Hancock v. Americo Fin. Life & Annuity Ins. Co.

• Decision Date: 25 July 2017
• Docket Number: NO. 7:16–CV–350–FL,7:16–CV–350–FL
• Citation: 272 F.Supp.3d 763
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: William T. HANCOCK, Sr., Individually and in a representative capacity on behalf of a class of persons similarly situated, Plaintiff, v. AMERICO FINANCIAL LIFE AND ANNUITY INSURANCE COMPANY, Investors Life Insurance Company of North America, and Americo Life, Inc., Defendants.

272 F.Supp.3d 763

William T. HANCOCK, Sr., Individually and in a representative capacity on behalf of a class of persons similarly situated, Plaintiff,
v.
AMERICO FINANCIAL LIFE AND ANNUITY INSURANCE COMPANY, Investors Life Insurance Company of North America, and Americo Life, Inc., Defendants.

NO. 7:16–CV–350–FL

United States District Court, E.D. North Carolina, Southern Division.

Signed July 25, 2017

272 F.Supp.3d 765

H. Forest Horne, Jr., Karl Joseph Amelchenko, John Alan Jones, Martin & Jones, PLLC, Raleigh, NC, for Plaintiff.

Carl C. Scherz, Roger B. Cowie, Taylor F. Brinkman, Locke Lord LLP, Dallas, TX, Debbie Weston Harden, Jackson R. Price, Meredith J. McKee, Womble Carlyle Sandridge & Rice, LLP, Charlotte, NC, for Defendant.

ORDER

LOUISE W. FLANAGAN, United States District Judge

This matter is before the court on defendant's motion to dismiss for failure to state a claim (DE 17). Briefing having been completed, the issues raised are ripe for ruling. For the following reasons, defendant's motion is granted.

BACKGROUND

Plaintiff commenced this action on October 14, 2016, asserting claims against defendants arising from the sale by defendant Investors Life Insurance Company of North America ("Investors Life") of a policy of life insurance to plaintiff in February 1985, policy number 303 1163280 (the "policy"), and collection of premiums thereunder through October 2013. Plaintiff claims that defendant Investors Life, in conjunction with the other defendants who are allegedly affiliated entities, breached the terms of the policy. Plaintiff asserts claims for breach of contract; declaration and injunction; equitable rescission; unjust enrichment and constructive trust; fraudulent suppression and concealment; fraud; breach of duties of good faith and fair dealing; unfair and deceptive trade practices; and violations of North Carolina's Racketeer Influenced and Corrupt Organizations (RICO) act. Plaintiff seeks compensatory and punitive damages and certification of the case as a class action on behalf of himself and all others similarly situated.

Defendants filed the instant motion to dismiss on December 9, 2016, asserting that all claims fail as a matter of law and should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The court stayed scheduling activities pending decision on the motion. Plaintiff responded in opposition to the instant motion on January 20, 2017, and defendants replied on February 3, 2017.

STATEMENT OF FACTS

The facts alleged in the complaint may be summarized as follows. On February 6,

272 F.Supp.3d 766

1985, plaintiff, then 33 years old, applied for a "Flexible Premium Adjustable Life Insurance" policy from defendant Investors Life (the "policy"). (DE 1–2 at 1; see DE 1–2 at 24–25).¹ On February 15, 1985, defendant Investors Life issued the policy to plaintiff. A cover letter to the policy, titled "Flexible Premium Adjustable Life Insurance Policy" states, inter alia "We agree to pay the Cash Value to the Owner on the Maturity Date if the Insured is living on that date. All payments made are subject to the policy provisions." (Id. ). The next page includes a table of contents. (Id. at 2).

A "policy specifications" page follows, stating that the "initial specified amount" is $50,000.00 and the "minimum initial premium" is $41.27. (Id. at 3). It also includes the following note and information:

 NOTE: THE MATURITY DATE IS THE POLICY ANNIVERSARY NEAREST THE INSURED'S
                 NINETY-FIFTH BIRTHDAY. THE AMOUNT OF CASH VALUE PAYABLE ON THE MATURITY
                 DATE DEPENDS UPON THE AMOUNT OF PREMIUMS YOU PAY. THERE MAY BE LITTLE CASH
                 VALUE AVAILABLE ON THE MATURITY DATE. COVERAGE WILL END PRIOR TO THE
                 MATURITY DATE SHOWN WHERE EITHER NO PREMIUMS ARE PAID FOLLOWING PAYMENT OF
                 THE INITIAL PREMIUM OR SUBSEQUENT PREMIUMS ARE INSUFFICIENT TO CONTINUE
                 COVERAGE TO SUCH DATE.
                 POLICY NUMBER 303 1163280 DATE OF ISSUE FEBRUARY 15, 1985
                 MONTHLY ANNIVERSARY DAY 15 MATURITY DATE FEBRUARY 15, 2047
                 INSURED WILLIAM T. HANCOCK, SR SPECIFIED AMOUNT $ 50,000
                 AGE AT ISSUE 33 SEX MALE
                 PLANNED PERIODIC PREMIUM $41.27 PAYABLE MONTHLY
                

(Id. ). The next four pages comprise a "Table of Expense Charges," "Table of Surrender Charges," "Insured Table of Guaranteed Maximum Insurance Rates Per $1000," and "Other Insured Table of Guaranteed Maximum Insurance Rates Per $1000." (DE 1–2 at 4–7).

The next page contains "general provisions" including the following:

272 F.Supp.3d 767

                 THE CONTRACT
                 This is your policy. We issued it in consideration of
                 your application and your payment of the minimum
                 initial premium. This policy and the application (and
                 any supplemental application for additional Specified
                 Amounts) make up the whole contract. We agree not
                 to use any statements other than those made in the
                 application or in a supplemental application in challenging
                 a claim or attempting to avoid liability under
                 this policy. The statements made in the application
                 and supplemental applications will be treated as representations
                 and not as warranties. A copy of the
                 application or supplemental application is attached to
                 this policy when issued, or is made part of the policy
                 when changes in the Specified Amount become
                 effective.
                

(id. at 8), and the following:

 PROCEEDS
                 Proceeds, as used in this policy, means the amount
                 payable on the Maturity Date; on the surrender of
                 this policy before the Maturity Date; or upon the
                 death of the insured.
                 The proceeds payable on the death of the Insured
                 shall be the Insured's death benefit, less any Indebtedness
                 (money owed the Company). If the policy is
                 surrendered before the Maturity Date, the proceeds
                 shall be the cash surrender value described in the
                 Nonforfeiture Provisions section, less any Indebtedness.
                 On the Maturity Date, the proceeds shall be the
                 cash value, less any indebtedness. The proceeds are
                 subject to the adjustments described in the following
                 provisions:
                 1. Misstatement of Age or Sex;
                 2. Incontestability;
                 3. Suicide Exclusions;
                 4. Surrender and Cash Surrender Value;
                 5. Partial Surrender;
                 6. Grace Period; and
                 7. Indebtedness.
                

(Id. ). The next two pages cover "exclusions," "ownership and beneficiary," and "premiums," including the following provisions regarding premiums:

272 F.Supp.3d 768

                 6. PREMIUMS
                 The Date of Issue is the date from which Monthly
                 Anniversary Days, policy months, policy years, and
                 policy anniversaries are determined. The minimum
                 initial premium is due on the Date of Issue. You may
                 pay more than the minimum initial premium on the
                 Date of Issue. But we have the right to limit the
                 amount. Future premiums are payable in advance at
                 our Administrative Office. You may pay future premiums
                 in any amount at any time before the Maturity
                 Date, subject to the limitations described below.
                 PLANNED PERIODIC PREMIUMS
                 Unless you tell us something else in writing, we will
                 send you periodic premium reminder notices for the
                 amount and in the frequency shown on the Policy
                 Specifications page. We have the right to stop sending
                 such notices if we do not receive any premium
                 payment for thirteen policy months. Changes in the
                 amounts or frequency of planned periodic premium
                 payments and payment reminder notices will be subject
                 to our approval. You may change the planned
                 periodic premium to any amount not less than $20.
                 You may not change the planned periodic premium
                 more than twice in a policy year.
                

(id. at 9), and the following:

272 F.Supp.3d 769

                 UNSCHEDULED PREMIUMS
                 You may make unscheduled premium payments.
                 They must be at least $100. There must be no indebtedness.
                 We have the right to limit the amount of such
                 payments. We have the right to limit the number of
                 such payments.
                 GRACE PERIOD
                 If the cash value, less any Indebtedness, on the date
                 before a Monthly Anniversary Day is less than the
                 monthly deduction for the month after that Monthly
                 Anniversary Day, you will have a grace period of 61
                 days from that Monthly Anniversary Day to pay a
                 premium which is enough to cover that monthly
                 deduction. The cash value and monthly deduction are
                 described in the Nonforfeiture Provisions section. If
                 such premium is not paid within the grace period, all
                 coverage under this policy will end at the end of the
                 grace period. We will mail to the last known address
                 of you and any assignee of record a written notice of
                 insufficient cash value at least 31 days before the end
                 of the grace period. If the insured dies during the
                 grace period, we will deduct any overdue monthly
                 deductions from the benefits.
                

(id. at 10). A subsequent section of the policy titled "nonforfeiture provisions" includes the following additional provisions, pertaining to "cash value" and deductions therefrom:

272 F.Supp.3d 770

                 CASH VALUE
                 On each Monthly Anniversary Day, the cash value
                 shall be calculated as (1), plus (2), plus (3), minus (4)
                 where:
                 (1) is the cash value on the prior Monthly Anniversary
                 Day.
                 (2) is all premiums received since the prior

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