Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Jackson v. Minnesota Life Insurance Co.

United States District Court, E.D. North Carolina, Western Division

March 8, 2017

DR. JAMES H. JACKSON and JAMES H. JACKSON IRREVOCABLE TRUST, Plaintiffs,
v.
MINNESOTA LIFE INSURANCE COMPANY; FIRST INSURANCE FUNDING CORPORATION; AND BARRINGTON BANK & TRUST COMPANY, N.A., Defendants.

          ORDER

          JAMES C. DEVER III., Chief United States District Judge

         On February 8, 2016, Dr. James H. Jackson ("Dr. Jackson") and the James H. Jackson Irrevocable Trust ("the Trust") (collectively, "plaintiffs") sued Minnesota Life Insurance Company ("Minnesota Life"), First Insurance Funding Corporation ("First Insurance Funding"), and Barrington Bank & Trust Company, N.A. ("Barrington") (collectively, "defendants") in Wake County Superior Court [D.E. 1-1]. Plaintiffs assert six claims for relief arising under North Carolina law: fraud in the inducement, negligent misrepresentation, breach of good faith and fair dealing, unfair and deceptive trade practices, and two claims for breach of contract. On March 14, 2016, Minnesota Life timely removed the action to this court [D.E. 1 ]. On April 20, 2016, Minnesota Life answered [D.E. 17], moved for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure [D.E. 20], and filed a supporting memorandum [D.E. 21]. Also on April 20, 2016, First Insurance Funding and Barrington answered [D.E. 18]. On May 10, 2016, First Insurance Funding and Barrington moved for judgment on the pleadings under Rule 12(c) [D.E. 25] and filed a supporting memorandum [D.E. 26]. On May 11, 2016, plaintiffs responded in opposition to Minnesota Life's motion for judgment on the pleadings [D.E. 27]. On May 20, 2016, plaintiffs responded in opposition to First Insurance Funding and Barrington's motion for judgment on the pleadings [D.E. 29]. On May 25, 2016, Minnesota Life replied to plaintiffs' response in opposition [D.E. 30]. On June 3, 2016, First Insurance Funding and Barrington replied to plaintiffs' response in opposition [D.E. 31 ]. As explained below, the court grants defendants' motions for judgment on the pleadings.

         I.

         In or around 2009, Dr. Jackson-then 68 years old-received marketing materials from Minnesota Life regarding one of its products called the Eclipse Indexed Life Policy ("the Policy"). See Compl. [D.E. 1-1] ¶¶ 15-17. Plaintiffs' complaint does not state whether Dr. Jackson solicited the materials. Under the Policy, the insured's annual premiums were invested in specified market funds and accumulated value based on the investments' performance. Id. ¶ 18. The marketing materials also listed lenders who offered a service known as "premium financing, " including First Insurance Funding. Id. ¶¶ 19-20. Premium financing lenders advance the annual premiums due under a life-insurance policy. Id. ¶ 21. The insured or beneficiary pays the interest on those advances until the policy's investment returns can sustain the interest payments. Id. The policy's cash, or surrender, value serves as collateral for the loan's repayment. Id. Upon the insured's death, the policy's proceeds repay the loan's principal, and the beneficiary receives any surplus. Id.

         In August 2009, First Insurance Funding and Minnesota Life provided Dr. Jackson with a "Plan Overview." Id. ¶ 22. The Plan Overview included illustrations (the "August 2009 Illustration") depicting the Policy's performance assuming $5, 000, 000.00 in coverage for Dr. Jackson, beginning at age 69, and $513, 261.00 in annual premiums. Id.; Compl. Ex. A. First Insurance Funding or its agent provided illustrations for the premium-financing loan based on $513, 261.00 in annual premiums and a 5.5% interest rate. Compl.¶22; Compl.Ex. A. The August 2009 Illustration projected the Policy's accumulated value and interest due under the premium-financing loan through the Policy's fourth year. Compl. ¶¶ 24-26.

         The August 2009 Illustration also depicted index credits, which are how the Policy accumulates value. See Id. ¶ 27. When a policyholder make a premium payment, the insurer allocates it to an "index segment." See [D.E. 21] 3-4. Each index segment tracks an investment-related market index and has a one-year life span. Id. At the end of that year, the insurer calculates an index credit based on the segment's value multiplied by both the participation rate and the segment's growth rate. Id. The product of that calculation-the index credit-is then credited back to the Policy's total accumulated value. Id. In February 2010, Dr. Jackson and the Trust applied for the Policy and sought $5, 000, 000.00 in coverage for Dr. Jackson based on an age of 69 with the Trust as the beneficiary. Id. ¶ 30. At the same time, Dr. Jackson applied for a premium-financing loan with First Insurance Funding to finance the Policy's premiums. Id. ¶ 31. Based on the Plan Overview that Minnesota Life and First Insurance Funding provided, Dr. Jackson asked Minnesota Life to add a Surrender Value Enhancement Agreement ("SVEA") to the Policy. Id. ¶ 32. The SVEA provided that the Policy's surrender value would not fall below the total amount in premiums paid on the Policy in the first three years. Id. ¶ 33.

         In March 2010, Minnesota Life approved Dr. Jackson's application and offered to issue him $5, 000, 000.00 in coverage with annual premiums of $513, 260.54. Id. ¶ 35. Minnesota Life also confirmed that it would issue the Policy with an effective date of February, 9, 2010, so that Dr. Jackson's age under the Policy would be 69. Id. On March 23, 2010-before the Policy was issued-Minnesota Life provided Dr. Jackson and the Trust with a document titled "Life Insurance Policy Illustration" (the "Minnesota Life March 2010 Illustration"), which contained numerous illustrations. Id.¶38; Compl.Ex. B. Each illustration in the Minnesota Life March 2010 Illustration showed that an index credit had been applied to the Policy's accumulated value in the Policy's first year. Compl. ¶ 43. The Minnesota Life March 2010 Illustration also projected the Policy's accumulated cash value under various scenarios, ranging from "worst case scenario" to a modest rate of return. Id. ¶¶ 44-47.

         On March 24, 2010, Dr. Jackson and the Trust signed the Minnesota Life March 2010 Illustration and returned it to Minnesota Life. See id ¶ 48; Compl. Ex. B. After receiving the signed Illustration, Minnesota Life issued the Policy for $5, 000, 000 in coverage for Dr. Jackson effective February 9, 2010, at age 69. Compl. ¶ 49. The Policy included the SVEA. Id. Also in March 2010, First Insurance Funding or its agent provided Dr. Jackson with a separate set of illustrations (the "First Insurance Funding March 2010 Illustration"). Id. ¶ 50; Compl. Ex. C.[1]The First Insurance Funding March 2010 Illustration indicated that, based on a 5.6% interest rate on the premium-financing loan and a 9.26% rate of return on the Policy, Dr. Jackson or the Trust would need to post an additional $100, 159 in collateral in the Policy's fourth year. Compl. Ex. C. Based on the listed assumptions, the maximum amount of additional collateral required in any one year would be $ 165, 673. Id. The First Insurance Funding March 2010 Illustration also showed that an index credit had been applied to the Policy's accumulated value in its first year. Id. ¶ 51.

         On or about March 19, 2010, the Trust executed a promissory note (the "Loan" or "Note"), Dr. Jackson executed a personal guaranty, and the Trust executed a document assigning the Policy to First Insurance Funding as collateral to secure the Loan. Id. ¶ 53. The Loan listed defendant Barrington as the "Lender." Id. ¶ 54. First Insurance Funding took all actions as Barrington's agent. Id¶55.

         Dr. Jackson and the Trust believed the August 2009 Illustration, the Minnesota Life March 2010 Illustration, and the First Insurance Funding March 2010 Illustration accurately and completely reflected the contract terms and anticipated performance for the Policy and Loan. Id. ¶ 5 8. Over the Policy's first three years, its underlying investments performed significantly better than the illustrations projected. Id. ¶¶ 73, 75-87. Nonetheless, the Policy's actual accumulated value was significantly less than projected because the illustrations' projections were based on an index credit being applied in the first year, when in reality no index credit was applied in the first year. Id. ¶¶73. 78. Thus, even though the index segment created during the first year earned a return of 8.48%-outperforming the assumed returns in the Minnesota Life March 2010 Illustrations-because an index credit based upon that segment was not applied in year one, the Policy's actual accumulated value fell significantly below that shown in the Minnesota Life March 2010 Illustrations, where an index credit had been applied. Id. ¶¶ 77-78. Because the index segment performed so well, the underlying index segment's performance did not cause the deviation between the Policy's actual accumulated value after the first year and the accumulated value shown in the illustrations. Id. ¶ 80. Rather, the deviation resulted from the allegedly false and misleading nature of the illustrations: specifically, the fact that an index credit had not been applied during the Policy's first year. Id. Because the Policy's actual accumulated value during the first year fell below the value shown in the some of the illustrations, the actual accumulated value during the second and third years also fell below the value shown in the illustrations due to the compounding nature of the index credits. See id ¶¶ 73-87. The Annual Policy Reviews that Minnesota Life issued at the end of each policy year to Dr. Jackson and the Trust reflected the actual index credits and accumulated value during each given year. M. ¶ 74; Compl. Ex. D.

         Plaintiffs allege that the SVEA hid the effect of these deviations between the Policy's projected value per the illustrations and the Policy's actual value. See Compl. ¶¶ 88-96. During the Policy's first three years, the SVEA ensured that the Policy's surrender value equaled the total amount in premium payments made. Id. ¶ 88. The SVEA thus fully secured the Loan during the Policy's first three years, meaning that First Insurance Funding did not require any additional interest payments or collateral above that shown in the illustrations. Id. ¶ 89. This fact allegedly prevented Dr. Jackson or the Trust from becoming aware of the discrepancy between the illustrations and the policy, or the effect of the deviation between the Policy's actual accumulated value and that shown in the illustrations. Id. ¶ 90 After the Policy's third year-when the SVEA lapsed-First Insurance Funding learned of the Policy's accumulated cash value and demanded that Dr. Jackson or the Trust pay the required $115, 381 in interest plus approximately $375, 000 in additional collateral for the Loan. Id. ¶ 91. This amount exceeded the First Insurance Funding March 2010 Illustration's projections that $100, 159 would be due as additional collateral in the Policy's fourth year and that $165, 673 would be the maximum additional collateral required in any one year. See Id. ¶¶ 92, 94; Compl. Ex. C.

         After First Insurance Funding's demanded additional collateral, Dr. Jackson and the Trust contacted both Minnesota Life and First Insurance Funding regarding the disparity between the illustrations' projected accumulated value and the actual accumulated value. Compl. ¶ 97. The parties agreed, without a written agreement, that Dr. Jackson and the Trust need not post additional collateral until February 22, 2013, defendants would not cancel the Policy until February 22, 2013, and Minnesota Life would extend the SVEA period until February 22, 2013. Id. ¶ 98. At that time, the parties planned to review the newest index segment's performance and the index credit due, which they would know on February 15, 2013. Id. First Insurance Funding would thereafter adjust the additional collateral it required. Id. On February 12, 2013, plaintiffs learned that notwithstanding the alleged agreement, First Insurance Funding had directed Minnesota Life to terminate the Policy. Id.¶99.[2]

         On February 8, 2016, Dr. Jackson and the Trust sued Minnesota Life, First Insurance Funding, and Barrington in Wake County Superior Court for fraud in the inducement, negligent misrepresentation, breach of good faith and fair dealing, unfair and deceptive trade practices, and two claims for breach of contract. See[D.E. 1-1]. After Minnesota Life removed the action to this court, defendants filed their answers and moved for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure.

         II.

         This court has subject-matter jurisdiction based on diversity jurisdiction. Thus, the court applies state substantive principles and federal procedural rules. See Erie R.R. v. Tompkins. 304 U.S. 64, 78-80 (1938); Dixon v. Edwards. 290 F.3d 699, 710 (4th Cir. 2002). Federal Rule of Civil Procedure 12(c) permits a party to move for judgment on the pleadings "[a]fter the pleadings are closed-but early enough not to delay trial." A court ruling on a Rule 12(c) motion applies the same standard as when deciding a Rule 12(b)(6) motion to dismiss. See Mayfield v. Nat'l Ass'n for Stock Car Auto Racing. Inc.. 674 F.3d 369, 375 (4th Cir. 2012).

         A motion to dismiss under Rule 12(b)(6) tests the legal and factual sufficiency of the complaint. See Fed.R.Civ.P. 12(b)(6); Ashcroft v.Iqbal. 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twomblv. 550 U.S. 544, 570 (2007); Coleman v. Md. Court of Appeals. 626 F.3d 187, 190 (4th Cir. 2010), affd. 132 S.Ct. 1327 (2012); Giarratano v. Johnson. 521 F.3d 298, 302 (4th Cir. 2008); accord Erickson v. Pardus. 551 U.S. 89, 93-94 (2007) (per curiam). The court "accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff in weighing the legal sufficiency of the complaint." Nemet Chevrolet. Ltd. v. Consumeraffairs.com. Inc.. 591 F.3d 250, 255 (4th Cir. 2009); see Burbach Broad. Co. of Del- v. F.lkins Kadio Corp.. 278 F.3d 401, 405-06 (4th Cir. 2002). The court need not, however, accept as true a complaint's "legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement." Nemet Chevrolet Ltd.. 591 F.3d at 255. Moreover, this court can consider documents relied on by the parties in their briefing if they are integral to and explicitly relied on in the complaint, and their authenticity is undisputed. See Occupy Columbia v. Halev. 738 F.3d 107, 117 n.7 (4th Cir. 2013).

         A.

         Defendants contend that the relevant statutes of limitation bar plaintiffs' claims for fraud in the inducement, negligent misrepresentation, unfair and deceptive trade practices, and one of their claims for breach of contract. Under the Rule 12(b)(6) standard applicable to Rule 12(c) motions, a Rule 12(c) motion "generally cannot reach the merits of an affirmative defense, such as the defense that the plaintiffs claim is time-barred." Goodman v. Praxair. Inc.. 494 F.3d 458, 464 (4th Cir.2007) (en banc). Nonetheless, a district court may reach the merits of an affirmative defense "if all facts necessary to the affirmative defense clearly appear on the face of the complaint." Id. (emphasis omitted). "A complaint showing that the statute of limitations has run on the claim is the most common situation in which the affirmative defense appears on the face of the pleading, rendering dismissal appropriate." Brooks v. City of Winston-Salem. N.C. . 85 F.3d 178, 181 (4th Cir. 1996) (quotation omitted). Failure to comply with the statute of limitations is therefore "a recognized basis for dismissal on the pleadings" under Rule 12(c). Evans v. Trinity Indus.. Inc.. 137 F.Supp.3d 877, 881 (E.D. Va. 2015); see West v. ITT Cont'l Baking Co.. 683 F.2d 845, 846 (4th Cir. 1982).

         1.

         The statute of limitations bars plaintiffs' claim for fraud in the inducement. Plaintiffs allege that defendants presented plaintiffs with the illustrations knowing they were false and intending to deceive plaintiffs into believing they accurately reflected the Policy's terms, the manner in which index credits would be applied, and the future additional collateral payments required. Compl. ¶¶ 108-14. Although plaintiffs' complaint makes a fleeting reference to information regarding the additional collateral payments, their complaint primarily alleges that each of the illustrations contained one "critical omission": showing that an index credit had been applied to the Policy in the first year. Id. ¶¶ 61-72. The court therefore analyzes plaintiffs' claims based on the allegation that the illustrations misrepresented that an index credit would be applied in the Policy's first year.

         A three-year statute of limitations governs North Carolina fraud claims. N.C. Gen. Stat. § 1 -52(9); Usserv v. Branch Ranking & Trust Co.. 368 N.C. 325, 333 n.5, 777 S.E.2d 272, 277 n.5 (2015). The limitations period for civil actions starts running whenever the plaintiff's cause of action accrues. N.C. Gen. Stat. § 1-15; McCutchen v. McCutchen. 360 N.C. 280, 283, 624 S.E.2d 620, 623 (2006). A cause of action for fraud accrues on the date the plaintiff actually discovered the alleged fraud, or reasonably should have discovered it in the exercise of due diligence. Vail v. Vail. 233 N.C. 109, 116, 63 S.E.2d 202, 207 (1951); Carlisle v. Keith. 169 N.C.App. 674, 683, 614 S.E.2d 542, 548 (2005). A plaintiff discovers fraud when he becomes "aware of facts and circumstances which, in the exercise of due care, would enable him or her to learn of or discover the fraud." Jennings v. Tindsey. 69 N.C.App. 710, 715, 318 S.E.2d 318, 321 (19841: see Newton v. Barth. 788 S.E.2d 653, 662 ( N.C. Ct. App. 2016): Spoor v. Barth. 781 S.E.2d 627, 633 ( N.C. Ct. App.), review denied, cert, denied. 787 S.E.2d 38 ( N.C. 2016V and review denied, cert, denied. 789 S.E.2d 4 ( N.C. 2016). When fraud should have been discovered in the exercise of reasonable diligence is ordinarily a question for the jury. Forbis v. Neal. 361 N.C. 519. 524. 649 S.E.2d 382. 386 (2007V But the absence of reasonable diligence is established as a matter of law "where the evidence is clear and shows without conflict that the claimant had both the capacity and opportunity to discover the fraud but failed to do so." State Farm Fire & Cas. Co. v. Darsie. 161 N.C. App.542, 548, 589S.E.2d391, 396-7 (2003).[3] Defendants contend that plaintiffs had both the capacity and opportunity to discover the fraud at three alternative dates, all of which are more than three years before plaintiffs filed suit.

         First, defendants argue that plaintiffs' receipt of the Policy in late March 2010 triggered the three-year statute of limitations because the Policy contained the terms by which index credits would be applied, which plaintiffs allege defendants misrepresented in the illustrations. In support, defendants note that the policyholder's net premium payments are held in an interim account. [D.E. 21] 3. The amount in the interim account is then transferred to the indexed account on the transfer date, which is "[t]he 3rd Friday of each month." Id.; see Policy [D.E. 17-1] 6.[4] Each transfer from the interim account to the indexed account on the transfer date created an index segment. [D.E. 21] 4; Policy [D.E. 17-1] 9. Each index segment had a life span of one year, which began on the transfer date. [D.E. 21] 4; Policy [D.E. 17-1] 5. After one year, an index credit would be calculated based on the growth in the segment's underlying index and then credited to the Policy's accumulated value. [D.E. 21] 4; Policy [D.E. 17-1] 18. Taken together, the Policy shows that index credits would be applied one year from each transfer date, which is the 3rd Friday of the month following the policyholder's premium payment.

         The Policy put plaintiffs on notice that an index credit would not be applied during the Policy's first year. Per plaintiffs' request, the Policy's effective date was February 9, 2010, so that Dr. Jackson's age at issuance would be 69. Thus, the Policy's first year ran from February 9, 2010, to February 9, 2011, but Minnesota Life did not actually issue the Policy until sometime after March 23, 2010. See Compl. ¶¶ 38, 48-49. The complaint does not state the date when Minnesota Life received the first premium payment, but Minnesota Life must have received plaintiffs' first premium some time after the Policy was issued in late March 2010. Based on the Policy's explanation of how index credits would be applied, plaintiffs were able to see that the premium would be transferred from the interim account to the indexed account on the third Friday of the month following receipt of the premium, or April 16, 2010. [D.E. 17-1] 6. The Policy also explained that an index credit would not be applied until roughly one year from the transfer date, when the index segment created from the transfer completed its one-year term. Id. at 18. Because this event would not occur until April 15, 2011, the Policy made clear that no index credit would be applied during the Policy's nominal first year, which plaintiffs knew would end on February 9, 2011, one year from its effective date.

         Here, in the exercise of due diligence, plaintiffs should have discovered the alleged fraud relating to index-credit application when they received the Policy in late March 2010. At that time they were "aware of facts and circumstances which, in the exercise of due care, would enable [them] to learn of or discover the fraud." Jennings. 69 N.C.App. at 715, 318 S.E.2d at 321; see Newton. 788 S.E.2d at 662; Spoor. 781 S.E.2d at 633. Even if plaintiffs failed to grasp how and when index credits would be applied, "one who signs a paper-writing is under a duty to ascertain its contents, and in the absence of a showing that he was willingly misled or misinformed by the defendant as to its contents ... he is held to have signed with full knowledge and assent as to what is therein contained." Williams v. Williams. 220 N.C. 806, 809-10, 18 S.E.2d 364, 366 (1942). Thus, when plaintiffs received the Policy, they had both the capacity and opportunity to discover the fraud, and the court can as a matter of law determine whether plaintiffs exercised due diligence. See Shepard. 172 N.C.App. at 480.617 S.E.2d at 65: Faircloth. 87 F.App'x 314 at 319: see also Gavlor. 190 N.C.App. at 451, 660 S.E.2d at 106; Darsie. 161 N.C.App. at 548, 589 S.E.2d at 397; Piedmont Inst, of Pain Mgmt.157 N.C.App. at 585, 581 S.E.2d at 73-74; Spears.145 N.C.App. at 708-09, 551 S.E.2d at 485. On this record, plaintiffs did not exercise due diligence. Because plaintiffs did not file their complaint until February 8, 2016-nearly six years after they should have discovered the fraud-their fraud claim is time-barred.

         In opposition, plaintiffs discuss Hunter v. Guardian Life Insurance Company of America. 162 N.C.App. 477, 593 S.E.2d 595 (2004). In Hunter, plaintiffs alleged that defendants sold them a life-insurance policy using illustrations showing that the policy would become self-sustaining after plaintiffs paid annual premiums for eleven years if dividends remained at the levels shown in the illustrations. 162 N.C.App. at 480, 593 S.E.2d at 598. Defendants allegedly knew when they sold plaintiffs the policy that the dividend projections were in fact unsustainable and would decrease over time. Id. Defendants asserted that the statutes of limitation barred plaintiffs' claims for fraud and negligent misrepresentation because plaintiffs should have discovered the misrepresentations upon receiving the policy based on the information about payments contained in the policy. Id. at 48 5.593 S.E.2d at 601. The North Carolina Court or Appeals rejected this argument because "[i]n their complaint, plaintiffs allege[d] they only recently discovered the acts of defendants and could not have discovered, with reasonable diligence, such acts until then." Id. at 486, 593 S.E.2d at 601.

         Hunter is distinguishable. First, North Carolina state courts do not employ the plausibility standard set forth in Twombly. instead applying a more lenient notice-pleading standard. See, e.g.. Fussell v. N.C. Farm Bureau Mut. Ins. Co.. 364 N.C. 222, 227, 695 S.E.2d 437, 441 (2010). The barebones claim in Hunter that plaintiffs could not have discovered the misrepresentations upon receiving the policy sufficed in North Carolina state court, but does not suffice in federal court. Second, unlike the plaintiffs in Hunter, plaintiffs here do not allege that they could not have discovered the misrepresentations upon receiving the Policy. Instead, they allege that they did not discover the effects of the fraud upon receiving the Policy. [D.E. 27] 11. North Carolina law, however, does not focus on discovering the fraud's effects. Rather, it focuses on discovering the facts constituting the fraud. See N.C. Gen. Stat. § 1-52(9); see also Forbis. 361 N.C. at 524, 649 S.E.2d at 386; Jenninps. 69 N.C.App. at 715, 318 S.E.2d at 321. Here that fact was that an index credit would not necessarily be applied during the Policy's first year, which the Policy made clear given its explanation of when index credits would be applied and plaintiffs' knowledge of the Policy's backdated effective date. Finally, in Hunter, plaintiffs alleged that the illustrations were based on dividend projections defendants knew were unsustainable, and defendants responded that plaintiffs should have discovered the alleged misrepresentations based upon provisions in the policy that apparently dealt with the number of premium payments required. Here, in contrast, plaintiffs allege that the illustrations misrepresented when index credits would be applied, but the relevant Policy provisions explained that concept directly. The Policy explicitly explained that the timing of index credits turned not on the Policy's effective date, but on when plaintiffs paid the premium. Thus, Hunter does not help plaintiffs.

         Alternatively, defendants argue that if plaintiffs did not discover the alleged fraud upon receiving the Policy in late March 2010, they reasonably should have discovered it by February 9, 2011. On that date plaintiffs received the Annual Policy Review ("APR") for the Policy's first year. The APRs "reflected the actual index credits and accumulated value of the Policy in each year." Compl. ¶ 74. Plaintiffs received the APRs at the end of each Policy year, including the Policy's first year. See Id. ¶¶ 75, 77. The APR issued at the end of the Policy's first year disclosed that no index credit was applied during that year. Compl. Ex. D at 46-47. That APR's first page lists the accumulated value as of February 9, 2011, along with an itemized list of all credits and charges to the accumulated value, and no index credit is listed. Id. at 46. The APR's second page explicitly shows "$0.00 " under "Index Credit." Id. at 47.

         Because plaintiffs received the first APR in February 2011, at that time they were "aware of facts and circumstances which, in the exercise of due care, would enable [them] to learn of or discover the fraud." Tenninps, 69 N.C.App. at 715, 318 S.E.2d at 321. Plaintiffs had both the capacity and opportunity to review this APR and notice that an index credit had not been applied during the Policy's first year. Thus, plaintiffs reasonably should have ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.