Opinion ID: 4536657
Heading Depth: 3
Heading Rank: 2

Heading: Pre-Settlement Policy Administration

Text: Finally, we address TVPX’s argument that the PSPA expressly reserved its claims by requiring Genworth to “administer a Class Member’s Class Policy in accordance with the terms of such policy.” TVPX’s reading of this clause—as preserving a class member’s right to sue Genworth for any alleged breach of its universal life policy—is a strained one. We conclude instead that the PSPA merely preserves Genworth’s right to administer its policies in the same manner as it had before the McBride settlement. As part of a settlement agreement, a party may expressly reserve the right to sue on a particular claim in the future. Cf. Norfolk S. Corp. v. Chevron, U.S.A., Inc., 371 F.3d 1285, 1290 (11th Cir. 2004). In determining whether such a 6 Genworth claims TVPX failed to preserve its argument that discovery was needed before the District Court could find that Genworth’s COI-related conduct had remained unchanged. This argument fails for at least a couple of reasons. During oral argument before the District Court on Genworth’s motion to enforce, TVPX said that any finding on whether Genworth was handling COI charges in the same manner now as they did before was “at worst . . . a factual dispute . . . that cannot be decided on the pleadings.” Nor are we persuaded by Genworth’s argument that remand is unwarranted because TVPX did not formally move for discovery in the District Court. Res judicata is an affirmative defense under Federal Rule of Civil Procedure 8. Concordia, 693 F.2d at 1075. The burden to seek discovery on this topic therefore would have been on Genworth, as the moving party, rather than TVPX. See In re Piper Aircraft Corp., 244 F.3d 1289, 1296 (11th Cir. 2001) (“At all times the burden is on the party asserting res judicata . . . .”). 18 Case: 19-11178 Date Filed: 05/26/2020 Page: 19 of 21 reservation has been made, we interpret the settlement agreement according to traditional principles of contract law. Id. at 1289–90. Here, the McBride parties agreed that their settlement would be interpreted under Virginia law. Under Virginia rules of contract interpretation, contract terms are read in context, see Babcock & Wilcox Co. v. Areva NP, Inc., 788 S.E.2d 237, 244 (Va. 2016), and courts must attempt to give effect to the entire contract, see Condo. Servs., Inc. v. First Owners’ Ass’n of Forty Six Hundred Condo., Inc., 709 S.E.2d 163, 170 (Va. 2011). TVPX’s proposed construction of the PSPA violates these basic principles of contract interpretation. If, as TVPX claims, the PSPA reserves a class member’s right to sue Genworth for any alleged policy violation, the PSPA would render much of the McBride release inoperable. Under TVPX’s interpretation, class members could sue Genworth for the precise policy violations at issue in McBride, so long as those alleged violations continued beyond the date of the McBride settlement agreement. This is directly at odds with the settlement’s release of all “past, present and future” causes of action related to Genworth’s administration of its policies. Beyond that, TVPX reads the phrase, “in accordance with the terms of such policy,” out of context. The PSPA provides that Genworth will “administer a Class Member’s Class Policy in the same manner that [it] administered flexible 19 Case: 19-11178 Date Filed: 05/26/2020 Page: 20 of 21 premium adjustable life insurance policies prior to the settlement.” This means, “[i]n particular,” that Genworth will “administer a Class Member’s Class Policy in accordance with the terms of such policy and in accordance with [Genworth]’s interpretation of that policy’s provisions, such that the policy will stay in force only so long as the Class Policy’s cash value . . . is sufficient to cover the monthly deductions . . . , and that a Class Member may have to pay [higher or more frequent] premiums” than “the Class Member was paying or expected to pay in order to keep his/her Class Policy from lapsing.” To the extent the PSPA says Genworth will administer policies “in accordance with the terms of such policy,” the rest of the PSPA makes clear that those “terms” refer to Genworth’s right to continue charging monthly deductions and to lapse a policy if the policyholder does not cover the monthly deductions. Whether Genworth was permitted to impose monthly deductions on its policyholders (and whether the failure to pay those deductions would result in the cancellation of a policy) was a central dispute in McBride, and the PSPA appears to resolve it in Genworth’s favor. When read in its entirety, therefore, the PSPA does not constitute a preservation of rights, but instead clarifies that Genworth may continue administering its policies in the same manner that it did before the settlement. 20 Case: 19-11178 Date Filed: 05/26/2020 Page: 21 of 21