The opinion
Filed 5/27/26; Certified for Publication 6/22/26 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION ONE
BRIAN GUTHRIE, et al.,
Plaintiffs and Appellants,
v. A171526
TRANSAMERICA LIFE
INSURANCE COMPANY, (Alameda County
Super. Ct. No. RG21098977)
Defendant and Respondent.
Plaintiffs and appellants Brian Guthrie and Grady Lee Harris, Jr.
appeal from an order denying their motion for class certification of certain
claims in their action against Transamerica Life Insurance Company
(Transamerica). In their complaint, plaintiffs allege Transamerica violated
all three prongs of the unfair competition law (Bus. & Prof. Code, § 17200 et
seq. (UCL))—unlawful, unfair and fraudulent business practices 1—in
connection with its sale of a life insurance product referred to as “Trendsetter
LB.” They sought class certification of claims based solely on common
“Each of these three prongs—unlawful, unfair, or fraudulent—
1
implicates a different legal standard, although a single practice may
simultaneously violate more than one prong of the UCL.” (Davis-Miller v.
Automobile Club of Southern California (2011) 201 Cal.App.4th 106, 110,
fn. 2.)
1
language in the policy. On appeal, plaintiffs complain the trial court relied
on improper criteria and erroneous legal assumptions in denying
certification. We affirm.
BACKGROUND
The Transamerica Life Insurance Products at Issue
Transamerica offers two term life insurance products within its
“Trendsetter” series. Trendsetter Super, the more basic product, has been
sold by Transamerica for decades, during which time the company has issued
hundreds of thousands of policies. The policyholder pays premiums for a
specific number of years and, if the insured dies during that term, the
policyholder receives a death benefit in the amount set forth in the policy.
Trendsetter Super also includes a type of “living benefit[]” feature that allows
the insured to access portions of the death benefit prior to death in the event
of a qualifying terminal illness. This benefit, generally referred to as an
“accelerated death benefit,” is a standard feature of many life insurance
policies. 2
Beginning in 2012, Transamerica began offering a second Trendsetter
product—Trendsetter LB. Like Trendsetter Super, the new LB product
provides a fixed death benefit and an accelerated death benefit for qualifying
terminal illnesses. In addition, the Trendsetter LB product provides two
other accelerated death benefits, for qualifying chronic and critical illnesses.
Transamerica developed Trendsetter LB as a “bundled” product, with the
2 We use the terminology “accelerated death benefit,” rather than
“living benefit,” because the policy language uses the terminology
“accelerated death benefits,” as do the governing provisions of the Insurance
Code. (Ins. Code, § 10295 et seq.) All further statutory references are to the
Insurance Code unless otherwise indicated.
2
three accelerated death benefits included through one endorsement (for
qualifying terminal illness) and two “riders” (for chronic and critical illness). 3
As a bundled product, the Trendsetter LB policy is sold at a single
premium rate. The only additional charge an insured may incur is an
administrative fee if the insured exercises the chronic, critical, or terminal
accelerated death benefits. A Trendsetter LB policy owner may also add
other, optional riders for an additional premium cost, such as a “Waiver of
Premium Rider, Accident Indemnity Rider, Children’s Insurance Rider, or
Monthly Disability Income Rider.” Plaintiffs were offered but declined, any
additional optional riders.
Trendsetter LB policies contain, at the outset of the policy, several
“ ‘policy data pages’ ” customized for each owner. 4
3 According to the National Association of Insurance Commissioners,
“An endorsement, also known as a rider, adds, deletes, excludes or changes
insurance coverage. An endorsement/rider can also be used to increase
standard limits of coverage and take precedence over the original agreement
or policy.” (NAIC, What is an Insurance Endorsement or Rider? (Aug. 22,
2019) <https://content.naic.org/article/consumer-insight-what-insurance-
endorsement-or-rider> [as of May 27, 2026]; see, e.g., §10295.8, subd. (a)
[providing for 30-day cancellation period and making no substantive
distinction between riders and endorsements; “If the accelerated death
benefit is purchased as an endorsement or rider at the same time as the base
life insurance policy, then the endorsement or rider may be returned within
30 days.”].)
4 The Insurance Code provisions governing policies that include
accelerated death benefits for critical and chronic illness require that such
policies be reviewed and approved by the State Insurance Commissioner.
(§ 10295.3, subd. (a); see § 10295.4, subd. (a) [filings with the commissioner
must include a “description of the accelerated death benefit, including the
effects of payment of the accelerated death benefit on all life insurance
benefits and any subsequent accelerated death benefits. . . .”].)
3
The first third or so of the first policy data page contains personal
identifying information and sets forth the amount of the death benefit.
The next third or so of the first page, set off from the first third by a
line of dashes, reads in plaintiffs’ policies as follows:
THE CHARGE FOR ANY ADDITIONAL BENEFITS WHICH ARE PROVIDED BY RIDER IS
SHOWN BELOW. ONLY A BRIEF DESCRIPTION IS GIVEN. THE COMPLETE PROVISIONS
ARE INCLUDED IN THE RIDER.
RIDER NUMBER SCHEDULE OF ADDITIONAL BENEFITS ANNUAL PREMIUM
NONE NO CHARGE
Immediately below this schedule is another line of dashes, setting off
the final third or so of the first page. This section summarizes various
payment options (e.g., annual, quarterly, monthly) and begins with the
following statement:
TOTAL ANNUAL PREMIUM ON POLICY DATE $2,895.00* 5
*THE “ANNUAL PREMIUM” AND “TOTAL ANNUAL PREMIUM ON POLICY DATE” LISTED ON
THIS PAGE ARE THE AMOUNT YOU WILL PAY PER YEAR ONLY IF YOU CHOOSE THE
ANNUAL PREMIUM PAYMENT MODE. THE AMOUNT YOU PAY PER YEAR MAY BE HIGHER
IF YOU PAY PURSUANT TO ANY OTHER PAYMENT MODE.
INITIAL ANNUAL PREMIUM FOR POLICY EXCLUDING RIDERS: $1,940.00
RATED EXTRA POLICY PREMIUM: $955.00
The next data page contains a yearly premium schedule that
commences as follows:
SCHEDULE OF NON-GUARANTEED PREMIUMS
–ANNUAL PREMIUMS–
POLICY YEAR POLICY EXCLUDING
BEGINNING RIDERS
May 18 2018 $2,895
May 18 2019 2,895
5 The annual premium amount shown is from plaintiff Guthrie’s policy.
The amount shown in the policies of other insureds, including plaintiff
Harris’s policy, differ depending on the death benefit amount and other
features of the particular policy.
4
The first entry on this schedule is the “ ‘total annual premium on policy
date’ ” identified on the first page. (Capitalization omitted.) The entries on
this schedule continue through the term of the policy.
The data pages in both plaintiffs’ policies are followed by seven pages of
form contract language. These pages, in turn, are followed by the two
accelerated death benefit riders—the “CHRONIC ILLNESS ACCELERATED
DEATH BENEFIT RIDER” and the “CRITICAL ILLNESS ACCELERATED
DEATH BENEFIT RIDER”—and the “TERMINAL ILLNESS
ACCELERATED DEATH BENEFIT ENDORSEMENT.” These
riders/endorsements all state at the outset: “We have issued this rider
[endorsement] as part of the policy to which it is attached. Except as
otherwise specifically set forth below, it is subject to all of the terms of the
policy.” The chronic and critical illness riders further provide: “We have
issued this rider in consideration of the application and payment of the
premiums for the policy.” (Italics added.)
The application forms completed by the insured are also appended to,
and made part of, the Trendsetter LB policy. One of these forms specifically
asks the applicant, as item “5,” to identify “Additional Benefits by Rider: [ ]
Waiver of Premium/Waiver Provision [ ] Accident Indemnity $___ [ ] Other
____, $____.” (Italics added.) Plaintiffs did not check any box, nor did they
make any other notation in item 5.
The application forms additionally show plaintiffs procured their
policies through insurance agents. 6
6 The governing statutes include requirements for the training and
education of agents selling policies with accelerated death benefits and
provide, in part: “Insurers shall ensure that agents offering, marketing, or
selling accelerated death benefits on their behalf are able to describe the
differences between benefits provided under an accelerated death benefit and
5
Allegations in the Complaint
Plaintiffs filed suit in May 2021, on behalf of themselves and an alleged
class of other Californians to whom Transamerica issued Trendsetter LB
policies from that date to the present. Some six months later, plaintiffs filed
a first amended complaint, which is the operative complaint (hereinafter
“complaint”).
In their complaint, plaintiffs allege the Trendsetter LB policy language
promised the premium for the policy was “ ‘EXCLUDING RIDERS’ ” and
therefore the additional accelerated death benefits for chronic illness and
critical illness—included automatically in the Trendsetter LB policy—were
being included at “ ‘NO CHARGE’ ” in the policies’ “ ‘TOTAL ANNUAL
PREMIUM.’ ” Plaintiffs claim these promises “misleadingly portrayed” the
Trendsetter LB policy as including the accelerated death benefit riders “for
no premium charge or other cost.” In other words, according to plaintiffs,
“these promises falsely portrayed the Trendsetter LB policy as costing the
same as a Trendsetter level premium term policy without the Riders [i.e., as
costing the same as Trendsetter Super], which simply was not true.” This is
so, claim plaintiffs, because Transamerica assertedly admitted during
discovery that the total annual premium charged for their Trendsetter LB
policies includes charges for the three automatically included accelerated
death benefit endorsement and riders.
benefits provided under long-term care insurance,” including: “(1) The
difference between the benefits afforded to an insured through an accelerated
death benefit and a long-term care insurance policy or rider. [¶] (2) The
differences between benefit eligibility criteria. [¶] . . . [¶] (4) The benefits
under the accelerated death benefit or long-term care insurance if benefits
are never needed. [¶] (5) The benefits under the accelerated death benefit or
long-term insurance if benefits are needed. [¶] . . . [¶] (8) Income and death
benefit considerations.” (§ 10295.12, subd. (a)(1), (2), (4), (5), (8).)
6
In other words, plaintiffs make no claim they did not receive the
benefits for which they paid, i.e., term life insurance and the chronic, critical,
and terminal illness accelerated death benefits. Rather, they complain that
the premium set forth in the Trendsetter LB policy was not broken down to
show separate charges for each of the four constituent parts of the bundled
policy (the term life insurance and the accelerated death benefit endorsement
and riders). They maintain this somehow caused consumers not to
understand they could acquire lesser coverage—i.e., term life and only the
terminal illness accelerated death benefit—at a lesser cost under the
Trendsetter Super policy.
In their complaint, plaintiffs characterize the Trendsetter Super
product as offering “the same basic Trendsetter Series level premium term
life insurance coverage without all of the ‘Riders’ for a significantly lower
level premium.” They allege Transamerica had a duty to disclose this
assertedly “material information” about its premium charge in the bundled
Trendsetter LB product (which automatically includes the three accelerated
death benefits) and the basic Trendsetter Super policy (which has only one of
these accelerated death benefits), as part of its obligations under the
Insurance Code. According to plaintiffs, Transamerica’s conduct also
frustrates the purpose and intent of section 10127.9—the 30-day free look
statute which allows policy holders to review and consider returning their
policies during that timeframe for a full refund—because policyholders had
no reason to carefully consider the accelerated death benefit riders they
assertedly thought they were getting for free and also had no reason to ask if
Transamerica provided the same basic Trendsetter term life insurance
(without the included riders) at a lower premium.
7
Transamerica’s asserted failure to “correct these false and misleading
statements by disclosing the premium charge for the Riders or the cost of a
comparable Trendsetter Super policy was,” claim plaintiffs, “unlawful, unfair
and deceptive” under the UCL. They seek restitution, suggesting the amount
“may be determined by calculating the amount of charges in the Trendsetter
LB policy premium Plaintiffs and the Class paid for the Riders or,
alternatively, calculating the amount of extra premium Plaintiffs and the
Class paid during the level premium period over that which they would have
paid for a Trendsetter Super policy with the same basic term insurance
coverage (plus accounting for any premium charge for the [terminal illness]
coverage in the Trendsetter Super policy).” In short, plaintiffs propose a
restitution model that effectively makes the premium for the Trendsetter LB
policy with greater benefits, the same as the premium for the Trendsetter
Super policy with fewer benefits—the rationale being consumers were
allegedly under the impression the additional accelerated death benefits
provided by the Trendsetter LB policy were free.
Motion for Class Certification
Plaintiffs subsequently filed a motion for class certification, seeking to
certify a class of “[a]ll persons in the state of California who, from May 11,
2017 through the date the Class is certified, paid for, were issued, and did not
cancel within 30 days after receipt a Transamerica Trendsetter LB individual
term life insurance policy.” Such a class should be certified, plaintiffs
maintained, because: (1) they had standing to pursue the UCL claims pleaded
in the operative complaint; (2) the proposed class was ascertainable and
sufficiently numerous; (3) there was a well-defined community of interest
because common questions of law and fact predominated, their claims were
8
typical of the class, and they would adequately represent the class; and (4)
proceeding as a class would be superior to the alternatives.
The crux of plaintiffs’ claims as to which they sought class certification
is considerably narrower than the claims alleged in their complaint.
Specifically, they sought certification of claims that the Trendsetter LB policy
language, in and of itself, is misleading, pointing to the language on the data
pages stating “THE ‘ANNUAL PREMIUM’ CHARGED” for the “ ‘POLICY
EXCLUDING RIDERS’ ” and asserting the premium, in fact, includes within
it a charge for the additional accelerated death benefit riders. According to
plaintiffs, this asserted misrepresentation runs afoul of section 332—which
requires parties to insurance contracts to “communicate to the other, in good
faith, all facts within [the party’s] knowledge which are or which [they]
believe[] to be material to the contract and as to which [they] make no
warranty, and which the other has not the means of ascertaining”—and
sections 330 and 331, which speak to intentional or unintentional
concealment of such facts. Plaintiffs further assert this misrepresentation
continued during the statutorily required “free look” period set forth in
sections 10127.9 and 10295.8, when policyholders are permitted to examine
the complete terms of their policy with the option of returning it for a refund.
As a result, plaintiffs claim they and other members of the class purportedly
“unknowingly paid premiums for the Riders,” which if “ ‘EXCLUDED’ ” from
the “ ‘ANNUAL PREMIUM’ ” as represented in their policies would have
resulted in a lower “ ‘ANNUAL PREMIUM’ ” than they were charged.
Thus, unlike their complaint, plaintiffs’ certification motion
encompassed no claims based on comparing the Trendsetter LB product with
the Trendsetter Super product.
9
In their motion, plaintiffs acknowledged Transamerica’s position—that
“ ‘there is no misrepresentation in the Policy Data pages of Plaintiffs’
Trendsetter LB Policies’ ” because Trendsetter LB is a bundled product,
“ ‘meaning it includes both a term life insurance benefit plus Chronic Illness,
Critical Illness, and Terminal Illness benefits which are conferred by riders
automatically included with the term life insurance at issuance,’ ” and that
plaintiffs and other putative class members knew they were purchasing a
bundled product that automatically included the three accelerated death
benefits along with the term death benefit.
Plaintiffs maintained, however, that knowing the accelerated death
benefits are automatically included in the bundled product is different from
knowing the annual premium includes a charge for these riders. In support
of this assertion, they submitted a declaration from their insurance expert
opining there would be no reason for policyholders not to take Transamerica’s
“ ‘POLICY EXCLUDING RIDERS’ representation at face value.”
Plaintiffs further claimed Transamerica had produced nothing in
discovery indicating “Plaintiffs or any other Trendsetter LB policyholder
would have been told that there was a premium charge for the Riders,
whether ‘inherent’ to the premium they were charged or not.” And even if
such information had been provided, that fact, they asserted, “would not
defeat Plaintiffs’ claims.” This is so, argued plaintiffs, because their claims
“are premised on Transamerica’s systemic misrepresentation and breach of
its unambiguous ‘POLICY EXCLUDING RIDERS’ provision in its standard
form Trendsetter LB policies,” and where “the policy language is clear and
explicit, it governs.” (Boldface & italics omitted.) “Since Plaintiffs’ claims
arise from unambiguous contract language, there will be no need for the
Court to go beyond the terms of the Trendsetter LB [policy] to resolve the
10
merits of Plaintiffs’ claims. Instead, they can be resolved based upon the
common language in the Trendsetter LB policies, yielding a common result
for the Class.”
Opposition to Certification Motion
In its opposition to the certification motion, Transamerica maintained
plaintiffs’ claims that it misrepresented and omitted material facts about its
Trendsetter LB product were not suitable for class certification because it
would “necessarily require individualized proof to assess what information
[Transamerica] and third-party brokers and agents provided to each
policyholder.” Transamerica further asserted the contractual language
plaintiffs challenge is true and correct: It “applies ‘NO CHARGE’ for any
‘ADDITIONAL BENEFITS WHICH ARE PROVIDED BY RIDER.’ The
statement ‘NO CHARGE’ clearly appears next to the word ‘NONE’—it does
not, for example, state ‘Chronic illness . . . No charge.’ ” Moreover, the
column titled “ ‘POLICY EXCLUDING RIDERS’ ” is consistent and accurate
because it includes only the quoted rates for the base term LB policy, which
excludes additional, optional riders. In other words, from Transamerica’s
perspective, the policy language adequately distinguishes between the
automatically included accelerated death benefit riders for which there is no
additional annual premium charge, and other optional riders for which there
are additional premium charges, which would be shown on the schedule on
the first page of the data pages.
Transamerica also disagreed with plaintiffs’ assertion that it had
conceded during discovery that there is a separate charge for the accelerated
death benefit riders included within the Trendsetter LB policy. What the
company actually said was that “any ‘charges’ for living benefits coverage
‘were inherent in the design of the Trendsetter LB product and fully
11
integrated with the total premium amount applicable to Trendsetter LB
policies.’ ” Transamerica would never agree “there exist discrete, calculable
‘charges’ for each living benefits rider”; indeed, the actuary involved in
designing the Trendsetter LB product “cannot even conceive of a way to
calculate separate ‘charges’ for each bundled benefit.” As Transamerica saw
it, plaintiffs’ real grievance was that they should have been told about the
less expensive Trendsetter Super term life product which provides lesser
benefits.
Transamerica additionally relied on an expert declaration from an
economist (Merrill) who opined that consumers would be able to make “an
informed economic choice” when purchasing the Trendsetter LB product.
Plaintiffs filed objections to the Merrill declaration, along with a
rebuttal declaration from another economist (Smith). Transamerica, in turn,
challenged plaintiffs’ objections to its expert’s declaration and objected to
their rebuttal declaration.
Denial of Certification Motion
Initial Ruling on the Motion
The trial court denied the motion for class certification in part and
granted it in part in August 2024. Preliminarily, it concluded the proposed
class was sufficiently numerous, noting Transamerica had stipulated that,
since May 11, 2017, “it has issued more than 38,000 Trendsetter LB policies
in California.” The court also found the class to be ascertainable based on
Transamerica’s stipulation it could identify the policy owners for each such
Trendsetter LB policy, along with all necessary facts related to that policy.
With respect to the scope of the posited class claims, the court—based
on plaintiffs’ repeated assertions—ruled they were based solely on language
in Transamerica’s Trendsetter LB policy. It went on to state that permitting
12
a plaintiff to focus a claim so narrowly in an effort to prevent a defendant
from presenting its defenses to the claims alleged in the operative pleading is
inconsistent with due process. Here, Transamerica was entitled to defend
against the claims alleged against it in the complaint by presenting evidence
at trial about its other insurance products and marketing materials, along
with any additional evidence that might provide context for the policy
language at issue.
Turning next to the issue of predominance, the court first considered
plaintiffs’ “unlawful” UCL claim. This claim was premised on sections 330
through 332 related to concealment, which is defined as “[n]eglect to
communicate that which a party knows, and ought to communicate. . . .”
(§ 330.) Pursuant to section 332, “[e]ach party to a contract of insurance shall
communicate to the other, in good faith, all facts within his knowledge which
are or which he believes to be material to the contract and as to which he
makes no warranty, and which the other has not the means of ascertaining.”
The trial court concluded common issues did not predominate as to this claim
because it “necessarily concerns not just the standard-form Trendsetter LB
policy text but also all the other information that was conveyed to purchasers
of the Trendsetter LB policies, including marketing materials and oral
representations by agents. The marketing materials and oral
representations communicated to each member of the putative class would be
different, which presents individual issues that cannot be resolved on a
common classwide basis.”
The court next rejected certification of plaintiffs’ “unfair” UCL claim to
the extent it was based on these same statutory provisions. In doing so the
court applied the unfairness test this district has adopted in the consumer
context. This test requires that “ ‘the allegedly unfair business practice be
13
“tethered” to a legislatively declared policy or has some actual or threatened
impact on competition.’ ” To the extent the plaintiffs’ unfair claim was
tethered to sections 330 through 332, the court concluded common issues did
not predominate for the same reasons they did not for purposes of their
“unlawful” claim—i.e., resolution of whether unfair concealment occurred
would implicate, in addition to the relevant policy language, information
conveyed to individual purchasers.
As for the plaintiffs’ “fraudulent” UCL claim, the court observed it
involved whether the policy language relied on by plaintiffs is “likely to
deceive” a reasonable consumer, and this was analogous to their “unlawful”
concealment claim. Common issues did not predominate for the same
reasons.
In contrast, the court found common issues did predominate with
respect to plaintiffs’ unlawful and unfair claims based on section 10127.9,
which “requires life insurance policies to include a notice that ‘the policy may
be returned by the owner for cancellation’ not less than 10 and not more than
30 days after receipt, and that in such cases, all premiums paid will be
refunded.” The court concluded the issue of whether Transamerica’s
standard policy language included the required notice was common to all
class members. However, while the court certified the section 10127.9
claims, it observed the operative complaint “appears to allege” that
Transamerica had complied with this statute.
Finally, with respect to typicality, while the court identified concerns as
to plaintiffs’ fraud and concealment claims, which it did not certify, it found
plaintiffs “sufficiently typical” for purposes of the certified claim under
section 10127.9. It also concluded plaintiffs were “sufficiently adequate” to
represent the class with respect to the certified claims.
14
First Clarification of Certification Order
The following month, plaintiffs sought an ex parte order clarifying the
trial court’s certification ruling. Specifically, plaintiffs asked the court to
clarify that their unlawful and unfair UCL claims based on section 10127.9
encompassed their allegation that the asserted misrepresentations in the
Trendsetter LB policy language denied “policyholders the ability to
understand and examine the true terms of their policies,” thereby violating
“the purpose, intent and spirit of the free look statute.” While plaintiffs
thought the order was already clear on this point, Transamerica was taking
the position the certification ruling limited their section 10127.9 claim to
whether the company had printed the requisite statutory notice in each
Trendsetter LB policy and/or failed to provide a requested refund.
Transamerica opposed the clarification request, asserting the trial
court “plainly declined” to certify plaintiffs’ claims to the extent premised on
alleged concealments or misrepresentations by Transamerica regarding how
its Trendsetter LB policies are priced. Rather, as the court had explained,
such claims “necessarily involve individualized evidence regarding the
information communicated to each class member, so common issues would
not predominate.”
Plaintiffs responded that “if Transamerica’s interpretation of the Order
is correct, the Court not only certified a claim Plaintiffs never brought and
have no intention of pursuing, but it certified a claim which all parties—
including Plaintiffs—agree would be utterly meritless and self-evidently dead
on arrival because the notice was printed in the LB policies and there is no
allegation (let alone any evidence) a requested refund was not paid.”
The trial court agreed with Transamerica that its certification of the
plaintiffs’ unlawful and unfair UCL claims predicated on section 10127.9
15
were “limited to whether defendant had a policy or practice of failing to
provide the required notice.”
Second Clarification of Certification Order
Plaintiffs then sought an ex parte order amending the certification
ruling to deny their class certification motion in its entirety. Plaintiffs stated
the one claim the court had certified—alleging Transamerica had failed to
provide the notice required under section 10127.9—was not one they had
brought or could bring in good faith.
The court amended its certification ruling as requested, noting its now
complete denial of class certification was based, collectively, on its two prior
orders and plaintiffs’ representation they never intended to bring a claim for
failure to provide the statutory notice required under section 10127.9.
DISCUSSION
Class Certification Overview
Legal Framework
“ ‘ “Courts long have acknowledged the importance of class actions as a
means to prevent a failure of justice in our judicial system. [Citations.] ‘ “By
establishing a technique whereby the claims of many individuals can be
resolved at the same time, the class suit both eliminates the possibility of
repetitious litigation and provides small claimants with a method of
obtaining redress. . . .” ’ [Citation.] Generally, a class suit is appropriate
‘when numerous parties suffer injury of insufficient size to warrant
individual action and when denial of class relief would result in unjust
advantage to the wrongdoer.’ [Citations.] But because group action also has
the potential to create injustice, trial courts are required to ‘ “carefully weigh
respective benefits and burdens and to allow maintenance of the class action
only where substantial benefits accrue both to litigants and the courts.” ’ ” ’ ”
16
(Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830,
843 (Kaldenbach).)
“ ‘ “Code of Civil Procedure section 382 authorizes class suits in
California when ‘ “the question is one of a common or general interest, of
many persons, or when the parties are numerous, and it is impracticable to
bring them all before the court.” To obtain certification, a party must
establish the existence of both an ascertainable class and a well-defined
community of interest among the class members. [Citations.] The
community of interest requirement involves three factors: “(1) predominant
common questions of law or fact; (2) class representatives with claims or
defenses typical of the class; and (3) class representatives who can adequately
represent the class.” ’ ” ’ ” (Fairbanks v. Farmers New World Life Ins. Co.
(2011) 197 Cal.App.4th 544, 561 (Fairbanks), quoting Kaldenbach, supra,
178 Cal.App.4th at p. 843.)
Here, we are largely concerned with a single aspect of the trial court’s
certification decision—whether questions of common or general interest
predominate. “The ‘ultimate question’ the element of predominance presents
is whether ‘the issues which may be jointly tried, when compared with those
requiring separate adjudication, are so numerous or substantial that the
maintenance of a class action would be advantageous to the judicial process
and to the litigants.’ [Citations.] The answer hinges on ‘whether the theory
of recovery advanced by the proponents of certification is, as an analytical
matter, likely to prove amenable to class treatment.’ [Citation.] A court
must examine the allegations of the complaint and supporting declarations
[citation] and consider whether the legal and factual issues they present are
such that their resolution in a single class proceeding would be both desirable
and feasible. ‘As a general rule if the defendant’s liability can be determined
17
by facts common to all members of the class, a class will be certified even if
the members must individually prove their damages.’ ” (Brinker Restaurant
Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021–1022, fn. omitted
(Brinker); see Knapp v. AT&T Wireless Services, Inc. (2011) 195 Cal.App.4th
932, 941 (Knapp) [“Commonality as a general rule depends on whether the
defendant’s liability can be determined by issues common to all class
members.”].)
“ ‘The burden remains with the proponent of class certification to show
common issues predominate.’ ” (Apple Inc. v. Superior Court (2018)
19 Cal.App.5th 1101, 1116 (Apple).) It bears repeating that, “ ‘when
assessing whether the plaintiff has satisfied that burden, the evidence must
be evaluated under the prism of the plaintiff’s theory of recovery.’ [Citation.]
A plaintiff’s theory of recovery, moreover, must conform to the legal elements
of the causes of action in its complaint, and it is those elements which must
be considered to determine whether common issues predominate. [Citations.]
[¶] ‘Although predominance of common issues is often a major factor in a
certification analysis, it is not the only consideration. In certifying a class
action, the court must also conclude that litigation of individual issues,
including those arising from affirmative defenses, can be managed fairly and
efficiently. [Citation.] “[W]hether in a given case affirmative defenses should
lead a court to approve or reject certification will hinge on the manageability
of any individual issues.” ’ ” (Ibid.)
Generally, “ ‘[t]he certification question is “essentially a procedural one
that does not ask whether an action is legally or factually meritorious.” ’
[Citations.] A class certification motion is not a license for a free-floating
inquiry into the validity of the complaint’s allegations; rather, resolution of
disputes over the merits of a case generally must be postponed until after
18
class certification has been decided [citation], with the court assuming for
purposes of the certification motion that any claims have merit [citation].”
(Brinker, supra, 53 Cal.4th at p. 1023.)
Sometimes, however, “ ‘issues affecting the merits of a case may be
enmeshed with class action requirements.’ ” (Brinker, supra, 53 Cal.4th at
p. 1023.) “When evidence or legal issues germane to the certification
question bear as well on aspects of the merits, a court may properly evaluate
them.” (Id. at pp. 1023–1024.) “The rule is that a court may ‘consider[] how
various claims and defenses relate and may affect the course of the litigation’
even though such ‘considerations . . . may overlap the case’s merits.’ ” (Id. at
p. 1024.)
Standard of Review
“ ‘[T]he trial court has great discretion with regard to class certification,
and its decision will not be disturbed on appeal if it is supported by
substantial evidence, unless it was based upon improper criteria or erroneous
legal assumptions. [Citations.] [¶] Ordinarily, appellate review is not
concerned with the trial court’s reasoning but only with whether the result
was correct or incorrect. [Citation.] But on appeal from the denial of class
certification, we review the reasons given by the trial court for denial of class
certification, and ignore any unexpressed grounds that might support denial.
[Citation.] We may not reverse, however, simply because some of the court’s
reasoning was faulty, so long as any of the stated reasons are sufficient to
justify the order.’ ” (Fairbanks, supra, 197 Cal.App.4th at p. 561, quoting
Kaldenbach, supra, 178 Cal.App.4th at pp. 843–844.)
Predominance, however, “ ‘is a factual question; accordingly, the trial
court’s finding that common issues predominate generally is reviewed for
substantial evidence. [Citation.] We must “[p]resum[e] in favor of the
19
certification order . . . the existence of every fact the trial court could
reasonably deduce from the record.” ’ ” (Apple, supra, 19 Cal.App.5th at
p. 1117.)
No Abuse of Discretion in Denying Class Certification
Plaintiffs’ argument as to why class certification should have been
granted can be summed up as follows: Because the claims as to which
certification was sought are predicated solely on assertedly unambiguous
form language in the Trendsetter LB policy, common issues necessarily exist
and predominate, as all that needs to be considered in determining liability is
the policy language. Plaintiffs’ view of their claims, even as pared down for
certification purposes, is, as the trial court ruled, too truncated.
To begin with, the policy language on which plaintiffs focus is not,
contrary to what they assert, susceptible to only one reasonable
interpretation, specifically theirs. While plaintiffs focus solely on the
language they have identified on the first two data pages, it is fundamental
that “we read a contract as a whole in order to ‘give effect to every part, if
reasonably practicable, each clause helping to interpret the other.’ (Civ.
Code, § 1641.)” (Van Ness v. Blue Cross of California (2001) 87 Cal.App.4th
364, 372.) In other words, “we do not find contract language ambiguous in
the abstract. Rather, we construe contractual language in the context of the
instrument as a whole, and under the circumstances of the case.” (Id. at
p. 373.)
There are numerous other provisions of the Trendsetter LB policy that
pertain to riders, none of which plaintiffs have acknowledged. For example,
the pages of form contractual provisions following the data pages include a
section titled, “PREMIUMS.” A paragraph therein, titled, “Schedules of
Premiums” states: “Premiums for this policy (excluding premiums for certain
20
Riders) will remain level until the First Premium Increase Date shown in the
Policy Data.” (Italics added.)
These pages are followed by the accelerated death benefit riders and
endorsement—the “CHRONIC ILLNESS ACCELERATED DEATH
BENEFIT RIDER,” the “CRITICAL ILLNESS ACCELERATED DEATH
BENEFIT RIDER,” and the “TERMINAL ILLNESS ACCELERATED
DEATH BENEFIT ENDORSEMENT.” Each states at the outset: “We have
issued this rider [endorsement] as part of the policy to which it is attached.
Except as otherwise specifically set forth below, it is subject to all of the
terms of the policy.” (Italics added.) The chronic and critical illness riders
further provide: “We have issued this rider in consideration of the
application and payment of the premiums for the policy.” (Italics added.)
The three riders are followed by the executed application forms, which
are included in, and form part of, the policy. One of these forms specifically
asks the applicant, as item “5,” to identify “Additional Benefits by Rider: [ ]
Waiver of Premium/Waiver Provision [ ] Accident Indemnity $___ [ ] Other
____, $____.” (Italics added.) Notably, the “Additional Benefits by Rider”
language in the application is identical to the language that appears on the
first data page that plaintiffs claim misleadingly states there is no charge for
the accelerated death benefit riders automatically included in the policy. The
application identifies only other optional benefits provided by rider, and if
any such additional rider is added, the application further identifies the
premium for that rider. As we have recited, the plaintiffs declined to
purchase any additional benefit riders and therefore no box was checked, nor
was any notation made, on item 5 of their applications.
In short, when considered in context and in light of all the other
provisions of the Trendsetter LB policy, the language on the data pages on
21
which plaintiffs rely is—on its face—ambiguous. That language certainly is
not the outright misstatement plaintiffs claim; at best they have offered up
an arguably plausible reading of the language. On the other hand, the
language does not clearly say what Transamerica says it means either,
although other provisions support the company’s reading of the language.
As we have recited, plaintiffs argued in their motion that certification
was proper because their claims “are premised on Transamerica’s systemic
misrepresentation and breach of its unambiguous ‘POLICY EXCLUDING
RIDERS’ provision in its standard form Trendsetter LB policies,” (italics
added) and “[s]ince Plaintiffs’ claims arise from unambiguous contract
language, there will be no need for the Court to go beyond the terms of the
Trendsetter LB [policy] to resolve the merits of Plaintiffs’ claims. Instead,
they can be resolved based upon the common language in the Trendsetter LB
policies, yielding a common result for the Class.” (Italics added.) Thus,
plaintiffs effectively conceded that if the language were ambiguous,
certification would be inappropriate.
Given the significance to plaintiffs’ certification motion of whether the
policy language on which they rely is unambiguous or ambiguous, it is, under
Brinker, an appropriate merits-related issue for us to address. (See Brinker,
supra, 53 Cal.4th at pp. 1023–1024 [“When evidence or legal issues germane
to the certification question bear as well on aspects of the merits, a court may
properly evaluate them.”]; id. at p. 1024 [“whether an element may be
established collectively or only individually, plaintiff by plaintiff, can turn on
the precise nature of the element and require resolution of disputed legal or
factual issues affecting the merits”].)
Even if we were inclined not to address plaintiffs’ predicate assertion
that the policy language on which they rely is unambiguous, we would
22
conclude that the trial court did not abuse its discretion in denying their
certification motion.
The trial court concluded the claims as to which certification was
sought “necessarily” concerned not just the form language on which plaintiffs
rely, but also other information conveyed to purchasers of the policies,
including marketing materials and oral representations by agents. Thus, as
the court saw it, the claims entailed numerous individual issues that could
not be resolved on a common basis for all class members. In reaching this
conclusion, the court relied on Kaldenbach, supra, 178 Cal.App.4th 830 and
Fairbanks, supra, 197 Cal.App.4th 544.
In Kaldenbach, supra, 178 Cal.App.4th 830, the court considered UCL
class claims pertaining to cash value life insurance in the “vanishing
premium” context. (Id. at p. 834.) “ ‘Cash value life insurance combines
“pure” life insurance with an investment component that creates a potential
accumulation of money in the policy.’ ” (Ibid.) Under a “vanishing premium”
plan, “ ‘the policyholder pays higher-than-normal premiums in the early
years of the policy, resulting in a quicker accumulation of premium dollars for
investment purposes [citations]. These policies are marketed on the premise
that enough cash value will accumulate so that at a fixed date future
administrative and insurance costs will be covered and the policyholder
relieved of any further out-of-pocket premium obligations.’ ” (Ibid.)
Kaldenbach purchased such a policy but was later informed the
accumulated cash reserves were no longer adequate to continue paying the
premium and the policy would lapse if he did not start making premium
payments again. (Kaldenbach, supra, 178 Cal.App.4th at pp. 835–836.) He
filed suit and moved to certify class claims, including fraud under the UCL,
based on alleged misrepresentations and omissions. Specifically, he alleged
23
the insurer “provided computer illustrations and uniform sales materials to
its agents that allowed [his agent] to mislead him into believing a low cost of
actual insurance combined with a very high rate of interest to be earned on
the cash accumulation component of his premium payment would act in
concert to generate adequate returns to cover the cost of his life insurance
until the maturity date of the policy.” (Id. at p. 836.) He further asserted the
insurer’s sales operations and presentations relating to the type of policy at
issue were uniform in every respect and that it utilized standardized training
methods, materials, and scripts. “Agents were required to adhere to a sales
script, and were specifically trained to disclose only the potential benefits of
the policy but conceal the risks.” (Ibid.)
In opposition, the insurer presented evidence the information given to
each prospective purchaser varied, there was no standardized sales method,
agents were not required to use sales materials, and training varied among
agents. (Kaldenbach, supra, 178 Cal.App.4th at p. 839.)
The trial court denied certification on the ground it would take
“ ‘individual evaluation of each claim to determine liability,’ ” and thus
Kaldenbach had not established typicality. (Kaldenbach, supra,
178 Cal.App.4th at p. 841.) It also questioned ascertainability and
numerosity. (Ibid.) Further, commonality had not been established because
there was no evidence linking the insured’s common tools “to what was
actually said or demonstrated in any individual sales transaction.” (Id. at
pp. 841–842.)
The Court of Appeal affirmed. (Kaldenbach, supra, 178 Cal.App.4th at
p. 844.) Specifically, it agreed with the trial court that the “individualized
issues the court found to predominate, includ[ed] whether any given agent
took [the insured’s] training, read its manuals, and routinely followed the
24
training and materials; and what materials, disclosures, representations, and
explanations were given to any given purchaser. These individualized issues
go not to the injury suffered by a purchaser, but to whether there was in fact
an unfair business practice.” (Id. at p. 848.)
In Fairbanks, supra, 197 Cal.App.4th 544, the court considered claims
involving a universal life insurance policy. In such policies, “premium
payments are paid into the policyholder’s accumulation account. The
insurance company credits the accumulation account with interest on its
balance, and deducts from the accumulation account the annual cost of
insurance.” (Id. at p. 548.) The universal life products at issue had two
death benefit options. “One, like term insurance, is a level death benefit.
The other, which is another purported advantage of universal life, is an
increasing death benefit. Consider a hypothetical policy value of $500,000.
When a universal life policyholder chooses an increasing death benefit, the
amount paid the beneficiary at the policyholder’s death is the set policy value
($500,000) plus the amount then in the policyholder’s accumulation account.
In contrast, when a universal life policyholder with a level death benefit dies,
the accumulation account partially offsets the policy value, and the insurer is
therefore required to pay only the difference between the accumulation
account and the policy value ($500,000). Put another way, the total policy
benefit would be $500,000, including the amount in the accumulation
account.” (Ibid.) “[W]ith an increasing death benefit, the cost of insurance
deducted from the account will increase each year; that is, the cost to provide
the policyholder with a hypothetical $500,000 in coverage goes up as the
policyholder ages. With a level death benefit, however, as long as the balance
in the accumulation account continues to increase (with premium payments
and accrued interest), the amount of insurance which needs to be purchased
25
each year decreases.” (Id. at pp. 548–549.)
Farmers sold two universal life policies with the two death benefit
options, one of which had an additional benefit: “Within broad limits, the
policyholder could pay as much, or as little, as the policyholder wanted. The
policy would remain in effect regardless of the amount of premium paid as
long as there was a sufficient balance in the accumulation account to pay the
cost of insurance.” (Fairbanks, supra, 197 Cal.App.4th at p. 549, fn. omitted.)
The crux of the plaintiffs’ complaint was that Farmers designed and
marketed the two universal life policies “in such a way that the premiums
paid would be inadequate to keep the policies in effect until maturity,
resulting in the underfunding of the policies, and their eventual lapse.”
(Fairbanks, supra, 197 Cal.App.4th at p. 550.) They sought certification of
fraud and concealment UCL claims. (Id. at p. 552.) Specifically, they alleged
a single fraudulent scheme by Farmers “ ‘directed at persuading
policyholders to buy underfunded term insurance policies in the belief that
they would offer the kind of permanent protection whole life policies provide
at a lower cost.’ ” (Id. at p. 553.) Plaintiffs maintained their claims could be
established through “a combination of common policy language, common
language in annual policyholder statements, and a common marketing
scheme.” 7 (Fairbanks, at p. 553.)
Farmers raised numerous arguments in opposition to certification. It
asserted, for example, “that, even if the policies were represented as
7 For instance, while nothing in the policies stated they were
permanent, the plaintiffs relied on language such as the following statement:
“ ‘This LIFE INSURANCE policy provides death protection for as long as you
live during the period of coverage. That period, the premium payment
details, and other policy data, are shown in the Policy Specifications on the
last page of this policy.’ ” (Fairbanks, supra, 197 Cal.App.4th at p. 554,
fn. 11.)
26
‘permanent,’ the materiality of such a representation would vary by
policyholder.” (Fairbanks, supra, 197 Cal.App.4th at p. 554.) It claimed, “it
is impossible to argue that a policy is ‘underfunded’ in the abstract” because
“a policy can only be underfunded if it lacks the funds to meet the specific
policyholder’s needs at any given time.” (Id. at p. 555.) And it submitted
substantial documentation indicating that its marketing was not subject to
common proof. (Id. at pp. 556–557.)
The trial court denied certification, concluding predominant common
questions of fact or law did not exist. (Fairbanks, supra, 197 Cal.App.4th at
p. 558.) The court explained “the design of the policies was only relevant to
the extent that (1) Farmers marketed the policies as permanent insurance;
(2) the class members wanted permanent insurance; and (3) the class
members relied on Farmers’s representations of permanence.” (Ibid.) And it
stated, “that whether marketing materials produced by Farmers made
representations of permanence was subject to common proof, but whether
those materials were conveyed to prospective policyholders, or other
representations of permanence were made, was not.” (Id. at p. 559.)
The Court of Appeal affirmed. (Fairbanks, supra, 197 Cal.App.4th at
p. 561.) It observed that “ ‘ “[t]o state a claim under . . . the UCL . . . based on
false advertising or promotional practices, ‘it is necessary only to show that
“members of the public are likely to be deceived.” ’ ” ’ [Citation.] A
representative plaintiff need not prove that members of the public were
actually deceived by the practice, relied on the practice, or suffered damages.”
(Id. at pp. 561–562.) “Nonetheless, a class action cannot proceed for a
fraudulent business practice under the UCL when it cannot be established
that the defendant engaged in uniform conduct likely to mislead the entire
class.” (Id. at p. 562.) It found the situation “virtually identical” to that in
27
Kaldenbach. (Ibid.) Thus, “[b]ecause the trial court determined, based on
substantial evidence, that the alleged misrepresentations of permanence
were not commonly made to members of the class, the denial of class
certification must be upheld.” (Id. at p. 564.)
The Fairbanks court then considered an argument raised by the
plaintiffs for the first time on appeal—“that the class action must be allowed
to proceed because it cannot be disputed that the language in the policies
themselves which suggests permanence is indisputably amenable to common
proof.” (Fairbanks, supra, 197 Cal.App.4th at p. 564.) The appellate court
disagreed: “While policy language clearly is amenable to common proof,
plaintiffs did not seek class certification on the basis that the policy language
standing alone was misleading; they alleged that it was misleading in the
context of the entire marketing scheme.” (Ibid., italics omitted.) It went on
to state: “In any event, even if [the] plaintiffs were permitted to now raise the
argument that they seek to proceed with a class action based solely on the
allegedly misleading language of the policies, it is still impossible to consider
the language of the policies without considering the information conveyed by
the Farmers agents in the process of selling them. (See Knapp [], supra,
195 Cal.App.4th at p. 944 [individual issues prevailed when many of the class
members may have received information explaining the allegedly concealed
fact].)” (Ibid., italics added; see In re Countrywide Financial Corp. Marketing
and Sales Practices Litigation (S.D.Cal. Dec. 16, 2011) 2011 WL 6325877, at
pp. *6–*9 (Countryside Financial) [there is a “critical distinction” between
cases that allege agents followed the same marketing script (amenable to
certification) and cases where agents were not so limited (certification not
appropriate); rejecting the plaintiffs’ relying-only-on-language argument
quoting the Fairbanks paragraph].)
28
Kaldenbach and Fairbanks are distinguishable to the extent they
involved allegedly deceptive marketing schemes. Nevertheless, as the trial
court recognized, the cases present many “similar circumstances” to those
here and support the court’s decision to deny certification because plaintiffs’
claims “necessarily concern[] not just the standard-form Trendsetter LB
policy text but also all the other information that was conveyed to purchasers
of the Trendsetter LB policies.”
What plaintiffs ignore in asserting the two cases are wholly inapposite
is that even assuming for purposes of the certification motion the policy
language at issue is, in and of itself, misleading, that issue of common proof
is insufficient to establish common liability under the statutes on which they
base their “unlawful” and “unfair” UCL claims—sections 330 through 332,
and section 10127.9.
As we have discussed, section 332 requires parties to insurance
contracts to “communicate to the other, in good faith, all facts within [the
party’s] knowledge which are or which [they] believe[] to be material to the
contract and as to which [they] make no warranty, and which the other has
not the means of ascertaining.” And sections 330 and 331 speak to
intentional or unintentional concealment of such facts. Thus, the inquiry
under these three predicate statutes requires consideration, not only of the
policy language, but also of what information was provided or imparted to
policy purchasers above and beyond that language. (Fairbanks, supra,
197 Cal.App.4th at p. 564.)
Indeed, section 332 requires parties to insurance contracts to
“communicate to the other, in good faith, all facts within [the party’s]
knowledge which are or which [they] believe[] to be material to the contract
and as to which [they] make no warranty, and which the other has not the
29
means of ascertaining.” (§ 332, italics added.) The governing statutes also
contemplate that agents can and will confer with prospective purchasers
about policies with accelerated death benefits. (§ 10295.12.) Thus, as the
trial court observed, Transamerica will be able to seek the admission of
marketing materials and other extrinsic evidence in its defense of the claims
based on these statutes.
With respect to plaintiff’s UCL fraud claim, the question is whether the
data-page language on which plaintiffs rely is “likely to deceive” a reasonable
consumer. In this regard, plaintiffs face the problem that not all Trendsetter
LB policies are the same. While the policies purchased by putative class
members all contained the “POLICY EXCLUDING RIDERS” language in the
data pages on which plaintiffs rely, these pages are also customized based on
the specific product purchased by the particular consumer.
Significantly, the schedule of “ADDITIONAL BENEFITS WHICH ARE
PROVIDED BY RIDER” and the columns thereunder on the first data page
differ among insureds, depending on whether the insured has purchased any
optional additional benefits. Because plaintiffs declined any such optional
benefits, the rider number column in their data pages is blank, the word
“NONE” is in the “SCHEDULE OF ADDITIONAL BENEFITS” column, and
the notation “NO CHARGE” is in the “ANNUAL PREMIUM” column.
Correspondingly, item 5 of their applications—which requires that any
“Additional Benefits by Rider” be identified and priced—has no boxes checked
nor any other notation of additional benefits by rider.
In contrast, other insureds who do purchase “Additional Benefits by
Rider” will so state in item 5 of their applications, identifying both the rider
and the additional premium cost for such. The schedule of “ADDITIONAL
BENEFITS WHICH ARE PROVIDED BY RIDER” on the first data page of
30
their policies, in turn, will list the “RIDER NUMBER,” the “NAME OF THE
ADDITIONAL RIDER,” and the “ANNUAL PREMIUM” for each additional
benefit. Clearly, these different textual and graphical differences could
impact a particular insured’s reasonable understanding of the
“ADDITIONAL BENEFITS WHICH ARE PROVIDED BY RIDER” language
and the rider and premium schedules.
In short, even if limited to the four corners of the policy document, the
Trendsetter LB policies differ at issuance based on the application process
and the language of the customizable pages.
Additionally, the plaintiffs’ applications show that they purchased their
policies through agents, and as we have recited, the statutory provisions
governing the accelerated death benefits provided by the Trendsetter LP
policy clearly anticipate that agents can, and will, discuss these policies with
applicants. (See § 10295.12.) Indeed, plaintiffs make no allegation that this
product can be purchased without the assistance of a broker or agent, which
would be the only conceivable context in which an applicant would be
provided “only” the language of the policy, and plaintiffs do not come within
that theoretical group. (Cf. Countryside Financial, supra, 2011 WL 6325877,
at p. *9 [plaintiff’s attempt to show “ ‘uniform conduct likely to mislead the
entire class’ ” by relying “exclusively on the written documents . . . ignores
the nature of the transaction as one that involves not only the exchange of
written documents but also considerable oral and written discussions
between the individual borrowers and their brokers”].)
Thus, contrary to plaintiffs’ view, this is not a situation where
certification might be proper even if members of the class were required to
individually prove damages. Rather, as in Kaldenbach, liability could not be
established on a class-wide basis. (See Kaldenbach, supra, 178 Cal.App.4th
31
at p. 848 [finding individual issues—such as “whether any given agent took
[the insured’s] training, read its manuals, and routinely followed the training
and materials; and what materials, disclosures, representations, and
explanations were given to any given purchaser”— predominated because
“[t]hese individualized issues go not to the injury suffered by a purchaser, but
to whether there was in fact an unfair business practice”].)
Fairbanks provides further support. In that case, the court
acknowledged, under similar circumstances, that individual issues may still
predominate even if certain questions are capable of common proof. For
example, it stated “that whether marketing materials produced by Farmers
made representations of permanence was subject to common proof, but
whether those materials were conveyed to prospective policyholders, or other
representations of permanence were made, was not.” (Fairbanks, supra,
197 Cal.App.4th at p. 559.) And even though the court acknowledged, albeit
in dicta, that “policy language clearly is amenable to common proof” (id. at
p. 564), it went on to opine in the context of fraudulent concealment and
misrepresentation UCL claims that it would be “impossible to consider the
language of the policies without considering the information conveyed by the
Farmers agents in the process of selling them.” (Ibid.) Thus, Fairbanks, as
well, supports the trial court’s reasons for denying class certification here. 8
8 Fairbanks also makes clear why cases like Massachusetts Mutual Life
Ins. Co. v. Superior Court (2002) 97 Cal.App.4th 1282, cited by plaintiffs, are
inapposite. There, the trial court certified a class of persons who bought
“ ‘vanishing premium’ ” life insurance products in an action asserting
violations of the UCL where the plaintiffs alleged, and had evidence
supporting their claim, that at the time they purchased their policies the
insurer had already developed plans to “ ‘ratchet down’ ” the discretionary
dividend it was paying on policies and the insurer failed to disclose to
purchasers or its agents that it did not intend to maintain the current high
discretionary dividend rate utilized by sales agents in sales presentations.
32
Plaintiffs’ assertion that the integration and modification clauses in the
Trendsetter LB policy foreclose any extrinsic evidence is also misdirected.
The referenced provisions state: “This policy, any amendment(s) or
endorsement(s), and a copy of the application(s) and any questionnaires for
issuance or Reinstatement of this policy attached to it contain the entire
contract between you and us. Any statements made in such application(s),
questionnaires or any amendments either by you or by the Insured will be
considered representations and not warranties. Also, any written statement
made either by you or by the Insured will not be used to void this policy nor
defend against a claim under this policy unless the statement is contained in
the application(s), questionnaires or any amendments thereto. [¶] Any extra
benefit rider attached to this policy will become a part of this policy and will
be subject to all of the terms and conditions of this policy unless we state
otherwise in the rider.” They further provide: “No agent or other person has
the authority to change or waive any provision of this policy.”
That a contract has an integration clause does not prohibit the
consideration of extrinsic materials relevant to understanding the meaning of
its terms. Nor—assuming interpreting the policy discloses a possible
misrepresentation or concealment—would referencing communications with
policyholders which could disclose or clarify those facts for purposes of
liability under the UCL alter the terms of the agreement. In sum, the
integration and modification provisions cited by plaintiffs are irrelevant to
the issue before us.
(Id. at pp. 1286, 1291.) The distinction is between cases where a common
misrepresentation or concealment establishes liability and ones where it does
not, which is the case here.
33
DISPOSITION
The judgment is affirmed. Transamerica is entitled to its costs on
appeal.
34
_________________________
Banke, J.
We concur:
_________________________
Humes, P. J.
_________________________
Langhorne Wilson, J.
35
Filed 6/22/26
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION ONE
BRIAN GUTHRIE, et al.,
A171526
Plaintiffs and Appellants,
v. (Alameda County
TRANSAMERICA LIFE INSURANCE Super. Ct. No. RG21098977)
COMPANY,
ORDER CERTIFYING OPINION FOR
Defendant and Respondent. PUBLICATION
[NO CHANGE IN JUDGMENT]
BY THE COURT:
The opinion in the above-entitled matter, filed on May 27, 2026, was not certified for
publication in the Official Reports. After the court’s review of the request for publication under
California Rules of Court, rule 8.1120, and good cause established under rule 8.1105, it is hereby
ordered that the opinion should be published in the Official Reports.
Dated:
_______________________________
Presiding Justice
36
Trial Court: Alameda County Superior Court
Trial Judge: Hon. Noël Wise
Counsel:
Feinstein Doyle Payne & Kravec, LLC, Joseph N. Kravec, Wyatt A. Lison, John Peter Worgul,
Kaitlyn M. Burns and Ruairi McDonnell for Plaintiffs and Appellants.
Edison, McDowell & Hetherington, LLP, Jodi Krystyn Swick, Hanqui Liu, Kendall J. Burr and
Jay M. Patterson for Defendant and Respondent.
A171526, Guthrie v. Transamerica Life Ins. Co
37