Opinion
3:16-cv-02305-YY
04-24-2022
THE ESTATE OF MARJORY GAIL THOMAS OSBORN-VINCENT, Plaintiff, v. AMERIPRISE FINANCIAL SERVICES, INC., a Delaware corporation; and RIVERSOURCE LIFE INSURANCE COMPANY, a Minnesota corporation, Defendants.
FINDINGS AND RECOMMENDATIONS
Youlee Yim You United States Magistrate Judge
FINDINGS
Plaintiff, the Estate of Marjory Gail Thomas Osborn-Vincent (“the Estate”), brought suit in December 2016, alleging claims for breach of life insurance contract, breach of the duty of good faith and fair dealing, and elder abuse under Oregon law. Defendants Ameriprise Financial Services, Inc. and RiverSource Life Insurance Company litigated this action for nearly two years before asking the District of Minnesota to enforce the terms of a 2001 class-action settlement agreement and find the Estate's claims were released under that agreement. Mot. Enforce Class Action Settlement (May 31, 2019), ECF #603, Benacquisto, et al. v. American Express Fin., et al., No. 0:00-cv-01980 (D. Minn. Aug. 21, 2000) (“Benacquisto”). The District of Minnesota granted defendants' motion on November 19, 2019. Order (Nov. 19, 2019), ECF #628, Benacquisto.
The parties had filed cross motions for summary judgment (ECF ##152, 173) before the District of Minnesota took up the motion to enforce, and both parties filed supplemental motions after the court granted it (ECF ##200, 205). Despite the extensive motions practice to date- including motions for leave to amend, for protective order, to strike, to show cause, to quash, and for sanctions-the dispositive issue now before the court is straightforward: does the District of Minnesota's order enforcing the Benacquisto settlement agreement preclude any further litigation in this action? The answer to that question is yes, and this case therefore must be dismissed.
I. Summary Judgment Standard
Under Federal Rule of Civil Procedure 56(a), “[t]he 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.” The party moving for summary judgment bears the initial responsibility of informing the court of the basis for the motion and identifying portions of the pleadings, depositions, answers to interrogatories, admissions, or affidavits that demonstrate the absence of a triable issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party does so, the nonmoving party must “go beyond the pleadings” and “designate ‘specific facts showing that there is a genuine issue for trial.'” Id. at 324 (citing FED. R. CIV. P. 56(e)).
The court “does not weigh the evidence or determine the truth of the matter, but only determines whether there is a genuine issue for trial.” Balint v. Carson City, Nev., 180 F.3d 1047, 1054 (9th Cir. 1999). “Reasonable doubts as to the existence of material factual issue[s] are resolved against the moving parties and inferences are drawn in the light most favorable to the non-moving party.” Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000).
II. Claim Preclusion
Claim preclusion bars litigation of claims that were or could have been raised in a prior action. Holcombe v. Hosmer, 477 F.3d 1094, 1097 (9th Cir. 2007). “Claim preclusion requires (1) an identity of claims, (2) a final judgment on the merits, and (3) privity between parties.” Howard v. City of Coos Bay, 871 F.3d 1032, 1039 (9th Cir. 2017) (citations and internal quotation marks omitted).
A. Identity of Claims
Courts in the Ninth Circuit weigh four factors to evaluate whether claims are identical:
(1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts.United States v. Liquidators of European Fed. Credit Bank, 630 F.3d 1139, 1150 (9th Cir. 2011) (quoting Costantini v. Trans World Airlines, 681 F.2d 1199, 1202 n.7 (9th Cir. 1982)). The factors are not applied mechanistically, and the fourth factor is the most important. Howard, 871 F.3d at 1039. “[T]he inquiry about the ‘same transactional nucleus of facts' is the same inquiry as whether the claim could have been brought in the previous action.” Liquidators, 630 F.3d at 1151 (emphasis in original).
Here, all four factors demonstrate there is an identity of claims between the District of Minnesota's order enforcing the Benacquisto class action settlement agreement and this action. Starting with the final and most important factor, the District of Minnesota expressly found the Estate's claims in this case arise out of the same transactional nucleus of facts that gave rise to the class action. Order (Nov. 19, 2019), ECF #628, Benacquisto. The District of Minnesota found Osborn-Vincent purchased a life insurance policy in 1989, she received notice of a class action litigating claims related to that policy in 2000, she was an unnamed class member in that litigation, she did not opt out of the class, and she received a settlement benefit. Id. at 2, 8. The court summarized the Estate's allegations in this case, then found:
The District of Minnesota initially found that it retained jurisdiction over the matter. The 2001 order approving the settlement states that the court “expressly retains jurisdiction as to all matters relating to the . . . enforcement and interpretation of the Settlement Agreement . . . including, without limitation, (a) enforcing the terms and conditions of the Settlement Agreement and resolving . . . whether claims or causes of action allegedly related to this case are or are barred by this Order and Judgment., etc.” Final Order and Judgment Approving Class Action Settlement and Dismissing Complaint ¶ 19(a) (May 15, 2001), ECF #94, Benacquisto (“Benacquisto Settlement Order”).
Under the “Release and Waiver” provision of the [Benacquisto Settlement Order ¶ 13(A)(1)], class members agreed to release all past or present claims “that are based upon, related to, or connected with, directly or indirectly, in whole or in part” the Benacquisto Action or the “released conduct.” [Benacquisto Settlement Order ¶ 13(A)(1).] The released conduct broadly includes representations, omissions, and communications related to or connected with the description, sale, administration, servicing, or performance of policies issued between January 1, 1985, and February 29, 2000, or related to the “setting, charging or reducing of any cost of insurance, . . . premiums, . . . charges, contract charges, . . . or expenses” of those policies. Id. ¶ 13(B)(2). Class members expressly reserved the right to assert various other claims, however, including those that “independently arise[] from acts, facts or circumstances that occur for the first time after the last day of the Class Period.” Id. ¶ 13(A)(3).
Osborn-Vincent purchased the Policy in 1989, at which point Defendants misrepresented to her that she would owe no premiums. This misrepresentation was repeated on the alleged conversion of the Policy to the MEC in 1991. The Estate argues that its claims in the Oregon Action fall outside the Class Period because the alleged fraudulent scheme of charging unwarranted premiums and costs of insurance began around 2010 - 10 years after the close of the Class Period. See ECF No. 617, at 4-5. The claim that these charges were improper or fraudulent, however, rests on the representations made in 1989 and 1991 that Osborn-Vincent would not owe any premiums. As such, these claims do not “independently arise” from acts that occurred after the close of the Class Period, but rather are “related to” the released conduct from the Benacquisto Settlement. Accordingly, enforcement of the Benacquisto Settlement against the Estate is warranted.Order 6-8, ECF #628, Benacquisto (emphasis added) (footnote omitted).
The Estate argues that “the issues and claims settled in the class action are not the same as those in this suit because the factual basis for the Estate's claims did not exist during the class period.” Pl.'s Reply 6, ECF #212. But this misses the point for precisely the reasons emphasized in the District of Minnesota's order above: the factual basis for the Estate's claims relates to conduct released by the Benacquisto settlement agreement. In any event, the relevant question is not whether the Minnesota court “got it right” (although the Eighth Circuit may take that question up shorty, see Notice of Appeal (Dec. 19, 2019), ECF #632, Benacquisto)). The question is whether the order enforcing the Benacquisto settlement agreement and this action arise out of the same transactional nucleus of facts. As the District of Minnesota considered the very conduct at issue in this action, they clearly do.
“A settlement agreement may preclude a party from bringing a related claim in the future ‘even though the claim was not presented and might not have been presentable in the class action,' but only where the released claim is ‘based on the identical factual predicate as that underlying the claims in the settled class action.'” Hesse v. Sprint Corp., 598 F.3d 581, 590 (9th Cir. 2010) (quoting Williams v. Boeing Co., 517 F.3d 1120, 1133 (9th Cir. 2008)).
Next, both suits clearly involve infringement of the same rights (i.e., the Estate's rights under the life insurance policy), and the rights and interests established by the District of Minnesota's order enforcing the Benacquisto settlement would clearly be destroyed by prosecution of this action. And finally, substantially the same evidence has been before the courts in both proceedings. The District of Minnesota and the parties even referenced filings and evidence in this case. E.g., Declaration of Roy B. Thompson (July 24, 2019), ECF #618, Benacquisto (attaching declarations and deposition transcripts produced in the course of this litigation). In sum, the order enforcing the Benacquisto settlement agreement and this action have an identity of claims.
B. Final Adjudication on the Merits
The dismissal of an action with prejudice constitutes a final judgment on the merits. Int'lUnion of Operating Eng'rs-Empl'rs Constr. Indus. Pension, Welfare & Training Tr. Funds v.Karr, 994 F.2d 1426, 1429 (9th Cir. 1993). The District of Minnesota's order enforcing the Benacquisto settlement agreement is clearly a final adjudication on the merits, and plaintiffs have appealed that order to the Eighth Circuit. Notice of Appeal (Dec. 19, 2019), ECF #632, Benacquisto. See Hawkins v. Risely, 984 F.2d 321, 324 (9th Cir. 1993).
C. Privity
Privity exists when “a person [is] so identified in interest with a party to former litigation that he represents precisely the same right in respect to the subject matter involved.” UnitedStates v. Bhatia, 545 F.3d 757, 759 (9th Cir. 2008) (citation and internal quotation marks omitted). The parties are clearly in privity, as they are the same parties that litigated the motion to enforce the settlement agreement.
Because there is an identity of claims, a final adjudication on the merits, and privity between the parties, prosecution of the Estate's claims here is precluded by the District of Minnesota's order enforcing the Benacquisto settlement agreement.
The court notes that, contrary to the Estate's contention, any remarks this court made regarding the Benacquisto settlement agreement when it granted the Estate's leave to amend was not a ruling on the merits. Findings and Recommendations 15, 21, ECF #134, adopted by Order, ECF #147. And the Estate's insistence that it did not receive a fair shake in Minnesota because it did not get to depose Trina Iijima is unfounded. Iijima is simply defendants' records custodian. See Opinion and Order, ECF #186 (granting defendants' motion to quash Iijima deposition notice).
The Estate makes several other arguments, e.g., delay, forum shopping, blaming the victim, etc. The Estate even includes a creative theory that the District of Minnesota's order constitutes a finding of fraud that has a preclusive effect on the merits here. These arguments do nothing to alter the claim preclusion analysis. Accordingly, they are summarily rejected for that reason. Any other motions for summary judgment (ECF ##152, 173, 205) are moot.
Finally, the parties' requests for attorney's fees under ORS 20.105 and Rule 11 were made in their response and reply briefs and not brought as a separate motions in violation of LR 7-1(b). Therefore, they must be summarily denied. Silliman v. Hawes Fin. Grp., Inc., No. 6:15-CV-00285-AA, 2015 WL 5056353, at *4 (D. Or. Aug. 26, 2015) (“neither party is entitled to attorney fees without first prevailing and then filing a separate motion”).
RECOMMENDATIONS
Defendants' Supplemental Motion for Summary Judgment (ECF #200) should be granted, all remaining motions for summary judgment (ECF ##152, 173, 205) should be denied as moot, and this action should be dismissed with prejudice.
SCHEDULING ORDER
These Findings and Recommendations will be referred to a district judge. Objections, if any, are due Friday, May 08, 2020. If no objections are filed, then the Findings and Recommendations will go under advisement on that date.
If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendations will go under advisement.
NOTICE
These Findings and Recommendations are not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any Notice of Appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of a judgment.