Key Discovery Rule Decision in Aronstein v. Massachusetts

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.

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