The opinion of the court was delivered by: Wolfson, United States District Judge:
After the Court denied a motion to dismiss filed by defendants, Yoel Schwarz and Ernst Schwarz ("Defendants") as trustees of the Valeria Schwarz Irrevocable Life Insurance Trust (the "Trust"), Defendants answered the Amended Complaint asserting substantive defenses and brought counterclaims against Plaintiff Lincoln National Life Insurance Company ("Plaintiff" or "Lincoln"). Specifically, Defendants assert a counterclaim for (1) breach of contract; (2) fraud/bad faith; and (3) violation of the New York General Business Law § 349. In this matter, Plaintiff moves to dismiss these counterclaims. For the reasons set forth below, Plaintiff's motion is granted.
For the purposes of this motion, the Court will construe the parties' pleadings as true. Plaintiff alleges that beginning in approximately May 2006, the Trust and others, executed a plan, scheme, or design to procure insurance on the life of Valeria Schwarz (now deceased) for the benefit of stranger investors. See Am. Compl., ¶ 2. According to Plaintiff, it was unware of Defendants' alleged illegal conduct and thus, Plaintiff issued two life insurance policies (the "Policies") to insure the life of Ms. Schwarz. Plaintiff alleges these policies were not sought by Ms. Schwarz to meet legitimate insurance needs, but rather, constitute illegal wagering contracts. Id. As the Court explained in its previous Opinion denying Defendants' motion to dismiss the Amended Complaint, at the heart of Plaintiff's case is the legality of stranger-owned life insurance policies, also known as "STOLI" plans.*fn1 Plaintiff seeks to void the Policies based on the fact that they are illegal and fraudulent and that they lack an insurable interest. Id. at ¶¶ 2-3.
In its Complaint, Plaintiff (1) seeks a declaratory judgment that the Policies lacked an insurable interest; (2) asserts that Defendants committed common law fraud; and (3) asserts that Defendants violated the New Jersey Insurance Fraud Act. Thereafter, Defendants moved to dismiss the Complaint and the Court denied the motion. Defendants then answered the Complaint and asserted three counterclaims against Plaintiff: (1) breach of the insurance contracts; (2) fraud/bad faith; and (3) violation of the New York General Business Law Section 349. The allegations of these counts will be discussed more fully below. In the instant matter, Plaintiff moves to dismiss these counterclaims.
The Federal Rules of Civil Procedure provide that a complaint "shall contain (1) a short and plain statement of the grounds upon which the court's jurisdiction depends ... (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks." Fed. R. Civ. P. 8(a). The purpose of a complaint is "to inform the opposing party and the court of the nature of the claims and defenses being asserted by the pleader and, in the case of an affirmative pleading, the relief being demanded." 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1182 (3d ed. 2004).
In reviewing a motion to dismiss for failure to state a claim under 12(b)(6), a court must take all allegations in the complaint as true, viewed in the light most favorable to the plaintiff "and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (citation and quotations omitted). In Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007), the Supreme Court "retired" the language in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Twombly, 550 U.S. at 561 (quoting Conley, 355 U.S. at 45-46). Rather, the factual allegations in a complaint "must be enough to raise a right to relief above the speculative level." Id. at 555. The Third Circuit summarized the pleading requirement post-Twombly:
The Supreme Court's Twombly formulation of the pleading standard can be summed up thus: 'stating ... a claim requires a complaint with enough factual matter (taken as true) to suggest 'the required element.' This 'does not impose a probability requirement at the pleading stage,' but instead 'simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of 'the necessary element.'
Phillips, 515 F.3d at 234 (quoting Twombly, 550 U.S. at 556).
In affirming that the Twombly standard applies to all motions to dismiss, the Supreme Court recently further clarified the 12(b)(6) standard. "First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). "Second, only a complaint that states a plausible claim for relief survives a motion to dismiss." Iqbal, 129 S.Ct. at 1950. Accordingly, "a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. In short, "a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to 'show' such an entitlement with its facts." Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009).
The Third Circuit recently reiterated that "judging the sufficiency of a pleading is a context-dependent exercise" and "[s]ome claims require more factual explication than others to state a plausible claim for relief." West Penn Allegheny Health System, Inc. v. UPMC, 627 F.3d 85, 98 (3d Cir. 2010). This means that, "[f]or example, it generally takes fewer factual allegations to state a claim for simple battery than to state a claim for antitrust conspiracy." Id. That said, the Rule 8 ...