Casados v. Drury et al
Filing
124
ORDER GRANTING IN PART AND DENYING IN PART THE AMERITAS DEFENDANTS' MOTION FOR SUMMARY AND FINAL JUDGMENT re 58 . Signed by JUDGE LESLIE E. KOBAYASHI on 06/30/2014. The Motion is HEREBY GRANTED in favor of the Ameritas Defendants as to:--Count I insofar as the Complaint alleges bad faith in violation of Haw. Rev. Stat. Chapter 431, and bad faith under Hawai'i common law against Drury;--Count IV against the Ameritas Defendants; and --the A meritas Defendants' Cross-Claim and the Casados Defendants' Cross-Claim.The Motion is HEREBY DENIED as to:--Count I insofar as the Complaint alleges bad faith under Hawai'i common law against Ameritas;--Count III against th e Ameritas Defendants;--the Counterclaim against Plaintiff;--he Counterclaim against the Casados Children insofar as it is moot; and --the Ameritas Defendants' request for final judgment on any of the claims. (ep s)CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FILED IN THE
UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII
FOR THE DISTRICT OF HAWAII
SUE BEITIA, CLERK
Jun 30, 2014
)
)
Plaintiff,
)
)
vs.
)
)
LORI A. DRURY; AMERITAS LIFE )
INSURANCE CORP.; DIANE PEREZ; )
GRACE CASADOS MARTINEZ; PETRA )
WILLIAMS; PATRICIA DIANE
)
)
JACOBS; ESTATE OF SAMUEL
FRANCISCO CASADOS; JOHN
)
)
and/or JANE DOES 1-20; DOE
)
ENTITIES 1-10,
)
)
Defendants.
_____________________________ )
YOKO CASADOS,
CIVIL NO. 13-00283 LEK-RLP
ORDER GRANTING IN PART AND DENYING IN PART THE AMERITAS
DEFENDANTS’ MOTION FOR SUMMARY AND FINAL JUDGMENT
Before the Court is Defendants Ameritas Life Insurance
Corp. (“Ameritas”) and Lori A. Drury’s (“Drury,” collectively
“Ameritas Defendants”) Motion for Summary and Final Judgment
(“Motion”), filed on February 7, 2014.
[Dkt. nos. 58-69.]
Plaintiff Yoko Casados (“Plaintiff”) filed her memorandum in
opposition on May 12, 2014, and the Ameritas Defendants filed
their reply on May 14, 2014.1
1
[Dkt. nos. 90, 92.]
This matter
On May 14, 2014, the Ameritas Defendants also filed their
Evidentiary Objections to Plaintiff and Counterclaim Defendant
Yoko Casados’ Exhibits L, N and P Filed May 12, 2014 in
Opposition to Summary and Final Judgment (“Evidentiary
Objections”). [Dkt. no. 92-1.] The Court finds that the
Ameritas Defendants’ arguments do not have merit and denies the
Evidentiary Objections for the limited purpose of this Motion.
The Court notes, however, that it reaches its decision on the
(continued...)
came on for hearing on June 2, 2014.
After careful consideration
of the Motion, supporting and opposing memoranda, and the
arguments of counsel, the Ameritas Defendants’ Motion is HEREBY
GRANTED IN PART AND DENIED IN PART for the reasons set forth
below.
BACKGROUND
On June 4, 2013, Plaintiff filed her Complaint for
Damages (“Complaint”) against the Ameritas Defendants and
Diane Perez (“Perez”), Petra Williams (“Williams”), Grace Casados
Martinez (“Martinez”), Patricia Diane Jacobs (“Jacobs”), the
Estate of Samuel Francisco Casados (“Samuel Casados’s Estate”),
and John and/or Jane Does 1–10 and Doe Entities 1–10 (“Doe
Defendants”), asserting diversity jurisdiction.
¶¶ 2–4.]
[Complaint at
Plaintiff is a Hawai`i resident and claims that she was
married to Charles Casados (“Mr. Casados”) “at all times
pertinent hereto.”
[Id. at ¶ 5.]
Drury is an employee of
Ameritas, which is a Nebraska corporation.
[Id. at ¶¶ 6–7.]
Williams; Martinez, and Perez/Jacobs2; and Samuel Casados (“the
Casados Defendants”) are the mother, two sisters, and brother,
respectively, of Mr. Casados and reside in Texas, with the
1
(...continued)
Motion independent of the exhibits challenged in the Evidentiary
Objections.
2
Perez and Jacobs are actually the same person. Thus, the
Court refers to this individual as Jacobs throughout this Order.
2
exception of Williams, who resides in Oklahoma.
[Id. at
¶¶ 8–12.]
On August 15, 2013, the Ameritas Defendants filed a
motion to dismiss (“Motion to Dismiss”) and, at a hearing on
October 2, 2013 (“10/2/13 Hearing”), the Court orally denied the
Motion to Dismiss.
38), at 7–8.]
[10/2/13 Hrg. Trans., filed 10/7/13 (dkt. no.
On October 17, 2013, the Ameritas Defendants filed
their answer and asserted a counterclaim against Plaintiff,
individually and as the personal representative of the estates of
Charles Casados (“Mr. Casados’s Estate”) and Stephanie Fay
Casados (“Stephanie Casados’s Estate”),3 and against Plaintiff
and Mr. Casados’s surviving children, Charles Lee and Lisa Ann
Casados (“the Casados Children”), and Does 1–10 (“Counterclaim”).
[Dkt. no. 40 at pgs. 15–24.]
They also asserted a cross-claim
against the Casados Defendants for indemnification and/or
contribution (“Ameritas Defendants’ Cross-Claim”).
25-30.]
[Id. at pgs.
On November 7, 2013, the Casados Defendants filed their
answer to the Complaint, and their First Amended Cross-Claim
against Ameritas Life Insurance Corp. for indemnification and/or
contribution should they be found liable to Plaintiff (“Casados
Defendants’ Cross-Claim”).
[Dkt. no. 44 at pgs. 7-15.]
3
Stephanie Casados was Plaintiff and Mr. Casados’s minor
daughter, who died along with Mr. Casados on January 27, 2011.
3
On January 16, 2014, Plaintiff and Lisa Ann Casados
moved to dismiss the Counterclaim.
[Dkt. no. 56.]
On April 30,
2014, the Court issued an “Order Granting Counterclaim Defendants
Lisa Ann Casados and Yoko Casados’ Motion to Dismiss Counterclaim
Filed on October 17, 2013, as to Counterclaim Defendants Charles
Lee Casados and Lisa Ann Casados” (“4/30/14 Order”).
[Dkt. no.
84.4]
The facts of this case, as alleged in the Complaint,
are set forth in the 4/30/14 Order.
In essence, Plaintiff claims
that the Ameritas Defendants are liable to her for disbursing the
proceeds (“Proceeds”) of her estranged husband’s life insurance
policy (“Policy”) to the Casados Defendants instead of to her,
while she was making an adverse claim on the Proceeds; she also
claims that the Casados Defendants are liable to her for
the manner in which they sought and then retained the Proceeds.
4/30/14 Order, 2014 WL 1744765, at *1-3.
The Complaint alleges the following claims: breach of
the duty of good faith and fair dealing by the Ameritas
Defendants (and Doe Defendants) in violation of Haw. Rev. Stat.
4
The 4/30/14 Order is also available at 2014 WL 1744765.
On June 30, 2014, the Court issued its Order Denying Defendants
Ameritas Life Insurance Corp. and Lori R. Drury’s Motion for
Reconsideration and/or Clarification of Order Granting
Counterclaim Defendants Lisa Ann Casados and Yoko Casados’ Motion
to Dismiss Counterclaim Filed on October 17, 2013, as to
Counterclaim Defendants Charles Lee Casados and Lisa Ann Casados,
Order Filed April 30, 2014. [Dkt. no. 123.]
4
Chapter 431 (“Count I”); breach of the duty of good faith and
fair dealing by the Casados Defendants (and Doe Defendants),
related to settlement negotiations (“Count II”); violation of
Hawaii’s Unfair and Deceptive Act or Practices (“UDAP”) law
against the Ameritas Defendants, for disbursing the Proceeds
while an active claim was pending (“Count III”); conversion
against all Defendants (“Count IV”); and unjust enrichment
against the Casados Defendants (“Count V”).
¶¶ 46–61.]
[Complaint at
Plaintiff seeks the following relief: a declaration
of wrongdoing; general, special, and punitive damages, including
the Proceeds and interest; attorneys’ fees and costs as provided
by Haw. Rev. Stat. Chapter 431; and treble damages under Haw.
Rev. Stat. § 480–13.
[Id. at pg. 14, ¶¶ 1–4.]
In the Motion, the Ameritas Defendants seek final
judgment as to all claims that involve them: Counts I, III, and
IV of the Complaint; the Cross-Claims between them and the
Casados Defendants; and their Counterclaim against Plaintiff and
the Casados Children.
DISCUSSION
I.
Count I - Bad Faith
As a technical matter, the Ameritas Defendants are
correct that there is no private right of action under Haw. Rev.
Stat. Chapter 431 for bad faith.
See Best Place, Inc. v. Penn
Am. Ins. Co., 82 Hawai`i 120, 126, 920 P.2d 334, 340 (1996)
5
(“Article 13 of the Hawai`i Insurance Code[5] does not authorize
a private cause of action pursuant to its administrative
remedies” (citation omitted)).
Although Count I alleges that the
Ameritas Defendants breached the “duties of good faith and fair
dealing to Plaintiff under Hawaii Revised Statutes Chapter 431,”
Plaintiff does not appear to limit herself to pleading bad faith
under Chapter 431.
[Complaint at ¶ 48.]
She titles the cause of
action, generally, “Bad Faith and Unfair Dealing,” but, as
opposed to Count III (which states “in Violation of HRS Chapter
480”), does not refer to a specific statutory provision.
pg. 10.]
[Id. at
Further, in Count I, Plaintiff broadly alleges that she
brings the claim “incident to Defendants Drury’s communications
with Plaintiff,” which supports a common law bad faith claim.
[Id. at ¶ 47.]
Thus, the Court construes Count I as alleging bad
faith under both Chapter 431 and Hawai`i common law.
Hawai`i
does recognize a private cause of action for bad faith in the
insurance context.
at 337.
See Best Place, 82 Hawai`i at 123, 920 P.2d
The Court therefore GRANTS summary judgment on Count I,
but only as to the allegation of bad faith under the Insurance
Code.
The Court also agrees with, and Plaintiff does not
appear to contest, the Ameritas Defendants’ argument that Hawai`i
law does not permit a bad faith claim against claim examiners
5
The Hawai`i Insurance Code is Chapters 431 to 435H.
6
like Drury.
See CIM Ins. Corp. v. Masamitsu, 74 F. Supp. 2d 975,
994 (D. Hawai`i 1999) (insurance handler “cannot be liable to the
[insured] for bad faith” (some citations omitted) (citing Moore
v. Allstate Ins. Co., 6 Haw. App. 646, 651, 736 P.2d 73, 77
(1987)).).
Thus, the Court GRANTS summary judgment on Count I,
but only as to the allegation of bad faith against Drury.
The Court rejects, however, the Ameritas Defendants’
contention that they are entitled to summary judgment on
Plaintiff’s common law bad faith claim against Ameritas.
The Hawai`i Supreme Court has held that “there is a
legal duty, implied in a first-and third-party insurance
contract, that the insurer must act in good faith in dealing with
its insured, and a breach of that duty of good faith gives rise
to an independent tort cause of action.”
at 132, 920 P.2d at 346.
beneficiaries as well.
Best Place, 82 Hawai`i
This duty extends to third-party
Donaldson v. Liberty Mut. Ins. Co., 947
F. Supp. 429, 432 (D. Hawai`i 1996) (allowing bad faith claim by
a third-party beneficiary).
“‘The implied covenant is breached,
whether the carrier pays the claim or not, when its conduct
damages the very protection or security which the insured sought
to gain by buying insurance.’”
Id. (quoting Best Place, 82
Hawai`i at 132, 920 P.2d at 346)).
Also, “an insurer must act in
good faith in dealing with its insured and in handling the
insured’s claim, even when the policy clearly and unambiguously
7
excludes coverage.”
Enoka v. AIG Haw. Ins. Co., Inc., 109
Hawai`i 537, 552, 128 P.3d 850, 865 (2006).
To prove bad faith, “an insured ‘need not show a
conscious awareness of wrongdoing or unjustifiable conduct, nor
an evil motive or intent to harm the insured.’”
Ill. Nat’l Ins.
Co. v. Nordic PCL Constr., Inc., Civil No. 11-00515 SOM/KSC, 2013
WL 5739639, *6-7 (D. Hawai`i Oct. 22, 2013) (quoting Best Place,
82 Hawai`i at 133, 920 P.2d at 347).
However, the “decision not
to pay a claim must be in ‘bad faith,’” and “bad faith implies
unfair dealing rather than mistaken judgment[.]”
Best Place, 82
Hawai`i at 133, 920 P.2d at 347 (citations omitted).
The Ameritas Defendants argue that they did not owe any
duty to Plaintiff because she was neither the insured nor a third
party beneficiary and, even if they did owe her a duty, they did
not breach it in disbursing the Proceeds to the Casados
Defendants because Plaintiff expressly disclaimed any interest in
the Proceeds.
[Mem. in Supp. of Motion at 3-5, 26-28.]
The
Court finds that, viewing the evidence in the light most
favorable to Plaintiff, there are genuine issues of material fact
as to whether and when Ameritas owed a duty to Plaintiff, and
whether Plaintiff intended to disclaim her rights to the
Proceeds.
See Crowley v. Bannister, 734 F.3d 967, 976 (9th Cir.
2013) (holding that at summary judgment, courts “must determine,
viewing the facts in the light most favorable to the nonmoving
8
party, whether there are any genuine issues of material fact
. . .” (citations and quotation marks omitted)).
On January 27, 2011, Mr. Casados and Stephanie Casados
drowned.
[Ameritas Defs.’ Concise Statement of Material Facts,
filed 2/7/14 (dkt. no. 58-1) (“Ameritas Defs.’ CSOF”), Decl. of
Lisa Miller (“Miller Decl.”), Exhs. 14, 15.6]
On February 15,
2011, Plaintiff first notified Ameritas of her claim to the
Proceeds.
Her attorney, Stephen H. Reese, Esq., wrote to
Ameritas to inform the insurer of Mr. Casados’s death, and that
Plaintiff believed that Mr. Casados had changed the beneficiaries
of the Policy in violation of an order (“Relief Order”) in the
family court divorce proceeding (“the Divorce Case”) that
restrained him from doing so.
[Pltf.’s Concise Statement of
Material Facts in Opposition to Ameritas Life Insurance Corp. and
Lori A. Drury’s Motion for Summary Judgment and Final Judgment
Filed on February 7, 2014, filed 5/12/14 (dkt. no. 91) (“Pltf.’s
CSOF”), Decl. of Della A. Belatti (“Belatti Decl.”), Exh. B
(“2/15/11 Reese Ltr. to Ameritas”, attaching Relief Order).]
He
requested that Ameritas not release the Proceeds until the matter
was resolved.
6
Along with the Miller declaration, the Ameritas Defendants
also included the Declaration of Lori A. Drury (“Drury
Declaration”). All of the exhibits attached to the Drury
declaration are also attached to the Miller declaration. For
that reason, the Court will only cite to the exhibits as attached
to the Miller declaration.
9
Over three months later, on April 29, 2011, Drury
emailed Mr. Reese, stating that she had received his letter, but
explaining that Drury would need something in writing to make the
claim or, if Plaintiff “decided not to make claims to the policy
benefits,” Drury would “need a Disclaimer Form and Hold Harmless
Agreement signed by” Plaintiff.
Drury Email to Reese”).]
[Miller Decl., Exh. 17 (“4/29/11
That same day, Drury also emailed
Jacobs in response to an inquiry about how to obtain the
Proceeds.
Drury, wrote,
I spoke with our attorney. He explained the
process like this. . . . We’ve received a letter
from [Plaintiff’s] Attorney stating that
[Plaintiff] will be making claim to the Insurance
benefit proceeds. Once we receive a notice like
this, legally we have to put a hold on everything
until the situation is resolved. [Plaintiff’s]
Attorney has been notified that we need something
in writing from [Plaintiff] stating she is making
a claim to the proceeds. We advised him that if
she has decided not to make a claim to the
proceeds, we will need him to send us a Disclaimer
Form and Hold Harmless Agreement signed by
[Plaintiff] disclaiming her interest in the
proceeds.
Legally an Insurance company cannot get in
the middle of an adverse situation like this. If
[Plaintiff] does not want to disclaim her Interest
and she states in writing that she is making claim
to the proceeds, we (Ameritas) will be forced to
Interplead the proceeds which means the proceeds
will be paid to the court for the court to decide
who is entitled to the proceeds. If she agrees to
disclaim her interest in the proceeds, the process
will be as simple as her signing a Disclaimer Form
and Hold Harmless Agreement.
10
This is where we stand right now. I will
notify you when I receive the information from
[Plaintiff’s] Attorney.
[Belatti Decl., Exh. C (“4/29/11 Drury Email to Jacobs”)
(elipsis in original) (emphasis added).]
On May 11, 2011, as requested, Plaintiff wrote to
Drury informing her that she was “making a claim to the
benefits” of the Policy and, on June 1, 2011, Plaintiff made
the formal claim.
(formal claim).]
[Miller Decl., Exhs. 18 (letter), 19
On May 20, 2011, counsel for the Casados
Defendants, Everett Cuskaden, Esq., wrote Drury that the
Casados Defendants were disputing Plaintiff’s claim to the
Proceeds, and requested that Drury not release the Proceeds
until the matter was fully resolved.
[Belatti Decl., Exh. F
(“5/20/11 Cuskaden Ltr. to Drury”).]
On July 12, 2011, in an email to Jacobs, Drury wrote
that, even though the family court had dismissed the Divorce
Case, it did not extinguish Plaintiff’s claim to the Proceeds:
I spoke with David Williams, Attorney for
Ameritas in reference to this claim. Our attorney
stated that we are still in the same situation as
before. Our attorney stated that even though we
have a statement from the court stating that the
divorce didn’t exist, we still need a statement
from [Plaintiff] stating she is dropping her
claim. He stated that the Court did not say that.
He said the Court just said that any claim she had
needed to be decided in a different court. In
fact, the Court even gave examples of ways to
pursue her claim. So this ruling was not final as
to her claim. She can drop it or we would likely
11
have to file an interpleader. Therefore, due to
the fact that [Plaintiff] actually tried to make
claim on the proceeds, we will need a statement
from her stating she is no longer pursuing this
claim and if she refuses to do so, we will need to
file an Interpleader. He said that I could also
send [Plaintiff] a letter stating that if we do
not hear from her within 15 days, we are dropping
her request for an Interest in the proceeds and we
could then pay the proceeds to you and the other
beneficiaries. I will do that as well. . . .
[Miller Decl., Exh. 31 (“7/12/11 Drury Email to Jacobs”)
(emphasis added).]
On July 21, 2014, in one letter, Drury informed
Plaintiff that she had received Plaintiff’s formal claim and,
unprompted, also described the process by which Plaintiff could
retract that claim.
The letter also included information for
Plaintiff, as representative of Stephanie Casados’s Estate, on
how to collect on the rider to the Policy (“the Rider”).
In
substance, the letter provided:
We are in receipt of the claim forms
concerning your claim for the proceeds under the
policy shown by number above.
We have received notice from the courts that
the divorce case has been extinguished/dismissed.
Therefore, Charles R. Casados [sic]change of
beneficiary is valid and you are not entitled to
the proceeds under his life insurance policy
number 1003123442. Please sign the enclosed
disclaimer form so that we can move forward with
this claim.
Stephanie Casados was a rider under this
policy and the proceeds under this rider are
payable to the Estate of Stephanie Casados as
beneficiary.
12
Our claim requirements consist of the
following:
- Certified Death Certificate
- Claimant’s Statement Form UN 3963 completed by
the Executor and notarized. . . .
- Copy of Court Order Appointing the Executor of
the Estate of Stephanie Casados.
- Disclaimer Form completed by you.
[Miller Decl., Exh. 23 (“7/21/11 Drury Ltr. to Plaintiff”)
(emphasis added).]
A few weeks later, on August 1, 2011, Jared N.
Kawashima, Esq., emailed Drury, informing her that he had been
retained by Plaintiff to assert Plaintiff’s claim to the
Proceeds.
[Miller Decl., Exh. 24 (“8/1/11 Kawashima Email to
Drury”).]
He updated Drury that he had written to Mr. Cuskaden
“to inquire whether he is willing to send you a joint request for
Ameritas to transfer the contested funds into an escrow account
here in Hawaii so that we may reach an amicable resolution
without further involvement with Ameritas.”
[Id.]
Further, he
wrote that, “Mr. Reese will be forwarding you the necessary
paperwork to collect on the rider.”
[Id.]
Nowhere did
Mr. Kawashima imply that Plaintiff intended to disclaim her
interest in the Proceeds, and Ameritas states that it has no
records of any communications between Mr. Kawashima and Ameritas
or Drury between early August 2011 and late January 2012, after
Ameritas disbursed the Proceeds to the Casados Defendants.
[Miller Decl. at ¶ 17.]
13
Then, on November 28, 2011, Mr. Reese wrote Drury
regarding Stephanie Casados’s Estate (“11/28/11 Reese Ltr. to
Drury”).
The substance of the letter stated:
I represent Yoko Casados, Personal
Representative of the Estate of S.F.C., Deceased.
The identity of “S.F.C” is Stephanie Fay Casados.
Please note that Hawaii Court records Rule 2,
requires that the identity of a minor child be
submitted under seal.
Enclosed please find the following documents
per your request:
. . . .
Also enclosed is a copy of your letter dated
July 21, 2011 for your reference. Upon completion
of the processing of the policy rider under the
life insurance policy of Charles R. Casados, we
would appreciate it if you would return the
certified copy of Stephanie’s death certificate.
If you have any questions or require
additional documentation, please don’t hesitate to
contact my office. . . .
[Miller Decl., Exh. 25 (emphasis added).]
The letter attaches:
Stephanie Casados’s death certificate; the claim on the Rider;
and letters of administration, and related materials for
Stephanie Casados’s Estate.
Ameritas_0125-31.]
[Belatti Decl., Exh. M at
It also includes a disclaimer (“Disclaimer”)
that states, “I, Yoko Casados, residing at 469 Ena Rd #2003
Honolulu, HI 96815, do hereby withdraw my claim for the proceeds
under Polic(ies) 1003123442 issued on the life of Charles R
Casados who died on 1-27-11.
[Id. at Ameritas_0124 (form
disclaimer with underlining showing handwritten additions).]
14
A
few weeks later, on December 13, 2011, Ameritas disbursed the
Proceeds to the Casados Defendants.7
[Miller Decl., Exh. 26.]
The undisputed facts show that, as early as February
15, 2011, Ameritas was on notice that Plaintiff claimed a right
to the Proceeds as a beneficiary under the Policy, [2/15/11 Reese
Ltr. to Ameritas,] and thus it had a duty to Plaintiff.
Ameritas
acknowledged this duty in its communications with Mr. Reese and
with Jacobs.
Drury wrote to Mr. Reese that, even if Plaintiff
decided not to make a claim to the Proceeds, Ameritas would need
a disclaimer form and a hold harmless agreement.
Email to Reese.]
[4/29/11 Drury
Similarly, Drury explained to Jacobs that
“legally” Ameritas had to “put a hold on everything until the
situation is resolved” and Ameritas would be “forced to
Interplead the proceeds” if Plaintiff did not retract her claim.
[4/29/11 Drury Email to Jacobs.]
Although Ameritas now argues it
had no duty to Plaintiff, at the time of the 4/29/11 Drury Email
to Jacobs, it expressly stated that it did.
Ameritas acknowledged the duty it had to Plaintiff even
after the family court dismissed the Divorce Case.
The Ameritas
Defendants argue that the Relief Order did not limit
Mr. Casados’s right to change beneficiaries and, even if it had,
it was superseded by a later marital agreement, and by the
7
Ameritas did not disburse Samuel Casados’s portion of the
Proceeds until January 27, 2012. [Miller Decl., Exh. 28.]
15
dismissal of the Divorce Case prior to the disbursement.
in Supp. of Motion at 5-6, 19-23.]
[Mem.
The Court does not, however,
reach the issue here of what effect, if any, the Divorce Case had
on Plaintiff’s right to the Proceeds.
It is enough that Ameritas
acknowledged contemporaneously that its duty to Plaintiff
continued even after the Divorce Case dismissal.
Ameritas
explained that the dismissal “was not final as to [Plaintiff’s]
claim[,]” that Ameritas would still “likely have to file an
interpleader[,]” and that it would “need a statement from
[Plaintiff] stating she [was] no longer pursuing this claim and
if she refuse[d] to do so, we will need to file an Interpleader.”
[7/12/11 Drury Email to Jacobs.]
Viewed in the light most
favorable to Plaintiff, there is a genuine issue of material fact
as to whether Ameritas owed a duty to Plaintiff as a beneficiary
under the Policy.
See Crowley, 734 F.3d at 976.
Further, under the circumstances, this Court finds that
a genuine issue of material fact remains as to whether Plaintiff
intended to disclaim her right to the Proceeds.
Plaintiff
communicated regularly over a period of months with Ameritas,
both individually and through her attorneys, that she was
pursuing her right to the Proceeds.
The Ameritas Defendants have
not offered any evidence, and the Court is aware of none – other
than the actual disclaimer – that shows that Plaintiff planned to
renege on her claim to the Proceeds.
16
Even the communications
leading up to and accompanying the disclaimer, do not show that
Plaintiff intended to disclaim her interest.
In her July 21, 2011 letter, Drury acknowledged that
Ameritas had received Plaintiff’s claim form.
Then, in the very
next paragraph, Drury wrote that Plaintiff should “sign the
enclosed disclaimer form so that we can move forward with this
claim.”
[7/21/11 Drury Ltr. to Plaintiff.]
The next two
paragraphs appear to relate to the Rider, including the last item
in the list of materials required, “Disclaimer Form completed by
you.”
Viewed in the light most favorable to Plaintiff, it is not
clear which claim Drury was referring to – the claim on the
Policy, the claim on the Rider, or a “claim” to disclaim her
interest in the Policy – the latter of which is what the Ameritas
Defendants argue is the correct interpretation.
Further, it is
not clear why the Disclaimer Form was included in a list of
“claim requirements.”
Further, Plaintiff continued to pursue her claim after
the 7/21/11 Drury Letter to Plaintiff, and Mr. Kawashima wrote
Drury, on August 1, 2011, that he was pursuing Plaintiff’s rights
under the Policy, and was negotiating with the Casados
Defendants.
He stated that “Mr. Reese will be forwarding you the
necessary paperwork to collect on the rider.”
Ltr. to Drury.]
[8/1/11 Kawashima
Finally, in sending the disclaimer back to
Drury, Mr. Reese wrote that he was sending the documents per
17
Drury’s request, and discussed the Estate of Stephanie Casados,
but not Plaintiff’s claim to the Proceeds.
to Drury.]
[11/28/11 Reese Ltr.
Although the Court agrees with the Ameritas
Defendants that the disclaimer appears clear on its face, in
light of the circumstances, and the confusing language in the
7/21/11 Drury Letter to Plaintiff, the Court finds that there is
a genuine issue of material fact of whether Plaintiff intended to
disclaim her rights to the Proceeds.
Since there are genuine issues of material fact as to
whether Ameritas owed a duty of good faith to Plaintiff, and as
to whether Plaintiff intended to retract her claim to the
Proceeds, the Court DENIES summary judgment on Plaintiff’s
Count I insofar as it alleges the common law tort of bad faith
against Ameritas.
See Fed. R. Civ. P. 56(a) (“The court shall
grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.”).8
8
For the same reasons, the Court also rejects the Ameritas
Defendants’ legal arguments that: (1) at most their actions were
erroneous, but not unreasonable, and thus cannot support a
finding of bad faith; [Mem. in Supp. of Motion at 20, 28;] and
(2) the bad faith claim is barred by Haw. Rev. Stat. § 431:10230, which discharges an insurer upon payment to named
beneficiaries where no adverse claim is made [id. at 4-5, 29–30].
There is a genuine issue of material fact as to whether Ameritas
acted reasonably and as to whether there was an adverse claim to
the Proceeds at the time Ameritas disbursed them to the Casados
Defendants.
18
II.
Count III - UDAP
In Count III, Plaintiff alleges that: (1) Drury knew
that there was an open dispute over the Proceeds between
Plaintiff and the Casados Defendants; (2) in an August 8, 2011
email to Mr. Kawashima (“8/8/11 Drury Email to Kawashima”), Drury
agreed not to disburse the Proceeds; and (3) Drury disbursed them
to the Casados Defendants nonetheless.
Taken together, Plaintiff
alleges that this constitutes deceptive acts or practices in
violation of Haw. Rev. Stat. Chapter 480.
[Complaint at ¶¶ 53-
54.]
The Ameritas Defendants take the position that Drury
made no such promise.
They rely on the wording of the 8/8/11
Drury Email to Kawashima.
As already discussed in this Order,
see supra Discussion § I. above, Mr. Kawashima emailed Drury on
August 1, 2011 to introduce himself, reassert Plaintiff’s claim,
inform Drury that Mr. Reese would be forwarding paperwork related
to the Rider, and to update Drury regarding settlement
discussions with the Casados Defendants and a request he made to
Mr. Cuskaden to put the Proceeds in escrow.
Email to Drury.]
[8/1/11 Kawashima
Mr. Kawashima concluded, “I will keep you
apprised of Mr. Cuskaden’s response.”
[Id.]
In response, Drury wrote,
Hello Mr. Kawashima,
Thank you for the update. I look forward to
hearing back from you.
Thank you, Lori Drury, Claim Examiner
19
[Miller Decl., Exh. 30 (8/8/11 Drury Email to Kawashima) at 1.]
The Ameritas Defendants argue that Drury did not, in
her email, promise to wait to hear back from Mr. Kawashima.
[Mem. in Supp. of Motion at 31; Evidentiary Objections at 3-4.]
While the Court agrees with the Ameritas Defendants that,
strictly speaking, her short, informal response did not expressly
state that she would wait to hear back from Mr. Kawashima, within
the context of the dispute and in the light most favorable to
Plaintiff, her response could reasonably be construed to show
implicit agreement not to disburse the Proceeds until she heard
from one of Plaintiff’s attorneys that Plaintiff was retracting
her claim.
While Mr. Kawashima did not expressly request she not
disburse the Proceeds, both Mr. Reese and Mr. Cuskaden had
already done so, [2/15/11 Reese Ltr. to Ameritas; 5/20/11
Cuskaden Ltr. to Drury,] and Mr. Kawashima did write that he was
retained by Plaintiff to “assert her rights” [8/1/11 Kawashima
Email to Drury].
Thus, the Court finds that it is a disputed
issue of material fact whether the Ameritas Defendants agreed not
to disburse the Proceeds.
The Ameritas Defendants also argue that Plaintiff was
not a “consumer” under Haw. Rev. Stat. § 480-1, presumably
because she did not purchase the Policy.
Thus, pursuant to
§ 480-2, Plaintiff does not have standing to bring Count III.
[Mem. in Supp. of Motion at 31-32.]
20
As discussed above, there is
a genuine issue of material fact as to whether Plaintiff was a
third-party beneficiary of the Policy.
A third-party beneficiary
does have standing as a “consumer” to bring a UDAP claim.
See
Donaldson, 947 F. Supp. at 433 (“Plaintiff, a third-party
beneficiary of an insurance contract between Defendant and a
consumer, has standing to bring a deceptive acts or practices
claim pursuant to Haw. Rev. Stat. § 480–2.”).
Thus, there is a
genuine issue of material fact as to whether Plaintiff has
standing to bring the UDAP claim.9
The Court therefore DENIES
the Motion as to Count III.
III. Count IV - Conversion
Plaintiff’s Count IV (conversion) implicates the
Ameritas Defendants only insofar as Plaintiff alleges that “[a]t
all times pertinent hereto, Plaintiff owned and/or had the right
to possession” of the Proceeds and that the Ameritas Defendants’
“distribution of the [Proceeds] to [the Casados Defendants]
constituted conversion inconsistent with [her] ownership and/or
right to possession” of the Proceeds.
[Complaint at ¶¶ 56-57.]
The Ameritas Defendants argue that these allegations are
9
The Court also notes that, since Plaintiff may be
Mr. Casados’s legal widow, and there is no current dispute that
Mr. Casados’s Estate paid premiums on the Policy, Plaintiff may
have standing on this basis as well. Plaintiff has not raised
this argument, and there is no evidence in the record addressing
this point, so the Court does not decide the Motion on this
ground.
21
insufficient as a matter of law to support a conversion claim
against them.
[Mem. in Supp. of Motion at 32-34.]
To prevail on a conversion claim, a plaintiff must
prove the following elements:
“‘(1) A taking from the owner
without his consent; (2) an unwarranted assumption of ownership;
(3) an illegal use or abuse of the chattel; and (4) a wrongful
detention after demand.’”
Freddy Nobriga Enters., Inc. v. State,
Dep’t of Hawaiian Home Lands, 129 Hawai`i 123, 129, 295 P.3d 993,
999 (Ct. App. 2013) (quoting Tsuru v. Bayer, 25 Haw. 693, 696
(1920)).
There is no genuine dispute that the Ameritas
Defendants did not take the Proceeds from Plaintiff or
Mr. Casados without consent.
the Policy.
Mr. Casados purchased and paid for
Thus, Plaintiff cannot prove the first element of
conversion, that the Ameritas Defendants ever took anything of
value from Plaintiff.
Similarly, even if they wrongfully held the Proceeds
beyond when they should have disbursed them to her, there is no
evidence that the Ameritas Defendants ever assumed or attempted
to assume ownership of the Proceeds.
Therefore, there is no
dispute that Plaintiff cannot prove element two.
On this basis
alone, Plaintiff’s conversion claim against the Ameritas
Defendants must fail as a matter of law.
22
Although it does not decide the Motion on this basis,
the Court further questions whether the Proceeds can be
considered a chattel for the purposes of conversion.
Neither
party has directed the Court to any Hawai`i law addressing this
issue, and the Court is not aware of any.
The Court recently
predicted that the Hawai`i Supreme Court would hold that
conversion does not extend to the taking of intangible property,
in particular, the taking of a video broadcast.
See J & J Sports
Prods., Inc. v. Alcantara, Civil No. 13-00220 LEK-RLP, 2014 WL
1669070, at *5 (D. Hawai`i Apr. 25, 2014).
The issue of whether
life insurance Proceeds can be considered chattel is a closer
issue since the Proceeds are not strictly intangible.
Further, a
number of jurisdictions allow claims for conversion of money
where there is a specific, identifiable sum involved.
See, e.g.,
Edwards v. Prime, Inc., 602 F.3d 1276, 1303 (11th Cir. 2010)
(stating that Alabama law allows conversion claims for “earmarked
money or specific money capable of identification”); Liberty Life
Ins. Co. v. Myers, No. CV 10-2024-PHX-JAT, 2013 WL 530317, at *12
(D. Ariz. Feb. 12, 2013) (“However, the modern rule, in which
Arizona joins, is that money can be the subject of a conversion
provided that it can be described, identified or segregated, and
an obligation to treat it in a specific manner is established.”
(citation and quotation marks omitted)); Cannon v. Wells Fargo
Bank, N.A., 926 F. Supp. 2d 152, 176 (D.D.C. 2013) (“Money can be
23
the subject of a conversion claim only if the plaintiff has the
right to a specific identifiable fund of money.” (citation and
quotation mark omitted)).10
Specifically, under California law, a plaintiff can
state a cause of action for conversion of a “specific,
identifiable sum involved, such as where an agent accepts a sum
of money to be paid to another and fails to make the payment.”
Kim v. Westmoore Partners, Inc., 133 Cal. Rptr. 3d 774, 789 (Cal.
Ct. App. 2011) (citation and quotation marks omitted).
However,
the focus of this type of conversion action is on the
misappropriation of the money to the agent itself.
See id. (“A
cause of action for conversion of money can be stated only where
defendant interferes with plaintiff’s possessory interest in a
specific, identifiable sum, such as when a trustee or agent
misappropriates the money entrusted to him.” (emphasis in
original)).
Thus, even if Hawai`i followed California law and
found that life insurance proceeds could be considered chattel
under certain circumstances, dismissal of Count IV would be
10
The Court notes, however, that some states that do permit
conversion of money claims deny them where an insurer simply
fails to pay the insured proceeds that the insured alleges she is
owed. See, e.g., Kia v. Imaging Sciences Int’l, Inc., 735 F.
Supp. 2d 256, 270 (E.D. Pa. 2010) (under Pennsylvania law, “an
insured [can] not sue his insurer for conversion when the insurer
retained premium payments and refused to pay benefits” (citation
omitted)); c.f., Gossels v. Fleet Nat’l Bank, 902 N.E.2d 370, 378
(Mass. 2009) (“Banks are not liable for conversion when they fail
to pay funds that they owe to a customer.”).
24
warranted because the Ameritas Defendants did not misappropriate
the Proceeds to themselves.
Since the Court disposes of this claim on other
grounds, the Court does not reach the issue of whether, under the
circumstances of this case, the Proceeds would be considered
chattel under Hawai`i law.
The Court GRANTS summary judgment in
favor of the Ameritas Defendants on Count IV.
IV.
Other Claims
The Ameritas Defendants also moved for summary judgment
on both the Ameritas Defendants’ Cross-Claim and the Casados
Defendants’ Cross-Claim.
the Motion.
The Casados Defendants did not oppose
In fact, at the hearing on the Motion, counsel for
the Casados Defendants joined in the Motion.
GRANTED as to the Cross-Claims.
Thus, the Motion is
The Court therefore GRANTS
summary judgment in favor of the Ameritas Defendants on the
Casados Defendants’ Cross-Claim and the Ameritas Defendants’
Cross Claim.
The Ameritas Defendants also moved for summary judgment
on the Counterclaim.
Since the Court has already disposed of the
Counterclaim as to the Casados Children, see 4/30/14 Order, the
Court DENIES the Motion for summary judgment on the Counterclaim
as to the Casados Children as moot.
For the reasons stated above
as to Count I, genuine issues of material fact exist as to
whether Plaintiff is a beneficiary of the Policy and whether she
25
retracted her claim to the Proceeds, and thus the Court DENIES
the Motion as to the Counterclaim against Plaintiff at this time.
Finally, the Ameritas Defendants appear to move for
final judgment on the claims.
Insofar as this order only
disposes of Count IV and the Cross-Claims, directing entry of
final judgment on those claims only at this time would neither
serve judicial administrative interests nor the equities of the
parties.
8 (1980).
See Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1,
Further, the Ameritas Defendants do not make any
showing that there are any just reasons to grant judgment,
pursuant to Fed. R. Civ. P. 54(b), at this time.
of Motion at 43.]
[Mem. in Supp.
Therefore, the Court DENIES the Motion insofar
as it seeks final judgment on the claims.
V.
Summary of Rulings
The Motion is HEREBY GRANTED in favor of the Ameritas
Defendants as to:
•Count I insofar as the Complaint alleges bad faith in violation
of Haw. Rev. Stat. Chapter 431, and bad faith under Hawai`i
common law against Drury;
•Count IV against the Ameritas Defendants; and
•the Ameritas Defendants’ Cross-Claim and the Casados Defendants’
Cross-Claim.
The Motion is HEREBY DENIED as to:
•Count I insofar as the Complaint alleges bad faith under Hawai`i
common law against Ameritas;
•Count III against the Ameritas Defendants;
26
•the Counterclaim against Plaintiff;
•the Counterclaim against the Casados Children insofar as it is
moot; and
•the Ameritas Defendants’ request for final judgment on any of
the claims.
CONCLUSION
On the basis of the foregoing, the Ameritas Defendants’
Motion for Summary and Final Judgment, filed on February 7, 2014,
is HEREBY GRANTED IN PART AND DENIED IN PART.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, June 30, 2014.
/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
YOKO CASADOS VS. LORI A. DRURY, ET AL.; CIVIL 13-00283 LEK-RLP;
ORDER GRANTING IN PART AND DENYING IN PART THE AMERITAS
DEFENDANTS’ MOTION FOR SUMMARY AND FINAL JUDGMENT
27
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