2011 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

9-21-2011

Monte Freeman v. MML Bay State Life

Precedential or Non-Precedential: Non-Precedential

Docket No. 11-1144

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Recommended Citation

"Monte Freeman v. MML Bay State Life" (2011). 2011 Decisions. Paper 497.

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

 __________

No. 11-1144

__________

MONTE K. FREEMAN, 

o/b/o himself and all others similarly situated,

 Appellant

v.

MML BAY STATE LIFE INSURANCE COMPANY

_________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 2-10-cv-04019)

District Judge: Hon. Jose L. Linares

__________

Argued September 13, 2011

Before: SLOVITER, SCIRICA, and SMITH, Circuit Judges

(Filed: September 21, 2011

__________

Lee R. Anderson, Esq.

Richard M. Paul, III , Esq. (Argued)

Patrick J. Stueve

Stueve Siegel Hanson LLP

460 Nichols Road

Suite 200

Kansas City, MO 64112

Patrick L. Rocco, Esq.

Stone Bonner & Rocco
2

447 Springfield Avenue

2

nd Floor

Summit, NJ 07901

John J. Schirger, Esq.

Miller Schirger

4520 Main Street

Suite 1570

Kansas City, MO 6411

Attorneys for Appellant

Joel S. Feldman, Esq.

Robert B. Hochman, Esq. (Argued)

David B. Johnson, Esq.

Jason M. Adler, Esq.

Sidley Austin

One South Dearborn Street

Chicago, IL 60603

Steven P. Del Mauro, Esq.

Robert L. Ghelli, Esq.

McElroy, Deutsch, Mulvaney & Carpenter

100 Mulberry Street

Three Gateway Center

Newark, NJ 07102

Attorneys for Appellee

__________

OPINION

__________

SLOVITER, Circuit Judge.
3

Monte Freeman appeals from the District Court’s grant of summary judgment in 

favor of MML Bay State Life Insurance Company (“MML”). We will affirm.1

In 2005, the United States District Court for the District of New Jersey approved a 

settlement agreement between MML and a nationwide class of its policy owners that 

included Freeman.2 See Varacallo v. Mass. Mut. Life Ins. Co., 226 F.R.D. 207 (D.N.J. 

2005). In exchange for significant compensation (valued by the District Court at about 

$700 million), class members consented to a broad Release.3 The Release bars Varacallo 

class members from bringing any claim “on the basis of, connected with, arising out of, 

or in any way related to, in whole or in part,” inter alia, the following transactions: “the 

expenses and/or costs (including all expenses, charges, and other deductions) charged or 

to be charged against the Policy or Policies,” the “terms, . . . and operation of any Policy, 

including . . . the amount or method of calculation of fees, charges, commissions, 

distribution costs, administrative expenses, and/or taxes in connection with the sale of, as 

part of the premiums for . . . a Policy,” the “cost of insurance, and administrative charge 

 

1

The District Court had jurisdiction under 28 U.S.C. §§ 1332 and 1367, and we 

have jurisdiction under 28 U.S.C. § 1291. We exercise plenary review of the District 

Court’s grant of summary judgment, and apply the same standard applicable in the 

District Court found in Fed. R. Civ. P. 56. See Doe v. C.A.R.S. Prot. Plus, Inc., 527 F.3d 

358, 362 (3d Cir. 2008).

2

Freeman does not dispute that he was a Varacallo class member, that he received 

notice of the settlement, and that he did not opt out of the settlement. 

3

In agreeing to the settlement, MML did not concede that it had engaged in any 

wrongful conduct. Varacallo, 226 F.R.D. at 217. Moreover, the settlement did not 

require MML to make any changes to any of the released transactions, including its fees 

and the cost of insurance. 
4

practices whether past present or future,” and “the Company’s Policy or premium charges 

and monthly deductions.” App. at 136-39. 

The Release also states that class members “acknowledge that they are aware that 

they may hereafter discover claims presently unknown or unsuspected, or facts in 

addition to or different from those which they now know or believe to be true with 

respect to the Released Transactions or with respect to their Policies.” App. at 143. 

Nevertheless, the Release continues, “it is the intention of . . . the Class Members in 

executing this Release fully, finally, and forever [to] settle, release, discharge, and hold 

harmless all such matters, and all claims relating thereto, which exist, hereafter may exist, 

or might have existed . . . with respect to their Policies . . . .” Id. It is difficult to 

imagine a more comprehensive release. However, the Release cautions that “nothing in 

[the] Release shall be deemed to . . . release a Class Member’s right to assert any claims 

that independently arise from acts, facts, or circumstances arising exclusively after the 

end of the Class Period.” App. at 142; see also Varacallo, 226 F.R.D. at 244 (“Future 

claims for future conduct are not included in the release.”). 

On January 15, 2010, Freeman filed the instant complaint in the District of 

Connecticut, alleging that MML “[b]eginning at or after the commencement of the Policy 

term [in Freeman’s case, 1999] . . . began breaching the terms of the Policy on a monthly 

basis by deducting as mortality charges, amounts unrelated to mortality,” which is 

“inconsistent with its internal mortality tables.” App. at 6. On MML’s motion, the 

Connecticut court transferred the action to the District of New Jersey to determine 

whether the claims are barred by the Varacallo release because that court, having 
5

overseen the Varacallo settlement, “is best equipped to undertake that assessment.” 

Freeman v. MML Bay State Life Ins. Co., No. 3:10-cv-66 (D. Conn. July 15, 2010). 

MML filed a motion for summary judgment on the ground that Freeman’s claims are 

barred by the Varacallo Release, and the District Court granted the same. 

Freeman argues that the present claim is not barred by the Varacallo Release 

because the present claim is not based on the same factual predicate as the claims in the 

Varacallo litigation. The present claim, Freeman contends, involves MML’s breach of 

the express terms of the Policy whereas the Varacallo litigation involved deceptive sales 

practices. Moreover, the present claim includes only actions that fall after the Varacallo

class period (defined as January 1, 1983 to December 31, 2003). Freeman’s arguments 

are unavailing. 

It is settled in this circuit that a class representative can enter into a settlement that 

bars future claims by class members “even though the precluded claim was not presented, 

and could not have been presented, in the class action itself.” In re Prudential Ins. Co. of 

Am. Sales Practice Litig., 261 F.3d 355, 366 (3d Cir. 2001) (citations omitted). This rule 

promotes judicial economy by preventing the relitigation of settled questions resolved in 

comprehensive settlement agreements. Id. The key inquiry is whether the factual 

predicate for future claims is identical to the factual predicate underlying the settlement 

agreement. See TBK Partners Ltd. v. Western Union Corp., 675 F.2d 456, 460 (2d Cir. 

1982), cited with approval in In re Prudential, 261 F.3d at 336. 

In its analysis of that issue, the District Court noted that Freeman’s claim “arises 

out of the same policy that made him a member of the Varacallo class.” Freeman v. 
6

MML Bay State Life Ins. Co., No. 10-4019 (D.N.J. Jan 4, 2011). The plaintiffs’ claims in 

Varacallo included challenges to the administration of policies and the calculation of 

policy charges. The fact that the plaintiffs in Varacallo were challenging different MML 

practices with respect to the policies does not mean that the factual predicates are 

different.4 The settlement does not define the scope of the Release by reference to the 

claims alleged in the Varacallo complaint, but rather, extends to the extensive list of 

released transactions partially recounted supra. Freeman seeks to challenge precisely 

what he is barred from challenging by the Release, to wit, the amount or method of 

calculation of charges. We conclude that Freeman’s present claim arises from the same 

factual predicate as the plaintiffs’ claims in Varacallo. 

It is of no moment that Freeman seeks relief only for charges applied after the 

Varacallo class period. The Release covers claims that could have been alleged at the 

time provided they arise out of, or are in any way related to, the covered transactions. 

Freeman’s complaint alleges that the actions presently complained of (i.e. monthly 

breaches of contract with respect to mortality charges) were occurring as early as 1999, 

which was during the Varacallo class period. Therefore, the instant claim does not fall 

within the Release’s exception that allows class members to assert future claims for acts 

 

4

The Varacallo complaint asserted ten causes of action, including breach of 

express and implied contract and unjust enrichment, that challenged several MML 

practices including “improper practices in marketing, selling, servicing, and 

administering permanent and term life insurance as well as disability income insurance 

policies.” Varacallo, 226 F.R.D. at 216. Despite the breadth of the Varacallo complaint, 

MML concedes that the Varacallo complaint did not specifically allege that MML was 

deducting as mortality charges amounts unrelated to mortality. 
7

“arising exclusively after the end of the Class Period.” App. at 142. It follows that 

Freeman cannot plead around the broad Release negotiated in the comprehensive 

settlement merely by asserting that some facts associated with his claim occurred outside 

of the class period.5 Freeman has provided no compelling reason to reverse the District 

Court, the same court that oversaw the comprehensive settlement and that is therefore in 

the best position to interpret the scope of the Release. 

For the foregoing reasons, we will affirm the order of the District Court.

 

5

Freeman misplaces reliance on Hesse v. Sprint Corp., 598 F.3d 581 (9th Cir.

2010), and Stephenson v. Dow Chem. Co., 273 F.3d 249 (2d Cir. 2001). In Hesse and 

Stephenson, the courts concluded that due process precludes a class action settlement 

from barring subsequent claims on behalf of class members where a conflict of interest

prevented the named plaintiffs from adequately representing class members. Hesse, 598 

F.3d at 589; Stephenson, 273 F.3d at 260-61. By contrast, Freeman has not alleged any 

conflict of interest on the part of the Varacallo plaintiffs or any other reason that their 

representation was inadequate. Likewise, In re Conseco Life Ins. Co. Cost of Ins. 

Litigation, No. ML 04-1610, 2005 WL 5678842 (C.D. Cal. Apr. 26, 2005), does not help 

Freeman. The court there concluded that the plaintiff’s claims were not based on the 

same factual predicate as the class settlement because, unlike the instant case, the 

defendants’ actions “first occurred years after the . . . settlement.” Id. at *7. Cf. Ross v. 

Metro. Life Ins. Co., 411 F. Supp. 2d 571, 578 n.3 (W.D. Pa. 2006) (holding plaintiff’s 

claim barred under prior settlement because defendant’s actions challenged by the 

plaintiff were also occurring during class period).