Opinion ID: 77633
Heading Depth: 3
Heading Rank: 3

Heading: The Gerald Metoyer Policy Issued by Jefferson Pilot

Text: 79 Gerald Metoyer, a California resident, applied for a $1.5 million life insurance policy from Jefferson Pilot on February 13, 1999. He signed the application in California. A query on the insurance application asked whether he had been diagnosed or treated within the past seven years for either AIDS, an AIDS-related complex, or HIV. Metoyer responded no. Metoyer also denied ever being treated for cancer in response to another query on the application. 80 According to count X of the insurers' complaint, doctors had diagnosed Metoyer with both HIV and cancer in 1993. Metoyer submitted to medical tests and blood tests as part of the application process, but the tests did not disclose evidence of either condition. Jefferson Pilot argued that Metoyer most likely enlisted the aid of an impostor when it came time to take these tests. Jefferson Pilot did not allege further details of how Metoyer managed to accomplish this fraud or identify the impostor who stood in for him during the medical tests. 81 On February 25, 1999, Jefferson Pilot issued Metoyer a $1 million policy on his life. Thereafter, Metoyer asked to raise the policy limits closer to $2 million, and on April 18, 1999, Jefferson Pilot complied, raising the coverage to $1.5 million. The policy contained a two-year incontestability clause, in keeping with the California Insurance Code, which requires that: 82 An individual life insurance policy delivered or issued for delivery in this state shall contain a provision that it is incontestable after it has been in force, during the lifetime of the insured, for a period of not more than two years after its date of issue. 83 Cal. Ins.Code § 10113.5(a) (1999). Metoyer assigned his policy to VBLLC on May 6, 2002. VSI began to service the policy shortly thereafter, paying regular premiums to ensure that it remained in force and submitting change of ownership/beneficiary notices. The receivership entities did not submit any claims for benefits under the policy as Metoyer is still alive. Nevertheless, on March 15, 2005, Jefferson Pilot asked the court to declare that the policy was void ab initio to relieve the company from its future obligations on the policy. At this point in time, the policy had been in effect for six years and the contestability period had lapsed four years earlier. 84 Under California law, once the contestability period has expired on a life insurance policy, an insurance company can no longer contest the policy for reasons of fraudulent procurement. Amex Life Assurance Co. v. Superior Court, 14 Cal.4th 1231, 1233-34, 60 Cal.Rptr.2d 898, 930 P.2d 1264, 1265 (1997). The contestability period on the Metoyer claim expired on February 25, 2001. The insurers contended in their brief that California amended its insurance code in 1998, the year that Jefferson Pilot issued the Metoyer policy, to allow challenges to policies in cases where the policies had been procured with the aid of impostors. 85 The pertinent provision only applies, however, if photographic identification is presented during the application process, and if an impostor is substituted for a named insured in any part of the application process. Cal. Ins.Code § 10113.5(b)(1) (1999). In such cases, the California Insurance Code states that any purported insurance contract is void from its inception. Id. The record does not indicate whether Jefferson Pilot required that Metoyer present photographic identification during the application process. Jefferson Pilot merely alleges that Metoyer likely made use of an impostor to obtain the medical results that he did, which made him appear AIDS and cancer-free at the time he applied for life insurance. 86 The district court found that the plaintiffs had alleged sufficient facts to show why the incontestability clause should not apply in the case of the Metoyer policy. Final Order of Dismissal and Order Denying All Pending Motions As Moot, August 15, 2005, at 8 n.7. We do not know which facts the court was alluding to in this footnote. California law on incontestability clauses does provide a limited exception for fraud in cases where an impostor is used. However, it simply is not clear whether this exception applies in Jefferson Pilot's case because Jefferson Pilot has failed to provide the necessary details of the alleged fraud. 87 Accordingly, we make no finding as to whether the incontestability clause applies to bar Jefferson Pilot's fraud claims. Nevertheless, we do agree with the district court that Jefferson Pilot's fraud claims suffer from a more basic problem — failure to plead fraud with particularity — and this deficiency provides grounds for dismissal. As we noted in Cooper v. Blue Cross & Blue Shield of Fla., Inc., 19 F.3d 562, 568 (11th Cir.1994), the plaintiff's complaint must allege the details of the defendants' allegedly fraudulent acts, when they occurred, and who engaged in them. Jefferson Pilot's allegations do not satisfy this requirement since they fail to allege unequivocally that an impostor stood in for Metoyer when it came time to submit to medical exams, when this fraud occurred, or what involvement the receivership entities had in perpetrating or perpetuating this fraud ( see infra ). 88 Accordingly, we affirm the district court's decision to dismiss Jefferson Pilot's claim for a declaratory judgment that the Metoyer policy was void ab initio (count XV). We do so because Jefferson Pilot presented only general conclusory allegations of fraud and conjecture on the use of an impostor. Such general conclusory allegations do not conform to the heightened pleading requirements for fraud claims. See Fed.R.Civ.P. 9(b). 89 Jefferson Pilot's remaining fraud claims — the aiding and abetting claim (count XII) and the conspiracy to commit fraud claim (count XI) — suffer from the same deficiency. As the district court noted in its dismissal order, Jefferson Pilot failed to allege any facts that would show how the receivership entities assisted Metoyer to file a fraudulent insurance application. Thus, Jefferson Pilot's aiding and abetting claim also fails to conform to the requirements of Rule 9(b) of the Federal Rules of Civil Procedure. And, as the district court noted, where a conspiracy claim alleges that two or more parties agreed to commit fraud, the plaintiff must also plead this act with specificity. Jefferson Pilot did not do so in this case and consequently, failed to make out a valid claim for conspiracy to commit fraud. Accordingly, we affirm the district court's decision to dismiss these two claims. 90 Jefferson Pilot also asserted two RICO claims against the receivership entities pursuant to section 1962(c) and (d) of Title 18 of the U.S.Code. Section 1962(c) makes it unlawful for anyone employed by or associated with an enterprise affecting interstate or foreign commerce to conduct the enterprise's affairs through a pattern of racketeering activity. Section 1962(d) makes it unlawful to conspire to violate section 1962(c). 91 Section 1961(1)(a) and (b) of the RICO statute provides a list of crimes or threats that constitute an act of racketeering for the purposes of section 1962(c). The list includes major crimes such as murder, arson, etc. that are chargeable under State law and punishable by imprisonment of more than a year, and crimes that are indictable under various sections of the United States Code, such as the mail fraud statute. To assert a pattern of racketeering activity, a plaintiff must allege that the defendant engaged in at least two discrete acts from the preceding list of predicate acts. 18 U.S.C. § 1961(5). 92 Jefferson Pilot based its RICO claims (counts XIII and XIV) on two predicate acts of mail fraud. The district court did not provide a reason for dismissing these two claims, but, and as we have noted above, the district court justifiably decried Jefferson Pilot's other fraud allegations for their lack of specificity. Thus, the court could have properly concluded that Jefferson Pilot failed to plead the predicate acts of mail fraud with the particularity required under Rule 9(b) of the Federal Rules of Civil Procedure. Jefferson Pilot's mail fraud allegations suffer from an additional deficiency, however. 93 Under the mail fraud statute, a plaintiff must allege a scheme to defraud where some type of deceptive conduct occurred. Pelletier v. Zweifel, 921 F.2d 1465, 1500 (11th Cir.1991). Jefferson Pilot did not allege that the receivership entities made any affirmative misrepresentations in these mailings. Rather, it seemed to suggest that the receivership entities engaged in a scheme to defraud the insurer because they failed to disclose what they learned in the process of acquiring the Metoyer policy. 94 We have stated that nondisclosure of material information can constitute a violation of the mail and wire fraud statutes where a defendant has a duty to disclose either by statute or otherwise. McCulloch v. PNC Bank Inc., 298 F.3d 1217, 1225 (11th Cir.2002). However, as the district court noted in its order to dismiss, if the insurers intended to assert a claim for fraudulent concealment, or nondisclosure, they needed to plead that the receivership entities had a duty to disclose. Jefferson Pilot did not do so in the amended complaint. Accordingly, it failed to state a claim upon which relief can be granted and we affirm the district court's dismissal of Jefferson Pilot's RICO claims for this reason.