United States District Court, M.D. Tennessee, Nashville Division
WILLIAM L. CAMPBELL, JR. UNITED STATES DISTRICT JUDGE.
before the Court is Plaintiff's Motion to Certify Class.
(Doc. No. 134; corrected copy filed at Doc. No. 143).
Defendant filed a response (Doc. No. 173), Plaintiff filed a
reply (Doc. No. 183). Almost three months after filing the
initial motion to certify class, Plaintiff requested leave to
file a supplemental memorandum in support of the motion for
class certification. (Doc. No. 156). Defendant filed an
opposition to Plaintiff's motion to supplement the motion
for class certification (Doc. No. 159), Plaintiff filed a
reply (Doc. No. 164), and Defendant filed a sur-reply (Doc.
No. 167). Following the Court's ruling on the motions for
summary judgment, the parties each filed supplemental briefs
on the motion for class certification. (Docs. Nos. 192 and
reasons below, Plaintiff's Motion to Certify Class (Doc.
No. 134) is GRANTED / DENIED.
Plaintiff's Motion to File a Supplemental Memorandum in
Support of the Motion for Class Certification (Doc. No. 156)
Marietta McClendon was the beneficiary of a life insurance
policy purchased in 1984 by her mother to insure the life of
Plaintiff's brother. The policy face value was $10, 000
and included two policy riders that had 27-year terms. In
1995, Plaintiff's mother took out loan against the policy
in the amount of $1, 533.90 at an interest rate of 5%. When
Plaintiff's brother passed away on March 16, 2016,
Defendant calculated that the benefit due on the policy was
$4, 896.46 and issued a check for this amount. In so doing,
Defendant incorrectly applied a 6% interest rate. When
notified by Plaintiff of this mistake, Defendant corrected
the interest calculation and issued Plaintiff a check in the
amount of $299.36, representing the 1% difference in
interest. Plaintiff was not satisfied with the interest
calculation and did not cash the check.
addition to the incorrect interest rate, Plaintiff claims
Defendant did not properly apply payments made by her mother
toward the loan amount and continued charging rider premiums
beyond the 27-year term. The rider premiums collected from
2011 (the expiry of the original 27-year term) to 2016
totaled $92.80. Defendant's records show that two
payments were made toward the original loan balance - $160 in
2004 and $400 in 2006. Plaintiff claims that her mother had
paid of the loan entirely and that Defendant failed to
properly credit the account.
similar problems affected thousands of policy holders,
Plaintiff filed a class action complaint against Defendants
on behalf of herself and all others similarly situated. The
Court dismissed Plaintiff's claims for unjust enrichment,
and violation of the Alabama Deceptive Trade Practices Act,
Ala. Code §8-19-1 et seq. and the North
Carolina Unfair or Deceptive Trade Practices Act, N.C. Gen
Stat. § 75-1.1 et seq. (See July 26,
2019 Order, Doc. No. 188). Plaintiffs sole remaining claim is
for breach of contract.
breach of contract claim is based on: (1) application of the
incorrect interest rate to the policy loan; (2) failure to
properly credit payments toward the policy loan; and (3)
collection of rider premiums beyond the rider term. The
Court's July 26, 2019 Order and Memorandum (Doc. No. 188,
189) addressed these breach of contract claims - granting
summary judgment to Plaintiff on the issue of the interest
rate and denying summary judgment to Plaintiff as to the
application of loan payments and collection of premiums for
the Court denied Plaintiff's motion for summary judgment
as to the rider payments, the denial was not because there
were disputed issues of material fact that should be resolved
at trial. Rather, the Court held as a matter of law that the
alleged conduct - continued billing and acceptance of
payments for the policy riders - did not constitute a breach
of contract under Alabama law. (See Memorandum, Doc.
No. 189 at 14-15). Because Defendant did not move for summary
judgment on this issue, the claim is left in a peculiar
procedural position where the Court has held that Plaintiff
does not state a claim as a matter of law, yet the claim is
technically still live.
the claims at this point of resolution, Plaintiff seeks to
certify the following two plaintiff classes:
(1) Loan Class - All policy holders and beneficiaries of
Assumed Policies against which the policyholder took out a
policy loan; and
(2) Rider Class - All policyholders and beneficiaries of
Assumed Policies whose policies included additional rider
benefits for terms less than life.
seeks certification under Federal Rule of Civil Procedure
23(b)(3) that allows certification of a class when
“questions of law or fact common to the class
predominate over any questions affecting only individual
members” and “a class action is superior to other
available methods for the fair and efficient adjudication of
the controversy.” Fed.R.Civ.P. 23(b)(3). After filing
the motion for class certification, Plaintiff moved to file a
supplemental memorandum in support of the motion for class
certification to add as an additional ground for class
certification that the class should be certified as a limited
fund under Fed.R.Civ.P. 23(b)(1)(B). (Doc. No. 156).
Defendant opposes the motion to assert a new basis for class
certification as untimely. (Doc. No. 159).