YERKES v. CESSNA AIRCRAFT COMPANY et al

Filing 36

OPINION FILED. Signed by Judge Renee Marie Bumb on 6/25/15. (js)

NOT FOR PUBLICATION

[Dkt. Ents. 19, 29]

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

ERIC NELS YERKES,
Civil Action No. 14-cv-05925
Plaintiff,
v.

OPINION

CESSNA AIRCRAFT CO., et al.,
Defendants.

Appearances:
Melissa A. Bozeman
Kutak Rock LLP
Two Liberty Place
50 South 16th Street
Suite 28B
Philadelphia, PA 19102
Oliver D. Griffin
Spector Gadon and Rosen, P.C.
1000 Lenola Road
P.O. Box 1001
Moorestown, NJ 08057
Attorneys for Plaintiff
Eric Nels Yerkes
Susan M. Kwiatkowski
Jeffrey W. Moryan
Connell Foley LLP
85 Livingston Avenue
Roseland, NJ 07068
Attorneys for Defendant
Cessna Aircraft Co.
Michael J. Miles
Brown & Connery, LLP
360 Haddon Avenue
Westmont, NJ 08108

1

Joseph L. Ruby
Lewis Baach PLLC
1899 Pennsylvania Avenue NW
Suite 600
Washington, DC 20006
Attorneys for Defendants
Certain Underwriters at Lloyd’s London
BUMB, UNITED STATES DISTRICT JUDGE:
This matter comes before the Court upon two motions to
dismiss filed by Defendant Cessna Aircraft Co. (“Cessna”) and
Defendants Certain Underwriters at Lloyd’s London (“Lloyd’s”).
(Dkt. Ents. 19, 29.) Cessna and Lloyd’s (collectively, the
“Defendants”) seek to dismiss Counts I, III, and IV of the
Second Amended Complaint (the “Second Amended Complaint”),
which, respectively, allege breach of contract against Cessna,
breach of contract against Lloyd’s, 1 and unjust enrichment
against both Cessna and Lloyd’s. 2 (Second Am. Compl. ¶¶ 32-38,
45-53, 54-57.)
I.

Factual Background
On August 18, 1981, Plaintiff Eric Nels Yerkes (the

“Plaintiff”) sustained severe and permanent injuries in a plane
crash that occurred near the Grand Canyon in Arizona. (Id. at

1

Count III alleges breach of contract against Cessna’s
insurers, and Lloyd’s underwrote 36.3787% of Cessna’s insurance
policy. (Id. at ¶¶ 8, 45-53.)
2

Count IV also alleges unjust enrichment against both the
policy’s other underwriters and the structured settlement’s
asignee, neither of whom have entered an appearance. (Id. at
¶¶ 54-57.)

2

¶¶ 1, 13.) The plane in which Plaintiff was injured was
manufactured by Cessna, whose insurance policy was underwritten
by certain “companies participating in the London insurance
market,” including Lloyd’s (collectively, Cessna’s “Insurers”).
(See id. at ¶¶ 7, 13.) Following the plane crash, Plaintiff
filed suit against Cessna and its Insurers in Arizona federal
court. (Id. at ¶ 1.) The parties resolved that suit by entering
into a settlement agreement, the terms of which were embodied in
a Release and Indemnity Agreement (“RIA”), as well as an
Assignment Agreement, both of which are alleged by Plaintiff to
be dated April 1, 1986. (Id. at ¶ 13.) Under the settlement
agreement, Plaintiff was to receive a $125,000.00 lump-sum
payout, as well as periodic payments throughout his lifetime,
which were to be funded by an annuity carrying an ultimate value
in excess of $6,000,000.00. (Id. at ¶¶ 13-14.) The annuity was
to be purchased from Executive Life Insurance Company of New
York (“ELNY”) and assigned to First Executive Corporation
(“FEC”). (See id. at Ex. A.) Plaintiff attached unexecuted and
undated copies of the RIA and Assignment Agreement to his Second
Amended Complaint but, as mentioned, Plaintiff avers that these
documents evidence the settlement agreement. 3 (See id. at ¶ 13 &
Ex. A.)

3

It is unclear what the basis is for Plaintiff’s allegation
that the documents are “dated April 1, 1986” (see id. at ¶ 13),
3

Specifically, the RIA provides that:
In consideration of payment of $125,000.00 cash,
receipt of which is acknowledged by [Plaintiff], and
payment of periodic sums, [Plaintiff] releases
[Cessna] and its [Insurers], and all those related or
that may be related to them, from all claims, demands
and causes of action, known or unknown, arising out of
a Grand Canyon Airlines plane crash occurring August
18, 1981.
In consideration for this Release and an
Assignment Agreement, Cessna and [Lloyd’s], in
addition to payment of $125,000.00, agree to purchase
an annuity from [ELNY] to fulfill their obligation to
provide . . . periodic payments [to Plaintiff] . . . .
. . .
It is also understood and agreed that [Cessna]
and [Lloyd’s] will assign their obligation for these
periodic payments to First Executive Corporation as
set forth in the Assignment Agreement. This assignment
is accepted by [Plaintiff] . . . in full release of
Cessna and [Lloyd’s] with respect to these periodic
payments. [Plaintiff] acknowledges that once this
assignment is made Cessna and [Lloyd’s] are released
from the obligation to make such payments.
since Plaintiff alleges that he does not possess fully-executed
versions of the RIA and Assignment Agreement. Nor is he
allegedly aware of whether the unexecuted versions attached to
his Second Amended Complaint are the “final version[s] which
[were] ultimately executed by the parties.” (Id. at ¶ 13.)
Nonetheless, Plaintiff relies upon these documents as evidencing
the terms of the parties’ settlement agreement. (See, e.g., id.
at ¶¶ 13, 18-19.) To the extent Plaintiff argues that the terms
of the unexecuted settlement documents do not reflect the
entirety of the parties’ agreement, this argument seems to be
belied by the terms of the RIA and Assignment Agreement, as well
as alleged conduct of the parties that is consistent with the
terms of the unexecuted documents. (See, e.g., id. at Ex. A, p.
2 (“All understandings and agreements between the parties are
expressed in and merged into this release.”); id. at p. 7 (“This
[Assignment] Agreement and a [RIA] . . . constitute the entire
agreement among Assignor, Assignee and Payee.”); id. at ¶¶ 1,
13, 18, 33, 40, 47, 55); see also Battaglia v. McKendry, 233
F.3d 720, 729 n.7 (3d Cir. 2000) (“[T]he standard merger clause
causes prior negotiations and understandings to merge into and
be extinguished by the subsequent agreement.”).

4

(Second Am. Compl. Ex. A 1-2 (emphasis added).)
Attached, and incorporated by reference, to the RIA is the
Assignment Agreement, which states:
In consideration of payment of a premium payment
by [Cessna’s Insurers], (“Assignor”) to [FEC], a
California Corporation (“Assignee”), Assignee assumes,
and Assignor assigns to Assignee, the liability of
Assignor to make periodic payments in the amounts and
at the times set forth in the Schedule of Payments
attached as Exhibit A, to [Plaintiff] . . . .
[Plaintiff] agrees that, by reason of such assumption
and assignment, [Cessna’s Insurers are] fully released
from [their] liability to make all periodic payments.
(Id. at Ex. A, p. 6.) The Assignment Agreement purports to be a
“qualified assignment” under Section 130(c) of the Internal
Revenue Code. (See id. at ¶ 19 & Ex. A, p. 6.) While the
Assignment Agreement and RIA attached to Plaintiff’s Second
Amended Complaint are unexecuted, Plaintiff, Cessna’s Insurers,
and FEC are all signatories to the Assignment Agreement, and
Plaintiff is a signatory to the RIA. (Id. at Ex. A, pp. 3-4.)
Plaintiff alleges that Cessna and/or its Insurers purchased
an annuity from ELNY. (Id. at ¶ 16.) Plaintiff received
structured settlement payments pursuant to this annuity
apparently from March 15, 1986 until August 8, 2013 (totaling at
least $788,000 by this Court’s calculation), 4 when ELNY underwent

4

This amount is based upon the terms of the RIA but does
not include the $125,000.00 lump sum payment that Plaintiff
alleges he also recieved.

5

a restructuring and liquidation process. (Id. at ¶ 2; see also
id. at ¶ 23.) ELNY’s remaining assets were transferred to
Guaranty Association Benefits Company (“GABC”), which has been
responsible for managing assets and making payments on behalf of
ELNY. (Id. at ¶¶ 26-27.) On October 13, 2014, GABC sent a letter
to Plaintiff’s New Jersey residence informing him that, due to
the liquidation and restructuring of ELNY, Plaintiff’s total
payout on the annuity owned by FEC would be reduced by 43.54%,
bringing Plaintiff’s total future payout to $2,394,700. (See id.
at ¶ 31 & Ex. B, p. 1.)
Plaintiff subsequently filed suit against Defendants, as
well as First Lincoln Holdings, LLC, successor to First
Executive Corporation (“FEC”), alleging claims for breach of
contract and unjust enrichment. Specifically, Plaintiff alleges
that, “[a]t the time of settlement, Cessna had an obligation to
make a settlement payment and properly purchase an annuity
contract to assume its obligation to make certain scheduled
payments pursuant to a properly executed assignment.” (Second
Am. Compl. ¶ 17.) According to Plaintiff’s Second Amended
Complaint, both Cessna and its Insurers agreed to assign their
obligation to make periodic payments to FEC, and that this
assignment was a condition precedent to the release of Cessna
and its Insurers’ obligation to make those payments. (Id. at
¶ 18.) Plaintiff alleges, however, that FEC, which was

6

misidentified as a “California corporation” in the Assignment
Agreement, was a non-existent and/or insolvent entity at the
time of the settlement. (Id. at ¶¶ 18-19.) Moreover, Plaintiff
alleges that the Assignment Agreement only purports to assign
the Insurers’ – not Cessna’s – obligation to make periodic
payments. (See id. at ¶ 19.) Thus, Plaintiff contends that
Defendants breached the settlement agreement by failing to (1)
properly purchase an annuity contract, (2) properly assign their
obligations, and (3) make periodic payments to Plaintiff. (Id.
at ¶¶ 36, 50, 52.)
Cessna and Lloyd’s have both moved to dismiss the Second
Amended Complaint in its entirety. (Dkt. Ents. 19, 29.)
II.

Standard
“[A] complaint must contain sufficient factual matter,

accepted as true, to ‘state a claim to relief that is plausible
on its face’” in order to withstand a motion to dismiss under
Federal Rule of Civil Procedure 12(b)(6). Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). Claims are facially plausible “when
the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for
the misconduct alleged,” and “an unadorned, the-defendantunlawfully-harmed-me accusation” will not survive a motion to
dismiss. Id. at 663, 678. “[A] plaintiff’s obligation to provide

7

the ‘grounds’ of his ‘entitle[ment] to relief’ requires more
than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.” Twombly, 550 U.S. at
555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).
The district court “must accept as true all well-pled
factual allegations as well as all reasonable inferences that
can be drawn from them, and construe those allegations in the
light most favorable to the plaintiff” when reviewing a
plaintiff’s allegations. Bistrian v. Levi, 696 F.3d 352, 358 n.1
(3d Cir. 2012). Only the allegations in the complaint, and
“matters of public record, orders, exhibits attached to the
complaint and items appearing in the record of the case” are
taken into consideration. Oshiver v. Levin, Fishbein, Sedran &
Berman, 38 F.3d 1380, 1384 n.2 (3d Cir. 1994) (citing Chester
Cnty. Intermediate Unit v. Pa. Blue Shield, 896 F.2d 808, 812
(3d Cir. 1990)). Furthermore, “[a] copy of a written instrument
that is an exhibit to a pleading is a part of the pleading for
all purposes” per Federal Rule of Civil Procedure 10(c), and
“[w]hen a written instrument contradicts allegations in the
complaint to which it is attached, the exhibit trumps the
allegations.” Creelgroup, Inc. v. NGS Am., Inc., 518 F. App’x
343, 347 (6th Cir. 2013); accord ALA, Inc. v. CCAIR, Inc., 29
F.3d 855, 859 (3d Cir. 1994); Gavornik v. LPL Fin. LLC, No. CIV.
14-955, 2014 WL 3844828, at *5 (D.N.J. Aug. 5, 2014); Goldenberg

8

v. Indel, Inc., 741 F. Supp. 2d 618, 624 (D.N.J. 2010). For that
reason, dismissal of a complaint which relies on a settlement
agreement is proper where its terms contradict the complaint’s
allegations. See, e.g., Snyder v. Everson, 237 F. App’x 734,
734-35 (3d Cir. 2007). Accordingly, the Court may consider the
unexecuted RIA and Assignment Agreement attached to the Second
Amended Complaint and relied upon by him. 5
III.

Analysis
Before turning to Defendants’ arguments, it is helpful to

consider the nature and underlying purpose of the structured
settlement arrangement entered into by Plaintiff, Cessna, and
Lloyd’s. 6 In “the typical personal-injury structured settlement
. . . a tortfeasor’s insurance company assigns to a structuredsettlement company its liability to make the periodic payments
to the plaintiff.” Owen v. CNA Ins./Cont’l Cas. Co., 771 A.2d
1208, 1218 (N.J. 2001). In consideration for the assumption of
liability, the insurance company pays a premium to a company
specializing in structured settlements, the sum of which funds

5

To the extent Plaintiff has a good faith belief that the
terms of the unexecuted copies of the settlement documents
materially differ from the terms of the governing agreements,
then he must include such allegations in any amended complaint
he seeks leave to file.
6

This discussion is meant only to provide background
information on the structured settlement agreement at issue
here.

9

the purchase of an annuity that makes periodic payments to a
beneficiary. Id. at 1217. If the transaction satisfies the
requirements of Section 130 of the Internal Revenue Code, it is
deemed a “qualified assignment” and the structured-settlement
company may not have to report the lump sum as federal income
until it received the annuity payments and it may then be
entitled to an offsetting deduction for periodic payments made
to the plaintiff. 7 Id. Annuities also may afford the beneficiary
certain federal tax benefits. For instance, a personal injury
plaintiff who chooses to receive a lump-sum payout may exclude
that amount from his or her taxable income under Section 104 of
the Internal Revenue Code, subject to certain restrictions; 8 any

7

Accordingly, to the extent Plaintiff contends that
Defendants’ assignment to FEC is void for failure to meet the
requirements of Section 130, such argument must be rejected.
Section 130 does not affect the legal assignment of an
obligation but rather concerns only the tax consequences of the
transaction. See Owen, 771 A.2d at 1217-18.
8

Under the current Internal Revenue Code, § 104(a)(2)
excludes from gross income “the amount of any damages (other
than punitive damages) received (whether by suit or agreement
and whether as lump sums or as periodic payments) on account of
personal physical injuries or physical sickness.” The
requirements of § 104(a)(2) have been narrowed since the time at
which the parties entered into their settlement agreement. See
generally DANIEL W. HINDERT, ET AL., STRUCTURED SETTLEMENTS AND
PERIODIC PAYMENT JUDGMENTS § 2.01 (Law Review Press 2015). For
example, punitive damages no longer qualify for exclusion, and
any injury or sickness damages must be physical in origin (i.e.,
emotional distress damages may not be excluded from gross
income). Id. Thus, not all structured settlement or lump sum
payment amounts necessarily qualify for tax exemption under
current tax regulations.

10

return on an investment of this lump sum, however, is deemed
taxable income. See, e.g., W. United Life Assur. Co. v. Hayden,
64 F.3d 833, 839-40 (3d Cir. 1995); see also HINDERT, ET AL.,
supra note 8. Through a structured settlement, on the other
hand, the plaintiff receives periodic payments rather than a
lump sum and thus the entirety of the payments are excludable as
compensation on account of personal injury. Hayden, 64 F.3d at
839-40. As a result, a plaintiff ultimately may collect a
greater monetary sum over time by choosing a structured
settlement funded by an annuity, rather than a lump-sum payout.
Here, Plaintiff and Defendants agreed to enter into a structured
settlement agreement, as set forth in the RIA and accompanying
Assignment Agreement, and Plaintiff received payments pursuant
to this agreement for over 27 years. (Second Am. Compl. ¶ 2.)
In their motions to dismiss, Defendants argue that the
Second Amended Complaint must be dismissed for failure to state
a claim, as the allegations are directly contradicted by the
terms of the RIA and Assignment Agreement. Specifically,
Defendants contend that they fulfilled their obligations under
the terms of the RIA and Assignment Agreement by making a lumpsum payment of $125,000.00, purchasing an annuity from ELNY, and
assigning to FEC the obligation to make periodic payments. In
exchange, Plaintiff agreed to release all claims against them
arising out of the 1981 plane crash. As such, Defendants argue,

11

the Second Amended Complaint fails to state a claim for breach
of contract. Defendants further argue that Plaintiff fails to
state a claim for unjust enrichment because the parties’
relationship is governed by a contract and, under that contract,
neither Defendant received any benefit of which they were
undeserving. Finally, Defendants argue that the statute of
limitations bars Plaintiff’s claims. The Court addresses these
arguments in turn below.
A. Breach of Contract
First, Defendants argue that the Second Amended Complaint
fails to adequately allege that Defendants breached the
settlement agreement as a result of the 2013 reduction in
Plaintiff’s payout allegedly caused by ELNY’s liquidation. To
maintain a claim for breach of contract under New Jersey law, 9 “a

9

This Court shall apply New Jersey law, as the parties do
not appear to contest its application to Plaintiff’s claims.
(See, e.g., Br. in Supp. of Cessna’s Mot. to Dismiss 8; Br. in
Supp. of Pl.’s Opp’n to Cessna’s Mot. to Dismiss 5; Br. in Supp.
of Lloyd’s Mot. to Dismiss 12 n.9.) In any event, because no
conflict exists between Arizona and New Jersey law, Bridgewater
Wholesalers, Inc. v. Penn. Lumbermens Mut. Ins. Co., No. 143684, 2015 WL 3448120, at *3 (D.N.J. May 29, 2015) (“If no
conflict exists, the law of the forum state applies.”), the
court shall apply New Jersey law. See Snyder v. HSBC Bank USA,
N.A., 913 F. Supp. 2d 755 (D. Ariz. 2012) (To prove a breach of
contract claim under Arizona law, “a plaintiff must allege the
existence of a contract between the plaintiff and defendant, a
breach of the contract by the defendant, and resulting damage to
the plaintiff.” (citing Warren v. Sierra Pacific Mortg. Servs.
Inc., No. 10-2095, 2011 WL 1526957, at *3 (D. Ariz. April 22,
2011)); see also USLife Title Co. of Ariz. v. Gutkin, 732 P.2d
579, 584 (Ariz. Ct. App. 1986) (“It is the well established law
12

plaintiff must prove four elements: (1) the existence of a valid
contract with the defendant; (2) that the defendant breached
that contract; (3) the damages resulting from that breach; and
(4) that plaintiff performed its obligations under the
contract.” Vonage Holdings Corp. v. Hartford Fire Ins. Co., No.
11-6187, 2012 WL 1067694, at *2 (D.N.J. Mar. 29, 2012).
Defendants challenge the second element, contending that
Plaintiff has failed to allege a breach of any obligation
created under the RIA and Assignment Agreement. The Court
agrees.
Plaintiff alleges that Defendants breached their
obligation to make periodic payments pursuant to the settlement
agreement when they failed to commence making those payments
following ELNY’s restructuring and liquidation. (Second Am.
Compl. ¶¶ 32-38, 45-53.) The RIA entered into by and among
Plaintiff, Cessna, 10 and Lloyd’s creates an obligation on the

of Arizona that in order to prevail upon a theory of unjust
enrichment, a plaintiff must establish that, (1) plaintiff
conferred a benefit upon the defendant; (2) defendant's benefit
is at plaintiff's expense; and (3) it would be unjust to allow
defendant to keep the benefit.”); Snyder v. Farnam Cos., Inc.,
792 F. Supp. 2d 712, 723-24 (D.N.J. 2011) (same under New Jersey
law).
10

Plaintiff argues that the RIA did not release Cessna from
liability to make periodic payments because the entity that
actually entered into the RIA, “The Cessna Aircraft Company,”
either did not exist or has since ceased to exist. This argument
ignores the clear language of the RIA, which releases “The
Cessna Aircraft Company and its insurer, [Lloyd’s] . . . and all
those related or that may be related to them . . . .” (Id. at
13

part of Defendants to make a partial lump-sum payment of
$125,000.00, as well as periodic payments throughout Plaintiff’s
lifetime. (Id. at Ex. A, p. 1.) That same RIA explains that
Cessna and Lloyd’s “will assign their obligation for these
periodic payments to [FEC] as set forth in the Assignment
Agreement.” (Id. at Ex. A, p. 2.) In exchange, Plaintiff agreed
to accept the assignment, as provided for in the Assignment
Agreement, in “full release of Cessna and [Lloyd’s] with respect
to these periodic payments.” (Id. (emphasis added).) Thus, under
the plain terms of the RIA, Cessna, and Lloyd’s assumed an
obligation to make periodic payments to Plaintiff, but Plaintiff
simultaneously released them from this obligation upon
assignment to FEC. In other words, under the plain terms of the
RIA, Defendants’ obligation to make periodic payments ceased
upon payment of $125,000.00, and the purchase of the annuity
from ELNY and subsequent assignment to FEC in accordance with
the Assignment Agreement.
The Assignment Agreement, on which Plaintiff was listed as
a signatory, further confirms that any and all liability to make
the periodic payments is assumed by FEC and that Lloyd’s is

Ex. A, p. 1 (emphasis added).) Moreover, according to
Plaintiff’s own Complaint, The Cessna Aircraft Company, which
was in existence on the date of the accident, merged with Cessna
on March 3, 1986, prior to the date on which the parties entered
into the settlement agreement. (See id. at ¶¶ 5, 15.)

14

“fully released from its liability to make all periodic
payments.” (Id. at Ex. A, p. 6.) Indeed, Plaintiff alleges that
“Cessna had an obligation to make a settlement payment and
properly purchase an annuity contract to assume its obligation
to make certain scheduled payments pursuant to a properly
executed assignment.” (Id. at ¶ 17 (emphasis added).) 11 Thus, the
terms of the RIA and Assignment Agreement attached to
Plaintiff’s Second Amended Complaint clearly reflect the
parties’ intention to release Defendants from any obligation to
make periodic payments to Plaintiff, upon the purchase 12 and
assignment of the annuity.
Recognizing that the purchase of the annuity and the valid
assignment of the obligation to make periodic payments (coupled

11

See also Pl.’s Opp’n to Cessna’s Mot. to Dismiss 5
(Cessna “remained ultimately responsibility [sic] for the
payments absent a valid assignment of that obligation.”).
12

Although Plaintiff also alleges a breach of the agreement
based upon the failure to properly purchase the annuity (see id.
at ¶¶ 36, 50), such allegations are flatly contradicted by
Plaintiff’s other allegations. For example, Plaintiff avers that
“[a]n annuity was purchased from ELNY to fund the structured
settlement payments . . .” (id. at ¶ 16), as was required by the
terms of the RIA to which Plaintiff expressly agreed, with the
apparent advice of counsel (see id. at Ex. A, p. 1 (“Cessna and
[Lloyd’s] . . . agree to purchase an annuity from [ELNY]
. . . .”)). Plaintiff further alleges that “ELNY . . . met its
structured settlement payment obligations to Plaintiff up to and
until the insurance company’s ultimate restructure and
liquidation, which occurred on August 8, 2013” – over 27 years
later. (See, e.g., id. at ¶ 2.) As such, Plaintiff fails to
adequately state a claim based on these allegations.

15

with Plaintiff’s receipt of the $125,000.00 lump-sum payment)
satisfies Defendants’ obligations pursuant to the RIA and
Assignment Agreement, Plaintiff attempts to allege that
Defendants breached the settlement agreement by failing to
properly assign the annuity to an appropriate and solvent
entity. (See, e.g., Second Am. Compl. ¶¶ 36, 50.) Essentially,
Plaintiff asserts that because the assignment to FEC was
defective, Defendants remain obligated to make the periodic
payments. (See id. at ¶¶ 32-38, 45-53.) As noted above, the RIA
set forth the parties’ understanding and agreement (with the
apparent advice of counsel) that Cessna and Lloyd’s “will assign
their obligation for these periodic payments to [FEC] as set
forth in the Assignment Agreement.” (See id. at Ex. A, pp. 2,
4.) The Assignment Agreement, in turn, provided that FEC would
assume liability for the periodic payments in exchange for a
premium payment made by Lloyd’s, and in return for this
assignment, Plaintiff agreed that Defendants would be “fully
released from [their] liability to make all periodic payments.”
(Id. at Ex. A, p. 6.) Notably, both the RIA and Assignment
Agreement list Plaintiff as a signatory, and establish that the
annuity would be assigned to FEC. (See id. at Ex. A.)
Plaintiff contends that the assignment and resulting
release of liability is invalid because FEC is identified in the
Assignment Agreement as “a California corporation” when, in

16

reality, it is a Delaware corporation. (Id. at ¶¶ 18-20.) Thus,
Plaintiff argues the FEC entity listed in the Assignment
Agreement does not exist. (Id. at ¶ 19.) Defendant Lloyd’s
contends, however, that identification of FEC as a California
corporation, rather than a Delaware corporation, was merely a
mistake and is immaterial. The Court agrees. Plaintiff does not
allege that Lloyd’s failed to assign the annuity to FEC in
accordance with its obligation under the settlement agreement,
or that FEC failed to accept the assignment. 13 Indeed, Plaintiff
asserts that FEC was renamed First Lincoln Holdings, Inc., which
was subsequently renamed First Lincoln (also a named defendant),
but that “[e]ach surviving entity assumed the liabilities of
FEC, including the obligations under the settlement and/or by

13

Despite Plaintiff’s contention that this
misidentification renders the identity of the intended assignee
“ambiguous,” no such ambiguity is alleged. See Thornton v.
Hubill, Inc., 571 N.W.2d 30, 33 (Iowa App. 1997); see also
Hedlund v. Ford Mktg. Corp., 629 P.2d 1012, 1015 (Ariz. Ct. App.
1981) (“We conclude, under the facts here, that there was
neither a change of parties nor a misnomer. There was only one
Ford Motor Company and one Ford Marketing Corporation. A mistake
in its place of incorporation was of no consequence. To hold
otherwise would be the height of exalting form over
substance.”); Hoboken Bldg. Ass’n v. Martin, 13 N.J. Eq. 427,
427 (Ch. 1861) (“A contract is not void because the corporation
with which it is made is misnamed therein.”); 6 Fletcher Cyc.
Corp. § 2444 (“the misnomer of a corporation generally will not
be treated by the courts as material if the identity of the
corporation is reasonably clear or can be ascertained by
sufficient evidence. . . . The omission, addition or
misdescription of a geographical phrase has been regarded as
unimportant.”).

17

reason of its ownership of Plaintiff’s annuity contract.”
(Second Am. Compl. ¶ 21 (emphasis added); see also id. at ¶ 22
(“First Lincoln is believed to be the current owner of
Plaintiff’s annuity contract . . . .”).) Moreover, the letter
Plaintiff received from GABC, and attached to his Second Amended
Complaint, identifies FEC as the annuity’s owner. (See id. at
Ex. B, p. 1.) As such, Plaintiff fails to allege that this
purported mistake in FEC’s place of incorporation renders the
assignment and contemporaneous release of liability invalid or
unenforceable. See Ctr. 48 Ltd. P’ship v. May Dep’t Stores Co.,
810 A.2d 610, 623 (N.J. Super. Ct. App. Div. 2002) (noting a
unilateral mistake of fact is not grounds for avoidance of a
contract unless the mistake relates to a material feature and is
“so great a consequence that it would be unconscionable to
enforce the contract”). In any event, Plaintiff received
periodic payments from the annuity for 27 years. As Plaintiff
accepted these annuity payments without complaint, this Court
would be hard-pressed to find such mistake material and
sufficient to render the assignment unenforceable.
In a similar action against FEC and its successor
companies, the court addressed the same alleged mistaken
identification of FEC’s place of incorporation in an assignment
contract. Thornton, 571 N.W.2d at 33. There, the court concluded
that “Thornton also argues there is a material fact issue

18

regarding the assignee’s identity. The settlement agreement
indicates [FEC] [identified in the documents as a “California
corporation”] accepted the assignment of liability, while
Executive Life actually made payments to Thornton. . . . We find
any resulting fact issue is not material.” Id. Accordingly, the
Iowa court affirmed the lower court’s grant of summary judgment
to the defendants on the annuity beneficiaries claims. Id.
Although this matter was presented in a different procedural
posture, this Court agrees with the Iowa court’s reasoning.
Plaintiff also challenges the assignment to FEC on grounds
that it was “grossly undercapitalized and insolvent for many
years,” including at the time of the 1986 settlement. (See
Second Am. Compl. ¶ 20.) There are no allegations, however, that
Defendants chose FEC knowing of its financial state. Rather, the
RIA and Assignment Agreement reflect the parties’ agreement
(with the apparent advice of counsel) that the annuity was to be
assigned to FEC. Nor does Plaintiff allege that FEC’s financial
struggles in the 1980’s and 1990’s caused the reduction in
Plaintiff’s payout under the annuity contract. (Cf. id. at
¶¶ 20-22 (alleging FEC had financial difficulties during these
times, but averring that successor companies assumed FEC’s
obligations under the annuity).) Rather, Plaintiff received

19

payments throughout this time period. 14 These payments ultimately
ceased causing Plaintiff’s damage, only because of ELNY’s
2013/2014 restructuring and liquidation – 27 years after the
settlement and annuity purchase.
While Plaintiff argues that “the obligation to fund the
periodic payments was certainly material to the contract as was
the assignee’s ability to perform that obligation” (Br. in Supp.
of Pl.’s Opp’n to Lloyd’s Mot. to Dismiss 4), it is unclear how
that fact alters this Court’s analysis. As Lloyd’s notes, the
settlement documents contain no representations or warranties as
to FEC’s financial stability at the time of the 1986 settlement,
nor any requirement that Defendants evaluate FEC’s credit risk.
Thus, Plaintiff fails to adequately allege a breach of the
settlement agreement based upon Defendants’ assignment of their
obligation to FEC.
As to Cessna, Plaintiff additionally alleges that Cessna
remains liable for making periodic, lifetime payments to
Plaintiff because only Lloyd’s purported to assign to FEC its
liability for making periodic payments. (See Second Am. Compl.
¶ 36.) Although the Assignment Agreement was entered into by and
among Plaintiff, Lloyd’s, and FEC, the RIA plainly states that

14

Plaintiff alleges that FEC filed for bankruptcy
protection in 1991 (Second Am. Compl. ¶ 20), yet Plaintiff
waited 23 years to bring his claims – a fact relevant to
Defendants’ statute of limitations arguments.

20

the assignment was to occur “as set forth in the Assignment
Agreement.” (Id. at Ex. A, pp. 1-2.) The RIA further states that
Plaintiff accepts this assignment “in full release of Cessna and
Lloyds with respect to these periodic payments.” (Id. (emphasis
added).) Thus, the RIA contemplates a single assignment in
accordance with the terms of the Assignment Agreement, which in
turn set forth that Lloyd’s would make the premium payment to
FEC in exchange for FEC’s assumption of liability. Upon
completion of the Assignment Agreement, the RIA – to which
Cessna appears to have been a party - released both Cessna and
Lloyd’s from further liability for making the periodic payments.
(Id. at Ex. A.) Notably, both the RIA and Assignment Agreement
were to be signed by Plaintiff. 15 (Id. at Ex. A, pp. 3, 7.)
The Court finds Thornton instructive on this issue as well.
There, the settlement agreement similarly provided that “by
reason of such assumption and assignment . . . [the defendants]
are fully and completely released and forever discharged from
their liability to make all periodic payments . . . .” 571
N.W.2d at 32. The plaintiff also signed an acceptance of annuity
and assignee, thereby acknowledging assignment to FEC and

15

Moreover, to the extent that Plaintiff believed Cessna
was required to be a signatory to the Assignment Agreement, it
is unclear why he failed to object to the terms of the
Assignment Agreement on or before the time he purportedly agreed
to them.

21

agreeing to a release of liability. Id. The court determined
that “the unambiguous terms of the settlement agreement relieved
[the defendants] of all liability to make payments upon
assignment.” Id. As this Court does, the Thornton court found it
notable that Plaintiff signed the acceptance of annuity contract
and assignee, and accepted payments from ELNY for nine years.
Id. Accordingly, it concluded that the terms of the settlement
agreement clearly and unambiguously released the defendants of
liability. This Court similarly concludes that the RIA and
Assignment Agreement clearly released Defendants from liability
upon assignment of the annuity to FEC. See Deficcio v. Winnebago
Indus., No. 11-872, 2011 WL 4594291, at *4-5 (D.N.J. Sept. 30,
2011) (“Where the terms of a contract are clear, a court ‘must
enforce the unambiguous terms as written, and it has no power to
rewrite the contract of the parties by substituting a new or
different provision from what is clearly expressed in the
instrument.’”). 16
In sum, the terms of the settlement agreement, as embodied
in the RIA and Assignment Agreement attached to Plaintiff’s
Second Amended Complaint, clearly and unambiguously demonstrate

16

See also Grosvenor Holdings, L.C. v. Figueroa, 218 P.3d
1045, 1050 (Ariz. Ct. App. Oct. 22, 2009) (“A general principle
of contract law is that when parties bind themselves by a lawful
contract, the terms of which are clear and unambiguous, a court
must give effect to the contract as written.”).

22

that Defendants fulfilled their contractual obligations by
making a lump-sum payment, purchasing an annuity from ELNY, and
assigning it to FEC. Under the terms of the settlement
agreement, therefore, Plaintiff fully released Defendants from
liability. While Plaintiff argues that Defendants’ assignment of
their obligation to FEC was invalid, the Court rejects
Plaintiff’s arguments as immaterial and inconsistent with the
terms of the RIA and Assignment Agreement. Accordingly,
Plaintiff fails to sufficiently plead a breach of the settlement
agreement and his breach of contract claims against Cessna and
Lloyd’s are dismissed.
B. Unjust Enrichment
Defendants also move to dismiss Plaintiff’s alternative
claims for unjust enrichment, arguing that (1) a claim for
unjust enrichment cannot be maintained where a contract governs
the parties’ rights; (2) Plaintiff fails to plead adequately
that Defendants received a benefit to the detriment of Plaintiff
upon the reduction of Plaintiff’s payout in 2013; and
(3) Plaintiff released any claim he may have had.
As an initial matter, “in New Jersey, an unjust enrichment
claim will not lie when there is an express contract governing
the rights and obligations of the parties.” Schweikert v. Baxter
Healthcare Corp., No. 12-5876, 2013 WL 1966114, at *6 (D.N.J.

23

May 10, 2013). 17 Plaintiff correctly notes, however, that Federal
Rule of Civil Procedure 8(d)(2) permits a party to plead
alternative claims, “and courts in this district, including this
Court, regularly have refused to dismiss an adequately pled
quasi-contract claim even when a express contract is alleged to
govern the parties’ relationship.” Id. Thus, it is not improper
for Plaintiff to bring an unjust enrichment claim in the
alternative.
Here, however, while Plaintiff styles Count IV as an unjust
enrichment claim, the allegations reveal that it is actually
another breach of contract claim, asserting a valid and
enforceable contract with different terms than those set forth
in the unexecuted settlement documents that form the basis of
the breach of contract claims in Counts I and III. 18 In this

17

See also USLife Title, 732 P.2d at 584 (“For instance,
our courts have repeatedly held that the existence of a contract
specifically governing the rights and obligations of each party
precludes recovery for unjust enrichment [under Arizona law].”).
18

Even if the Second Amended Complaint could be read to
assert a claim for unjust enrichment, that claim fails. To
maintain a claim for unjust enrichment, as a matter of law in
New Jersey, “a plaintiff must allege that (1) at plaintiff’s
expense (2) defendant received benefit (3) under circumstances
that would make it unjust for defendant to retain benefit
without paying for it.” Snyder, 792 F. Supp. 2d at 723-24; see
also USLife Title, 732 P.2d at 584 (same elements under Arizona
law). Not only must the defendant have received the benefit, but
the defendant also must not have paid for it. Snyder, 792 F.
Supp. 2d at 723-24. The benefit that Defendants allegedly
received consists of a release of Plaintiff’s claims arising out
of his injuries. The Second Amended Complaint alleges, however,
that Defendants made a lump-sum payment of $125,000.00, and
24

count, Plaintiff alleges that “[o]n or about April 1, 1986,
Plaintiff, Cessna, and the [Insurers] entered into a settlement
agreement whereby Cessna and the [Insurers] agreed to make a
payment of $125,000 and periodic payments as required under the
structured settlement to Plaintiff in release of his personal
injury claims against The Cessna Aircraft Company, Cessna,
and/or the [Insurers].” (Id. at ¶ 55 (emphasis added).)
Plaintiff further alleges that the release constitutes a
valuable benefit conferred upon Defendants, such that retention
without compensation would be inequitable. (Id. at ¶ 56.) In
other words, the parties entered into a valid and enforceable
settlement agreement, pursuant to which Defendants agreed to
(a) make a partial lump-sum payment to Plaintiff and (b) make
periodic payments throughout Plaintiff’s lifetime, in exchange
for which (c) Plaintiff released his then-pending personal
injury claims. Defendants, however, allegedly breached that
agreement by failing to make the periodic payments.

purchased an annuity from ELNY that has been making periodic
payments to Plaintiff for over 27 years. (Second Am. Compl. ¶¶
13, 29, 56.) Plaintiff, with the apparent advice of counsel,
chose to enter into a structured settlement with only a partial
lump-sum payment, rather than to receive a single, presumably
larger, lump-sum payment. Moreover, ELNY’s liquidation and
subsequent re-valuation of Plaintiff’s annuity are not alleged
to have occurred because of the actions of either Defendant. As
such, Plaintiff fails to allege that Defendants received any
benefit to Plaintiff’s detriment, and thus fails to state a
claim for unjust enrichment.

25

Notably absent from the purported contract explained in this
count is any express agreement that the obligation to make
periodic payments would be assigned to FEC in exchange for a
full release of Plaintiff’s claims against Defendants. (Compare
id. at Ex. A, pp. 6-7.) But, this latter agreement regarding the
assignment and resulting release is contained in the settlement
documents that Plaintiff alleges at least partially embody the
parties’ settlement agreement (see id. at ¶¶ 2, 16-18 & Ex. A,
pp. 1-2), and as addressed above the RIA and Assignment
Agreement are fatal to Plaintiff’s breach of contract claims. 19
See Creelgroup, Inc., 518 F. App’x at 347 (“When a written
instrument contradicts allegations in the complaint to which it
is attached, the exhibit trumps the allegations.”). Accordingly,
this claim must also be dismissed. 20

19

It appears Plaintiff is attempting to assert in Counts I
and III that the unexecuted RIA and Assignment Agreement reflect
the terms of the parties’ settlement, but then in Count IV
preserve his ability to maintain that those documents do not
accurately reflect the terms of the settlement agreement. This
he cannot do. See, e.g., White v. Hon Co., 520 F. App’x 93, 95
(3d Cir. 2013) (“White may not attempt to use discovery as a
fishing expedition to determine the existence of a warranty
covering future performance and to seek out the facts necessary
to establish a legally adequate complaint.”). As noted above,
should Plaintiff have a good faith belief that the terms of the
unexecuted settlement documents do not in fact represent the
parties’ agreement, then he must set forth such good faith
allegation in any amended complaint he seeks leave to file.
20

See Donnelly v. Option One Mortg. Corp., No. 11-7019,
2014 WL 1266209, at *14 (D.N.J. March 26, 2014) (“Under New
Jersey law, Plaintiffs must plead that the Defendants were
enriched in a manner not governed by any enforceable
26

C. Statute of Limitations
Finally, even if Plaintiff had adequately pled his breach
of contract claims, they are barred by the applicable six-year
statute of limitations. See N.J.S.A. § 2A:14-1; Angera v. Angera,
No. 14-CV-01253-SDW, 2014 WL 4988406, at *4 (D.N.J. Oct. 6,
2014) (holding that breach of contract claims must be brought
within six years from the date on which the claim accrues). 21 A
breach of contract claim accrues when “the injured party
discovers, or by an exercise of reasonable diligence and
intelligence should have discovered that he may have a basis for
an actionable claim.” Labeau v. Rentzis, No. 08-6300, 2010 WL
2521764, at *2 (D.N.J. June 14, 2010) (quoting Lopez v. Swyer,
300 A.2d 563 (1973)). 22 Plaintiff contends that his claims

contract.”); Century Indem. Co. v. URS Corp., No. 08-5006, 2009
WL 2446990, at *5 (E.D. Pa. Aug. 7, 2009) (“Because of the
quasi-contractual nature of an unjust enrichment claim, the
doctrine does not apply ‘when the relationship between the
parties is founded on a written agreement or express contract.’
. . . Indeed, ‘[d]ismissal of an unjust enrichment claim is
appropriate upon a motion to dismiss when the relationship
between the parties is founded on a written instrument.’”
(citations omitted)).
21

See also Cameron v. Martucci, No. 1 CA-CV 11-0436, 2012
WL 2499691, at *2-3 (Ariz. Ct. App. June 28, 2012) (“The statute
of limitations for breach of a written contract is six years.”
(citing A.R.S. § 12–548))
22

Although Plaintiff appears to agree that the applicable
statute of limitations is the six-year statute of limitations
under New Jersey law, the parties did not address any choice of
law questions. Accordingly, to the extent either party objects
to the application of New Jersey law to Plaintiff’s claims, they
should move to have this Court reconsider the issue and set
27

accrued in August 2013, when ELNY reduced Plaintiff’s total
payout and Defendants failed to cover the difference as is
allegedly required under the settlement agreement. Plaintiff
thus attempts to circumvent the statute of limitations bar by
framing his breach of contract action as a breach of the
obligation to make periodic payments. This he cannot do.
Under the clear terms of the settlement agreement, as
embodied in the documents Plaintiff attached to his Second
Amended Complaint (see Second Am. Compl. ¶ 13 & Ex. A),
Plaintiff released Defendants from any obligation to make the
periodic payments upon Defendants’ assignment of that obligation
to FEC. See discussion supra. Plaintiff’s theory as to why
Defendants remain liable for making the periodic payments is
therefore based upon his allegation that Defendants failed to
properly assign their obligation to FEC in 1986 – more than 27
years ago. In essence, Plaintiff contends that a breach of the
settlement agreement in 1986 resulted in a continuing obligation
to make periodic payments to Plaintiff, an obligation Defendants
breached in 2013 when they failed to cover the amount by which
Plaintiff’s scheduled payments were reduced in the ELNY
liquidation. So Plaintiff’s argument goes, because Defendants
breached the settlement agreement in 2013, and Plaintiff filed

forth the applicable choice-of-law analysis. See Local Civ. R.
7.1.

28

suit in 2014, the statute of limitations does not bar his
claims.
The Court finds that the appropriate focus for purposes of
the statute of limitations analysis in this matter is
Defendants’ alleged 1986 breach of the settlement agreement. To
hold otherwise would undermine the purpose of the statute of
limitations by permitting a plaintiff to sit on his rights
unless and until he determines to pursue them, and would keep
defendants on the hook in perpetuity. See R.C. Beeson, Inc. v.
Coca Cola Co., No. 07-4806, 2008 WL 4447106, at *5 (D.N.J. Sept.
26, 2008) (“Generally, the purpose of a statute of limitations
is to weed out stale claims where the reliability of the
evidence becomes suspect. According to the Supreme Court, such
statutes are: designed to promote justice by preventing
surprises through the revival of claims that have been allowed
to slumber until evidence has been lost, memories have faded,
and witnesses have disappeared. The theory is that even if one
has a just claim it is unjust not to put the adversary on notice
to defend within the period of limitation and that the right to
be free of stale claims in time comes to prevail over the right
to prosecute them.” (citations omitted)).
Plaintiff does not allege that he could not have known in
1986, even through the exercise of reasonable diligence, that
Defendants failed to properly assign their obligations to FEC.

29

Moreover, because Plaintiff was listed as a signatory to the
Assignment Agreement, the Court is hard-pressed to see how
Plaintiff could not have known of the circumstances underlying
the allegedly improper assignment at the time of settlement.
Accordingly, the claims are barred by the six-year statute of
limitations. 23
IV.

Conclusion
For the reasons set forth above, the Court finds that, even

drawing all reasonable inferences in Plaintiffs’ favor, as this
Court must on a motion to dismiss, Plaintiff fails to adequately
plead claims against Cessna and Lloyd’s for breach of contract
and unjust enrichment. Therefore, Cessna and Lloyd’s motions to
dismiss Counts I, III, and IV of the Second Amended Complaint
are granted and these parties are hereby dismissed from this
action.
Date: June 25, 2015
s/Renée Marie Bumb
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE

23

Although Cessna initially argued that this matter should
also be dismissed for lack of venue under 28 U.S.C. § 1391 as
there is no substantial nexus between New Jersey and the
allegations of the Second Amended Complaint, it has withdrawn
this argument (see Cessna Reply 1).

30