Insurance – Negligence – Notice

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Where plaintiffs alleging that the defendant insurance company acted improperly in terminating a life insurance policy have moved to amend their complaint, the plaintiffs should be permitted to add their new claim for negligence, as the facts alleged in the proposed amended complaint plausibly suggest that the insurer negligently performed a contractual duty to provide notice that the policy would soon lapse without the payment of additional premium amounts.

“Robert and Sybil Sheinkopf, together with their daughters as Trustees of the Robert Sheinkopf Family Irrevocable Trust, seek a declaratory judgment that Pacific Life Insurance Company acted improperly in terminating a ‘second to die’ variable universal life insurance policy that it issued to the Trust. The Sheinkopfs arranged for this Policy, to cover any estate tax due after Robert and Sybil have both died. The current complaint also asserts that Pacific Life committed breach of contract by cancelling and refusing to reinstate the Policy.

“Plaintiffs have moved for leave to amend their complaint. Pacific Life does not object to the addition of new factual allegations or the proposed revisions to the existing claims. But it opposes Plaintiffs’ request to add new claims asserting that Pacific Life is liable on theories of negligence, unjust enrichment, breach of fiduciary duty, and violating G.L.c. 93A. Pacific contends that those claims would be futile because they could not survive a motion to dismiss.

“The Court will permit Plaintiffs to add their new claim for negligence. The facts alleged in the proposed amended complaint plausibly suggest that Pacific Life negligently performed a contractual duty to provide the Trust with notice that the Policy would soon lapse without the payment of additional premium amounts. This cause of action is recognized under Massachusetts law, and the Trust and the Sheinkopfs all have standing to assert this claim. It would therefore not be futile to add this claim to Plaintiffs’ complaint.

“With respect to the proposed claim for unjust enrichment, the Court will permit the Sheinkopfs but not the Trust to add that cause of action to their claims. The Sheinkopfs may assert a claim for unjust enrichment in the alternative to their claims for breach of contract, because Pacific Life asserts that they lack standing to enforce the Policy. But the Trust’s proposed unjust enrichment claim would be futile, because it is undisputed that the Trust entered into a valid and binding contract with Pacific Life, and a claim of unjust enrichment cannot succeed where the parties entered into a valid contract that defines their rights and obligations.

“The Court will not permit the Plaintiffs to add the two other proposed new claims because they would be futile. The facts alleged in the proposed amended complaint do not plausibly suggest that Pacific Life owed any fiduciary duty. And Plaintiffs’ allegations that Pacific Life was negligent and breached contractual obligations by failing to provide effective notice that the policy was about to lapse do not plausibly suggest that Pacific Life violated G.L.c. 93A. …

“Plaintiffs’ motion for leave to file first amended complaint is allowed in part to the extent that Plaintiffs seek leave to assert a claim for negligence, to revise the factual allegations supporting their current claims, and to assert a claim of unjust enrichment on behalf of Robert Sheinkopf and Sybil Sheinkopf. This motion is denied in part to the extent that Plaintiffs seek to assert a claim for unjust enrichment on behalf of the Robert Sheinkopf Family Irrevocable Trust, or to assert claims for breach of fiduciary duty or violating G.L.c. 93A. …”

Sheinkopf, et al. v. Pacific Life Insurance Company (Lawyers Weekly No. 09-036-25) (7 pages) (Salinger, J.) (Suffolk Superior Court) (Docket No. 2384CV1704-BLS2) (Feb. 6, 2025).

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