Two California policyholders, Brian Guthrie and Grady Lee Harris, Jr., sued Transamerica Life Insurance Company on behalf of themselves and a proposed class, alleging the company violated all three prongs of California’s Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) – the unlawful, unfair, and fraudulent business practice prongs – in connection with a term life product called “Trendsetter LB.”

Transamerica markets two products in its Trendsetter line. The older, more basic Trendsetter Super offers term life coverage plus a single “accelerated death benefit” allowing an insured to draw down part of the death benefit early in the event of a qualifying terminal illness. Beginning in 2012, the company introduced Trendsetter LB, a bundled product that adds two more accelerated death benefits – for qualifying chronic and critical illness – delivered through one endorsement and two riders that are automatically included. The bundled LB policy is sold at a single premium rate.

The plaintiffs’ grievance centered on language in the policy’s “data pages.” A schedule listing “ADDITIONAL BENEFITS WHICH ARE PROVIDED BY RIDER” showed “NONE” and “NO CHARGE” in the plaintiffs’ policies, and the premium summary referred to the “INITIAL ANNUAL PREMIUM FOR POLICY EXCLUDING RIDERS.” Plaintiffs argued this language misleadingly portrayed the automatically included chronic and critical illness benefits as free, when (they claimed) Transamerica conceded in discovery that the total premium actually embedded charges for those benefits.

Notably, the plaintiffs did not claim they failed to receive the coverage they paid for. Their complaint was that the premium was never broken down into separate line items for each bundled component, which they said obscured the existence of the cheaper Trendsetter Super alternative.

For purposes of their class certification motion, the plaintiffs sharply narrowed their theory. They dropped any comparison to Trendsetter Super and rested certification solely on the proposition that the standard form policy language itself – read in isolation – was misleading and therefore amenable to common, classwide proof.

The Alameda County Superior Court granted certification in part and denied it in part in August 2024, and after two rounds of clarification ultimately denied certification entirely.The court found the proposed class numerous (Transamerica had issued more than 38,000 Trendsetter LB policies in California since May 2017) and ascertainable. The dispositive problem was predominance.

For the unlawful prong – premised on Insurance Code sections 330 through 332, which govern concealment and a party’s duty to communicate material facts – the court held common issues did not predominate. The claim “necessarily concern[ed]” not only the standard policy text but also marketing materials and oral representations by agents, which would differ from one purchaser to the next. The court reached the same conclusion on the unfair prong (applying the requirement that an unfair practice be “tethered” to a legislatively declared policy) and the fraudulent prong (which asks whether the language is “likely to deceive” a reasonable consumer), because each turned on the same individualized inquiry.

The court initially certified narrow unlawful/unfair claims tied to section 10127.9 – the “free look” statute requiring a cancellation-and-refund notice – reasoning that whether the standard policy contained the required notice was a common question. But after the plaintiffs sought clarification, the court confirmed that this certified claim was limited to whether Transamerica failed to provide the statutory notice. The plaintiffs then asked the court to deny certification outright, conceding they had never brought, and would not bring, a notice-failure claim. The court obliged, denying certification in full.

The Court of Appeal affirmed in the published case of Guthrie v. Transamerica Life Insurance Company, -Case No. A171526 (June 2026). It held the trial court did not abuse its discretion in denying class certification, and Transamerica was awarded its costs on appeal.

The plaintiffs’ appeal rested on a single premise: because their pared-down claims relied solely on “unambiguous” form language, common issues necessarily predominated. The appellate court rejected that premise on two independent grounds.

First, the language is not unambiguous. Reading the contract as a whole, as required by Civil Code section 1641, the court found the data-page language “ambiguous” on its face. Plaintiffs had ignored numerous other rider-related provisions – including a “Schedules of Premiums” paragraph stating that premiums “(excluding premiums for certain Riders)” remain level, the riders’ own recitals that they were issued “in consideration of … payment of the premiums for the policy,” and an application item identical to the disputed data-page language that lists only optional additional riders. At best, the court said, plaintiffs offered “an arguably plausible reading,” not the outright misstatement they claimed. Because the plaintiffs themselves had argued certification depended on the language being unambiguous, they effectively conceded that ambiguity would defeat certification. Under Brinker, the court found it proper to evaluate this merits-adjacent issue because it was germane to the certification question.

Second, even assuming the language were misleading, that common question would not establish common liability. Drawing on two governing precedents, the court explained that the unlawful and unfair claims – grounded in sections 330 through 332 – require examining not just the policy text but what additional information was conveyed to each purchaser. The statutes themselves (§ 10295.12) contemplate that agents will discuss accelerated death benefit policies with applicants, so Transamerica could introduce marketing materials and other extrinsic evidence in its defense, generating individualized issues. As for the fraud prong, the court noted that the data pages are customized: an insured who buys optional riders sees different rider and premium entries than one who declines them, so even “within the four corners” the policies differ. Because the plaintiffs purchased through agents and alleged no way to buy the product on policy language alone, liability could not be resolved on a classwide basis.