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Barry Sunshine, On Behalf of Himself and All Others v. Reassure America Life Insurance Company and

March 6, 2012

BARRY SUNSHINE, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED
v.
REASSURE AMERICA LIFE INSURANCE COMPANY AND
SWISS RE LIFE & HEALTH AMERICA, INCORPORATED.



The opinion of the court was delivered by: Norma L. Shapiro, J.

MEMORANDUM

Plaintiff Barry Sunshine ("Sunshine") filed an amended class action complaint*fn1 under Federal Rule of Civil Procedure 23(b)(3) on behalf of himself and all others similarly situated against defendants Reassure America Life Insurance Company ("Reassure") and Swiss Re Life & Health America, Incorporated ("Swiss Re").*fn2 Sunshine's counsel has not moved for class certification. Sunshine claims the court has diversity jurisdiction under 28 U.S.C. § 1332(a) because the action is between citizens of different states and the amount-in-controversy exceeds $75,000.00.*fn3

Sunshine alleges Reassure prematurely terminated disability insurance benefits owed to him. Sunshine asserts four counts under Pennsylvania law: breach of contract (Count I); violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL") (Count II); fraud (Count III); and unjust enrichment (Count IV). Sunshine requests injunctive relief, actual damages in the amount of $46,000.00, treble and punitive damages, and attorney's fees.

Reassure moved to dismiss Sunshine's amended complaint, in its entirety, under Federal Rule of Civil Procedure 12(b)(6) and to strike Sunshine's prayer for punitive damages under Federal Rule of Civil Procedure 12(f). Sunshine did not oppose Reassure's motion to dismiss Count IV but opposed its motion to dismiss Counts I, II, and III and to strike Sunshine's prayer for punitive damages. At oral argument, the court dismissed Counts II and IV with prejudice and granted the motion to strike Sunshine's prayer for punitive damages. The court now also grants the motion to dismiss Count III with prejudice.

Having dismissed Counts II, III, and IV with prejudice, the court must consider whether it still has subject matter jurisdiction over Count I. The court must dismiss an action, at any stage of the litigation, when it appears to a "legal certainty" that it lacks subject matter jurisdiction. See Kontrick v. Ryan, 540 U.S. 443, 455 (2004) (subject matter jurisdiction may be raised initially by either parties, or sua sponte by the court, at any stage of the litigation, including appeal). The court will sua sponte dismiss the action without prejudice for lack of subject matter jurisdiction because Sunshine, claiming actual damages only in the amount of $46,000.00 on Count I, no longer meets the amount-in-controversy requirement under 28 U.S.C. § 1332(a).*fn4

See Prof'l Cleaning & Innovative Bldg. Serv. v. Kennedy Funding, Inc., 408 Fed. Appx. 566, 576 (3d Cir. 2010) (unpublished) (affirming dismissal of the action when plaintiff did not meet the amount-in-controversy requirement after the district court dismissed most of plaintiff's claims as well as a request for punitive damages).*fn5

I. Background

Sunshine alleges that, on or about September 21, 1990, he was issued a disability insurance policy by Reassure. The amended complaint states that the date of application and issuance was November 21, 1990, but the insurance policy lists the issuance date as September 21, 1990; the anniversary date of the insurance policy is September 21 rather than November 21. Sunshine made premium payments according to the terms of the policy.

When Sunshine became disabled and received disability benefits, he was released from the obligation to pay premiums.*fn6 Although the pleadings do not state Sunshine's date of disability, the parties agreed at oral argument that he became disabled prior to age 63. On Sunshine's 65th birthday, March 22, 2009, Reassure ceased paying disability benefits to Sunshine.

Sunshine alleges that termination of benefits on his 65th birthday was a breach of the insurance policy because it provided benefits until the anniversary date following his 65th birthday. Sunshine also alleges Reassure failed to reveal he would have been required to pay premiums to the anniversary date following his 65th birthday (September 21, 2009) had he not become disabled. Sunshine further alleges that because the insurance policy provided that he pay premiums to the anniversary date following his 65th birthday, but payment of benefits ceased six months earlier, Reassure "devised a payment schedule in which policyholders would pay premiums for a period during which they were not eligible to receive benefits." Pl.'s Am. Compl. ¶ 42.

Sunshine brought suit on his own behalf and on behalf of similarly situated proposed class members. The proposed class includes:

All persons who purchased or paid premiums for an individual disability insurance policy written by Maccabees Mutual Life Insurance Company (now Reassure) and subsequently administered by Reassure and/or Swiss Re, received disability benefits pursuant to the policy, and had their benefit payments terminated prior to the policy's Anniversary Date occurring after the policyholder's sixty-fifth birthday.

Pl.'s Am. Compl. ...


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