taking judicial notice of 22 “government documents, court filings, press releases, and undisputed matters of public 23 record”
How later courts described this case
- taking judicial notice of 22 “government documents, court filings, press releases, and undisputed matters of public 23 record”
- holding implied 6 covenant “protects against one party interfering with another party’s contract rights; it does 7 not obligate a party to help another party” or “waive” its own rights
- claim for 12 breach of the implied covenant fails absent showing that an insurer “withheld benefits due 13 under the policy”
- “Because [insured] cannot 13 establish that [insurer] has withheld benefits due under the policy, its implied-covenant 14 claim must fail as a matter of law.”
Written by the judges who cited it.
The opinion
1
2
3
4
5
6 UNITED STATES DISTRICT COURT
7 SOUTHERN DISTRICT OF CALIFORNIA
8
9 MINERVA CHAVEZ, individually and Case No.: 22-cv-00166-AJB-DEB
on behalf of all others similarly situated,
10
Plaintiff, ORDER GRANTING DEFENDANT’S
11 MOTION FOR SUMMARY
v. JUDGMENT
12
ALLSTATE NORTHBROOK
13 INDEMNITY COMPANY, (Doc. No. 121)
14 Defendant.
15
16
17
18
19 Presently pending before the Court is Defendant Allstate Northbrook Indemnity
20 Company’s (“Allstate”) Motion for Summary Judgment. (Doc. No. 121.) Allstate’s motion
21 for summary judgment has been fully briefed. (Doc. Nos. 121; 131; 133.) Pursuant to Civil
22 Local Rule 7.d.1, the Court finds the matter suitable for determination on the papers
23 without oral argument and vacates the hearing on Allstate’s motion for summary judgment.
24 For the reasons set forth below, the Court GRANTS Allstate’s motion for summary
25 judgment.
26 I. BACKGROUND
27 Plaintiff filed the original complaint against Allstate in this Court on February 4,
28 2022. (See Doc. No. 1.) On January 3, 2023, the Court granted in part and denied in part
1 Allstate’s motion to dismiss Plaintiff’s Complaint, (Doc. No. 33), and on January 13, 2023,
2 Plaintiff filed the operative FAC, (Doc. No. 34). On April 13, 2023, the Court granted in
3 part and denied in part Allstate’s motion to dismiss Plaintiff’s FAC. (Doc. No. 42.)
4 Plaintiff’s single remaining claim is for violation of the implied covenant of good faith and
5 fair dealing. (See generally id. (dismissing Plaintiff’s California Unfair Competition Law
6 (“UCL”) claim).) On June 25, 2024, the Court certified a class of “all California residents
7 who purchased personal automobile insurance from Allstate covering any portion of the
8 time period from March 1, 2020 to June 11, 2021[,]” and appointed Plaintiff Minerva
9 Chavez as class representative. (Doc. No. 83.) Allstate’s motion for summary judgment on
10 Plaintiff’s remaining claim follows.
11 A. Plaintiff’s Allstate Private Passenger Automobile Insurance Policy
12 Plaintiff first purchased a 6-month Private Passenger Automobile (“PPA”) insurance
13 policy from Allstate (the “Policy”) in the fall of 2019, covering the period of October 26,
14 2019, to April 26, 2020. (Doc No 121-11 ¶ 2.) Plaintiff subsequently renewed her Policy
15 several times, such that her Policy remained effective through at least October 26, 2023.
16 (Id. ¶¶ 7, 18, 26, 31, 33, 41, 48.)
17 B. COVID-19 and Allstate’s Shelter-In-Place Payback Program
18 At the onset of COVID-19, on March 4, 2020, California Governor Newsom issued
19 an executive order, proclaiming a State of Emergency. (Doc. No. 121-22 at 2.) On March
20 19, 2020, he issued a “stay-at-home” order, directing “all individuals living in the State of
21 California to stay at home or at their place of residence” with limited exceptions. (Id.)
22 In response to the stay-at-home order, on April 6, 2020, Allstate announced its
23 Shelter-In -Place Payback (“SIPP”) program “to help its personal auto insurance customers
24 in these challenging times.” (Doc. No. 121-23 at 2.) In its press release, Allstate stated that
25 its customers would receive “15% of their monthly premium in April and May, [2020,]
26 totaling more than $600 million [nationwide].” (Id. at 3.) The day prior to announcing its
27 SIPP program, Allstate submitted a rate filing with the California Department of Insurance
28 (“CDI”), seeking authorization to implement the program. CDI responded that the
1 California rate filing process did not have a mechanism to permit COVID related refunds,
2 and CDI requested that Allstate withdraw its filing. (Doc. No. 121-12 at 56:1–58:8.)
3 C. CDI Orders Insurers to Provide COVID-19 Premium Relief
4 One week later, on April 13, 2020, CDI issued Bulletin 2020-3 to all property,
5 casualty, and workers compensation insurers. (Doc. No. 121-26.) Bulletin 2020-3
6 recognized that reduced driving during the “stay-at-home” order “resulted in fewer
7 accidents, injuries, and fatalities on public highways and roads[,]” and
8 “projected loss exposures of many insurance policies have become overstated or
9 misclassified.” (Id. at 2.) Accounting for this reduction in risk, CDI ordered insurers to
10 make premium refunds for March and April 2020 to California private passenger
11 automobile insurance holders “as quickly as practicable.” (Id. at 3.) Bulletin 2020-3 granted
12 “each insurer reasonable flexibility in determining how best to quickly and fairly
13 accomplish the refund of premium to policyholders” and permitted insurers to refund
14 premium without prior approval by CDI if the insurers applied a uniform premium
15 reduction for all policyholders in an individual line of insurance. (Id.) It also required
16 insurers to report to the Department of Insurance “an explanation and justification for the
17 amount and duration of any premium refund, and how those measures reflect the actual or
18 expected reduction of exposure to loss.” (Id. at 4.) As the pandemic continued, on May 15,
19 2020, and December 3, 2020, CDI issued two additional bulletins, Bulletins 2020-4 and
20 2020-8, respectively, (see Doc. Nos. 121-27; 121-28), which extended the directions and
21 reporting requirements set forth in Bulletin 2020-3 (collectively, “CDI Bulletins”), and
22 ordered insurers to continue providing premium relief through May and June 2020, as well
23 as subsequent months “as conditions warrant.” (See Doc. Nos. 121-27; 121-28 at 2.)
24 Following the issuance of the CDI Bulletins, Allstate subsequently provided
25 additional refunds to California customers in 2020 and 2021, by issuing 15% premium
26 refunds for March through May 2020, 7% premium refunds for June through August 2020,
27 5.5% premium refunds for September through December 2020, and 3.5% premium refunds
28
1 for January through March 2021. (Doc. No. 121-12 at 122:3–20, 123:13–17 ; see also Doc.
2 No. 131-5 at 3.) Allstate asserts, and Plaintiff does not dispute, that Allstate returned over
3 $190.5 million in premium to over one million California personal automobile insurance
4 policyholders for the period March 2020 through March 2021. (See Doc. No. 121-1 at 12;
5 Doc. No. 131 at 3.)
6 D. CDI’s Investigation into Allstate’s Premium Relief
7 On March 11, 2021, CDI Commissioner Ricardo Lara issued Bulletin 2021-03
8 which found, “based on extensive analysis of data received, the Department’s review of
9 this loss data demonstrates the premium relief that insurance companies provided to their
10 policyholders was insufficient, leaving consumers paying inflated premiums while they
11 continue to experience reduced risk of loss.” (Doc. No. 121-29 at 2.) Bulletin 2021-03
12 directed insurance companies to “continue to provide premium relief information to the
13 Department on a quarterly basis” and to justify if no premium was returned. (Id. at 5.)
14 In a similar vein, on October 6, 2021, CDI issued a press release, titled,
15 “Commissioner Lara orders Allstate, Mercury, and CSAA to ‘close the gap’ on auto
16 insurance refunds owed to drivers who drove less during the pandemic[.]” (Doc. No. 121-
17 31 at 2.) The press release stated that CDI’s analysis of data “received directly from auto
18 insurance companies shows these three auto insurance companies have the greatest gap
19 between what they initially refunded drivers, and what they should have refunded, to
20 provide proper premium relief to their policyholders since the start of the COVID-19
21 pandemic.” (Id.) Specifically, CDI’s analysis “found that from March to September 2020,
22 insurance company groups returned on average 9 percent of auto premiums, but the
23 Department’s analysis found they should have refunded nearly double that amount—17
24 percent—over the seventh month period.” (Id.) The press release provided Allstate and the
25
26 1 Allstate’s 30(b)(6) witness, Alexander DeWitt, at one point testified that Allstate provided 7.5%
premium relief refunds from June through August 2020. (See Doc. No. 121-12 at 122:5–7.) However, he
27 also testified the premium refund for that time period was 7%, (id. at 102), and the parties do not dispute
that Allstate provided 7% premium refunds for June through August 2020. (See Doc. No. 121-1 at 13;
28
1 other two insurance companies 30 days to respond to CDI prior to facing legal action. (Id.
2 at 3.)
3 On November 5, 2021, CDI issued a follow-up press release, indicating that Allstate,
4 Mercury, and CSAA complied with Commissioner Lara’s order to submit additional data
5 to CDI about auto premium refunds provided to customers during the pandemic. (See Doc.
6 No. 121-32.) CDI indicated that it would “evaluate the data and determine how much in
7 additional premiums each insurance company owes their policyholders.” (Id. at 2.)
8 Commissioner Lara expressed that his “goal is to have an accurate and fair determination
9 of what each insurance company’s appropriate amount of premium should be.” (Id.)
10 In response to CDI’s orders, Allstate reports that it made at least fifteen submissions
11 to CDI, supporting the amount of premium it returned through its SIPP program. (Doc. No.
12 121-1 at 14; see also Doc. Nos. 121-16; 121-17; 121-18.) Actuaries within CDI’s Rate
13 Regulation Branch, the entity responsible for evaluating insurers’ compliance with CDI’s
14 bulletins relating to premium relief due to the pandemic, reviewed insurer-submitted data
15 from 2020 to 2023 in response to CDI’s orders. (Doc. No. 121-33 at 3 ¶ 4.)
16 Ultimately, on January 23, 2023, CDI’s Deputy Commissioner of the Rate
17 Regulation Branch, Ken Allen, informed Allstate that CDI determined that Allstate’s
18 premium relief refunds were sufficient, and that Allstate did not need to return any
19 additional premium to its California personal automobile policy insurance holders. (Doc.
20 No. 121-34 at 4.) Mr. Allen stated that CDI’s determination was “based on data and other
21 information submitted to [CDI] by Allstate [], the PPA premium previously returned to its
22 California PPA policyholders, and the methodology utilized by [CDI] to calculate whether
23 insurers returned a sufficient amount of PPA premium to account for the lower risk of loss
24 during the COVID pandemic period[.]” (Id.) While CDI established that Allstate’s
25 premium relief refunds were sufficient, it found that other insurance companies failed to
26 distribute adequate premium refunds, and required those companies to provide additional
27 premium relief. (See Doc. Nos. 121-35; 121-36; 121-37.)
28
1 Plaintiff does not dispute that she received Allstate’s premium relief payments in
2 2020 and 2021 under its SIPP program. (Doc. No. 121-1 at 12; Doc. No. 131 at 11.) Rather,
3 Plaintiff asserts “it was far from enough.” (Doc. No. 131 at 3.) Plaintiff alleges Allstate
4 failed to issue adequate refunds, and that she and other class members should have received
5 “at least a 30% average refund of paid premiums” to compensate for the windfall Allstate
6 received by individuals staying at home and not driving during the pandemic. (FAC ¶ 4.)
7 II. REQUEST FOR JUDICIAL NOTICE
8 In support of its motion for summary judgment, Allstate requests judicial notice of
9 eighteen exhibits. (See Doc. No. 121-21 ¶¶ 1–18.) Plaintiffs have not objected. Under
10 Federal Rule of Evidence 201, a court may take judicial notice of a fact that is “not subject
11 to reasonable dispute because it: (1) is generally known within the trial court’s territorial
12 jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy
13 cannot reasonably be questioned.” Fed. R. Evid. 201(b). The Court evaluates Allstate’s
14 request for judicial notice by grouping the eighteen exhibits in the following categories:
15 A. Government announcements regarding the COVID-19 pandemic
(Exhibit 15)
16
17 Exhibit 15 is a copy of Executive Order N-33-20 of the Executive Department of the
18 State of California, dated March 19, 2020. (Doc. No. 121-22.)2 Exhibit 15 is the California
19 “stay-at-home” order issued in response to COVID-19 and signed by California Governor
20 Gavin Newsom. (Id.) “The Court may take judicial notice of public records and
21 government documents available from reliable sources, including government websites.”
22 Day v. GEICO Cas. Co., No. 21-CV-02103-BLF, 2024 WL 251408, at *2 (N.D. Cal. Jan.
23 23, 2024). Accordingly, the Court GRANTS Allstate’s request to take judicial notice of
24 Exhibit 15. See id. (taking judicial notice of “state and federal announcements regarding
25 the COVID-19 pandemic”).
26 / / /
27
2 Exhibit 15 is available at https://www.gov.ca.gov/wp-content/uploads/2020/03/3.19.20-attested-EO-N-
28
1 B. Allstate’s Press Release (Exhibit 16)
2 Exhibit 16 is a copy of Allstate’s April 6, 2020, press release titled, “Allstate is
3 Providing More Than $600 Million to Auto Insurance Customers Amid Pandemic[,]”
4 which remains accessible on Allstate’s website. (Doc. No. 121-23.) “Courts may take
5 judicial notice of publications introduced to indicate what was in the public realm at the
6 time, not whether the contents of those articles were in fact true.” Von Saher v. Norton
7 Simon Museum of Art at Pasadena, 592 F.3d 954, 960 (9th Cir. 2010) (internal quotations
8 and citations omitted). Here, the Court finds it proper to judicially notice Allstate’s press
9 release, accessible on Allstate’s website. (Doc. No. 121-22 ¶ 2); see also Romero v. Securus
10 Techs., Inc., 216 F. Supp. 3d 1078, 1085 (S.D. Cal. 2016) (taking judicial notice of press
11 releases issued by defendant that remain readily available on defendant’s website); see also
12 In re Sorrento Therapeutics, Inc. Sec. Litig., No. 20-CV-00966-AJB-DEB, 2021 WL
13 6062943, at *4 (S.D. Cal. Nov. 18, 2021) (taking judicial notice of company-issued press
14 release but not for the truth of the matters asserted therein).
15 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of Exhibit
16 16, but not for the truth of the matters asserted therein.
17 C. California Department of Insurance website pages (Exhibits 17, 18)
18 Exhibit 17 is a copy of the “About the Department” page of the CDI website, (Doc.
19 No. 121-24), and Exhibit 18 is a copy of the “Rate Regulation Branch” page of CDI’s
20 website, (Doc. No. 121-25). It is appropriate to take judicial notice of information available
21 online if the information “was made publicly available by [a] government entit[y] . . . and
22 neither party disputes the authenticity of the web sites or the accuracy of the information
23 displayed therein.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010);
24 see also Day, 2024 WL 251408, at *2. Here, CDI’s website is a reliable government agency
25 website, and neither party disputes the authenticity of the CDI website pages. Accordingly,
26 the Court GRANTS Allstate’s request to take judicial notice of Exhibits 17 and 18.
27 / / /
28 / / /
1 D. California Department of Insurance Bulletins (Exhibits 19, 20, 21, 22)
2 Exhibits 19–22 are copies of CDI’s bulletins dated April 13, 2020, May 15, 2020,
3 December 3, 2020, and March 11, 2021, respectively, which are publicly available online.
4 (See Doc. Nos. 121-26; 121-27; 121-28; 121-29.) Because the Court “may take judicial
5 notice of public records and government documents available from reliable sources,
6 including government websites[,]” Day, 2024 WL 251408, at *2, the Court finds it proper
7 to take judicial notice of these CDI bulletins. See id. (taking judicial notice of CDI
8 bulletins); see also Drawdy v. Nationwide Ins. Co. of Am., No. 222CV00271JAMKJN,
9 2022 WL 3020050, at *1 (E.D. Cal. July 29, 2022) (taking judicial notice of CDI bulletins).
10 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of Exhibits 19–
11 22.
12 E. California Department of Insurance Press Releases (Exhibits 24, 25)
13 Exhibits 24 and 25 are CDI-issued press releases dated October 6, 2021, and
14 November 5, 2021, respectively, which are publicly available online on CDI’s website.
15 (See Doc. Nos. 121-31; 121-32.) Because the Court “may take judicial notice of public
16 records and government documents available from reliable sources, including government
17 websites[,]” Day, 2024 WL 251408, at *2, the Court finds it proper to take judicial notice
18 of these CDI press releases. See id. (taking judicial notice of CDI press releases); see also
19 In re Outlaw Lab’ys, LP Litig., 352 F. Supp. 3d 992, 1006 n.5 (S.D. Cal. 2018) (taking
20 judicial notice of a U.S. Department of Justice press release); see also DeHoog v. Anheuser-
21 Busch InBev SA/NV, 899 F.3d 758, 763 (9th Cir. 2018) (taking judicial notice of
22 “government documents, court filings, press releases, and undisputed matters of public
23 record”).
24 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of
25 Exhibits 24 and 25.
26 F. California Department of Insurance Correspondence (Exhibits 23, 27)
27 Exhibits 23 and 27 are both pieces of correspondence from CDI to Allstate. (See
28 Doc. Nos. 121-30; 121-34.) “A court may . . . take judicial notice of self-authenticating
1 documents, including those that bear ‘a seal purporting to be that of the United States . . .
2 or a department [or] agency’ and ‘a signature purporting to be an execution or attestation.’”
3 Blain v. Liberty Mut. Fire Ins. Co., No. 22-CV-00970-AJB-MMP, 2024 WL 948020, at *2
4 (S.D. Cal. Feb. 12, 2024) (quoting Fed. R. Evid. 902(1)).
5 Exhibit 23 is a copy of CDI’s October 5, 2021, letter from Kenneth B. Schnoll, CDI’s
6 General Counsel & Deputy Commissioner, to Allstate titled, “Additional Premium
7 Refunds, Credits, and Reductions in Response to COVID-19 Pandemic.” (Doc. No. 121-
8 30.) The letter is signed by Kenneth B. Schnoll. (Id.) The Court finds Exhibit 23 to be self-
9 authenticating because the letter is signed by CDI’s General Counsel & Deputy
10 Commissioner. See Blain, 2024 WL 948020, at *2 (taking judicial notice of the self-
11 authenticating CDI’s Settled Order for Liberty Mutual because it was “signed by the
12 Deputy Commissioner of [the California Department of Insurance].”)
13 Exhibit 27 is a CDI-certified copy of a January 23, 2023, email from Ken Allen,
14 Deputy Commissioner of the Rate Regulation Branch at CDI, to Gerald Zimmerman, then
15 Senior Vice President and Deputy General Counsel of Government and Industry Relations
16 at Allstate, with the subject line, “Allstate Northbrook Indemnity Company.” (Doc. No.
17 121-34.) On October 25, 2024, Destiny S. Youn, Custodian of Records at CDI, certified
18 under CDI’s seal that the January 23, 2023, email is a true and correct copy from the official
19 records of CDI. (Id. at 3.) The Court finds Exhibit 27 to be self-authenticating because
20 CDI’s Custodian of Records certified the email correspondence with the CDI seal along
21 with the signature of Destiny S. Youn, the Custodian of Records at CDI. See See Blain,
22 2024 WL 948020, at *2.
23 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of
24 Exhibits 23 and 27.
25 G. Declaration Filed in Different Case (Exhibit 26)
26 Exhibit 26 is a copy of the June 14, 2023, Declaration of Jack C. Nick filed in support
27 of CDI and Ken Allen’s Motion to Quash Subpoena, or in the Alternative, Motion for
28 Protective Order in Day v. GEICO Cas. Co., N.D. Cal. Case No. 2:23-mc-00091-FMO-
1 RAO, filed on June 20, 2023 under Docket No. 1. (Doc. No. 121-33.) A court may take
2 judicial notice of court filings and other matters of public record. See Reyn’s Pasta Bella,
3 LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006). Additionally, declarations
4 filed in connection with another case can be used to support a motion for summary
5 judgment. See Campbell v. Nat’l Passenger R. Corp., No. C05-05434 MJJ, 2008 WL
6 930992, at *14–15 (N.D. Cal. Apr. 3, 2008) (overruling evidentiary objection of the
7 plaintiff’s use of “declarations of witnesses that were taken for the purposes of a different
8 lawsuit” in evaluating summary judgment motion). “However, while the authenticity and
9 existence of a particular order, motion, pleading or judicial proceeding, which is a matter
10 of public record, is judicially noticeable, veracity and validity of its contents are
11 not.” Esparza v. Kohl’s, Inc., 723 F. Supp. 3d 934, 940 (S.D. Cal. 2024) (internal
12 punctuation and citation omitted).
13 Because Exhibit 26 is a court filing in a different case and publicly available, the
14 Court GRANTS Allstate’s request to take judicial notice of the existence of Exhibit 26.
15 See Reyn’s Pasta Bella, LLC, 442 F.3d at 746 n.6. However, the Court declines to grant
16 judicial notice of the factual allegations included in Jack C. Nick’s declaration. See Wheeler
17 v. Home Depot U.S.A., Inc., No. 15-CV-2236-CAB-AGS, 2020 WL 12835895, at *8 (S.D.
18 Cal. Nov. 23, 2020).
19 H. Settlement Stipulations (Exhibits 28, 29, 30)
20 Exhibits 28, 29, and 30 are copies of three different settlement stipulations that have
21 been publicly filed in other cases: Exhibit 28 is a copy of the August 1, 2023 Settlement
22 Stipulation in In the Matter of the COVID Refund of Liberty Mutual Fire Ins. Co., (Doc.
23 No. 121-35); Exhibit 29 is a copy of the April 24, 2023 Stipulation in In the Matter of the
24 COVID Refund of Mercury Ins. Co. & Cal. Auto. Ins. Co., (Doc. No. 121-36); and Exhibit
25 30 is a copy of the May 24, 2023 Settlement Stipulation in In the Matter of the COVID
26 Refund of Farmers Ins. Exch. and Mid-Century Ins. Co., (Doc. No. 121-37). A court may
27 take judicial notice of court filings and other matters of public record. See Reyn’s Pasta
28 Bella, LLC, 442 F.3d at 746 n.6. “However, while the authenticity and existence of a
1 particular order, motion, pleading or judicial proceeding, which is a matter of public record,
2 is judicially noticeable, veracity and validity of its contents are not.” Esparza, 723 F. Supp.
3 3d at 940.
4 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of
5 Exhibits 28, 29, and 30, but not the veracity of their content.
6 I. Professional Standards Published by Professional Standards Boards
(Exhibits 31, 32)
7
8 Exhibits 31 and 32 are copies of Actuarial Standard of Practice No. 1 and No. 17,
9 respectively, of the Actuarial Standards Board that are publicly available online. (See Doc.
10 Nos. 121-38; 121-39.) Courts may take judicial notice of publicly available standards
11 published by professional standards boards, including actuarial standards of practice. See
12 e.g., Sec. & Exch. Comm'n v. Life Partners Holdings, Inc., 854 F.3d 765, 776 n.6 (5th Cir.
13 2017) (taking judicial notice of the adoption of Actuarial Standard of Practice No. 48); see
14 also Garcia v. J2 Glob., Inc., No. 2:20-CV-06096-FLA (MAAX), 2021 WL 1558331, at
15 *10 (C.D. Cal. Mar. 5, 2021) (taking judicial notice of accounting standards from the
16 Financial Accounting Standards Boards in part because “[c]ourts . . . regularly take judicial
17 notice of published accounting standards.”) Because the Actuarial Standard of Practices
18 Nos. 1 and 7 are publicly available and neither party disputes their accuracy, the Court
19 finds judicial notice of Exhibits 31 and 32 to be proper.
20 Accordingly, the Court GRANTS Allstate’s request to take judicial notice of
21 Exhibits 31 and 32.
22 III. MOTION FOR SUMMARY JUDGMENT
23 A. Legal Standard
24 A court may grant summary judgment when it is demonstrated that there exists no
25 genuine dispute as to any material fact, and that the moving party is entitled to judgment
26 as a matter of law. See Fed. R. Civ. P. 56(a); Adickes v. S.H. Kress & Co., 398 U.S. 144,
27 157 (1970). The party seeking summary judgment bears the initial burden of informing a
28 court of the basis for its motion and of identifying the portions of the declarations,
1 pleadings, and discovery that demonstrate an absence of a genuine dispute of material fact.
2 See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A fact is “material” if it might
3 affect the outcome of the suit under the governing law. See Anderson v. Liberty Lobby,
4 Inc., 477 U.S. 242, 248–49 (1986). A dispute is “genuine” as to a material fact if there is
5 sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See
6 Long v. Cnty. of Los Angeles, 442 F.3d 1178, 1185 (9th Cir. 2006).
7 Where the moving party will have the burden of proof on an issue at trial, the movant
8 must affirmatively demonstrate that no reasonable trier of fact could find other than for the
9 movant. See Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). Where
10 the nonmoving party will have the burden of proof on an issue at trial, the movant may
11 prevail by presenting evidence that negates an essential element of the nonmoving party’s
12 claim or by merely pointing out that there is an absence of evidence to support an essential
13 element of the nonmoving party’s claim. See Nissan Fire & Marine Ins. Co. v. Fritz Cos.,
14 210 F.3d 1099, 1102–03 (9th Cir. 2000). If a moving party fails to carry its burden of
15 production, then “the nonmoving party has no obligation to produce anything, even if the
16 nonmoving party would have the ultimate burden of persuasion at trial.” Id. If the moving
17 party meets its initial burden, the burden then shifts to the opposing party to establish that
18 a genuine dispute as to any material fact actually exists. See Matsushita Elec. Indus. Co. v.
19 Zenith Radio Corp., 475 U.S. 574, 586 (1986). The opposing party cannot “rest upon the
20 mere allegations or denials of the adverse party’s pleading but must instead produce
21 evidence that sets forth specific facts showing that there is a genuine issue for trial.” See
22 Estate of Tucker ex rel. Tucker v. Interscope Records, Inc., 515 F.3d 1019, 1030 (9th Cir.
23 2008) (internal quotation marks, alterations, and citation omitted).
24 The evidence of the opposing party is to be believed, and all reasonable inferences
25 that may be drawn from the facts placed before a court must be drawn in favor of the
26 opposing party. See Stegall v. Citadel Broad. Co., 350 F.3d 1061, 1065 (9th Cir. 2003).
27 However, “[b]ald assertions that genuine issues of material fact exist are insufficient.” See
28 Galen v. Cnty. of Los Angeles, 477 F.3d 652, 658 (9th Cir. 2007); see also Day v. Sears
1 Holdings Corp., 930 F. Supp. 2d 1146, 1159 (C.D. Cal. 2013) (“Conclusory, speculative
2 testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and
3 defeat summary judgment.”). Further, a motion for summary judgment may not be defeated
4 by evidence that is “merely colorable, or is not significantly probative . . . .” See Anderson,
5 477 U.S. at 249–50 (citations omitted); see also Hardage v. CBS Broad. Inc., 427 F.3d
6 1177, 1183 (9th Cir. 2006) (same). If the nonmoving party fails to produce evidence
7 sufficient to create a genuine dispute of material fact, the moving party is entitled to
8 summary judgment. See Nissan Fire & Marine, 210 F.3d at 1103.
9 B. Implied Covenant of Good Faith and Fair Dealing
10 Allstate moves for summary judgment on the single remaining cause of action—
11 Plaintiff’s implied covenant of good faith and fair dealing claim. (Doc. No. 121.) Plaintiff
12 alleges that Allstate breached the implied covenant by failing to utilize its discretion to
13 return sufficient premiums to California insurance holders in response to the changed
14 circumstances precipitated by the COVID-19 pandemic. (Doc. No. 34 ¶¶ 47–56.) The
15 parties disagree as to whether Plaintiff’s insurance policies provided Allstate with
16 discretion to make downward adjustments to premiums based on generalized changed
17 circumstances, or to limit premium to no more than a fair rate of return. (Doc. No. 121-1
18 at 18–19; Doc. No. 131 at 2, 11.)
19 “[T]he implied covenant of good faith and fair dealing . . . is based on the contractual
20 relationship between the insured and the insurer.” Waller v. Truck Ins. Exch., Inc., 11 Cal.
21 4th 1, 36 (1995), as modified on denial of reh’g (Oct. 26, 1995) (citation omitted). The
22 covenant exists “to prevent one contracting party from unfairly frustrating the other party’s
23 right to receive the benefits of the agreement actually made.” Guz v. Bechtel Nat. Inc., 24
24 Cal. 4th 317, 349 (2000). The implied covenant of good faith and fair dealing “cannot
25 impose substantive duties or limits on the contracting parties beyond those incorporated in
26 the specific terms of their agreement.” Id. at 349–50. Rather, the implied covenant “is
27 limited to assuring compliance with the express terms of the contract, and cannot be
28 extended to create obligations not contemplated by the contract.” Pasadena Live v. City of
1 Pasadena, 114 Cal. App. 4th 1089, 1094 (2004) (citing 1 Witkin, Summ. of Cal. Law (2003
2 supp.) Contracts § 743) (emphasis in original). Within this framework, “to establish the
3 insurer’s ‘bad faith’ liability, the insured must show that the insurer has (1) withheld
4 benefits due under the policy, and (2) that such withholding was ‘unreasonable’ or ‘without
5 proper cause.’” Major v. W. Home Ins. Co., 169 Cal. App. 4th 1197, 1209
6 (2009) (quoting Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566, 573–74 (1973)).
7 1. Implied Covenant of Good Faith & Fair Dealing—Withholding of
Benefits Analysis
8
9 With respect to the first element, “a bad faith claim cannot be maintained unless
10 policy benefits are due . . . [.]” Waller, 11 Cal. 4th at 36 (quotation omitted); see also
11 OneWest Bank v. Houston Cas. Co., 676 F. App’x 664, 666 (9th Cir. 2017) (claim for
12 breach of the implied covenant fails absent showing that an insurer “withheld benefits due
13 under the policy”). This is because “[a]bsent that contractual right, . . . the implied covenant
14 has nothing upon which to act as a supplement, and ‘should not be endowed with an
15 existence independent of its contractual underpinnings.’” Waller, 11 Cal. 4th at
16 36 (quoting Love v. Fire Ins. Exchange, 221 Cal. App. 3d 1136, 1153 (1990)). In other
17 words, for Plaintiff’s claim to stand, Plaintiff “must tie [Allstate’s] alleged discretionary
18 power to a specific contractual provision.” Day v. GEICO Cas. Co., No. 21-CV-02103-
19 BLF, 2022 WL 2135746, at *2 (N.D. Cal. June 14, 2022).
20 Plaintiff fails to demonstrate how any provision in her Allstate policy either confers
21 Allstate discretion to downwardly adjust premiums in response to generalized changed
22 circumstances due to a pandemic like COVID-19 or grants policyholders the right to limit
23 premium to no more than a fair rate of return. (See generally Doc. No. 131); see also Nissan
24 Fire & Marine, 210 F.3d at 1103. In fact, Plaintiff rejects that such a requirement exists.
25 (Doc. No. 131 at 22 (“The Court should reject Allstate’s argument that Plaintiff’s claim
26 must be tied to a specific provision of its auto insurance contract.”))3 The law necessitates
27
3 Plaintiff appears to mistakenly conflate the need to tie Allstate’s discretion to a specific provision of the
28
1 that the Court decline Plaintiff’s invitation. This Court has consistently recognized that it
2 is well-settled California law that courts “cannot impose substantive duties or limits on the
3 contracting parties beyond those incorporated in the specific terms of their agreement.”
4 (See Doc. No. 33 at 16 (quoting Guz, 24 Cal 4th at 349–50)); see also Openshaw v. FedEx
5 Ground Package Sys., Inc., 576 F. App’x 685, 688 (9th Cir. 2014) (holding implied
6 covenant “protects against one party interfering with another party’s contract rights; it does
7 not obligate a party to help another party” or “waive” its own rights) (emphasis in
8 original)).
9 As Allstate suggests, there are good reasons why an implied covenant claim must be
10 tied to a specific contractual provision. (Doc. No. 121-1 at 23.) The Court finds the
11 reasoning in the analogous case, Day v. GEICO Cas. Co., No. 21-CV-02103-BLF, 2022
12 WL 2135746 (N.D. Cal. June 14, 2022), persuasive. There, the Day court stated:
13 If an insured could claim that generic economic or environmental
circumstances had changed and force a reduction in their
14
insurance premium, then insurance companies could not with
15 any certainty establish insurance rates within the marketplace.
Indeed, if Day’s theory worked, GEICO too would have the
16
inherent discretion to increase her rate in the face of more
17 challenging economic or environmental circumstances for the
company. Without a specific contractual provision authorizing
18
this practice, the implied covenant of good faith and fair dealing
19 cannot impose such a duty by itself.
20
21 Day, No. 21-CV-02103-BLF, 2022 WL 2135746, at *2. The same reasoning holds true
22 here.
23
24
25 2135746, at *2, with the proposition that “breach of a specific provision of the contract is not a necessary
prerequisite” to a good faith and fair dealing claim. (See Doc. No. 131 at 22 (quoting Carma Devs. (Cal.),
26 Inc. v. Marathon Dev. California, Inc., 2 Cal. 4th 342, 372 (1992)).) Allstate does not argue that that a
claim for breach of the implied covenant of good faith and fair dealing requires Plaintiff to prove the
27 breach of a specific contract provision. (Doc. No. 133 at 9.) Accordingly, the Court agrees with Allstate
that “Plaintiff’s entire digression on this point misses the mark . . . [.]” (Id.)
28
1 Rather than tethering Allstate’s alleged discretionary power to a specific term or
2 provision in the insurance policies, Plaintiff’s evidence demonstrating Allstate’s “inherent
3 discretion” under its California auto insurance contracts to make downward premium
4 adjustments is Allstate’s “own conduct[.]” (See Doc. No. 131 at 9 (“Allstate
5 unquestionably had the discretion to adjust premiums and issue premium relief. Its own
6 conduct proves as much.”); id. at 20 (“Allstate plainly had the discretion under its
7 California auto insurance contracts to make downward premium adjustments in response
8 to the changed circumstances of the COVID-19 pandemic. Allstate’s own actions refute
9 any claim to the contrary.”); id. at 21 (“As a California state manager testified, Allstate
10 knew that it could [make downward premium adjustments] even though it ‘wasn’t an
11 obligation of a typical insurance contract.’”) (quoting Doc. No. 129-2 at 33:13-34:13).)4
12 Plaintiff’s circular, conclusory argument fails to carry the day at summary judgment
13 for an implied covenant claim. See Shirley v. Allstate Ins. Co., 392 F. Supp. 3d 1185, 1191
14 (S.D. Cal. 2019), aff’d, 825 F. App’x 472 (9th Cir. 2020) (“rhetorical questions and
15 conclusory assertions are not enough to survive summary judgment.”) That Allstate issued
16 premium relief through its SIPP program does not imply that its discretion to do so
17 originated through contract. While both Plaintiff and Allstate recognize that Allstate may
18 waive its contractual rights under California Civil Code §§ 3268 and 3513 and return
19 credits, savings, and dividends under California Insurance Code §§ 1420 and 1860, such
20 statutory authorization does not demonstrate that Allstate breached the implied covenant
21 of good faith and fair dealing, which “is based on the contractual relationship between the
22 insured and the insurer.” Waller, 11 Cal. 4th at 36 (emphasis added). Additionally, other
23 courts have recognized that insurance companies may issue premium refunds for extra-
24 contractual reasons such as “marketing or competitive purposes.” Roby v. Liberty Mut.
25
26 4 In its Reply, Allstate stipulates that “Allstate’s California manager did not testify Allstate ‘knew’ it had
such discretion.” (Doc. No. 133 at 7 n.2.) Rather, Allstate asserts that he “testified premium relief
27 ‘wasn’t an obligation’ of the contract, he ‘d[id]n’t know the specifics of how—or why [Allstate would
have been allowed to do this,’ and it had never ‘been seen within the industry.’” (Id. (citing Doc. No.
28
1 Pers. Ins. Co., No. 20 C 6832, 2022 WL 204610, at *4 (N.D. Ill. Jan. 24, 2022) (dismissing
2 implied covenant claim “[b]ecause [plaintiff] has not pointed to express terms in the policy
3 establishing that Liberty Mutual possessed the contractual discretion to lower premium
4 rates based upon change in overall driving habits” during COVID-19). Here, Allstate
5 asserts, and Plaintiff does not dispute, that Allstate initiated the SIPP program out of
6 goodwill to its customers during a health and economic crisis. (See Doc. No. 121-11 at 11,
7 19; Doc. No. 131 at 12.) Rather than having contractual discretion to issue the premium
8 refunds, CDI ordered insurers to make premium refunds in its bulletins. (See Doc. Nos.
9 121-26; 121-27; 121-28.)
10 While Plaintiff does not assert that Allstate’s discretion to downwardly adjust
11 premiums is tied to any provision in the contract, (see Doc. No. 131 at 22), for
12 completeness, the Court will address the only portion of Allstate’s insurance policy which
13 explicitly authorizes Allstate to alter a policyholder’s premium: the “Changes” provision.
14 (See Doc. No. 121-1 at 9.) The “Changes” provision includes two relevant subsections: the
15 “Premium Changes” section and the “Duty to Report Policy Changes” section. The
16 “Premium Changes” section provides:
17 The premium for each auto which Allstate agrees to insure [is]
based on information Allstate has received from you or other
18
sources. You agree to cooperate with us in determining if this
19 information is correct, if it is complete, and if it changes during
the policy period. You agree that if this information changes or
20
is incorrect or incomplete, we may adjust your premium
21 accordingly during the policy period.
22 (Doc. No. 121-4 at 25.) The “Duty to Report Policy Changes” provision provides, in part:
23 “Your policy was issued in reliance on the information you provided concerning autos and
24 persons insured by the policy.” (Id.)
25 Allstate argues that the insurance policy limits premium adjustments to only when
26 Plaintiff reports changes in information concerning autos and persons insured by the policy,
27 rather than grant Allstate discretion to alter premium due to generalized changed
28 circumstances in the environment. (Doc. No. 121-1 at 9.) Conversely, Plaintiff asserts that
1 the inclusion of “other sources” in the “Premium Changes” section reveals that the purpose
2 of the auto insurance contract as a whole is “to ensure that the premium is commensurate
3 with the risk to the insurer, which, as Allstate notes, may either increase or decrease[,]”
4 and which Plaintiff argues includes reductions in risk caused by the COVID-19 pandemic.
5 (Doc. No. 131 at 27.)
6 The Court agrees with Allstate that the insurance policy limits premium adjustments
7 to changes in Plaintiff’s information concerning autos and persons insured by the policy.
8 In interpreting a contract under California law, “[t]he whole of a contract is to be taken
9 together, so as to give effect to every part, if reasonably practicable, each clause helping to
10 interpret the other.” Cal. Civ. Code § 1641. Here, reading the entire “Changes” provision
11 in context “makes clear that [Allstate’s] discretionary power to adjust Plaintiff’s policy
12 premiums is based on changes in ‘information’ in Plaintiff’s insurance file.” Day v. GEICO
13 Cas. Co., 580 F. Supp. 3d 830, 840 (N.D. Cal. 2022). That “information” is data or
14 circumstances that a customer provides, “perhaps a new address or correction of existing
15 information—not general changed circumstances like COVID-19.” Id. The emphasis on
16 “you,” the Allstate customer, in both the “Premium Changes” and “Duty to Report Policy
17 Changes” reinforces this interpretation. (Id.) The policy states, “You agree to cooperate
18 with us in determining if this information is correct, if it is complete, and if it changes
19 during the policy period.” (Doc. No. 121-4 at 25 (emphasis added).) “You agree that if this
20 information changes or is incorrect or incomplete, we may adjust your premium
21 accordingly during the policy period.” (Id. (emphasis added).) “You agree to cooperate
22 with us in determining if this information is correct . . . [.]” (Id. (emphasis added).) Because
23 “[t]he general circumstances of the COVID-19 pandemic are not ‘information’ that would
24 be provided by Plaintiff to [Allstate], as the ‘Changes’ section contemplates, . . . [Allstate’s]
25 discretionary power to adjust premiums under that provision is not triggered.” See Day v.
26 GEICO Cas. Co., 580 F. Supp. 3d 830, 840 (N.D. Cal. 2022) (dismissing implied covenant
27 of good faith and fair dealing claim brought under similar GEICO auto insurance policy);
28 see also Boobuli’s LLC v. State Farm Gen. Ins. Co., 712 F. Supp. 3d 1300, 1317–18 (N.D.
1 Cal. 2024) (granting summary judgment on implied covenant claim where “changes”
2 provision “simply provides discretion for adjustments, and only in the case of changed
3 circumstances for the insured party”); see also Siegal v. GEICO Cas. Co., 523 F. Supp. 3d
4 1032, 1040 (N.D. Ill. 2021) (dismissing breach of implied covenant claim under Illinois
5 law based on “Changes” provision in GEICO insurance policy because the “Changes”
6 provision “clearly relates to plaintiff’s specific information underlying her policy[,]” not
7 generalized changed circumstances like a pandemic).
8 Because no evidence has been proffered showing that Plaintiff’s Allstate policies
9 contained an express provision providing Allstate the discretion to reduce premium due to
10 generalized changed circumstances or granting a right to policyholders to limit premium
11 to a fair rate of return, Allstate is entitled to summary judgment of Plaintiff’s implied
12 covenant claim. See OneWest Bank, 676 F. App’x at 666 (“Because [insured] cannot
13 establish that [insurer] has withheld benefits due under the policy, its implied-covenant
14 claim must fail as a matter of law.”)
15 2. Implied Covenant of Good Faith & Fair Dealing—Reasonable
16 Withholding Analysis
17 Because Plaintiff does not prevail on demonstrating that Allstate withheld benefits
18 due under Allstate’s PPA policy, the Court finds that Allstate is entitled to summary
19 judgment on this first ground. Accordingly, the analysis of whether any withholding by
20 Allstate was reasonable is rendered moot.
21 * * *
22 The Court has reviewed all evidence submitted in support of, and in opposition to,
23 Defendant’s Motion for Summary Judgment. (Doc. Nos. 121; 131; 133.) To the extent this
24 evidence has not been discussed above or is not duplicative of the evidence submitted in
25 relation to Allstate’s Motion for Summary Judgment, the Court finds it does not alter the
26 conclusions reached above. For the reasons discussed above, Allstate is entitled to summary
27 judgment as to the breach of the implied covenant of good faith and fair dealing claim.
28 Accordingly, Allstate’s Motion for Summary Judgment is GRANTED.
1 || VII. CONCLUSION
2 Based on the foregoing, the Court GRANTS Allstate’s motion for □□□□□□
3 ||judgment. The Clerk of Court is ORDERED TO CLOSE the case.
4 IT IS SO ORDERED.
5
© Dated: June 25, 2025 C Lo Avex □
7 Hon, Anthony J. attaglia
8 United States District Judge
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
20