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Mary Gross, Trustee of Kathryn B. Gross v. Metropolitan Life

April 11, 2013

MARY GROSS, TRUSTEE OF KATHRYN B. GROSS IRREVOCABLE LIFE INSURANCE TRUST, DATED DECEMBER 20, 2005, PLAINTIFF,
v.
METROPOLITAN LIFE
INSURANCE COMPANY, N.Y., N.Y., A BUSINESS ENTITY FORM UNKNOWN; ET. AL., DEFENDANTS.



The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court

ORDER:

(1) GRANTING IN PART AND DENYING IN PART METLIFE'S MOTION TO DISMISS [Doc. No. 19]

(2) DENYING AS MOOT METLIFE'S MOTION TO STRIKE; AND [Doc. No. 20]

(3) DENYING AS MOOT JOHN HANCOCK'S MOTION TO DISMISS [Doc. No. 21]

On February 8, 2013, Defendants Metropolitan Life Insurance Company, N.Y., N.Y. and MetLife Inc. (collectively "MetLife") filed a motion to dismiss Plaintiff Mary Gross, Trustee of the Kathryn B. Gross Irrevocable Life Insurance Trust ("Plaintiff")'s first amended complaint ("FAC") and a motion to strike portions of the FAC. (Doc. Nos. 19-20.) On February 8, 2013, Defendants John Hancock Life Insurance Company, John Hancock USA, and John Hancock Variable Life Insurance (collectively "John Hancock") also filed a motion to dismiss Plaintiff's FAC. (Doc. No. 21.) On March 11, 2013, Plaintiff filed oppositions to MetLife's motion to dismiss and motion to strike. (Doc. Nos. 27-28.) On March 25, 2013, MetLife filed its replies. (Doc. Nos. 32-33.) On March 26, 2013, the Court took the matters under submission. (Doc. No. 34.) For the reasons below, the Court grants in part and denies in part MetLife's motion to dismiss the FAC, denies as moot MetLife's motion to strike portions of the FAC, and denies as moot John Hancock's motion to dismiss the FAC.

Background

Plaintiff alleges that she is the trustee of the Kathryn B. Gross Irrevocable Insurance Trust (the "Trust"), and she is the daughter of Kathryn B. Gross, the deceased Trustor of the Trust, and Sam Gross. (Doc. No. 17, FAC ¶ 1, 16.) Plaintiff alleges that in the early 1990's, her parents, Kathryn and Sam, formed a relationship with Joseph Langlois, Jr., a successful MetLife agent. (Id. ¶ 16.) Plaintiff alleges that by 1996, her parents relied almost entirely on Langlois and MetLife for their financial planning. (Id. ¶ 18.)

Plaintiff alleges that on September 2, 2002, her father, Sam Gross, passed away, and in late 2005, Kathryn Gross--based on the recommendation of Mr. Langlois--used the proceeds from policies covering Mr. Gross's life and other assets to purchase a $695,789.84 immediate annuity from MetLife and a separate life insurance policy with John Hancock. (FAC ¶ 19.) The John Hancock policy carried a death benefit of $1,373,420 and a policy premium of $88,000 per year. (Id.) Plaintiff alleges that because the MetLife annuity paid a lifetime annual income of $88,000, Mrs. Gross was able to use her income from the MetLife annuity to pay the annual premium on the John Hancock life insurance policy; thereby, allowing her children to essential double their money when she passed away. (Id.)

Plaintiff alleges that each year there was only a small window of time to collect the annuity distributions and pay the life insurance premium. (FAC ¶ 20.) Plaintiff alleges as a result, the John Hancock policy would already be in delinquent status by the time the payments were made. (Id.) Plaintiff alleges that due to this small window of time, it was Mr. Langlois's custom and practice, which Plaintiff relied on, to call Plaintiff and inform her when and where to send the premium and in what amount. (Id. ¶ 21.)

Plaintiff alleges that between January and June of 2010, Mr. Langlois was in and out of the MetLife downtown San Diego office due to unknown medical issues or disability, and that this situation led to his ultimate termination or separation from MetLife in June 2010. (FAC ¶ 22.) Plaintiff alleges that after Mr. Langlois left the company, MetLife failed to place someone else in charge of her mother's account. (Id. ¶¶ 24, 27.) Plaintiff alleges that in December 2010, the John Hancock policy was cancelled, thereby, causing the Trust to lose the $1,373,420 death benefit after making premium payments of nearly $450,000. (Id. ¶ 21.) Plaintiff alleges that prior to the time she received the cancellation notice, she was unaware that Langlois and his staff were no longer employed at MetLife or that the John Hancock policy was about to be cancelled. (Id. ¶ 23.) Plaintiff alleges that she attempted to reinstate the John Hancock policy, but was unable to do so because of delays cause by MetLife. (Id. ¶ 26.) Plaintiff alleges that on May 10, 2012, Kathryn Gross passed away, and to date, no death benefit has been paid to Plaintiff, nor has any premium been refunded. (Id. ¶ 31.)

On September 11, 2012, Plaintiff filed a complaint in San Diego superior court against Defendants MetLife and John Hancock asserting causes of action for: (1) negligence; (2) negligent misrepresentation; (3) breach of contract; and (4) breach of the implied covenant of good faith and fair dealing. (Doc. No. 1, Compl.) On October 12, 2012, Defendants removed Plaintiff's action from state court to this Court pursuant to 28 U.S.C. § 1441 on the basis of diversity jurisdiction. (Doc. No. 1, Notice of Removal.) On November 8, 2012, Defendants MetLife and John Hancock moved to dismiss Plaintiff's complaint. (Doc. Nos. 7, 9.) On January 9, 2013, Plaintiff filed a first amended complaint ("FAC"), mooting the motions to dismiss. (Doc. No. 17.) The FAC contains the same four causes of action as the original complaint and adds John Langlois, Jr. as a Defendant. (Id.)

MetLife moves to dismiss Plaintiff's claims for negligent misrepresentation, breach of contract, and breach of the implied covenant of good faith and fair dealing. (Doc. No. 19-1.) MetLife also moves to strike from the FAC Plaintiff's requests for punitive damages and attorneys' fees. (Doc. No. 20-1.) John Hancock moves to dismiss Plaintiff's claims for breach of contract and breach of the implied covenant of good faith and fair dealing. (Doc. No. 21-1.)

Discussion

I. MetLife's Motion to ...


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