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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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 United States District Court Northern District of California 9 JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.), Case No. Plaintiff, ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION 10 v. 11 12 17-cv-04317-CW DANIEL C. VIAU, (Dkt. No. 11) Defendant. 13 14 15 Plaintiff John Hancock Life Insurance Company (U.S.A.) moves 16 for a preliminary injunction. 17 C. Viau filed an opposition and Plaintiff filed a reply. 18 Nos. 22, 24. 19 hearing. 20 the arguments of counsel, the Court DENIES Plaintiff’s motion for 21 preliminary injunction. Defendant Daniel Docket On October 3, 2017, the parties appeared for a Having considered the papers, supporting evidence, and 22 23 Docket No. 11. BACKGROUND Around 1986, Defendant was badly burned in a fire on private 24 property. 25 the property owner agreed to pay Defendant a substantial amount 26 of money. 27 an annuity contract. 28 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 1 and periodic lump sum payments to be made to Defendant on 2 specific dates starting in 1987 and continuing through August 1, 3 2045. 4 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 6 due to Defendant since September 2007. 7 letter contains a comparison of the amount Defendant “should have 8 received” under the annuity contract and the amount actually 9 United States District Court Northern District of California 5 received. 10 Id., Ex. B. The The letter alleges that the total overpayment was $127,588.12. 11 Id. ¶ 8, Ex. B. Id., Ex. B at 1. On September 1, 2015, Plaintiff sent Defendant another 12 letter. 13 amount Defendant “should have received” under the annuity 14 contract and the amount Defendant actually received. 15 at 1. 16 $127,588.12. 17 “verbal agreement” “discussed via telephone on September 1, 2015” 18 that Plaintiff would withhold $64,000 from the lump sum due to 19 Defendant on August 19, 2017 and $63,588.12 from the lump sum due 20 to Defendant August 19, 2022. 21 “Agreement for Reduction of Debt” to the letter. 22 addition to the payment terms, the draft agreement also included 23 a provision that would require Defendant to release Plaintiff 24 “and its directors, officers, affiliates, agents, owners, 25 employees, successors and attorneys, from all claims, demands, 26 known or unknown, that now exist and that arise out of, or are in 27 any way connected with, or that result from, the matters 28 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. 2 Plaintiff attached a draft Id. at 3. In The draft agreement contains 1 no provision requiring Plaintiff to release Defendant in a 2 similar fashion. 3 See id. On January 27, 2016, March 2, 2016, and April 1, 2016, Plaintiff sent Defendant additional letters, which were 5 substantially the same as the September 1, 2015 letter. 6 ¶¶ 10-12, Exs. D-F. 7 overpaid $127,588.12 and again requested that Defendant sign an 8 agreement allowing Plaintiff to withhold $64,000 from the lump 9 United States District Court Northern District of California 4 sum due on August 19, 2017 and $63,588.12 from the lump sum due 10 11 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 12 letter to Plaintiff on behalf of Defendant. 13 Walker disputed Plaintiff’s claim that Defendant owed Plaintiff 14 money. 15 letters: Plaintiff’s letter states that Defendant should have 16 received $2,400.84 for the month of September 2007, but the 17 annuity contract states that Defendant should have received 18 $3,400.44 for the same month. 1 19 According to Plaintiff’s letter, then, Plaintiff actually 20 underpaid Defendant by $1000 for the month of September 2007. 21 Id., Ex. G at 2. 22 experienced “difficulties” with his annuity contract under 23 Plaintiff’s administration. 24 allowed the mother of Defendant’s child to withdraw money from 25 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, 26 27 28 1 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. 3 Defendant received a check of $1,100 from Plaintiff which 2 Plaintiff had forgotten to give to him. 3 Defendant’s payments “stopped” in October for a period of time, 4 and were restored after Mr. Walker called Plaintiff on 5 Defendant’s behalf. 6 considered the matter closed. 7 Defendant is “not competitively employable,” has “no savings and 8 no assets,” and “needs his structured payments to live.” 9 United States District Court Northern District of California 1 Mr. Walker concluded by stating that Defendant would not sign the 10 agreement. 11 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 12 letter to Mr. Walker. 13 Downey reiterated that Defendant had been overpaid by $127,588.12 14 during the period of September 2007 through August 2015. 15 1. 16 alleged overpayment: (1) the August 19, 2017 lump sum payment of 17 $100,000 would be applied to the debt, and (2) the monthly 18 payments due between September 1, 2017 and September 1, 2019 19 would each be reduced by $1,500 until the remaining balance was 20 paid off. 21 alternative proposal, but hinted that Plaintiff might seek court 22 relief. 23 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 24 explained, the proposed deal was “unacceptable.” 25 Mr. Walker stated that Defendant could not survive on the terms 26 of the proposed deal. 27 28 Id., Ex. J. Id. Four days later, on July 28, 2017, Plaintiff filed this lawsuit against Defendant, seeking return of the alleged 4 1 overpayment of $127,588. 2 restitution, money had and received, conversion, and declaratory 3 and injunctive relief. 4 amended complaint asserting the same claims but reducing the 5 amount of the alleged overpayment from $127,588 to $113,155. 6 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, 8 transferring, withdrawing, or otherwise dissipating the lump sum 9 United States District Court Northern District of California 7 payments due on August 19, 2017 and August 19, 2022.” 10 Motion at 2. 11 LEGAL STANDARD 12 To obtain either a TRO or a preliminary injunction under 13 Federal Rule of Civil Procedure 65, the moving party must 14 demonstrate “(1) a likelihood of success on the merits; (2) a 15 significant threat of irreparable injury; (3) that the balance of 16 hardships favors the applicant; and (4) whether any public 17 interest favors granting an injunction.” 18 F.3d 1222, 1227 (9th Cir. 2003); see also Winter v. Natural Res. 19 Def. Council, Inc., 129 S. Ct. 365, 374 (2008). 20 Circuit has recognized that an injunction could issue if “serious 21 questions going to the merits were raised and the balance of 22 hardships tips sharply in plaintiff’s favor,” so long as the 23 plaintiff demonstrates irreparable harm and shows that the 24 injunction is in the public interest. 25 Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011) 26 (citation and internal quotation marks omitted). 27 relief is “an extraordinary remedy that may only be awarded upon 28 a clear showing that the plaintiff is entitled to such relief.” 5 Raich v. Ashcroft, 352 The Ninth Alliance for the Wild Injunctive 1 Winter, 555 U.S. at 22. 2 3 DISCUSSION I. Likelihood of Success on the Merits “To prevail on a common count for money had and received, 5 the plaintiff must prove that the defendant is indebted to the 6 plaintiff for money the defendant received for the use and 7 benefit of the plaintiff.” 8 Rey, 223 Cal. App. 4th 221, 230 (2014). 9 United States District Court Northern District of California 4 for conversion, the plaintiff must prove an “ownership or right Rutherford Holdings, LLC v. Plaza Del To prevail on a claim 10 to possession of the property at the time of the conversion, the 11 defendant’s conversion by a wrongful act or disposition of 12 property rights, and resulting damages.” 13 Place, Inc., 212 Cal. App. 4th 1439, 1452 (2013). 14 the subject of an action for conversion if a specific sum capable 15 of identification is involved.” 16 Avidor v. Sutter's “Money can be Id. Plaintiff has not provided any persuasive evidence showing 17 that Defendant actually received overpayments from September 2007 18 through August 2015. 19 in support of this point is the declaration of Ketty Saez, 20 Assistant Vice President and Senior Counsel for Litigation, 21 Bankruptcy, and Dispute Resolution for Plaintiff, who states in a 22 conclusory fashion that Defendant “accepted monthly payments from 23 Plaintiff in amounts that exceeded the monthly payments due under 24 the terms of the Annuity Contract” in the amount of $113,155. 25 Saez Decl. ¶ 7. 26 Defendant had been overpaid or how she calculated the amount of 27 the overpayment. 28 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 6 Am. Passage Media Corp. v. 1 Cass Commc’ns, Inc., 750 F.2d 1470, 1473 (9th Cir. 1985) (in 2 denying preliminary injunction motion, disregarding affidavits 3 that were “conclusory and without sufficient support in facts”). 4 Plaintiff could have provided reliable evidence in the form of 5 copies of the actual checks sent to and cashed by Defendant, 6 which should be in Plaintiff’s possession, but Plaintiff failed 7 to do so. 8 United States District Court Northern District of California 9 The only other evidence Plaintiff provides is the letters it sent to Defendant to try to collect the alleged overpayment. 10 While the Court may consider hearsay evidence in conjunction with 11 a preliminary injunction motion, these letters have already been 12 demonstrated to be unreliable. 13 their face. 14 states that, under the annuity contract, the monthly payments for 15 the period of September 2007 through August 2008 should have been 16 $2,400.84. 17 which plainly shows that the monthly payments for the period of 18 September 2007 through August 2008 should have been $3,400.44. 19 This mistake affects Plaintiff’s calculation of the alleged 20 overpayment. 21 actually received $2,400.84 for September 2007, which means that 22 Defendant was not overpaid for that month and was actually 23 underpaid by about $1000. 24 for the period of October 2007 through August 2008 should be 25 reduced by a significant amount. 26 calculation of the alleged overpayment as $127,588.12 is wrong. 27 Although Defendant’s counsel pointed out this mistake in his 28 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 7 of the alleged overpayment was the same: $127,588.12. 2 Decl., Ex. I. 3 overpayment was $127,588 in its initial complaint. 4 ¶ 9. 5 thirteen days later, when it filed an amended complaint asserting 6 the alleged overpayment was $113,155. 7 amount is different from the amount that would result from 8 correcting the mistake pointed out by Defendant, and so it is 9 United States District Court Northern District of California 1 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 10 none of which are disclosed in its preliminary injunction motion. 11 What is clear from all this is that the Court cannot rely on the 12 letters -- or Plaintiff’s accounting -- to determine whether 13 Defendant received overpayments. 14 Moreover, Defendant has raised at least some serious doubt 15 over whether Defendant was underpaid at various times over the 16 years. 17 for the month of September 2007. 18 alleges that Defendant received a check for $1,100, which 19 Plaintiff had forgotten to give to him. 20 alleges that payments to Defendant stopped in October for some 21 period of time, which Defendant confirmed at the hearing. 22 addition, Defendant’s counsel states that he personally sat down 23 with Defendant and reviewed Defendant’s records and found 24 evidence that Plaintiff has underpaid Defendant “at various times 25 more than $1,000 per month.” 26 underpaid Defendant at various times, then those underpayments 27 would likely count against the alleged overpayment, if any. 28 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 8 1 of money it claims it is owed, or even that it is owed any money 2 at all, Plaintiff has not made a clear showing that it is likely 3 to succeed on the merits of its claims. 2 4 II. 5 Significant threat of irreparable injury Plaintiff alleges in a conclusory fashion that “Defendant will dissipate or otherwise transfer the lump sum payments 7 received from Plaintiff and not preserve the funds for 8 reimbursement to Plaintiff” while this case is pending. 9 United States District Court Northern District of California 6 at 7. Motion Plaintiff claims that this is evidenced by Defendant’s 10 refusal to return the funds or accept a plan to settle the debt. 11 Id. at 6-7. 12 “Purely monetary injuries are not normally considered 13 irreparable.” 14 F.2d 1211, 1213 (9th Cir. 1984); see also Idaho v. Coeur d’Alene 15 Tribe, 794 F.3d 1039, 1046 (9th Cir. 2015). 16 that adequate compensatory or other corrective relief will be 17 available at a later date, in the ordinary course of litigation, 18 weighs heavily against a claim of irreparable harm.” 19 Murray, 415 U.S. 61, 90, 94 (1974). 20 freeze must show a likelihood of dissipation of the claimed 21 assets, or other inability to recover monetary damages, if relief 22 is not granted.” 23 Cir. 2009); see also In re Estate of Ferdinand Marcos, Human 24 Rights Litig., 25 F.3d 1467, 1480 (9th Cir. 1994) (affirming 25 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 26 2 27 28 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. 9 1 “due to impending insolvency of the defendant or that defendant 2 has engaged in a pattern of secreting or dissipating assets to 3 avoid judgment”). 4 Here, Defendant refused to settle the debt because he disputes that he was overpaid. 6 disputes that he is legally required to return the amount 7 demanded by Plaintiff. 8 concerns have merit. 9 United States District Court Northern District of California 5 Plaintiff’s demands and pay the amount requested does not show 10 that Defendant is likely to dissipate or secrete the funds, as 11 Plaintiff suggests. 12 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 13 return the funds at the end of this lawsuit because is “not 14 competitively employable.” 15 by the fact that, under the annuity contract, Plaintiff is 16 obliged to pay Defendant substantial lump sum and monthly 17 payments until at least 2044. 18 this lawsuit results in a money judgment against Defendant, 19 Defendant could presumably use those funds to pay the money 20 judgment. 21 future lump sum payments on the secondary market. 22 But this argument appears to be merely speculative. 23 injury does not constitute irreparable injury.” 24 Bookstore, Inc. v. Superior Court of State of Cal., 739 F.2d 466, 25 472 (9th Cir. 1984) (citing Wright and Miller, 11 Federal 26 Practice and Procedure § 2948 at 436 (1973)); see also Aliya 27 Medcare Fin., LLC v. Nickell, 2014 WL 12526382, at *7 (C.D. Cal. 28 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 10 Reply at 3. “Speculative Goldie’s 1 allegations of insolvency were “wholly speculative” and there was 2 no evidence of actual dissipation or diversion of funds). 3 III. Balance of hardships 4 “Courts must balance the competing claims of injury and must 5 consider the effect on each party of the granting or withholding 6 of the requested relief.” 7 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 9 United States District Court Northern District of California 8 $200,000 in annuity payments, an amount which exceeds greatly 10 even Plaintiff’s monetary demand in this case. 11 to rely heavily on his annuity payments in order to pay his 12 bills. See Walker Decl. ¶¶ 2-5. 13 point. Reply at 2. 14 Defendant appears Plaintiff does not dispute this By contrast, Plaintiff will not suffer any irremediable harm 15 if the injunction does not issue. 16 may recover money damages later, if and when a judgment against 17 Defendant issues. 18 IV. 19 As discussed above, Plaintiff Public interest While the public interest does weigh in favor of fair 20 disposition of legal disputes and the preservation of legal 21 remedies, as Plaintiff contends, there has been no clear showing 22 that Plaintiff is likely to succeed on the merits of its claims. 23 There is also a significant public interest in proper 24 administration and regulation of insurance companies, which 25 provide “a vital service” that is “quasi-public” in nature. 26 Yue v. Conseco Life Ins. Co., 282 F.R.D. 469, 484 (C.D. Cal. 27 2012) (quoting Egan v. Mutual of Omaha Ins. Co., 24 Cal.3d 809, 28 820 (1979)). See Because it appears that Plaintiff committed several 11 1 errors in administering Defendant’s annuity contact, and any 2 overpayment occurred because of Plaintiff’s own errors rather 3 than Defendant’s intentional wrongdoing, the public interest 4 weighs against granting an injunction. 5 6 In sum, a preliminary injunction is not warranted because all of the factors favor Defendant. 7 8 United States District Court Northern District of California 9 10 CONCLUSION Plaintiff’s motion for a preliminary injunction (Docket No. 11) is DENIED. As stated at the hearing, Plaintiff has filed copies of the 11 annuity contract as exhibits to at least the complaint and the 12 present motion which contain personally identifiable information, 13 including an individual’s birth date and a financial-account 14 number, in derogation of Federal Rule of Civil Procedure 5.2. 15 The parties shall review the record to determine all instances 16 where such information was filed on the docket. 17 shall then file a stipulated motion to remove the incorrectly 18 filed documents, following the steps on the Court’s website: 19 20 The parties should do so without delay. 21 The parties At the parties’ Rule 26(f) conference, the parties shall: 22 (1) review the checks that were sent to and cashed by Defendant 23 and determine the amount of Plaintiff’s overpayment to Defendant, 24 if any; (2) present their respective positions on the effect of 25 the statute of limitations on the potential recovery in this 26 case, and (3) discuss whether the statute of limitations issue is 27 suitable for disposition as an early motion for summary judgment. 28 The parties shall report on their discussion of the above issues 12 1 2 in their case management statement. IT IS SO ORDERED. 3 4 Dated: October 5, 2017 CLAUDIA WILKEN United States District Judge 5 6 7 8 United States District Court Northern District of California 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13

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