Myers v. Guardian Life Ins. Co. of America, Inc.

• Decision Date: 15 April 1998
• Docket Number: No. CIV. A. 2:97CV35-D-B.,CIV. A. 2:97CV35-D-B.
• Citation: 5 F.Supp.2d 423
• Parties: Gary MYERS, Individually on Behalf of Himself and on Behalf of All Others Similarly Situated, Plaintiff, v. The GUARDIAN LIFE INSURANCE COMPANY OF AMERICA, INC., Defendant.
• Court: U.S. District Court — Northern District of Mississippi

5 F.Supp.2d 423

Gary MYERS, Individually on Behalf of Himself and on Behalf of All Others Similarly Situated, Plaintiff, v. The GUARDIAN LIFE INSURANCE COMPANY OF AMERICA, INC., Defendant.

No. CIV. A. 2:97CV35-D-B.

United States District Court, N.D. Mississippi, Delta Division.

April 15, 1998.

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MEMORANDUM OPINION

DAVIDSON, District Judge.

Presently before the court is the Defendant's Motion to Dismiss or, in the Alternative, Transfer Venue.¹ Finding the motion to dismiss not well-taken, this court shall deny it. Finding the motion to transfer well-taken, this court shall grant it.

I. Factual² and Procedural Background

On or about March 9, 1988, the Plaintiff Gary Myers purchased a whole life insurance policy from the Defendant Guardian Life Insurance Company of America, Inc., (Guardian). The policy was a "vanishing premium" life insurance policy. That is, Guardian represented through sales presentations and illustrations that out-of-pocket premium payments would "vanish" on a date certain. Complaint ¶ 6. The out-of-pocket payments would vanish because the early payments would finally total a sum large enough for the policy to begin paying for itself with the interest it would be earning. Complaint ¶ 6. In his complaint, Mr. Myers does not plead whether the date certain has passed. Mr. Myers has made and will continue to make all premium payments on the policy. Complaint ¶ 10.

On February 25, 1997, Mr. Myers filed the present putative class action lawsuit against Guardian. In his complaint, Mr. Myers stated,

Contrary to Guardian's express representations at the time of sale, the Policies' premiums would not in fact `vanish' on the date promised, and plaintiff and the Class would be required to pay additional out-of-pocket premiums beyond those shown at the time of sale. In sum, Guardian knowingly and recklessly manipulated its vanishing premium Policy illustrations to artificially enhance the illustrated Policy performance through a variety of insupportable assumptions and actuarial devices.

Complaint, ¶ 8. Consequently, Mr. Myers asserted the following causes of action: fraud, fraudulent inducement, breach of fiduciary duty/constructive fraud, tortious breach of duty to deal with insured in good faith, negligence, negligent misrepresentation, unfair trade practices, unjust enrichment and imposition of a constructive trust, and declaratory relief.

Guardian moves to dismiss all of the plaintiff's claims. Guardian presents eight arguments supporting dismissal:

1. [P]laintiff, having suffered no damages, cannot meet the amount in controversy requirement of 28 U.S.C. 1332 ....

2. [P]laintiff, having failed to plead damages adequately, does not state a claim as to any of his causes of action....

3. [P]laintiff, having suffered no damages, can offer allegations only of future injury which are insufficient to confer standing.

4. All claims fail because they are not "ripe" for adjudication since they concern uncertain and contingent future events.

5. All claims fail as a matter of law because they are flatly contradicted by the express terms of the written and fully integrated insurance contract signed by plaintiff.

6. All claims are barred by the statutes of limitations.

7. All claims should be dismissed because they are fraud based and have not been pled with particularity pursuant to Fed.R.Civ.P. 9(b).

8. The purported breach of fiduciary duty claim fails because no fiduciary relationship exists between an insurer and an insured under a first-party insurance contract.

The Guardian Life Insurance Company of America's Motion to Dismiss or, in the Alternative Motion to Transfer Venue and Request for Oral Argument (Motion to Dismiss), pp. 1-2 (numbering added). This court will address each of Guardian's arguments in turn.

II. Discussion

A. Standard of Review for a Motion to Dismiss under Rule 12(b)(6)

This court shall review most³ of Guardian's arguments using the standard applicable to a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. A Rule 12(b)(6) motion is disfavored, and it is rarely granted. Clark v. Amoco Prod. Co., 794 F.2d 967, 970 (5th Cir.1986); Sosa v. Coleman, 646 F.2d 991, 993 (5th Cir.1981). In deciding a motion to dismiss under Rule 12(b)(6), the district court accepts as true those well-pleaded factual allegations in the complaint. C.C. Port, Ltd. v. Davis-Penn Mortgage Co., 61 F.3d 288, 289 (5th Cir.1995). "Taking the facts alleged in the complaint as true, if it appears certain that the plaintiff cannot prove any set of facts that would entitle it to the relief it seeks," dismissal is proper. Id. It must appear beyond doubt that the plaintiff "can prove no set of facts in support of his claim which would entitle him to relief." Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir.1995) (alterations and citations omitted). "However, `the complaint must contain either direct allegations on every material point necessary to sustain a recovery ... or contain allegations from which an inference fairly may be drawn that evidence on these material points will be introduced at trial.'" Id. (quoting 3 Wright & Miller, Federal Practice & Procedure: Civil 2d § 1216, pp. 156-59). "Conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir.1995).

Nevertheless, dismissal is never warranted because the court believes the plaintiff is unlikely to prevail on the merits. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). Even if it appears almost a certainty that the facts alleged cannot be proved to support the claim, the complaint cannot be dismissed so long as it states a claim. Clark, 794 F.2d at 970; Boudeloche v. Grow Chem. Coatings Corp., 728 F.2d 759, 762 (5th Cir.1984). "To qualify for dismissal under Rule 12(b)(6), a complaint must on its face show a bar to relief." Clark, 794 F.2d at 970; see also Mahone v. Addicks Util. Dist., 836 F.2d 921, 926 (5th Cir.1988); United States v. Uvalde Consol. Indep. Sch. Dist., 625 F.2d 547, 549 (5th Cir.1980), cert. denied, 451 U.S. 1002, 101 S.Ct. 2341, 68 L.Ed.2d 858 (1981). While dismissal under Rule 12(b)(6) ordinarily is determined by whether the facts alleged, if true, give rise to a cause of action, a claim may also be dismissed if a successful affirmative defense appears clearly on the face of the pleadings. Clark, 794 F.2d at 970; Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir.1982), cert. denied, 459 U.S. 1105, 103 S.Ct. 729, 74 L.Ed.2d 953 (1983).

Additionally, Rule 12 provides,

If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

Fed.R.Civ.P. 12(b). However, district courts are "permitted to refer to matters of public record when deciding a 12(b)(6) motion to dismiss." Davis v. Bayless, 70 F.3d 367, 372 n. 3 (5th Cir.1995) (citing Cinel v. Connick, 15 F.3d 1338, 1343 n. 6 (5th Cir.1994)). Further, even though matters outside the pleadings might be present in the record, the court is not required to treat the motion as one for summary judgment if it does not rely upon such documents. Davis, 70 F.3d at 372 n. 3 (citing Ware v. Associated Milk Producers, Inc., 614 F.2d 413, 415 (5th Cir.1980)). Regarding the case at bar, the parties have submitted a number of matters outside the pleadings. In ruling on Guardian's 12(b)(6) motion, this court declines to rely upon the matters outside the pleadings. This court bases its ruling today solely on the pleadings and the applicable law.

B. The Applicable Law

By invoking Mississippi law in his complaint, Mr. Myers appears to assert that Mississippi law governs the action at bar. See Complaint ¶ 123 (referring to "Mississippi Consumer Protection and Unfair Trade Practices laws"). Guardian does not argue which State law governs but assumes only for purposes of the Motion to Dismiss that it is Mississippi law. For purposes of this motion, the court shall apply Mississippi law. In doing so, this court notes that the legal principles relevant to this action are fundamental and are therefore not likely to vary significantly under applications of different state laws. See Solomon v. The Guardian Life Ins. Co., No. CIV. A. 96-1597, 1996 WL 741888 at *1 (E.D.Pa. Dec.10, 1996).

C. The Defendant's Eight Arguments Supporting Dismissal

1. Subject Matter Jurisdiction

Invoking Rule 12(b)(1) of the Federal Rules of Civil Procedure, Guardian argues that this court lacks jurisdiction over the subject matter of the present action. District courts have subject matter jurisdiction of civil actions where the matter in controversy exceeds the sum of $75,000.00, exclusive of interest and costs, and is between citizens of different states. 28 U.S.C. § 1332 (providing what courts commonly label "diversity jurisdiction"). The party asserting diversity jurisdiction bears the burden of proving by a preponderance of the evidence that the claim exceeds the statutory amount. Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir.1995) (citing Gaitor v. Peninsular & Occidental S.S. Co., 287 F.2d 252, 253-54 (5th Cir.1961)); Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia (ANPAC) v. Dow Quimica de Colombia S.A., 988 F.2d 559, 566 (5th Cir.1993). Here, Mr. Myers is the party asserting diversity jurisdiction. However, in the complaint, Mr. Myers does not allege a specific amount of damages.⁴ As the Fifth Circuit recently...