Lady v. Jefferson Pilot Life Ins. Co.
| Decision Date | 28 March 2001 |
| Docket Number | No. CIV.A.3:00-CV-313WS.,CIV.A.3:00-CV-313WS. |
| Citation | 241 F.Supp.2d 655 |
| Parties | Clarence LADY Plaintiff v. JEFFERSON PILOT LIFE INSURANCE COMPANY; Billy Joe Ladd, et al. Defendants |
| Court | U.S. District Court — Southern District of Mississippi |
Christopher E. Sanspree, Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., Montgomery, AL, Henry T. Holifield Ridgeland, MS, Mark I. Burton, Burton & Burton, PLLC, Kosciusko, MS, for Clarence Lady, Catherine Reed, Donnie Reed, plaintiffs.
John G. Corlew, William F. Ray, Katherine K. Smith, Watkins & Eager, Jackson, MS, Claire W. Ketner, Brunini, Grantham, Grower & Hewes, Jackson, MS, Charles E. Griffin, Griffin & Associates, Jackson, MS, for Jefferson Pilot Insurance Co., Billy Joe Ladd, defendants.
ORDER DENYING REMAND
Before the court is the motion of the plaintiff to remand this case to the Circuit Court for the First Judicial District of Hinds County, Mississippi. The defendants removed this case to this federal court under Title 28 U.S.C. § 1441(a),1 claiming that the defendant Billy Joe Ladd had been joined fraudulently as a party in this cause in order to defeat federal diversity jurisdiction pursuant to Title 28 U.S.C. § 1332.2 The plaintiff is a citizen of Madison County, Mississippi, who claims that he purchased an insurance policy in 1986 through the defendant insurance company now called Jefferson Pilot Life Insurance Company (hereinafter "Jefferson Pilot"). According to the plaintiffs complaint, one Billy Joe Ladd, who at all times pertinent was the agent for Jefferson Pilot and who acted within the "line and scope of his agency in dealing with the plaintiff," failed to disclose that an existing policy was being replaced by a new policy; failed to complete insurance policy replacement forms; and, either negligently or intentionally, misrepresented material facts when he sold the policy in question to the plaintiff in 1986. Jefferson Pilot Life Insurance Company is a North Carolina corporation with its principal place of business in Greensboro, North Carolina. The defendant Billy Joe Ladd is a resident citizen of Mississippi. For the purposes of removal under Title 28 U.S.C. § 1441(a), the citizenship of defendants sued under fictitious names is disregarded. Badon v. RJR Nabisco Inc., 224 F.3d 382, 385 (5th Cir.2000).
In support of their motion in opposition to remand, the defendants argue that the plaintiffs complaint against Billy Joe Ladd asserts only claims which now are barred by the applicable statute of limitations; that the plaintiffs complaint asserts no allegations against Billy Joe Ladd after 1986 which might serve to toll the applicable statute of limitations; that at all times pertinent Billy Joe Ladd was acting as an agent for a known principal, as clearly is asserted in the plaintiffs complaint; and that the plaintiffs conspiracy claim against Billy Joe Ladd fails as a matter of law. Thus, the defendants ask this court to dismiss the plaintiffs complaint against Billy Joe Ladd and to deny the plaintiffs motion to remand this case to state court.
The plaintiff contends that the defendants sold him a policy of insurance which was represented to be one that would be paid for in six years and would not require the plaintiff to make any premium payments for continuing coverage. Essentially, the plaintiff is contending that the defendants offered to sell him a form of "vanishing premium" policy where the premium would be paid from the value of his existing policy and with interest or dividends which would be sufficient to pay the premium, depending on the cost of future insurance rates. According to the plaintiff, the defendants told him that Policy JS3543779, the policy in question in this case, would be paid for in six years if the plaintiff transferred the value of his existing policy in order to fund the new policy. Plaintiff says in his complaint that he understood this new policy "would take care of itself in six years." Plaintiff says he paid no premiums for a number of years (he does not say specifically how many), but that later the defendants began to require him to make premium payments. This premium requirement, says plaintiff, was not communicated to him by the defendants in 1986 when they sold him the policy, and their failure to do so, says plaintiff, constitutes misrepresentation and fraud.
The defendants respond that the plaintiff knew the true nature of his policy from the onset. The first page of the policy, say defendants, states that "[flexible premiums [are] payable during insured's lifetime until the Maturity Date." The maturity date appears on page three of the policy in bold letters, "JUL 18, 2010." Beneath the maturity date, the policy states as follows:
The maturity date shown is the date the policy will mature if it is in force on that date. Even if coverage continues to the maturity date, there may in fact be little or no value to be paid. It is possible that coverage will terminate prior to the maturity date shown. This will happen if premiums paid and interest credited are not sufficient to continue coverage on that date.
If you pay the planned premium on time and make no policy loans or partial surrenders, coverage will continue until JUL 18, 1992, based on the guaranteed interest and guaranteed cost of insurance rates shown on the policy...... (emphasis added).
Defendants note that the plaintiffs age when the policy was issued was 71 years. The planned premium was $400.00 per quarter, or $1600.00 per year. The expiration date of the policy, note defendants, appears on page 4 where it states that "Expiration Year 6 (AGE 77) This is the year the policy will expire assuming the payment of the planned premium as shown on page 4 and based on the use of guaranteed interest and cost of insurance rates." Page four of the policy contains a schedule of five premium payments of $1600.00 per year for six years of coverage.
Thus, say defendants, plaintiff knew from the onset that he would be covered under this policy for six years or until he was 77 years of age. Defendants particularly note that the plaintiff had ten days after delivery of the policy in 1986 to return it for a refund of any premium paid. If the plaintiff had not been satisfied with the terms of the policy, say defendants, then he could have returned it without penalty or any further obligation.
According to the defendants, Billy Joe Ladd made no representations about the terms of the policy inconsistent with its written provisions. However, say defendants, even if he did make false statements to the plaintiff, those statements are now outside Mississippi's applicable statute of limitations. Moreover, say defendants, the defendant Billy Joe Ladd has made no effort to conceal any alleged fraud. If fraud exists, say defendants, then it is apparent on the face of the insurance policy in question. Thus, say defendants, the court should dismiss the plaintiffs complaint against Billy Joe Ladd.
The instant ease was filed in the Circuit Court for the First Judicial District of Hinds County, Mississippi, on February 22, 2000, almost fourteen years after Billy Joe Ladd sold the policy in question to the plaintiff. In 1986, the year the plaintiff purchased the policy in question, Mississippi's general statute of limitations, Mississippi Code Annotated Section 15-1^9, provided that for causes of actions not otherwise provided for by statute the limitations period was six years.3 All the plaintiffs specific assertions of fraud and misrepresentation4 against Billy Joe Ladd relate to when the policy was sold to the plaintiff in 1986.
Under Mississippi law, a cause of action for fraud accrues on completion of the sale induced by the false representation or upon consummation of the fraud. Black v. Carey Canada, Inc., 791 F.Supp. 1120, 1123 (S.D.Miss.1990), citing Dunn v. Dent, 169 Miss. 574, 153 So. 798 (1934) (). Inasmuch as the policy was sold to the plaintiff in 1986, say defendants, the statute of limitations ran in 1992, long before this lawsuit was filed. In the instant case, say defendants, if Billy Joe Ladd told the plaintiff that the policy "would take care of itself in six years," then this representation occurred before the policy in question was issued, and now clearly is outside the six-year statute of limitation.
Next, the defendants respond to the plaintiffs assertion that the statute of limitations was tolled until the plaintiff discovered the alleged fraud. Citing Donald v. Amoco Production Company, 735 So.2d 161 (Miss.1999), the defendants note that the "discovery rule" applies only where the injury or loss is "inherently undiscoverable." Id. at 166. In Donald, the defendant had contaminated the plaintiffs property with radioactive waste which was invisible to and undetectable by the plaintiff. In the instant case, say defendants, the plaintiff was given sufficient information in advance of accepting the policy and had only to exercise due diligence to discover all the terms of the insurance policy in question, or to discover any fraud that might have existed. Mississippi's discovery rule, say defendants, is limited to those circumstances where the fraud or injury or disease was not detectable with the exercise of due diligence. See Staheli v. Smith, 548 So.2d 1299 (Miss.1989) (); and Owens-Illinois, Inc. v. Edwards, 573 So.2d 704 (Miss.1990) (). Thus, say defendants, the plaintiff may not claim tolling based on discovery of a fraud that was inherently undetectable at the time it allegedly was committed.
In Phillips v. New England Mutual Life Insurance Company, 36 F.Supp.2d 345, 349 (S.D.Miss.1998), the court rejected the defendant's assertion that the...
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