Arcieri v. New York Life Insurance Company

Filing 37

Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER: "For the foregoing reasons, defendant's motion to dismiss (Docket No. 11 ) is ALLOWED. So ordered."(Moore, Kellyann)

United States District Court
District of Massachusetts
)
)
)
Plaintiff,
)
)
v.
)
)
NEW YORK LIFE INSURANCE COMPANY, )
)
Defendant.
)
)
KAREN ARCIERI,

Civil Action No.
14-11907-NMG

MEMORANDUM & ORDER
GORTON, J.
Plaintiff Karen Arcieri (“Arcieri”) alleges that defendant
New York Life Insurance Company (“New York Life”) breached the
terms of a life insurance policy by 1) improperly amending the
designation of the beneficiaries of the policy without her
consent or knowledge and 2) distributing the proceeds in
accordance with that amendment.
Pending before the Court is defendant’s motion to dismiss
or, in the alternative, for summary judgment.

For the reasons

that follow, the motion to dismiss will be allowed.
I.

Background
New York Life issued two policies insuring the life of the

plaintiff’s late husband, Vincent A. Arcieri, III.

Policy No.

44384504, dated November 11, 1991, provided whole life coverage
in the amount of $500,000 and $500,000 of term coverage under an
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increasing premium term rider (“Policy A”).

At the time it

issued, plaintiff was the owner and sole beneficiary of Policy
A.

The New York Life agent assigned to Policy A was Thomas

Chevalier (“Chevalier”), who worked for the company between 1991
and 1993.
In January, 1992, New York Life recorded a change in
beneficiary such that the plaintiff’s beneficial interest in
Policy A was reduced to 50% and her father-in-law, Vincent
Arcieri Jr. (“father-in-law”), was named the other 50%
beneficiary.

New York Life requires a Change of Beneficiary

form signed by the policy owner in order to change a beneficiary
on a policy.
Chevalier recalled, during his deposition in a prior
lawsuit filed by plaintiff in state court against the executors
of the father-in-law’s estate, that the plaintiff’s late husband
requested the beneficiary change.

He did not remember whether

it was the plaintiff or her late husband who signed the required
form.

Chevalier testified, however, that someone must have

signed the form because he would not have processed it
otherwise.

Plaintiff, on the other hand, asserts that the

change of beneficiary was effected without her knowledge or
consent.

New York Life has been unable to locate the relevant

paperwork either to rebut or to confirm her assertion.

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In October, 1992, plaintiff submitted an application to
convert the $500,000 term rider on Policy A into a separate
$500,000 whole life policy.

The rider was thus converted into

Policy No. 44711438 (“Policy B”).

Under Policy B, the

plaintiff’s infant daughter was a 50% beneficiary and the
plaintiff and her father-in-law were each 25% beneficiaries.
Upon the death of the plaintiff’s late husband in December,
1992, plaintiff and her father-in-law apparently entered into an
oral agreement with respect to both policies under which the
father-in-law promised to hold $375,000 of the life insurance
proceeds (his entire beneficial interest under both policies)
for the benefit of plaintiff and her daughter until her
daughter’s 18th birthday.

Plaintiff alleges that she requested

New York Life to disburse the funds in accordance with her
agreement with her father-in-law.
Consistent with the recorded beneficiary designation and
plaintiff’s alleged request, New York Life paid out the full
amount due under Policy A in February, 1993 (which included some
interest).
$252,539.

Plaintiff and her father-in-law each received
New York Life also paid out proceeds under Policy B,

whereby plaintiff and her father-in-law each received their 25%
shares, or $126,590.

Although it is unstated, the remainder of

the proceeds of Policy B was presumably held in trust for the

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benefit of plaintiff’s daughter.

Plaintiff makes no claim with

respect to Policy B in this case.
Apparently, plaintiff’s daughter had not reached age 18
when the father-in-law died in 2008.

He had not yet paid the

money he allegedly promised to hold on his granddaughter’s
behalf prior to his death.

In April, 2009, plaintiff filed suit

in Massachusetts Superior Court for Middlesex County against the
executors of her father-in-law’s estate, seeking recovery of
$375,000 in life insurance proceeds.

Plaintiff voluntarily

dismissed that action in May, 2012.
IV.

Procedural history
Arcieri filed her complaint against New York Life in the

same Middlesex Superior Court in April, 2014.

Defendant timely

removed that case to this Court and moved to dismiss it or, in
the alternative, for summary judgment in May, 2014.

Plaintiff

subsequently filed a motion for leave to amend her complaint to
join Chevalier as an additional defendant, which would have
extinguished this Court’s diversity jurisdiction and
necessitated a remand to state court.

This Court denied that

motion by endorsement in July, 2014.
V.

Defendant’s motion to dismiss or, in the alternative, for
summary judgment
Plaintiff asserts claims against New York Life for breach

of contract, breach of fiduciary duty and negligence and for

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violations of Massachusetts General Laws, Chapters 175, 176 and
93A.

Defendant has moved to dismiss or, in the alternative, for

summary judgment in response.
A.

Legal standard

Federal Rule of Civil Procedure 12(d) provides that if
matters outside the pleadings are presented to and not
excluded by the court, the motion shall be treated as
one for summary judgment and disposed of as provided
in Rule 56.
Here, both parties have submitted materials beyond the complaint
and its exhibits, such as documents associated with the
plaintiff’s suit against her father-in-law’s estate for breach
of contract filed in state court and an affidavit of the
plaintiff dated July 21, 2014.
Filing additional materials outside the pleadings does not
automatically convert a motion to dismiss into one for summary
judgment. Garita Hotel Ltd. P'ship v. Ponce Fed. Bank, F.S.B.,
958 F.2d 15, 18 (1st Cir. 1992).

The decision whether to

exclude the materials and determine the motion under the Rule
12(b)(6) standard is within the Court’s discretion. Trans-Spec
Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 321 (1st
Cir. 2008).

In this case, the Court chooses to treat

defendant’s motion as a motion to dismiss.
To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to “state a claim

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to relief that is plausible on its face. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007).

Exhibits attached to the

complaint are properly considered “part of the pleading for all
purposes.” Fed. R. Civ. P. 10(c).

In considering the merits of

a motion to dismiss, the Court must accept all factual
allegations in the complaint as true and draw all reasonable
inferences in the plaintiff's favor. Langadinos v. Am. Airlines,
Inc., 199 F.3d 68, 69 (1st Cir. 2000).

Yet “[t]hreadbare

recitals of the elements of a cause of action, supported by mere
conclusory statements,” do not suffice to state a cause of
action. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Accordingly, a complaint does not state a claim for relief where
the well-pled facts fail to warrant an inference of anything
more than the mere possibility of misconduct. Id. at 679.
B.

Application
1.

M.G.L. c. 175 § 123 and M.G.L. c. 176D (Counts IV
and V)

As a preliminary matter, plaintiff has no private cause of
action under M.G.L. c. 175, § 123 or M.G.L. c. 176D because the
Commissioner of Insurance has exclusive authority to enforce
those statutes. M.G.L. c. 175, § 3A; M.G.L. c. 176D §§ 6, 7; see
also Thorpe v. Mut. of Omaha Ins. Co., 984 F.2d 541, 544 n.1
(1st Cir. 1993).

Accordingly, Counts IV and V of plaintiff’s

complaint will be dismissed.

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2.

Statute of limitations

New York Life contends that all of the claims set forth by
the plaintiff should be dismissed as time-barred.

A defendant

can raise the statute of limitations as an affirmative defense
in a Rule 12(b)(6) motion to dismiss so long as the underlying
factual basis for the defense is “clear on the face of the
plaintiff’s pleadings.” Santana-Castro v. Toledo-Davila, 579
F.3d 109, 113-14 (1st Cir. 2009) (citation omitted).

As the

First Circuit Court of Appeals recently held
[w]hen the allegations in a complaint show that the
passage of time between the events giving rise to the
claim and the commencement of the action exceeds the
applicable limitations period, a [] court should grant
a 12(b)(6) motion by the defense if the complaint (and
any other properly considered documents) fails to
sketch a factual predicate that would provide a basis
for tolling the statute of limitations.
Abdallah v. Bain Capital LLC, 752 F.3d 114, 119 (1st Cir. 2014)
(internal quotations omitted).
Tort claims, claims brought under Chapter 93A and breach of
contract claims must be commenced within three, four and six
years, respectively, after the causes of action accrue. M.G.L.
c. 260 §§ 2, 2A, 5A.

Causes of action in contract and tort

generally accrue at the time of breach or injury. See Int’l
Mobiles Corp. v. Corroon & Black/Fairfield & Ellis, Inc., 29
Mass. App. Ct. 215, 221 (1990).

For the plaintiff, this

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occurred at the latest in February, 1993, when New York Life
paid out the full amount of proceeds due under Policies A and B.
The statute of limitations may be tolled, however, when 1)
the facts giving rise to a cause of action are “inherently
unknowable” to the injured party or 2) when a cause of action is
fraudulently concealed by the wrongdoer. Gonzalez v. United
States, 284 F.3d 281, 288-89 (1st Cir. 2002).
a.

Inherently unknowable

Tolling takes effect pursuant to the discovery rule if the
factual basis for the cause of action must have been “inherently
unknowable” at the time of injury. Gonzalez, 284 F.3d at 288-89.
The factual basis for a cause of action is “inherently
unknowable” if it is “incapable of detection by the wronged
party through the exercise of reasonable diligence.” Geo. Knight
& Co., Inc. v. Watson Wyatt & Co., 170 F.3d 210, 213 (1st Cir.
1999) (citation and internal quotations omitted).

The

“inherently unknowable” standard is “no different from, and is
used interchangeably with, the “knew or should have known”
standard.” Williams v. Ely, 423 Mass. 467, n. 7 (1996).
Arcieri contends that she could not have learned of the
change of beneficiary due to her emotional state upon the death
of her husband and her reasonable reliance upon Chevalier, the
defendant and her father-in-law.

Although she acknowledges

being aware that her father-in-law received a disbursement from
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Policy A, plaintiff alleges that she believed that he received
it pursuant to their agreement rather than as a 50% beneficiary.
She claims to have first learned of the change in beneficiaries
in 2011, after discovery began in her earlier lawsuit against
her father-in-law.
The factual allegations in the complaint indicate that the
only reason plaintiff did not learn of the change of beneficiary
at the time the policy proceeds were disbursed in 1993 was
because she apparently had made an oral agreement with her
father-in-law and requested that New York Life distribute the
proceeds of Policy A accordingly.

Had she not given such an

instruction, plaintiff presumably would have noticed that onehalf of the Policy A proceeds were, in her eyes, wrongfully
distributed.

In any event, if plaintiff had questions regarding

the terms and/or beneficiaries of Policy A, in the exercise of
reasonable diligence, she should have asked New York Life during
or after the time of the disbursement of policy proceeds.
The facts alleged in the pleadings therefore do not support
a finding that plaintiff’s causes of action against New York
Life were “inherently unknowable.”
b.

Fraudulent concealment

A statute of limitations may also be tolled if a wrongdoer
“conceal[s] the existence of a cause of action through some
affirmative act done with intent to deceive.” Puritan Med. Ctr.,
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Inc. v. Cashman, 413 Mass. 167, 175 (1992).

Mere “silence in

subsequent dealings between the parties does not amount to
fraudulent concealment”. Szymanski v. Bos. Mut. Life Ins. Co. 56
Mass. App. Ct. 367, 381 (2002).

There must be a requisite

affirmative act. Id.
The plaintiff has not alleged that Chevalier or anyone else
at New York Life affirmatively acted with an intention to
deceive her.

At worst, New York Life was silent on the issue of

the change in beneficiary and silence is insufficient to rise to
the level of deception. See id.

Plaintiff’s claims therefore

cannot be tolled due to fraudulent concealment.
Although the Court perceives a heartless, intra-family
fraud perpetuated against a naïve but sympathetic widow, it can
provide no remedy.

The Court concludes that plaintiff’s claims

against New York Life for breach of contract, breach of
fiduciary duty, negligence and violation of M.G.L. c. 93A are
barred by the statute of limitations as a matter of law.
Accordingly, the remaining Counts of the complaint will be
dismissed.

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ORDER
For the foregoing reasons, defendant’s motion to dismiss
(Docket No. 11) is ALLOWED.

So ordered.
/s/ Nathaniel M. Gorton __
Nathaniel M. Gorton
United States District Judge
Dated December 4, 2014

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