Landau v. Landau
| Decision Date | 04 May 2022 |
| Docket Number | 21-cv-11958 |
| Parties | JULEE LANDAU, Plaintiff, v. IRVING MARC LANDAU, Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
On August 23, 2021, Julee Landau (“Plaintiff”) filed the instant action against her brother, Irving Marc Landau (“Defendant”). ECF No. 1. Plaintiff alleges Defendant wrongfully retained several hundred thousand dollars in life insurance benefits that were paid by Transamerica Insurance Company (“Transamerica”) upon the death of Plaintiff and Defendant's mother, Alene Landau. Id. at PageID.1.
Presently before the Court is Defendant's Motion to Dismiss pursuant to Federal Rule of Procedure 12(b)(6). ECF No. 15. The Motion is fully briefed. See ECF Nos. 20, 21. Upon review of the parties' submissions, the Court concludes oral argument will not aid in the disposition of this matter. Therefore, the Court will resolve the instant Motion on the briefs. See E.D. Mich. LR § 7.1(f)(2). For the following reasons, the Court will GRANT IN PART AND DENY IN PART Defendant's Motion to Dismiss (ECF No. 15). Specifically, the Court will GRANT the Motion as to Count IV and DENY the Motion as to Plaintiff's remaining claims.
The following facts are alleged in the Complaint, which the Court takes as true for the purposes of the Motion to Dismiss.
On or about April 25, 1995, Alene Landau, Plaintiff and Defendant's mother, arranged for a life insurance policy to be issued on her life by Transamerica (the “Policy”).[1] Compl., ECF No. 1, PageID.2. Alene listed Plaintiff and Defendant- her daughter and son, respectively-as the owners and equal beneficiaries of the Policy. Id. at PageID.2-3. The Policy, which was assigned number 92502033, had a face amount of $837, 000.00. Id. (citing Policy, ECF No. 4).
In late 2005 or early 2006, Alene became aware Defendant was experiencing financial problems and at risk of bankruptcy. Id. at PageID.3. Among other things, Alene became concerned her son's creditors could assert a claim against the Policy and negatively impact her daughter's interest. Id. Thus, Alene wanted to split the Policy into two separate policies worth equal amounts so that each child could separately own and obtain benefits from one of the newly created policies. Id. Specifically, Alene chose to divide the Policy so Defendant could, if he chose, surrender his portion for its cash value and so Plaintiff's portion would not be impacted by Defendant's potential bankruptcy. Id. at PageID.3-4 ( )). Alene discussed this decision with her son and daughter, both together and separately. Id. at PageID.4.
In early 2006, Plaintiff and Defendant as owners of the Policy and Alene as the inured executed a form requesting to split the Policy. Id. (citing Policy Split App., ECF No. 6). The Policy was split into two equal policies worth $418, 500, with the cash surrender value of the initial Policy also split equally between the two new policies. Id. Plaintiff's policy was assigned number 92551193 (“Plaintiff's Policy”), and Defendant's was assigned number 92551192 (“Defendant's Policy”). Id.; Def. Mot. to Dismiss, ECF No. 15, PageID.115. After obtaining his policy, Defendant terminated it to procure the cash surrender value. Compl., ECF No. 1, PageID.4. Plaintiff did not attempt to acquire or share in the proceeds from Defendant's Policy. Id. at PageID.4-5.
Alene died on June 1, 2021. Id. at PageID.5. Plaintiff thus notified Transamerica of her mother's death and submitted a claim for the insurance proceeds under Plaintiff's Policy. Id. Transamerica paid $427, 820.34 as a death benefit under Plaintiff's Policy; however, Transamerica paid half of that sum to each party because both were designated as beneficiaries of Plaintiff's Policy. Id. “Plaintiff never knew or understood that any action needed to be taken by her, when she received Plaintiff's Policy several years ago, to remove Defendant as a beneficiary of the Policy.” Id.
Upon learning that Defendant had received half of the insurance proceeds under Plaintiff's Policy, Plaintiff's counsel wrote Defendant demanding he not cash the insurance check or return the funds to Plaintiff if he had already cashed the check. Id. at PageID.6. Defendant, however, has retained the funds. Id.
Plaintiff brings claims for unjust enrichment (Count I), breach of implied contract in fact (Count II), breach of contract implied in law (Count III), and conversion (Count IV). Id. at PageID.6-8.
As stated above, Defendant moves to dismiss the Complaint pursuant to Rule 12(b)(6) for failure to state a claim upon which relief may be granted. ECF No. 15. Defendant argues that “[a]lthough Alene was the named insured, she did not own th[e] [P]olicy” and thus “had no authority to change the ownership or beneficiary designations on th[e] [P]olicy.” Id. at PageID.113. Accordingly, when the Policy was split into two separate policies owned individually by Plaintiff and Defendant, respectively, “[t]he beneficiary designations for both policies remained the same- Julee and Marc.” Id. at PageID.114. Defendant emphasizes that the application to split the Policy explicitly includes a clause stating, “Unless the right to change the beneficiary is specifically exercised by the New Owner, the beneficiary of the Policy shall be the same as the beneficiary of record at the time of this Assignment.” Id. at 115 (citing Split App., ECF No. 6). Thus, Defendant asserts, “Julee now seeks to obtain the proceeds paid by Transamerica to Marc contrary to the beneficiary designation.” Id. at PageID.113. In contrast, Defendant contends his policy “was no longer in effect” when Alene died, so “the beneficiary designations on his policy were no longer relevant.” Id. at PageID.115.
Defendant also specifically attacks each of Plaintiff's claims. First, Defendant avers, “Under Michigan law, a claim for unjust enrichment or other equitable relief will not sound where there is an express contract in place covering the same subject-here the insurance contract.” Id. at PageID.118. In the alternative, Defendant maintains “[P]latiniff cannot meet the first requirement for unjust enrichment, as defendant received a distribution of life insurance proceeds not from [P]laintiff herself, but from the insurance carrier, ” and “[P]laintiff cannot establish the second requirement for unjust enrichment either as defendant did not cause an inequity to [P]laintiff where [D]efendant had neither the authority nor the ability to change the beneficiary designations contained in [P]laintiff's policy.” Id. at PageID.119. Defendant also argues Plaintiff “is legally charged with knowledge of the [P]olicy's terms and contents” regardless of whether she read it. Id. at PageID.120.
Second, Defendant repeats that a contract will only be implied when there is no express contract because there cannot be both an express and implied contract covering the same subject matter at the same time. Id. at PageID.121. He further asserts that under Michigan law, “[a] life insurance policy itself contains the entire contract between the insurance carrier, a policy owner, the insured party, and the designated beneficiaries.” Id. at PageID.122 (emphasis in original). Thus, according to Defendant, “Julee may not now invoke parole evidence in an attempt to contradict the express provisions of the life insurance policy.” Id. Further, Defendant contends an insurer must pay a life insurance policy to the person or people named as beneficiary under the policy.[2] Id. at PageID.123.
Finally, Defendant avers, “Plaintiff does not plead her conversion claim with any specificity.” Id. at PageID.124. Because Plaintiff references treble damages in her conversion claim, Defendant presumes she intends to invoke statutory conversion under MCL § 600.2919a. Defendant argues “that simply retaining money does not amount to buying, receiving, or aiding in the concealment of stolen, embezzled or converted property.” Id. at PageID.126 (quoting Akno 1010 Mkt. St. St. Louis Missouri LLC v. Pourtaghi, No. 218-CV-13498-TGB-MKM, 2021 WL 3810698 (E.D. Mich. Aug. 26, 2021) (internal quotation marks omitted)). Thus, Defendant maintains Plaintiff cannot establish a statutory conversion claim. Id.
Plaintiff filed a timely response. ECF No. 20. She states, “Neither Alene nor Julee removed Irving as a beneficiary of the policy given to Julee because they did not realize they needed to do so, inasmuch as Alene, Julee and Irving understood and agreed that the policy given to Julee would benefit only her, just as the policy given to Irving benefitted only him.” Id. at PageID.146-47. Specifically, Plaintiff asserts:
Alene and her two children understood and agreed that: the new policy received by Julee would have a face amount equal to one-half of the original policy, and a cash surrender value equal to one-half of the cash surrender value of the original policy; the policy given to Irving would be in the same amounts; and Irving was to have no rights or obligations under the policy given to Julee, and conversely, Julee was to...
To continue reading
Request your trial