688 F.3d 203 (5th Cir. 2012), 11-20218, Dameware Development, L.L.C. v. American General Life Ins. Co.
|Court:||United States Courts of Appeals, Court of Appeals for the Fifth Circuit|
|Attorney:||Joseph F. Bishop, Jr. (argued), Servando C. Garcia, III, Garcia & Bishop, Covington, LA, for Plaintiffs-Appellants. David T. McDowell (argued), Edison, McDowell & Hetherington, L.L.P., Houston, TX, Amy Beth Boyea, Edison, McDowell & Hetherington, L.L.P., Arlington, TX, for Defendant-Appellee.|
|Judge Panel:||Before STEWART, ELROD and SOUTHWICK, Circuit Judges.|
|Opinion Judge:||CARL E. STEWART, Circuit Judge:|
|Party Name:||DAMEWARE DEVELOPMENT, L.L.C.; Dameware Development L.L.C. Defined Benefit Pension Plan and Trust, Plaintiffs-Appellants, v. AMERICAN GENERAL LIFE INSURANCE COMPANY, Defendant-Appellee.|
|Case Date:||July 19, 2012|
|Citation:||688 F.3d 203|
Appeal from the United States District Court for the Southern District of Texas.
Dameware Development, LLC Defined Benefit Pension Plan and Trust (" Dameware" or the " Plan" )1 bought several life insurance policies (the " policies" ) from American General Life Insurance Company (" American General" ). After Dameware
was unable to obtain the tax benefits it hoped would result from purchasing the policies, it sued American General for damages and for rescission of the contract. The district court granted summary judgment to American General. Because we conclude that Dameware has not shown any basis for rescinding the contract nor any contractual duties breached by American General, we AFFIRM the district court's judgment.
In 2003, Joseph Vizzini, Dameware's financial advisor, attended a presentation about the use of American General financial products to establish a pension plan that qualified for favorable tax treatment pursuant to section 412 of the Internal Revenue Code. On Vizzini's advice, Dameware decided to establish such a plan. Accordingly, Vizzini contacted Kimberly Branch, an American General vice president. Branch referred Vizzini to Alan Zeplain, an American General agent, who, Vizzini says, advised Vizzini that, in order to establish a 412(i) Plan funded by American General's financial products, Dameware must select a Third-Party Administrator (" TPA" )2 from American General's list of approved TPAs. Dameware chose B& F Corporate Benefit Services, Inc. (" B& F" ), one of the TPAs that American General had approved. On December 16, 2003, B& F sent Zeplain a proposed 412(i) Plan, and Zeplain forwarded it to Vizzini the next day. Dameware signed an administrative services agreement with B& F on December 23, 2003. Dameware intended to fund the Plan, which came to be known as the Dameware Development, LLC Defined Benefit Pension Plan and Trust, with life insurance policies for three employees and annuities from American General.
On January 13, 2004, Dameware submitted applications for life insurance policies to American General on behalf of three employees: Victoria Goodwin, Karla Hatcher, and Robert K. Hatcher. It paid American General $743,510.47 to fund the Plan for 2003 and partially fund the Plan for 2004 on February 20, 2004, and subsequently paid American General an additional $486,274 to fund the Plan for the remainder of 2004. The three insureds acknowledged receipt of the policies on March 24, 2004. The policies themselves contained no information relating to a 412(i) Plan, except that the applications asserted that one basis for purchasing the policies was " tax benefit." Delivered along with the policies were Disclosure and Acknowledgment Forms. These Disclosure and Acknowledgment Forms included a list of thirteen TPAs, and required the signor to check a box next to the TPA it selected. Each signor selected B& F as TPA. The Disclosure and Acknowledgment Forms contained a number of disclaimers, including the following: that Dameware is not relying on any " representation, warranty or guarantee beyond those contained within the insurance policy contract itself, including any riders or amendments thereto" ; that " the TPA indicated herein is responsible for administering the section 412(i) Plan ..." ; and that
American General Life Insurance Company operates solely in the capacity of a product provider and that any sales presentations, tax consequences, and/or planning concepts that may have been presented by American General Life Insurance Company ... describing the benefits of using life insurance in connection with the Plan cannot be relied upon as tax or legal advice.
Each Disclosure and Acknowledgment Form was signed on March 24 by Dameware, acting through an agent; the covered Dameware employee; and by Vizzini.
While American General immediately began to provide life insurance coverage for the three covered Dameware employees, Dameware never obtained any tax benefits from the life insurance policies or annuities it purchased from American General. In July 2005, Vizzini began contacting B& F to learn what information needed to be submitted to receive tax benefits for 2004, but received no response. Vizzini accordingly contacted American General's Zeplain, who informed Vizzini that American General had terminated its relationship with B& F. Vizzini and Zeplain thereafter contacted Pension Professionals of America, which American General had also approved as a TPA. The Pension Professionals of America worked on Dameware's 412(i) Plan for approximately a year. In April 2006, a representative of Pension Professionals informed Vizzini that B& F's strategy in formulating Dameware's 412(i) Plan had been flawed. Then, in the summer of 2006, a representative from Pension Professionals of America informed Vizzini that the company was no longer acting as a TPA, and that it had not completed Dameware's 412(i) Plan.
Vizzini contacted Zeplain again, and Zeplain provided...
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