Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Bacchi v. Massachusetts Mutual Life Insurance Co.

United States District Court, D. Massachusetts

March 25, 2016

KAREN L. BACCHI, Plaintiff,
v.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, Defendant.

         ELECTRONIC ORDER entered.

          ORDER ON REPORT AND RECOMMENDATIONS

          DENISE J. CASPER, Judge.

         Having reviewed Karen L. Bacchi's ("Plaintiff") objections, D. 196, to the Report and Recommendation ("R&R"), D. 193, and Massachusetts Mutual Life Insurance Company's ("Defendant") response to the same, D. 199, the Court rules as follows. The R&R recommends that the motion to amend be denied in substantial part and allowed only to the extent that it narrows the class period. In reaching this conclusion, after full briefing and oral argument by the parties, the Court (Cabell, M.J.) found that two of the claims in the amended complaint were new claims. The Court further concluded that there had been undue delay in seeking this amendment because the basis for the amendment was previously known to Plaintiff and there was no justification for the delay. The Court further found that there was prejudice to Defendant where such new claims were proposed after factual discovery had closed.

         The Plaintiff objects to both findings. Upon de novo review of Plaintiff's objections, the Court rejects these objections as the conclusions in the R&R were not erroneous and are supported by the relevant facts and applicable law. The two new claims concern the Defendant's safety fund calculations: namely, that the Defendant should net its unrealized gains and that the Defendant should lower its MVM adjustment by a hypothetical tax rate. Plaintiff did not assert eeither claim in the operative complaint and they were not part of the factual discovery that is now concluded. Moreover, these claims are proposed three years after litigation and several months after fact discovery has closed, presumably long after Defendant decided its theory of defense and discovery plan. There was also no suggestion that Plaintiff was justified in its delay to seek such amendment where earlier produced discovery put Plaintiff on notice of the factual basis for such claims. Given this context, the magistrate judge also did not err in finding that Defendant would be prejudiced.

         For all of these reasons, the Court ACCEPTS and ADOPTS the R&R, D. 193, and DENIES IN PART the motion to amend, D. 159. The motion to amend is ALLOWED only to the extent that it narrows the class period. (Hourihan, Lisa). (Entered: 05/20/2016)

         REPORT AND RECOMMENDATION REGARDING PLAINTIFF'S MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT (#159)

          DONALD L. CABELL, Magistrate Judge.

         Pending before the Court is the plaintiff's motion for leave to file its first amended complaint. For the reasons discussed below, it is recommended that the motion be granted in part and denied in part.

         I. Relevant Background

         Massachusetts law limits the "surplus" funds that a mutual life insurance company may retain from its "participating business" to "an amount not in excess of twelve percent of its reserve for such business... and a margin of the market value of its securities over their book value...." M.G.L. c. 175, § 141. The amount that a mutual life insurance company is permitted to retain is referred to as a "safety fund." Id. On July 12, 2012, the plaintiff, Karen Bacchi, filed a four count complaint alleging that the defendant, Massachusetts Mutual Life Insurance Company, since 1999, has manipulated its safety fund calculation in order to improperly retain funds that it otherwise would have been obligated to distribute to policyholders. (Dkt. No. 1).

         On December 24, 2015, the plaintiff moved to amend her complaint. (Dkt. No. 159). The proposed amendments in the aggregate relate to three aspects of the safety fund calculation. First, the plaintiff in her complaint alleges that the defendant may not take a market value over book value (MVM) adjustment as part of the safety fund calculation. The proposed amended complaint recognizes that such an adjustment may be taken, but alleges that the adjustment may not include interest rate or currency derivatives, stock in wholly-owned subsidiaries, long-term invested assets ("BA Assets"), or FX gains. Second, the complaint does not make any allegations regarding the treatment of unrealized gains but the proposed amended complaint contends that the defendant should "net" its unrealized gains. Third, the original complaint does not make any allegations regarding hypothetical taxes but the proposed amended complaint contends that the defendant should lower its MVM adjustment by a hypothetical tax rate of 35%.[1] (Dkt. No. 160-1 at ¶¶ 41-43).

         The plaintiff avers that the proposed amendments do not add any new parties or claims for relief or otherwise substantively amend the complaint. She contends that they instead reflect "a more detailed understanding of MassMutual's accounting methodologies and Safety Fund practices, " which in turn allowed her to refine "her theories as to the precise nature and extent of MassMutual's challenged miscalculations." The plaintiff asserts that its "fundamental" challenges to the way the defendant calculated the safety fund has not changed, and that she has moved to amend only to "preclude any argument that those challenges are somehow not encompassed by the operative complaint." (Dkt. No. 159).

         The plaintiff asserts at the same time, however, that she suspected all along that there were issues with these three areas of the safety fund calculation. The plaintiff contends that she was not able to amend the complaint, however, until after she received supplemental discovery responses in September and October 2015, and then honed her theory through expert analysis.

         The defendant argues that the proposed amendments substantively amend the core allegation in the original complaint. It contends that the principal thrust of the original complaint is that the defendant improperly calculated the safety fund because it included a market value over book value adjustment, something the plaintiff contended should not be included, at all. The defendant argues that the proposed amended complaint jettisons this theory (because it lacks merit), and now, differently, alleges that the defendant improperly calculated the safety fund because of the three factors noted above. The defendant points as proof to Interrogatory No. 1, which asked the plaintiff to provide her "specific calculation" of the safety fund for each year in the class period. The plaintiff had responded that the safety fund should have been limited to "twelve percent of reserves, " that is, it should have been calculated without inclusion of an MVM adjustment. (Dkt. No. 129 at pp. 3-11). The defendant argues that the failure of the Interrogatory response to mention the specific safety fund calculation criticisms set out in the proposed amended complaint demonstrates that the proposed amended complaint does indeed introduces new claims. The defendant argues that the proposed amendments are untimely because the plaintiff has been aware of the factual basis for the proposed amendments since at least 2013, when the defendant produced documents explaining how it ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.