WATKINS v. PROTECTIVE LIFE INSURANCE COMPANY
OPINION. Signed by Judge William J. Martini on 6/5/17. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
DAVID M WATKINS,
Civ. No. 2:17-0734 (WJM)
PROTECTIVE LIFE INSURANCE
WILLIAM J. MARTINI, U.S.D.J.:
Plaintiff David Watkins brings this breach of contract and declaratory judgment
action against Defendant Protective Life Insurance Company. This matter now comes
before the Court upon Defendant’s motion to dismiss for failure to state a claim. There
was no oral argument. Fed. R. Civ. P. 7$(b). for the reasons set forth below,
Defendant’s motion to dismiss is GRANTED, and Plaintiffs Complaint is DISMISSED
Plaintiff alleges the following facts in his Complaint. ECF No. 1, Ex. A (Cornpl.).
On July 22, 1994, Plaintiff purchased a $1 million life insurance policy in his name. Id.
¶j 1-3. The terms of the policy were, inter a/ia. as follows:
The policy allows for flexibility in making premium payments, that is, the
policy owners may choose the amount and frequency of payments, with
certain limits. Cash surrender value accumulates over time as premiums
are paid and those values earn interest. Each month, on the 22nd, the
amount required to cover the monthly deduction is deducted from the
policy’s cash surrender value. As long as the policy has sufficient net cash
surrender value to cover the monthly deductions, the policy remains in
force. Monthly deductions increase each year on the policy anniversary.
The policy further stated that:
[I]f, on the 22nd of the month, the net cash surrender value is not sufficient
to cover the monthly deduction, a grace period of 61 days is allowed for the
payment of the premium, unless the policy is continued under its
continuation period. The continuation period provides for the policy to
remain in force for 20 years, even if the policy has insufficient cash
surrender value, as long as the total premiums paid exceed or remain equal
to the Monthly Continuation Premium of $205.83 times the number of
months the policy remains in force.
Id. 6. On February 22, 2016, Defendant cancelled Plaintiffs policy without ‘proper
notification or warning.” Id. ¶ 7. Plaintiff was made aware of the cancellation of his
policy when his check was returned with correspondence indicating that the policy had
lapsed and he was no longer covered. Id. ¶ 8. He seeks a declaratory judgment,
including Defendant’s acceptance of any required premiums necessary to maintain his
policy, and raises claims of breach of contract, unjust enrichment, and breach of the
implied covenant of good faith and fair dealing. Id. .pdf 5-7.
Defendant now moves to dismiss the Complaint, arguing that Plaintiff has failed to
state a claim. ECF No. 5. Plaintiff opposes the motion, arguing that Defendant failed to
give notice, pursuant to § 17B:25-10.1 of the New Jersey statutes, that, to prevent the
policy from lapsing, the premium had been paid by charging it against the policy’s loan
value. ECF No. 8. Plaintiff also submits a proposed Amended Complaint, requesting
leave to file that Complaint should the original one be dismissed. ECF No. 9. The
proposed Amended Complaint is essentially identical to Plaintiffs original Complaint,
except that Plaintiff emphasizes that he did not receive any notice from Defendant that
increased premium payments were necessary to maintain the policy. Id. ¶I 9-13.
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint,
in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted.
The moving party bears the burden of showing that no claim has been stated. Hedges v.
United States, 404 F.3d 744. 750 (3d Cir. 2005). When considering a 12(b)(6) motion,
the Court must accept as true all allegations in the complaint, and all reasonable
inferences that can be drawn therefrom, and view them in the light most favorable to the
plaintiff. See Evancho v. Fisher, 423 F.3d 347, 350 (3d Cir. 2005).
The Court finds that Plaintiffs Complaint and proposed Amended Complaint both
fail to state a claim for relief under any of Plaintiffs proposed theories of liability (i.e.,
breach of contract, unjust enrichment, and breach of the implied covenant of good faith
and fair dealing).
Briefly, to state a claim for breach of contract under New Jersey law, a plaintiff
‘rnust allege (1) a contract between the parties; (2) a breach of that contract; (3) damages
flowing therefrom, and (4) that the party stating the claim performed its own contractual
obligations.” Frederico v. Home Depot, 507 F.3d 188, 203 (3d Cir. 2007). To state a
claim for unjust enrichment under New Jersey law, a plaintiff must show that he
conferred a benefit on defendant and that the failure of remuneration enriched defendant
beyond its contractual rights.” VRG Corp. v. GKW Realty Corp., 135 N.J. 539, 554
(1994). Lastly, “every contract in New Jersey contains an implied covenant of good faith
and fair dealing.” Kalogeras v. 239 Broad Ave., L.L.C., 202 N.J. 349, 366 (2010).
Accordingly, “neither party shall do anything which will have the effect of destroying or
injuring the right of the other party to receive the fruits of the contract.” Id. (citations and
At this stage, Plaintiff has failed to allege any viable claims for relief under any of
the legal standards provided above.1 At bottom, each of Plaintiffs claims hinge upon the
fact that Defendant failed to provide Plaintiff with sufficient notice, as required by a New
Jersey statute, before cancelling his life insurance policy. But Plaintiff does not actually
allege a violation of this statute in either his Complaint or proposed Amended Complaint.
which he claims, in his
Nor does Plaintiff provide a copy of his insurance policy
opposition papers, contains this statutory provision. And a Complaint cannot be amended
(or supplemented) by way of an opposition brief. Pennsylvania ex rel. v. Zimmerman v.
Pepsico, $36 f.2d 173 (3d Cir. 198$) (“It is axiomatic that the complaint may not be
amended by the briefs in opposition to a motion to dismiss.”) (citation omitted). On its
face, Plaintiffs Complaint does not allege that any notice was required before
cancellation of the policy.
At best, Plaintiff has presently alleged only that Defendant violated the
continuation period provision of the insurance policy. But that provision merely ensures
that the insurance policy will “remain in force for 20 years, even if the policy has
insufficient cash surrender value, as long as the total premiums paid exceed or remain
equal to the Monthly Continuation Premium of $205.83 times the number of months the
policy remains in force.” Cornpl. ¶ 6. Plaintiffs policy was purchased on July 22, 1994;
therefore, the continuation period expired on July 22, 2014. Viewing the Complaint in
the light most favorable to the Plaintiff, Plaintiff has not alleged that the policy’s
cancellation violated any provision of the parties’ contract. Rather, Plaintiff contends
that his policy was cancelled on February 22, 2016, well after the continuation policy
ended. Because Plaintiff has failed to demonstrate that any provision of the contract
between the parties was breached, he has failed to state a claim for breach of contract.
To the extent that Plaintiff has framed his Complaint as a “declaratory judgment action,” the Court determines that,
because no breach of contract has been shown, specific performance of the contract cannot be awarded; therefore,
relief in the form of a declaratory judgment cannot be entertained at this time.
Nor do the allegations of the Complaint contain a plausible claim that Defendant
was unjustly enriched beyond what was provided for in the contract: according to the
Complaint, Defendant honored the insurance policy for a 20-year term, which appears to
be the extent of Defendant’s obligations, and Plaintiff paid the full amount for coverage
of that 20-year term. Likewise, Plaintiff received the fruits of the contract (a 20-year
term insurance policy), such that a claim for breach of the implied covenant of good faith
and fair dealing cannot be maintained at this time.
Under these circumstances, the Court finds that Plaintiffs Complaint has failed to
state a claim for relief, and will dismiss the Complaint without prejudice to Plaintiff filing
an Amended Complaint within 30 days of this Opinion and accompanying Order.
F or the reasons stated above, Defendant’s motion to dismiss is GRANTED, and
Plaintiffs Complaint is DISMISSED without prejudice. An appropriate Order follows.
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