Plaintiff was insured by Defendant on two separate life insurance policies. The policies had been purchased by Plaintiff’s father, and they had been completely paid and no further premiums were due. Plaintiff alleged that Defendant’s agent recommended that Plaintiff surrender these policies and apply the cash to a new policy. Plaintiff alleges that the agent represented to him that Plaintiff would not be required to pay additional premiums on the policy, but that his benefit would increase over time. Relying on the representations, Plaintiff made the exchange for the new life insurance policy.
Subsequently, Plaintiff received a notice of premium for the new life insurance policy. As a result, Plaintiff filed an action alleging violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), common law breach of contract and bad faith pursuant to 42 Pa.C.S.A. § 8371. Before the court for consideration was Defendant’s motion to dismiss.
Defendant’s motion was premised on the argument that Plaintiff’s claims were barred, based on a prior class action settlement in Willson v. New York Life Ins. Co., Index No. 94/127804 (Sup.Ct. NY Co. Feb. 1, 1996). The Willson class action lawsuit arose from allegations that the defendant had engaged in a nationwide scheme to induce class members to purchase life insurance on the basis of alleged misleading sales presentations.
In support of its motion, Defendant argued that Plaintiff was a member of the Willson settlement class and was precluded from bringing his claims pursuant to the settlement agreement. Plaintiff argued that he was not bound by the settlement agreement. He argued that he was not part of the settlement class because his claim had not arisen at the time of the settlement agreement, nor did he receive adequate notice of the class action settlement, nor was he adequately represented by the settlement class.
In a thorough analysis, the court agreed with the Defendant and concluded that the Plaintiff was a member of the settlement class, and he alleged injury based entirely on transactions released by the settlement agreement. As a result, Plaintiff’s action was dismissed on all counts.
Date of decision: March 19, 2008
Pyle v. New York Life Insurance Company, United States District Court for the Western District of Pennsylvania, Civil Action No. 07-00360, 2008 U.S. Dist. LEXIS 21638, (W.D. Pa. Mar. 19, 2008) (Fischer, J.).