John Hancock Life Insurance Company (U.S.A.) v. Viau

Filing 28

ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION by Judge Claudia Wilken denying 11 Motion for Preliminary Injunction.(tlS, COURT STAFF) (Filed on 10/5/2017)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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United States District Court
Northern District of California

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JOHN HANCOCK LIFE INSURANCE
COMPANY (U.S.A.),

Case No.

Plaintiff,

ORDER DENYING PLAINTIFF'S
MOTION FOR PRELIMINARY
INJUNCTION

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v.
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17-cv-04317-CW

DANIEL C. VIAU,
(Dkt. No. 11)
Defendant.

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Plaintiff John Hancock Life Insurance Company (U.S.A.) moves

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for a preliminary injunction.

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C. Viau filed an opposition and Plaintiff filed a reply.

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Nos. 22, 24.

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hearing.

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the arguments of counsel, the Court DENIES Plaintiff’s motion for

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preliminary injunction.

Defendant Daniel
Docket

On October 3, 2017, the parties appeared for a

Having considered the papers, supporting evidence, and

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Docket No. 11.

BACKGROUND
Around 1986, Defendant was badly burned in a fire on private

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property.

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the property owner agreed to pay Defendant a substantial amount

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of money.

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an annuity contract.

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dated October 23, 1987, provides for a series of monthly payments

Decl. of Walter H. Walker ¶ 2.

Id. ¶ 3.

The case settled and

The settlement money would be paid through
Id. ¶ 4.

The annuity contract, which is

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and periodic lump sum payments to be made to Defendant on

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specific dates starting in 1987 and continuing through August 1,

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2045.

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Decl. of Ketty Saez ¶ 4, Ex. A.
On August 18, 2015, Plaintiff sent Defendant a letter

alleging that Plaintiff had been overpaying the monthly payments

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due to Defendant since September 2007.

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letter contains a comparison of the amount Defendant “should have

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received” under the annuity contract and the amount actually

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United States District Court
Northern District of California

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received.

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Id., Ex. B.

The

The letter alleges that the total

overpayment was $127,588.12.

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Id. ¶ 8, Ex. B.

Id., Ex. B at 1.

On September 1, 2015, Plaintiff sent Defendant another

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letter.

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amount Defendant “should have received” under the annuity

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contract and the amount Defendant actually received.

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at 1.

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$127,588.12.

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“verbal agreement” “discussed via telephone on September 1, 2015”

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that Plaintiff would withhold $64,000 from the lump sum due to

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Defendant on August 19, 2017 and $63,588.12 from the lump sum due

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to Defendant August 19, 2022.

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“Agreement for Reduction of Debt” to the letter.

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addition to the payment terms, the draft agreement also included

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a provision that would require Defendant to release Plaintiff

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“and its directors, officers, affiliates, agents, owners,

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employees, successors and attorneys, from all claims, demands,

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known or unknown, that now exist and that arise out of, or are in

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any way connected with, or that result from, the matters

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described herein.”

Id. ¶ 9, Ex. C.

This letter purports to compare the

Id., Ex. C

Plaintiff reiterated that Defendant had been overpaid
Id., Ex. C at 1.

The letter further refers to a

Id.

Id., section 4.
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Plaintiff attached a draft
Id. at 3.

In

The draft agreement contains

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no provision requiring Plaintiff to release Defendant in a

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similar fashion.

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See id.

On January 27, 2016, March 2, 2016, and April 1, 2016,
Plaintiff sent Defendant additional letters, which were

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substantially the same as the September 1, 2015 letter.

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¶¶ 10-12, Exs. D-F.

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overpaid $127,588.12 and again requested that Defendant sign an

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agreement allowing Plaintiff to withhold $64,000 from the lump

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Northern District of California

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sum due on August 19, 2017 and $63,588.12 from the lump sum due

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on August 19, 2022.

Id.

Plaintiff reiterated that Defendant had been

See id., Exs. D-F.

On April 28, 2016, Mr. Walker, counsel for Defendant, sent a

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letter to Plaintiff on behalf of Defendant.

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Walker disputed Plaintiff’s claim that Defendant owed Plaintiff

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money.

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letters: Plaintiff’s letter states that Defendant should have

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received $2,400.84 for the month of September 2007, but the

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annuity contract states that Defendant should have received

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$3,400.44 for the same month. 1

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According to Plaintiff’s letter, then, Plaintiff actually

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underpaid Defendant by $1000 for the month of September 2007.

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Id., Ex. G at 2.

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experienced “difficulties” with his annuity contract under

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Plaintiff’s administration.

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allowed the mother of Defendant’s child to withdraw money from

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his monthly payments for about two years.

Id.

Id., Ex. G.

Mr.

Mr. Walker pointed out a mistake in Plaintiff’s

Id. at 1-2; Id., Ex. A at 1.

Mr. Walker also alleged that Defendant

Id. at 1.

Plaintiff apparently

Id.

Another time,

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Mr. Walker’s letter contained some typographical errors
with respect to these numbers, which he corrected in a follow-up
letter on May 5, 2016. Id., Ex. H.
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Defendant received a check of $1,100 from Plaintiff which

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Plaintiff had forgotten to give to him.

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Defendant’s payments “stopped” in October for a period of time,

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and were restored after Mr. Walker called Plaintiff on

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Defendant’s behalf.

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considered the matter closed.

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Defendant is “not competitively employable,” has “no savings and

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no assets,” and “needs his structured payments to live.”

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Northern District of California

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Mr. Walker concluded by stating that Defendant would not sign the

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agreement.

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Id. at 2.

Id.

In addition,

Mr. Walker stated that he
Id.

Mr. Walker also stated that

Id.

Id.

On July 17, 2017, Mr. Downey, counsel for Plaintiff, sent a

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letter to Mr. Walker.

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Downey reiterated that Defendant had been overpaid by $127,588.12

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during the period of September 2007 through August 2015.

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alleged overpayment: (1) the August 19, 2017 lump sum payment of

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$100,000 would be applied to the debt, and (2) the monthly

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payments due between September 1, 2017 and September 1, 2019

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would each be reduced by $1,500 until the remaining balance was

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paid off.

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alternative proposal, but hinted that Plaintiff might seek court

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relief.

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Decl. of Thomas M. Downey, Ex. I.

Mr.

Id. at

Mr. Downey came forward with a new proposal to settle the

Id.

Mr. Downey invited Defendant to provide an

Id. at 2.

On July 24, 2017, Mr. Walker responded that, as previously

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explained, the proposed deal was “unacceptable.”

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Mr. Walker stated that Defendant could not survive on the terms

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of the proposed deal.

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Id., Ex. J.

Id.

Four days later, on July 28, 2017, Plaintiff filed this
lawsuit against Defendant, seeking return of the alleged
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overpayment of $127,588.

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restitution, money had and received, conversion, and declaratory

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and injunctive relief.

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amended complaint asserting the same claims but reducing the

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amount of the alleged overpayment from $127,588 to $113,155.

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Plaintiff asserted claims for

On October 10, 2017, Plaintiff filed an

On August 10, 2017, Plaintiff filed this motion seeking to
enjoin Defendant from “accepting, accessing, spending,

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transferring, withdrawing, or otherwise dissipating the lump sum

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Northern District of California

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payments due on August 19, 2017 and August 19, 2022.”

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Motion at

2.

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LEGAL STANDARD

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To obtain either a TRO or a preliminary injunction under

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Federal Rule of Civil Procedure 65, the moving party must

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demonstrate “(1) a likelihood of success on the merits; (2) a

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significant threat of irreparable injury; (3) that the balance of

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hardships favors the applicant; and (4) whether any public

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interest favors granting an injunction.”

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F.3d 1222, 1227 (9th Cir. 2003); see also Winter v. Natural Res.

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Def. Council, Inc., 129 S. Ct. 365, 374 (2008).

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Circuit has recognized that an injunction could issue if “serious

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questions going to the merits were raised and the balance of

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hardships tips sharply in plaintiff’s favor,” so long as the

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plaintiff demonstrates irreparable harm and shows that the

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injunction is in the public interest.

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Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011)

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(citation and internal quotation marks omitted).

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relief is “an extraordinary remedy that may only be awarded upon

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a clear showing that the plaintiff is entitled to such relief.”
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Raich v. Ashcroft, 352

The Ninth

Alliance for the Wild

Injunctive

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Winter, 555 U.S. at 22.

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DISCUSSION
I.

Likelihood of Success on the Merits
“To prevail on a common count for money had and received,

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the plaintiff must prove that the defendant is indebted to the

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plaintiff for money the defendant received for the use and

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benefit of the plaintiff.”

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Rey, 223 Cal. App. 4th 221, 230 (2014).

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Northern District of California

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for conversion, the plaintiff must prove an “ownership or right

Rutherford Holdings, LLC v. Plaza Del
To prevail on a claim

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to possession of the property at the time of the conversion, the

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defendant’s conversion by a wrongful act or disposition of

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property rights, and resulting damages.”

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Place, Inc., 212 Cal. App. 4th 1439, 1452 (2013).

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the subject of an action for conversion if a specific sum capable

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of identification is involved.”

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Avidor v. Sutter's
“Money can be

Id.

Plaintiff has not provided any persuasive evidence showing

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that Defendant actually received overpayments from September 2007

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through August 2015.

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in support of this point is the declaration of Ketty Saez,

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Assistant Vice President and Senior Counsel for Litigation,

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Bankruptcy, and Dispute Resolution for Plaintiff, who states in a

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conclusory fashion that Defendant “accepted monthly payments from

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Plaintiff in amounts that exceeded the monthly payments due under

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the terms of the Annuity Contract” in the amount of $113,155.

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Saez Decl. ¶ 7.

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Defendant had been overpaid or how she calculated the amount of

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the overpayment.

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that Plaintiff is entitled to relief.

The only direct evidence Plaintiff submits

Ms. Saez does not state how she determined that

Ms. Saez’s declaration is insufficient to show

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Am. Passage Media Corp. v.

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Cass Commc’ns, Inc., 750 F.2d 1470, 1473 (9th Cir. 1985) (in

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denying preliminary injunction motion, disregarding affidavits

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that were “conclusory and without sufficient support in facts”).

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Plaintiff could have provided reliable evidence in the form of

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copies of the actual checks sent to and cashed by Defendant,

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which should be in Plaintiff’s possession, but Plaintiff failed

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to do so.

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United States District Court
Northern District of California

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The only other evidence Plaintiff provides is the letters it
sent to Defendant to try to collect the alleged overpayment.

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While the Court may consider hearsay evidence in conjunction with

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a preliminary injunction motion, these letters have already been

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demonstrated to be unreliable.

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their face.

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states that, under the annuity contract, the monthly payments for

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the period of September 2007 through August 2008 should have been

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$2,400.84.

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which plainly shows that the monthly payments for the period of

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September 2007 through August 2008 should have been $3,400.44.

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This mistake affects Plaintiff’s calculation of the alleged

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overpayment.

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actually received $2,400.84 for September 2007, which means that

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Defendant was not overpaid for that month and was actually

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underpaid by about $1000.

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for the period of October 2007 through August 2008 should be

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reduced by a significant amount.

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calculation of the alleged overpayment as $127,588.12 is wrong.

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Although Defendant’s counsel pointed out this mistake in his

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April 28, 2016 letter, Plaintiff continued to assert the amount

These letters are inaccurate on

Every single letter sent by Plaintiff to Defendant

This is contradicted by the annuity contract itself,

According to Plaintiff’s letters, Defendant

In addition, the alleged overpayment

As a result, Plaintiff’s

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of the alleged overpayment was the same: $127,588.12.

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Decl., Ex. I.

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overpayment was $127,588 in its initial complaint.

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¶ 9.

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thirteen days later, when it filed an amended complaint asserting

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the alleged overpayment was $113,155.

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amount is different from the amount that would result from

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correcting the mistake pointed out by Defendant, and so it is

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Northern District of California

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possible that Plaintiff found other mistakes in its calculation,

See Downey

Plaintiff even maintained that the alleged
Docket No. 1

Plaintiff did not attempt to correct its mistake until

Docket No. 10 ¶ 9.

This

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none of which are disclosed in its preliminary injunction motion.

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What is clear from all this is that the Court cannot rely on the

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letters -- or Plaintiff’s accounting -- to determine whether

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Defendant received overpayments.

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Moreover, Defendant has raised at least some serious doubt

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over whether Defendant was underpaid at various times over the

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years.

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for the month of September 2007.

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alleges that Defendant received a check for $1,100, which

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Plaintiff had forgotten to give to him.

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alleges that payments to Defendant stopped in October for some

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period of time, which Defendant confirmed at the hearing.

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addition, Defendant’s counsel states that he personally sat down

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with Defendant and reviewed Defendant’s records and found

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evidence that Plaintiff has underpaid Defendant “at various times

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more than $1,000 per month.”

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underpaid Defendant at various times, then those underpayments

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would likely count against the alleged overpayment, if any.

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Plaintiff’s own letters show that Defendant was underpaid
Defendant’s counsel’s letter

The same letter also

Walker Decl. ¶ 6.

In

If Plaintiff

Accordingly, because Plaintiff cannot establish the amount
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of money it claims it is owed, or even that it is owed any money

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at all, Plaintiff has not made a clear showing that it is likely

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to succeed on the merits of its claims. 2

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II.

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Significant threat of irreparable injury
Plaintiff alleges in a conclusory fashion that “Defendant

will dissipate or otherwise transfer the lump sum payments

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received from Plaintiff and not preserve the funds for

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reimbursement to Plaintiff” while this case is pending.

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Northern District of California

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at 7.

Motion

Plaintiff claims that this is evidenced by Defendant’s

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refusal to return the funds or accept a plan to settle the debt.

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Id. at 6-7.

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“Purely monetary injuries are not normally considered

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irreparable.”

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F.2d 1211, 1213 (9th Cir. 1984); see also Idaho v. Coeur d’Alene

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Tribe, 794 F.3d 1039, 1046 (9th Cir. 2015).

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that adequate compensatory or other corrective relief will be

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available at a later date, in the ordinary course of litigation,

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weighs heavily against a claim of irreparable harm.”

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Murray, 415 U.S. 61, 90, 94 (1974).

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freeze must show a likelihood of dissipation of the claimed

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assets, or other inability to recover monetary damages, if relief

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is not granted.”

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Cir. 2009); see also In re Estate of Ferdinand Marcos, Human

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Rights Litig., 25 F.3d 1467, 1480 (9th Cir. 1994) (affirming

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district court’s finding that money damages would be inadequate

Lydo Enterprises, Inc. v. City of Las Vegas, 745

“The possibility

Sampson v.

“A party seeking an asset

Johnson v. Couturier, 572 F.3d 1067, 1085 (9th

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Because Plaintiff cannot show it is likely to be able to
prove the elements of its claims, the Court need not consider at
this time whether Defendant is likely to prevail on its statute
of limitations argument.
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“due to impending insolvency of the defendant or that defendant

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has engaged in a pattern of secreting or dissipating assets to

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avoid judgment”).

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Here, Defendant refused to settle the debt because he
disputes that he was overpaid.

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disputes that he is legally required to return the amount

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demanded by Plaintiff.

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concerns have merit.

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Northern District of California

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Plaintiff’s demands and pay the amount requested does not show

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that Defendant is likely to dissipate or secrete the funds, as

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Plaintiff suggests.

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Id.

Opposition at 6.

He also

As discussed above, Defendant’s

Defendant’s refusal to simply give in to

Plaintiff further argues that Defendant may not be able to

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return the funds at the end of this lawsuit because is “not

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competitively employable.”

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by the fact that, under the annuity contract, Plaintiff is

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obliged to pay Defendant substantial lump sum and monthly

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payments until at least 2044.

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this lawsuit results in a money judgment against Defendant,

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Defendant could presumably use those funds to pay the money

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judgment.

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future lump sum payments on the secondary market.

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But this argument appears to be merely speculative.

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injury does not constitute irreparable injury.”

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Bookstore, Inc. v. Superior Court of State of Cal., 739 F.2d 466,

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472 (9th Cir. 1984) (citing Wright and Miller, 11 Federal

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Practice and Procedure § 2948 at 436 (1973)); see also Aliya

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Medcare Fin., LLC v. Nickell, 2014 WL 12526382, at *7 (C.D. Cal.

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Nov. 26, 2014) (finding no likelihood of irreparable injury where

Reply at 2.

This argument is belied

See Saez Decl., Ex. A at 1-2.

If

Plaintiff responds that Defendant could transfer

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Reply at 3.
“Speculative

Goldie’s

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allegations of insolvency were “wholly speculative” and there was

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no evidence of actual dissipation or diversion of funds).

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III. Balance of hardships

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“Courts must balance the competing claims of injury and must

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consider the effect on each party of the granting or withholding

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of the requested relief.”

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Winter, 555 U.S. at 24.

The balancing of the hardships favors Defendant.

Defendant

will likely suffer great hardship if he is required to freeze

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United States District Court
Northern District of California

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$200,000 in annuity payments, an amount which exceeds greatly

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even Plaintiff’s monetary demand in this case.

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to rely heavily on his annuity payments in order to pay his

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bills.

See Walker Decl. ¶¶ 2-5.

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point.

Reply at 2.

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Defendant appears

Plaintiff does not dispute this

By contrast, Plaintiff will not suffer any irremediable harm

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if the injunction does not issue.

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may recover money damages later, if and when a judgment against

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Defendant issues.

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IV.

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As discussed above, Plaintiff

Public interest
While the public interest does weigh in favor of fair

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disposition of legal disputes and the preservation of legal

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remedies, as Plaintiff contends, there has been no clear showing

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that Plaintiff is likely to succeed on the merits of its claims.

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There is also a significant public interest in proper

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administration and regulation of insurance companies, which

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provide “a vital service” that is “quasi-public” in nature.

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Yue v. Conseco Life Ins. Co., 282 F.R.D. 469, 484 (C.D. Cal.

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2012) (quoting Egan v. Mutual of Omaha Ins. Co., 24 Cal.3d 809,

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820 (1979)).

See

Because it appears that Plaintiff committed several
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errors in administering Defendant’s annuity contact, and any

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overpayment occurred because of Plaintiff’s own errors rather

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than Defendant’s intentional wrongdoing, the public interest

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weighs against granting an injunction.

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In sum, a preliminary injunction is not warranted because
all of the factors favor Defendant.

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Northern District of California

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CONCLUSION
Plaintiff’s motion for a preliminary injunction (Docket No.
11) is DENIED.
As stated at the hearing, Plaintiff has filed copies of the

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annuity contract as exhibits to at least the complaint and the

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present motion which contain personally identifiable information,

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including an individual’s birth date and a financial-account

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number, in derogation of Federal Rule of Civil Procedure 5.2.

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The parties shall review the record to determine all instances

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where such information was filed on the docket.

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shall then file a stipulated motion to remove the incorrectly

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filed documents, following the steps on the Court’s website:

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http://www.cand.uscourts.gov/ecf/correctingmistake#SENSITIVE.

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The parties should do so without delay.

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The parties

At the parties’ Rule 26(f) conference, the parties shall:

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(1) review the checks that were sent to and cashed by Defendant

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and determine the amount of Plaintiff’s overpayment to Defendant,

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if any; (2) present their respective positions on the effect of

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the statute of limitations on the potential recovery in this

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case, and (3) discuss whether the statute of limitations issue is

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suitable for disposition as an early motion for summary judgment.

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The parties shall report on their discussion of the above issues
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in their case management statement.
IT IS SO ORDERED.

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Dated: October 5, 2017
CLAUDIA WILKEN
United States District Judge

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United States District Court
Northern District of California

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