Key Discovery Rule Decision in Aronstein v. Massachusetts Mutual
In a Decision handed down on April 22, 2016, the Honorable Mark G. Mastroianni, United States District Judge, for the District of Massachusetts, upheld the right of an investor, in a class action lawsuit against Massachusetts Mutual Life Insurance Company, to proceed with his underlying claims sounding in fraudulent misrepresentation. A careful and detailed analysis in the Decision noted that “[p]laintiff receives the benefit of the discovery rule under the laws of both states, with Massachusetts Law giving him three years from the date of reasonable discovery and New York Law giving him two years from that date.”
The Decision also determined that the marketing materials which the plaintiff received prior to purchasing his annuity indicated a minimum guaranteed interest rate of 3%, whereas an endorsement appended to the back of the contract sought to change the guaranteed interest rate to 1.5% noting:
“[it] is plausible that a reasonable person would have viewed the single sheet of paper mixed in with the rest of the documentation as ambiguous in light of the marketing materials, the rest of the documentation and the actual performance of the annuity”, also noting “[t]he clash between the marketing materials and the certificate package, on the one hand, and the single sheet of paper containing the endorsement, on the other hand, created an ambiguity that was entirely of defendant’s making. This ambiguity was not necessarily dissolved by the brief nature of the endorsement, because the endorsement remained at odds with the rest of the documentation in defendant’s marketing materials.”
The Court went on to note:
“This relatively small difference, combined with the fact that the annual statements did not explicitly state the interest rate and instead required consumers to calculate it themselves, renders the Court unable to find as a matter of law that plaintiff should have discovered the discrepancy at a certain time. It may well be that discovery reveals, or a jury decides, that plaintiff should reasonably have discovered the interest rate discrepancy in 2004 or 2012, but given the ambiguity introduced by defendant’s own documentation, it is also plausible that a fact finder could determine that it would not have been reasonable for plaintiff to discover the effect of defendant’s craftiness until 2015.”
The case is still pending and the plaintiff has filed a proposed amended complaint containing yet further claims of wrongdoing.
We offer a free initial consultation to purchasers of life insurance policies and annuities who have been defrauded. For an appointment contact the Law Offices of Timothy J. O'Connor at (518) 426-7700.