Goldman v. Metropolitan Life Ins. Co.

CourtNew York Court of Appeals
Writing for the CourtG. Smith
Citation5 N.Y.3d 561,841 N.E.2d 742
PartiesNeil A. GOLDMAN, on Behalf of Himself and All Others Similarly Situated, Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, Respondent. Allen S. Franco et al., Appellants, v. The Guardian Life Insurance Company of America, Respondent. Michael Katz, Appellant, v. American Mayflower Life Insurance Company of New York, Respondent.
Decision Date21 November 2005

Page 742

841 N.E.2d 742
5 N.Y.3d 561
Neil A. GOLDMAN, on Behalf of Himself and All Others Similarly Situated, Appellant,
v.
METROPOLITAN LIFE INSURANCE COMPANY, Respondent.
Allen S. Franco et al., Appellants,
v.
The Guardian Life Insurance Company of America, Respondent.
Michael Katz, Appellant,
v.
American Mayflower Life Insurance Company of New York, Respondent.
Court of Appeals of New York.
November 21, 2005.

Page 743

Goodkind Labaton Rudoff & Sucharow LLP, New York City (Ira A. Schochet, Joel H. Bernstein and Stacey Fishbein of counsel), Goldman Scarlato & Karon, P.C., Conshohocken, Pennsylvania (Mark S. Goldman and Brent T. Jordan of counsel), and Weinstein Kitchenoff & Asher, LLC, Philadelphia, Pennsylvania (David H. Weinstein of counsel), for appellant in the first above-entitled action.

Baker & McKenzie, San Francisco, California, New York City (Christopher Van Gundy and Mark R. Winston of counsel), for respondent in the first above-entitled action.

Goodkind Labaton Rudoff & Sucharow LLP, New York City (Ira A. Schochet, Joel H. Bernstein, Louis Gottlieb and Stacey Fishbein of counsel), and Lowey Dannenberg Bemporad & Selinger P.C., White Plains (Richard Bemporad and Vincent Briganti of counsel), for appellants in the second above-entitled action.

Skadden Arps Slate Meagher & Flom LLP, New York City (Thomas J. Dougherty of counsel), for respondent in the second above-entitled action.

Wechsler Harwood LLP, New York City (William R. Weinstein and Robert I. Harwood of counsel), for appellant in the third above-entitled action.

Sonnenschein Nath & Rosenthal LLP, New York City (Reid L. Ashinoff, Sandra D. Hauser and Michael S. Gugig of counsel), for respondent in the third above-entitled action.

OPINION OF THE COURT

G.B. SMITH, J.


The primary issue in each of these cases is whether there is a breach of an insurance contract when a policy date is set prior to an effective date and the insured, in the first year of the policy, must pay for days that are not covered. We hold that the insurers' CPLR 3211(a)(1) and (7) motions to dismiss the complaints were properly granted, and we affirm the orders of the Appellate Division.

Facts

Goldman v. Metropolitan Life Ins. Co.

On January 30, 2002, plaintiff "submitted an application to MetLife for a yearly renewable term life insurance policy in the amount of $250,000." On May 30, 2002, the policy was delivered and plaintiff paid his annual premium. The insurer set the policy date as May 6, 2002. The total annual premium amount was $217.50.

Goldman brought a putative class action alleging breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment and violations under General Business Law § 349. In the complaint and on this motion to dismiss, plaintiff argues that since he was not covered for the 24 days between May 6 and May 30, 2002, yet was required to pay for that period of time, there was a breach of contract. He argues that the term "annual premium" is ambiguous because it leads the average insured to believe that he or she will receive 365 days of coverage. In fact, based upon the delay from the policy date until the date of payment and delivery of the policy, there are fewer than 365 days of coverage in the first year of the policy.

Defendant counters that there is no breach, the policy is not ambiguous and that the dates of coverage are in accordance with the payment of the premiums. Defendant points to the language of the application, which is incorporated into the policy and states "no insurance will take effect until a policy is delivered to the owner and the full first premium due is paid." Further, plaintiff had the option of

Page 744

not accepting the policy and receiving a refund of any premiums already paid. According to defendant, the term "annual premium" never referred to the days of coverage but rather to the "frequency of payment."

Supreme Court denied MetLife's motion to dismiss based on ambiguity in the contract specifically related to payment for days of coverage without actually receiving coverage. The Appellate Division reversed, granted the insurer's motion and dismissed the complaint, finding "that the terms of the subject insurance policy, including the initial application, which was incorporated therein, were not ambiguous and clearly set forth when coverage was to begin and when the first and subsequent annual premiums were to be paid by the C.O.D. policyholders." (13 A.D.3d 289, 290, 788 N.Y.S.2d 25 [2004].) The Appellate Division granted plaintiff's motion for leave to appeal and certified the following question to this Court: "Was the order of this Court, which reversed the order of Supreme Court, properly made?"

Franco v. Guardian Life Ins. Co. of Am.

On June 13, 2000, the Francos signed an application for a "modified premium whole life insurance policy in the amount of $2 million." On July 28, 2000, Guardian Life sent a policy to the Francos. On the same day, the Francos completed a second application in order to change the beneficiary from the wife to a trust. The total initial annual premium of $2,790 was paid on August 2, 2000. On August 28, 2000, Guardian Life reissued the policy to plaintiffs with the same policy date of July 20, 2000. The policy became effective only after the policy was delivered and accepted by the insured. Even though it was permitted by the application, the Francos chose not to purchase interim coverage and receive a conditional receipt for temporary insurance to cover the dates between the date of application and delivery of the policy.

The Franco plaintiffs brought a putative class action for breach of contract, unjust enrichment and violations of General Business Law § 349. They argue that they were required to pay for a period of time in which the insurance company assumed no financial risk and, thus, unjustly collected monies without providing coverage. In addition to the breach of contract and unjust enrichment claims, the Francos argue that Guardian engaged in deceptive business practices in violation of...

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290 practice notes
  • St. John's Univ. v. Bolton, No. 08–CV–5039 (NGG)(JMA).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • 10 Diciembre 2010
    ...Horizon Blue Cross and Blue Shield of New Jersey, Inc., 448 F.3d 573, 586–87 (2d Cir.2006) (quoting Goldman v. Metropolitan Life Ins. Co., 5 N.Y.3d 561, 572, 807 N.Y.S.2d 583, 841 N.E.2d 742 (2005)). “To plead a plausible claim to relief on a theory of unjust enrichment, plaintiffs must sho......
  • McAnaney v. Astoria Financial Corp., No. 04-CV-1101 (JFB)(WDW).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • 29 Septiembre 2009
    ...claim. It is an obligation the law creates in the absence of any agreement.'" Id. at 586-87 (quoting Goldman v. Metro. Life Ins. Co., 5 N.Y.3d 561, 572, 807 N.Y.S.2d 583, 841 N.E.2d 742 (N.Y.2005)) (emphasis in original). The Court finds that plaintiffs cannot proceed with their unjust enri......
  • In re Anthem, Inc. Data Breach Litig., Case No. 15-MD-02617-LHK
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • 14 Febrero 2016
    ...against Defendants as a breach of contract claim, and not as an unjust enrichment claim. See, e.g. , Goldman v. Metro. Life Ins. Co. , 5 N.Y.3d 561, 807 N.Y.S.2d 583, 841 N.E.2d 742, 746–47 (2005) (“Given that the disputed terms and conditions fall entirely within the insurance contract, th......
  • Judge Rotenberg Educ. Ctr. Inc. v. Blass, No. 10–cv–3628 (ADS)(ARL).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • 25 Junio 2012
    ...are known as quasi or constructive contracts, which are unrelated to the intentions of the parties. Goldman v. Metro. Life Ins. Co., 5 N.Y.3d 561, 807 N.Y.S.2d 583, 841 N.E.2d 742 (2005). An implied-in-law contract is thus not a contract all, but rather an obligation which the law creates f......
  • Request a trial to view additional results
290 cases
  • St. John's Univ. v. Bolton, No. 08–CV–5039 (NGG)(JMA).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • 10 Diciembre 2010
    ...Horizon Blue Cross and Blue Shield of New Jersey, Inc., 448 F.3d 573, 586–87 (2d Cir.2006) (quoting Goldman v. Metropolitan Life Ins. Co., 5 N.Y.3d 561, 572, 807 N.Y.S.2d 583, 841 N.E.2d 742 (2005)). “To plead a plausible claim to relief on a theory of unjust enrichment, plaintiffs must sho......
  • McAnaney v. Astoria Financial Corp., No. 04-CV-1101 (JFB)(WDW).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • 29 Septiembre 2009
    ...claim. It is an obligation the law creates in the absence of any agreement.'" Id. at 586-87 (quoting Goldman v. Metro. Life Ins. Co., 5 N.Y.3d 561, 572, 807 N.Y.S.2d 583, 841 N.E.2d 742 (N.Y.2005)) (emphasis in original). The Court finds that plaintiffs cannot proceed with their unjust enri......
  • In re Anthem, Inc. Data Breach Litig., Case No. 15-MD-02617-LHK
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • 14 Febrero 2016
    ...against Defendants as a breach of contract claim, and not as an unjust enrichment claim. See, e.g. , Goldman v. Metro. Life Ins. Co. , 5 N.Y.3d 561, 807 N.Y.S.2d 583, 841 N.E.2d 742, 746–47 (2005) (“Given that the disputed terms and conditions fall entirely within the insurance contract, th......
  • Judge Rotenberg Educ. Ctr. Inc. v. Blass, No. 10–cv–3628 (ADS)(ARL).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • 25 Junio 2012
    ...are known as quasi or constructive contracts, which are unrelated to the intentions of the parties. Goldman v. Metro. Life Ins. Co., 5 N.Y.3d 561, 807 N.Y.S.2d 583, 841 N.E.2d 742 (2005). An implied-in-law contract is thus not a contract all, but rather an obligation which the law creates f......
  • Request a trial to view additional results

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