Bean v. American General Life Insurance Company

Filing 23

ORDER AND REASONS granting 6 Motion to Dismiss Case. Plaintiff's claims for breach of contract and statutory interest are DISMISSED WITHOUT PREJUDICE. Plaintiff has 21 days to amend her complaint. Plaintiff's claim for attorney's fees arising out of a breach of contract claim is DISMISSED WITH PREJUDICE. Signed by Judge Sarah S. Vance on 6/30/2017. (cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PAMELA BEAN

CIVIL ACTION

VERSUS

NO. 17-57

AMERICAN GENERAL LIFE
INSURANCE COMPANY

SECTION “R” (4)

ORDER AND REASONS
Defendant American General Life Insurance Company (AIG) moves to
dismiss under Federal Rule of Civil Procedure 12(b)(6). Defendant asks the
Court to dismiss plaintiff Pamela Bean’s claims. For the following reasons,
the Court grants defendant’s motion.

I.

BACKGROUND
Plaintiff Pamela Bean alleges that defendant is liable for breach of a life

insurance policy issued to her husband, Daniel Clinton Bean, before his
death.1 In 1999, Mr. Bean entered into a life insurance contract with Old Line

1

R. Doc. 1-2 at 1.

Life Insurance Company of America, which later merged with AIG.2 The
contract named plaintiff as the primary beneficiary. 3
In November 2013, defendant sent a letter to Mr. Bean informing him
that his current contract was ending and providing instructions to renew his
policy.4 Neither the plaintiff nor Mr. Bean received this letter because it was
mailed to an old address. 5 Mr. Bean’s life insurance contract term ended on
December 29, 2013. 6
In September 2014, defendant mailed a letter to Mr. Bean at his correct
address with a reinstatement application. 7

Mr. Bean completed the

application and made a timely payment to renew the policy.8 According to
the complaint, defendant received the application and applied Mr. Bean’s
payment to his life insurance contract account. 9 Mr. Bean died days later on
October 8, 2014. 10
After Mr. Bean’s death, defendant sent a letter to Mr. Bean’s old
address stating that it had reviewed the reinstatement application and was

2
3
4
5
6
7
8
9
10

Id. at 6 ¶ 5-7.
Id. at 7 ¶ 12.
Id. at 7 ¶ 13-14.
Id.
Id. at 7 ¶ 9.
R. Doc. 1-2 at 8 ¶ 16.
Id. at 8 ¶ 17.
Id.
Id. at 8 ¶ 20.
2

awaiting medical records from Mr. Bean’s physicians.11 The letter stated that
defendant would notify Mr. Bean of its decision on whether to reinstate his
policy after receipt and review of the records. 12
Weeks later, a company working on behalf of defendant mailed a letter
to Mr. Bean requesting that he sign a medical release form.13 Plaintiff signed
and returned this form to the defendant. 14 In her return letter, plaintiff
stated that it was her understanding the policy was reinstated because
defendant had cashed the check included with the reinstatement
application.15
Months later, defendant mailed another letter to Mr. Bean’s old
address stating that defendant was closing the application because it had not
received the requested additional information. 16 Defendant mailed the same
letter the next day to the correct address. 17 Mr. Bean’s doctor allegedly
indicated to plaintiff that neither he nor his office ever received a medical
records request from defendant.18

11
12
13
14
15
16
17
18

Id. at 9 ¶ 21.
Id.
R. Doc. 1-2 at 9 ¶ 22.
Id.
Id. at 9 ¶ 23.
Id. at 9-10 ¶ 25-26..
Id. at 10 ¶ 27.
Id. at 10 ¶ 30.
3

Plaintiff asserts that she and Mr. Bean performed every act required
under the contract and performed every act requested and required in the
reinstatement process.19 She further alleges that, despite timely notification
of Mr. Bean’s death, defendant has not settled her life insurance claim.20
Plaintiff argues that defendant violated its contractual and statutory
obligations by canceling and failing to renew the life insurance contract.21
Plaintiff seeks damages for breach of contract in the amount of $400,000,
statutory interest, and attorney’s fees.22 Defendant now moves to dismiss
plaintiff’s complaint for failure to state a claim. 23

II.

LEGAL STANDARD
To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead

“sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially
plausible when the plaintiff pleads facts that allow the court to “draw the
reasonable inference that the defendant is liable for the misconduct alleged.”

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20
21
22
23

R. Doc. 1-2 at 11 ¶ 31.
Id. at 11 ¶ 34.
Id. at 11 ¶ 32.
Id. at 11 ¶ 32-35.
R. Doc. 6-1 at 3-5.
4

Id. at 678. A court must accept all well-pleaded facts as true and must draw
all reasonable inferences in favor of the plaintiff. See Lormand v. US
Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009).
A legally sufficient complaint must establish more than a “sheer
possibility” that the plaintiff’s claim is true. Iqbal, 556 U.S. at 678. It need
not contain detailed factual allegations, but it must go beyond labels, legal
conclusions, or formulaic recitations of the elements of a cause of action. Id.
In other words, the face of the complaint must contain enough factual matter
to raise a reasonable expectation that discovery will reveal relevant evidence
of each element of the plaintiff’s claim. Lormand, 565 F.3d at 257. The claim
must be dismissed if there are insufficient factual allegations to raise a right
to relief above the speculative level, Twombly, 550 U.S. at 555, or if it is
apparent from the face of the complaint that there is an insuperable bar to
relief, Jones v. Bock, 549 U.S. 199, 215 (2007).

III. DISCUSSION
Defendant moves to dismiss plaintiff’s petition for failure to state a
claim for breach of contract, attorney’s fees, or statutory interest.24 Plaintiff
concedes that she is not entitled to attorney’s fees on her current claims

24

R. Doc. 6.
5

under the contract or Louisiana law.25 The Court considers the remaining
arguments.
A. Breach of Contract Claim
Plaintiff alleges that defendant breached the life insurance contract
when it failed to pay her $400,000 following her husband’s death.26 To state
a valid claim for breach of contract under Louisiana law, the plaintiff must
allege: “(1) the obligor’s undertaking an obligation to perform, (2) the obligor
failed to perform the obligation (the breach), and (3) the failure to perform
resulted in damages to the obligee.” Favrot v. Favrot, 68 So. 3d 1099, 110809 (La. App. 4 Cir. 2011).
Plaintiff has not adequately alleged a breach of a contract. Under the
provisions of Mr. Bean’s life insurance contract, his insurance term ended on
December 29, 2013. 27 The complaint alleges that defendant failed to renew
or reinstate the life insurance contract even though plaintiff and Mr. Bean
performed every act required of them in the renewal and reinstatement
process.28

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26
27
28

R. Doc. 19 at 9.
R. Doc. 1-2 at 11 ¶ 33.
Id. at 7 ¶ 9.
Id. at 11.
6

Yet plaintiff has not identified any provision of the underlying contract
that obliges defendant to renew or reinstate the life insurance policy. See
Louque v. Allstate Ins. Co., 314 F.3d 776, 782-83 (5th Cir. 2002) (affirming
motion to dismiss where plaintiff failed to identify specific provision of
contract allegedly breached). The allegation in the complaint that defendant
breached its contractual obligations by failing to reinstate the life insurance
policy is thus a legal conclusion without factual support.29 See Iqbal, 556
U.S. at 678.

Plaintiff’s reliance on Louisiana statutes governing the

performance of contracts is unavailing because plaintiff has not specified
defendant’s obligations under the contract. See La. Civ. Code art. 1772 (“A
condition is regarded as fulfilled when it is not fulfilled because of the fault
of a party with an interest contrary to the fulfillment.”); La. Civ. Code art.
1983 (obligation to perform in good faith).
Moreover, the complaint does not allege that the contract should be
deemed renewed as a matter of law. The plaintiff asserts that she told
defendant that she believed the policy was reinstated because defendant
cashed the check accompanying Mr. Bean’s reinstatement application. 30 But
the complaint cites no facts or law to support the proposition that an

29
30

R. Doc. 1-2 at 11 ¶ 32.
Id. at 9 ¶ 23.
7

insurance contract is automatically renewed when an insurance company
deposits a payment received with an application for renewal. Plaintiff’s
memorandum in opposition argues that defendant had a statutory obligation
under Louisiana Revised Statutes § 22:905 to provide written notice before
cancelling a life insurance policy after a default in payment. 31 This statute
appears to have no application to the facts alleged here.
Thus, plaintiff has failed to plausibly allege a breach of contract claim.
B. Statutory Interest Claim
Defendant also moves to dismiss plaintiff’s claim for statutory interest
under Louisiana Revised Statutes § 22:1811. The statute provides that all
death claims under policies issued within the state shall be settled by the
insurer within sixty days after receipt of proof of death. La. R.S. 22:1811. If
the insurer fails to do so without just cause, the amount due shall bear
interest. Id.
Plaintiff has not stated a claim for statutory interest. For the reasons
explained above, the complaint does not allege that Mr. Bean had a valid life
insurance policy at the time of his death. Nor does plaintiff specifically allege
that she made a claim for insurance proceeds or indicate whether and when
she provided defendant with proof of death.

31

R. Doc. 19 at 7-8.
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C. Leave to Amend
The plaintiff has requested the opportunity to amend her complaint if
defendant’s motion is granted.32 The Court will “freely give leave [to amend]
when justice so requires.” Fed. R. Civ. P. 15(a). The Supreme Court has held
that “[i]f the underlying facts or circumstances relied upon by a plaintiff may
be a proper subject of relief, he ought to be afforded an opportunity to test
his claim on the merits.” Foman v. Davis, 371 U.S. 178, 182 (1962).
Leave to amend, however, is not automatic. Halbert v. City of
Sherman, 33 F.3d 526, 529 (5th Cir. 1994). The Court considers multiple
factors, including “undue delay, bad faith or dilatory motive on the part of
the movant, repeated failure to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party by virtue of allowance of the
amendment, [and] futility of amendment.” Foman, 371 U.S. at 182. This is
plaintiff’s first complaint and the Court finds no indication of bad faith,
dilatory motive, or undue prejudice to the defendant. After consideration of
these factors, the Court grants plaintiff leave to amend her complaint.

IV.

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CONCLUSION

R. Doc. 19 at 5.
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For the foregoing reasons, the Court GRANTS defendant’s motion to
dismiss plaintiff’s complaint. Plaintiff’s claims for breach of contract and
statutory interest are DISMISSED WITHOUT PREJUDICE. Plaintiff has 21
days to amend her complaint. Plaintiff’s claim for attorney’s fees arising out
of a breach of contract claim is DISMISSED WITH PREJUDICE.

30th
New Orleans, Louisiana, this _____ day of June, 2017.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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