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Dilworth v. Metropolitan Life Insurance Co.

August 12, 2005

ADRIENNE DILWORTH
v.
METROPOLITAN LIFE INSURANCE COMPANY



On Appeal from the United States District Court for the Western District of Pennsylvania. (D.C. No. 01-00128). District Judge: Honorable Honorable Donetta W. Ambrose.

The opinion of the court was delivered by: Greenberg, Circuit Judge.

PRECEDENTIAL

Argued June 2, 2005

Before: FUENTES, GREENBERG, and COWEN, Circuit Judges.

OPINION

I. INTRODUCTION

This matter arises from a dispute regarding alleged misrepresentations made to the plaintiff-appellant, Adrienne Dilworth, when she purchased a life insurance policy from the Metropolitan Life Insurance Company (hereinafter called "MetLife") to insure her nine-year old daughter, Aisha Sharif. In particular, Dilworth asserted claims predicated on negligence, common law fraud and deceit, violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, Pa. Stat. Ann. tit. 73, § 201-1 (West 1993) (hereinafter called "UTPCPL"), breach of the implied covenant of good faith and fair dealing, bad faith under 42 Pa. Cons. Stat. Ann. § 8371 (West 1998), and breach of fiduciary duty.*fn1 The district court on MetLife's motion under Federal Rule of Civil Procedure 12(b)(6) dismissed Dilworth's claims for breach of the implied covenant of good faith and fair dealing, bad faith, and breach of fiduciary duty. Inasmuch as Dilworth has not appealed from the order of dismissal of those claims, we are not concerned with them on this appeal. Accordingly, at this point Dilworth's claims are for negligence and fraud and deceit, thus sounding in tort, or are statutory under the UTPCPL.

Subsequently, MetLife moved for summary judgment and the court granted that motion by an order entered April 6, 2004. Dilworth then moved for reconsideration of the order for summary judgment but the court denied that motion by an order entered on May 10, 2004. The court's bases for granting MetLife summary judgment were that the statute of limitations barred all of Dilworth's claims remaining after the Rule 12(b)(6) dismissal, except those under the UTPCPL, as her causes of action on the barred counts accrued when MetLife delivered the policy more than two years before she brought this case. In reaching this conclusion the court rejected Dilworth's argument that the discovery rule saved her claims. The court then held that the UTPCPL claim failed on the merits as she had not relied justifiably on MetLife's misrepresentations when she purchased the policy.*fn2 Dilworth appeals from these two orders. For the reasons we set forth below we will reverse the orders of April 6, 2004, and May 10, 2004, and will remand the case to the district court for trial.

The circumstances leading to this litigation may be traced to November 1, 1991, when Dilworth met with Haisela Dorsey, a MetLife agent, regarding the purchase of a life insurance policy insuring the life of her daughter.*fn3 Dorsey had a close relationship to Dilworth as she was Dilworth's sister's best friend. On that same day, Dilworth signed an application for life insurance insuring her daughter. Metlife subsequently issued the policy which provided for a face amount of $75,000 and required monthly premium payments of $39.75. MetLife delivered the policy on December 14, 1991, to Dilworth who did not read it in detail but instead merely "skimmed" it.*fn4 App. at 255, 257, 258.

Dilworth asserts that she believed that she was purchasing a life-insurance policy requiring a minimal number of out-of-pocket cash payments. She alleges that Dorsey, the MetLife sales agent, represented that the policy would require her to make premium payments for only nine years because after that period the remaining premium payments would be fully funded. The policy was said to "self-fund" through the use of accrued dividends, accumulated cash value, and interest. Policies with such provisions commonly are referred to as "vanishing premium" policies. Thus, Dilworth contends that it was her understanding that "after nine, close to ten years, I wouldn't have to pay anything else into it." App. at 250-51.

In our experience defendants and their agents usually contest the factual predicate underlying claims similar to those Dilworth asserts. While MetLife may take that position at the trial, this case nevertheless is unusual in that Dorsey, the MetLife sales agent, acknowledged in her deposition that she had characterized the policy to Dilworth as self-funding.*fn5 Thus, Dorsey stated in her deposition that:

The way it was supposed to be, it was an Accelerated Payment Plan to be paid up in ten years. She bought it to have college money for her daughter. And she bought it somewhere in '90, so by the year 2000 it was supposed to be paid up and then collect dividends.

It wasn't anything like she was to get monthly dividend payments, no. It was to be a ten-year policy that would be paid up in ten years, and that there would be dividends -- by the time [the daughter] was 95, [the daughter] was supposed to have millions of dollars, and she was supposed to be able to collect the money before death, because at 95, they can declare you legally dead, if she wanted to get the other part.

App. at 445. In the circumstances, we regard it as clear for purposes of this appeal that Dorsey misled Dilworth. We also regard it as established at this time that MetLife was hardly an innocent party in Dorsey's conduct for she testified that MetLife instructed her to inform her customers that the life insurance policies were ...


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