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Waskul v. Metropolitan Life Insurance Company

United States District Court, E.D. Michigan, Southern Division

July 31, 2018

Carl Waskul, Plaintiff,
Metropolitan Life Insurance Company, Defendant.


          Sean F. Cox United States District Court Judge

         Plaintiff had a long-term care insurance policy with Defendant. But when his children sought a coverage determination on the policy, Defendant informed them that the policy had been terminated. So, Plaintiff sued Defendant, alleging breach of contract, fraudulent misrepresentation, and a statutory claim. Defendant has moved to dismiss and Plaintiff, in turn, seeks leave to amend his complaint.

         For the reasons below, the Court shall grant Plaintiff's motion for leave to amend. The Court shall also grant Defendant's motion to dismiss in part and deny it in part. The Court shall deny the motion to dismiss as to the breach of contract claim, but it shall grant the motion to dismiss as to the fraudulent misrepresentation and statutory claims.


         Plaintiff Carl Waskul initially filed this suit in state court against Defendant Metropolitan Life Insurance Company. Defendant then removed the case to this Court (Doc. # 1) and, on January 12, 2018, moved to dismiss under Rule 12(b)(6) (Doc. # 3). On February 5, 2018, Plaintiff responded to Defendant's motion (Doc. # 6). That same day, he also moved for leave to file an amended complaint, which he attached to his motion (Doc. # 7). Defendant opposed the motion for leave to amend, arguing that it would be futile (Doc. # 11). The Court held a hearing on these motions on July 12, 2018.

         Because Plaintiff seeks leave to amend his complaint, the Court shall consider the facts as alleged in his proposed complaint. That way, the Court can assess whether leave to amend would be futile, see Benzon v. Morgan Stanley Distributors, Inc., 420 F.3d 598, 613 (6th Cir. 2005) (noting that although leave to amend “shall be freely given when justice so requires, ” denial may be appropriate if the amendment is futile), in which case Defendant's Motion to Dismiss should be granted. See Riverview Health Institute LLC v. Med. Mut. of Ohio, 601 F.3d 505, 512 (6th Cir. 2010) (“A proposed amendment is futile if the amendment could not withstand a Rule 12(b)(6) motion to dismiss.”). If not, leave to amend should be granted. Thus, the Court relies on the facts set forth in Plaintiff's proposed first amended complaint (Doc. # 7, Ex. 2).

         In 1996, Plaintiff purchased a long-term care insurance contract from Defendant.[1]Proposed Amended Complaint, ¶ 7. The coverage included Plaintiff's expenses for nursing home care, capped at $200 per day, and a maximum lifetime benefit of $511, 000. Id. at ¶ 11. The policy was Guaranteed Renewable, meaning Plaintiff merely had to pay the premiums to keep the policy in force and that Defendant could not cancel the policy. Id. at ¶ 8. Plaintiff paid his premiums for more than 19 years. Id. at ¶ 9.

         In March 2003, Plaintiff designated his son William as his “Lapse Designee” to receive notice of lapse or termination of the policy for non-payment of premium. Id. at ¶ 12. The Lapse Designee Form stated:

If you elect this option, TIAA-CREF life will notify the person you designate that your policy is in danger of lapsing due to lack of premium payment. When this option is chosen, TIAA-CREF life will extend your 31-day grace period by an additional 30 days from the date we notify your designee about the potential lapse of your policy. We will not extend your grace period unless you elect this option.
I understand that I have the right to designate at least one person other than myself to receive notice of lapse or termination of this long-term care insurance policy for nonpayment of premium. I understand that notice will not be given until 30 days after a premium is due and unpaid.

         Later, in June 2014, Plaintiff authorized Defendant to disclose personal information to William and his son Terrance. The Disclosure Authorization provided:

I hereby authorize Metropolitan Life Insurance Company (“MetLife”) to disclose my personal heath information (including demographic, billing, claim, and plan information) about my MetLife long-term care insurance to the person(s) listed below to allow that person(s) to assist me in matters related to my insurance coverage.

         Plaintiff alleges that, through this form, he designated William and his son Terrance as his powers of attorney as to the policy. Id. at ¶ 13.

         On August 8, 2015, Plaintiff was diagnosed as cognitively impaired. Id. at ΒΆ 14. Three days later, he completed an application for admission into an assisted living long-term care ...

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