Judge Bruce G. Iwasaki, Case 22STCV21573 2023-02-08 Tentative Ruling

Case Name: Rhonda Rothstein et al. v. Metropolitan Life Insurance Company et al.

Moving Party: Defendants Metropolitan Life Insurance Company & MetLife Legal Plans

Farmers Property and Casualty Insurance Company, as Successor in Interest to Metropolitan Property and Casualty Insurance Company

Tentative Ruling: The Demurrer is sustained in its entirety with 20 days leave to amend. The motion to strike the prayer for punitive damages is granted.

This is a breach of contract action. Rhonda Rothstein (Rothstein) and her company, Cal First Responders Insurance Agency, Inc. (CFR) sued Metropolitan Life Insurance Company (MetLife), Metropolitan Property and Casualty Insurance Company, MetLife Legal Plans, Inc. (MetLaw), County of Los Angeles Fire Museum Association (CLAFMA), Winston Financial Services, Inc., Jeffrey Kaliher, Paul Oyler, and Paul Schneider for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, conversion, unfair business practices, and promissory estoppel.

Rothstein alleged that she developed a group insurance plan for Los Angeles County firefighters. She then reportedly entered into numerous contracts with the various Defendants to provide and administer the insurance. The Complaint principally alleges the existence of the following agreements:

· January 28, 2019: contract between Rothstein, through her company RRIA, with Metropolitan Property and Casualty Insurance Company.[1] This contract was later assigned by RRIA to CFR. The agreement governed Rothstein’s commissions as to personal lines of property and casualty insurance.

· January/February 2019: contract between Plaintiffs and MetLaw allegedly providing Plaintiffs 10% commission of total annual premiums for new enrollments of firefighters in the MetLaw plan relating to legal coverage.

· Two contracts between Rothstein, through CFR, and MetLife that were executed on May 16, 2019 (“First MetLife Non-Standard Commission Agreement”) and June 10, 2019 (Second MetLife Non-Standard Commission Agreement”). These agreements allegedly established Plaintiff’s entitlement to commissions as to optional life, optional accidental death & dismemberment, dependent optional life, dependent optional accidental death & dismemberment, and voluntary short-term disability coverage.

· May 16, 2019: contract between Rothstein, through CFR, and MetLife (“MetLife Enrollment Vesting Based Commission Agreement). This agreement governed Plaintiffs’ commission structure as to critical illness insurance, hospital indemnity insurance, and accident with hospital coverage insurance.

The Complaint alleges that by July 2019, Rothstein was entitled to at least $533,611.62 in commissions, but has only received $19,900. In addition, Plaintiff alleges that Defendants colluded with each other to remove her from the agreements. As one example, she alleges that MetLife utilized Winston Financial Services, a third-party benefits administrator, to administer its group insurance plan; however, Winston was allegedly inept, and Rothstein frequently had to step in and provide guidance to any firefighters that had enrollment questions or inquiries. Rothstein further alleges that this eventually resulted in the County of Los Angeles Fire Museum Association terminating her as its insurance broker.

Defendants MetLife and MetLaw (collectively MetLife) and Farmers Property and Casualty Insurance Company, as successor in interest to Metropolitan Property and Casualty Insurance Company (Farmers) demur to the entire First Amended Complaint. Plaintiffs filed an opposition and Defendants filed a reply.

The parties’ request for judicial notice is granted. The documents are court records filed in this case and various search results from the Secretary of State. (Evid. Code, § 452, subds. (c), (d).) The meet-and-confer requirements are satisfied. (Hopkins Decl., ¶ 3; Nam Decl., ¶ 2.)

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . ..” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.)

To state a claim for breach of contract, a plaintiff must allege: (1) a contract between the parties; (2) plaintiff's performance or excuse for nonperformance; (3) defendant's breach; and (4) damages to plaintiff from the breach. (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

If multiple contracts are involved, it is better to plead them as separate causes of action. Otherwise, there may be a lack of clarity about which contract is the basis of the cause of action, and which acts are the alleged breaches of which contract, as well as the associated damages. (See Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 608; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2022) ¶¶ 6:104.)

Plaintiffs’ first cause of action is based on the several agreements they have alleged. (Complaint, ¶ 103.) Defendants’ liability under each of those agreements is unclear because the Complaint combines the contracts and alleges “at least $533,611.62 in commissions . . . based on the various commission agreements [Rothstein] executed with the MetLife Defendants.” (Id. at ¶ 77.) Therefore, the demurrer is sustained to the first cause of action because of the uncertainty resulting from the multiple contracts and different Defendants allegedly implicated.

MetLife argues that the breach of contract claim with respect to MetLaw is uncertain because Plaintiffs did not attach a copy of the contract or plead its terms. Plaintiffs oppose, asserting that they allege the existence of the contact, the approximate date, that the contract was in writing, and the substantive terms, i.e., the commission structure.

A complaint may plead the contract verbatim, attach a copy as an exhibit, or set forth its legal effect. If Plaintiffs opt to plead a contract’s legal effect, they must “ ‘allege the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.’ ” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.)

“‘Under California law, a contract will be enforced if it is sufficiently definite (and this is a question of law) for the court to ascertain the parties’ obligations and to determine whether those obligations have been performed or breached.’ [Citation.] ‘To be enforceable, a promise must be definite enough that a court can determine the scope of the duty[,] and the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages.’ [Citations.] ‘Where a contract is so uncertain and indefinite that the intention of the parties in material particulars cannot be ascertained, the contract is void and unenforceable.’ [Citations.] ‘The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.’ [Citations.] But ‘[i]f … a supposed “contract” does not provide a basis for determining what obligations the parties have agreed to, and hence does not make possible a determination of whether those agreed obligations have been breached, there is no contract.’” (Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 209.)

The allegations of a contract with MetLaw are insufficient. (Complaint, ¶ 59.) There are no details as to when Plaintiff was to begin receiving the commission or the frequency of the payments. (Compare Complaint ¶ 59 with ¶¶ 65, 67.) While Plaintiffs assert that they allege information on the “underlying arrangement between MetLaw and CLAFMA” including the timeframe of that contract, there are no details as to the instant contract between MetLaw and Plaintiffs. (See Id. at ¶ 59.) Finally, there is no information on Plaintiffs’ obligations and duties under their contract with MetLaw and the structure of the commission. (Compare Id. at ¶ 58 with ¶¶ 65-66; 70-74.)

Farmers argues that there are inconsistencies between the Complaint’s allegations as to the name of “CAL First Responders Insurance Solutions Inc.” and the Plaintiffs’ actual registered name of “First Responders Insurance Solutions, Inc.” They allege this creates a standing issue because “Inc.” cannot properly be appended to the end of “CAL First Responders Insurance, Agency” because that entity is non-existent.

The Court does not agree that this creates uncertainty in the Complaint. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2 [finding that complaint is not uncertain if it “sufficiently appris[es] defendant of the issues it is being asked to meet”].) Paragraph 3 of the Complaint alleges that Plaintiff CFR is “formally named First Responders Insurance Agency, Inc.” This is the correct entity that is suing and who is a party to the various contracts. (Complaint, Exs. C, D, E.) It is true that Plaintiffs confusingly reference “CAL First Responders Insurance Agency, Inc.” in six locations throughout their Complaint. However, the Court understands “CFR” to refer to the formal name of “First Responders Insurance Agency, Inc.” To the extent that there is confusion regarding Plaintiffs’ business name, this may be amended given that the demurrer is sustained and an amended complaint will need to be filed.

Second cause of action – implied covenant of good faith and fair dealing

The elements for breach of the implied covenant of good faith and fair dealing are: (1) existence of a contract between plaintiff and defendant; (2) plaintiff performed his contractual obligations or was excused from performing them; (3) the conditions requiring defendant’s performance had occurred; (4) the defendant unfairly interfered with the plaintiff’s right to receive the benefits of the contract; and (5) the plaintiff was harmed by the defendant’s conduct. (Merced Irrigation. Dist. v. County of Mariposa¿(E.D. Cal. 2013) 941 F.Supp.2d 1237, 1280 [discussing California law].) Plaintiffs must allege that defendant’s conduct for failure or refusal to discharge contractual responsibilities was a conscious and deliberate act, not an honest mistake, bad judgment or negligence. (Ibid.) “ ‘ “[T]he implied covenant of good faith and fair dealing is limited to assuring compliance with the¿express terms¿of the ¿contract, and¿cannot be extended to create obligations not contemplated by the contract.” ’ ” (Ragland v. U.S. Bank Nat. Assn.¿(2012) 209 Cal.App.4th 182, 206, original italics.)

A breach of the implied covenant cause of action is dependent upon the parties entering into an underlying contract. (See CACI No. 4510; see also Kuitems v. Covell (1951) 104 Cal.App.2d 482, 485.) As the demurrer is sustained on the breach of contract claim above, it is also sustained on the second cause of action.

MetLife advances numerous other arguments why this claim fails against it: (1) MetLife was not a party to the contract between Plaintiffs and Metropolitan Property and Casualty Company, (2) use of Rothstein’s “protected data” does not constitute unreasonable conduct because Defendants had access to the data early on and she does not allege that data was used without her knowledge prior to her termination as broker, (3) the insistence of using Winston as the third party administrator cannot form the basis of the claim because there is no allegation that Defendants knew of Winston’s incompetence beforehand and the commission agreements were executed in May 2019, after Winston was appointed, and (4) CLAFMA, not the MetLife Defendants, terminated Rothstein as broker.

Plaintiffs allege that Defendants engaged in various behaviors that interfered with Plaintiffs’ right to receive benefits under the contract, such as developing their own group insurance “that ran parallel to Plaintiffs’ group insurance plan without telling [her] while, at the same time, deliberately encouraging Ms. Rothstein to recruit firefighters.” (Complaint, ¶ 113.) While MetLife takes issue with the timing of these events, those arguments go to the merits of the cause of action, which the Court does not consider on demurrer.

Farmers’ argument that this claim is duplicative of the first cause of action for breach of contract is unavailing. Plaintiffs also allege that Metropolitan Property & Casualty appointed Winston, whose incompetence “threatened the success of the initial roll-out of the group and/or supplemental insurance plans.” (Complaint, ¶ 112.)

Nevertheless, because of the deficiencies in the breach of contract cause of action, the demurrer is sustained on the second cause of action.

The elements of fraud, are “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631.) Fraud must be pled specifically, not with “general and conclusory allegations.” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184; Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73 [“This particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.”)

MetLife argues that it is unclear which of the “MetLife Defendants” committed the acts and there is no specificity as to the facts alleged. Farmers argues that Plaintiffs do not identify any misrepresentations such as specific statements that were made to Plaintiffs. In opposition to both demurrers, Plaintiffs contend that the fraud claims rest upon the statements of Kelly Gerli, an account executive and “shared agent” for MetLife and Farmers.

The Complaint alleges that Gerli “sent a flyer to Plaintiffs regarding MetLaw” as supplemental insurance for personal legal services. (Complaint, ¶ 35.) In December 2018, Gerli represented that MetLife could deliver “better and cheaper” group insurance than the prior provider. (Id. at ¶ 36.) Plaintiffs allege that Gerli and Defendants “intentionally misrepresented their interest in promoting and meeting the demands of Ms. Rothstein’s idea to assemble a group insurance plan by convincing her to switch insurers from Guardian to MetLife and by communicating to Ms. Rothstein that she would receive a percentage of commissions for various lines of insurance that firefighters signed up for, whether as part of the group insurance offered by the MetLife Defendants or whether they added supplemental insurance in addition to the group insurance offering.” (Id. at ¶ 117.)

The allegations are insufficiently specific. While Plaintiffs generally allege that the “MetLife Defendants knew that their contractual representations to Ms. Rothstein . . . were false,” this is too vague. They do not allege which, if any, of Gerli’s purported representations were false. (Complaint, ¶¶ 35, 36, 75, 76, 94.) Instead, the Complaint alleged that “Mr. Kaliher” made false representations.[2] (Id. at ¶ 120.) By grouping all the Defendants together, Plaintiffs have created ambiguity in their Complaint. Thus, the demurrer is sustained.

“ ‘ “Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.” ’ ” (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 208 (Welco).)

“[T]he historical underpinnings of the tort [] provided a remedy for the loss of intangible property interest[s] [] only if those interests are reflected in something tangible that can be physically taken[,]” such as a floppy disc that contains trade secrets or stock certificates. (Thrifty-Tel, Inc. v. Bezenek (1996) 46 Cal.App.4th 1559, 1565-1566.) “Courts have traditionally refused to recognize as conversion the unauthorized taking of intangible interests that are not merged with, or reflected in, something tangible.” (Ibid.)

The requirement that a conversion tort must be tethered to physical property has eroded in recent years. “[C]onversion has been adapted to new property rights and modern commercial transactions” that expand “well beyond its original boundaries.” (Welco, supra, 223 Cal.App.4th at pp. 210-211.) In Welco, the defendant “wrongfully caused a charge to plaintiff’s credit card account by having a specific sum of money paid through defendant’s credit card terminal into defendant’s bank account.” (223 Cal.App.4th at p. 211.) The defendant subsequently obtained the money from the credit card company, causing plaintiff to be indebted for the unauthorized transfer, and which constituted conversion. (Id. at pp. 211-212.) Similarly, in Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 125, the Court of Appeal held that a “net operating loss” is a definite amount and “the misappropriation of intangible net operating losses alleged [] supports a cause of action for conversion.” That court further noted that the “significance of this, in our view, is not that the intangible right is somehow merged or reflected in a document, but that both the property and the owner’s rights of possession and exclusive use are sufficiently definite and certain. The misappropriation of a net operating loss without compensation in the manner alleged in the complaint, causing damage to [plaintiff] as alleged, is comparable to the misappropriation of tangible personal property or shares of stock for purposes relevant here. We see no sound basis in reason to allow recovery in tort for one but not the other.” (Fremont Indemnity Co., supra, 148 Cal.App.4th at p. 125.) Thus, a cause of action for conversion may be sufficiently pled if there are allegations of the unauthorized taking of an intangible property interest even if it is not reflected in tangible property. (Id. at pp. 125-126.)

Both Welco and Fremont Indemnity Co. required that the intangible property be sufficiently certain, and that the plaintiff’s rights of possession and use of the property were exclusive. “Plaintiff had a property right in its credit card account because plaintiff’s interest was specific, plaintiff had control over its credit card account, and plaintiff had an exclusive claim to the balance in the account.” (Welco, supra, 223 Cal.App.4th at p. 211 [citing Kremen v. Cohen (9th Cir. 2003) 325 F.3d 1035, 1030 (discussing the three-part test to determine whether a property right exists: “ ‘First, there must be an interest capable of precise definition; second, it must be capable of exclusive possession or control; and third, the putative owner must have established a legitimate claim to exclusivity’ ”)].)

Here, MetLife argues that the alleged property does not meet the Kremen test. They contend that group insurance plan is not capable of precise definition, Plaintiffs did not have exclusive control because the census data was publicly available information, and there is no legitimate claim to exclusivity. Plaintiffs oppose, asserting that Defendants capitalized on their “design of the insurance plan . . . compilation of census data . . . and personal information, including name, business address, and broker license.”

Paragraph 127 describes the allegedly converted property: “the design of the group insurance plan . . . the census data created and prepared by Ms. Rothstein about Los Angeles County firefighters, Plaintiffs’ broker license and broker license number, and Plaintiffs’ office address.” Plaintiffs contend that Defendants used that data to “create a separate group insurance plan . . . with the goal of displacing Plaintiffs’ plan” to block her commissions. (Complaint, ¶ 128.) As to her brokerage license and number, she alleges that Defendants used this information “to process payments for compensation, which were diverted from the MetLife Defendants to Winston, CLAFMA, and/or the Individual Defendants.” (Ibid.)

First, “design of the group insurance plan” and “census data” do not constitute property for purposes of conversion. Census data is publicly available information, and “design of the group insurance plan” is a vague term. In fact, Plaintiffs define “design of the group insurance plan” as merely a collection of different insurance products. (Complaint, ¶ 24.) Plaintiffs’ cited cases are distinguishable. Palm-Springs-La Quinta Development Co. v. Kieberk Corp. (1941) 46 Cal.App.2d 234, 239 involved a collection of index cards containing members’ names, “valuable information regarding sales of lots or prospects for such sales, their financial standing, the names of agents and the dates of interviewing members and status of contracts.” The party had “expended thousands of dollars in procuring the information from which these cards were made” and the preparation of each card was supported by a dollar amount. (Id. at pp. 239-240.) Similarly, Lone Ranger TV, Inc. v. Program Radio Corp. (9th Cir. 1984) 740 F.2d 718, 725 involved intangible ownership of intellectual copyrighted material. Here, Plaintiffs do not allege anything proprietary about their obtained compilation of insurance information, nor do they allege that such information was capable of “exclusive possession or control.”

As to Rothstein’s brokerage license and number, the Court interprets this to mean that Defendants misappropriated that information to improperly divert funds. Thus, Plaintiffs assert a misappropriation of funds, which requires that a “specific, identifiable sum” be alleged. (Welco, supra, 223 Cal.App.4th at p. 209.) Again, because Plaintiffs group all Defendants together, they do not sufficiently specify any dollar amounts that are traceable to the allegedly converted funds with the use of her brokerage license or numbers.[3] Accordingly, the demurrer is sustained.

Fifth cause of action – violation of Business and Professions Code section 17200

California Business and Professions Code section 17200 prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code § 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.) “A plaintiff alleging unfair business practices under these statutes must state with reasonable particularity the facts supporting the statutory elements of the violation. [Citations.]” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 619.)

An unlawful business practice can be based on violations of other laws. The unfair competition law treats such violations as unlawful practices and makes them independently actionable. (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone, Co. (1999) 20 Cal.4th 163, 180.)

Plaintiffs’ fifth cause of action is based on their other claims. (See Complaint, ¶ 131-133.) Since the demurrer is sustained on those claims, the demurrer is also sustained on this cause of action. (Cel-Tech Communication, Inc., supra, 20 Cal.4th at p. 182; Gutierrez v. Carmax Auto Superstores Cal. (2018) 19 Cal.App.5th 1234, 1265.)

Farmers argues there are no allegations directed to any wrongdoing that it committed. But Paragraph 133(d) states that the “MetLife Defendants transferring Plaintiffs’ right to commissions from the MetLife Auto & Home insurance plan offering to Mr. Kaliher, who himself, engineered or participated in the depriving Plaintiffs of their rights to earn those commissions.” This allegation is rooted in the January 28, 2019 contract between Farmers (as assignee) and Plaintiffs.

MetLife argues that it cannot be held vicariously liable for this claim, citing to several cases. However, there appears to be a split in case law on this issue. (Compare Emery v. Visa Internat. Service Assn. (2002) 95 Cal.App.4th 952, 960 [“unfair practices claim under section 17200 cannot be predicated on vicarious liability”] with People v. JTH Tax, Inc. (2013) 212 Cal.App.4th 1219, 1242 [“persons can be found liable for . . . unfair business practices under normal agency theory. To the extent that Toomey, . . . or Emery, . . . hold otherwise . . ., these cases are mistaken”]; see also Krumme v. Mercury Insurance Co. (2004) 123 Cal.App.4th 924, 946.) In any event, the demurrer is sustained for the reasons above that all the other claims fail.

“ ‘The elements of a promissory estoppel claim are “(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3)[the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” ’ ” (Joffe v. City of Huntington Park (2011) 201 Cal.App.4th 492, 513)

Here, Plaintiffs allege that “CLAFMA and the Individual Defendants made a promise to Plaintiffs to pay Plaintiffs commissions based on premiums received from CLAFMA members . . . so that Plaintiffs would receive at least 12 months’ worth of commissions. The MetLife Defendants and Winston, in turn, agreed to this arrangement and promised to pay Plaintiffs through CLAFMA and the Individual Defendants.” (Complaint, ¶ 135.)

These terms are not “clear and unambiguous” because Plaintiff makes a blanket assertion across all the Metropolitan entities without specifying which one made the promise. Moreover, it is unclear when this promise was made. Plaintiffs vaguely allege that the promise was made after July 24, 2019, when she was terminated as broker of record, but no specific date is provided. (Id. at ¶ 135.) And it is unclear which of the multiple contracts are implicated to provide the “12 months’ worth of commissions,” which is problematic because different contracts contained varying commission percentages and duties. (Compare Complaint ¶ 59 [“10% of MetLaw’s total annual premiums”] with ¶ 72 [“21% of MetLife’s total annual premiums].) Thus, the demurrer is sustained on this cause of action.

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.”¿ (Code Civ. Proc., § 436.)

Farmers’ motion to strike the paragraph for punitive damages is granted because the demurrer is sustained on all causes of action.

The demurrer is sustained in its entirety and the motion to strike is granted. Plaintiffs are provided 20 days leave to amend the Complaint.

[1] Farmers Property and Casualty Insurance Company is the successor in interest to Metropolitan Property and Casualty Insurance Company.

[2] Mr. Kaliher was allegedly a “retired battalion chief for the Los Angeles County Fire Department” who was not an insurance broker or agent. (Complaint, ¶¶ 27, 30.) Plaintiffs do not allege his connection to any of the MetLife entities.

[3] Plaintiffs allege generally that they are owed $276,507.86 as of March 2019 and $533,611.62 as of July. But these are mere contract damages insufficient to support a claim of conversion. (See Voris v. Lampert (2019) 7 Cal.5th 1141, 1151-1152 [“ ‘the simple failure to pay money owed does not constitute conversion’ . . . Were it otherwise, the tort of conversion would swallow the significant category of contract claims that are based on the failure to satisfy ‘ “mere contractual right[s] of payment” ’]