The opinion of the court was delivered by: LEGROME DAVIS, District Judge
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
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
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. ¶
Dr. Dua died on October 15, 2002. Compl. ¶ 25. Shortly thereafter,
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).
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.
Whitman, 114 F.3d 1392, 1398 (3d Cir. 1997)).
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 ...