MH Obtains Dismissal of Suit Against Life Insurer and Affirmation by Ninth Circuit

October 19, 2023

Case Studies

McDowell Hetherington secured dismissal of a plaintiff’s lawsuit against its insurer client in California federal court.  The plaintiff sued the insurer and several of its employees for allegedly underpaying life insurance benefits on a policy purchased by plaintiff’s grandmother in 1954 insuring the life of plaintiff’s mother. Plaintiff asserted claims for breach of contract, fraud, and civil rights violations under 42 U.S.C. § 1983. He claimed his grandmother paid premiums totaling $57,200 over 20 years and that the insurer owed over $838,000 in benefits plus $150 million in punitive damages.

MH moved to dismiss and demonstrated that the maximum benefit payable under the express terms of the insurance policy was $1,000. MH also argued plaintiff failed to state any viable federal claim, as § 1983 does not apply to private entities AGL. The district court agreed, finding based on its review of the insurance policy documents that plaintiff ‘s damages allegations were plainly frivolous and made in bad faith. The court dismissed plaintiff’s federal claims with prejudice.

Plaintiff appealed to the Ninth Circuit and the appellate court affirmed the district court’s dismissal. The Ninth Circuit held plaintiff’s invocation of § 1983 did not transform his state law claims into federal claims and found it was legally certain his claims could not meet the amount in controversy requirement.

The MH team, including MH’s California office partner Jodi Swick and senior attorney John Burnite efficiently disposed of this lawsuit, successfully defending AGL against plaintiff’s damages claims at both the district and appellate court levels.