Sun Life Assurance Co. of Can. v. Wells Fargo Bank
| Decision Date | 08 May 2023 |
| Docket Number | Civil Action 21-9959 (ZNQ) (JBD) |
| Parties | SUN LIFE ASSURANCE COMPANY OF CANADA, Plaintiff, v. WELLS FARGO BANK, N.A., as Securities Intermediary, Defendant. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
This dispute arises out of a $9 million life insurance policy. Plaintiff Sun Life Assurance Company of Canada (“Plaintiff”) alleges that the policy is an illegal stranger-oriented life insurance (“STOLI”) policy and seeks a declaration that the policy is void ab initio. Defendant Wells Fargo Bank, N.A., as Securities Intermediary (“Defendant”), the owner and beneficiary of the policy, seeks to collect the policy's death benefit. Defendant previously moved to dismiss Plaintiff's Complaint for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2), or in the alternative, to transfer the case to the United States District Court for the Eastern District of New York. The Court denied Defendant's motion, and Defendant now moves to certify the Opinion and Order for interlocutory appeal.
On January 18, 2022, Defendant moved to certify the Court's Order denying its motion to dismiss (“December 20th Order”) for appeal pursuant to 28 U.S.C. § 1292(b). (ECF No. 18 (“Def.'s Moving Br.”)). Plaintiff filed opposition on February 8, 2022. (ECF No. 21 (“Pl. Opp'n Br.”)).
The Court has carefully considered the parties' submissions and decides the matter without oral argument pursuant to Local Civil Rule 78.1. For the reasons set forth below, the Court DENIES Defendant's Motion to Certify the December 20th Order for Interlocutory Appeal.
Plaintiff is a life insurance company organized and existing under the laws of Canada with its principal place of business in Massachusetts. . Defendant is a national banking association with its main office in South Dakota. (Id. ¶ 2). In or around July 2007, Plaintiff received an application for a life insurance policy (the “Application”) insuring the life of Tova Fruchter. (Id. ¶ 16). The Application contains two parts-Parts I and II. Part I of the Application, dated July 16, 2007, is signed by former New York resident, Tova Fruchter (the “Insured”), her son, New York resident Eli Fruchter, as the Trustee (the “Trustee”), and Alter Rubin as the Broker/Registered Representative. (Id. ¶ 18). According to the documents contained in the policy file, Plaintiff's communications with Mr. Rubin in connection with the policy transpired at one of Mr. Rubin's New Jersey addresses, which is located at the offices of Associated Life Brokerage, Inc./Capitas. (ECF No. 9-7 ¶ 7 (Affidavit of Michelle Wilkosky)). Part II of the Application, also dated July 16, 2007, is signed by the Insured. Both Parts were signed at Lakewood, New Jersey. (ECF No. 9-7 ¶ 4). The Application identified the Trust as established in New Jersey. (ECF No. 1, at ¶ 18; ECF No. 9-1, Ex. A, at 31).
On August 8, 2007, Plaintiff issued a policy (the “Policy”) insuring the life of the Insured in the amount of $9,000,000. (ECF No. 9-1 at 4). The Policy designates the Fruchter One Trust DTD 3/1/2007 (the “Trust”) as the initial owner and beneficiary of the Policy. (Id.) In connection with the Policy transaction, Plaintiff also received a Non-Licensed Territory Declaration (the “Declaration”) dated March 1, 2007. The Declaration states that “no solicitation was ever made in the State of New York in connection with the life insurance application dated 3/01/07” and “[w]e are fully aware that Sun Life Assurance Company of Canada and Sun Life Assurance Company of Canada (U.S.) are non-New York companies and that they cannot issue [policies to] New York residents unless the solicitation, sale and delivery of their contracts takes place outside of the State of New York.” (ECF No. 9-2, Ex. B, at 2). The Declaration was signed in Lakewood, New Jersey by the Insured, the Trustee and Mr. Rubin. (Id.)
On September 10, 2007, Eli Fruchter, as Trustee, signed a Request for Alteration of Application Amending the Application at Lakewood, New Jersey, in the presence of Mr. Rubin, (ECF No. 9-7 ¶ 5; ECF No. 9-1, Ex. A, at 30), as well as a Life Insurance Policy Dating Acknowledgement and Delivery Receipt Form (the “Delivery Receipt”). Mr. Fruchter acknowledged that “by signing below, [the signee] confirm[s] that [he or she has] received, reviewed and accepted the policy” and “[t]he company will retain this document as evidence that the policy has been delivered to [the signee] on the date shown.” (ECF No. 9-4, Ex. D, at 2).
After the Policy was issued on August 8, 2007, the Policy's owner and beneficiary changed several times. On July 15, 2010, the Trust changed the owner and beneficiary of the Policy to Dukes Bridge LLC (“Dukes Bridge”). (Compl. ¶ 32). On December 29, 2010, Dukes Bridge changed ownership and beneficiary to Manufacturers and Traders Trust Company (“Manufacturers”), as securities intermediary. (Id. ¶ 33). On March 15, 2012, Defendant, as securities intermediary, acquired the Policy as owner and beneficiary from Manufacturers. (Id. ¶ 34). On May 21, 2014, Defendant changed the owner and beneficiary of the Policy to Wilmington Trust, N.A., as securities intermediary, but reacquired the Policy from Wilmington Trust, N.A. on October 31, 2018, and remains the current record owner and beneficiary. (Id. ¶ 36).
On January 16, 2021, the Insured passed away. (Compl. ¶ 37). Defendant submitted a death claim and Plaintiff conducted a claim review. On April 21, 2021, Plaintiff filed this action against Defendant in its capacity as securities intermediary. Plaintiff seeks a declaration that the policy lacks an insurable interest and is void ab initio under New Jersey law. (Id. ¶ 45). On May 26, 2021, Defendant commenced its own action against Plaintiff in the United States District Court for the Eastern District of New York to recover the Policy death benefits from Plaintiff. Wells Fargo Bank, N.A., as Securities Intermediary v. Sun Life Assurance Co. of Canada, No. 21-2984 (E.D.N.Y.). Defendant voluntarily dismissed that action on August 10, 2021. Ten days later, Defendant refiled its complaint in Massachusetts (“Massachusetts Action”). See Wells Fargo N.A. v. Sun Life Assurance Co. of Canada, No. 21-8401896 (Mass. Sup. Ct.).
On May 27, 2021, Defendant moved to dismiss the Complaint in this action for lack of personal jurisdiction, or in the alternative, to transfer venue. (ECF No. 6). In an Opinion and Order dated December 20, 2021, the Court denied Defendant's motion, finding that Plaintiff had established specific jurisdiction against Defendant. (ECF No. 14 (“Prior Opinion”)). Specifically, in finding that Plaintiff had sufficiently demonstrated that Defendant possessed the minimum contacts necessary to establish specific jurisdiction, the Court relied on two recently decided cases involving STOLI claims in this district: Lincoln Benefit Life Co. v. Wells Fargo Bank, No. 1702905, 2017 WL 4953904 (D.N.J. Nov. 1, 2017), recon. denied, 2017 WL 6539244 (D.N.J. Dec. 20, 2017) and West Coast Life Ins. Co. v. Wells Fargo, No. 20-04350, 2021 WL 302919, at * 3 (D.N.J. Jan. 29, 2021), recon. denied, 2021 WL 2712152 (D.N.J. July 1, 2021). (Prior Opinion 78). In Lincoln Benefit, for example, the Court found specific jurisdiction where the trust and the trustee were located in New York at all times; (2) the policy application and amendment to the policy were signed in New Jersey, and (3) the policy contained a conformity with state law provision subjecting the certificate to the laws where the application was signed and insured a New Jersey resident. 2017 WL 4953904 at *3. Indeed, the Court noted that the Lincoln Benefit Court found that “Wells Fargo's relation to the New Jersey policy gives rise to personal jurisdiction,” because “Wells Fargo owns and holds a substantial interest in a policy that on its face is governed by New Jersey Law.” (Prior Opinion 8) (quoting Lincoln Benefit, 2017 WL 4953904 at *4). Applying the reasoning of those decisions to the instant case, the Court found specific jurisdiction existed over Defendant because the place of contracting was New Jersey and Defendant procured a New Jersey policy. (Id. at 8-9).
Generally a matter may not be appealed to the Third Circuit until a final judgment has been rendered. Kaplan v. Saint Peter's Healthcare Sys., No. 13-2941, 2014 WL 4678059, at *2 (D.N.J. Sept. 19, 2014). An interlocutory appeal, however, may be proper in “exceptional cases” where forgoing the normal procedure of appealing after final judgment is appropriate. Caterpillar Inc. v. Lewis, 519 U.S. 61, 74 (1996). Thus, under § 1292(b), the Court may exercise its discretion in certifying an order for interlocutory appeal if the order (1) “involves a controlling question of law,” (2) “as to which there is substantial ground for difference of opinion,” and (3) “an immediate appeal from the order may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b); F.T.C. v. Wyndham Worldwide Corp., 10 F.Supp.3d 602, 633 (D.N.J. 2014). But even if all three criteria are met, certification is not mandatory, rather, it is “wholly discretionary.” Juice Ent., LLC v. Live Nation Ent., Inc., 353 F.Supp.3d 309, 312 (D.N.J. 2018) (quoting P. Schoenfeld Asset Mgmt. LLC v. Cendant Corp., 161 F.Supp.2d 355, 358 (D.N.J. 2001)). The burden to demonstrate that certification is proper lies with the moving party. Kapossy v. McGraw-Hill Inc., 942 F.Supp. 996, 1001 (D.N.J. 1996). And, importantly, “[i]n evaluating these factors, ‘[a] motion [for certification] should not be granted merely because a party...
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