Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca11-22-12991/USCOURTS-ca11-22-12991-0/pdf.json

Parties Involved:
Advance Trust & Life Escrow Services, LTA
Appellant
Worth Johnson
Appellant
Protective Life Insurance Company
Appellee

Document Text:

[PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 22-12991

____________________

ADVANCE TRUST & LIFE ESCROW SERVICES, LTA,

As Securities Intermediary for Life partners 

Position Holder Trust, on behalf of itself 

and all others similarly situated, 

Plaintiff,

WORTH JOHNSON,

Plaintiff-Appellant,

versus

PROTECTIVE LIFE INSURANCE COMPANY, 

Defendant-Appellee.

____________________

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2 Opinion of the Court 22-12991

Appeal from the United States District Court

for the Northern District of Alabama

D.C. Docket No. 2:18-cv-01290-MHH

____________________

Before GRANT, ABUDU, and HULL, Circuit Judges.

HULL, Circuit Judge:

This class action involves a dispute over a life insurance 

policy issued to Plaintiff Worth Johnson (“Johnson”) by Defendant 

Protective Life Insurance Company (“Protective”) in South 

Carolina. While the procedural history is complicated, Johnson is 

now the sole remaining named plaintiff. Johnson brought on his 

behalf and others’ the second amended complaint (the 

“complaint”), which alleges only a breach of contract claim under 

the policy.

The district court granted Protective’s motion for judgment 

on the pleadings, concluding Protective did not breach its

insurance contract as a matter of law. The primary issues on appeal 

concern the interpretation of the policy under South Carolina law. 

We begin by setting forth the complaint’s allegations and the 

policy’s relevant terms. 

I. POLICY TERMS 

In 1988, Protective issued a universal life insurance policy 

(the “policy”) to Johnson in the face amount of $100,000. Johnson’s 

policy conferred a death benefit with a savings or investment 

component, known as the “account value” or “policy value.” The 

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22-12991 Opinion of the Court 3

savings component allows policies to be a tax-advantaged savings 

vehicle, earning interest on the policy value. Here is how it works. 

A. Net Premium

In a schedule, the policy setsJohnson’s premiums at $900 per 

year. The policyholder is permitted to pay premiums more 

frequently or in greater sums. The policy then permits Protective 

to deduct “expense charges” from the premium, which yields a 

“net premium.” Johnson’s policy lists these “expense charges”: 

The percentage of premium expense charge is 5.00% 

of each premium payment.

The monthly expense charge per $1000 (which 

applies during the first 12 policy months) is $ .00.

The monthly expense charge per $1000 of increase 

(which applies during the first 12 policy months 

following an increase) is $ .26.

The monthly administrative charge is $4.00. 

(Font altered.) In this regard, the policy defines “Net Premium” as 

the “premium payment less the percentage of premium expense 

charges shown in the Policy Schedule.” Johnson does not 

challenge Protective’s calculation of the “expense charges” or the 

net premium.

B. Policy Value

The policy also permits Protective to make monthly 

deductions from the net premium, which yields the “Policy Value.” 

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And the Policy Value is the money that accrues interest at a

guaranteed interest rate set in the policy. It is through this process 

that the investment component of Johnson’s policy grows in value. 

The Policy Value increases each month by one month’s interest 

less the monthly deduction. 

C. Monthly Deduction for Cost of Insurance

In turn, the policy defines the “Monthly Deduction” from 

the net premium. This monthly deduction “is the sum of the 

following four items,” which are listed as:

(1) The cost of insurance and the cost of additional 

benefits provided by riders for the policy month.

(2) The monthly expense charge applicable to the 

Initial Face Amount. This charge applies only the first 

12 policy months. . . .

(3) The monthly expense charge applicable to any 

increase in face amount. This charge applies only to 

the first 12 policy months following the day on which 

an increase becomes effective. . . .

(4) The Monthly Administrative Charge shown in the 

Policy Schedule.

(Emphasis added.) Johnson does not challenge items 2-4 (the 

monthly expense and administrative charges). 

Johnson does contest item 1, the “cost of insurance” charge. 

The formula for that charge states: 

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The cost of insurance is determined at the end of each 

policy month as follows:

(1) divide the death benefit at the beginning of the 

policy month by the sum of 1 plus the guaranteed 

interest rate; 

(2) reduce the result by the amount of policy value 

(prior to deducting the cost of insurance) at the 

beginning of the policy month;

(3) multiply the difference by the cost of insurance

rate as described in the Cost of Insurance Rates 

section.

(Emphasis added.) Johnson submits that “[u]nder this formula, a 

lower COI rate directly translates to a lower monthly COI charge.” 

The only part of this formula in dispute is the cost of insurance rate

(the “COI rate”). 

D. COI Rates

Johnson’s policy has three main sections about the COI rate.

His policy initially has a “Table of Guaranteed Maximum Insurance 

Rates” for each “attained age” from age 0 to age 94. (Font altered.) 

Johnson was 43 when he purchased his policy in 1988. His Table’s 

guaranteed maximum monthly COI rate was 0.322 for his age of 

43. 

As Johnson grew older, his Table’s listed COI rate generally

increased. By age 65, his Table shows a monthly COI rate of 2.122, 

over a 500% increase. Johnson’s Class Period begins on August 13, 

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6 Opinion of the Court 22-12991

2012. We thus list the monthly COI rates after that date, which

increased from 2.543 at age 67 in 2012 to 5.912 at age 76 in 2021—

a 132% increase: 

TABLE OF GUARANTEED MAXIMUM 

INSURANCE RATES

MONTHLY RATE PER $1,000 EXCLUDING 

RIDERS

. . .

 [JOHNSON’S]

[YEAR] ATTAINED AGE RATE

[2012] 67 2.543

[2013] 68 2.773

[2014] 69 3.023

[2015] 70 3.303

[2016] 71 3.621

[2017] 72 3.986

[2018] 73 4.405

[2019] 74 4.872

[2020] 75 5.377

[2021] 76 5.912

Johnson does not challenge the Table’s monthly COI rate scale. 

Later on, his policy states that the guaranteed maximum COI rates

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22-12991 Opinion of the Court 7

“are equal to the 1980 CSO male and female mortality rates as 

applicable, adjusted to reflect [the insured’s] underwriting class.”

(Font altered.) Other than this Table, Johnson’s policy does not 

contain any other COI rate scale.

Instead, Johnson contends that insurers, like Protective,

“typically create an internal table of projected, non-guaranteed 

COI rates,” and “when a policy is issued, an insured is ‘assigned’ to 

an initial COI rate table or scale that lays out a set of COI rates that

cover the life of the insured.” Johnson represents that “[t]his initial 

COI table is not shared with the [insured] owner.” We refer to 

Protective’s internal set of monthly rates covering the insured’s life 

as Protective’s “internal COI rate scale.” 

Johnson does not allege what rates Protective chose in its 

internal COI rate scale at inception in 1988 to cover his life. Rather, 

Johnson’s main complaint is that Protective never changed and 

redetermined its internal COI rate scale “a single time” during the 

Class Period that began on August 13, 2012, even though 

nationwide mortality rates had declined during that period. 

Notably though, Johnson does not allege that Protective

used an internal COI rate scale with rates that exceeded the 

guaranteed maximum rate. And he does not claim on appeal that 

Protective breached its contract by using a COI rate scale that 

exceeded the guaranteed maximum rate.

Johnson’s policy also contains two other COI rate sections. 

One section, entitled “Cost of Insurance Rates,” states:

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8 Opinion of the Court 22-12991

The monthly cost of insurance rate is based on sex, 

attained age, and rate class of the Insured and on the 

policy year. Attained age means age nearest birthday 

on the prior policy anniversary. Monthly cost of 

insurance rates will be determined by us, based on 

our expectations as to future mortality experience. 

Any change in the monthly cost of insurance rates 

will be on a uniform basis for insureds of the same 

class such as age, sex, rate class, and policy year. 

However, the cost of insurance rates will not be 

greater than those in the Table of Guaranteed 

Maximum Insurance Rates, shown in the Policy 

Schedule.

(Emphasis added.) Another section, entitled “Non-Dividend 

Paying,” states: 

This policy does not pay dividends and does not share 

in our surplus or profits. Any change in insurance 

rates or interest rates will be prospective and will be 

subject to our future expectations as to mortality and 

interest.

(Emphasis added.) The parties dispute the meaning of the above 

policy terms. We thus set forth their contentions and the contract 

issues on appeal.1

1 Other plaintiffs and other Protective policies were originally part of this case. 

One policy included an endorsement that is not in Johnson’s policy. 

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22-12991 Opinion of the Court 9

II. CONTRACT INTERPRETATION ISSUES

Although Protective’s internal monthly COI rate scale never 

exceeded the Table’s guaranteed maximum monthly rates, 

Johnson claims the policy contractually obligated Protective to 

reassess, redetermine, and reduce its internal COI rates when by 

2012 nationwide mortality had improved. 

Specifically, Johnson’s complaint alleges that Protective 

breached its contract because: (1) the policy’s language required 

Protective to reassess and redetermine its COI rates based on 

exclusively “improved mortality expectations and experience”; 

(2) nationwide mortality rates improved at 1% per year during the 

Class Period; (3) Protective thus must have “enjoyed significantly 

improved mortality experience and expectations”; but

(4) Protective never redetermined COI rates “a single time” and

wrongly continued to use its initial COI rate scale that considered 

other factors, including its expenses and lapse rates. His complaint 

also contains an alternative breach of contract theory: Protective 

did elect to redetermine and actually change its monthly COI rates 

during the Class Period, but wrongfully ignored its expectations as 

In the “Cost of Insurance Rates” section in the Policy to which 

this endorsement is attached, we state that monthly cost of 

insurance rates will be determined by us, based on our 

expectations as to future mortality experience. . . .

Any change in our scale of cost of insurance rates will be based 

solely on our expectations as to future mortality experience. 

(Emphasis added.) This endorsement is not relevant because this case now 

involves only Johnson’s policy.

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10 Opinion of the Court 22-12991

to future mortality experience. Johnson complains that his 

“monthly mortality charges have increased from $124.61 in 2012 to 

$285.90 in 2019” and his “monthly COI rates have increased by 

more than 100%.” 

Protective responds that Johnson’s complaint fails to state a 

breach of contract claim because: (1) the policy does not impose a 

contractual duty requiring that Protective reassess and 

redetermine its COI rates “based on” exclusively its “expectations 

as to future mortality experience”; (2) the policy does not preclude

Protective from using its internal COI rate scale assigned to cover 

Johnson’s life until age 94, as long as Protective does not exceed the 

guaranteed maximum monthly COI rates in the policy’s Table; and 

(3) the policy does not preclude Protective from considering other 

factors impacting its COI rates. 

This appeal presents these contract interpretation issues. 

First, after setting at inception its internal COI rate scale to cover

Johnson’s life, did Protective have a contractual duty to reassess 

and redetermine that COI rate scale during the Class Period? 

Second, even if Protective had a contractual duty to reassess 

and redetermine its COI rate scale, whether the policy (1) requires

Protective to redetermine its COI rate based on exclusively its 

“expectations as to future mortality experience” and (2) precludes 

Protective from considering any other factors. 

And third, whether Protective could ignore its expectations 

as to future mortality when it chose or elected voluntarily to 

reassess and redetermine its COI rates. 

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III. PRECEDENT ABOUT COI RATES

The parties agree that South Carolina law governs the 

interpretation of Johnson’s policy. See Bah. Sales Assoc., LLC v. 

Byers, 701 F.3d 1335, 1342 (11th Cir. 2012) (“If the parties litigate 

the case under the assumption that a certain law applies, we will 

assume that that law applies.”). The parties, however, do not cite, 

and we have not located, a South Carolina appellate court decision 

involving a life insurance policy with COI rates. 

Yet, our Court and two other circuits have interpreted 

universal life policies with COI rates. See Anderson v. Wilco Life Ins.

Co., 17 F.4th 1339, 1340-41 (11th Cir. 2021) (applying Georgia law); 

Slam Dunk I, LLC v. Conn. Gen. Life Ins. Co., 853 F. App’x 451, 452 

(11th Cir. 2021) (unpublished) (applying Florida law); Norem v. 

Lincoln Benefit Life Co., 737 F.3d 1145, 1147-49 (7th Cir. 2013)

(applying Illinois law); Vogt v. State Farm Life Ins. Co., 963 F.3d 753, 

761 (8th Cir. 2020) (applying Missouri law). We review these 

decisions before turning to South Carolina law.

A. Anderson v. Wilco Life Ins. Co. (11th Cir. 2021)

In Anderson v. Wilco Life Insurance Co., the policy referenced: 

(1) an “[a]ctual monthly” COI rate; (2) a “guaranteed monthly” 

COI rate; and (3) a “current monthly” COI rate. 17 F.4th at 1340-

43. How our Court used rules of contract construction to interpret 

the COI rate terms is instructive. 

Similar to Protective’s Table, Wilco’s Table of guaranteed 

COI rates listed the attained age and the maximum possible COI 

rate, which generally increased each year. Id. at 1343. The dispute 

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involved the paragraph below that Table, that said “[a]ctual 

monthly” COI rates “will be determined . . . based on the policy 

cost factors described in your policy,” as follows: 

The cost of insurance rates shown above are based on 

the Commissioner’s 1980 standard ordinary male 

mortality table, age last birthday. Actual monthly cost 

of insurance rates will be determined by the 

company based on the policy cost factors described in 

your policy. However, the actual cost of insurance 

rates will not be greater than those shown above.

Id. (emphasis added and font altered). Wilco’s policy also had a 

“Cost of Insurance” section with a formula for the monthly COI 

charge that included a multiplier for the monthly COI rate. Id.

Wilco’s COI Rate section then differentiated between “the 

guaranteed” and “the current” monthly COI rates:

The guaranteed monthly cost of insurance rates for 

the policy are based on the insured’s sex, attained age 

and premium class on the date of issue. Attained age 

means age on the prior policy anniversary except 

when this policy is issued when it means age last 

birthday prior to policy date. These rates are shown 

on a Policy Data Page.

Current monthly cost of insurance rates will be 

determined by the Company. The current monthly 

cost of insurance rates will not be greater than the 

guaranteed monthly cost of insurance rates which are 

listed on a Policy Data Page.

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Id. at 1344 (emphasis added). Even though her policy said the 

“current monthly” COI rate “will be determined by the Company,”

the plaintiff focused on the paragraph below the COI rate Table, 

which said the “actual monthly” COI rates “will be determined by 

the Company based on the policy cost factors described in your 

policy.” Id. at 1343-45 (font altered). 

The Wilco plaintiff argued (1) the only “cost factors described 

in [the] policy” were those associated with the guaranteed monthly 

COI rate, which were “sex, attained age, and premium class” and

(2) therefore, “the policy required Wilco to base her current 

monthly rate” also “on her age, sex, and premium class.” Id. at 

1341, 1344-45. Wilco countered that its policy unambiguously gave 

it “discretion to set the current monthly rate provided that the 

amount [did] not exceed the guaranteed monthly rate.” Id. at 1345.

In affirming the dismissal of plaintiff’s complaint, this Court 

held that under Georgia law, the policy “unambiguously gives 

Wilco the discretion to set [plaintiff’s] current monthly rate, so long 

as that rate does not exceed the guaranteed monthly rate.” Id. at 

1346. We acknowledged that the plaintiff stressed that the policy—

i.e., the paragraph under the Table—provided that the “[a]ctual 

monthly” COI rate “will be determined by the company based on 

the policy cost factors described in your policy.” Id. at 1347

(quotation marks omitted). However, we pointed out that “the 

policy never mentions policy cost factors in conjunction with the 

current monthly rate.” Id. The only factors mentioned in the 

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14 Opinion of the Court 22-12991

policy—the insured’s “sex, attained age, and premium class”—

relate to the guaranteed monthly COI rate. Id. 

Despite this sentence—that “[a]ctual monthly” COI rates 

“will be determined based on the policy cost factors described in 

your policy”—the Wilco Court concluded the policy language was 

not ambiguous. Id. at 1348-49. Citing Georgia law, we explained

that: “[e]ven a policy which is susceptible to two reasonable 

meanings is not ambiguous if the trial court can resolve the 

conflicting interpretations by applying the rules of contract 

construction.” Id. at 1348 (quotation marks omitted and 

alterations adopted). Applying those rules, the Wilco Court 

reasoned that “the specific provision about the current monthly 

rate”—i.e., “the current monthly rate is determined by the 

company, with no mention of factors”—controlled to the extent it 

was inconsistent with the paragraph about the “[a]ctual monthly” 

COI rate under the Table, stating it “will be determined by the 

Company based on to-be-described policy cost factors.” Id. at 1347. 

We also rejected the plaintiff’s claims that (1) the policy’s use 

of “based on” was reasonably susceptible to an exclusivity 

interpretation and (2) the cost factors—sex, attained age, premium 

class—in the guaranteed-rate sentence could be grafted on the 

current monthly rate. Id. We found plaintiff’s argument 

“untenable” because (1) it would mean the guaranteed/current 

monthly rates “would be calculated in the exact same way,” (2) “it 

destroys the guaranteed/current monthly rate distinction,” and 

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(3) it would render the phrase in the COI rate section—“will be 

determined by the Company”—“superfluous.” Id. at 1348-49. 

When read as a whole, the policy demonstrated that “Wilco 

was required to calculate[] Anderson’s guaranteed monthly rate 

based on her age, sex, and premium class, but that this rate was 

distinct from the current monthly rate, which Wilco had discretion 

to set at any level, so long as it did not exceed the guaranteed 

monthly rate.” Id. at 1346-47. 

B. Slam Dunk v. Conn. Gen. Life Ins. Co. (11th Cir. 2021)

Our Court has addressed another universal life policy with

language quite similar to Protective’s. In Slam Dunk I, LLC v. 

Connecticut General Life Insurance Co., the plaintiff’s policy stated the 

monthly COI rates “are determined by [the insurer] based on its 

expectations as to future mortality experience.”2 853 F. App’x at 

452-53. The full COI rate section, however, stated:

The Monthly Cost of Insurance Rates are based on 

the Insured’s Attained Age, the type of benefit, the 

Class of Insured and whether premiums for that 

Insured are paid directly to [Connecticut General] or 

through payroll deductions. The Monthly Cost of 

Insurance Rates are determined by [Connecticut 

General] based on its expectations as to future 

mortality experience. Adjustment in the Monthly 

2 Unpublished opinions, like Slam Dunk, “are not precedential, so they do not 

bind us . . . to any degree.” Patterson v. Ga. Pac., LLC, 38 F.4th 1336, 1346 (11th 

Cir. 2022) (citing 11th Cir. R. 36-2). We discuss Slam Dunk only because the 

parties’ appellate briefs heavily focus on it.

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Cost of Insurance Rates may be made by 

[Connecticut General] from time to time, but not 

more than once a year, and will apply to Insureds of 

the same class. Under no circumstance will the 

Monthly Cost of Insurance Rates for Life Insurance 

ever be greater than those shown in the Table of 

Guaranteed Maximum Life Insurance Rates. Such 

guaranteed maximum rates are based on the 

Commissioners 1980 Extended Term Table (age last 

birthday) and 4% effective annual interest.

Id. at 452 (emphasis added). 

Our Court affirmed the dismissal of the plaintiff’s complaint

and rejected “a reading of the [] policies that focuses only [on] one 

sentence to the exclusion of all others.” Id. at 454. “We must read 

the contract as a whole and cannot sever the single sentence 

highlighted by [the plaintiff] from the remainder of the COI 

provision.” Id. While one sentence “mentions future mortality 

experience as a basis for establishing the COI rate,” the 

“immediately preceding sentence” establishes that “the COI rates 

are also based on ‘the Insured’s Attained Age, the type of benefit, 

the Class of the Insured and whether premiums for that Insured are 

paid directly to [Connecticut General] or through payroll 

deductions.” Id. We reasoned that a reading of the policy that 

required monthly COI rates to be exclusively based on the insurer’s 

expected future mortality experience would ignore the 

immediately preceding sentence. Id.

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We also reasoned that “[n]othing about the plain and 

ordinary meaning of the phrase ‘based on’ connotes exclusivity,” 

and “nothing about it implies the list that follows is exhaustive.” Id.

at 455. This Court pointed out that “[h]aving been used twice to 

refer to different factors, the phrase ‘based on’ cannot connote 

exclusivity without leading to an absurd or internally inconsistent 

result.” Id. We therefore “decline[d] to adopt Slam Dunk’s 

proposed interpretation because to do so would rewrite the []

policies.” Id. We ruled that this policy interpretation was “most 

consistent with Florida contract law.” Id. 

Our Slam Dunk decision also relied on the Seventh Circuit’s 

Norem decision, which we discuss. 

C. Norem v. Lincoln Benefit Life Co. (7th Cir. 2013)

In Norem v. Lincoln Benefit Life Co., the plaintiff asserted that

the defendant Lincoln (1) was obligated to calculate its COI rate 

“based on the insured’s sex, issue age, policy year, and payment 

class” and (2) breached its contract by considering other factors, 

including expected policy lapse rates, agent commissions, and 

anticipated death benefit costs. 737 F.3d at 1147-48. The policy 

value had a monthly cost of insurance deduction, calculated as 

follows:

1. Divide the death benefit as of the prior monthly 

deduction day by 1.003273739 [;] 2. Subtract the 

policy value as of that prior monthly deduction day 

less the policy fee and less the cost of insurance of any 

benefit riders attached to this policy; 3. Multiply the 

results by the current cost of insurance rate divided 

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18 Opinion of the Court 22-12991

by 1,000. The cost of insurance rate is based on the 

insured’s sex, issue age, policy year, and payment 

class. The rates will be determined by us, but they 

will never be more than the guaranteed rates shown 

on Page 5.

Id. at 1147 n.2 (alterations in original) (emphasis added). 

Affirming summary judgment for the defendant Lincoln, 

the Seventh Circuit held that the plain and ordinary meaning of the 

phrase “based on” does not imply “exclusivity.” Id. at 1150. The 

Seventh Circuit first noted that the policy did not define the phrase 

“based on.” Id. at 1149. Next, the Court turned to 

Merriam-Webster’s definition of the word “base”: “(1) ‘a main 

ingredient;’ (2) ‘a supporting or carrying ingredient;’ (3) ‘the 

fundamental part of something.’” Id. (quoting Merriam-Webster’s 

Collegiate Dictionary, 101 (11th ed. 2007)). The Court stated that 

“[o]ther definitions are in accord: (1) ‘[s]omething on which a thing 

stands or by which it is supported;’ or (2) ‘[t]he principal ingredient, 

the fundamental element.’” Id. (alterations in original) (quoting 

Shorter Oxford English Dictionary Vol. I, 192 (6th ed. 2007)). 

The Seventh Circuit concluded that none of these 

definitions supported plaintiff Norem’s proposed interpretation—

that “base” or “based on” implies “exclusivity.” Id. at 1149-50. 

Therefore, “neither the dictionary definitions nor the common 

understanding of the phrase ‘based on’ suggest that Lincoln Benefit 

is prohibited from considering factors beyond sex, issue age, policy 

year, and payment class when calculating its COI rates.” Id. at 1150. 

The Seventh Circuit also noted that (1) the policy included a table 

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of “guaranteed maximum rates” and (2) it was undisputed that 

“Norem’s COI rates have remained unchanged and have also never 

exceeded these guaranteed maximums.” Id. 

According to the Seventh Circuit, the policy’s COI rate 

provision “is most reasonably read as a description of those 

components of the COI rate relevant to an individual insured.” Id.

at 1152. The Seventh Circuit remarked that it was industry practice 

for insurers to consider numerous factors in setting COI rates, and 

that the specifics of Lincoln’s formula were proprietary and not 

disclosed to policyholders. Id. at 1150. The Court stated it was 

“logical” the policy would spell out factors specific to the insured 

without providing a precise list of all factors it would consider. Id. 

The Court also observed that the sentence immediately after 

the “based on” clause states that “[t]he rates will be determined by 

us but they will never be more than the guaranteed rates shown on 

Page 5.” Id. The Court reasoned that “[t]his sentence makes clear 

that Lincoln Benefit will utilize its own formula to determine the 

rates, subject to the limitation that they cannot exceed the 

guaranteed maximum rates.” Id. It determined that interpreting 

the “based on” provision “as informational gives meaning to the 

provision as a whole.” Id. 

Additionally, the Seventh Circuit concluded that “the only 

express limitation is found in the explicit guarantee that the COI 

rates never be more than the listed maximum rates.” Id. To the

Court, the policy was best read as containing two parts: “first, an 

explanatory clause listing key components of the COI rate; and 

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second, a guaranteed rate that allows a policyholder to see the 

maximum COI charge that could be deducted from his policy 

value.” Id. 

The Seventh Circuit also distinguished other district court 

cases involving a “based on” clause that referred to “mortality 

experience” and a lawsuit focused on “an increase” in COI rates 

despite declining mortality. Id. at 1153-54. Plaintiff Norem had not 

claimed or demonstrated that the insurer’s COI rates “are ‘utterly 

divorced’ from mortality.” Id.

Ultimately, the Seventh Circuit found “the reasoning of the 

cases advanced by Lincoln Benefit” convincing. Id. at 1155. The 

Seventh Circuit said: “These cases hold generally that absent a 

promise to use a specific formula when calculating a COI rate, an 

insurer is not bound to consider only those factors listed in a COI 

provision.” Id. The Seventh Circuit concluded that “[t]his 

interpretation comports with the common understanding of the 

phrase ‘based on’ and is also the most reasonable way to construe 

the language of the COI provision as a whole.” Id. 

After Norem, the Eighth Circuit in Vogt disagreed with the 

Seventh Circuit. So we review Vogt.

D. Vogt v. State Farm Life Ins. Co. (8th Cir. 2020)

In Vogt v. State Farm Life Insurance Co., the Eighth Circuit 

concluded “based on” was ambiguous, should be construed against 

State Farm, and read to imply exclusivity of the listed factors. 963 

F.3d at 761-64 (applying Missouri law). Once again, the policy 

terms were the crux of the lawsuit.

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In 1999, Vogt purchased his life insurance policy, but 

surrendered it in 2013 for its policy value. Id. at 761. Dissatisfied 

with the COI fees, Vogt brought breach of contract and conversion 

claims as part of a class action. Id. Vogt alleged State Farm used 

non-listed, non-mortality related factors to calculate its COI rate. 

Id. 

State Farm’s policy allowed monthly deductions for “(1) the 

cost of insurance, (2) the monthly charges for any riders, and (3) the 

monthly expense charge.” Id. The COI rate provision stated:

[The Monthly Cost of Insurance]rates for each policy 

year are based on the Insured’s age on the policy 

anniversary, sex, and applicable rate class. A rate class 

will be determined for the Initial Basic Amount and 

for each increase. The rates shown on page 4 are the 

maximum monthly cost of insurance rates for the 

Initial Basic Amount. Maximum monthly cost of 

insurance rates will be provided for each increase in 

the Basic Amount. We can charge rates lower than 

those shown. Such rates can be adjusted for projected 

changes in mortality but cannot exceed the maximum 

monthly cost of insurance rates. Such adjustments 

cannot be made more than once a calendar year.

Id. Vogt claimed State Farm (1) may set its COI rates based on the 

enumerated mortality factors of age, sex and rate class but

(2) breached its policy by “using non-enumerated factors unrelated 

to a policyholder’s mortality risk,” that “included taxes, profit 

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22 Opinion of the Court 22-12991

assumptions, investment earnings, and capital and reserve 

requirements.” Id. Because State Farm included non-mortality 

factors in its COI rates, Vogt asserted that “State Farm deducted 

from the monthly premium payments more than what the policy 

stated would be included in the COI fees.” Id. 

The district court granted plaintiff Vogt’s motion for 

summary judgment as to liability, concluding the policy was 

ambiguous and should be construed against State Farm. Id. at 

761-72. After a trial as to damages, a jury returned a $34 million 

verdict in the plaintiff class’s favor. Id. at 761. State Farm appealed. 

Applying Missouri law, the Eighth Circuit affirmed the 

summary judgment grant and the damages verdict in favor of the 

plaintiff class, and held that, “at the very least the phrase [‘based 

on’] is ambiguous.” Id. at 763. The Eighth Circuit explained that 

the policy “contains no definition for the phrase ‘based on,’ so we 

rely on the plain and ordinary meaning of the phrase.” Id. As 

opposed to dictionary definitions, the Court relied on how a 

reasonable person would read the policy language, concluding:

[A] person of ordinary intelligence purchasing an 

insurance policy would not read the provision and 

understand that where the policy states that the COI 

fees will be calculated “based on” listed mortality 

factors that the insurer would also be free to 

incorporate other, unlisted factors into this 

calculation.

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22-12991 Opinion of the Court 23

Id. at 763-64. The Eighth Circuit noted that the Seventh Circuit’s

Norem (1) concluded “based on” did not imply “exclusivity of 

factors” but (2) “acknowledge[d] that other courts have reached the 

opposite conclusion.” Id. at 764. The Eighth Circuit stated that the 

fact that several courts “have examined the issue in very similar 

circumstances and have reached differing conclusions supports the 

conclusion that the phrase is ambiguous.” Id. 

The Eighth Circuit observed that State Farm was free to 

draft the policy language to unambiguously give it the freedom to 

collect a COI fee based on unenumerated factors, but it did not. Id. 

The Eighth Circuit concluded that “the phrase ‘based on’ in the 

COI provision is at least ambiguous and thus must be construed 

against State Farm.” Id.3 

In addition to addressing COI rates, these circuit court 

decisions illustrate the importance of contract interpretation

principles. We now set forth South Carolina’s contract law. 

IV. SOUTH CAROLINA LAW

Courts in South Carolina “have a long history of formalistic 

interpretation with respect to all contracts and have repeatedly 

held that the ‘[i]nsurance policies are subject to general rules of 

3 Johnson cites Mirkin v. XOOM Energy, LLC to support his argument that the 

“will be . . . based on” language creates a duty to change rates. See generally

931 F.3d 173 (2d Cir. 2019). Besides not involving a life insurance policy, 

Mirkin is inapplicable because it was not disputed that the consumers had to 

pay a variable rate for energy purchases and that XOOM had an ongoing 

contractual duty to base its variable rates on supply costs. See id. at 175–77.

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24 Opinion of the Court 22-12991

contract construction.’” Bell v. Progressive Direct Ins. Co., 757 S.E.2d 

399, 406 (S.C. 2014) (quoting Gambrell v. Travelers Ins. Cos., 310 

S.E.2d 814, 816 (S.C. 1983)). Contract language in an insurance 

policy must be given its plain and ordinary meaning. Williams v. 

Gov’t Emps. Ins. Co., 762 S.E.2d 705, 709-10 (S.C. 2014); Bell, 757 

S.E.2d at 406; Sloan Constr. Co. v. Cent. Nat’l Ins. Co. of Omaha, 236 

S.E.2d 818, 819 (S.C. 1977). “Where the contract’s language is clear 

and unambiguous, the language alone determines the contract’s 

force and effect.” Williams, 762 S.E.2d at 709 (quoting McGill v. 

Moore, 672 S.E.2d 571, 574 (S.C. 2009)). 

When a policy does not define a term, South Carolina courts 

consider dictionary definitions as helpful tools to ascertain its plain, 

ordinary, and common meaning. See Super Duper Inc. v. Pa. Nat’l 

Mut. Cas. Ins. Co., 683 S.E.2d 792, 796 (S.C. 2009); Barkley v. Int’l 

Mut. Ins. Co., 86 S.E.2d 602, 604 (S.C. 1955); S.C. Farm Bureau Mut. 

Ins. Co. v. Oates, 588 S.E.2d 643, 646 (S.C. Ct. App. 2003). 

“The construction of a clear and unambiguous contract is a 

question of law for the court to determine.” Williams, 762 S.E.2d 

at 710. It is also “a question of law for the court whether the 

language of a contract is ambiguous.” Id. (quoting S.C. Dep’t of Nat. 

Res. v. Town of McClellanville, 550 S.E.2d 299, 302-03 (S.C. 2001)); 

McGill, 672 S.E.2d at 574.

An insurance contract is read as a whole document so that 

one may not create an ambiguity by pointing out a single sentence 

or clause. Schulmeyer v. State Farm Fire and Cas. Co., 579 S.E.2d 132, 

134 (S.C. 2003) (quoting Yarborough v. Phx. Mut. Life Ins. Co., 225 

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22-12991 Opinion of the Court 25

S.E.2d 344, 348 (S.C. 1976)); McGill, 672 S.E.2d at 574. “Whether a 

contract is ambiguous is to be determined from examining the 

entire contract, not by reviewing isolated portions of the contract.” 

Williams, 762 S.E.2d at 710. “The meaning of a particular word or 

phrase is not determined by considering the word or phrase by 

itself, but by reading the policy as a whole and considering the 

context and subject matter of the insurance contract.” Schulmeyer, 

579 S.E.2d at 134; Yarborough, 225 S.E.2d at 349.

A contract “is ambiguous when it is capable of more than 

one meaning when viewed objectively by a reasonably intelligent 

person who has examined the context of the entire integrated 

agreement and who is cognizant of the customs, practices, usages 

and terminology as generally understood in the particular trade or

business.” Williams, 762 S.E.2d at 710 (quoting Hawkins v. 

Greenwood Dev. Corp., 493 S.E.2d 875, 878 (S.C. Ct. App. 1997)). 

“If the court decides the language is ambiguous, however, 

evidence may be admitted to show the intent of the parties, and the 

determination of the parties’ intent becomes a question of fact for 

the fact-finder.” Id. (citing Hawkins, 493 S.E.2d at 878-79). 

“Ambiguous or conflicting terms in an insurance policy must be 

construed liberally in favor of the insured and strictly against the 

insurer.” Id. (quoting Diamond State Ins. Co. v. Homestead Indus., 

Inc., 456 S.E.2d 912, 915 (S.C. 1995)). For ambiguous contracts, 

“[c]ourt[s] will look to the reasonable expectations of the insured 

at the time when he entered into the contract.” Bell, 757 S.E.2d at 

407. 

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26 Opinion of the Court 22-12991

If a form insurance contract is ambiguous, contra proferentem, 

which construes ambiguity against the drafter (i.e., the insurer), 

applies as a rule of last resort. Williams, 762 S.E.2d at 710; Waters 

v. S. Farm Bureau Life Ins. Co., 617 S.E.2d 385, 388 (S.C. Ct. App. 

2005) (“After a consideration of extrinsic evidence, the jury is to 

resolve all remaining ambiguity in favor of the insured.”).

We now apply South Carolina law to Johnson’s policy. 

V. ALLEGED DUTY AS TO COI RATES

The first issue is whether after initially setting its monthly 

COI rate scale in 1988 to cover the life of Johnson, Protective had

a contractual duty or obligation to reassess and redetermine that 

COI rate scale during the Class Period, when by 2012 nationwide 

mortality had improved. 

Johnson contends this sentence, in the middle of one of the 

three COI rate sections, imposed that requirement: “Monthly cost 

of insurance rates will be determined by us, based on our 

expectations as to future mortality experience.” Johnson argues 

that the “will be determined” phrase obligates Protective to 

reassess and recalculate its monthly COI rates when mortality risks

significantly improve. He claims that “will” is a mandatory, not 

permissive word and creates a contractual command. Johnson 

distinguishes “will” from “may” and “might.” 

As to time of performance, Johnson asserts this contractual

duty applies “as often as every month,” but, at a minimum,

“periodically,” and those “precise intervals at which Protective’s 

COI rates ‘will be determined’” are a fact question. Johnson 

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22-12991 Opinion of the Court 27

submits that we “need not reach the issue of how frequently this 

periodic duty arises,” but must decide at this stage only that such a 

contractual duty exists. 

Protective replies that Johnson reads the “will be 

determined” phrase in isolation and out of context. Protective

asserts that phrase, read with the rest of the sentence, the entire 

paragraph, and the policy as a whole, merely acknowledges 

Protective’s ability or capacity to choose its monthly COI rates in 

the future. Protective contends the policy leaves it to Protective to 

determine whether and when to change its monthly COI rates in 

the future, subject to the requirement that “any change” not 

exceed the guaranteed maximum monthly COI rates in Johnson’s

policy’s Table. Indeed, those guaranteed maximum monthly COI 

rates (1) are listed in great detail in the policy’s monthly COI rate 

Table, (2) thoroughly covered the life of Johnson specifically for 

each year from age 0 to 94, and (3) thus are known by him as the 

policyholder at inception. 

Regarding the “will be determined” phrase, both parties cite 

pieces of dictionary definitions of “will.” Our review of them 

reveals “will” has more than one ordinary or common meaning, 

making context key to our contract interpretation.4 

4 “Many words have more than one ordinary meaning. The fact is that the 

more common the term . . . the more meanings it will bear.” ANTONIN SCALIA 

& BRYAN A.GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 70 

(2012). 

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28 Opinion of the Court 22-12991

For example, the American Heritage Dictionary defines 

“will” as (1) “[u]sed to indicate simple futurity” and (2) “[u]sed to 

indicate capacity or ability,” but also as (3) “[u]sed to indicate 

requirement or command.” Will, AMERICAN HERITAGE 

DICTIONARY OF THE ENGLISH LANGUAGE ONLINE,

https://perma.cc/YUU5-SULL.

Merriam-Webster defines “will” as (1) “used to express 

futurity” and (2) “used to express desire, choice, willingness,” but 

also as (3) “used to express a command, exhortation, or 

injunction.” Will, MERRIAM-WEBSTER ONLINE, 

https://perma.cc/S2BB-BV6G. 

Webster’s Third New International Dictionary defines 

“will” as (1) “used to express capability or sufficiency” but also as

(2) “used to express a command, exhortation, or injunction.” 

WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 2616-17 (3rd 

ed. 1961). 

Webster’s New World Dictionary, from 1988, defines “will” 

as (1) “used to express expectation or surmise” and (2) “used to 

express possibility,” but also as (3) “used to express determination, 

compulsion, or obligation.” WEBSTER’S NEW WORLD DICTIONARY 

OF AMERICAN ENGLISH 1528 (3d ed. 1988). 

The Oxford English Dictionary defines “will” as 

(1) “[e]xpressing potentiality, capacity, or sufficiency: can, may, be 

able to, be capable of ——ing,” but also as (2) “[e]xpressing 

determination, wish, or intention to bring about some action, 

event, or state of things in the future: intend to, mean to.” Will, 

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22-12991 Opinion of the Court 29

OXFORD ENGLISH DICTIONARY ONLINE, https://perma.cc/BNY6-

EHMR. 

When common words, like “will,” have different meanings, 

courts “must use the context in which a given word appears to 

determine its aptest, most likely sense.” ANTONIN SCALIA & BRYAN 

A. GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS

Appendix A, 418 (2012). In the same vein, South Carolina law

provides that the meaning of a word is not always determined by 

the word alone, but “by reading the policy as a whole and 

considering the context and subject matter” of the policy. 

Schulmeyer, 579 S.E.2d at 134.

Accordingly, let’s consider the phrase in the context of the 

complete sentence. The sentence broadly leaves the monthly COI 

rate to be determined in the future “by us” (Protective) based on 

“our expectations.” (Emphasis added.) This surrounding language 

does not bespeak a mandatory obligation to another party. In this 

context, “will” seems to be used as merely a future tense verb as to 

what Protective may choose to do in the future.5

5 Johnson, quoting § 27.3(b) of Bryan Garner’s The Redbook, argues that

“[g]enerally speaking, contractual promises are well expressed with will.” 

However, the topic of § 27.3(b) is entitled the “Ambiguous ‘shall,’” and § 27.3(b) 

explains how “contracts often use the word [shall] in as many as four or five 

different senses.” BRYAN GARNER, THE REDBOOK: A MANUAL ON LEGAL STYLE

562, § 27.3(b) (4th ed. 2018). Section 27.3(b) reviews how “[s]ometimes its 

sense is indeed mandatory”; “sometimes it means ‘may’”; and “sometimes it 

is merely a future-tense verb.” Id. The same can be said for “will.” 

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30 Opinion of the Court 22-12991

An examination of the entire paragraph yields this meaning 

too. The very next sentence states: “Any change in the monthly 

cost of insurance rates will be on a uniform basis for insureds of the 

same class such as age, sex, rate class, and policy year.” (Emphasis 

added.) “Any change” suggests no change is required by 

Protective, but is possible in the future. And the inclusion of the 

“uniform basis” term is informative. If the policy language in the 

first sentence was a mandatory contractual command, then all such 

life policies had that obligation and there would be no need for that

“uniform basis” term. On the other hand, if Protective has the 

ability or choice to make a “change” in its internal COI rates, it will 

do so uniformly for other insureds with the same age, sex, rate 

class, and policy year. The need for this uniformity clause makes 

more sense if Protective has the ability, not a mandatory 

obligation, to reassess and “change” its internal COI rates set at 

inception. 

This reading of the “will be determined” phrase is reinforced 

by the policy as a whole. Other provisions set forth highly specific 

and detailed guaranteed maximum monthly COI rates for the life of 

Johnson from age 0 to 94. In contrast, Johnson’s isolated relied-upon

sentence does not contain a formula or table for calculating COI 

rates in the future. The most reasonable reading of that sentence 

in context is that Protective has the capacity, ability, choice, or 

possibility to determine its internal COI rates in the future, as long 

as it does not exceed that guaranteed maximum monthly COI rate. 

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22-12991 Opinion of the Court 31

Tellingly too, the “will be determined” sentence omits any 

clue as to when the alleged mandatory duty to reassess internal 

COI rates would have to be performed. Even Johnson 

acknowledges that his policy does not specify in this isolated

sentence, or anywhere else, the precise intervals at which 

Protective’s COI rates will be redetermined; he instead argues 

“those precise intervals are a fact question.” 

Although Protective’s internal COI rate scale is applied 

monthly as part of the monthly cost of insurance charge, Johnson 

is careful not to stress that Protective must redetermine the COI 

rate each and every month. Think about this though. If this 

sentence is read, as Johnson suggests, to impose a contractual 

command “as to the monthly COI rate,” then that obligation would 

be monthly. It would not be periodic, i.e., stop one year, skip over 

a few years, and then start again in the Class Period. The text 

Johnson relies on does not support Johnson’s periodic theory. 

For all of these reasons, we are not persuaded that the “will 

be determined” phrase read in context mandates that Protective, 

each month or even periodically, reassess and redetermine its 

internal monthly COI rates set at inception for the life of Johnson. 

VI. POLICY TERM: “BASED ON”

Alternatively, let’s assume that Protective had a contractual 

duty to reassess and redetermine its COI rate scale each month or 

periodically. The next question is whether the policy (1) requires

Protective to redetermine its monthly COI rates based on 

exclusively its “expectations as to future mortality experience” and 

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32 Opinion of the Court 22-12991

(2) precludes Protective from considering any other factors. 

Johnson’s main theory underlying his breach of contract claim is 

that (1) “based on” connotes exclusivity and (2) Protective breached 

its contractual duty by not redetermining its monthly COI rates 

based on exclusively its “expectations as to future mortality 

experience.” 

As noted above, the circuit courts are split on the meaning 

of the “based on” term as to COI rates. Some concluded that 

“based on” does not mean solely or exclusively and granted

judgment for the insurance company. Slam Dunk, 853 F. App’x at 

455; Norem, 737 F.3d at 1155; see also Wilco, 17 F.4th at 1347; Thao 

v. Midland Nat’l Life Ins. Co., 549 F. App’x 534, 537 (7th Cir. 2013) 

(applying Norem). These decisions ruled that it is not reasonable to 

read “only,” “exclusively,” or “solely” into the term “based on.” 

Slam Dunk, 853 F. App’x at 454; Norem, 737 F.3d at 1150-51. 

The Eighth Circuit, however, determined that “based on” 

connotes exclusivity, or is “at least ambiguous.” Vogt, 963 F.3d at 

763. The Eighth Circuit construed the term against the defendant 

insurer and granted judgment in the plaintiff’s favor. Id.; see also 

Meek v. Kan. City Life Ins. Co., 664 F. Supp. 3d 923, 933-34 (W.D. Mo. 

2023). And some district courts concluded that “based on” is 

ambiguous and denied an insurer judgment as a matter of law. See, 

e.g., PHT Holding II LLC v. N. Am. Co. for Life & Health Ins., ---

F. Supp. 3d ----, 2023 WL 3714746, at *9-10, 17 (S.D. Iowa May 27, 

2023) (summary judgment motion); Fine v. Kan. City Life Ins. Co., 

627 F. Supp. 3d 1153, 1158-60 (C.D. Cal. 2022) (motion to dismiss); 

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22-12991 Opinion of the Court 33

McClure v. State Farm Life Ins. Co., 608 F. Supp. 3d 813, 818-22 (D. 

Ariz. 2022) (summary judgment motion); see also Fleisher v. Phx. Life 

Ins. Co., 18 F. Supp. 3d 456, 470-74, 479 (S.D.N.Y. 2014) (concluding 

“based on” connotes exclusivity, or is at least ambiguous, but 

granting summary judgment to the insurer for other reasons). 

Johnson’s policy does not define “based on” used in the COI 

rate section. We thus begin, under South Carolina law, with the 

term’s plain and ordinary meaning. See Williams, 762 S.E.2d at 

709-10. As discussed above, South Carolina courts consider 

dictionary definitions to ascertain the plain and ordinary meaning 

of a term. See Super Duper Inc., 683 S.E.2d at 796; Barkley, 86 S.E.2d 

at 604; Oates, 588 S.E.2d at 646. Generally, dictionaries define 

“base,” not “based on,” so we start there. 

Webster’s New Collegiate Dictionary defines “base” as: 

(1) “a main ingredient”; (2) “a supporting or carrying ingredient”; 

or (3) “the fundamental part of something.” WEBSTER’S NINTH 

NEW COLLEGIATE DICTIONARY, 133 (1986). 

Webster’s New World Dictionary defines “base” as: (1) “the 

fundamental or main part” and (2) “the principal or essential 

ingredient.” WEBSTER’S NEW WORLD DICTIONARY OF AMERICAN 

ENGLISH 114 (3d ed. 1988). 

The Oxford English Dictionary defines “base” as: (1) “[a] 

ground for an action or attitude; an underlying reason or 

justification” and (2) “[t]he main or most important ingredient or 

element, to which other things are added or from which another 

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34 Opinion of the Court 22-12991

thing is derived.” Base, OXFORD ENGLISH DICTIONARY ONLINE, 

https://perma.cc/WA97-ZEFW.

The American Heritage Dictionary defines “base” as “[t]he 

fact, observation, or premise from which a reasoning process is 

begun.” Base, AM. HERITAGE DICTIONARY OF THE ENGLISH 

LANGUAGE ONLINE, https://perma.cc/D7VC-QT84. 

These definitions are consistent with the dictionary entries 

our Court approved in Slam Dunk, which defined “base” as “a main 

ingredient,” “a supporting or carrying ingredient,” “the 

fundamental part of something,” “[s]omething on which a thing 

stands or by which it is supported,” and “[t]he principal ingredient, 

the fundamental element.” See Slam Dunk, 853 F. App’x at 454-55 

(discussing Seventh Circuit’s cited dictionary entries in Norem);

Norem, 737 F.3d at 1149 (applying Illinois law); see also Thao, 549 

F. App’x at 537 (applying Wisconsin law and following Norem).

We agree with Slam Dunk and Norem that “based on” does 

not mean “exclusively on” or “solely on.” Johnson’s complaint

alleged that Protective’s policy required it to base its monthly COI 

rate “exclusively” or “solely” on its “expectations as to future

mortality experience.” Because the policy does not have that 

requirement, the district court did not err in dismissing Johnson’s 

breach of contract claim to the extent it relied on an allegation of 

“exclusivity.”

So far, the above contract issues are premised on Johnson’s

allegation that Protective did not reassess and redetermine its 

monthly COI rates “a single time” during the Class Period. 

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22-12991 Opinion of the Court 35

Johnson makes a different allegation for his final breach of contract 

theory, which we address.

VII. IGNORING MORTALITY EXPERIENCE

As his final breach of contact theory, Johnson contends that 

(1) Protective actually did choose to reassess, and did redetermine, 

its internal COI rate scale during the Class Period, (2) as to such 

redeterminations, the policy required Protective to use its 

“expectations as to future mortality experience,” (3) but Protective 

violated the policy by ignoring its “expectations as to future 

mortality experience” in making its redeterminations. 

Protective responds this breach of contract theory is not 

properly before our Court. Protective asserts Johnson did not 

argue this theory below and is precluded from raising it on appeal. 

See Bryant v. Jones, 575 F.3d 1281, 1308 (11th Cir. 2009) (holding 

legal theories not raised before the district court may not ordinarily 

be raised for the first time on appeal). 

After review, we conclude Johnson did not forfeit this 

breach of contract theory. Johnson’s complaint expressly alleges 

that during the Class Period, Protective conducted “periodic 

redeterminations, and continuous mortality review.” Despite 

these redeterminations, Johnson’s complaint expressly alleges that 

his “monthly COI rates have not been determined based on 

Protective’s improving mortality expectations, and the results of 

Protective’s new mortality reviews during the Class Period are 

being ignored to the detriment [of] the members of the Class.” 

Johnson’s complaint also (1) describes his current COI rates as 

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36 Opinion of the Court 22-12991

“wildly divorced from current expectations of future mortality 

experience” and (2) alleges that Protective’s COI rates do not 

“reflect” its expectations as to future mortality experience. 

In reply, Protective emphasizes that at a hearing on its 

motion, Johnson summarized his case as primarily concerning 

whether Protective (1) had an ongoing contractual duty “to review 

and adjust its COI rates” and (2) was contractually permitted to 

consider factors other than its expectations as to future mortality 

experience. At the hearing, however, Johnson also made clear that 

he was asserting a theory of liability “that even if Protective was 

allowed to consider factors other than expectations of future 

mortality experience, . . . it did not determine its COI rates in 

accordance with the contract because it ignored its expectations of 

future mortality.” 

The record also shows Johnson stressed this breach of 

contract theory in his opposition to Protective’s motion for 

judgment on the pleadings and in his post-hearing briefing. For 

example, Johnson’s opposition brief argued that Slam Dunk was not 

dispositive of his breach of contract claim because “allowing 

Protective to consider factors such as expense and lapse is not the 

same as allowing Protective to ignore the enumerated factors.” In 

post-hearing briefing, Johnson emphasized that the complaint 

alleges “that Protective did ignore its improving mortality 

expectations and did not treat them as the ‘main ingredients.’” 

After review, we also conclude that Johnson’s complaint 

sufficiently alleges that Protective did redetermine its COI rates but 

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22-12991 Opinion of the Court 37

ignored its “expectations as to future mortality experience” when 

it did so. While the policy did not require Protective to 

redetermine its internal COI rates set at inception, that’s a separate 

matter from the issue of what the policy required if Protective 

chose or elected voluntarily to reassess and change them.

Further, in assessing Protective’s contractual duty under the 

policy, the district court erroneously cabined that duty to whether 

Protective was obligated to reassess and redetermine its COI rates, 

as opposed to also what duty Protective had if Protective chose to 

reassess and did redetermine its COI rates. While Johnson’s 

highlighted sentence in the COI rate section did not mandate a 

redetermination by Protective, that sentence in context does 

support Johnson’s alternative breach of contract theory that if 

Protective chose to, and did, redetermine its COI rates, Protective 

was obligated to consider its “expectations as to future mortality 

experience.” 

Given the COI rate section, the district court erred in 

dismissing Johnson’s breach of contract claim to the extent Johnson 

asserted Protective chose to, and did, reassess and redetermine its 

COI rate scale during the Class Period, but “ignored” its 

expectations as to future mortality experience in doing so. As 

explained above, “based on” means as a main or principal 

ingredient, and thus Protective could not ignore that factor. While 

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38 Opinion of the Court 22-12991

it remains to be seen what can be proven, at this pleadings stage 

Johnson’s complaint states a breach of contract claim to that extent. 

VIII. PROPOSED THIRD AMENDED COMPLAINT

Before concluding, we address a procedural issue raised by 

Johnson as to his proposed third amended complaint. Johnson 

argues that the district court erred by not “adequately considering” 

the new factual allegations in 13 new paragraphs of his proposed 

third amended complaint (“TAC”) and by describing it as a “carbon 

copy” of the complaint. Johnson asserts that the district court 

incorrectly found his proposed TAC was a futile “carbon copy,”

and erroneously denied Johnson’s request for leave to amend. 

Protective responds that Johnson did not file a standalone 

motion for leave to amend, and thus his request as to the proposed 

TAC was not properly before the district court. Protective points 

out that Johnson only requested leave to amend in the last two

pages of his brief in opposition to Protective’s motion for judgment 

on the pleadings. Protective asserts the district court “never ruled 

on the misplaced request that [Johnson] made in [his] opposition.” 

As background, Johnson’s original complaint was filed on 

August 13, 2018, his first amended complaint on November 19, 

2018, and his second amended complaint on June 29, 2020, which 

was the deadline for any amendments of the pleadings.6 On June 

11, 2021, Protective filed its motion for judgment on the pleadings.

6 The district court had set a May 30, 2020 deadline, but it was extended to 

June 29, 2020 under the General Orders entered by the Northern District of 

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22-12991 Opinion of the Court 39

On August 4, 2021, Johnson filed his 30-page opposition 

brief, to which he attached a proposed TAC. His brief asked for 

leave to amend in the last two pages. Johnson’s brief summarily 

cited Rule 15 and argued he had good cause to amend because (1) 

Protective raised Slam Dunk in June of 2021 and (2) Protective 

would not be prejudiced. Protective replied that the TAC was 

futile in any event. 

In its order granting Protective’s motion for judgment on 

the pleadings, the district court did not directly address Johnson’s

request for leave to amend embedded in his brief. Its order 

mentions Johnson’s request in only a footnote, which describes his 

proposed TAC as a “carbon copy” of the complaint, as follows:

The factual allegations discussed in this opinion 

appear in [Johnson’s] second amended complaint 

(Doc. 92), and [Johnson’s] proposed third amended 

complaint, (Doc. 123). The second amended 

complaint was the operative complaint when 

Protective Life filed the motion for judgment on the 

pleadings now before the Court. The proposed third 

amended complaint is a carbon copy of the second 

amended complaint with one additional allegation: 

Even if Protective [Life] Were Permitted 

to Consider Other Unenumerated 

Factors in Determining COI Rates, It is 

Alabama in response to the COVID-19 pandemic. See General Order entered 

Apr. 13, 2020, No. 2020-04 (N.D. Ala.); General Order entered Mar. 17, 2020 

(N.D. Ala.). 

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40 Opinion of the Court 22-12991

Still Dramatically Overcharging 

Policyholders and in Breach of Contract

Other than this observation, the district court’s order did not 

expressly grant or deny Johnson’s request for leave to amend 

embedded in his brief. 

On appeal, Johnson emphasizes his proposed TAC was not 

a “carbon copy,” but contained “13 additional, new factual 

allegations,” “spanning seven pages.” The district court’s order 

contained parallel citations to paragraphs that were the same in the 

complaint and the proposed TAC. But there were no citations to 

the 13 new allegations in the TAC. Thus, the district court’s 

footnote characterizing it as a “carbon copy” was not correct. 

Nonetheless, the problem for Johnson is that his request for 

leave to amend was embedded in his opposition brief and was not 

properly before the district court. To properly request leave to 

amend, a plaintiff must satisfy two requirements: (1) file a motion 

for leave to amend and (2) “[‘]either set forth the substance of the

proposed amendment or attach a copy of the proposed 

amendment.’” Cita Tr. Co. AG v. Fifth Third Bank, 879 F.3d 1151, 

1157 (11th Cir. 2018) (quoting Long v. Satz, 181 F.3d 1275, 1279 

(11th Cir. 1999)). 

In Long, “the plaintiff did not file a motion for leave to 

amend,” “[t]he request for leave to amend was included in the 

memorandum [plaintiff] filed in opposition to the motion to 

dismiss,” and plaintiff “failed to attach the amendment or set forth 

the substance of the proposed amendment.” Long, 181 F.3d at 1279. 

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22-12991 Opinion of the Court 41

The Long Court explained that “[f ]iling a motion is the proper 

method to request leave to amend a complaint.” Id. We stressed 

that Rule 7(b)(1) provides that “[a]n application to the court for an 

order shall be by motion which, unless made during a hearing or 

trial, shall be made in writing, shall state with particularity the 

grounds therefor, and shall set forth the relief or order sought.” Id.

(quoting Fed. R. Civ. P. 7(b)(1)). We held that “plaintiff had ample 

time to file a motion for leave to amend but failed to do so,” and 

“the district court did not abuse its discretion in denying plaintiff 

leave to amend her complaint.” Id. at 1279-80. 

Our decision in Newton v. Duke Energy Florida, LLC, is also 

instructive. See 895 F.3d 1270, 1277 (11th Cir. 2018). Plaintiffs 

requested leave to amend in their opposition memorandum to 

defendant’s motion to dismiss. Id. This Court held that “the 

request possessed no legal effect for two reasons.” Id. “First, where 

a request for leave to file an amended complaint simply is 

embedded within an opposition memorandum, the issue has not 

been raised properly.” Id. (quotation marks omitted and alterations 

adopted). “Second, a request for a court order must be made by 

motion.” Id. (quotation marks omitted and alterations adopted). 

Citing Rule 7(b), the Newton Court stated the motion must 

(1) “be in writing unless made during a hearing or trial,” (2) “state 

with particularity the grounds for seeking the order,” and (3) “state 

the relief sought.” Id. (quotation marks omitted). Our Court held 

that “[p]laintiffs’ inclusion of the request for leave in their 

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42 Opinion of the Court 22-12991

opposition to a motion to dismiss did not constitute a ‘motion’ and 

thus did not comply with this Rule 7(b) command.” Id. 

As to this “motion” requirement, our Court recently 

affirmed a dismissal without leave to amend, relying on a plaintiff’s 

failure to satisfy the first requirement. Chabad Chayil, Inc. v. Sch. Bd. 

of Mia.-Dade Cnty., 48 F.4th 1222, 1236 (11th Cir. 2022). We held 

that “[w]here a request for leave to file an amended complaint 

simply is imbedded within an opposition memorandum, the issue 

has not been raised properly.” Id. (quotation marks omitted).

That Johnson satisfied the second requirement by filing a 

proposed TAC does not cure his defect as to the first, especially

under the circumstances of this case. On the June 29, 2020 deadline 

for amendments, Johnson filed a standalone motion for leave to file 

his second amended complaint, which was granted. It was a year 

later that Johnson’s proposed TAC was attached to his opposition 

brief and his request for leave to amend came not by motion, but 

only embedded in that brief. We decline to fault the district court 

for not expressly ruling on that embedded request by granting or 

denying it. Rather, we conclude Johnson’s request for leave to 

amend embedded in his opposition brief was not properly before 

the district court. 

Johnson asserts that this first requirement—a motion—is 

only a question of whether the request for leave to amend in his 

brief is “the functional equivalent of a motion for leave to amend.” 

(Quotation marks omitted.) We disagree. As outlined above, our 

precedent is clear that a request for leave to amend embedded in an 

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22-12991 Opinion of the Court 43

opposition memorandum does not properly put the issue before 

the district court. 

Johnson’s two cited cases are not on point. See United States 

v. HPC Healthcare, Inc., 723 F. App’x 783, 793 (11th Cir. 2018); United 

States ex rel. Atkins v. McInteer, 470 F.3d 1350, 1362 (11th Cir. 2006). 

In both cases, the plaintiff did not file a motion, requested leave to 

amend in an opposition brief, and failed to attach a proposed 

amendment or set forth the substance of the proposed 

amendment. HPC Healthcare, Inc., 723 F. App’x at 793; Atkins, 470 

F.3d at 1362. 

These two cases, however, did not analyze the first 

requirement of a motion. They bypassed the first requirement and 

only “assumed” that the plaintiff’s request was the functional 

equivalent of a motion and upheld the district court’s denial of 

leave to amend based on the plaintiff’s failure to comply with the 

second requirement. HPC Healthcare, Inc., 723 F. App’x at 793 

(stating our Court in Atkins “assumed that a request to amend 

included in a response to a motion to dismiss (what [plaintiff] did 

here) is ‘the functional equivalent of a motion’ for leave to 

amend”); Atkins, 470 F.3d at 1362 (“Therefore, assuming that 

Atkins’s request was the functional equivalent of a motion, we 

affirm the district court’s rejection thereof because it failed to 

include the proposed amendment or the substance thereof as 

required by Long.”).

Based on our search, this Court also bypassed the first 

requirement in other cases. See Crawford’s Auto Ctr., Inc. v. State Farm 

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44 Opinion of the Court 22-12991

Mut. Auto. Ins. Co., 945 F.3d 1150, 1163 (11th Cir. 2019) (quoting 

Atkins and “[a]ssuming that [p]laintiffs’ requests amount to ‘the 

functional equivalent of a motion,’” but nonetheless still affirming 

the district court’s rejection thereof because plaintiffs failed to 

include the proposed amendment or the substance thereof ); 

My24HourNews.com, Inc. v. AT&T Corp., 791 F. App’x 788, 803 (11th 

Cir. 2019) (“Even assuming that request was the functional 

equivalent of a motion, [plaintiff] failed to attach the proposed 

amendment or set forth the substance of the proposed 

amendment, as required by Long.”).

At bottom, it was unnecessary in these cases to address the 

first requirement of a motion, where the plaintiff had not satisfied 

the second requirement of attaching a proposed amendment or 

stating the substance of the amendment. The obvious (and easiest) 

route was to rule on only the second requirement. 

Here, we face the opposite situation: the plaintiff did not file 

a motion as required by our precedent and Rule 7(b), but attached 

a proposed TAC. Our precedent sets forth two separate 

requirements, and we must, and should, apply them here. See Long, 

181 F.3d at 1279; Chabad Chayil, Inc., 48 F.4th at 1236; Newton, 895 

F.3d at 1277-78; Cita Tr. Co., 879 F.3d at 1157. Because Johnson 

embedded his request in his opposition brief and did not file a 

motion for leave to amend, Johnson’s request for leave to amend 

was not properly before the district court. 

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22-12991 Opinion of the Court 45

IX. CONCLUSION

In sum, we affirm the district court’s dismissal of Johnson’s 

breach of contract claim premised on the theory Protective (1) had 

a contractual duty to reassess and redetermine, monthly or 

periodically, its COI rates based exclusively on its “expectations as 

to future mortality experience” (2) but never did so “a single time” 

during the Class Period. We affirm that dismissal on two grounds:

(1) the policy did not impose that contractual duty and (2) even if 

Protective had such a contractual duty, Protective was not required 

to redetermine its monthly COI rates based on exclusively its 

“expectations as to future mortality experience.”

We reverse the district court’s dismissal of Johnson’s breach 

of contract claim premised on the alternative theory that 

Protective chose to, and did, reassess, redetermine, and change its 

internal monthly COI rate scale during the Class Period and

violated the policy by ignoring its “expectations as to future 

mortality experience” when it did so. 

Finally, we find no reversible error as to Johnson’s proposed 

third amended complaint because it was not properly before the 

district court. 

AFFIRMED IN PART, REVERSED IN PART, AND 

REMANDED.

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