Lomma v. Ohio Nat'l Life Assurance Corp.

• Decision Date: 06 September 2017
• Docket Number: 3:16–CV–2396
• Citation: 283 F.Supp.3d 240
• Parties: Nicholas LOMMA, and J.L., a Minor, by Anthony Lomma, Guardian, Plaintiffs, v. OHIO NATIONAL LIFE ASSURANCE CORPORATION, and Ohio National Life Insurance Company, Defendants.
• Court: U.S. District Court — Middle District of Pennsylvania

283 F.Supp.3d 240

Nicholas LOMMA, and J.L., a Minor, by Anthony Lomma, Guardian, Plaintiffs,

v.OHIO NATIONAL LIFE ASSURANCE CORPORATION, and Ohio National Life Insurance Company, Defendants.

3:16–CV–2396

United States District Court, M.D. Pennsylvania.

Signed September 6, 2017

Ethan C. Wood, Paul J. LaBelle & Associates, LLC, Moosic, PA, Paul J. LaBelle, Law Offices of Paul J. LaBelle, Scranton, PA, for Plaintiffs.

Luke A. Repici, White and Williams LLP, Philadelphia, PA, for Defendants.

MEMORANDUM OPINION

Robert D. Mariani, United States District Judge

Before the Court is Defendants', Ohio National Life Assurance Corporation and Ohio National Life Insurance Company, ("Defendants"), motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. 4). For the reasons that follow, Defendants' motion will be granted in part and denied in part.

I. INTRODUCTION AND PROCEDURAL HISTORY

Plaintiffs Nicholas Lomma and J.L., a minor, by his guardian, Anthony Lomma, ("Plaintiffs"), seek to recover $100, 000 as beneficiaries of a replacement term life insurance policy issued by Defendants (the "Replacement Policy") on the life of their mother, Lora Marie Lomma ("Ms. Lomma"). Ms. Lomma committed suicide in May of 2009 and Defendants have denied payment of full death benefits based on a suicide exclusion in the Replacement Policy.

Plaintiffs commenced this action on November 2, 2016, in the Court of Common Pleas of Lackawanna County. The complaint ("Complaint") asserts five causes of action: (1) breach of contract; (2) unjust enrichment; (3) promissory estoppel; (4) breach of implied covenant of good faith and fair dealing; and (5) statutory bad faith pursuant to 42 Pa. C. S. A. § 8371.¹ (Doc. 1–4). Defendants removed the action to this Court on December 2, 2016, (Doc. 1), and promptly moved to dismiss the Complaint in its entirety on December 9, 2016. (Doc. 4).

II. FACTUAL ALLEGATIONS

Plaintiffs' Complaint and the exhibits attached thereto allege the following facts:

Plaintiffs, Nicholas Lomma and J. L., are or were minors residing in Scranton Pennsylvania and are the surviving children of Ms. Lomma. (Doc. 1–4, at ¶¶ 1–2). Anthony Lomma ("Mr. Lomma") is the natural parent of Nicholas Lomma and J. L and is the surviving former husband of Ms. Lomma and is also J. L.'s guardian. (Id. at ¶¶ 3–4). Defendants are Ohio corporations with registered addresses in Cincinnati, Ohio and are licensed to sell insurance in Pennsylvania. (Id. at ¶ 5).

In September 1986, Ms. Lomma applied for, and was issued, a life insurance policy (the "Original Policy") by Pennsylvania National Life Insurance Company with a coverage amount of $25, 000. (Id. at ¶ 6). The Original Policy contained a suicide exclusion.² Although the facts surrounding Defendants' purchase of the Original Policy from Pennsylvania National Life Insurance Company are not entirely clear, Plaintiffs allege Defendants "purchased or otherwise acquired the Original Policy from Pennsylvania National Life Insurance Company." (Id. at ¶ 7).

On December 4, 1995, Ms. Lomma applied to increase the amount of coverage under the Original Policy from $25, 000 to $100, 000. (Id. at ¶ 8). In order to do so, she executed a "Request For Universal Life Policy Change" with Defendants. (Doc. 1–4 at 30–32). Ten days later Defendants informed Ms. Lomma that "[u]pon written request ... the stated amount is hereby increased from $25, 000 to $100,000 effective December 4, 1995." (Id. at 32). The Original Policy was set to expire on September 4, 2028.

Ms. Lomma filed an application for a new life insurance policy with Defendants with a coverage amount of $100, 000 on June 6, 2007.³ (Doc. 1–4 at 33–49). On the application, a box is checked indicating that the "proposed policy" would "replace or cause change in any existing policy." (Doc. 1–4 at 35). It identified the "existing policy" that the "proposed policy" would replace as "Ohio National," "Universal," "$100,000," and again a box is checked indicating that the existing policy will "be replaced." (Id. ) Written on the application was that the "replacement date" would be "upon issue of this policy." (Id. )

On August 15, 2007, Defendants issued the Replacement Policy to Ms. Lomma with a benefit value of $100,000. (Id. at ¶ 13). Both the amount of insurance coverage and the beneficiaries are identical to those under the Original Policy.⁴ (Id. ) The Replacement Policy identifies the "Contract Date" as August 10, 2007, and the "Issue Date" as August 15, 2007. (Doc. 1–4 at 51). It also contains a definition of "Contract Months and Years," and states: "[t]his contract takes effect on the contract date shown on page 3. Contract months and years are marked from the contract date. The first day of the contract year is the contract date and its anniversaries." (Id. at 60).

The Replacement Policy, like the Original Policy, contains a suicide exclusion. The two exclusions, however, do not contain the same language. The suicide exclusion in the Replacement Policy provides:

If the insured dies by suicide while sane or insane or by intentional self-destruction while insane, we will not pay any death proceed payable on amounts of insurance which have been in effect for less than 2 years. If the suicide or intentional self-destruction is within the first 2 contract years, we will pay as death proceeds the premiums you paid.

(Doc. 1–4 at 62). Although the Replacement Policy defines the term "contract years," it does not contain a definition for "amounts or insurance" and does not provide guidance for determinations of whether those "amounts of insurance" have or have not "been in effect for less than 2 years." (Id. )

Ms. Lomma committed suicide on May 24, 2009. (Doc. 1–4 at ¶ 15). At the time of her death she had timely paid all premiums due under both the Original Policy and the Replacement Policy and no premiums were due. (Id. at ¶ 26). Shortly after her death, Mr. Lomma filed a claim for death benefits under the Replacement Policy on behalf of Nicholas Lomma and J.L., requesting the $100,000 full death benefit. (Id. at ¶ 16). On August 31, 2009, Defendants' informed Mr. Lomma that they were denying the claim "on the grounds that Ms. Lomma's suicide violated the provisions of the policy." (Id. at ¶ 17). Specifically, Defendants wrote that "[b]ased on the information we have received and in accordance with" the suicide exclusion in the Replacement Policy, "the death proceeds for death due to ‘Suicide’ within the first two contract years is a refund of premiums paid." (Doc. 1–4 at 69). Enclosed with the letter were two checks each in the amount of $144. 27 (totaling $288. 54) representing the premiums Ms. Lomma paid on the Replacement Policy plus 4. 5% interest. (Id. )

III. STANDARD OF REVIEW

A complaint must be dismissed under Federal Rule of Civil Procedure 12(b)(6) if it does not allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009).

"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds’ of his ‘entitlement to relief requires more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do." Twombly , 550 U. S. at 555, 127 S.Ct. 1955 (internal citations and alterations omitted). In other words, "[f]actual allegations must be enough to raise a right to relief above the speculative level." ( Id. ) A court "take[s] as true all the factual allegations in the Complaint and the reasonable inferences that can be drawn from those facts, but ... disregard[s] legal conclusions and threadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Ethypharm S.A. France v. Abbott Laboratories , 707 F.3d 223, 231 n.14 (3d Cir. 2013) (internal citations and quotation marks omitted).

Twombly and Iqbal require [a court] to take the following three steps to determine the sufficiency of a complaint; First, the court must take note of the elements a plaintiff must plead to state a claim. Second, the court should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth. Finally, where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.

Connelly v. Steel Valley Sch. Dist. , 706 F.3d 209, 212 (3d Cir. 2013).

"Under Federal Rule of Civil Procedure 8, a complaint need not anticipate or overcome affirmative defenses; thus, a complaint does not fail to state a claim simply because it omits facts that would defeat" an affirmative defense. Schmidt v. Skolas , 770 F.3d 241, 248 (3d Cir. 2014) (citations omitted). "Technically, the Federal Rules of Civil Procedure require a defendant to plead an affirmative defense ... in the answer, not in a motion to dismiss." ( Id. at 249 ) (citing Robinson v. Johnson , 313 F.3d 128, 134–35 (3d Cir. 2002) ). However, in limited circumstances an affirmative defense may properly be raised in a Rule 12(b)(6) motion to dismiss. But when the affirmative defense "is not apparent on the face of the complaint, then it may not afford the basis for a dismissal of the complaint under Rule 12(b)(6)." Robinson , 313 F.3d at 134–35 (internal citations and quotation marks omitted).

"To decide a motion to dismiss, courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record." Pension Benefit Guar. Corp. v. White Consol. Indus., Inc. , 998 F.2d 1192, 1196 (3d Cir. 1993) (citations...