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Hancock v. Americo Financial Life and Annuity Insurance Co.

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

July 25, 2017

WILLIAM T. HANCOCK, SR., Individually and in a representative capacity on behalf of a class of persons similarly situated, Plaintiff,
v.
AMERICO FINANCIAL LIFE AND ANNUITY INSURANCE COMPANY, INVESTORS LIFE INSURANCE COMPANY OF NORTH AMERICA, and AMERICO LIFE, INC., Defendants.

          ORDER

          LOUISE W. FLANAGAN United States District Judge

         This matter is before the court on defendant's motion to dismiss for failure to state a claim (DE 17). Briefing having been completed, the issues raised are ripe for ruling. For the following reasons, defendant's motion is granted.

         BACKGROUND

         Plaintiff commenced this action on October 14, 2016, asserting claims against defendants arising from the sale by defendant Investors Life Insurance Company of North America (“Investors Life”) of a policy of life insurance to plaintiff in February 1985, policy number 303 1163280 (the “policy”), and collection of premiums thereunder through October 2013. Plaintiff claims that defendant Investors Life, in conjunction with the other defendants who are allegedly affiliated entities, breached the terms of the policy. Plaintiff asserts claims for breach of contract; declaration and injunction; equitable rescission; unjust enrichment and constructive trust; fraudulent suppression and concealment; fraud; breach of duties of good faith and fair dealing; unfair and deceptive trade practices; and violations of North Carolina's Racketeer Influenced and Corrupt Organizations (RICO) act. Plaintiff seeks compensatory and punitive damages and certification of the case as a class action on behalf of himself and all others similarly situated.

         Defendants filed the instant motion to dismiss on December 9, 2016, asserting that all claims fail as a matter of law and should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The court stayed scheduling activities pending decision on the motion. Plaintiff responded in opposition to the instant motion on January 20, 2017, and defendants replied on February 3, 2017.

         STATEMENT OF FACTS

         The facts alleged in the complaint may be summarized as follows. On February 6, 1985, plaintiff, then 33 years old, applied for a “Flexible Premium Adjustable Life Insurance” policy from defendant Investors Life (the “policy”). (DE 1-2 at 1; see DE 1-2 at 24-25).[1] On February 15, 1985, defendant Investors Life issued the policy to plaintiff. A cover letter to the policy, titled “Flexible Premium Adjustable Life Insurance Policy” states, inter alia “We agree to pay the Cash Value to the Owner on the Maturity Date if the Insured is living on that date. All payments made are subject to the policy provisions.” (Id.). The next page includes a table of contents. (Id. at 2).

         A “policy specifications” page follows, stating that the “initial specified amount” is $50, 000.00 and the “minimum initial premium” is $41.27. (Id. at 3). It also includes the following note and information:

         (Image Omitted)

(Id.). The next four pages comprise a “Table of Expense Charges, ” “Table of Surrender Charges, ” “Insured Table of Guaranteed Maximum Insurance Rates Per $1000, ” and “Other Insured Table of Guaranteed Maximum Insurance Rates Per $1000 ” (DE 1-2 at 4-7).

         The next page contains “general provisions” including the following:

THE CONTRACT
This is your policy We issued it in consideration of your application and your payment of the minimum initial premium. This policy and the application (and any supplemental application for additional Specified Amounts) make up the whole contract. We agree not to use any statements other than those made in the application or in a supplemental application in challenging a claim or attempting to avoid liability under this policy The statements made in the application and supplemental applications will be treated as representations and not as warranties. A copy of the application or supplemental application is attached to this policy when issued, or is made part of the policy when changes in ihe Specified Amount become effective,

(id at 8), and the following:

         PROCEEDS

Proceeds, as used in this policy means the amount payable on the Maturity Date; on the surrender ot this policy before the Maturity Date; or upon the death of the Insured.
The proceeds payable on the death of the Insured shall be the Insured's death benefit, less any Indebtedness [money owed the Company). If the policy is surrendered before the Maturity Date, the proceeds shalt be the cash surrender value described in the Nonforfeiture Provisions section, less any Indebtedness. On the Maturity Date, the proceeds shall be the cash value, less any Indebtedness. The proceeds are subject to the adjustments described in the following provisions;
1. Misstatement of Age or Sex;
2. Incontestability,
3. Suicide Exclusions;
4. Surrender and Cash Surrender Value;
5. Partial Surrender;
6. Grace Period; and
7. Indebtedness.

(Id.). The next two pages cover “exclusions, ” “ownership and beneficiary, ” and “premiums, ” including the following provisions regarding premiums:

6. PREMIUMS
The Date of Issue is the date from which Monthly Anniversary Days, policy months, policy years, and policy anniversaries are determined. The minimum initial premium is due on the Date of Issue. You may pay more than the minimum initial premium on the Date of Issue. But we have the right to limit the amount. Future premiums are payable in advance at our Administrative Office. You may pay future premiums in any amount at any time before the Maturity Date, subject to the limitations describe below.
PLANNED PERIODIC PREMIUMS
Unless you tell us something else in writing, we will send you periodic premium reminder notices for the amount and in the frequency shown on the Policy Specifications page. We have the right to stop sending such notices if we do not receive any premium payment for thirteen policy months. Changes in the amounts or frequency of planned periodic premium payments and payment reminder notices will be subject to our approval. You may change the planned periodic premium to any amount not less than $20. You may not change the planned periodic premium more than twice in a policy year.

(id at 9), and the following:

UNSCHEDULED PREMIUMS
You may make unscheduled premium payments. They must be at least $100. There must be no indebtedness. We have the rig fit to limit the amount of such payments. We have the ...

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