United States District Court, M.D. Tennessee, Nashville Division
MARIETTA MCCLENDON, on behalf of herself and all others similarly situated, Plaintiff,
NORTH CAROLINA MUTUAL LIFE INSURANCE COMPANY, Defendant.
WILLIAM L. CAMPBELL, JR., UNITED STATES
before the Court are three motions by Defendant seeking
dismissal of the claims in Plaintiff's Second Amended
Complaint and Plaintiff's Motion for Partial Summary
Judgment. Prior to Plaintiff filing the Second Amended
Complaint, Defendant moved for summary judgment on
Plaintiff's claims of breach of contract, violation of
the North Carolina Unfair and Deceptive Trade Practices Act
(“NCUDTPA”), and unjust enrichment. (Doc. No.
Plaintiff's Second Amended Complaint (Doc. No. 108) added
a claim for violation of the Alabama Deceptive Trade
Practices Act (“ADTPA”). Defendant moved to
dismiss the new ADPTA claim and the NCUDTPA claim. (Doc. No.
124.) Defendant then filed a Supplemental Motion for Summary
Judgment (Doc. No. 130). Plaintiff filed her own Motion for
Partial Summary Judgment seeking summary judgment on her
claims for breach of contract and violations of the ADTPA.
(Doc. No. 144.)
reasons stated below, Defendant's motions for summary
judgment are GRANTED in part and DENIED in part,
Defendant's motion to dismiss the ADPTA and NCUDTPA
claims is GRANTED, and Plaintiff's motion for partial
summary judgment is GRANTED in part and DENIED in part.
1984, Plaintiff's mother purchased a $10, 000 whole life
insurance policy from Protective Industrial Insurance Company
of Alabama (the “Policy”) to insure the life of
Plaintiff's brother. (Am. Compl. at ¶ 36, Doc. No.
108.) The monthly premium for the policy was $17.06, which
consisted of $15.46 for the preferred whole life premium that
was to be paid for the duration of the policy, $0.50 per
month for a waiver of premium rider benefit, and $1.10 per
month for an accidental death benefit rider. (Doc. No. 82-1.)
The policy riders had 27-year terms.
1995, Plaintiff's mother took out a loan against the
policy in the amount of $1, 533.90 at an interest rate of 5%
(“Policy Loan”). (Am. Compl., Doc. No. 108 at
¶ 39; Policy Loan Disc. Stmt., Doc. No. 139-19.) The
parties dispute the amount and frequency of payments made
toward the loan. Defendant claims only two payments were made
- $160 in 2004 and $400 in 2006. (Doc. No. 169-26.) Plaintiff
claims additional payments were made and that the policy loan
was entirely paid off. (McClendon Dep., Doc. No. 169-3 at
2009, Defendant acquired the Policy following the insolvency
of the issuing company. (Am. Compl. ¶ 17-20, Doc. No.
108.) Defendant continued to charge premiums for the policy
riders after the rider term expired in 2011. From June 2011
to March 2016, Defendant charged an additional $1.60 per
month for policy riders covering Waiver of Premium and
Accidental Death. (Am. Compl., Doc. No. 108 at ¶ 38.)
Payments related to the policy riders during that period
totaled $92.80. (Id.)
March 16, 2016, Plaintiff's brother passed away. (Doc.
No. 139-21.) At the time of his death, Plaintiff was the sole
beneficiary on the life insurance policy. (Doc. No. 82-2.)
Following the death of her brother, Plaintiff assigned the
proceeds of the Policy to Roberts Funeral Services.
(Assignment of Proceeds and Power of Attorney, Doc. No.
82-3.) The assignment of proceeds stated: “I hereby
assign, set over and transfer to the said ROBERTS FUNERAL
SERVICES, the sum of ten thousand dollars ($10, 000) of the
proceeds and or refund of premiums of the policy(ies)
… which is or may be due me from the said Company as
beneficiary of the said policy(ies).” (Id.)
The document included a power of attorney appointing Roberts
Funeral Services attorney in fact to endorse her name on the
check representing the assigned proceeds. (Id.)
calculated that the benefit due on the policy was $4, 896.46,
representing the value of the Policy, minus the principal and
6% interest, and sent that amount to the funeral home on May
4, 2016. (Am. Compl., Doc. No. 108 at ¶ 41; Doc. No.
82-5.) Defendant corrected the interest calculation when it
received loan documents specifying the correct interest
amount was 5% and issued a check to Plaintiff in the amount
of $299.36, representing the 1% difference in interest. (Am.
Compl., Doc. No. 108 at ¶ 42.) Plaintiff was not
satisfied with the explanation of the calculation and did not
cash the check. (Id.)
that similar problems affected thousands of policy holders,
Plaintiff filed a class action complaint against Defendant on
behalf of herself and all others similarly situated.
Plaintiff's Second Amended Complaint alleges breach of
contract, unjust enrichment, violation of the Alabama
Deceptive Trade Practices Act, Ala. Code §8-19-1 et
seq., and violation of the North Carolina Unfair or
Deceptive Trade Practices Act, N.C. Gen Stat. § 75-1.1
STANDARD OF REVIEW
Motion to Dismiss
Rule of Civil Procedure 12(b)(6) permits dismissal of a
complaint for failure to state a claim upon which relief can
be granted. For purposes of a motion to dismiss, a court must
take all the factual allegations in the complaint as true.
Ashcroft v. Iqbal, 556 U.S. 662 (2009). To survive a
motion to dismiss, a complaint must contain sufficient
factual allegations, accepted as true, to state a claim for
relief that is plausible on its face. Id. A claim
has facial plausibility when the plaintiff pleads facts that
allow the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged. Id.
In reviewing a motion to dismiss, the Court construes the
complaint in the light most favorable to the plaintiff,
accepts its allegations as true, and draws all reasonable
inferences in favor of the plaintiff. Directv, Inc. v.
Treesh, 487 F.3d 471, 476 (6th Cir. 2007).
considering a Rule 12(b)(6) motion, the Court may consider
the Complaint and any exhibits attached thereto, public
records, items appearing in the record of the case and
exhibits attached to Defendant's motion to dismiss so
long as they are referred to in the Complaint and are central
to the claims. Bassett v. National Collegiate Athletic
Assn., 528 F.3d 426, 430 (6th Cir. 2008).
judgment is appropriate “if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). The party bringing the summary judgment
motion has the initial burden of informing the Court of the
basis for its motion and identifying portions of the record
that demonstrate the absence of a genuine dispute over
material facts. Rodgers v. Banks, 344 F.3d 587, 595
(6th Cir. 2003). The moving party may satisfy this burden by
presenting affirmative evidence that negates an element of
the non-moving party's claim or by demonstrating an
absence of evidence to support the nonmoving party's
evaluating a motion for summary judgment, the court views the
facts in the light most favorable for the nonmoving party and
draws all reasonable inferences in favor of the nonmoving
party. Bible Believers v. Wayne Cty., Mich., 805
F.3d 228, 242 (6th Cir. 2015); Wexler v. White's Fine
Furniture, Inc., 317 F.3d 564, 570 (6th Cir. 2003). The
Court does not weigh the evidence, judge the credibility of
witnesses, or determine the truth of the matter. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
Rather, the Court determines whether sufficient evidence has
been presented to make the issue of material fact a proper
jury question. Id. The mere scintilla of evidence in
support of the nonmoving party's position is insufficient
to survive summary judgment; instead, there must be evidence
of which the jury could reasonably find for the nonmoving
party. Rodgers 344 F.3d at 595.
Deceptive and Unfair Trade Practices
Second Amended Complaint, Defendant alleges claims of
deceptive and unfair trade practices under the NCUDTPA and
diversity action, state law governs the parties' claims.
(Order on Choice of Law, Doc. No. 46 (citing Erie R.R.
Co. v. Tompkins, 304 U.S. 64 (1938).)
“Choice-of-law analysis in a diversity action is
governed by the law of the state where the federal court
sits.” In re Air Crash Disaster, 86 F.3d 498,
540-41 (6th Cir. 1996) (citing Klaxton Co. v. Stentor
Elec. Mfg. Co., 313 U.S. 487, 496 (1941)).
Tennessee's choice-of-law rules will determine which
state's unfair trade practices law applies to the claims
in this case.See Premium Freight Mgmt., LLC v. PM