Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-00177/USCOURTS-caed-1_06-cv-00177-1/pdf.json

Parties Involved:
Allstate Life Insurance Company
Defendant
Victor Davis
Defendant
Vicky Guerra
Plaintiff
Mel Mendoza
Defendant

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

VICKY GUERRA, as Administrator

for the Estate of JENNIFER

PERRY

Plaintiff,

v.

Allstate LIFE INSURANCE

COMPANY; MEL MONDOZA; VICTOR

DAVIS; DOES 1 through 100,

Defendants.

1:06-CV-00177 OWW DLB

MEMORANDUM DECISION AND ORDER

RE GRANTING PLAINTIFFS MOTION

TO REMAND

1. INTRODUCTION

Plaintiff Vicky Guerra (“Plaintiff”) brings a motion to

remand this action to Stanislaus County Superior Court. 

Defendant Allstate Life Insurance Company (“Allstate”) opposes

the motion. Concurrently, Allstate moves to dismiss Plaintiff’s

claims for fraud and breach of covenant of good faith and fair

dealing. Plaintiff opposes Allstate’s motion to dismiss her

claims. 

2. PROCEDURAL HISTORY

A. Plaintiff’s Motion to Remand

Defendants removed this action from Stanislaus County

Superior Court. (Doc. 1, Notice of Removal, Filed February 17,

2006.) Plaintiff has filed a Motion to Remand. (Doc. 11, Mot.

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to Remand, Filed March 9, 2006.) Defendant filed its opposition

on April 21, 2006. (Doc. 20, Mem. in Opp. to Plaintiff’s Mot. to

Remand “Opp. to Remand”, Filed March 12, 2006.)

B. Defendants’ Motion To Dismiss

Defendants filed a Motion to Dismiss Plaintiff’s claims for

breach of contract and breach of the implied covenant of good

faith. (Doc. 7, Defendants Mot. to Dismiss, Filed February 23,

2006.) Plaintiffs filed their opposition on March 13, 2006. 

(Doc. 14, Mem. in Opp. to Mot. to Dismiss.)

3. FACTUAL BACKGROUND

A. The Life Insurance Policy

On January 29, 2000, Jennifer Perry ("Perry") purchased a

life insurance policy from Allstate Life Insurance Company. 

(Doc. 1, Notice of Removal, Exhibit A, Second Amended Complaint

("SAC"), ¶1.) The face amount of the policy was $100,000. (Id.,

¶7.) The agent selling the policy was Defendant Mel Mendoza

("Mendoza"). (Doc. 11, Mot. to Remand.) The named beneficiary

under the policy is Defendant Victor Davis ("Davis"). (Doc. 1,

Notice of Removal, SAC, ¶10.) Davis was convicted in the

Superior Court of California of the murder of Jennifer Perry in

February 2005. (Doc. 14, Mem. in Opp. to Mot. to Dismiss.) 

Davis is appealing his conviction. (Doc. 1, Notice of Removal,

SAC, ¶10.) 

Plaintiff is the Administrator for the Estate of Jennifer

Perry. (Doc. 1, Notice of Removal, SAC, ¶1.) On August 6, 2001,

Plaintiff’s counsel contacted Allstate and informed it of Perry's

death. (Id., ¶12.) In a letter to Plaintiff dated August 27,

2002, Allstate denied coverage, refused to pay the benefits, and

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rescinded the policy. (Id., ¶13.) Allstate’s denial of coverage

is based on alleged false representations by Perry when she

applied for insurance benefits. (Id., ¶14.) 

Mendoza was present when Perry filled out the application. 

(Doc. 1, Notice of Removal, SAC, ¶17.) Plaintiff alleges Mendoza

either filled out the application for Perry or instructed her on

how to answer the questions on the application. (Id.) 

B. The Underlying Dispute

Plaintiff initially brought several claims against Allstate

and Mendoza in Stanislaus County Superior Court. First,

Plaintiff alleges a claim for breach of contract. According to

Plaintiff, Allstate, Mendoza, and other unnamed defendants,

breached their obligation under the policy by refusing to pay her

the benefits in accordance with its terms. (Doc. 1, Notice of

Removal, SAC, ¶23 and ¶30.) Plaintiff also asserts a claim for

breach of the implied covenant of good faith and fair dealing. 

She argues that Allstate, Mendoza, and other unnamed defendants

intentionally engaged in a course of conduct intended to oppress

plaintiff and dissuaded her from seeking the benefits under the

policy. (Doc. 1, Notice of Removal, SAC, ¶32.) 

Lastly, Plaintiff claims fraud against Allstate and Mendoza. 

Plaintiff argues that Mendoza, in the scope of his Allstate

employment, made false representations to Perry when instructing

her on how to fill out the insurance application. (Doc. 1,

Notice of Removal, SAC, ¶36.) 

Plaintiff, as the administrator of Perry’s estate, brings

one claim against Davis for declaratory relief to determine her

rights and duties of entitlement to the proceeds of Perry’s

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policy. (Doc. 1, Notice of Removal, SAC, ¶46.) 

Allstate has removed the dispute to federal court and

Plaintiff now seeks remand of the action. 

C. The Parties’ States of Citizenship 

Plaintiff is a citizen of the State of California. (Doc. 1,

Notice of Removal, SAC, ¶1.) Allstate is incorporated in the

State of Illinois, with its principal place of business in

Northbrook, Illinois. (Doc. 1, Notice of Removal, ¶5). Davis is

a citizen of the State of California currently serving two life

sentences for murder in a California prison. (Doc. 11, Mot. to

Remand.) 

The record, however, is unclear as to Mendoza's state of

citizenship. Mendoza sold insurance policies for Allstate using

the insurance license number 063380. (Doc. 11, Mot. to Remand.) 

An investigation with the California Department of Insurance has

revealed that this licence number does not exist. (Id.) 

According to Plaintiff, the California Department of Insurance

has no record of Mendoza having a license to sell insurance. 

(Id.) Plaintiff argues that because Mendoza assisted Perry in

filling out her insurance application in California, it must be

inferred that Mendoza was a citizen of California at that time. 

(Id.) Defendant does not contest Mendoza's California

citizenship.

4. PLAINTIFF’S MOTION TO REMAND

A. Standard of Review

Section 1447(c) provides that “if at any time before final

judgment it appears that the district court lacks subject matter

jurisdiction, the case shall be remanded.” 28 U.S.C. 1447(c);

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 It is undisputed that the amount in controversy is 1

$100,000, the amount of the policy. There is no federal question

apparent from Plaintiff’s second amended complaint. 

5

Briano v. Conseco Life Ins. Co., 126 F. Supp. 2d 1293, 1295 (C.D.

Cal 2000). The subject matter jurisdiction of the district court

is not a waivable matter and may be raised at anytime by one of

the parties, by motion, or in the responsive pleadings. Id. A

defendant has the burden of establishing that removal was proper. 

Arellano v. Home Depot U.S.A., Inc., 245 F. Supp. 2d 1102, 1105

(S.D. Cal 2003); Duncan, 76 F.3d at 1485. The removal statute is

to be strictly construed against removal. Abrego v. Dow Chem.

Co., 443 F.3d 676, 685 (9th Cir. 2006). Federal jurisdiction

must be rejected if there is any doubt as to the right or removal

in the first instance. Duncan v. Stuetzle, 76 F.3d 1480, 1485

(9th Cir. 1996). Without jurisdiction the court cannot proceed

at all in any cause. Jurisdiction is the power to declare the

law, and when it ceases to exist, the only function remaining to

the court is that of announcing the fact and dismissing the case. 

Santos v. People of Guam, 436 F.3d 1051, 1053 (9th Cir. 2006). 

B. Analysis

i. Complete Diversity Must Exist Amongst All Parties

For Removal to Be Proper.

Jurisdiction in this case is based exclusively on diversity

of citizenship. Original diversity jurisdiction exists under 28

U.S.C. section 1332(a) when the parties are of diverse

citizenship and the amount in controversy exceeds $75,000. A 1

defendant may remove from state court any action “of which the

district courts of the United States have original jurisdiction.” 

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28 U.S.C. section 1441(a). When an action is removed based on

diversity, complete diversity must exist at removal. Gould v.

Mutual Life Ins. Co. of New York, 790 F.2d 769, 773 (9th Cir.

1986), cert. denied, 479 U.S. 987, 107 S. Ct. 580 (1986). 

Complete diversity requires each plaintiff to be a citizen of a

different state from each defendant. Caterpillar Inc. v. Lewis,

519 U.S. 61, 68 (1996); Morris v. Princess Cruises, Inc. 236 F.3d

1061, 1067 (9th Cir. 2001). Generally, diversity is determined

from the face of a complaint. Gould, 790 F.2d at 773. The first

issue is whether complete diversity exists between Plaintiff,

Mendoza, and Davis such that removal was proper.

a. Mendoza’s Citizenship

Plaintiff is a citizen of the state of California. 

Plaintiff alleges that Mendoza is an agent for Allstate, licensed

to sell insurance policies in the State of California on its

behalf. (Doc. 1, Notice of Removal, SAC, ¶3.) The record is

unclear as to Mendoza's state of citizenship. Mendoza sold

insurance policies for Allstate using the insurance license

number 063380, a number Plaintiff alleges does not exist. The

California Department of Insurance has no record of Mendoza

having a license to sell insurance. Allstate does not contest

Mendoza's citizenship in California. Instead Allstate argues

that Mendoza’s citizenship should be disregarded because he is a

fraudulently joined defendant. (Doc. 20, Opp. to Mot. to

Remand.)

Mendoza sold a policy in California to a California

resident. Allstate issued the subject insurance policy and

collected the premiums from Perry. (Doc. 11, Mot. to Remand.) 

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Because Allstate does not contest Mendoza's California

citizenship and there is no evidence to the contrary, Mendoza is

deemed a California citizen for purposes of this action. 

b. Davis’ Citizenship

It is undisputed that Davis resides in the State of

California and is the named beneficiary under Perry's life

insurance policy. (Doc. 1, Notice of Removal, SAC, ¶4.) Davis

is currently serving two life sentences in a California state

prison for the murder of Perry and Perry's daughter. (Doc. 11,

Mot. to Remand.) 

At first glance, it appears that diversity jurisdiction does

not exist between Plaintiff, Mendoza, and Davis at the time of

Allstate’s removal of the action. However, the question of

diversity depends on whether Mendoza and Davis, as non-diverse

parties, are necessary and proper to this litigation. 

ii. Mendoza and Davis Were Properly Joined as

Necessary Parties Under Fed. R. Civ. P. 19(a).

Federal Rule of Civil Procedure 19(a) requires joinder of

persons whose interests are so directly involved that their

presence is needed for just adjudication. Fed. R. Civ. P. 19(a). 

A necessary party is one having an interest in the controversy,

and who ought to be made a party, in order that the court may act

on that rule which requires it to decide and finally determine

the entire controversy, and do complete justice, by adjusting all

the rights involved in it. IBC Aviation Servs. v. Compania

Mexicana De Aviacion, S.A. de C.V., 125 F. Supp. 2d 1008, 1011

(N.D. Cal. 2000)(citing, CP Nat’l. Corp. v. Bonneville Power

Admin., 928 F.2d 905, 912 (9th Cir. 1991).) This standard is met

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when failure to join will lead to separate and redundant actions. 

Id. Plaintiff is required to join any person whose interests are

such that in his or her absence: 

1) complete relief cannot be accorded among

those already parties; or

2) Any judgment rendered may:

a) impair or impede the absent

person’s ability to protect that

interest, or 

b) leave any of the existing parties

subject to a substantial risk of

incurring double, multiple or

otherwise inconsistent obligations

Fed. R. Civ. P. 19(a)

a. Complete Relief Cannot Be Accorded to the

Parties Without Including Mendoza In This

Litigation.

Plaintiff sues for breach of contract, breach of the

covenant of good faith and fair dealing, and fraud against

Allstate and against Mendoza, as Allstate’s agent. Mendoza was

with Perry when she filled out her life insurance application. 

Plaintiff claims that, at that time, Mendoza either filled out

the insurance application for Perry “and adjust[ed] her answers

as he saw fit” or instructed her on how to answer the questions

on the application. (Doc. 1, Notice of Removal, SAC, ¶35.) 

Plaintiff claims Mendoza intended for Perry to give incomplete

and incorrect information about her medical history and to tender

the premiums contracted. (Id., at ¶36.) Until the time of her

death, Plaintiff performed all of the conditions under her

contract and paid all required premiums. (Id., at ¶29.) 

Plaintiff claims that any alleged inaccuracies in the policy

application were immaterial. (Id., at ¶23.) Plaintiff further

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argues that Perry relied on Mendoza’s representations and that

she could not have otherwise discovered the falsity of Mendoza’s

representation. (Id., ¶37.) Mendoza’s actions were discovered

only after Plaintiff was informed by counsel that Allstate would

not honor the policy and an investigation was conducted into what

occurred at the time the application was filled. (Id., ¶38.) 

Plaintiff seeks relief from Mendoza and from Allstate.

Plaintiff's claims against Allstate rely entirely on the

relationship between Mendoza and Perry. By definition, parties

to be joined under Rule 19 are those against who are so situated

as a practical matter as to impair either the effectiveness of

relief or their own present parties’ ability to protect their

interest. EEOC v. Peabody W. Coal Co., 400 F.3d 774, 783 (9th

Cir. 2005). Perry is no longer available to speak about her

purchase of the life insurance policy. Without joining Mendoza

in this litigation, Plaintiff, as the administrator of Perry's

estate, could not obtain full and just adjudication of her

claims. The rights present in this controversy depend on the

information Mendoza may provide. He is the only party in this

case who has information about the circumstances underlying the

purchase of the life insurance policy. 

The record is unclear as to whether Mendoza was a life

insurance agent employed by Allstate, an independent insurance

agent, a broker, an agent of Perry, or a dual agent. Such a

determination directly affects the relief to which Plaintiff may

be entitled. Without Mendoza's testimony and participation,

complete relief cannot be accorded to all the parties and

complete justice cannot be obtained. Allstate would be able to

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 Cal. Prob. C. Section 252 provides: 2

“A named beneficiary of a bond, life

insurance policy, or other contractual

arrangement who feloniously and intentionally

kills the principal obligee or the person

upon whose life the policy is issued is not

entitled to any benefit under the bond,

policy, or other contractual arrangement, and

it becomes payable as though the killer

predeceased the decedent.”

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point to the “empty chair” and deny all his acts or omissions. 

Thus, Mendoza is a necessary party to this action per Rule 19 as

his presence is needed for the just adjudication of the claims,

particularly if he is found to be independent of Allstate. 

b. Any Judgment Rendered In This Action May

Impair or Impede Davis’ Ability to Protect

His Interest, As The Named Beneficiary, To

Perry’s Life Insurance Policy. 

Plaintiff also brings a claim for declaratory relief against

Davis, the named beneficiary under the policy. Davis was

convicted of Perry’s murder and is currently serving two life

sentences in a California prison. A final judgment has not been

rendered as Davis is currently appealing his conviction. 

Plaintiff seeks declaratory relief under Probate Code section

254(b) which provides that any civil proceeding subsequent to a

criminal trial may independently examine the facts in order to

determine whether the defendant actually committed the offense

for the purposes of the particular proceeding. Estate of

McGowan, 35 Cal. App. 3d 611, 618 (Cal. Ct. App. 1973). 

Plaintiff’s claim for declaratory relief against Davis

substantially affects his claim to Perry’s insurance benefits. 

Under section 252 of the California Probate Code , a court may 2

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find by a preponderance of the evidence that Davis is ineligible

to receive the benefits of Perry’s life insurance. 

Under Rule 19, the finding that a party is necessary to the

action is predicated only on that party having a claim to an

interest. Shermoen v. United States, 982 F.2d 1312, 1317 (9th

Cir. 1992). Just adjudication of claims require that courts

protect a party's right to be before the court and to participate

in adjudication of a claimed interest, even if the dispute is

ultimately resolved to the detriment of that party. Id. The

joinder rule is to be applied so as to preserve the right of

parties "to make known their interests and legal theories." Id.

In this case, the ultimate issue is whether Allstate is required

to pay the benefits under Perry's insurance policy. While this

question depends on the circumstances surrounding the policy and

the relationship between Perry and Mendoza, it cannot be said

that Davis, as the policy's beneficiary, does not have an

interest in the outcome of this case. Davis has an interest in

preserving his own claim to Perry's insurance benefits with his

concomitant right not to have his legal duties judicially

determined without his consent. Failure to include Davis in this

action would prejudice Plaintiff’s and his interests in the

policy by impairing or impeding their ability to resolve their

respective interests in a single forum. Under Rule 19(a) Davis

is a necessary party to this action.

iii. Even If Davis Were Not a Necessary Party Under

Fed. R. Civ. P. Rule 19(a), He May Still Be Joined

As A Defendant Under Fed. R. Civ. P. 20(a). 

Any person may be joined as a co-plaintiff or be joined as a

defendant, if: 

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1) A right to relief is asserted by or

against them jointly, severally, or in

the alternative; and 

2) The right to relief arises out of the

same transaction or series of

transactions; and 

3) There is at least one question of law or

fact common to all parties joined. 

Fed. R. Civ. P. 20(a). 

The permissive joinder requirements of Fed. R. Civ. P. 20(a)

are construed liberally in order to promote the broadest scope of

action consistent with fairness to the parties. Matthews Metal

Prods., Inc. v. RBM Precision Metal Prods., Inc., 186 F.R.D. 581,

583 (N.D. Cal. 1999); see also League to Save Lake Tahoe v. Tahoe

Regional Planning Agency, 558 F2d 914, 917 (9th Cir. 1977)

(permissive joinder is to be construed liberally in order to

promote trial convenience and to expedite the final determination

of disputes, thereby preventing multiple lawsuits). It is not

necessary that each plaintiff or defendant be involved in every

claim set forth in the complaint. Judgment may be awarded

against one or more defendants according to their respective

liabilities. Fed. R. Civ. P. 20(a). After a case has been

removed, if a defendant’s joinder destroys complete diversity,

the court may nonetheless allow joinder and remand the case to

state court. 28 U.S.C. § 1447(e); see also Boon v. Allstate Ins.

Co., 229 F. Supp. 2d 1016, 1019 (C.D. Cal. 2002). 

Both Plaintiff and Davis have an interest in the ultimate

issue of whether Allstate owes either of them benefits under

Perry's life insurance policy. This right to relief from

Allstate arises from the common set of facts relating to the

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policy’s purchase and designation of Davis as a beneficiary. 

Plaintiff has also asserted a claim for declaratory relief

against Davis as the beneficiary under the policy. Davis has

been convicted of Perry's murder. Though Davis is appealing this

conviction, under California state law, Plaintiff may bring an

action for declaratory relief to determine whether Davis has

forfeited his rights to collect the insurance proceeds under the

policy. All parties share an interest in common questions of law

and fact that speak to the validity of Perry's policy, the rights

of her personal representative to collect under the policy, and

whether Davis is a proper beneficiary under the policy. In the

interests of trial convenience and judicial expediency and

economy, Davis is properly joined under Fed. R. Civ. P. 20(a). 

iv. Fraudulent Joinder 

Allstate contends that Plaintiff joined Mendoza and Davis as

sham defendants to destroy diversity jurisdiction. However,

since Mendoza and Davis are necessary parties and proper parties

under Rule 19(a) and Rule 20(a), it follows that they were not

fraudulently joined. Even if Mendoza and Davis were not

necessary or proper parties, based on their legal interests in

the policy, they are not sham defendants.

A non-diverse party named in the state court action may be

disregarded if the federal court determines that party’s joinder

is a sham or fraudulent. Morris v. Princess Cruise, Inc., 236

F.3d 1061, 1067 (9th Cir. 2001). Fraudulently joined defendants

will not defeat removal on diversity grounds. Briano, 126 F.

Supp. 2d at 1296 (citing Ritchey v. Upjohn Drug Co., 139 F.3d

1313, 1318-19 (9th Cir. 1998).)

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Fraudulent joinder is a term of art. Id. (quotations

omitted). The question is simply whether there is any

possibility that the plaintiff will be able to establish a cause

of action against the disputed defendant in state court, or that

there has been an outright fraud in plaintiff’s pleadings of

jurisdictional facts. Alderman v. Pitney Bowes Mgmt. Servs., 191

F. Supp. 2d 1113, 1116 (C.D. Cal. 2002)(citing Green v. Amerada

Hess Corp., 707 F.2d 201, 205 (5th Cir. 1983).) The burden of

proving a fraudulent joinder is a heavy one. A defendant will be

deemed fraudulently joined only if, after all disputed questions

of fact and all ambiguities in the controlling state law are

resolved in the plaintiff’s favor, the plaintiff could not

recover against a non-diverse party. Calero v. Unisys Corp., 

271 F. Supp. 2d 1172, 1176 (N.D. Cal. 2003). The defendant

seeking removal to federal court is entitled to present facts

showing joinder to be fraudulent. McCabe v. General Foods Corp.,

811 F.2d 1336, 1339 (9th Cir. 1987). There is no fraudulent

joinder if the defendant’s assertions go to the merits of the

action as an entirety, and not to the joinder. Ritchey, 139 F.3d

at 1318.

A court must not take an overly mechanistic approach to

defendants’ fraudulent joinder claim. Alderman, 191 F. Supp. 2d

at 1116. Given the presumption against removal jurisdiction,

disputed questions of fact should be decided in favor of the nonmoving party. Levine v. Allmerica Financial Life Ins. & Annuity

Co., 41 F.Supp. 2d 1077, 1078 (C.D. Cal. 1999); Good v.

Prudential Ins. Co. of America, 5 F. Supp. 2d 804, 807 (N.D. Cal.

1998). Doubt arising from inartful, ambiguous, or technically

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defective pleadings should be resolved in favor of remand. 

Alderman, 191 F. Supp. 2d at 1116. 

a. There is No Possibility That Plaintiff Would

Prevail In Her Claims Against Mendoza For

Breach of Contract or Breach of Implied

Covenant of Good Faith.

Plaintiff brought claims against Mendoza for breach of

contract and for a breach of the implied covenant of good faith. 

Plaintiff argues that Mendoza breached his obligation under the

policy by refusing to pay her the benefits under the policy. 

"Under California law an insurance agent cannot be held liable

for breach of the insurance contract or breach of implied

covenant of good faith and fair dealing because he is not a party

to the insurance contract." Meisel v. Allstate Indemnity Co.,

357 F. Supp. 2d 1222, 1226 (E.D. Cal. 2005); Minnesota Mut. Life

Ins. Co. v. Ensley, 174 F.3d 977, 981 (9th Cir. 1999)(citing

Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566, 567, 108 Cal. Rptr.

480, 510 P.2d 1032 (1973).) Plaintiff's breach of contract claim

and claim for breach of implied covenant of good faith fail as a

matter of law. 

Plaintiff also raises the issue of attaching liability to

Mendoza under a “dual agent” theory. An insurance agent or

employee acting as a dual agent can be held liable where he acts

for his own personal advantage. Meisel, 357 F. Supp. 2d at 1227

(citing Mercado v. Allstate Ins. Co., 340 F. 3d 824, 826 (9th

Cir. 2003).) An employee becomes a dual agent by assuming

special duties for the benefit of the insured beyond those

required by the principal insurer. Mercado, 340 F.3d at 826 n.1. 

Accordingly, the agent may be liable to the insured for losses

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which resulted as a breach of that special duty. Jones v. Grewe,

189 Cal. App. 3d 950, 955 (Cal. Ct. App. 1987). The insured may

sue for breach of the agreement, or he may sue in tort for

negligent breach of the duty imposed by the agreement. Id. 

Plaintiff does not allege that Mendoza assumed any special

duties for Perry's benefit. Plaintiff does not allege that a

fiduciary relationship existed between Mendoza and Perry. 

Plaintiff only contends that it is impossible to determine

whether such an arrangement might have existed without joining

Mendoza as a defendant. Plaintiff is Perry’s personal

representative and is legally permitted to develop facts to

determine whether Mendoza acted in a dual agency capacity. It

cannot be determined as a matter of law that Plaintiff cannot

prevail against Mendoza for breach of an agency contract.

b. Plaintiff Sufficiently Alleges A Claim for

Fraud Against Mendoza.

Plaintiff also brings a claim for fraud against Mendoza. An

insurance company’s agent may be held personally responsible for

committing fraud. McNeill v. State Farm Life Ins. Co., 116 Cal.

App. 4th 597, 603 (Cal. Ct. App. 2004). Allstate argues that

Plaintiff’s fraud claim against Mendoza fails because Plaintiff

does not allege with specificity the misrepresentations made by

Mendoza to Perry. Allstate contends that Plaintiff’s complaint

only presents mere allegations of information and belief and, as

such, is insufficient to state a claim for fraud. 

In determining whether there was fraudulent joinder, a

district court must decide whether the plaintiff can sustain a

claim against the defendant in state court. Alderman, 191 F.

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Supp. 2d at 1116 (citing Green, 707 F.2d at 205). Under

California law, to state a claim for fraud the Plaintiff must

plead: 1) a misrepresentation of material fact; 2) knowledge of

falsity; 3) intent to deceive and induce reliance; 4) justifiable

reliance on the misrepresentation; 5) resulting damages. 

Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal. 4th 979, 990

(Cal. 2004); Century Surety Co. v. Crosby Insurance Inc., 124

Cal. App. 4th 116, 122 (Cal. Ct. App. 2004); see also Cal. Civ.

Code §§ 1709 and 1710. In California, fraud must be pled

specifically; general and conclusory allegations do not suffice. 

Murphy v. BDO Seidman, 113 Cal. App. 4th 687, 692 (Cal. Ct. App.

2003); Small v. Fritz Companies, Inc., 30 Cal. 4th 167, 184

(Cal. 2003). A policy of liberal construction of the pleadings

will not ordinarily be invoked to sustain a pleading defective in

any material respect. Id. This particularity requirement calls

for facts that show how, when, where, to whom, and by what means

the representations were tendered. Id. 

Plaintiff alleges that on January 29, 2000 Mendoza was with

Perry at the time that she filled out her life insurance

application. Plaintiff alleges that, at that time, Mendoza

misrepresented material facts to Perry by either filling out the

insurance application for Perry “and adjust[ing] her answers as

he saw fit” or instructing her on how to answer the questions on

the application. (Doc. 1, Notice of Removal, SAC, ¶35.) 

Plaintiff alleges that Mendoza made knowingly false

representations to Perry with the intent to induce her to give

incomplete and incorrect information in the policy’s application

regarding her medical history and to tender the premiums

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contracted. (Id., at ¶36.) Plaintiff alleges that Perry relied

on Mendoza’s representations and that she could not have

otherwise discovered the falsity of Mendoza’s representations. 

(Id., ¶37.) Mendoza’s fraud was not discovered until after

Plaintiff was informed by counsel that Allstate would not honor

the policy and an investigation took place into what occurred at

the time the application was filled. (Id., ¶38.) Lastly,

Plaintiff claims that Mendoza’s misrepresentations caused Perry

injury and damage in the amount of the policy, prejudgment

interests, and damages. (Id., at ¶39.) Plaintiff’s allegations

are sufficient to state a claim for fraud against Mendoza. At

the pleading stage, it cannot be said that there is no

possibility Plaintiff’s fraud claim will fail as a matter of law

or that Mendoza is fraudulently joined as a defendant in the

present action. Even if Plaintiff’s claim for fraud against

Martinez is insufficiently pled, Allstate must still show that

Davis was also fraudulently joined as a defendant to maintain

diversity jurisdiction. Mendoza is a proper defendant.

c. Plaintiff’s Claim for Declaratory Relief

Against Davis Was Properly Brought Before

California Courts. 

Allstate argues that Plaintiff's claim against Davis is

improper. First, Allstate argues that the claim for declaratory

relief is a procedural remedy, not substantive law and Plaintiff

has therefore asserted no substantive claims against Davis. 

Allstate cites Skelly Oil Co. v. Phillips Petroleum Co., 339 US

667, 672 (1950) which holds that where a suit is brought in

federal courts, "upon the sole ground that the determination of

the suit depends on some question of a federal nature" it must

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appear from the pleadings that the suit is of that character. 

Skelly Oil Co. v. Phillips Petroleum Co., 339 US 667, 672

(1950). Skelly is distinguishable and inapplicable. The issue

in this case is whether the court has diversity jurisdiction, not

whether federal question jurisdiction exists. Plaintiff’s

declaratory judgment action is brought under state law. In

evaluating a claim of fraudulent joinder, the inquiry is not

whether Plaintiff will actually prevail in her declaratory

judgment action against Davis in state court, but only whether

there is a possibility Plaintiff may do so. Alderman, 191 F.

Supp. 2d at 1116. 

Allstate argues that Plaintiff’s claim for declaratory

relief is a special proceeding that does not qualify as a “viable

cause of action” in California state courts. Allstate also

argues that even if Plaintiff's claims are valid, no claim

against Davis can stand because the controversy is not yet ripe

for declaratory relief, since Davis is appealing his conviction. 

Allstate contends that Davis' conviction is a "mere hypothetical"

because it is currently on appeal and that declaratory relief

cannot be finally adjudicated when the appeal is pending. 

Lastly, Allstate claims that any decision for declaratory relief

would purely be an advisory opinion.

Once again, Allstate confuses the proceedings and the law. 

California Probate Code section 254(b) provides: 

"In the absence of a final judgment of

conviction of felonious and intentional

killing, the court may determine by a

preponderance of evidence whether the killing

was felonious and intentional for purposes of

this part. The burden of proof is on the

party seeking to establish that the killing

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 Cal. Code. Civ. Proc. §22 provides, “An Action is an 3

ordinary proceeding in a court of justice by which one party

prosecutes another for the declaration of a public offense

(emphasis added)...”

 Cal. Code Civ. Proc. §30 provides, “A civil action is 4

prosecuted by one party against another for the declaration...of

a wrong.”

 Cal. Code Civ. Proc. §1060 provides: 5

“Any person interested under a written

instrument... or under a contract... or who

desires a declaration of his or her rights or

duties with respect to another...may, in

cases of actual controversy relating to the

legal rights and duties of the respective

parties, bring an original action in superior

court for a declaration of his or her

rights... including a determination of any

question of construction or validity arising

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was felonious and intentional . . . ."

Subsequent to a criminal trial, state courts in any civil

proceeding may independently examine the facts to determine

whether the defendant actually committed the offense for the

purposes of the particular proceeding. Estate of McGowan, 35

Cal. App. 3d at 618. In other words, section 254(b) gives

Plaintiff the option of seeking to determine whether “the killing

was intentional and felonious” in California State courts, rather

than in a probate proceeding. 

Plaintiff did not bring a claim against Davis in a

California probate court. Plaintiff brought a claim for

declaratory relief in the Superior Court of Stanislaus County. 

Actions for declaratory relief are civil actions, expressly

authorized by California law. Cal. Civ. Proc. Code §§ 22 , 30 ,

3 4

and 1060 ; see also 5 Maguire v. Hibernia Sav. & Loan Soc., 23 Cal.

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under the instrument.” 

 At oral arguments, Counsel for Allstate also argued that 6

Plaintiff failed to state a cause of action against Martinez and

against Davis under McCabe v. General Foods Corp., 811 F.2d 1336,

1339 (9th Cir. 1987). In McCabe, the Court found that Plaintiff

failed to allege the duty element of his negligence claim and

failed to state the requisite outrageousness for his intentional

infliction of emotional distress claim. McCabe is factually

distinguishable. Martinez and Davis are necessary parties to

this litigation. Even if they were not necessary parties,

however, Plaintiff has sufficiently alleged state law claims

against both parties such that it cannot be said their joinder is

fraudulent. 

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2d 719, 733 (Cal. 1944). Plaintiff is not required to wait until

Davis’ criminal appeal becomes final to bring her claim. 

Further, the issue is not whether Plaintiff will be granted

declaratory relief. Whether Davis was fraudulently joined

requires an inquiry only as to whether Plaintiff has a

possibility of sustaining a claim against him for such relief in

California state court. A decision on this claim cannot be an

advisory opinion as Allstate suggests. It cannot be said that

Plaintiff will fail in her claim for declaratory relief in state

court against Davis as a matter of law. She has a genuine

dispute with Davis whether his conduct excludes his right to the

policy proceeds which are claimed by Plaintiff. Allstate has not

met its burden of showing that Plaintiff's claim for declaratory

relief will obviously fail under California law. The presumption

against removal weighs in favor of Plaintiff.6

v. Unanimity Requirement

Plaintiff argues that even if Mendoza and Davis are found to

be fraudulently joined, there is still a lack of diversity

jurisdiction because Allstate failed to comply with the unanimity

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7 28 U.S.C. § 1446(a) provides: 

“a defendant or defendants desiring to remove

any civil action... from a State court shall

file in the district court of the United

States for the district and division within

which such action is pending a notice of

removal and signed pursuant to Rule 11 of the

Federal Rules of Civil Procedure...” 

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requirement for removal. Pursuant to 28 U.S.C. Section 1446 ,

7

all proper defendants are required to join or consent to the

removal of any civil action from a state court to a federal

district court. Prize Frize v. Matrix (U.S.) Inc., 167 F.3d

1261, 1266 (9th Cir. 1999); Parrino v. FHP, Inc., 146 F.3d 699,

703 (9th Cir. 1998). In removals involving multiple defendants,

not all defendants must actually file a notice of removal. Ford

v. New United Motors Mfg., 857 F. Supp. 707, 708 n.3 (N.D. Cal.

1994). All that is required is that each defendant file a

document in which the defendant formally concurs with the

removal. Id. The removing defendant has the burden of

explaining the absence of any other defendant. Prize Frize, 167

F.3d at 1266 (holding “the case was improperly removed because

not all defendants consented to the removal”). 

Allstate’s pleadings are silent as to Davis and Mendoza’s

consent for removal. Allstate does not allege it obtained either

Davis or Mendoza’s consent before removing this case to federal

court. There are no documents on record by either Mendoza or

Davis indicating a formal concurrence with the removal. It is

unknown, based on Allstate’s Notice of Removal, whether Davis or

Mendoza have consented or will consent officially and

unambiguously to Allstate’s removal action. Allstate is not in a

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position to speak for Mendoza or Davis. Allstate’s failure to

meet its burden of explaining the absence of unanimity by Mendoza

and Davis is fatal. Removal of the case to federal court was

improper. 

vi. Davis’ Interest Cannot Be Realigned For the

Purposes of Determining Diversity.

Allstate argues that Davis should be realigned with

Plaintiff because his real interests are the same in that both

Davis and Plaintiff are seeking the insurance benefits paid under

the policy. The issue of alignment for purposes of diversity

jurisdiction requires a court to “look beyond the pleadings” to

the actual interests of the parties respecting the subject matter

of the lawsuit. Prudential Real Estate Affiliates, Inc. v. PPR

Realty, Inc., 204 F.3d 867, 872 (9th Cir. 1999). Alignment for

jurisdictional purposes is proper where parties’ interests

coincide respecting the “primary matter in dispute.” Id. at 873.

If the interests of a party named as a defendant coincide with

those of the plaintiff in relation to the purpose of the lawsuit,

the named defendant must be realigned as a plaintiff for

jurisdictional purposes. Dolch v. United California Bank, 702

F.2d 178, 181 (9th Cir. 1983). 

The primary issue in this case involves coverage under

Perry’s policy and who is entitled to receive Perry’s insurance

benefits. While Allstate correctly asserts that Plaintiff and

Davis both share a similar interest in Perry’s insurance

benefits, those interests are totally antagonistic to each other. 

If a judgment against Allstate is entered finding coverage, the

right to the benefits and whether the conduct of Perry or Davis

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defeats recovery remains. The allegedly disabling grounds to

defeat coverage are different for Perry and Davis. Plaintiff’s

and Davis’s interests are different and cannot be aligned. 

Plaintiff’s allegations pursuant to Probate Code section 252 are

also totally opposed to Davis’ interests, as he is currently

appealing his murder conviction. Realigning Davis as a plaintiff

in this action is improper. 

C. Attorney Fees 

An order remanding the case may require payment of just cost

and any actual expenses, including attorney fees, incurred as a

result of the removal. 28 U.S.C. § 1447(c). The purpose of such

an award is not to punish defendants, but rather to reimburse

plaintiffs for unnecessary litigation costs. Kanter v. Warner

Lambert Co., 52 F. Supp. 2d 1126, 1132 (N.D. Cal. 1999), aff’d,

265 F.3d 853 (9th Cir. 2001). A showing of the removing

defendant’s bad faith is not required for an award of attorney

fees and costs. Moore v. Permanente Medical Group, Inc., 981

F.2d 443, 446 (9th Cir. 1992). The decision of whether to award

costs and fees lies within the sound discretion of the trial

judge who may take into account the particular circumstances of

the case and the legal issues involved. Schrader v. Hamilton,

959 F. Supp. 1205, 1212 (C.D. Cal. 1997). 

Plaintiff seeks to recover $2,250 for fees and expenses

incurred for the remand motion. (Doc. 13, Declaration of Robert

W. Crabtree, Filed March 9, 2006, ¶4.) Plaintiff’s attorney

supports his hourly billing rate of $300 by noting that he is a

California certified specialist in estate planning and probate

law. (Id., ¶3.) The breakdown of attorneys fees are as follows: 

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Preparation of motion (2.5 hours): $450.00

Preparation of reply (1 hour): $300.00

Attendance at hearing, including 

travel (5 hours): $1500.00

Total: $2,250.00

(Doc. 13, Declaration of Robert W. Crabtree, ¶4.)

Defendants should have noted another insurer lost a remand

motion concerning Perry’s administratrix’s pursuit of coverage

under another insurance policy. Attorneys fees are appropriately

recoverable in securing remand.

5. DEFENDANTS’ MOTION TO DISMISS

A. Standard of Review

Fed. R. Civ. P. 12(b)(6) provides that a motion to dismiss

may be made if the plaintiff fails “to state a claim upon which

relief can be granted.” However, motions to dismiss under Fed.

R. Civ. P. 12(b)(6) are disfavored and rarely granted. The

question before the court is not whether the plaintiff will

ultimately prevail; rather, it is whether the plaintiff could

prove any set of facts in support of his claim that would entitle

him to relief. See Hishon v. King & Spalding, 467 U.S. 69, 73

(1984). “A complaint should not be dismissed unless it appears

beyond doubt that plaintiff can prove no set of facts in support

of his claim which would entitle him to relief.” Van Buskirk v.

CNN, Inc., 284 F.3d 977, 980 (9th Cir. 2002) (citations omitted).

In deciding whether to grant a motion to dismiss, the court

“accept[s] all factual allegations of the complaint as true and

draw[s] all reasonable inferences” in the light most favorable to

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the nonmoving party. TwoRivers v. Lewis, 174 F.3d 987, 991 (9th

Cir. 1999); see also Rodriguez v. Panayiotou, 314 F.3d 979, 983

(9th Cir. 2002). A court is not “required to accept as true

allegations that are merely conclusory, unwarranted deductions of

fact, or unreasonable inferences.” Sprewell v. Golden State

Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

B. Discussion 

i. Stanislaus County Superior Court Must Decide

Whether Cal. Code Civ. Proc. Section 339(1) Was

Tolled Until Victor Davis, the Named Beneficiary

Under the Insurance, Was Convicted for the Murder

of Jennifer Perry. 

Defendants move to dismiss Plaintiff’s claim for breach of

the implied covenant of good faith and fair dealing arguing that

it is time barred under California Code of Civil Procedure

section 339(1). Section 339(1) provides: 

“Within two years... a [cause of] action upon

a contract, obligation, or liability

evidenced... by a policy of title insurance

shall not be deemed to have accrued until the

discovery of the loss or damage suffered by

the aggrieved party thereunder.”

Cal. Code Civ. Proc. §339(1). Defendants argue that the statute

of limitations began to run once Plaintiff became aware of the

cause of action. Allstate notified Plaintiff in August of 2002

that the benefits under the insurance were not payable. 

Plaintiff did not file her cause of action until June 3, 2005,

over two years after she discovered that she had a cause of

action. Accordingly, Defendants argue that Plaintiff’s claim for

breach of covenant of good faith and fair dealing is time barred. 

Plaintiff opposes defendants’ motion claiming that she

lacked standing to bring a claim for breach of covenant of good

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faith and fair dealing until Davis was convicted for the murder

of Perry. However, Plaintiff points to no legal authority to

support her argument. She argues that Davis was the only named

beneficiary of the insurance policy and that Plaintiff could not

enforce the policy unless the estate became the beneficiary. 

Only after Davis was convicted of Perry's murder and deemed to

have predeceased Perry under California Probate Code section 252

did Plaintiff attain standing as a beneficiary. Plaintiff argues

that section 339(1) did not begin to run until February 2005 when

Davis was convicted. Plaintiff claims that she filed her

original complaint on June 3, 2005 well within the two year

statute of limitations. (Doc. 14, Mem. in Opp. to Mot. to

Dismiss.) 

There are two separate requirements to establish breach of

the implied covenant of good faith: 1) benefits due under the

policy must have been withheld and 2) the reason for withholding

benefits must have been unreasonable or without proper cause. 

Tilbury Construction, Inc. v. State Comp. Ins. Fund, 137 Cal.

App. 4th 466, 475 (Cal. Ct. App. 2006). Because the essence of

the tort of bad faith and breach of contract is focused on the

prompt payment of benefits due under an insurance policy, there

is no cause of action for breach of covenant of good faith and

fair dealing when no benefits are due. Progressive West Ins. Co.

v. Superior Court, 135 Cal. App. 4th 263, 279 (Cal. Ct. App.

2005). In California, in the event of an intentional killing of

the insured by the primary beneficiary, the contingent

beneficiaries become entitled to the insurance proceeds. Estate

of McGowan, 35 Cal. App. 3d at 615. Unless the policy so

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Mize, however, does not stand for the proposition that the 8

statute of limitations is automatically tolled in a case where

the insured is killed by the named beneficiary in the life

insurance policy and a criminal prosecution is pending. There

must be a conviction. Whether there is tolling depends on the

particular facts of the case. Mize, 48 Cal. App. 3d at 494 n.4. 

In this case there is no criminal prosecution pending. 

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provides, however, the insurer is not relieved of liability

because of the disqualification of the principal beneficiary. 

Mize v. Reserve Life Insurance. Co., 48 Cal. App. 3d 487, 492 n.2

(Cal. Ct. App. 1975). If no contingent beneficiary is designated

in the policy the proceeds thereof are payable to the estate of

the murdered insured. Id. (internal quotations and citations

omitted). 

The particular set of facts in this case has been addressed

in Mize v. Reserve Life Ins. Co., 48 Cal. App. 3d 487 (Cal. Ct.

App. 1975). Mize held that section 339(1) is tolled until the

judgment of conviction of the named beneficiary for the murder of

the insured becomes final. 

8 Mize, 48 Cal. App. 3d at 494. In

Mize, an administrator of an estate brought an action against a

life insurance company to collect the proceeds of two life

policies on the ground that payment was due to the insured’s

estate rather than to the named beneficiary who had murdered the

insured. Mize, 48 Cal. App. 3d at 489. The administrator of the

estate did not commence the action until after the judgment of

the murder conviction became final on appeal. Id. The parties

disputed whether the administrator’s action was barred by the

statute of limitations section 339(1). Id. at 491. Prior to

initiating the lawsuit, the administrator wrote a letter to

Defendant insurance company notifying it that the insured’s death

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was the result of a homicide and requested the funds to be

withheld until further investigation. Id. at 490. She also

furnished the insurance company with documents of the police

investigation into the insured’s death. Id. The insurance

company sent the administrator a notice of cancellation and

rescission of each of the policies on the grounds that “the

consent of the party rescinding was obtained through fraud of the

deceased.” Id. In its answer to the complaint, Defendant

insurance company alleged as a defense that the administrator’s

action was barred by the statute of limitations. Id. The court

rejected this defense on the ground that the administrator had

promptly alerted the insurance company as to the possibility that

the named beneficiary was disqualified from receiving any

proceeds. Id. at 493. The fundamental purpose of the statute of

limitations was served in that the insurance company had timely

notice of the circumstances bearing upon the claims under the

policy and its rights and obligations, so that it could assemble

a defense while the facts were still fresh. Id. 

Plaintiff’s counsel contacted Allstate and informed them of

Perry’s death on August 6, 2001. (Doc. 1, Notice of Removal,

SAC, ¶12.) It is unclear from the record, however, whether

Plaintiff’s counsel also informed Allstate that Perry’s death was

a possible murder. Plaintiff alleges that she made a claim for

the benefits under the policy. (Doc. 1, Notice of Removal, SAC,

at ¶13.) In a letter dated August 27, 2002, Allstate refused to

pay the benefits and rescinded the policy on the grounds that

Perry misrepresented her medical condition in her application. 

(Doc. 1, Notice of Removal, SAC, ¶14.) Allstate alleges as a

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 Plaintiff acknowledged that her counsel received 9

Allstate’s letter on August 30, 2002. (Doc. 1, Notice of

Removal, SAC, at ¶13.) 

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defense that the statute of limitations for Plaintiff’s breach of

covenant of good faith claim began accruing on the date

Plaintiff’s counsel received this letter. 

9

Plaintiff did not file her claim until June 3, 2005 after

Davis was convicted of Perry’s murder. Plaintiff could not

maintain an action for proceeds of the insurance policy because

no benefits were due to the estate until after Davis was

convicted of Perry’s death. The running of the statute of

limitations may be suspended by causes not mentioned in the

statute itself. Mize, 48 Cal. App. 3d at 492. Suspension of the

running of the statute of limitations in this case would not

frustrate the primary purpose of section 339(1), prejudice to the

insurer. The fundamental purpose of section 339(1) was served in

that Allstate had timely notice of Plaintiff’s claims so that

they could assemble a defense. 

Allstate also argues that nothing prevented Plaintiff from

bringing a special proceeding pursuant to Probate Code Section

254 for a determination of whether the killing was felonious and

intentional. Allstate’s argument does not make sense in light of

its opposition to Plaintiff’s motion for remand in which Allstate

argues against such a “special proceeding.” It would have been

impractical and inefficient for Plaintiff to have brought such a

proceeding while Davis’ criminal trial was pending. Where there

is no available eyewitness to establish that Davis killed the

insured, “it [is] impracticable for [Plaintiff] to undertake the

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 Though not specified in the pleadings, Plaintiff alleges 10

actual fraud. She does not raise the issue of constructive

fraud. 

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difficult task of assembling circumstantial evidence sufficient

to show the essential fact of murder.” Mize, 48 Cal. App. 3d at

494. “The exercise of prudent judgment would dictate that task

be left to the prosecuting authorities, who were investigating

the case and did in fact undertake the prosecution of [Davis]

resulting in the Murder conviction.” Id. “Upon that conviction

becoming final, it was practicable for [Plaintiff] to proceed

with [her] civil action.” Id. 

While the facts indicate that Section 339(1) was tolled

pending the determination of Davis’ murder trial, that

determination is better left to Stanislaus County Superior Court.

ii. Stanislaus County Superior Court Must Also Decide

Whether Plaintiff Sufficiently Alleged a Claim of

Fraud Against Allstate through Mendoza As a Life

Agent.

Allstate moves to dismiss Plaintiff’s fraud claim arguing 10

that she has failed to plead the claim with particularity. 

Plaintiff’s claim for fraud is alleged against Allstate through

the conduct of Mendoza in his capacity as a life agent. 

In California, a life agent is an insurance agent authorized

by and on behalf of a life insurer to transact life insurance

business. Cal. Ins. Code § 31. Where there is an agency, the

company is bound as to third persons dealing with the agent in

good faith as to all matters within the scope of the agent’s real

or apparent authority. Bank of Anderson v. Home Ins. Co., 14

Cal. App. 208, 218 (Cal. Ct. App. 1910). To state a claim for

fraud in California, the Plaintiff must plead: 1) a

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misrepresentation of material fact; 2) knowledge of falsity; 3)

intent to deceive and induce reliance; 4) justifiable reliance on

the misrepresentation; 5) resulting damages. Robinson Helicopter

Co., Inc. v. Dana Corp., 34 Cal. 4th 979, 990 (Cal. 2004);

Century Surety Co. v. Crosby Insurance Inc., 124 Cal. App. 4th

116, 122 (Cal. Ct. App. 2004); see also Cal. Civ. Code §§ 1709

and 1710. Fraud must be pled specifically; general and

conclusory allegations do not suffice. Murphy v. BDO Seidman,

113 Cal. App. 4th 687, 692 (Cal. Ct. App. 2003); Small v. Fritz

Companies, Inc., 30 Cal. 4th 167, 184 (Cal. 2003). A policy of

liberal construction of the pleadings will not ordinarily be

invoked to sustain a pleading defective in any material respect. 

Id. This particularity requirement requires facts which show

how, when, where, to whom, and by what means the representations

were tendered. Id. 

Allstate argues that plaintiff has failed to identify

Mendoza’s specific statements that were allegedly fraudulent. 

Allstate claims that it is unclear what conduct by Mendoza the

fraud claim is based on and that Plaintiff has not alleged

concrete facts demonstrating contemporaneous falsehood in any

representations. 

Plaintiff alleges that Mendoza was with Perry at the time

she filled out her life insurance application on January 29,

2000. Plaintiff claims that Mendoza misrepresented material

facts to Perry at that time by either adjusting her answers on

the application or instructing on how to provide the answers. 

According to Plaintiff, Mendoza intended to induce Perry to give

incomplete or incorrect information by knowingly making false

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representations to her. Perry, in turn, relied on these

representations and could not have known of their falsity. 

Lastly, Plaintiff claims that Mendoza’s misrepresentations caused

Perry injury and damage in the amount of the policy. Whether

these allegations are sufficient to plead a fraud claim against

Allstate, through Mendoza in his capacity as a life agent, is a

determination to be made in Stainslaus County Superior Court. 

 CONCLUSION

This action is REMANDED to Stanislaus County Superior Court. 

Allstate is ORDERED to pay Plaintiff attorneys fees in the amount

of $2,250.00 within thirty (30) days following date of service of

this decision.

SO ORDERED

Dated: July 17, 2006

/s/ OLIVER W. WANGER

OLIVER W. WANGER

United States District Judge

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