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Wilson v. Canada Life Assurance Co.

March 3, 2009

SHARON ANN WILSON, PLAINTIFF
v.
THE CANADA LIFE ASSURANCE COMPANY, ET AL., DEFENDANTS



The opinion of the court was delivered by: Judge John E. Jones III

MEMORANDUM

This dispute over the proceeds of a life insurance policy is before the Court on the Motion to Dismiss Amended Complaint (Doc. 11) of defendant The Canada Life Assurance Company ("Canada Life") which seeks to dismiss the complaint of plaintiff Sharon Ann Wilson for failure to join a party under Rule 19 and failure to state a claim. Also before the Court is Wilson's Motion to Extend Time for Service Upon Foreign Corporation (Doc. 28) which seeks an extension of time in which to serve defendant Toyo Motors, Ltd. ("Toyo"). For the reasons set forth below, Canada Life's motion to dismiss will be granted, and Wilson's motion will be denied as moot.

I. BACKGROUND*fn1

Wilson commenced this action by filing a praecipe for writ of summons in the Court of Common Pleas of Schuylkill County on November 13, 2007. (Doc. 1, Ex. B.) Canada Life removed the action to this Court on November 25, 2008. (See Doc. 1.) On July 31, 2008, Wilson filed an amended complaint naming as defendants Canada Life and Toyo. (Doc. 8.)

Wilson's complaint asks the Court to determine the ownership of the proceeds of a life insurance policy. (See id. at ¶ 2.) The complaint alleges that on July 4, 1980, New York Life Insurance Company issued a $100,000 whole life policy, number 3077070, on the life of Robert Andrew Stevens. (Id. at ¶ 9.) The policy listed Robert A. Stevens as the insured and Toyo Motors, Ltd. as the applicant and beneficiary.*fn2 (Doc. 11-3 at 17, 18.) Toyo is a general automotive repair business located in Richmond, British Columbia, Canada. (Amend. Compl. ¶ 6.) At the time the policy was issued, Robert A. Stevens was the owner and president of Toyo, as well as a mechanic. (See Doc. 11-3 at 13, 17.)

In April 1994, Canada Life acquired certain assets of New York Life, including the policy insuring the life of Robert A. Stevens, and converted policy 3077070 to a Canada Life policy. (Amend. Compl ¶ 11; Doc. 11-4.)

Robert A. Stevens was the domestic partner of plaintiff Wilson. (Amend. Compl. ¶ 20). On dates unspecified in the complaint, Robert A. Stevens changed ownership of the policy from Toyo to himself and changed the beneficiary of the policy from Toyo to Wilson. (See id. at ¶ 28). At the time of Robert A. Stevens's death on October 5, 2007, the policy listed Robert A. Stevens as the owner and Wilson as the sole beneficiary. (Id. at ¶¶ 21-23.) Wilson provided timely notice of Robert A. Stevens's death to Canada Life and sought the proceeds of the policy. (Id. at ¶ 27.)

Canada Life has not paid Wilson the policy proceeds, however, because Toyo has submitted a competing claim. (Id. at ¶¶ 12, 28.) On May 12, 2008, Toyo commenced suit against Canada Life and Wilson in the Supreme Court of British Columbia. (Id. at ¶ 12.) In that action, Toyo contends that on October 21, 2002, Robert A. Stevens resigned from his positions at Toyo, and therefore, had no authority to transfer ownership of the policy to himself on April 28, 2005 or to change the beneficiary of the policy to Wilson on September 20, 2005.*fn3 (Doc. 11-9.) In the Canadian action, Toyo seeks a declaration that it is the owner and beneficiary of the policy and payment of the policy proceeds. (Id.)

In this action, Wilson asserts against both Canada Life and Toyo claims of breach of contract and fraud. (Amend. Compl. ¶¶ 30-33, 34-40.) She seeks compensatory damages in an amount in excess of $100,000 and punitive damages.*fn4

To date, Wilson has not returned proof of service of the amended complaint on Toyo, and no counsel has entered an appearance on Toyo's behalf. Canada Life moves to dismiss Wilson's amended complaint pursuant to Fed. R. Civ. P. 12(b)(7) for failure to join Toyo. Canada Life asserts that Toyo is an necessary party and cannot be joined because this Court lacks personal jurisdiction over Toyo. Canada Life also moves pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss Wilson's fraud claim and request for punitive damages for failure to state a claim upon which relief can be granted.

II. STANDARD OF REVIEW

For the purpose of ruling on motion to dismiss under Rule 12(b)(7) for failure to join indispensable party, the well-pleaded factual allegations of the complaint are accepted as true. See Jurimex Kommerz Transit G.M.B.H. v. Case Corp., 65 Fed. Appx. 803, 805 (3d Cir. 2003); Clements v. Holiday Inns, Inc., 105 F.R.D. 467, 469 (E.D. Pa. 1984). Similarly, in considering a motion to dismiss pursuant to Rule 12(b)(6), courts "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)).

III. DISCUSSION

Canada Life moves to dismiss Wilson's amended complaint for failure to join a party under Rule 19, which "states the principles that determine when persons or entities must be joined in a suit." Philippines v. Pimentel, 128 S.Ct. 2180, 2188 (2008). In analyzing a motion under Rule 19, a court must first determine whether a party is "necessary" under the factors in Rule 19(a) such that it should be joined if "feasible". Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 404 (3d Cir. 1993). Joinder may not be feasible for a number of reasons, including because joinder would destroy diversity, see id., or, as alleged in this case, because the court lacks personal jurisdiction over the absentee, see 7 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure ("Wright & Miller") § 1610 (2008); 4 James Wm. Moore et al., Moore's Federal Practice ("Moore's") § 1904[2]. If a party should be joined but joinder is not feasible, "the court must determine whether, in equity and good conscience, the action should proceed among the existing parties." Fed. R. Civ. P. 19(b). This question "turns on the factors outlined in subdivision (b)." Pimentel, 128 S.Ct. at 2188. If the court determines that an action should not go forward without an unjoined party, the absentee is considered "indispensable", and the action must be dismissed.*fn5 See id. at 2188-89; Janney, 11 F.3d at 404. "[T]he issue of joinder can be complex," and the decision whether to proceed without an absent party "'must be based on factors varying with the different cases, some such factors being substantive, some procedural, some compelling by themselves, and some subject to balancing against opposing interests.'" Pimentel, 128 S.Ct. at 2189 (quoting Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 119 (1968)).

As an initial matter, Wilson did name as a defendant and therefore did, technically, join Toyo as a party. However, given that Toyo has not been properly served with the complaint and Canada Life's assertion that, if and when it is served, Toyo will not be subject to this Court's personal jurisdiction, the technical joinder of Toyo as a party does not circumvent the Rule 19 analysis, ...


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