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Hancock v. Americo Financial Life and Annuity Insurance Co.

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

March 29, 2019

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

          LOUIS W. FLANAGAN UNITED STATES DISTRICT JUDGE.

         This matter is before the court on defendants' motion to dismiss plaintiff's amended complaint for failure to state a claim (DE 36). Briefing having been completed, the issues raised are ripe for ruling. For the following reasons, defendants' motion is granted.

         BACKGROUND

         This case returns to this court following dismissal of plaintiff's original complaint, in order entered July 25, 2017, Hancock v. Americo Fin. Life & Annuity Ins. Co., 272 F.Supp.3d 763, 779 (E.D. N.C. 2017), and mandate of the Fourth Circuit, dismissing appeal and remanding to this court, with instructions to allow plaintiff to amend his complaint. 723 Fed.Appx. 241, 242 (4th Cir. 2018). In accordance with that mandate, plaintiff filed amended complaint on July 11, 2018. Where plaintiff's amended complaint is substantially similar to the original complaint, and where it fails to state a claim for many of the same reasons relied upon in order entered July 25, 2017, the court reiterates herein many components of that order, augmented through discussion of law and issues raised in the instant amended complaint and briefs of the parties.

         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 “Flexible Premium Adjustable Life Insurance Policy” 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.

         In his original complaint, plaintiff asserted 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; as well as violations of North Carolina's Unfair and Deceptive Trade Practices Act (UDTPA) and Racketeer Influenced and Corrupt Organizations act.

         In his amended complaint, plaintiff again asserts claims for breach of contract; declaration and injunction; equitable rescission; unjust enrichment and constructive trust; as well as violation of UDTPA. He has not reasserted the remaining tort claims from the original complaint. Plaintiff continues to seek compensatory, trebled, and punitive damages and certification of the case as a class action on behalf of himself and all others similarly situated, as well as attorney's fees. As before, plaintiff attaches a copy of the policy to the amended complaint. He also relies in this instance upon a declaration of Tim Cody Ryles, Ph.D., an accredited advisor in insurance.

         Defendants filed the instant motion to dismiss on August 24, 2018, asserting that all claims fail as a matter of law and should be dismissed with prejudice 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 October 5, 2018, and defendants replied on October 19, 2018.

         STATEMENT OF FACTS

         The facts alleged in the complaint[1] may be summarized as follows. On February 15, 1985, defendant Investors Life issued the policy to plaintiff, then 33 years old. (Compl. ¶ 45; see DE 32-2 at 3).[2] 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.” (DE 32-2 at 1). 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.” (Id. at 4-7).

         The next page contains “GENERAL PROVISIONS” including the following:

         (Image Omitted.)

         (id. at 8), and the following:

         (Image Omitted.)

         (Id.). The next two pages cover “EXCLUSIONS, ” “OWNERSHIP AND BENEFICIARY, ” and “PREMIUMS, ” including the following provisions regarding premiums:

         (Image Omitted.)

         (id. at 9), and the following:

         (Image Omitted.)

         (id. at 10). The “PREMIUMS” section of the policy also includes provisions regarding “reinstatement.” (Id.). Thereafter, the policy includes a section titled “INSURANCE COVERAGE PROVISIONS” providing information about termination of coverage and death benefit. (Id. at 10-12).

         The next section of the policy titled “NONFORFEITURE PROVISIONS” includes the following additional provisions, pertaining to “CASH VALUE” and deductions therefrom:

         (Image Omitted.)

         (Id. at 12).

         The policy then separately defines the “MONTHLY DEDUCTION” to include a charge for “COST OF INSURANCE, ” which in turn is calculated as set forth in the following provision:

         (Image Omitted.)

         (Id. at 13). The table referenced is one of the four initial tables at the front of the policy, which shows the cost of insurance for each age group, between 0 and 94 years. For example, the rate for age 33 (plaintiff's age at policy inception) is 0.29008, whereas the rate for age 65 (plaintiff's age at filing of complaint) is 3.98456. (Id. at 6).

         “INTEREST RATE” is defined as set forth in the ...


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