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Woods v. Liberty National Life Insurance Co.

United States District Court, N.D. Alabama

January 4, 2018

SUE S. WOODS, et al, Plaintiffs,
v.
LIBERTY NATIONAL LIFE INSURANCE COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

          VIRGINIA EMERSON HOPKINS UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         On August 10, 1987, Sue Woods and her husband, Fred Woods[1], purchased policy number 027835793 (the “Policy”), a cancer policy, from Liberty National Life Insurance Company (“Liberty National”). The Plaintiffs claim that the agent who sold them the Policy

represented to Fred prior to the Plaintiffs' purchase of the Policy in 1987 that [the Policy] would cover all costs and expenses arising out of any cancer suffered by Sue after the Policy's inception. Amongst other things, the agent specifically told Fred that the cancer policy the Plaintiffs were purchasing would cover anything Sue and Fred needed it to cover pertaining to any cancer suffered by Sue in the future.

(Doc. 1-1, at 5, ¶11). The Plaintiffs allege that Fred relayed this information to Sue, and that, based on the agent's representations, Sue and Fred then decided to purchase the policy.

         In February 2015, Sue was diagnosed with cancer. The Plaintiffs contend that Liberty National has failed to live up to its promise to pay “anything Sue and Fred needed it to cover pertaining to any cancer suffered by Sue in the future.” On August 9, 2017, they filed suit against Liberty National and various “fictitious defendants” in the Circuit Court of Calhoun County, Alabama. (Doc. 1-1). The Complaint alleges that Liberty National is liable for: breach of contract (Count One); fraud (Counts Three, Four, Five); deceit (Count Six); and promissory fraud (Count Seven). The Complaint alleges that the fictitious defendants are liable for breach of contract (Count Two); fraud (Counts Eight, Nine, and Ten); deceit (Count Eleven); and promissory fraud (Count Twelve). As to both Liberty National and the fictitious defendants, the Complaint also sets out a claim for rescission. (Count Thirteen). On September 15, 2017, Liberty National removed the action to this Court. (Doc. 1).

         The case comes before the Court on Liberty National's Partial Motion To Dismiss (the “Motion”) pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. 8). For the reasons stated herein, the motion will be GRANTED.

         II.ANALYSIS[2]

         A. Fictitious Party Practice

         Liberty National “moves this Court to dismiss all counts not directed against Liberty National as there is no fictitious party practice in federal court.” (Doc. 8 at 2).

         The Eleventh Circuit has stated:

As a general matter, fictitious-party pleading is not permitted in federal court. See, e.g., New v. Sports & Recreation, Inc., 114 F.3d 1092, 1094 n. 1 (11th Cir.1997). We have created a limited exception to this rule when the plaintiff's description of the defendant is so specific as to be “at the very worst, surplusage.” Dean v. Barber, 951 F.2d 1210, 1215-16 (11th Cir.1992).

Richardson v. Johnson, 598 F.3d 734, 738 (11th Cir. 2010). The Plaintiffs concede that Count Two of the Complaint is due to be dismissed because it “does not state a claim against a specific real party using a specific name.” (Doc. 9 at 16, n. 4). Accordingly, Count Two will be dismissed.

         The Plaintiffs argue that the remaining counts, to the extent directed towards the name of “the specific agent [who] sold them the subject policy, ” should not be dismissed, because this fictitious party is specifically described. (Doc. 9 at 16; see also doc. 9 at 17).[3] The Court agrees to the extent that the Complaint describes all persons who “acted as an agent or agency for any named or fictitiously named Defendant herein in the sale of the insurance policy” (doc. 1-1 at 4, ¶5), otherwise identified as “Fictitious Defendants ‘G, ' ‘H, ' and ‘I'” (doc. 1-1 at 4, ¶5).[4]

         B. The Rule of Repose

         The Eleventh Circuit has written:

“Alabama's judicially created rule of repose serves to bar claims that arise out of events that are more than twenty years old. Ex parte Grubbs, 542 So.2d 927, 930-31 (Ala.1989). Alabama's rule of repose “ ‘is similar to a statute of limitations, but [is] not dependent upon one, ' ” and has a greater breadth than any such statute. McDurmont v. Crenshaw, 489 So.2d 550, 552 (Ala.1986) (quoting Boshell v. Keith, 418 So.2d 89, 91 (Ala.1982)). Unlike a statute of limitations, “the only element of the rule of repose is time.” Boshell, 418 So.2d at 91. “[The rule of repose] is not affected by the circumstances of the situation, by personal disabilities, or by whether prejudice has resulted or evidence obscured.” Id. There is some debate in Alabama law concerning the types of claims to which the doctrine is applicable. It is unclear, for example, whether the rule applies to personal injury actions. Spain v. Brown & Williamson Tobacco Corp., 230 F.3d 1300, 1307 (11th Cir.2000) (acknowledging uncertainty about the scope of actions to which the rule of repose applies). However, it is clear that any claim in Alabama courts, brought more than twenty years after the time when it first could have been, is barred if the rule of repose applies. Boshell, 418 So.2d at 91. The Alabama Supreme Court articulated the rationale for the rule as follows:
As a matter of public policy ... it has long been the settled policy of this state ... that antiquated demands will not be considered by the courts.... It is necessary for the peace and security of society that there should be an end of litigation, and it is inequitable to allow those who have slept upon their rights for a period of 20 years ... to demand an accounting.”

Moore v. Liberty Nat. Life Ins. Co., 267 F.3d 1209, 1213-14 (11th Cir. 2001) (quoting Snodgrass v. Snodgrass, 176 Ala. 276, 58 So. 201, 201-02 (Ala.1912)). “The rule of repose begins running on a claim as soon as all of the essential elements of that claim coexist so that the plaintiff could validly file suit.” Am. Gen. Life & Acc. Ins. Co. v. Underwood, 886 So.2d 807, 812 (Ala. 2004) (citing Spain v. Brown & WilliamsonTobacco Corp., 872 So.2d 101, 129 (2003) (Johnstone, J., writing specially)). “If aplaintiff's actual injury resulting from a tort is the payment of premiums for aninsurance policy, the payment of the first premium for the policy establishes the elementof damage essential to a claim for the tort.” Underwood, 886 So.2d ...


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