MEMORANDUM AND ORDER
In 2004, Stuart Moldaw and his wife Phyllis were approached by their longtime estate-planning advisor with an interesting proposal: a group of investors would pay the couple a total of $4 million in exchange for their obtaining a number of insurance policies on their lives. 1 Advised by accountants and legal counsel, Stuart and Phyllis decided to participate in the plan. In or about 2004, ten to twelve policies were issued to insure Stuart’s life, with coverage totaling $78 million. After Stuart died in May 2008, his estate executor and widow remained silent while the insurance carriers paid policy proceeds to the investors. The estate, the widow and an entity identified as The 2004 Stuart Moldaw Trust, all domiciled in California, have now sued the principal investor groups, domiciled in New York, to recover the insurance payments. 2 Plaintiffs rely principally on a New York statute that grants to the administrator or executor оf an estate the right to sue someone who procures a policy on another’s life without having an insurable interest. N.Y. Ins. L. § 3205(b).
Defendants move to dismiss the Complaint on various grounds, pursuant to Rule 12(b)(6), Fed.R.Civ.P. As explained below, the motion is granted because California law, and not New York law, governs Claims One and Two; under California law, only the insurer has the right to sue a person who has received insurance proceeds but holds no insurable interest. In addition, Claim Three, which is asserted by Phyllis under California’s community property law, California Family Code § 1100(b), is time-barred because Stuart’s transfer of the policies occurred more than three years before commencement of the action. Finally, Claims Four and Five, which seek equitable relief based on the other claims, are dismissed because the other claims fail.
BACKGROUND
For the purposes of this motion to dismiss, the allegations set forth below are aсcepted as true, with the exception of legal conclusions couched as factual allegations.
See Ashcroft v. Iqbal,
— U.S. -,
A. The Parties.
This action is directed toward what the plaintiffs describe as the defendants’ “illegal wagers on the life of Stuart G. Moldaw.” (Compl. ¶ 1.) Stuart Moldaw died in California on May 24, 2008, at age 81. (Compl. ¶¶ 13, 50.)
Defendant XE Capital Management, LLC (“XE Capital”) is an asset management and hedge fund and the sole member of defendant XE L.I.F.E. LLC (“XE Life”). (Compl. ¶¶ 15-16.) Randall K. Kau, a New York citizen, is the sole member of XE Capital, and XE Capital is the sole member of XE Life. (Compl. ¶¶ 15-16.) According to the plaintiffs, the defendants arranged for life insurance policies to issue on the life of Stuart Moldaw, for which they paid Stuart $2 million, under the premise that the payments to Stuart and the policy premiums would be less than the benefits to be realized upon payment at Stuаrt’s death. (Compl. ¶¶ 4-5.) According to the defendants, “ten or twelve” policies were issued on Stuart’s life by “four or five” different carriers. (July 22 Tr. at 24.) The policies provided for payment of approximately $78 million upon Stuart’s death, and were written in or about 2004. (Compl. ¶4; Nawaday Dec. Exs. A, B.) Defendants and their co-conspirators allegedly paid all policy premiums, and Stuart Moldaw paid none. (Compl. ¶¶ 4, 32,62,79,106.)
Plaintiff Susan Moldaw is the executor of the estate of Stuart Moldaw (the “Executor”). (Compl. ¶ 13.) She resides in California. (Compl. ¶ 13.) In both the caption and the body of the Complaint, she is identified in her capacity as estate executor, and not in any individual capacity. (Compl. ¶¶ 6, 13.) Plaintiff Phyllis Moldaw is Stuart’s widow, and resides in California. (Compl. ¶¶ 14, 27.) The third plaintiff is The 2004 Stuart Moldaw Trust (the “Trust”), which is identified as an irrevocable trust organized under California law. (Compl. ¶ 12.) Its trustee, Norman Ferber, resides in California. (Compl. ¶ 12.) The Trust was formed as an unfunded trust on December 13, 2004, and, according to the Complaint, is “the rightful beneficiary of the Policies.” (Compl. ¶¶ 6, 44.)
Plaintiffs contend that the Court should order defendants to pay to the Trust any proceeds from the policies; grant declaratory relief declaring the Trust the rightful beneficiary of the policies, as well as imposition of a constructive trust and an accounting; or, alternatively, order the defendants to pay the Executor all proceeds “for transfer to the 2004 Stuart Moldaw Trust .... ” (Compl. ¶¶ 126-30, 142-44.) Elsewhere, the Complaint states that if the insurance proceeds are returned to the Trust, the plaintiffs “agree to repay” the $4 million cumulatively received by Stuart and Phyllis as compensation for their participation in the transaction. (Compl. ¶ 6; see also July 22 Tr. at 44 (“If we prevail on this, we recognize that [keeping the $4 million] would be inequitable and we would hand back the 4 million, and that’s in our complaint.”).)
B. The Life Insurance Policies and Related Transactions.
According to the Complaint, non-party “conspirators” initiated the chain of events that culminated in this action. The Complaint alleges that Mark Ross, the principal owner of a firm called Mark Ross & Co. (“MR & Co.”), advised Stuart Moldaw on life insurance and estate-planning matters for a period of about 10 years. (Compl. ¶¶ 18-19, 27.) Ross first proposed a transaction through which Stuart and *230 Phyllis Moldaw would be paid $4 million in exchange for a series of insurance policies to be issued on their lives, after which the life insurance policies would be sold to investors. (Compl. ¶¶ 26, 28.) According to the Complaint, the Moldaws had no need or desire for additional insurance, but the defendants presented the proposal as a way for the Moldaws to make money with little risk. (Compl. ¶ 29.)
During a series of meetings in fall 2004, which were attended at least in part by Stuart, his accountant, and his attorney from the Heller Ehrman law firm, it was concluded thаt approximately $78 million in life insurance coverage could be written on the lives of both Stuart and Phyllis, without any premium payments from Stuart or Phyllis. (Compl. ¶¶ 30-32.) All costs associated with the transaction were to be incurred by the defendants and/or MR & Co. (Compl. ¶ 32.) Stuart agreed to proceed with the transaction, the effects of which the Complaint describes as follows:
[T]he Moldaws would earn $4 million in exchange for participating in the deal. Specifically, Ross explained that upon the issuance of the insurance policies on the lives of Stuart and Phyllis, Defendant XE Life and/or the other Defendants would pay Stuart and Phyllis a total of $4 million as consideration for their agreeing to become the insured lives and, in effect, giving up their rights to secure insurance coverage that they could otherwise own on their lives.
(Compl. ¶ 33.)
According to the Complaint, the structure of the transaction was complеx, since defendants were “[apparently aware of the legal prohibition of transactions by which a person is paid to take out insuranee upon his or her life for the benefit of a stranger .... ” (Compl. ¶ 35.) “[A] complicated scheme” was orchestrated to work around that statutory prohibition, using unfunded trusts, limited liability companies and financing agreements. (Compl. ¶ 35.) Once formed, the trusts and LLCs had no assets other than the life insurance policies. (Compl. ¶ 36.) The Complaint alleges that “the Defendants would make ‘loans’ to the trusts and/or the [LLCs] in the form of an agreement to pay the premiums due on the policies” in exchange for secured interest in the life insurance policies. (Compl. ¶ 36.) According to the Complaint, once the loans expired, the defendants were to take ownership of the policies. (Compl. ¶ 36.) The Complaint alleges that policies on the lives of Stuart аnd Phyllis were first purchased on October 6, 2004, with the LLCs and trusts named as beneficiaries and the premiums paid directly by the defendants. (Compl. ¶ 37.)
The Complaint asserts that in or about October 2004, the defendants, via Mark Ross, informed Stuart that they could not immediately pay Stuart and Phyllis the promised $4 million. (Compl. ¶ 40.) Instead, payment would be contingent on the expiration of a two-year “incontestability period,” after which the policies on their lives would be available for sale. (Compl. ¶ 40.) At Stuart’s suggestion, the defendants placed $4 million in escrow, payable to Stuart and Phyllis at the close of the incontestability period. (Compl. ¶¶ 40-41.) Ross promised Stuart that any sales transactions “would be undertaken so as to protect the names of Stuart and Phyllis as the insureds from the possible beneficial buyers of the insurance policies on their lives.” 3 (Compl. ¶ 41.) An escrow agree *231 ment was entered between Stuart, Phyllis, XE Life and JP Morgan Trust Company, National Association of New York. (Compl. ¶ 45.) New LLCs and trusts formed as part of the transaction’s restructuring. (Compl. ¶¶ 42-44.) One of these new trusts was plaintiff The 2004 Stuart Moldaw Trust. (Compl. ¶ 44.)
Ultimately, defendants XE Capital and XE Life acquired ownership over the Moldaw life insurance policies, following a “struggle” with MR & Co. and XE-R that occurred “in less than amicable circumstances.” (Compl. ¶ 48.) The defendants made no effort to sell the insurance policies during the two-year incontestability period, and Stuart and Phyllis each received $2 million, plus interest, from the escrow account. (Compl. ¶ 49.) According to the Complaint, litigation followed between Ross and the defendants, which is ongoing. (Compl. ¶ 50.) 4
The plaintiffs commenced this action on November 3, 2008. As explained in the Complaint, “[t]he instant action does not arise out of the Policies themselves and does not seek to have those Policies voided or otherwise reformed.” (Compl. ¶ 51.) Rather, the Complaint seeks relief directed toward what it broadly refers to as “the Transaction” — the purchase of Stuart’s life insurance policies by entities with no insurable interest in his life. (Compl. ¶¶ 35, 51.) According to the Complaint, the defendants violated New York Insurance Law § 3205 by causing life insurance policies to be issued solely for the benefit of the defendants rather than for the benefit of persons with an insurable interest. Claim One alleges violation of New York Insurance Law § 3205(b)(2), which prohibits a person without an insurable interest from procuring or causing to be procured an insurance policy on the life of another; Claim Two alleges violation of New York Insurance Law § 3205(b)(1), which permits individuals to procure an insurance policy on their own lives; and Claim Three alleges violation of California Family Law § 1100(b), which requires written consent of a spouse prior to disposing or giving away community property for less than fair and reasonable value. Claim Four seeks declaratory relief and Claim Five requests the Court to order a constructive trust and an accounting.
As to relief, the plaintiffs seek disgorgement of the insurance proceeds from the defendants and claim that any proceeds should be placed in the Trust as the rightful beneficiary. (Compl. ¶ 6.) They also propose alternative equitable remedies whereby Phyllis Moldaw or the Executor would receive the policy benefits. (Compl. ¶¶ 7-11.) The Complaint does not allege breach of contract or fraud claims.
*232 STANDARD GOVERNING A MOTION TO DISMISS
Rule 8(a)(2), FecLR.Civ.P., requires “a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of wiiat the ... claim is and the grounds upon which it rests.”
Bell Atlantic Corp. v. Twombly,
The Supreme Court has described the motion to dismiss standard as encompassing a “two-pronged approach” that requires a court first to construe a complaint’s allegations as true, while not bound to accept the veracity of а legal conclusion couched as a factual allegation.
Id.
Second, a court must then consider whether the complaint “states a plausible claim for relief,” which is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.”
Id.
Although the Court is limited to facts as stated in the complaint, it may consider exhibits or documents incorporated by reference without converting the motion into one for summary judgment.
See Int’l Audiotext Network, Inc. v. Am. Telephone & Telegraph Co.,
DISCUSSION
I. California Law Governs and the Plaintiffs’ Claims Brought Under the New York Insurance Law Are Dismissed.
Plaintiffs assert that New York Insurance Law § 3205 governs Claims One and Two, and that the statute has been violated. Defendants argue that New York law is inapplicable and that California law is controlling.
In this diversity action, the Court must apply the choice of law rules of New York, the forum state.
Klaxon Co. v. Stentor Elec. Mfg. Co.,
A. An Actual Conflict Exists Between the Laws of California and New York as to Whether the Plaintiffs Have a Right to Bring Suit.
For the purposes of this motion, the central inquiry is whether the two states’ laws conflict as to the plaintiffs’ right to bring an action to recover the proceeds of a policy on the life of Stuart Moldaw from persons who have no insurable interest. I conclude that such a conflict exists.
*233
The laws of California and New York both limit the categories of persons who may own an insurance policy on the life of another. New York statute provides that an individual may “on his own initiative procure or effect” a policy on his own life “for the benefit of any person, firm, association or corporation.” N.Y. Ins. L. § 3205(b)(1). Thus, under the plain language of the statute, Stuart could, on his own initiative, make someone with no insurable interest a beneficiary under the policy.
See, e.g., Hota v. Camaj,
California similarly limits ownership of a life insurance policy: “If the insured has no insurable interest, the contract is void.” Cal. Ins.Code § 280. A separate provision specifies that “[a] policy executed by way of gaming or wagering, is void.” Cal. Ins. Code § 252. The effect of section 252 has been described as follows: “The law is clear that a person taking out a policy of insurance upon the life of another must have an insurable interest in the life of the other person. Otherwise, the policy is a mere wager on the life of the person insured, and the policy is void as against public policy.”
Jimenez v. Protective Life Ins. Co.,
“Gambling” or “wagering” on the life of another through an insurance policy has long been disfavored in American law. As Justice Holmes has stated, “[a] contract of insurance upon a life in which the insured has no interest is a pure wager that gives the insured a sinister counter interest in having the life сome to an end.”
Grigsby
*234
v. Russell,
While California and New York both limit who may lawfully own insurance on the life of another, they conflict as to who has a right of action to vindicate a violation of the statute. Section 3205(b)(4) of the New York Insurance Law empowers the person insured or his “executor or administrator” to bring action “to recover such benefits from the person receiving them.” It appears that pursuant to section 3205(b)(4), neither the Trust nor Phyllis is an appropriate plaintiff under the statute. Californiа Insurance Code § 252 is silent as to who may sue to enforce its terms, but the state does have a general requirement that “[ejvery action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute.” Cal.Code. Civ. P. § 367. Section 367 has been interpreted to give parties the right to sue “if they or someone they represent have either suffered or are threatened with an injury of sufficient magnitude to reasonably assure the relevant facts and issues will be adequately presented.”
City of Irvine v. Irvine Citizens Against Overdevelopment,
California intermediate appellate courts have concluded that the right to challenge whether a person has an insurable interest in a person’s life resides with the insurer who wrote the policy rather than the estate or beneficiaries of the estate.
8
In
Jenkins v. Hill,
Upon the decedent’s death, however, proceeds were paid to the administrator of the estate, and the plaintiff sued for their recovery.
Id.
at 522,
The holding of
Jenkins
is consistent with a long line of common-law precedent. In
Woodmen of the World v. Rutledge,
Jenkins
remains good law and continues to be cited by California courts. For example, in
In re Marriage of Bratton,
Under Jenkins, its predecessor opinions, and its progeny, the plaintiffs do not have a right to sue under the California statutes prohibiting policy ownership by one without an insurable interest. Plaintiffs are squarely in the category of plaintiffs that Jenkins bars from bringing a claim for payment of policy benefits. This is in direct conflict with New York Insurance Law § 3205(b)(4), which, in the case of a dispute over insurable interest under a life insurance policy, permits an “executor or administrator” to bring action “to recover such benefits from the person receiving them.”
Because New York statute reсognizes the plaintiffs as having the right to assert such claims, and California law would not recognize the claims of the plaintiffs, an actual conflict exists between the laws of the two states. I proceed to the next step of the conflict of laws analysis.
Allstate Ins. Co.,
B. Pursuant to the Grouping of Contacts Approach to a Choice of Law Analysis, California Law Governs This Case.
In a dispute based in contract, New York applies “[t]he ‘center of gravity’ or ‘grouping of contacts’ choice of law theory ....”
Id.
at 226,
Some disputes, though based in contract, also may implicate strong governmental interests.
Id.
at 318-19,
When the rights created by a life insurance contract are disputed, courts generally apply “the local law of the state where the insured was domiciled at the time the policy was applied for,” since the domicile state often “has the dominant interest in the insured,” and legislatures often seek “to protect the individual insured and his beneficiaries.” Restatement (Second) of Conflict of Laws § 192 & cmt. (c). “[A]t least as a general rule, the insured should receive the protection acсorded him by the local law of his domicil.” Id. at cmt. (c). 9
In evaluating the parties’ contacts to New York and California, I draw the following from the Complaint and the parties’ documentary submissions integral to the allegations therein. The plaintiff Trust is organized under the laws of California, and trustee Norman Ferber resides in California. (Compl. ¶ 12.) Phyllis Moldaw resides in California, as does the Executor. (Compl. ¶¶ 13-14.) Stuart resided in California at the time of his death. (Compl. ¶ 13.) In the fall of 2004, meetings were held at the office of Seiler & Co., LLC in Redwood City, California, at which the participants discussed taking out policies on the life of Stuart and Phyllis Moldaw. (Compl. ¶ 30.) On January 18, 2005, Stuart Moldaw authorized the release of medical information to XE-R, with his signature witnessed by a notary public in San Mateo, California. (Nawaday Dec. Ex. E.)
Both defendant LLCs are “organized” under Delaware law and have their principal places of business in New York. (Compl. ¶¶ 15-16.) Ross, who is а non-party to this action, is alleged to reside in New York, and non-party MR & Co. is alleged to be a Florida corporation with its principal place of business in New York. (Compl. ¶¶ 18-19.) Another non-party “conspirator,” XE-R, LLC, is alleged to be organized under Delaware law, with its principal place of business in New York. (Compl. ¶ 17.) The transaction was initiated by Ross with a call placed from New York. (Compl. ¶ 26.) The Complaint also asserts that non-party MR & Co. negotiated, placed and drafted all of the underlying policies in New York, and that the premiums were paid from New York. (Compl. ¶¶ 103-06.)
The parties also note the existence of several contractual choice-of-law provisions. The Complaint asserts that all agreements underlying the transaction in- *238 elude a New York choice-of-law provision. (Compl. ¶ 56.) That assertion is belied by the defendants’ submissions, which show that Stuart Moldaw agreed that two of his life insurance policies were to be governed by California law. 10 (Nawaday Dec. Ex. A at 3.2; Nawaday Dec. Ex. B at 3.2.) None of the other policies included a choice-of-law provision. (July 22 Tr. at 31.) By contrast, New York choice of law clauses are incorporated in promissory notes between MR & Co., Stuart, Phyllis and certain trusts; a loan agreement between XE Life, Moldaw Capital Partners, LLC and the Trust; a loan agreement between XE Life and MR & Co.; a loan agreement between XE-R and MR & Co.; LLC agreements between defendants and their “co-conspirators”; and the escrow agreement between XE Life, Stuart and Phyllis. (Compl. ¶ 56.) 11
Applying the center of gravity and grouping of contacts criteria, I conclude that California law governs this case. The plaintiffs are all domiciled in California, and Stuart Moldaw was domiciled in California at the time the policy was issued and at the time of his death. (Compl. ¶¶ 12-14.) The initial face-tо-face policy negotiations occurred in California. (Compl. ¶ 30.) At bottom, California plaintiffs claim an insurable interest in the life of a California domiciliary who agreed to enter a transaction negotiated in California. At least two of the policies issued on the life of Stuart Moldaw contain a California choice-of-law provision. These contacts to California are more significant— particularly the domicile of the insured— than the New York contacts cited by the plaintiffs. It is true that the defendants maintain principle places of business in New York, and various non-party “conspirators” are alleged to have a New York presence, but they entered into a contract with Stuart, who lived and died in California, and it is three California plaintiffs who allege that they were harmed.
Applying the law of California to these allegations is consistent with New York’s grouping-оf-contacts approach.
See, e.g., Zurich,
Relevant government interests also support application of California law to this case.
See Certain Underwriters at Lloyd’s,
Lastly, the plaintiffs’ citation to choice-of-law provisions in various transaction documents is unpersuasive. The plaintiffs have loosely characterized this action as directed toward the “transaction” that resulted in the defendants benefiting from underlying life insurance policies issued to Stuart Moldaw. Plaintiffs do not cite to any over-arching, master agreement or explain why the choice-of-law provisions in сertain of the contracts are determinative of which law governs the dispute. They argue in conclusory fashion that certain transaction documents with New York choice-of-law provisions are more integral to the dispute than the insurance policies themselves, and contend that these choice of law provisions should govern. They do not adequately explain why this ought to be so. It would be a different matter if the plaintiffs were bringing a breach of contract action under the provisions of one of the transaction agreements with a New York choice-of-law provision. They are not. Here, plaintiffs are cherry-picking from an assortment of choice-of-law clauses and argue that Claims One and Two ought to be decided under New York law.
Because California law governs this action, and because California does not recognize the plaintiffs аs having a right to challenge the defendants’ insurable interest, Claims One and Two are dismissed.
II. Phyllis’s Claim Under California Family Code § 1100(b) is Time-Barred.
The Complaint repeatedly alleges that neither Stuart nor Phyllis Moldaw paid premiums on Stuart’s life insurance. According to the Complaint, “Stuart Moldaw never paid a single premium related to the Policies and never held a beneficiary interest in the Policies.” (Compl. ¶ 4.) Indeed, no one with an insurable interest in Stuart’s life ever paid a premium. (Compl. ¶ 4.) The Complaint indicates that Stuart was enticed in part to pursue the transaction because the Moldaws would not be required to pay any premiums or in any way cover the costs of the transaction. (Compl. ¶ 32.) Plaintiffs allege that the defendants and their “co-conspirators” paid all policy premiums. (Compl. ¶¶ 62, 79, 106.) Flying in the face of these spe *240 cific factual allegations, the plaintiffs allege in Claim Three thаt “[p]remiums on the Policies were fully paid with the community funds of Stuart and Plaintiff Phyllis.” (Compl. ¶ 148.)
California Family Code § 1100(b) states in relevant part:
A spouse may not make a gift of community personal property, or dispose of community personal property for less than fair and reasonable value, without the written consent of the other spouse.
Phyllis alleges that the transaction violated section 1100(b) because premiums were paid with community funds of Stuart and Phyllis, but that Stuart disposed of beneficial interest on the policies for less than fair and reasonable value without Phyllis’s consent. (Compl. ¶¶ 148-50.)
Under California law, “[a] policy of insurance on the husband’s life is community property when the premiums have been paid with community funds.”
Tyre v. Aetna Life Insurance Co.,
Even though the factual premise of the community property claim contradicts much of the Complaint, Rule 8(d)(2), Fed.R.Civ.P., which was formerly codified at Rule 8(e)(2), “permits pleading inconsistent theories in the alternative.”
Kruse v. Wells Fargo Home Mortgage, Inc.,
Whether, as paragraph 148 alleges, premium payments “were fully paid with the community funds” or whether, alternatively, premiums were paid by some combination of the defendants and their “co-conspirators” would appear to be information within the unique knowledge of the estate and the widow, Phyllis. Nevertheless, “ ‘Rule 12(b)(6) does not countenance ... dismissals based on a judge’s disbelief of a complaint’s factual allegations.’ ”
Twombly,
Accepting as true the allegations set forth at paragraph 148 of the Complaint, Phyllis’s claim is nevertheless time-barred. *241 The parties do not disagree that a claim under California Family Law § 1100(b) is governed by the three-year limitations period set forth at California Code of Civil Procedure § 338(c). According to paragraph 43 of the Complaint, “in October and November of 200k,” “[o]wnership of the insurance policies taken out on the lives of Stuart and Phyllis [was] then transferred to the newly created limited liability companies.” (emphasis in original) Accepting the Complaint’s allegations as true, any wrongful transfer of community property by Stuart first occurred in November 2004, at latest. (July 22 Tr. at 49.) This action was filed on November 3, 2008, approximately one year after the statute of limitations expired under section 338(c). The plaintiffs do not allege that Phyllis lacked knowledge of the policies’ transfer. The limitations period began to run in October or November 2004, when, according to the Complaint, Stuart first relinquished ownership of the policies. (Compl. ¶ 43.) That there may have been subsequent transfers of the policies does not eliminate the fact of the first transfer of purported community property. The claim is time-barred.
III. Defendants’ Motion to Dismiss Based on the Releases Signed by Phyllis and Stuart Moldаw is Denied.
Finally, the defendants have moved to dismiss this action based on certain releases signed by Stuart and Phyllis Moldaw. Although the defendants initially argued in their papers that all claims should be dismissed on the basis of the release, at oral argument held on July 22, 2009, they acknowledged that the release only applies to claims brought by the Executor. (July 22 Tr. at 2-3.) The release states: “I waive and release any legal claims that I might have of any kind arising out of any interest XEL may acquire as to a Policy under the agreements entered into connection with the premium financing referenced above.” (Nawaday Dec. Ex. E.)
Typically, a release secured by Stuart would bind Stuart’s estate. Though still living, Stuart fully knew the nature of the transaction. There remains the issue of whether the release would violate California public policy. The release signed by Stuart would affect the rights of the estate and the exeсutor in this case no more than the holding of
Jenkins
and related cases. With or without the release, California does not recognize the estate as having a right to litigate an insurer’s determination of insurable interest.
See Jenkins,
IV. Claims Four and Five are Dismissed.
Claims Four and Five seek declaratory relief, imposition of a constructive trust and an accounting to remedy the statutory violations set forth in Claims One, Two and Three. Because Claims One and Two fail state a claim for underlying violations of the state statutes and Claim Three is time-barred, the plaintiffs’ claims for equitable relief are dismissed.
CONCLUSION
The motion to dismiss is GRANTED. The Clerk is directed to enter judgment for the defendants.
The Clerk is also directed to transmit by mail a copy of this Memоrandum and Order to the New York State Superintendent *242 of Insurance and to the California Insurance Commissioner.
SO ORDERED.
Notes
. There is a growing market for this type of "stranger-owned life insurance,” sometimes referred to as "death bonds.” See J. Alan Jensen & Stephan R. Leimberg, Stranger-Owned Life Insurance: A Point/Counterpoint Discussion, 33 ACTEC J. 110, 110, 120 (2007). In such a transaction, the insured individual is compensated for obtaining and transferring the policy and the term policy is almost always renewed by the purchaser until the insured dies and policy proceeds are paid to the investors. Id. at 111-12. The secondary market for these policies is estimated to have grown from $200 million in 1998 to $12 billion in 2005. Id. at 111.
. Jurisdiction is invoked by reason of diversity of citizenship. 28 U.S.C. § 1332. Because the defendants are limited liability companies (“LLCs”) and not corporations, I entered an order requiring the plaintiff to amend to set forth the citizenship of all constituent members of the LLCs. (Order of Nov. 8, 2008.)
See Handelsman v. Bedford Village Assocs. Ltd. Partnership,
. Such promises are commonly made as pail of a stranger-owned life insurance transaction, due, in part, to concern that a policy’s owner may wish to visit harm upon an insured, from whose death the policy owner *231 stands to profit. See Jensen & Leimberg, 33 ACTEC J., at 117-19.
. The Complaint does not identify by caption or jurisdiction where any such litigation is pending, and according to the defendants, all such actions have now been dismissed. (July 22 Tr. at 22.) On November 12, 2008, Justice Charles Ramos of the Supreme Court of the State of New York, New York County, entered judgment in the matter of XE Capital Management, LLC v. XE-R, LLC, R2004, LLC, Mark Ross & Co., Inc. and Mark E. Ross, Index No. 602336/2008. The judgment confirmed an arbitration award granted to XE Capital in the amount of $9,133,308.80, plus expenses and court сosts. The defendants’ motion papers include an affidavit executed by Stuart Moldaw in October 2006, in the matter of XER, LLC v. XE Capital Management, LLC, 603658/2006 (N.Y.Sup.Ct.N.Y.Cty.). There has been at least one other action in the Supreme Court of the State of New York, New York County, that include as parties the entities alleged to be involved in the Moldaw transactions. See Mark Ross & Co., Inc. and Mark E. Ross, Individually v. XE Capital Management, LLC, 104935/2007 (N.Y.Sup.Ct. N.Y.Cty.).
. Available at http://www.ins.state.ny.us/ogco 2005/rg051215.htm.
. Available at http://www.insurance.ca.gov/ 015 0-seniors/01 OOalerts/strangerownedlifeins. cfm.
. Stranger-owned life insurance also has been described as "theft by deception, a fraud on the insurer,” since it often requires evasions and omissions on a policy application in order "to trick the insurer into issuing a contract it would not otherwise issue.” Jensen & Leimberg, 33 ACTEC J. at 115. These transactions may sometimes be vehicles for money laundering schemes. Id. at 119.
. " 'Where an intermediate appellate state сourt rests its considered judgment upon the rule of law which it announces, that is a datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise ....'”
Pentech Int’l, Inc. v. Wall Street Clearing Co.,
.
Johansen v. Confederation Life Ass’n,
. The two policies were issued by The Manufacturers Life Insurance Company (USA), and each provided a face amount of $5 million in coverage. (Nawaday Dec. Exs. A & B.) These documents incorporated into the Complaint by reference are properly considered on a motion to dismiss.
Int’l Audiotext Network,
. Neither party asserts that the citizenship of any insurer is material to the outcome of this choice-of-law analysis. Along with The Manufacturers Life Insurance Company (USA), it apрears that policies were issued by Jefferson Pilot LifeAmerica Insurance Company, of Concord, NH (Nawaday Reply Dec. Ex. C); Phoenix Life Insurance Co., of Boston, MA (Nawaday Reply Dec. Exs. D-G); Sun Life Assurance Company of Canada (Nawaday Reply Dec. Ex. H); Lincoln Life & Annuity Co., of New York (Nawaday Reply Dec. Ex. I); MONY Life Insurance Company of America, of New York (Nawaday Reply Dec. Ex. J); and Metropolitan Life Insurance Co. (Nawaday Reply Dec. Ex. K).
. California could rationally conclude that a decedent's estate should not benefit from an unlawful policy issued with the connivance of the decedent. It does not necessarily follow that because a person has no insurable interest and is not entitled to wager on a person's life that the illegal wager should nevertheless be honored, with the policy effectively rewritten to name the estate, trust or widow as beneficiary. California could make the public policy decision to limit the right to challenge to the insurer and, perhaps, state insurance regulators.