Nicholls v. Aetna Life Insurance Company et al

Filing 51

CORRECTED ORDER denying 38 MOTION to Dismiss for Lack of Jurisdiction by Barbara Nicholls. Signed by Judge Warren W. Eginton on 7/30/14.(Ladd-Smith, I.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
RYAN NICHOLLS,
Plaintiff,

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v.
BARBARA NICHOLLS,
Defendant.

3:13-cv-00821-WWE

MEMORANDUM OF DECISION ON DEFENDANT’S MOTION TO DISMISS
Plaintiff Ryan Nicholls alleges that defendant Barbara Nicholls violated a contract
pursuant to which defendant relinquished the rights to life insurance proceeds in favor of
plaintiff. Defendant has moved to dismiss for lack of subject matter jurisdiction. For the
following reasons, defendant’s motion will be denied.
BACKGROUND
Plaintiff’s complaint alleges that Aetna Life Insurance Company improperly delivered life
insurance benefits from the policy of Harry Nicholls, plaintiff’s father, to Barbara Nicholls, Harry
Nicholls’ second wife. The complaint alleges that Barbara Nicholls agreed, through contract
with Harry Nicholls, to forgo insurance proceeds to which she was previously entitled. Barbara
Nicholls allegedly failed to notify Aetna that, pursuant to the contract, she was not entitled to any
life insurance proceeds of Harry Nicholls.
Plaintiff further alleges that as an heir at law of Harry Nicholls, he has suffered losses and
damage as a consequence of defendant’s conduct. He seeks damages and a declaration that
Aetna is obligated to provide the insurance proceeds and benefits under the life insurance policy
of Harry Nicholls to plaintiff.

DISCUSSION
The function of a motion to dismiss is "merely to assess the legal feasibility of the
complaint, not to assay the weight of the evidence which might be offered in support thereof."
Ryder Energy Distribution v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir.
1984). When deciding a motion to dismiss, the Court must accept all well-pleaded allegations as
true and draw all reasonable inferences in favor of the pleader. Hishon v. King, 467 U.S. 69, 73
(1984). The complaint must contain the grounds upon which the claim rests through factual
allegations sufficient “to raise a right to relief above the speculative level.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 556 (2007). A plaintiff is obliged to amplify a claim with some factual
allegations in those contexts where such amplification is needed to render the claim plausible.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Defendant argues that plaintiff lacks standing because he is neither a party to nor a
contemplated beneficiary of the contract between defendant and Harry Nicholls. “The issue of
standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to
dismiss.” Wilcox v. Webster Ins., Inc, 294 Conn. 206, 213 (2009). “Whenever a claim of lack
of jurisdiction is brought to the court's attention, it must be resolved before the court can
proceed.” Gallant v. Caballaro, 50 Conn. App. 132, 134 (1998).
On the face of the complaint, plaintiff implicitly argues that he is a beneficiary seeking to
recover benefits due him under the terms of the life insurance plan based on his status as heir at
law of Harry Nicholls. Moreover, the insurance plan provides that:
If no named beneficiary survives you or if no beneficiary has been named,
payment will be made as follows to those who survive you:
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Your spouse, if any.
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If there is no spouse, in equal share to your children.

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Plaintiff’s complaint alleges that since Barbara Nicholls relinquished her rights as beneficiary via
contract with Harry Nicholls, plaintiff is entitled to life insurance payments.
“It is well settled that one who is neither a party to a contract nor a contemplated
beneficiary thereof cannot sue to enforce the promises of the contract.” Tomlinson v. Board of
Educ. Of City of Bristol, 226 Conn. 704, 718 (1993). “The ultimate test to be applied in
determining whether a person has a right of action as a third party beneficiary is whether the
intent of the parties to the contract was that the promisor should assume a direct obligation to the
third party beneficiary and that intent is to be determined from the terms of the contract read in
the light of the circumstances attending its making, including the motives and purposes of the
parties.” Wasniewski v. Quick and Reilly, Inc., 292 Conn. 98, 109 (2009). However, “it is not in
all instances necessary that there be express language in the contract creating a direct obligation
to the claimed third party beneficiary . . .” Id.
Defendant argues that the motive and purpose for the agreement at issue was to divide
property between defendant and Harry Nicholls in connection with their divorce. Nevertheless,
the Court must draw all reasonable inferences in favor of plaintiff at this stage, and the
circumstances attending the making of the contract, including the motives and purposes of the
parties are disputed. Accordingly, plaintiff’s standing as a third party beneficiary is plausible.
Defendant alternatively contends that plaintiff lacks standing because his alleged harm is
too remote. See Padawer v. Yur, 142 Conn. App. 812, 817 (2013) (finding that an individual
member of an LLC did not have standing to bring action on behalf of the LLC). “As a general
rule, a plaintiff lacks standing unless the harm alleged is direct rather than derivative or indirect.”
Id. Defendant argues that even if she relinquished her right to the life insurance benefits, plaintiff
cannot prove that he would have received them as an heir at law. This, once again, is a factual
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dispute, dependant on the motives of the contracting parties. In light of the fact that the
insurance policy contemplates Harry Nicholls’ children as beneficiaries, plaintiff’s alleged harm
is not too remote as a matter of law. Accordingly, defendant’s motion to dismiss for lack of
standing will be denied.
CONCLUSION
For the foregoing reasons, defendant’s motion to dismiss [Doc. # 38] is DENIED.

Dated this 30th day of July, at Bridgeport, Connecticut.

/s/Warren W. Eginton
WARREN W. EGINTON
SENIOR UNITED STATES DISTRICT JUDGE

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