Stockbroker Law - Wednesday, October 24, 2018
Class Action Lead Plaintiff is Successful in Thwarting Effort of Massachusetts Mutual Seeking to Dismiss Claims

Plaintiff is Successful in Thwarting Effort of Massachusetts Mutual Seeking to Dismiss Claims

Several years ago, a spry retiree walked into our law offices insisting that Mass Mutual had defaulted on the guaranteed rate set forth in his annuity contract.  Our first thought was - "Yeah, right."

We just survived a Motion for Summary Judgment and the class certification hearing on this issue in a case venued in the United Stated District Court for the District of Massachusetts is set for November 28th.  In an Order dated September 25, 2018 (Aronstein v. Mass Mutual Case #: 3:15-cv-12864-MGM) the court noted:

..."Defendant itself acknowledged, prior to approving the endorsement, that modifying the Guaranteed Minimum Interest Rate in this manner would be "[c]onfusing to the customer" because "[t]he schedule page would list the minimum rate at 3.0% with the endorsement counteracting with a lower rate"...

Fortunately, from a monetary recovery perspective, the breach of contract cause of action survived.

The Order on the motion also includes a textbook analysis of respective summary judgment and conflicts of law concepts, with the Court deciding that the plaintiff's contractual claims are viable, given the interplay of Massachusetts and New York State Law:

...Here, the court concludes New York has "a more significant relationship to the parties and the... claim," and applying the Massachusetts statute of limitations would "seriously impinge upon" New York's interest. Id. at 292-93...

...New York's "interest in the timeliness of [this claim] is more compelling" than the "general interest" of Massachusetts arising out of Defendant's actions in this state...

...In short, New York "has the dominant interest in having its own limitations statute enforced," id. at 294, and Count II is clearly untimely under New York law.

When the elderly client first showed up in my offices, I was amazed at how such a large insurance company could confuse such a customer with purported minimum guaranteed annuity payouts touted in sales materials, as well as in the body of the main contract, while seeking to alter the guaranteed minimum interest rate in an unpaginated endorsement, floating in the back of the subsequently delivered contract.

The moral of the story?  If you take the time to listen to a potential client and read through an annuity contract and the accompanying sales materials, you might just find a viable plaintiff's case to help your client.


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