed to alcoholism

in August 1998 which made him unable to continue working as a

self-employed accountant. Plaintiff made a claim under the

Policy soon thereafter and subsequently received total disability

benefits from approximately February of 1999 until November 2005.

During this period, Plaintiff claims he attempted to return

to work on three occasions after achieving apparent sobriety,

only to relapse back into alcoholism. Nonetheless, according to

Plaintiff, on or about November 1, 2005 Defendant terminated his

benefits despite his allegedly continuing disability. 

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3

Plaintiff asserts that he requested reinstatement of his benefits

because it was impossible for him to return to work. Defendant

refused on grounds there was no medical evidence to show

Plaintiff was prevented from performing his occupational duties. 

Plaintiff alleges in terminating the policy benefit

payments, the Defendant acted “despicably, willfully, wantonly,

oppressively, fraudulently or in conscious disregard of the

plaintiff’s rights.” Pl.’s Compl., ¶ 25. Plaintiff further

alleges Defendant acted, “with the intent to annoy, harass or

injure plaintiff...” and “pursued an outrageous course of

conduct, intentionally and recklessly, proximately causing

plaintiff severe emotional distress, shock and other highly

unpleasant emotions.” Id. at ¶¶ 37, 30. Plaintiff claims that as

a result of the Defendant’s conduct, Plaintiff has “suffered

mental and emotional distress, including, but not limited to,

frustration, depression, nervousness and anxiety...” Id. at ¶ 22. 

In its Motion to Dismiss, Defendant claims Plaintiff cannot

allege facts demonstrating “extreme and outrageous” conduct, and

that Plaintiff cannot allege a “severe injury” necessary to

maintain the claim for intentional infliction of emotional

distress. Def.’s Mot. to Dismiss at pp. 3-5. Consequently,

Defendant claims Plaintiff has not pled sufficient facts

necessary to state a claim upon which relief can be granted. 

Plaintiff has not opposed the Motion.

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4

STANDARD

On a motion to dismiss for failure to state a claim under

Rule 12(b)(6), all allegations of material fact must be accepted

as true and construed in the light most favorable to the

nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336,

337-38 (9th Cir. 1996). Federal Rule of Civil Procedure 8(a)(2)

requires only “a short and plain statement of the claim showing

that the pleader is entitled to relief,” in order to “give the

defendant fair notice of what the . . . claim is and the grounds

upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47, 78 S.

Ct. 99, 2 L. Ed. 2d 80 (1957). While a complaint attacked by a

Rule 12(b)(6) motion to dismiss does not need detailed factual

allegations, a plaintiff’s obligation to provide the “grounds” of

his “entitlement to relief” requires more than labels and

conclusions, and a formulaic recitation of the elements of a

cause of action will not do. Bell Atl. Corp. v. Twombly, 127

S.Ct. 1955, 1964-65 (2007) (internal citations and quotations

omitted). Factual allegations must be enough to raise a right to

relief above the speculative level. Id. at 1965 (citing 5 C.

Wright & A. Miller, Federal Practice and Procedure § 1216, pp.

235-236 (3d ed. 2004) (“The pleading must contain something more

. . . than . . . a statement of facts that merely creates a

suspicion [of] a legally cognizable right of action”).

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5

If the court grants a motion to dismiss a complaint, it must

then decide whether to grant leave to amend. The court should

“freely give[]” leave to amend when there is no “undue delay, bad

faith[,] dilatory motive on the part of the movant, . . . undue

prejudice to the opposing party by virtue of . . . the amendment,

[or] futility of the amendment. . . .” Fed. R. Civ. P. 15(a);

Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to

amend is only denied when it is clear that the deficiencies of

the complaint cannot be cured by amendment. DeSoto v. Yellow

Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).

ANALYSIS

To state a claim for intentional infliction of emotional

distress, Plaintiff must allege: (1) outrageous conduct by

Defendant, (2) Defendant intentionally caused or recklessly

disregarded the probability of causing emotional distress,

(3) Plaintiff suffered severe or extreme emotional distress, and

(4) Defendant’s outrageous conduct was the actual and proximate

cause of Plaintiff’s emotional distress. Trerice v. Blue Cross of

Cal., 209 Cal. App. 3d 878, 883 (1989). 

Initially, the court determines if the conduct is

sufficiently extreme and outrageous to permit recovery. 

Tollefson v. Roman Catholic Bishop of San Diego, 219 Cal. App. 3d

843, 858 (1990). The outrageousness of a defendant's conduct

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

of fact. Trerice, 209 Cal. App. 3d at 883 

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6

An insurance company acting in an outrageous manner while

asserting a valid economic interest may still be liable for

intentional infliction of emotional distress. Fletcher v. Western

National Life Insurance Co., 10 Cal. App. 3d 376, 396 (1970). 

A. Extreme and Outrageous Conduct

In order to sufficiently plead a claim for intentional

infliction of emotional distress, Defendant’s conduct must have

been "so extreme as to exceed all bounds of that usually

tolerated in a civilized community." Ricard v. Pacific Indemnity

Co., 132 Cal. App. 3d 886, 895, 183 Cal. Rptr. 502 (1982);

Trerice, 209 Cal. App. 3d at 883, n.4; Cervantes v. J.C. Penney

Co., Inc., 24 Cal. 3d 579, 593 (1979). Conduct that is

objectively offensive and that breaches societies standards of

decency may still not qualify as outrageous conduct. Yurick v.

Superior Court (Antonetti), 209 Cal. App. 3d 1116, 1123 (1989). 

On the spectrum of offensiveness, outrageous conduct is the most

extreme or severe form of offensiveness, and anything less is

without legal recourse. Id. at 1128-1129.

Deciding whether conduct qualifies as outrageous must be

done using a case-by-case analysis because there is no “brightline” test. Yurick, 209 Cal. App. 3d at 1128. In Schlauch v.

Hartford Accident & Indemnity Co., 146 Cal. App. 3d 926 (1983),

the insurer delayed payment of the policy limits for two and

one-half years in a third-party claim with undisputed liability.

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7

Plaintiff brought a bad-faith claim against the insurer, which

included a third cause of action alleging that the insurer had

acted outrageously and with intent to inflict emotional distress. 

The court of appeal affirmed the demurrer of this claim, stating, 

"We finally note one additional flaw in

plaintiff's pleading. The third cause of action

simply asserts that Hartford acted outrageously

and with intent to inflict emotional distress. 

The failure to accept an offer of settlement or

the violation of statutory duties under Insurance

Code Section 790.03 does not in itself constitute

the type of outrageous conduct which will support

a cause of action for intentional infliction of

emotional distress.”

Id. at 936, citing Ricard, 132 Cal.App.3d at 894; Beckham v.

Safeco Ins. Co. of America, 691 F.2d 898, 904 (9th Cir. 1982).

In Ricard, the plaintiff sustained an injury to his back in

the course of his employment. 132 Cal. App. 3d at 889. 

Plaintiff's employer was insured by Pacific Indemnity Company. 

For several weeks following his injury, plaintiff was

incapacitated and required medical treatment from an orthopedic

surgeon. The orthopedic surgeon advised him that his disability

was chronic, and would reoccur for the rest of his life. Pacific

Indemnity paid for three of plaintiff's treatments but failed to

pay for the fourth treatment. Plaintiff wrote Defendant a letter

stating that its denial of payment was causing him “great

emotional distress” and “fear and worry.” Id. Plaintiff filed an

action alleging intentional infliction of emotional distress

based on the insurer's refusal properly to investigate and

process plaintiff's claim and communicate with plaintiff

concerning his claim, and its denial of the claim. Id. at 890.

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8

The appellate court sustained the trial court's decision to

grant the defendant's demurrer, stating: "One element of the tort

is 'outrageous conduct,' and in order to satisfy that element a

defendant's conduct must be 'so extreme as to exceed all bounds

of that usually tolerated in a civilized community.' (citations

omitted). We believe the trial court was justified in

concluding, as a matter of law, that defendant's conduct, as

pleaded, could not be deemed 'outrageous' within that

definition . . ." Ricard, 132 Cal.App.3d at 895.

In the present matter, the Court finds that Plaintiff has

not pled conduct on Defendant’s part which rises to the level of

being outrageous. Defendant has a valid economic interest in the

benefits paid to insured individuals, and Defendant may

investigate those claims under the terms of the insurance policy. 

An allegation that Defendant refused to pay benefits to Plaintiff

after approximately five years of continuing payment, without

more, is not outrageous conduct. Both Ricard and Schlauch stand

for the proposition that an insurer’s conduct in denying claims

submitted under a disability policy does not in and of itself

constitute outrageous conduct. Plaintiff has failed to plead

additional facts constituting outrageous conduct that are

sufficient to survive a motion to dismiss for failure to state a

claim upon which relief can be granted. 

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9

B. Severe or Extreme Emotional Distress

To satisfy the third element of the tort of intentional

infliction of emotional distress, a plaintiff must have suffered

severe or extreme emotional distress. Sawhney v. Allstate Ins.

Co., 1995 U.S. Dist. LEXIS 9261 (D. Cal. 1995); Bogard v.

Employers Casualty Co., 164 Cal. App. 3d 602, 616 (1985). Severe

emotional distress is defined as emotional distress of such a

quantity or enduring quality that no reasonable member of society

should be expected to endure it. Bogard, 164 Cal. App. 3d at 616; 

Fletcher v. Western National Life Ins. Co., 10 Cal. App. 3d 376,

397 (1970).

Courts have relied upon and adopted the explanation of

severe or extreme emotional distress as stated in the Restatement

Second of Torts, section 46, comment j: “emotional tranquility is

seldom attainable in this world, and some degree of transient and

trivial emotional distress is a part of the price of living among

people. The law intervenes only where the distress inflicted is

so severe that no reasonable man could be expected to endure it.”

Id. at 397; Bogard, 164 Cal. App. 3d at 616. Facts need to be

alleged that indicate the nature or extent of any mental distress

suffered as a result of the alleged outrageous conduct. Bogard,

164 Cal. App. 3d at 616. 

In the present matter, Plaintiff has failed to allege facts

that show he suffered from mental distress of such a severe

nature that no reasonable member of society should be expected to

endure it. 

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10

Plaintiff has alleged that he suffered from “depression,”

“frustration,” “nervousness and anxiety,” but these conclusory

statements lack the necessary specific facts to show their nature

or extent. It is not uncommon for members of society to feel

these emotions on any given day for a variety of reasons. The

Court finds the Plaintiff has failed to state facts indicating

severe or extreme emotional distress sufficient to survive a

motion to dismiss for a failure to state a claim upon which

relief can be granted.

 

CONCLUSION

For the forgoing reasons, Defendants’ Motion to Dismiss the

claim of intentional infliction of emotional distress for failure

to state a claim upon which relief can be granted is GRANTED. 

In light of Plaintiff’s lack of opposition to the motion to

dismiss and the court’s belief that Plaintiff will not be able to

allege sufficient facts to sustain a claim for intentional

infliction of emotional distress, leave to amend is NOT GRANTED.

IT IS SO ORDERED.

Dated: September 26, 2007

_____________________________

MORRISON C. ENGLAND, JR.

UNITED STATES DISTRICT JUDGE

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