Transamerica Life Insurance Company v. Caramadre et al

Filing 141

MOTION for Entry of Judgment under Rule 54(b) (Separate Final) With Supporting Memo by Fortune Financial Services, Inc.. Responses due by 5/7/2012 Associated Cases: 1:09-cv-00470-S-DLM et al.(Brenner, Jeffrey)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO,
Plaintiff,
v.

C.A. No. 09-470/S

JOSEPH CARAMADRE, RAYMOUR
RADHAKRISHNAN, ESTATE PLANNING
RESOURCES, INC., HARRISON CONDIT,
:
and FORTUNE FINANCIAL SERVICES, INC., :
Defendants. :
WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO,
Plaintiff,
v.

C.A. No. 09-564/S

JOSEPH CARAMADRE, RAYMOUR
RADHAKRISHNAN, ESTATE PLANNING
RESOURCES, INC., HARRISON CONDIT,
and FORTUNE FINANCIAL SERVICES, INC., :
Defendants. :

FORTUNE FINANCIAL SERVICES, INC.'S MOTION FOR
ENTRY OF SEPARATE FINAL JUDGMENT PURSUANT TO RULE 54(b)
Defendant Fortune Financial Services , Inc. hereby moves for entry of separate final
judgment pursuant to Rule 54(b) on the Counts of Rescission, Declaratory Judgment, Civil
Liability for Criminal Offenses and Negligence for insurance fraud, and Fraud In Factum
contained in the Third Amended Complaint. In support of their Motion, Fortune Financial
Services, Inc., hereby submits the accompanying Memorandum of Law.

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Defendant,
FORTUNE FINANCIAL SERVICES, INC.,
By their Attorneys,

Dated: April 18, 2012

/s/ Jeffrey S. Brenner
Jeffrey S. Brenner (#4369)
Armando E. Batastini (#6016)
Nixon Peabody LLP
One Citizens Plaza, 5th Floor
Providence, RI 02903
Tel: [phone]
Fax: [phone]
j brenner nixonpeabo dy. corn
abatastinignixonpeabo dy. corn

CERTIFICATE OF SERVICE
I hereby certify that on the 18 th day of April, 2012, an exact copy of the within document
was electronically filed with the Electronic Case Filing System of the United States District
Court for the District of Rhode Island. Service by electronic means has been effectuated on all
counsel of record.
/s/ Jeffrey S. Brenner

13875636 1

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO,
Plaintiff,
v.

C.A. No. 09-470/S

JOSEPH CARAMADRE, RAYMOUR
RADHAKRISHNAN, ESTATE PLANNING
RESOURCES, INC., HARRISON CONDIT,
:
and FORTUNE FINANCIAL SERVICES, INC., :
Defendants. :
WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO,
Plaintiff,
v.

C.A. No. 09-564/S

JOSEPH CARAMADRE, RAYMOUR
RADHAKRISHNAN, ESTATE PLANNING
RESOURCES, INC., HARRISON CONDIT,
:
and FORTUNE FINANCIAL SERVICES, INC., :
Defendants. :
MEMORANDUM OF LAW IN SUPPORT OF
FORTUNE FINANCIAL SERVICES, INC.'S MOTION FOR
ENTRY OF SEPARATE FINAL JUDGMENT PURSUANT TO RULE 54(b)
The claims that remain against Defendant Fortune Financial Services, Inc. are distinct
from those claims that this Court has dismissed. Additionally, co-Defendants Joseph Caramadre
and Raymour Radhakrishnan are seeking Rule 54(b) final judgment with respect to claims that
have also been dismissed with respect to Fortune Financial, so that entering final judgment on
those counts as to Fortune Financial along with Caramadre and Radhakrishnan fosters judicial
economy and avoids piecemeal appeals. Fortune Financial therefore seeks a certification of Rule
54(b) final judgment as to counts for Rescission, Declaratory Judgment, Civil Liability for
Criminal Offenses for insurance fraud, Negligence, and Fraud In Factum.

13870978.1

Background
Fortune Financial is a defendant in two cases — C.A. No. 09-470 S (the "470 Litigation")
and C.A. No. 09-564 S (the "564 Litigation"). The allegations and causes of action in each of
these cases are identical with respect to Fortune Financial, and so Fortune Financial will brief
both matters simultaneously. The most recent pleading is each case is the Third Amended
Complaint.' (470 ECF No. 91; 560 ECF No. 57).
This Court's June 2, 2010 Opinion and Order dismissed the counts of Rescission,
Declaratory Judgment, Civil Liability for Criminal Offenses, and Negligence as to all parties.
(6/2/10 Op. and Order, p. 47). Of note, the Court dismissed the count for Criminal Offenses and
Negligence because the alleged underlying crime, insurance fraud, does not apply to the
annuities at issue in these cases. (See id, pp. 40-41). The June 2 Opinion and Order allowed the
Fraud and Civil Conspiracy counts proceed as to all parties (the 470 and 564 Complaints do not
contain counts for Civil Conspiracy). (Id., pp. 47-48)
This Court's later Opinion and Order dated February 7, 2012 dismissed the Fraudulent
Inducement count as to, inter alia, Joseph Caramadre and Raymour Radhakrishnan, and the
Fraud In Factum count as to, inter alia, Caramadre, Radhakrishnan, and Fortune Financial.
(2/7/12 Op. and Order, p. 42). That Opinion and Order also allowed the Civil Liability for
Crimes and Offenses to proceed with respect to the alleged forgery of the subject annuities, and
"except[ed] those counts dismissed as to certain Defendants in the June 2 Order," i.e. the claims
of Civil Liability for Crimes and Offenses based upon insurance fraud. (Id, pp. 42-43). The
Court also "reaffirm[ed] the dismissal of all claims previously dismissed but not discussed in the
instant Opinion and Order," to include counts of Rescission and Declaratory Judgment as against
Fortune Financial.

This Court recognized that Western Reserve has re-alleged certain dismissed counts in the
Third Amended Complaint for the purposes of preserving those counts for appellate review.
(2/7/12 Op. and Order, p. 10 n. 9).

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As a result of the foregoing, the only remaining counts against Fortune Financial are
Fraudulent Inducement, Breach of Contract, Breach of the Duty of Good Faith and Fair Dealing,
Civil Liability for Crimes and Offenses with respect to alleged forgery only, and Unjust
Enrichment, as further narrowed by the Opinions and Orders. Specifically, this Court has
eliminated from the Breach of Contract and Breach of Good Faith and Fair Dealing claims any
alleged breaches related to Plaintiff Western Reserve Life Assurance Co. of Ohio's rules and
regulations and Ethics Code. (2/7/12 Op. and Order, p. 34). As a result, the only remaining
Breach of Contract and Breach of Good Faith and Fair Dealing claims against Fortune Financial
relate to Fortune's contractual duty to indemnify Western Reserve as a result of the purported
fraudulent conduct of Fortune's supposed agents, and an alleged failure to supervise those agents
consistent with a purported contractual duty to do so, thereby somehow failing to prevent the
agents' alleged fraudulent activities. (See 6/2/10 Op. and Order, pp. 42-44).
Additionally, this Court held that the Breach of Contract and Breach of Good Faith and
Fair Dealing claims were coextensive under governing Florida law, so that these counts are
identical as a matter of law. (Id, pp. 44-45). At bottom, all of the remaining claims against
Fortune Financial derive from Fortune's alleged participation in the purported fraudulent
inducement of Western Reserve and alleged forgery of the annuitant applications. While these
claims have survived a Motion to Dismiss, there is absolutely no evidence of forgery by Fortune
Financial and it is doubtful that these claims will survive a motion for summary judgment.
The cumulative effect of the Opinions and Orders is a dismissal of all counts against
Caramadre and Radhakrishnan in the 470 and 564 Litigations. Both have consequently filed
Motions for Entry of Final Judgment Pursuant to Rule 54(b), including final judgment with
respect to the Fraud In Factum, Civil Liability for Criminal Offenses for insurance fraud,
Rescission, Declaratory Judgment and Negligence counts that are also dismissed as to Fortune
Financial. (470 ECF No. 135; 564 ECF No. 103).

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Governing Standard

This Court may determine, in its discretion, whether final judgment may enter as to some,
but not all, of the multiple claims in these matters:
To meet the demonstrated need for flexibility, the District Court is used as a
"dispatcher." It is permitted to determine, in the first instance, the appropriate
time when each 1Inal decision" upon "one or more but [fewer] than all" claims
in a multiple claims action is ready for appeal. .... [T]he District Court may, by
exercise of its discretion in the interest of sound judicial administration, release
for appeal final decisions upon one or more, but less than all, claims in multiple
claims actions. The timing of such release is, with good reason, vested by the rule
primarily in the discretion of the District Court as the one most likely familiar
with the case and any justifiable reasons for delay.
Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 435-37 (1956) (emphasis in original).
In making this determination, the central inquiries are whether the entry of final judgment
will foster judicial economy and will be equitable. See Curtiss-Wright Corp. v. General Elec.
Co., 446 U.S. 1, 8 (1980) ("a district court must take into account judicial administrative interests
as well as the equities involved"). This Court should therefore "consider such factors as whether
the claims under review are separate from the others remaining to be adjudicated and whether the
nature of the claims already determined was such that no appellate court would have to decide
the same issues more than once ...." Id.
The First Circuit has cited a series of five, non-dispositive factors to be considered in this
context: (1) the relationship between the adjudicated and unadjudicated claims; (2) the possibility
that appellate review may be mooted by future developments; (3) the possibility that the
appellate court may have to review the same issue on multiple occasions; (4) the presence of a
claim that may result in a set-off; and (5) miscellaneous factors such as delay, expense and the
like. Allis-Chalmers Corp. v. Philadelphia Elec. Co., 521 F.2d 360, 364 (3 rd Cir. 1975) (cited by
Spiegel v. Trustees of Tufts College, 843 F.2d 38, 43 n.3 (1 st Cir. 1988)).
Argument

The factors relevant to this matter militate in favor of the entry of partial final judgment.
The matters that remain in these cases are distinct from those claims that this Court had
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dismissed. The remaining counts all relate to alleged fraudulent inducement and purported
forgery, whereas the dismissed claims present legal issues regarding the characterization of the
annuity as an insurance contract or not, and, with respect to the Fraud In Factum count, whether
Western Reserve appreciated that the annuity was a contract. Entry of partial final judgment is
therefore appropriate on this basis. See, e.g. Hudson River Sloop Clearwater, Inc. v. Dept. of
Navy, 891 F.2d 414, 418 (2" Cir. 1989) (54(b) certification appropriate where counts dismissed
were distinct from those that remained for trial).
Moreover, entry of partial final judgment fosters judicial economy and is equitable.
Otherwise, Caramadre and Radhakrishnan may be defending issues on appeal that also affect
Fortune Financial without Fortune Financial's participation. This problem is avoidable with the
entry of partial final judgment to Fortune Financial.
Conclusion

There is no just reason to delay entry of final judgment with respect to the dismissal of
the counts of Rescission, Declaratory Judgment, Civil Liability for Criminal Offenses and
Negligence for insurance fraud, and Fraud In Factum. This Court should therefor grant Fortune
Financial's Rule 54(b) Motion for Entry of Final Judgment.

Defendant,
FORTUNE FINANCIAL SERVICES, INC.,
By their Attorneys,

Dated: April 18, 2012

/s/ Jeffrey S. Brenner
Jeffrey S. Brenner (#4369)
Armando E. Batastini (#6016)
Nixon Peabody LLP
One Citizens Plaza, 5th Floor
Providence, RI 02903
Tel: [phone]
Fax: [phone]
[e-mail]
[e-mail]

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13870978 1

CERTIFICATE OF SERVICE
I hereby certify that on the 18 th day of April, 2012, an exact copy of the within document
was electronically filed with the Electronic Case Filing System of the United States District
Court for the District of Rhode Island. Service by electronic means has been effectuated on all
counsel of record.
/s/ Jeffrey S. Brenner

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