Plaintiff’s Reading of the Policy is Plaintiff’s Reasonable Allegations

By Barry Zalma on October 19, 2026

CLASS ACTION THAT STATES A SIMPLE CLEAR AND PLAUSIBLE CAUSE OF ACTION SURVIVES

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In Sheila Marino v. Farmers New World Life Insurance Company, No. 2:25-cv-02200-JNW, United States District Court, W.D. Washington, Seattle (October 13, 2026) defendant Farmers New World Life Insurance Company’s (“FNWL”) moved to dismiss Plaintiff Sheila Marino’s putative class action involving flexible universal life insurance.

Marino filed a putative class action in King County Superior Court alleging: (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, and (3) violation of the Washington Consumer Protection Act (CPA).

She pleaded two theories: an “overcharge” theory and an “underpayment of interest” theory asked the Court to take judicial notice of historical Federal Funds Effective Rates.

THE LAW

Pleading Standard.

To survive a Rule 12(b)(6) motion, a complaint must state a claim that is plausible on its face.

Choice Of Law.

A federal court sitting in diversity Washington law presumptively applies.

Policy Interpretation.

Under Washington law, insurance policies are construed as contracts.

Implied Covenant And CPA.

In Washington, the duty of good faith and fair dealing does not arise when that authority is unconditional.

DISCUSSION

Washington Law Governs Every Claim.

The Court found an actual conflict only on the implied covenant claims.

Breach Of Contract (Overcharge Theory).

Because Marino’s reading is reasonable, the Court could not reject it on a motion to dismiss.

CONCLUSION

The Court denied FNWL’s motion to dismiss in its entirety.

CONCLUSION

The Court denied FNWL’s motion to dismiss. The Court lifted the stay imposed and issued a new Order Regarding Initial Disclosures, Joint Status Report, and Early Settlement.

ZALMA OPINION

Class Actions are always difficult and expansive. Most go away when a motion to dismiss is granted. In this case the motion was denied because the complaint stated a claim that is plausible on its face. The motion to dismiss also failed because at this early stage, her reading of the policy is reasonable, and her allegations were plausible.

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