Superior Court of Massachusetts, Suffolk, Business Litigation Session
The MUFFIN TRUST et al.
MONY LIFE INSURANCE COMPANY OF AMERICA et al.
MEMORANDUM OF DECISION AND ORDER ON DEFENDANTSâ
PARTIAL MOTIONS TO DISMISS AND MOTION TO STRIKE PORTIONS OF
PLAINTIFFSâ DEMAND FOR RELIEF
L. Sanders, Justice of the Superior Court
case challenges the defendantsâ calculation of premiums and
other charges on three life insurance policies owned by the
plaintiffs. Defendant MONY Life Insurance Company of America
(MONY) issued two of the policies (the MONY Policies).
Defendant AXA Equitable Life Insurance Company (AXA) issued
the third policy (the AXA Policy). Also named as defendants
are Dale Peatman, the insurance broker who sold the policies
to the plaintiffs, and Protective Life Insurance Company
(Protective) which now owns MONY as a subsidiary.
First Amended Verified Complaint (the Complaint) asserts the
following counts against the defendants: declaratory judgment
(Counts I and II); breach of contract (Counts III and IV);
breach of implied covenant of good faith and fair dealing
(Count V); violation of G.L.c. 93A (Count VI); violation of
G.L.c. 19A, Â§ 14 (Count VII); violation of G.L.c. 93A (Count
VIII); violation of G.L.c. 110A, Â§ 410 (Count IX); unjust
enrichment (Count X); and breach of fiduciary duty (Count
XI). Among other relief, plaintiffâs request that the life
insurance policies be rescinded. Pursuant to Mass.R.Civ.P.
12(b)(6), defendants now move to dismiss some but not all of
these counts, and also request that this Court strike
plaintiffsâ demand for rescission. This Court concludes that
the Motions to Dismiss must be ALLOWED in part and
DENIED in part, and that the Motion to Strike must
be DENIED .
three life insurance policies at issue are:
1. Flexible Premium Variable Life to Maturity Age Policy,
No. 2VUL008292 ("Policy No. 292 "):
This policy was issued by MONY in 1998 as life insurance for
plaintiff Leonard Lewis, now 89 years old. The face value of
the policy is $ 2.5 million. Plaintiff, the Muffin Trust (the
Trust), is the owner of this policy. Plaintiff Ann Marie
Lewis is the trustee and beneficiary of the Trust and also
named as the beneficiary of Policy No. 292.
2. Flexible Premium Adjustable Life to Maturity to Age
Policy, No. 2ULA000309 ("Policy No. 309
"): This policy was issued by MONY in 2003 as life
insurance for plaintiff Ann Marie Lewis, currently 83 years
old. Ann Marie Lewis is Leonard Lewisâ wife. The face value
of this policy is also $ 2.5 million. The owner of this
policy is plaintiff Barbara Lewis, Ann Lewisâ daughter.
Barbara Lewis is 50 years old.
3. Joint Survivorship Universal Life Insurance Policy,
No. 156 231 340 ("Policy No. 340 "):
This policy was issued by AXA in 2007 and insures the life of
both Leonard Lewis and his wife, Ann Marie. The face value of
this policy is $ 5 million. Barbara Lewis is the owner of
defendant, Dale Peatman, was the insurance broker who, as an
agent of the defendants MONY and AXA, sold the three policies
to plaintiffs. Plaintiffs had a long standing relationship
with Peatman dating back to 1993 and relied upon his advice
with respect to which insurance products would be suitable
for them considering their net worth, their age, and their
plaintiffs purchased the MONY Policies, they understood that
the monthly premiums would be in a fixed amount: $ 3, 410.46
for Policy No. 309 and $ 5, 594 a month for Policy No. 292.
They understood that the maximum amount of premiums that
would be paid on either policy would not exceed what the
policy described as the "Guideline Premium Limit."
That Limit was $ 1, 518, 010 for Policy No. 292 and $ 1, 211,
374.30 for Policy No. 309. With respect to the AXA Policy,
plaintiffs understood that it had "guaranteed fixed
premiums" for the life of the policy. Policy No. 340
further provided that any changes in "policy cost
factors ... will be on a basis that is equitable to all
policy holders of a given class and will be determined based
on reasonable assumptions as to expense, mortality, policy
and contract claims, taxes, investment income and
lapses." Â¶ 54, Complaint.
some point (according to the Complaint), MONY began to charge
the plaintiffs far in excess of the amounts permitted by the
policies. By way of example, the Complaint states that MONY
is demanding an annual payment of $ 400, 000 a year under
Policy No. 292 such that plaintiffs will have to pay more
than the face value of the policy itself within two and a
half years. As to both Policy No. 292 and No. 309, MONY has
required premium payments that exceed the Guideline Premium
Limit. With respect to Policy No. 340, the Complaint alleges
that AXA has raised the Cost of Insurance beyond anything
that is equitable or actuarially justified. More generally,
the Complaint alleges that the defendants have "targeted
the elderly" by raising premiums so that policyholders
like the plaintiffs are forced to abandon their policies and
thus relinquish death benefits paid for with premiums over
twenty years. Â¶ 1, Complaint. "By indiscriminately and
unlawfully raising the Cost of Insurance and the premiums on
these policies without proper basis or explanation, [the
defendants] have breached the express and implied terms of
the policies" which are in any event
"unconscionable" and "oppressive." Â¶ 4,
AXAâs and MONYâs Motions to Dismiss
standard that this Court applies to these motions is well
established. To withstand a motion to dismiss under Rule
12(b)(6), the complaint must contain "allegations
plausibly suggesting (not merely consistent with) an
entitlement to relief ..." Iannacchino v. Ford Motor
Co.,451 Mass. 623, 636 (2008), quoting Bell A.
Corp. v. Twombly,550 U.S. 544, 555-57 (2007). Although
a complaint need not set forth detailed factual allegations,
a plaintiff is required to present more than labels and
conclusions and must raise a right to relief "above the
speculative level." Id. Thus, dismissal is
proper when a fair reading of the Complaint establishes that
the facts alleged do not support a cause of action which the
law recognizes. Nguyen v. William Joiner Center for the
Study of War and Social Consequences,450 Mass. 291, 295
(2007). It is therefore not enough simply to allege ...