United States District Court, E.D. Tennessee
Lee brings this action against AXA Financial, Inc.
(“AXA Financial”), AXA Equitable Life Insurance
Company (“AXA Equitable”), Larry George, and Will
Evans (collectively “Defendants”) alleging
negligence, breach of fiduciary duty, breach of contract, and
respondeat superior. This case arises from a meeting held on
October 23, 2014 between Ms. Lee, her now-deceased husband,
Mr. George, and Mr. Evans regarding her husband's
variable annuity IRA and the changing of the beneficiary on
that IRA from Mr. Lee's brother to Mrs. Lee.
the court are three motions: Mr. Evans and Mr. George's
Motion to Strike Plaintiff's First Amended Complaint
(ECF. 37), AXA Equitable's Motion to Dismiss for Failure
to State a Claim (ECF. 39), and Plaintiff's Second Motion
to Amend/Revise Amended Complaint (ECF. 42). Plaintiff's
Second Motion to Amend/Revise Amended Complaint has been
opposed by Defendants as “futile”. ECF. 47; ECF.
on the facts as presented in the complaint, Plaintiff's
Second Motion to Amend (ECF. 42) is GRANTED
as sufficient to overcome the motions to dismiss as described
in Foman v. Davis. Accordingly, Defendants'
Motions to Dismiss (ECF. 37; ECF. 39) is
Dalen Lee was a customer of AXA Equitable and owned at least
three different accounts and/or financial products with the
company. On March 4, 2013, Mr. Lee created variable annuity
IRA #313008923 (“the IRA”) with AXA Equitable.
2014, Mr. Lee discovered that he had a terminal illness, and
on October 24, 2014, Mr. Lee married Mrs. Mary Lee. One day
before their marriage, Mr. Lee and the soon-to-be Mrs. Lee
met with Mr. Larry George and Mr. Will Evans, both employees
of AXA Financial and AXA Equitable. According to Mrs. Lee,
the intent of this meeting was to change the beneficiary on
each of Mr. Lee's accounts from Mr. Lee's brother to
Mrs. Lee, including the IRA. Mrs. Lee also alleges that an
oral promise was made by Mr. George and Mr. Evans to change
the beneficiary on these accounts through whatever forms were
required to be created and submitted. Two of the financial
products that Mr. Lee owned with AXA Equitable were updated
to reflect Mrs. Lee as the beneficiary, but the IRA was not.
died on June 27, 2015 after moving to Florida with Mrs. Lee.
The value of the IRA on the date of Mr. Lee's death was
$135, 373.76. After Mr. Lee's death, Mrs. Lee received
mail from AXA Equitable indicating that she was not the
beneficiary on Mr. Lee's IRA and that she would not be
receiving the payment as she had expected.
26, 2018, Mrs. Lee filed a complaint against Mr. George, Mr.
Evans, AXA Equitable, and AXA Financial, which wholly owns
AXA Equitable as a subsidiary corporation. ECF. 1. On
September 27, 2018, Mr. George and Mr. Evans properly filed a
motion to dismiss for failure to state a claim under Fed. R.
Civ. Proc. 12(b)(6) (ECF. 18) to which Mrs. Lee responded on
October 1, 2018 with a motion to amend her complaint under
Fed. R. Civ. Proc. 15(a)(2) (ECF. 23), which the court
granted on October 10, 2018 (ECF. 28) after receipt of the
Stipulation allowing the filing of the amended complaint
(ECF. 27). Mrs. Lee filed her First Amended Complaint
(“FAC”) the same day the order was granted,
October 10, 2018 (ECF. 29). AXA Financial then filed a joint
motion for extension of time to file an answer on October 15,
2018 (ECF. 32), and the court issued a scheduling order on
October 29, 2018 setting a trial date for January 28, 2020
(ECF. 36). On October 31, 2018, Mr. George and Mr. Evans
filed a 12(b)(6) motion to dismiss the FAC (ECF. 37). AXA
Equitable and AXA Financial filed a 12(b)(6) motion making
similar arguments and citing similar authorities on November
2, 2018 (ECF. 39). Mrs. Lee then responded on November 14,
2018 with a second motion to amend her complaint attaching
her proposed Second Amended Complaint (“SAC”).
(ECF. 42). All defendants then filed responses on November
29, 2018 (ECF. 45; ECF. 46; ECF. 47), arguing that the SAC
did not overcome the defects of the FAC.
Second Motion to Amend (ECF. 42) was filed fourteen days
after the earlier of the two Defendants' Motions to Amend
(ECF. 37; ECF. 39). Despite not raising the argument in her
responses or motions, Plaintiff has a legal basis to assert
that she preserved her one-time right to amend as of course
under Fed. R. Civ. Proc. 15(a)(1)(B) because her first
amendment was made by stipulation rather than as a matter of
course. This amendment was also timely under the rule because
it was made within 21 days of a 12(b)(6) motion.
on the decisions of the Sixth Circuit, the District Court for the
Eastern District of Tennessee, other District Courts within the
Sixth Circuit, and other appellate courts, a simple order
granting the Second Motion to Amend (ECF. 42) and holding the
Motions to Dismiss (ECF. 37; ECF. 39) as moot on these
procedural grounds would be valid. However, that order would
likely lead to further delay and the filing of redundant
motions. Determining whether leave should be granted to amend
as well allows the court to resolve these motions on the
merits. As the Supreme Court wrote in the landmark case on
Fed. R. Civ. Proc. 15(a), “It is too late in the day
and entirely contrary to the spirit of the Federal Rules of
Civil Procedure for decisions on the merits to be avoided on
the basis of such mere technicalities.” Foman v.
Davis, 371 U.S. 178, 181- 82 (1962).
Standard of Review
court must decide whether the motion to amend and the
attached proposed SAC meet the standard from Foman
for granting leave to amend. The enumerated reasons for
denying such a motion to amend include “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, futility of amendment,
” but the most important to evaluate in this case is