Marcus v. LifePoint Wealth Management CA2/7 ( 2021 )

Filed 1/19/21 Marcus v. LifePoint Wealth Management CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
MARLENE MARCUS, B293837
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC650318)
v.
LIFEPOINT WEALTH
MANAGEMENT, INC., et al.,
Defendants and
Respondents.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Terry A. Green, Judge. Affirmed.
Sanford M. Passman for Plaintiff and Appellant.
Markun Zusman Freniere & Compton, Jeffrey K. Compton
and Daria D. Carlson for Defendants and Respondents.
______________
Marlene Marcus appeals from a judgment entered after the
trial court granted the summary judgment motion filed by
insurance broker Roderick Uy and his company LifePoint Wealth
Management, Inc. (LifePoint). Marcus sued Uy and LifePoint for
breach of fiduciary duty, fraud, negligence, and related claims,
alleging Uy induced her to purchase three life insurance policies
that were unnecessary and ill-suited to her needs. The trial court
found Marcus’s claims were time-barred because they accrued
when the policies were issued, outside of all applicable
limitations periods. On appeal, Marcus contends triable issues of
material fact existed whether the delayed discovery of her
injuries deferred accrual and preserved her claims. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. Uy Meets and Advises Marcus on Life Insurance in 20111
Uy is a California licensed insurance agent and wealth
advisor doing business through LifePoint. In mid-2011 Uy
contacted Marcus by telephone following a referral from Marcus’s
tax accountant. At that time Marcus was in her late 50’s and
unmarried, with two adult children, Branden and Michelle.
Marcus, who holds a law degree, owned a fabric store and several
real estate investments, and she had an annual income of
approximately $472,000.
Following Uy’s initial contact, Marcus and Uy met several
times, telephonically and later in person, and they discussed
1 The factual background is taken from the evidence
submitted by the parties in connection with defendants’ motion
for summary judgment. We indicate where the evidence is in
dispute.
2
Marcus’s financial planning goals and concerns at length.
Marcus told Uy she had been engaged in bitter litigation with her
siblings for many years over the disposition of her parents’ estate,
and she had a dispute with the Internal Revenue Service
regarding the estate taxes. Marcus therefore wanted to create a
wealth plan to manage her affairs upon her death or disability, to
protect the family business, to minimize the estate taxes, and to
prevent her children from becoming embroiled in disputes over
her estate. Because Marcus had been forced to sell off real estate
to pay the estate taxes on her inheritance, Marcus was interested
in life insurance with a benefit sufficient to cover the taxes on her
own estate. Marcus also wanted her children to have access to
funds that would allow them, if she became ill, to pay her medical
expenses without having to rely on their own money.
When Marcus met Uy, she had a $6 million life insurance
policy with Lincoln National Life Insurance Company and paid
premiums on two $2 million policies with Jefferson Pilot Life
Insurance, one held by her daughter Michelle and one held by her
son Branden. Marcus was unsure of her net worth and did not
know how much additional life insurance she would need to meet
her goals. Accordingly, upon Uy’s recommendation, Marcus sent
information concerning her finances to GamePlan Financial
Marketing, a field marketing organization Uy regularly used, to
prepare an estimate of her net worth. GamePlan estimated
Marcus’s current net worth was about $24.7 million, comprised
largely of real estate holdings, and it estimated the net value of
her estate at death would exceed $51 million based on a standard
asset growth rate of 5 percent and the assumption Marcus would
die in 2027 at age 75. Marcus received a copy of GamePlan’s
written estimate, assumptions, and calculations dated
3
November 26, 2012. Marcus’s estate planning attorney, Fred
Corbalis, calculated the same future value of Marcus’s estate.
Uy relied on the GamePlan and Corbalis evaluations and
applied a 40 percent effective tax rate to the $51 million future
valuation of Marcus’s estate, less the $5 million exclusion in
effect at the time, to calculate Marcus would need approximately
$18 million in life insurance to guarantee the death benefit would
cover her estate taxes. At the time of her deposition in January
2018, Marcus admitted she “really [didn’t] know” whether any of
the numbers and analyses were inaccurate.
B. Marcus Replaces the Jefferson Policies with Southwest
Policies in 2012
The two $2 million Jefferson policies held by Michelle and
Branden included an accelerated death benefit (that is, the
benefit payable before Marcus’s death) of $25,000 for each
qualifying event, including specified illnesses, with a $250,000
cap. In mid-2010, prior to meeting Uy, Marcus considered
replacing the Jefferson policies with policies from Pacific Life
Insurance Company, but Marc Jacoby, the insurance broker who
sold her the Jefferson policies in 2005, dissuaded her from
replacing them. Jacoby explained to Marcus that the Jefferson
policies only required premium payments for 10 years from the
date of issuance and, therefore, the death benefit would vest in
2015 without any further premium payments.
Sometime in mid-2011, Uy gave a presentation to Marcus
and her children in which he proposed replacing the Jefferson
policies with policies from Life Insurance Company of the
Southwest that he believed would better address Marcus’s desire
to protect her children from paying her medical expenses. In
4
contrast to the Jefferson policies, the Southwest policies offered
an accelerated death benefit of up to $1 million, with a minimum
$500,000 benefit payable if Marcus suffered a terminal illness,
chronic illness, or critical illness.2
Around September 15, 2011, Jacoby learned upon receiving
an insurance replacement form that Marcus intended to replace
the Jefferson policies with the Southwest policies sold by Uy.
Jacoby spoke with Marcus on multiple occasions, again advising
her not to replace the Jefferson policies because they would be
fully paid up in 2015, whereas Marcus would have to pay
premiums on the new Southwest policies indefinitely. Jacoby
asked to see the Southwest policy documents, and at his urging,
Marcus delayed switching the policies until Jacoby could meet
with both Uy and Marcus in person. At the meeting Jacoby again
stressed that replacing the policies would require more premium
payments without increasing the $2 million death benefit, and
the Jefferson policies had been purchased as a tax-planning
investment, not for their ancillary benefits.
Following the meeting with Jacoby and Uy, Marcus
nonetheless proceeded to replace the Jefferson polices with the
Southwest policies. Michelle signed a replacement notice dated
February 17, 2012; Branden signed a replacement notice dated
December 1, 2012.
2 The Southwest policies also included an “overloan
protection rider,” which provided protection for lapses in
premium payments, and a provision for the accumulated cash
value of the policy to increase over time.
5
C. Marcus Purchases an $8 Million Allianz Policy in June
2013
Uy recommended Marcus purchase an additional $8 million
life insurance policy to meet her goal of paying her estate taxes
with her death benefits. Marcus and Uy discussed the idea for
more than two years from their initial meeting, during which
period Uy presented Marcus with a variety of options for different
levels of coverage and premiums. Marcus ultimately chose to
purchase an $8 million flexible premium adjustable life insurance
policy with an index benefit3 from Allianz Life Insurance
Company that required an annual premium of $258,240. On
May 23, 2013 Marcus paid $258,240 as the first annual
premium. Shortly thereafter, Marcus spoke telephonically with
agents at Allianz and told them her estate was worth $25 million
and she would be able to pay the sizable annual premiums with
cash or by selling assets, rather than financing them.
On June 11, 2013 Uy personally delivered the Allianz
policy documents to Marcus at her home. Uy reviewed the basic
terms of the policy with Marcus, offered to answer any questions,
and advised Marcus she could back out if she did not want to go
through with the enrollment. Marcus did not have any questions,
and she signed the policy documents. Among the documents,
3 A flexible premium adjustable life insurance policy with an
index benefit is a “a policy where . . . as long as you make
payments for the policy, all the cash growing inside the policy can
grow based on an index that one chooses on the inside of the
policy.” The flexible premium meant Marcus could pay more or
less than the planned premium in any policy year (and she could
make the payments in a lump sum or monthly) provided the
minimum premium payment requirements set forth in the policy
were met.
6
Marcus signed a statement of benefits that illustrated possible
benefit scenarios based upon policy and index variables and
stated, “I have read this illustration. It has been explained to me
by the agent, and the agent has made no statements that
contradict this illustration. [¶] I also believe the Allianz Life
Pro+ is suitable for my insurance needs.” The first page of the
policy document stated Marcus had 30 days in which to cancel
the policy without any penalty. The policy also described the
grace periods applicable to untimely premiums and warned that
if the policy lapsed, it could only be reinstated once.
The policy documents also included an application
questionnaire, signed by Marcus, with boxes checked “yes” in
response to the following questions: “Do you believe this life
insurance policy that you are applying for will meet your
insurance needs and financial objectives?”; “Did the agent discuss
with you your current life insurance policies and other assets
prior to your decision to purchase this life insurance policy?”; and
“Do you feel you have sufficient liquid assets available for living
expenses and emergencies in addition to the money allocated to
pay the life insurance policy?”
Marcus admitted in her deposition she would have read
these questions when she signed the document and she would not
have signed a document that was incorrect. She also admitted
she was capable of understanding the Allianz policy and the
benefit illustrations. Marcus knew she needed to pay minimum
premiums to avoid cancellation of the policy and loss of the
accumulated cash value, and she knew she could only reinstate
the policy one time if it lapsed.
On May 13, 2014 Allianz sent Marcus a notice that her
$258,240 annual premium (for the second year of her policy) was
7
due by June 11. Marcus did not make the payment. On July 8
Allianz sent a grace period notice requiring a minimum payment
of $86,080 by August 12, 2014 to avoid a lapse in the policy,
which amount Marcus remitted on July 27. Marcus continued to
miss payments, and Allianz sent her second and third grace
period notices requiring additional $86,080 installments. Marcus
made the first and second installments, but she missed the
April 14, 2015 deadline for the third installment. On April 15
Allianz sent a lapse notice, stating, “Your policy referenced above
has lapsed, and there is no coverage in force at this time.” On
April 28, 2015 Marcus remitted the $86,080, and on May 12
Allianz notified her the policy had been approved for
reinstatement.
On May 13, 2015 Allianz sent Marcus a notice that her
$258,240 annual premium (for the third year of the policy) was
due by June 11, 2015. After Marcus failed to make any premium
payment for nearly a year, Allianz on April 8, 2016 sent a grace
period notice requiring a payment of $279,760 by May 12, 2016 to
avoid a lapse in the policy. In early May 2016, Uy called Marcus
and told her to make a payment. She did not, and on May 14
Allianz sent another lapse notice. On May 24 Marcus made a
payment of $150,000, but on July 27 Allianz notified Marcus the
policy could not be reinstated because the policy had already been
reinstated once.4 On August 3, 2016 Marcus called Allianz to
request reinstatement of the policy, without success.
Marcus testified in her deposition she believed all three
policies sold by Uy were appropriate for her needs at the time she
4 Allianz deposited Marcus’s $150,000 check on June 6, 2016,
but on July 28 it sent Marcus a refund check.
8
purchased them, and she believed the Allianz policy was an
appropriate policy for her when she tried to reinstate it in August
2016.5 As of her deposition in January 2018, Marcus did not know
whether the $8 million benefit on the Allianz policy was too high,
too low, or just right for her needs.
D. Marcus Files This Action in February 2017
On February 10, 2017 Marcus filed this action against
LifePoint, Uy, and Allianz. On March 23, 2017, she filed a first
amended complaint asserting causes of action for breach of
contract, breach of fiduciary duty, breach of the covenant of good
faith and fair dealing, and declaratory relief against LifePoint,
Uy, and Allianz. She also asserted against only LifePoint and Uy
causes of action for intentional misrepresentation in the sale of
the Southwest and Allianz policies, fraud, negligent
misrepresentation, and negligent failure to obtain insurance
coverage. The trial court sustained without leave to amend
LifePoint and Uy’s demurrer to the causes of action for breach of
contract, breach of the implied covenant of good faith and fair
dealing, and declaratory relief. Marcus later settled with Allianz,
and Marcus dismissed Allianz with prejudice.
Marcus alleged Uy took advantage of her at a time she was
vulnerable due to her litigation with her siblings over her
parents’ estate; he held himself out as a trusted financial advisor,
and “through a series of multiple false representations, convinced
[Marcus] to replace the [Jefferson] policies” with the Southwest
polices. Marcus alleged Uy misrepresented that Marcus would
5 The record does not show a lapse or cancellation of the two
$2 million Southwest policies.
9
benefit from replacing the Jefferson policies with the Southwest
policies, even though Marcus had almost fully paid for the
Jefferson policies, so that Uy and LifePoint would make
commissions on Marcus’s premiums.6 Marcus further alleged Uy
knew she wanted to have sufficient funds to satisfy her estate
obligations but induced her “through a series of
misrepresentations and/or omissions” to enter into the Allianz
policy with an annual premium of $258,240. Marcus also alleged
Uy and LifePoint harmed her by placing her in a flexible
premium adjustable life insurance policy with an index benefit,
which has a stipulated surrender charge, instead of a simple term
life insurance contract. Further, Marcus “never received the
subject Allianz policy after paying in excess of [$516,000] in
premium[s] and failed to receive the type of coverage she
requested.”
E. LifePoint and Uy’s Summary Judgment Motion
On May 31, 2018 LifePoint and Uy filed a motion for
summary judgment, or in the alternative for summary
adjudication, asserting each of Marcus’s causes of action was
barred by the applicable statute of limitations, the longest of
which was three years. LifePoint and Uy argued as to the
Southwest policies that before the policies were issued, Uy
provided Marcus and her children multiple presentations,
illustrations, and documents setting forth the terms, scope of
coverage, and benefits. In addition, Marcus knew at the time the
policies were issued that the Southwest policies required
6 On our own motion we augment the record to include the
March 23, 2017 first amended complaint. (Cal. Rules of Court,
rule 8.155(a)(1)(A).)
10
continued premiums; unlike the Jefferson policies, a death
benefit was not guaranteed after 10 years; and Uy and LifePoint
as insurance brokers had a financial interest in the transaction.
Moreover, Jacoby expressly cautioned her about the premiums,
but she decided to replace the polices. Accordingly, Marcus was
on inquiry notice of her claims at the time she replaced the
Jefferson policies in 2011 and 2012, five to six years before she
filed the complaint.
With respect to the Allianz policy, LifePoint and Uy argued
Marcus understood when the policy was issued in June 2013 and
she made her first annual payment (more than three years before
she filed her complaint), that the policy required an annual
$258,240 premium payment or she would forfeit the death benefit
because she would have learned this from her two interviews
with the Allianz agents, the illustrations and policy she signed,
and the premium statements she received. Defendants supported
their motion with a separate statement, deposition testimony
from Marcus, Uy, and Jacoby, and insurance policy documents,
correspondence, and payment records.
In her opposition, Marcus argued Uy “misrepresented the
nature, extent and scope of the coverage being offered to [Marcus]
in both the . . . Southwest policies as well as the Allianz policy
and assumed an additional duty, owing to [Marcus] by either
express agreement or by ‘holding himself out’ as having expertise
in a given field of insurance being sought by the insured.” She
argued she did not learn of Uy’s misconduct until August 2016,
after the Allianz policy was cancelled, when she first “acquired
sufficient information to give rise to the various causes of action.”
In support of this argument, Marcus relied on her deposition
testimony:
11
“Q. Other than your attorney, who have you spoken to
about this case? Not just in preparation for your deposition, but
who have you spoken to about this case?
“A. Nobody in particular that I know of. I’ve spoken to
another insurance man, which is one of the ways that I found out
that some of the stuff was going on.
“Q. Who is this other insurance man?
“A. Patrick Tanzania.
“[Marcus’s Counsel]: Tanzillo.”7
Marcus did not cite in her opposition to any other evidence
supporting her contention of delayed notice or submit a
declaration stating what she learned from her discussion with
Tanzillo that caused her to believe the policies purchased from
Uy were unnecessary or that Uy made misrepresentations about
the policies. Marcus submitted a responsive separate statement
and excerpts of Marcus’s and Uy’s depositions. In the separate
statement, she disputed approximately 30 of the 360 facts offered
by LifePoint and Uy, largely based on evidentiary objections, and
she included 65 additional material facts supported by excerpts of
Marcus’s and Uy’s depositions.
7 We granted Marcus’s motion to augment the record with
her opposition memorandum and separate statement. However,
the augmented record does not include the evidence Marcus
submitted as an attachment to the declaration of her trial
attorney, Stanford M. Passman. On our own motion, we augment
the record to include the August 3, 2018 Passman declaration
and attached documents. (Cal. Rules of Court, rule
8.155(a)(1)(A).)
12
F. The Trial Court’s Ruling
After a hearing, the trial court granted summary judgment
in favor of defendants on August 17, 2018. In its seven-page
ruling, the court held Marcus’s causes of action were all barred by
the statute of limitations and the discovery rule did not apply to
defer accrual of the claims. Citing Jolly v. Eli Lilly & Co. (1988)
44 Cal.3d 1103, 1110 (Jolly), the court explained that under the
discovery rule, “the statute of limitations begins to run when the
plaintiff suspects or should suspect that her injury was caused by
wrongdoing.” The court observed that although Marcus alleged
she learned of her injuries in mid-2016, she directed no argument
to the discovery rule’s objective prong, and a reasonable person
would have suspected her alleged harm at the time the policies
were issued.
With respect to the Southwest policies, the court concluded,
“Any cause of action related to the replacement of the Jefferson
Pilot policies was complete with all of its elements when the
replacement was performed, over the objection of [Marcus’s]
regular insurance advisor. That was done no later than
December 1, 2012. Even if the four-year statute applied to the
breach of fiduciary duty claim, [Marcus] should have filed her
complaint by December 1, 2016. The original complaint in this
case was filed on February 10, 2017. Therefore, any claim based
on the replacement of the Jefferson Pilot policies is time-barred.”
With respect to the Allianz policy, the court similarly concluded,
“[Marcus] paid for the Allianz policy in May of 2013; she received
and signed the policy on June 11, 2013. Therefore, any
misconduct related to that policy was complete with all its
elements by that date. Under the two-year statute which applies
to negligence and the three-year statute which applies to fraud,
13
[Marcus] should have filed her complaint no later than June 11,
2015, or June 11, 2016, respectively. . . . Those claims are
therefore time-barred.” The court overruled Marcus’s evidentiary
objections for failing to comply with Rules of Court, rule 3.1354.8
The court did not rule on defendants’ evidentiary objections.
The trial court entered judgment on September 10, 2018.
Marcus filed a motion for new trial, which the court denied on
October 25, 2018. Marcus timely appealed.
DISCUSSION
A. Standard of Review
Summary judgment is appropriate if there are no triable
issues of material fact and the moving party is entitled to
judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c);9
Regents of University of California v. Superior Court (2018)
4 Cal.5th 607, 618; Valdez v. Seidner-Miller, Inc. (2019)
33 Cal.App.5th 600, 607 (Valdez).) “‘“‘“We review the trial court’s
decision de novo, considering all the evidence set forth in the
moving and opposing papers except that to which objections were
made and sustained.”’ [Citation.] We liberally construe the
evidence in support of the party opposing summary judgment and
resolve doubts concerning the evidence in favor of that party.”’”
(Hampton v. County of San Diego (2015) 62 Cal.4th 340, 347;
accord, Valdez, at p. 607.)
8 Marcus does not argue on appeal the trial court erred in
overruling her objections.
9 All further statutory references are to the Code of Civil
Procedure.
14
A defendant may move for summary judgment on the
ground there is an affirmative defense to the action. (§ 437c,
subds. (o)(2), (p)(2); see Aryeh v. Canon Business Solutions, Inc.
(2013) 55 Cal.4th 1185, 1191 (Aryeh) [statute of limitations is an
affirmative defense]; see also Jolly, supra, 44 Cal.3d at 1109 [trial
court properly granted a summary judgment based on statute of
limitations].) The defendant has the initial burden to show that
undisputed facts supported each element of the affirmative
defense. (§ 437c, subd. (p)(2); see Sumner v. Simpson University
(2018) 27 Cal.App.5th 577, 580 [“As defendants who are moving
for summary judgment based on the assertion of an affirmative
defense, defendants had the burden to show that undisputed
facts supported each element of the affirmative defense.”].) Once
the defendant meets its burden, the burden shifts to the plaintiff
to show there is a triable issue of one or more material facts
regarding the defense. (§ 437c, subd. (p)(2); Jessen v. Mentor
Corp. (2008) 158 Cal.App.4th 1480, 1484-1485; Mirzada v.
Department of Transportation (2003) 111 Cal.App.4th 802, 806-
807.)
B. The Discovery Rule
“The limitations period, the period in which a plaintiff must
bring suit or be barred, runs from the moment a claim accrues.
[Citations.] Traditionally at common law, a ‘cause of action
accrues “when [it] is complete with all of its elements”—those
elements being wrongdoing, harm, and causation.’ [Citation.]
This is the ‘last element’ accrual rule: ordinarily, the statute of
limitations runs from ‘the occurrence of the last element essential
to the cause of action.’” (Aryeh, supra, 55 Cal.4th at p. 1191;
accord, Howard Jarvis Taxpayers Assn. v. City of La Habra
15
(2001) 25 Cal.4th 809, 815; Stella v. Asset Management
Consultants, Inc. (2017) 8 Cal.App.5th 181, 191 (Stella).)
An exception to the general rule of accrual is the discovery
rule, “which postpones accrual of a cause of action until the
plaintiff discovers, or has reason to discover, the cause of action.”
(Fox v. Ethicon Endo–Surgery, Inc. (2005) 35 Cal.4th 797, 807
(Fox); accord, Stella, supra, 8 Cal.App.5th at pp. 191-192.)
“Under the discovery rule, the statute of limitations begins to run
when the plaintiff suspects or should suspect that her injury was
caused by wrongdoing, that someone has done something wrong
to her.” (Jolly, supra, 44 Cal.3d at p. 1110; accord, Stella, at
p. 192; see § 338, subd. (d) [cause of action based on fraud or
mistake “is not deemed to have accrued until the discovery, by
the aggrieved party, of the facts constituting the fraud or
mistake”].)
“A plaintiff need not be aware of the specific ‘facts’
necessary to establish the claim; that is a process contemplated
by pretrial discovery. Once the plaintiff has a suspicion of
wrongdoing, and therefore an incentive to sue, she must decide
whether to file suit or sit on her rights. So long as a suspicion
exists, it is clear that the plaintiff must go find the facts; she
cannot wait for the facts to find her.” (Jolly, supra, 44 Cal.3d at
p. 1111; accord, Stella, supra, 8 Cal.App.5th at p. 192.) “The
discovery rule only delays accrual until the plaintiff has, or
should have, inquiry notice of the cause of action. . . . [P]laintiffs
are required to conduct a reasonable investigation after becoming
aware of an injury, and are charged with knowledge of the
information that would have been revealed by such an
investigation.” (Fox, at pp. 807-808; accord, Jolly, at p. 1114 [“the
16
limitations period begins when the plaintiff suspects, or should
suspect, that she has been wronged”].)
Courts apply a more relaxed discovery rule to fraud claims
against fiduciaries. “Although the general rules relating to
pleading and proof of facts excusing a late discovery of fraud
remain applicable, it is recognized that in cases involving such a
[fiduciary] relationship facts which would ordinarily require
investigation may not excite suspicion, and that the same degree
of diligence is not required.” (Hobart v. Hobart Estate Co. (1945)
26 Cal.2d 412, 440; accord, Alfaro v. Community Housing
Improvement System & Planning Assn., Inc. (2009)
171 Cal.App.4th 1356, 1394 (Alfaro).) Even so, “[a] person in a
fiduciary relationship may relax, but not fall asleep. ‘[I]f she
became aware of facts which would make a reasonably prudent
person suspicious, she had a duty to investigate further, and she
was charged with knowledge of matters which would have been
revealed by such an investigation.’” (Alfaro, at p. 1394 [even if
the defendant community housing developer was in a fiduciary
relationship with the plaintiff buyer, disclosure of a deed
restriction in grant deeds gave plaintiff actual knowledge of the
restriction and the developer’s prior nondisclosure of the
restriction].)
“The resolution of a statute of limitations defense is
typically a factual question for the trier of fact. However,
summary judgment is proper if the court can draw only one
legitimate inference from uncontradicted evidence about the
limitations issue.” (Choi v. Sagemark Consulting (2017)
18 Cal.App.5th 308, 323-324, 329 [affirming grant of summary
judgment in favor of defendants financial advisors based on
statute of limitations where evidence showed plaintiffs were on
17
inquiry notice of their causes of action arising from defendants’
investment advice]; see Stella, supra, 8 Cal.App.5th at p. 193
[“When a plaintiff reasonably should have discovered facts for
purposes of the accrual of a cause of action or application of the
delayed discovery rule is generally a question of fact, properly
decided as a matter of law only if the evidence . . . can support
only one reasonable conclusion.”].)
C. The Trial Court Did Not Err in Granting Summary
Judgment Because Marcus’s Claims Were Barred by the
Statutes of Limitations
1. The longest limitations period applicable to Marcus’s
claims is three years
As the trial court found, and the parties do not dispute, the
statute of limitations applicable to Marcus’s causes of action
alleging fraud is three years (§ 338, subd. (d)), and the statute of
limitations applicable to her causes of action alleging negligence
is two years (§ 339, subd. (1); accord, Moss v. Duncan (2019)
36 Cal.App.5th 569, 574).10
As the trial court found, the limitations period applicable to
Marcus’s cause of action for breach of fiduciary duty is three
years. “The statute of limitations for breach of fiduciary duty is
three years or four years, depending on whether the breach is
10 We construe Marcus’s cause of action for “negligent failure
to obtain insurance coverage” as a professional negligence claim
subject to section 339, subdivision (1), because the gravamen of
Marcus’s allegations is that “Defendants . . . owed a duty to
[Marcus] to obtain the required insurance policy, and breached
said duty by failing to provide to [Marcus] the requested
insurance.”
18
fraudulent or nonfraudulent.” (American Master Lease LLC v.
Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1479; accord,
Fuller v. First Franklin Financial Corp. (2013) 216 Cal.App.4th
955, 963 [“limitations period is three years . . . for a cause of
action for breach of fiduciary duty where the gravamen of the
claim is deceit, rather than the catchall four-year limitations
period that would otherwise apply”].) However, where the
asserted breach of fiduciary duty effectively “‘amount[s] to a
claim of professional negligence,’” the two-year statute of
limitations for professional negligence applies. (American Master
Lease LLC, at p. 1479; accord, Hydro-Mill Co., Inc. v. Hayward,
Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th
1145, 1159 (Hydro-Mill) [where “the complaint shows that the
allegations of professional negligence subsume all of the
allegations for breach of fiduciary duty,” the defendant “cannot
prolong the limitations period by invoking a fiduciary theory of
liability”].)
Here, Marcus alleged, “Defendants . . . breached their
fiduciary duty by the acts and omission set forth above and below
including, but not limited to, misrepresentations of fact with the
intent to fraudulently induce [Marcus] to enter into the [Allianz
policy], which misrepresentations [Marcus] justifiably relied upon
to her financial detriment.”11 The basis of Marcus’s breach of
11 The first amended complaint also alleged, “Defendants . . .
breached the fiduciary duty . . . by failing to comply with the
relevant California Insurance Code Sections . . . as stated above.”
The Insurance Code provisions referenced in the complaint
regulate the conduct of licensed insurance agents in substituting
policies; accordingly, to the extent Uy’s alleged breaches were not
fraudulent, the two-year statute of limitations period applicable
19
fiduciary duty cause of action is that Uy fraudulently induced her
to purchase unsuitable and unnecessary insurance to generate
commissions. Thus, Uy’s alleged breaches of fiduciary duty are in
the nature of fraud and subject to the three-year limitations
period of section 338, subdivision (d). (See Fuller v. First
Franklin Financial Corp., supra, 216 Cal.App.4th at p. 963
[three-year limitations period applicable to breach of fiduciary
duty claim in homeowner’s action against loan broker for
predatory lending].)
2. Marcus’s claims relating to the Southwest policies are
time-barred because they accrued by December 1, 2012
Marcus contends she did not discover she was injured by
Uy’s sale of any of the insurance policies until the Allianz policies
were cancelled in 2016 and she met with another insurance
agent, Tanzillo. Her contention lacks merit. The trial court
correctly held Marcus’s claims arising from replacement of the
Jefferson policies accrued no later than December 1, 2012, when
Branden signed the replacement notice for his Southwest policy
(Michelle signed her policy on February 17, 2012). Under the
applicable two-year or three-year limitations periods, Marcus’s
complaint filed in February 2017 was untimely.
LifePoint and Uy met their initial burden by presenting
evidence showing Jacoby advised Marcus as early as 2010 that
replacing the Jefferson policies would be against her financial
interest because she only had to pay premiums on the Jefferson
policies until 2015 to obtain a vested death benefit. After Uy
to professional negligence claims would apply. (See Hydro-Mill,
supra, 115 Cal.App.4th at p. 1159.)
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proposed Marcus replace the Jefferson policies with the
Southwest policies, Jacoby repeated his advice not to replace the
Jefferson policies, again emphasizing that she would have to
continue to pay premiums but would receive the same $2 million
death benefit afforded under the Southwest policies. At a 2011
meeting with Uy and Jacoby, Marcus expressed her interest in an
accelerated death benefit if she became critically ill, but Jacoby
again advised against her replacing the policies.
Marcus failed to meet her burden to present material
evidence to raise a triable issue of fact in her opposition. She
acknowledged Jacoby advised her not to purchase the policies
and Uy did not make any misrepresentations about the benefits
available under the Southwest policies. Yet Marcus continued to
maintain that Uy’s recommendation that Marcus replace the
Jefferson policy was bad advice that harmed her financially by
requiring her to pay premiums for a longer period of time to
obtain an identical death benefit, while enriching Uy with
commissions. But this wrongdoing is precisely what Jacoby
warned Marcus about in 2011. As he testified, “[L]ike I explained
to her, I had nothing to gain by her keeping or getting rid of the
[Jefferson] policy. Only that gentleman [had] something to gain
by selling this [Southwest] policy.”12 As to Marcus’s assertion she
first learned Uy had given her bad advice in 2016 when she spoke
with Tanzillo, Marcus never presented evidence of what Tanzillo
12 Marcus’s own separate statement of additional undisputed
material facts includes the assertion, “At the conclusion of their
meeting . . . , Jacoby formed the conclusion that the [Southwest]
policies Defendant Uy was trying to sell to [Marcus], w[ere] not in
the best interest of Marlene Marcus and w[ere] totally
inappropriate.”
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told her that was different from what Jacoby told her in 2010 and
2011 (or that it had anything to do with the Southwest policies).
As a result, Marcus did not meet her burden to show delayed
discovery, and her claims accrued when the last element of her
causes of action occurred—when her children signed for the
Southwest policies in 2012. (Aryeh, supra, 55 Cal.4th at p. 1191.)
3. Marcus did not raise a triable issue of material fact
that her later realization the Allianz policy was
unsuitable deferred accrual of her claims
Marcus’s contention that her claims related to the Allianz
policy only accrued when the policy was cancelled in 2016 and
she met with Tanzillo likewise lacks merit. As the trial court
correctly held, Marcus’s claims related to the Allianz policy
accrued by June 11, 2013, when she signed the policy, because
“any misconduct related to that policy was complete with all its
elements by that date.” Because the longest limitations period
applicable to Marcus’s claims is three years, her claims were
untimely.
LifePoint and Uy met their initial burden by presenting
evidence Marcus was on actual or constructive notice of the
suitability of the Allianz policy that forms the basis of Marcus’s
claims. Marcus expressed to Uy the desire to purchase sufficient
insurance so the death benefit would cover her estate taxes
without drawing from the estate to avoid the troubles she faced
in addressing her parents’ estate. Uy’s recommendation Marcus
purchase an additional $8 million in death benefits to achieve
this goal was based on independent evaluations of Marcus’s
projected estate value conducted by GamePlan and Marcus’s
estate attorney, Corbalis. Marcus and Uy discussed policy
22
options for nearly two years before Marcus selected the Allianz
policy. Marcus told the Allianz agents her estate was worth $25
million and she could afford the $258,000 annual premium
payments. When Uy delivered the Allianz policy documents to
Marcus, he went over them with her and offered to answer any
questions. Without asking questions, Marcus signed the
documents, including a disclaimer that she read the policy’s
illustration of the adjustable premium and index benefit, the
agent explained the policy to her consistent with the illustration,
and she believed the policy met her needs. In the signed
application, Marcus indicated she agreed the Allianz policy would
meet her “insurance needs and financial objectives” and she had
sufficient liquid assets for her living expenses and emergencies
beyond the funds needed for the policy premiums. Marcus also
admitted she understood she was obligated to pay the premiums
and a defaulted policy could only be reinstated once. Marcus
graduated from law school and admitted she was capable of
reading the Allianz policy and the benefit illustrations.
Marcus failed to meet her burden to create a triable issue of
fact that there was any aspect of the Allianz policy that she
discovered after purchasing the policy. Although Marcus points
to facts she learned from her meeting with Tanzillo, the only
evidence she submitted with respect to the meeting is the brief
excerpt of Marcus’s deposition in which she stated when asked
with whom she had discussed the case other than her attorney,
“I’ve spoken to another insurance man [Patrick Tanzillo], which
is one of the ways that I found out that some of the stuff was
going on.” But Marcus did not identify what she learned from
Tanzillo. Nor did she present any evidence that the valuation of
her estate Uy relied on in recommending she obtain $8 million of
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additional insurance was in error. Therefore, Marcus failed to
rebut the showing she had actual or constructive knowledge of
the policy’s unsuitability after having conversations with Uy and
Allianz and reading and signing the policy and its disclaimer, or
that she should be excused of her obligation to undertake a
reasonable inquiry. (See Jolly, supra, 44 Cal.3d at p. 1114;
Stella, supra, 8 Cal.App.5th at p. 192 [where the purchase price
of properties set forth in a private placement memorandum
exceeded the properties’ prices, a reasonable person would have
inquired into whether seller was collecting a commission].) Even
if we were to apply the relaxed discovery rule based on Marcus’s
contention Uy acted as her fiduciary in holding himself out as a
wealth manager and cultivating her trust, Marcus did not
present evidence to suggest her claim is based on anything other
than what she learned from her meetings with Uy and the
Allianz agent and her review of the policies. (Alfaro, supra,
171 Cal.App.4th at 1394.)
DISPOSITION
The judgment is affirmed. Defendants are to recover their
costs on appeal.
FEUER, J.
We concur:
PERLUSS, P. J. SEGAL, J.
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