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Estate of Osborn-Vincent v. Ameriprise Financial Services, Inc.

United States District Court, D. Oregon, Portland Division

February 13, 2018

THE ESTATE OF MARJORY GAIL THOMAS OSBORN-VINCENT, Plaintiff,
v.
AMERIPRISE FINANCIAL, INC., a Delaware corporation; AMERIPRISE FINANCIAL SERVICES, INC., a Delaware corporation; and RIVERSOURCE LIFE INSURANCE COMPANY, a Minnesota corporation, Defendants.

          OPINION AND ORDER

          Youlee Yim You, United States Magistrate Judge

         INTRODUCTION

         This case involves claims by the Estate of Marjory Gail Thomas Osborn-Vincent (“Decedent”). Named defendants include Ameriprise Financial, Inc. (“AFI”), Ameriprise Financial Services, Inc. (“AFSI”), and Riversource Life Insurance Company (“Riversource”). In its Amended Complaint (“A/C”) (ECF #20), the Estate alleges that it was the named beneficiary of a single-premium, universal life insurance policy (“the Policy”) purchased by Decedent on August 4, 1989, that provided a death benefit of $273, 125.00. A/C ¶ 6. The Estate alleges that defendants: (1) on August 14, 1991, reduced the death benefit in the Policy to $150, 000.00; and (2) between 2008 and 2015, violated the terms of the Policy by increasing the cost of the insurance and/or other policy costs, thereby consuming the cash value of the Policy and causing it to lapse in November 2015, four months before Decedent's death on March 8, 2016. A/C ¶¶ 7, 9-12.

         Initially, this case named only AFSI as a defendant. Complaint 1, ECF #1. However, this court permitted the Estate to file the Amended Complaint, adding AFI and Riversource. ECF #18 (granting Mot. to Amend, ECF #12).

         The Amended Complaint alleges claims for: (1) breach of contract (“First Claim”); (2) breach of the duty of good faith and fair dealing (“Second Claim”); and (3) elder abuse under ORS Chapter 124 (“Third Claim”). The Estate has now filed a second Motion to Amend the Complaint (ECF #30). The proposed Second Amended Complaint (“SAC”) would add a Fourth Claim for common law fraud and a Fifth Claim for rescission, as well as a series of additional factual allegations in support of those claims. ECF #30-1, Ex. 1 Defendants filed an opposition to the Estate's motion, combined with AFI's Motion to Dismiss for Lack of Personal Jurisdiction Pursuant to FRCP 12(B)(2) (“Comb. Opp.”, ECF #34). In separate Findings and Recommendations, to be entered immediately after entry of this Opinion and Order, this court concludes that AFI's motion should be granted and that one portion of the Estate's Motion to Amend (addition of the Fifth Claim) should be disallowed. For the reasons in this Opinion and Order, the Estate's Motion to Amend is GRANTED to the extend it seeks to add a Fourth Claim for common law fraud.[1]

         ANALYSIS

         I. Combined Motion in Opposition

         Defendants' “Combined” Opposition to the Estate's Motion to Amend and Motion to Dismiss is not permitted under Local Rule 7-1(b), which provides that “[m]otions may not be combined with any response, reply, or other pleading.” Nevertheless, AFI's motion occupies an entirely separate section and AFI has complied with the certification of conferral requirements with regard to its motion. Comb. Opp. 4, 21-28, ECF #34. Thus, this court will consider AFI's motion in separately filed Findings and Recommendations.

         II. Addition of the Fourth Claim for Fraud

         The Estate seeks to add a Fourth Claim for Fraud and a Fifth Claim for Rescission. For the reasons set forth in the accompanying Findings and Recommendations, the motion to dismiss the Fifth Claim should be granted. However, for the reasons that follow, the Fourth Claim is allowed.

         A. Legal Standard

         “Rule 15(a) declares that leave to amend shall be freely given when justice so requires; this mandate is to be heeded.” Foman v. Davis, 371 U.S. 178, 182 (1962) (internal quotation marks omitted). A ruling on a requested amendment is reviewed for an abuse of discretion. Ariz. Students' Ass'n v. Ariz. Bd. of Regents, 824 F.3d 858, 871 (9th Cir. 2016) (citations omitted). When exercising its discretion on a motion to amend, the court should be guided by the underlying purpose of FRCP 15(a), which is “to facilitate decisions on merits, rather than on the pleadings or technicalities.” Novak v. United States, 795 F.3d 1012, 1020 (9th Cir. 2015) (citation omitted). Thus, leave to amend is to be granted with “extreme liberality.” Desertrain v. City of Los Angeles, 754 F.3d 1147, 1154 (9th Cir. 2014); see also Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (citation omitted).

         The court may consider factors “such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment” and deny leave to amend on those or similar grounds. Foman, 371 U.S. at 182. However, “outright refusal to grant leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules.” Id.

         Absent prejudice, there is a strong presumption in favor of granting leave to amend. Eminence Capital, LLC, 316 F.3d at 1052 (citation omitted). Nevertheless, futility may support denial of a motion to amend if it is clear that the pleading, as amended, is subject to dismissal and cannot be cured by amendment. United States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011) (citations omitted). “Leave to amend is warranted if the deficiencies can be cured with additional allegations that are consistent with the ...


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