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Jacoby v. AXA Equitable Life Insurance Co.

United States District Court, E.D. Pennsylvania

December 15, 2014



L. FELIPE RESTREPO, Magistrate Judge.

Presently before the Court are Defendant's Motion to Dismiss Plaintiff's Amended Complaint (ECF Doc. 12) and Plaintiff's response in opposition to Defendant's Motion (Doc. 13). Oral argument on the motion was held on November 20, 2014, and the motion is ripe for disposition.[1] For the following reasons, Defendant's Motion will be granted in part and denied in part.


In 1984, Defendant[2] issued Richard A. Jacoby (the "Insured") a life insurance policy with a face amount of $450, 000 (the "Policy"). Am. Compl. ¶ 11, Ex. A. Plaintiff claims that the policy was marketed and sold as a "Vanishing Premium Policy, " which meant that after nine annual payments, the dividends earned would be used to pay all future premiums. Id. ¶¶ 13-14. On page 3 of the Policy, the "Premium Period" is listed as "For Life." Id. at Ex. A. On page 5, four different dividend options are listed. Id. One such option states, "Premiums: Your dividends will be used to help pay any premium then due." Id. A second option states, "Dividend Additions: Your dividends will be used to provide paid-up additional whole life insurance on the Insured." Id. On the first page of the Insured's application for life insurance, which was incorporated into the Policy, in a section titled "Dividend Election, " the "Additions" option was selected. Id.

The Policy was assigned to the Indenture of Trust of Richard A. Jacoby (the "Trust") in 1992 and James H. Jacoby ("Plaintiff") was named as Trustee. Id. ¶¶ 15-16, Ex. B. Nine annual premiums were paid between 1984 and 1992, totaling approximately $77, 341.50. Id. ¶¶ 19-20. In 1993, counsel for the Trust received a Notice of Payment Due ("Notice") for the tenth annual premium payment. See id. ¶¶ 19-21. After learning about the Notice, the Insured contacted an individual named Kathy Krakowski at HSA Corporation to determine whether the Notice could be disregarded. Id. ¶¶ 25-26, Exs. F, G. Krakowski responded by letter in March 1993, stating: "Enclosed is the Equitable Life illustration you requested showing existing dividends being used to pay premiums. As you will see from this illustration, this will keep your policy in-force without having to pay any additional premiums." Id. ¶¶ 28-29, Ex. G. The letter also enclosed an illustration allegedly from Defendant (the "1993 Illustration") that, according to Plaintiff's Amended Complaint, showed no further premiums were due. Id. ¶¶ 28-30, Ex. G.

The Trust did not pay the Notice and never received any subsequent notices or communication from Defendant until 2013. See id. ¶¶ 32-36, 41-43, 46-47. In March 2013, counsel for the Trust requested from Defendant the most recent annual statement for the Policy. Id. ¶ 37. In response, Defendant notified the Trust that the policy had been converted to a term policy after the tenth premium payment was not paid, and the term policy expired on August 2, 2004. See id. ¶¶ 38-40. Defendant thereafter refused to reinstate the Policy. Id. ¶ 49.

Plaintiff, trustee of the Trust, now brings this suit in his individual capacity[3] against Defendant, alleging breach of contract (Count I), insurance bad faith (Count II), promissory estoppel (Count III), fraud (Count IV), and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL") (Count V). Defendant has moved to dismiss the Amended Complaint in its entirety, pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b).


This Court has federal subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a).[4] Dismissal pursuant to Rule 12(b)(6) is proper where an Amended Complaint fails to state a claim upon which relief may be granted, such as where the plaintiff does not plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). This plausibility standard requires "more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Conclusory allegations are insufficient to survive a defendant's motion to dismiss. See Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). The Court must consider only those facts alleged in the Amended Complaint and must accept all of those allegations as true. Wiest v. Lynch, 15 F.Supp. 3d 543, 557 (E.D. Pa. 2014) (citing ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994)). But the Court "need not accept as true unsupported conclusions and unwarranted inferences, " see id. (quoting Doug Grant, Inc. v. Great Bay Casino Corp., 232 F.3d 173, 183-84 (3d Cir. 2000)), and "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions, " Iqbal, 556 U.S. at 678.

"Generally, a court ruling on a motion to dismiss will not consider matters extraneous to the pleadings.' However, an exception to the general rule is that a document integral to or explicitly relied upon in the complaint may be considered without converting the motion [to dismiss] into one for summary judgment.'" Sunshine v. Reassure Am. Life Ins. Co., 515 F.Appx. 140, 143 (3d Cir. 2013) (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1140, 1426 (3d Cir. 1997) (emphasis and alterations in original)).

In addition, where a plaintiff alleges fraud, he is subject to the heightened pleading standard of Rule 9(b) and must allege fraud with particularity. Fed.R.Civ.P. 9(b). To satisfy Rule 9(b), Plaintiff must "plead or allege the date, time and place of the alleged fraud or otherwise inject precision or some measure of substantiation into a fraud allegation, " Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007), and include "who made a misrepresentation to whom and the general content of the misrepresentation." Lum v. Bank of Am., 361 F.3d 217, 224 (3d Cir. 2004). In other words, Plaintiff must plead the "who, what, when, where and how of the events at issue." In re Rockefeller Ctr. Props., Inc. Secs. Litig., 311 F.3d 198, 217 (3d Cir. 2002) (internal quotation marks and citation omitted).


a. Count I - Breach of Contract

To make out a breach of contract claim under Pennsylvania law, a Plaintiff must allege: "(1) the existence of a contract, including its essential terms, (2) a breach of duty imposed by the contract and (3) resultant damages." Omicron Systems, Inc. v. Weiner, 860 A.2d 554, 564 (Pa.Super. Ct. 2004) (internal quotations omitted). Where an insurance policy is "integral to or explicitly relied upon in the complaint, " the Court may consider the policy itself without converting the motion to dismiss into a motion for summary judgment. In re Rockefeller, 311 F.3d at 206. On the face of the Amended Complaint, Plaintiff alleges all elements of a breach of contract claim.[5] See Am. Compl. ¶¶ 80-84. Defendant argues, however, that Plaintiff's allegations are directly contradicted by the unambiguous language of the policy, and where the language of an insurance policy is ...

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