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SONECHA v. NEW ENGLAND LIFE INSURANCE COMPANY

January 28, 2004.

JAY SONECHA, Trustee of the Dua Family Multiple Powers Liquidity Trust
v.
NEW ENGLAND LIFE INSURANCE COMPANY t/a NEW ENGLAND FINANCIAL, NEW ENGLAND FINANCIAL GROUP, ROBERT P. WERMUTH, and ANIL MINOCHA



The opinion of the court was delivered by: LEGROME DAVIS, District Judge

MEMORANDUM ORDER

Presently before this Court are Defendant Anil Minocha's Motion to Dismiss (Dkt. No. 3) and Defendants New England Life Insurance Company, New England Financial Group and Robert P. Wermuth's Motion to Dismiss (Dkt. No. 4). For the reasons discussed below, Defendants' Motions are GRANTED.

I. Factual Background and Procedural History

  Plaintiff Jay Sonecha ("Sonecha") is the Trustee of the Dua Family Multiple Powers Liquidity Trust (the "Dua Family Trust" or the "Trust"). Compl. ¶ 1. The Dua Family Trust was established on May 17, 1990 by Jayant Kamar Dua, M.D. ("Dr. Dua") to hold and manage various assets, including the proceeds of certain life insurance policies on Dr. Dua's life. Compl. ¶ 6. The original trustees of the Dua Family Trust were Dr. Dua's sister, Sangeeta Minocha ("Mrs. Minocha"), and his cousin, Roop Kumar Dua ("Roop Dua"). Compl. ¶ 7. Sonecha replaced Mrs. Minocha and Roop Dua as trustee in March 2003. Compl. ¶ 26.

  While she was trustee, Mrs. Minocha was responsible for paying the premiums on the insurance policies of which the Dua Family Trust was the beneficiary. Compl. ¶ 9. Defendant Anil Minocha ("Mr. Minocha") assisted Mrs. Minocha by writing the checks and Page 2 mailing the premium payments. Mr. Minocha also received all incoming mail related to the Dua Family Trust. Compl. ¶ 12.

  One of the life insurance policies for which the Dua Family Trust was beneficiary was a Valley Forge Life Insurance Company ("VFLIC") policy with a $500,000 death benefit (the "Valley Forge Policy" or the "Policy"). Compl. ¶ 14. The Policy was sold to Dr. Dua by Defendant Robert P. Wermuth ("Wermuth"). Compl. ¶ 15. The premium on the Valley Forge Policy was due to be paid on or before March 15, 2001, but was not paid by that date or within the 30-day grace period. Compl. ¶ 16. As a result, the Policy lapsed.

  When Wermuth received notice that the Valley Forge Policy had lapsed, he contacted Dr. Dua about reinstating the policy. Compl. ¶ 18. Wermuth arranged for Dr. Dua and Mrs. Minocha to sign an application for reinstatement, which was approved by VFLIC on June 20, 2001, subject to receipt of the delinquent premium by July 10, 2001. Compl. ¶ 19. Mrs. Minocha failed to remit the premium to VFLIC, and the Valley Forge Policy was not reinstated. Compl. ¶ 20.

  In February 2002, Dr. Dua and his wife, Meena Dua ("Mrs. Dua") had conversations with Wermuth about additional life insurance coverage. Compl. ¶ 21. Because Wermuth did not suggest otherwise, Dr. Dua and Mrs. Dua assumed that the Valley Forge Policy had been reinstated and remained in full force and effect. Compl. ¶ 21. In July 2002, Mrs. Dua contacted Wermuth to ensure that all of the policies on Dr. Dua's life, including the Valley Forge Policy, were in full force and effect. Compl. ¶ 23. Several days later, at Wermuth's direction, his assistant advised Mrs. Dua that all of the policies were in effect and in order. Compl. ¶ 24.

  Dr. Dua died on October 15, 2002. Compl. ¶ 25. Shortly thereafter, the Dua Page 3 Family Trust learned that the Valley Forge Policy had never been reinstated and, as a result, the Trust had $500,000 less in insurance coverage than had been assumed. Compl. ¶ 26.

  On May 19, 2003, Sonecha filed a four count Complaint in the Chester County Court of Common Pleas. Count One alleges negligence against Wermuth. Count Two alleges that New England Life Insurance Company ("New England Life") and New England Financial Group ("NEFG") are vicariously liable for Wermuth's acts. Count Three alleges that New England Life, NEFG and Wermuth are vicariously liable for the acts of Wermuth's assistant and Count Four, which is misnumbered as Count Three, alleges negligence against Mr. Minocha. Defendants New England Life, NEFG and Wermuth removed the Complaint to this Court on June 20, 2003. Defendants now move pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss the Complaint for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6).

  II. Standard of Review

  A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the complaint. See Markowitz v. Northeast Land Co., 906 F.2d 100, 103(3d Cir. 1990): Sturm v. Clark, 835 F.2d 1009. 1011(3d Cir. 1987). In considering a motion to dismiss, the court must accept as true all factual allegations of the complaint and draw all reasonable inferences in the light most favorable to the plaintiff. Board of Trs. of Bricklayers and Allied Craftsmen Local 6 of N.J. v. Wettlin Assoc., Inc., 237 F.3d 270, 272 (3d Cir. 2001). A court therefore "may dismiss a [claim] only if it is clear that no relief could be granted under any set of facts that could be proven consistent with the allegations." Ramadan v. Chase Manhattan Corp., 229 F.3d 194, 195-96 (3d Cir. 2000) (citing Alexander v. Page 4 Whitman, 114 F.3d 1392, 1398 (3d Cir. 1997)).

  III. Analysis

  Sonecha admits that Mrs. Minocha was the trustee of the Dua Family Trust and the person responsible for paying the premium on the Valley Forge Policy of which the Dua Family Trust was the beneficiary. He further admits that Mrs. Minocha's failure to pay the premium caused the Policy to lapse, resulting in a loss of $500,000 to the Trust. Notwithstanding these admissions, Sonecha attempts to impose liability ...


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