United States District Court, E.D. Pennsylvania
Darnell Jones, II J.
MetLife Insurance Company is an insurance provider from which
Plaintiff West Chester University Foundation purchased two
variable life insurance policies. Plaintiff alleges that
Defendant fraudulently represented that after making six out
of pocket payments on each policy, Plaintiff would never have
to make another payment. Defendant allegedly assured
Plaintiff that investments associated with the policies would
yield sufficient returns to cover the cost of all future
premiums. Plaintiffs made the six out of pocket payments on
each policy, but the investments associated with the policies
did not perform as projected, and were insufficient to cover
the remaining payments owed. Based on the foregoing,
Plaintiff brings suit against Defendant for fraud, fraud in
the inducement, negligent misrepresentation, promissory
estoppel, bad faith, and unjust enrichment. Pursuant to
Federal Rule of Civil Procedure 12(b)(6), Defendant moves to
dismiss each count of the Amended Complaint. For the reasons
that follow, Defendant's Motion to Dismiss is GRANTED IN
PART and DENIED IN PART.
court accepts Plaintiff's allegations as true at the
motion to dismiss stage and therefore recites the facts as
alleged by Plaintiff.
is a Pennsylvania based nonprofit corporation that, as part
of its charitable purpose and through fundraising activities,
donates resources to prospective contributors. (Am. Compl.
¶ 5, 9.) Defendant developed a vanishing premium scheme
for flexible premium variable life insurance policies and
advanced the scheme through misleading and false
representations. (Am. Compl. ¶ 10, 13) Specifically,
Defendant represented that future premium payments would
vanish after the “out of pocket” payment of a
limited number of premiums, because investments made in
connection with the accounts would yield returns sufficient
to cover the future payments. (Am. Compl. ¶ 12).
Plaintiff relied on such representations and thus procured
two MetLife Flexible Premium Variable Life Insurance policies
(“Policies”) with the Foundation as the owner and
beneficiary of the Policies. (Am. Compl. ¶ 24-25.) The
Policies have not delivered in accordance with MetLife's
projections, representations, and warranties, or in
accordance with the reasonable expectations of the
Foundation. (Am. Compl. ¶ 31.) The annual premiums never
vanished and as such, the Policies will lapse unless
Plaintiff continues to pay the annual premium for each. (Am.
Compl. ¶ 32-33). Plaintiff therefore brings suit against
Defendant under Pennsylvania law for fraud, fraud in the
inducement, negligent misrepresentation, promissory estoppel,
bad faith, and unjust enrichment. (Am. Compl.¶ 36-72).
Presently before this Court is Defendant's Motion to
Dismiss each of Plaintiff's claims, Plaintiff's
Response in Opposition, and Defendant's Reply.
deciding a motion to dismiss pursuant to Rule 12(b)(6),
courts must “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. Cnty. of Allegheny, 515
F.3d 224, 233 (3d Cir. 2008) (internal quotation marks
omitted). After the Supreme Court's decision in Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007),
“[t]hreadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. at 678
(citing Twombly, 550 U.S. at 556). This standard,
which applies to all civil cases, “asks for more than a
sheer possibility that a defendant has acted
unlawfully.” Id. at 678; accord Fowler v.
UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)
(“[A]ll civil complaints must contain more than an
accusation.”) (internal quotation marks omitted).
Counts I and II of the Amended Complaint allege fraud, they
are subject to the heightened pleading requirements of
Federal Rule of Civil Procedure 9(b). United States ex
rel. Whatley v. Eastwick Coll., 657 F. App'x. 89, 94
(3d Cir. 2016). “In alleging fraud or mistake, a party
must state with particularity the circumstances constituting
fraud or mistake. Malice, intent, knowledge and other
conditions of a person's mind may be alleged
generally.” Fed.R.Civ.P. 9(b). The aim of this
heightened pleading standard is to “place the
defendants on notice of the precise misconduct with which
they are charged, and to safeguard defendants against
spurious charges of immoral and fraudulent behavior.”
Seville Indus. Mach. Corp. v. Southmost Mach. Corp.,
7742 F.2d 786 (3d Cir. 1984). “Rule 9(b) requires, at
minimum, that plaintiffs support their allegations
of…fraud with all of the essential background facts
that would accompany the first paragraph of any newspaper
story - that is the who, what, when, where, and how, of the
events at issue.” In re Rockefeller Ctr. Props.
Sec. Litig., 311 F.3d 198, 217 (3d Cir. 2002) (internal
Response to Defendant's Motion to Dismiss, Plaintiff
alleges that Defendant's Motion was filed out of time,
and should consequently be denied as time barred. (Resp., 2).
Plaintiff filed the Amended Complaint on June 20, 2016 and
Defendant filed its Motion to Dismiss on July 7, 2016.
Despite Plaintiff's contentions to the contrary,
Defendant's Motion was timely, as Federal Rule of Civil
Procedure 6(d) afforded Defendant a total of seventeen days
to file any responsive pleading, if said pleading would be
filed electronically - as the present Motion was. Having
established the timeliness of Defendant's Motion, the
court now considers each ground upon which Defendant contends
that Plaintiff's Amended Complaint should be dismissed.
to Federal Rule of Civil Procedure 12(b)(6), Defendant moves
to dismiss each claim advanced in Plaintiff's Amended
Complaint. Defendant argues that all of Plaintiff's
claims are procedurally barred by the applicable statutes of
limitations and that each count of the Amended Complaint
fails to substantively state a claim upon which relief can be
granted. In the sections that follow, the court considers
Defendant's procedural challenge to the Amended
Complaint, and each of Defendant's substantive challenges
to the Amended Complaint in turn.
Plaintiff's Claims are not Procedurally Barred by the
Applicable Statutes of Limitations
procedural matter, Defendant argues that all of
Plaintiff's claims are time barred by the applicable
statutes of limitations. (Mot., 3). Pursuant to 42 Pa.C.S.
§ 5524, Plaintiff's fraud, fraud in the inducement,
and negligent misrepresentation claims are subject to a
two-year statute of limitations; pursuant to 42 Pa.C.S.
§ 8371, Plaintiff's bad faith claim is also subject
to a two-year statute of limitations; and pursuant to 42
Pa.C.S. § 5525, Plaintiff's promissory estoppel and
unjust enrichment claims are subject to a four-year statute
of limitations. According to Defendant, the Policies at the
heart of this action were executed in November of 2002 and
March of 2003. (Mot., 3). As Plaintiff was entitled to annual
policy statements - each of which outlined the cash value of
each policy, the premiums paid in the previous year, and the
total loan account value - Defendant argues that Plaintiff
should have known in 2009 and 2010 respectively, that
Plaintiff's six out of pocket payments had not yielded
sufficient returns to cover the remaining payments owed on
the Policies. (Mot., 5). Upon consideration of all the
applicable statutes of limitations, Defendant argues that
Plaintiff's fraud, fraud in the inducement, negligent
misrepresentation, and bad faith claims were barred as of
2011 for the November 2002 Policy, and 2012 for the March
2003 Policy, and that Plaintiff's promissory estoppel and
unjust enrichment claims were procedurally barred as of 2013
and 2014, respectively. (Mot., 3-5).
of limitations require “aggrieved individuals to bring
their claims within a certain time of injury so that the
passage of time does not damage the defendant's ability
to adequately defend against the claims made.”
Dalrymple v. Brown701 A.2d 164, 167 (Pa. 1997). The
applicable statute of limitations begins to run as soon as
the right to initiate and maintain a suit arises.
Id. But the discovery rule is an exception to the
requirement that a complaining party must file suit within
the statutory period. Id. “The discovery rule
provides that where the existence of the injury is not known
to the complaining party and such knowledge cannot reasonably
be ascertained within the prescribed statutory period, the
limitations period does not begin to run until the discovery
of the injury is reasonably possible.” Baselice v.
Franciscan Friars Assumption BVM Province, 879 A.2d 270,
276 (Pa. Super. Ct. 2005). (internal citations omitted). The
Pennsylvania Supreme Court has held that the discovery rule
applies to toll the statute of limitations in any case where
a party neither knows nor reasonably should have known of his
injury and its cause at the time his right to initiate suit
arises, regardless of whether the underlying injury was
discoverable before the end of the prescribed limitations
period. Id. Under the discovery rule, ...