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First National Bank of Pennsylvania v. Transamerica Life Insurance Co.

United States District Court, W.D. Pennsylvania

January 23, 2015



CYNTHIA REED EDDY, Magistrate Judge.[1]

This is a contract dispute initiated by Plaintiff First National Bank of Pennsylvania, as successor by merger to Park View Federal Savings Bank ("F.N.B." or "Plaintiff") seeking to recover $2, 585, 776.11 from Defendants Transamerica Life Insurance Company ("Transamerica") and Clark Consulting, Inc. ("Clark")[3] (collectively referred to as "Defendants"). Both Transamerica and Clark are indirect subsidiaries of AEGON, USA, Inc. and AEGON NV. Pending before the Court is Defendants' motion to dismiss (ECF No. 6) the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons which follow, said motion will be granted in part and denied in part.


Purchase of BOLI Policies

On October 13, 2006, Park View Federal Savings Bank ("Park View") entered into two Bank-Owned Life Insurance policies (collectively referred to as "the policies").[5] The first policy was entered into with Transamerica ("Policy 1"). (Compl. ¶ 17, ECF No. 1). The second policy was entered into with Life Investors Insurance Company of America ("Life Investors") ("Policy 2"). ( Id. at ¶ 25). Life Investors subsequently merged with Transamerica. ( Id. at ¶ 26). Therefore, F.N.B. asserts that "by virtue of the merger, Transamerica became contractually responsible for fulfilling all promises obligations and duties to Park View under Policy 2." ( Id. at ¶ 26). The policies were "substantially similar" and were "assignable by Park View - so long as the assignment was made in writing, filed at Transamerica's Home Office, and... approved by Transamerica." ( Id. at ¶¶ 18, 25).

Defendant Clark acted as a broker under the policies, handling "all correspondence and material related to the [policies]." ( Id. at ¶¶ 13, 23). A copy of each policy is attached to the complaint. (Compl. Ex. A, ECF No. 1-2); (Compl. Ex. B, ECF No. 1-3).

Investment in the Stable Value Fund

Under the policies, Park View initially allocated its investment fund election in the JPMorgan Core Mortgage Fund. (Compl. ¶ 27). In August 2009, Park View changed its investment fund election allocation to JPMorgan Stable Value Fund ("Stable Value Fund") to attain "greater protection from fluctuations in market interest rates." ( Id. ). As a result, in an effort "[t]o protect Park View's investment in the Stable Value Fund, Transamerica entered into contractual obligations with certain third parties to grow/ensure the investment." ( Id. at ¶ 28). The complaint, however, does not indicate that Park View had access to these documents before it decided to invest in the Stable Value Fund or that these third-party agreements were incorporated into the policies.

Park View's Merger with F.N.B.

On October 12, 2013, Park View merged into F.N.B. ( Id. at ¶ 29). On October 16, 2013, Park View and F.N.B. completed the requisite forms to transfer ownership of the policies to F.N.B., which were accepted by Transamerica. ( Id. at ¶ 30). The transfer forms are attached to the Complaint at Exhibit C. (ECF No. 1-4).[6] Thereafter, F.N.B made timely payments of the entire premium amount and Defendants accepted the same. (Compl. ¶ 31).

F.N.B.'s Exercise of its Option to Surrender the Policies

The policies each contained a provision allowing the Policyowner to surrender the policies. On March 4, 2014, F.N.B sent Transamerica written notice that it was surrendering the policies. ( Id. at ¶ 32). The surrender notice was accepted by Defendants on March 5, 2014. ( Id. at ¶ 34). Plaintiff asserts that, based upon a March 2014 Monthly Asset Report prepared by Clark, the Cash Surrender Value of the policies at the time of surrender was $21, 249, 801.46. ( Id. at ¶ 33).

Shortly thereafter, F.N.B. received two letters from Defendants of draft language, "without any instruction, " which were "to be sent by F.N.B. to Transamerica for Transamerica's submission to the Stable Value Fund's manager: JP Morgan Chase Bank, National Association ("JPM")." ( Id. at ¶ 35). "These letters were requested to F.N.B. to purportedly facilitate JPM's reimbursement to Transamerica of certain amounts due to F.N.B. as part of F.N.B.'s investment in the Stable Value Fund, " known as the Bank Enhancement Amount, which "were part of the Cash Surrender Value under the Policies." ( Id. at ¶ 36).

On March 10, 2014, F.N.B. submitted these requested letters to Defendants, which were in turn submitted by Defendants, after their review/approval, to JPM. ( Id. at ¶ 37). F.N.B. was never notified by Defendants that these materials were in any way deficient. ( Id. at ¶ 39). On March 12, 2014, Defendants advised F.N.B. that Transamerica was not ...

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