United States District Court, N.D. Mississippi, Greenville Division
M. BROWN, UNITED STATES DISTRICT JUDGE.
the Court are (1) New York Life Insurance Company's
“Motion for Summary Judgment and for Dismissal, ”
Doc. #25; (2) Michael Willis' unopposed motion to exceed
page limits, Doc. #44; and (3) Fried Alligator Films, LLC and
Jerry Tankersley's “Motion to Strike New Legal
Arguments and Evidence Raised in Rebuttal to their Memorandum
Brief in Opposition to Motion for Summary Judgment and for
Dismissal, ” Doc. #47.
15, 2016, Fried Alligator Productions, LLC and Jerry
Tankersley filed a complaint in the Circuit Court of Leflore
County, Mississippi, against New York Life Insurance Company
(“NYL”), Michael Willis, and John Does 1-10. Doc.
#2. In the complaint, Fried Alligator and Tankersley alleged
that the defendants sold them a universal life policy, rather
than a custom whole life policy proposed by Tankersley, which
was to be used as collateral to finance Fried Alligator's
business operations up to $5, 000, 000. The plaintiffs
further alleged that the universal life policy could not be
used for its intended purpose.
August 15, 2016, the defendants removed the state court
action to this Court on the basis of diversity
jurisdiction. Doc. #1 at ¶¶ 4-7. NYL and
Willis answered the complaint on August 30, 2016, and
September 6, 2016, respectively. Doc. #10; Doc. #12.
October 14, 2016, the plaintiffs, with leave of the Court,
filed an amended complaint against the defendants. Doc. #22.
In the amended complaint, the plaintiffs assert claims for
(1) “Negligence, ” (2) “Breach of Fiduciary
Duty, ” (3) “Breach of Contract, ” (4)
“Breach of Implied-in-fact Contract, ” (5)
“Breach of Duty of Good Faith and Fair Dealing, ”
(6) “Misrepresentation, ” (7) “Promissory
Estoppel, ” (8) “Equitable Estoppel, ” (9)
“Third Party Beneficiary, ” (10) “Vicarious
Liability, ” and (11) “Gross Negligence and/or
Malicious Conduct.” Willis and NYL answered the amended
complaint on October 19, 2016, and October 28, 2016,
respectively. Doc. #23; Doc. #24.
October 28, 2016, NYL filed a “Motion for Summary
Judgment and for Dismissal.” Doc. #25. The same day,
Willis filed a “Joinder of Defendant Michael Willis in
Defendant New York Life Insurance Company's Motion for
Summary Judgment or, in the Alternative, for Dismissal,
” in which he joins NYL's motion and asserts
additional grounds for summary judgment as to the
plaintiffs' contract-related claims against him. Doc.
#27. The plaintiffs filed identical responses and supporting
memoranda to NYL's motion and Willis' joinder on
January 9, 2017. Doc. #28; Doc. #29; Doc. #30; Doc. #31.
The next day, the plaintiffs filed a supplement to their
responses, Doc. #33, and an affidavit exhibit, Doc. #33-1.
January 27, 2017, NYL moved to exceed by 10 pages the page
limit for its reply to plaintiffs' responses. Doc. #42.
This Court granted the motion in part, allowing NYL an
additional five pages. Doc. #43. In the order, the Court
noted that inasmuch as the motion was not a joint motion, the
order applied only to NYL and no other defendant.
Id. at 1 n.1. Willis then moved for an additional
five pages to reply. Doc. #44. On January 31, 2017, NYL filed
a reply to plaintiffs' responses, which Willis joined.
Doc. #45; Doc. #46.
February 9, 2017, the plaintiffs filed a motion to strike
certain arguments and evidence raised in NYL's reply and
Willis' joinder. Doc. #47. On February 21, 2017, NYL
responded to this motion, and Willis joined the response.
Doc. #49; Doc. #50. On February 28, 2017, the plaintiffs
filed a reply. Doc. #51.
Motion to Strike
plaintiffs contend in their motion to strike that NYL's
reply raises new arguments and is supported by new evidence
not previously relied on by NYL in its motion. The plaintiffs
request that any new arguments and evidence not be considered
by the Court in evaluating the summary judgment motion or,
alternatively, that they be given an opportunity to respond.
NYL argues that each argument and piece of evidence responds
to arguments the plaintiffs raised in their response.
and any accompanying brief are generally limited to
addressing matters presented in a motion and a response.
See AAR, Inc. v. Nunez, 408 F. App'x 828, 830
(5th Cir. 2011) (“Generally, and for obvious reasons, a
reply brief is limited to addressing matters presented by
appellant's opening brief and by appellee's response
brief, and is not the appropriate vehicle for presenting new
arguments or legal theories to the court.”) (internal
quotation marks omitted). A review of the relevant documents
shows that the matters the plaintiffs find objectionable in
NYL's reply are responsive to arguments and evidence in
the plaintiffs' responses to NYL's motion.
Consequently, such matters were not raised for the first time
in NYL's reply. Accordingly, the plaintiffs' motion
to strike will be denied.
Willis' Motion for Additional Pages
seeks an additional five pages for his reply in support of
NYL's motion, which he joined. As grounds, Willis
incorporates by reference the reasons advanced in NYL's
motion for additional pages, which this Court granted in part
on January 30, 2017. Doc. #44 at 2; Doc. #43.
reasons stated in the January 30 order, Willis' motion
for additional pages is granted.
defendants seek dismissal of all Fried Alligator's claims
on the grounds that Fried Alligator lacks standing to assert
claims based on policies on which it is not the insured or a
third-party beneficiary, and that Fried Alligator fails to
state a claim upon which relief can be granted. Because
standing is a jurisdictional requirement, the Court will
address Fried Alligator's standing first. See Cole v.
Gen. Motors Corp., 484 F.3d 717, 721 (5th Cir. 2007)
(“[W]e must resolve the standing question as a
threshold matter of jurisdiction.”).
summary judgment is an inappropriate way to effect a
dismissal for lack of subject matter jurisdiction.”
Bank One Tex. v. United States, 157 F.3d 397, 403
n.12 (5th Cir. 1998). Accordingly, a court should construe a
motion for summary judgment predicated on a lack of
jurisdiction as a motion to dismiss under Rule 12(b)(1).
See Fox v. Leavitt, 572 F.Supp.2d 135, 140 n.5
(D.D.C. 2008) (“Although CMS's motion requests
summary judgment[, ] ... the request to dismiss based on
… lack of standing is properly treated as a motion to
dismiss for lack of jurisdiction under Federal Rule of Civil
Procedure 12(b)(1).”). This Court therefore will
analyze NYL's standing argument as a motion to dismiss
for lack of jurisdiction under Rule 12(b)(1).
motion to dismiss for lack of standing may be either
‘facial' or ‘factual.'”
Superior MRI Servs., Inc. v. Alliance Healthcare Servs.,
Inc., 778 F.3d 502, 504 (5th Cir. 2015). Where, as here,
“the defendant submits affidavits, testimony, or other
evidentiary materials” in support of the motion, the
attack on standing is considered factual. Id.
(internal quotation marks omitted). “To defeat a
factual attack, a plaintiff must prove the existence of
subject-matter jurisdiction by a preponderance of the
evidence and is obliged to submit facts through some
evidentiary method to sustain his burden of proof.”
Id. (internal quotation marks omitted).
is perhaps the most important of the jurisdictional
doctrines.” United States v. H a y s , 515
U.S. 737, 742 (1995) (internal quotation marks and
alterations omitted). To establish standing under Article
III, a plaintiff “must have (1) suffered an injury in
fact, (2) that is fairly traceable to the challenged conduct
of the defendant, and (3) that is likely to be redressed by a
favorable judicial decision.” Sayles v. Advanced
Recovery Sys., Inc., 865 F.3d 246, 250 (5th Cir. 2017).
Facts Relevant to Standing Issue
Alligator is a production company “within the
entertainment industry.” Doc. #22 at ¶
Tankersley is a member and agent of Fried Alligator.
Id. at ¶¶ 8, 10. Since 2013, Tankersley
has been the primary financing member of Fried Alligator
charged with managing and securing financing for Fried
Alligator's prospective entertainment projects.
Id. at ¶ 10.
Initial discussions between Tankersley and NYL
summer of 2013, Tankersley began meeting with Anna Muse
Moses, an employee of NYL and family friend of Tankersley.
Id. at ¶ 11. The meetings later included other
NYL representatives, including Taylor Triplett. Id.
During these meetings, Tankersley explained to Moses and
Triplett that he desired to purchase life insurance or other
NYL products that “would be a conduit to enhance
financing options available for Fried Alligator's
prospective and/or ongoing projects.” Id. at
¶ 12. Tankersley further informed Moses and Triplett
that “the building of cash value and/or the use of the
product as collateral in conjunction with traditional
financing products through banks were paramount concerns
vital to the well[-]being and success of Fried
Alligator.” Id. Tankersley's explanations
and representations “were all made on behalf of Fried
Alligator, and for Fried Alligator's business
purposes.” Id. Moses, Triplett, and later
Willis, “repeatedly affirmed” they understood why
Tankersley sought these products for Fried Alligator.
Id. at ¶ 13.
2013, relying on advice of NYL representatives, Tankersley
determined that a custom whole life insurance policy would
best fit Fried Alligator's needs. Id. at ¶
14. According to Tankersley, such a policy would build cash
value quickly, and could serve as collateral to obtain more
financing through traditional means. Id.
Discussions between Tankersley and Willis
December of 2013, Tankersley was introduced to Willis at NYL,
who “presented himself as an expert and seasoned
professional veteran” and changed Tankersley's mind
regarding the proper policy. Doc. #22 at ¶¶ 15-16,
18. NYL promoted Willis and encouraged Tankersley to rely on
his expert and professional advice. Id. at ¶
16. Willis belittled the concept of a custom whole life
policy, and told Tankersley that “a universal policy
was a far superior option to accomplish the purposes of
Tankersley and Fried Alligator.” Id. Willis
represented that the cash value of the policy “could be
used as collateral from day 1” and that “banks
would loan Tankersley as much as $5, 000, 000, the face value
of the universal life policy, as long as the policy was used
as collateral.” Id. Tankersley believed Willis
when Willis told him this product would suit his needs and be
the best product he could purchase from NYL to accomplish the
goals of Tankersley and Fried Alligator. Id. at
universal life policy is dated December 11, 2013, and names
“Jerry Deane Tankersley” as the insured. Doc.
#26-7 at 31. The insured is listed as the
“owner;” [t]he “initial base policy face
amount” is “$5, 000, 000.00;” the
“planned monthly premium” is “$10,
000;” and the “surrender charge premium” is
“$165, 070.29.” Id. at 32, 33, 36. The
beneficiaries listed are Suzy Bergner, Cheryl Wells, Teresa
Garner, and Joy Campbell. Id. at 53.
turned out, Willis' advice was incorrect. Doc. #22 at
¶ 25. Unlike the custom whole life policy, the universal
life product had substantial fees with high surrender
charges, was a modified endowment contract with tax
consequences, did not as aggressively build cash value, and
was not acceptable for collateral with banks. Id. at
¶¶ 17-24. Because of the high surrender values,
Tankersley continued to contribute to the universal life
product which simultaneously deprived him of the ability to
fund Fried Alligator projects, resulting in Fried
Alligator's inability to fund at least one project.
Id. at ¶¶ 28-31. Had Tankersley received
the custom whole life policy, the funds would have been
available to fund such project. Id. at ¶ 31.
Attempts to modify policy
in 2014, Tankersley realized the policy was useless for his
needs. Doc. #22 at ¶ 25. Tankersley informed Moses of
his problems with the policy, and Moses reported the
situation to NYL. Id. at ¶ 26. NYL met with
Tankersley and acknowledged he received bad advice and that
“he should be put back in the position he would have
been but for the bad advice.” Id. However, due
to the surrender fee to swap out the policy and the tax
consequences, the policy was not changed. Id. at
¶¶ 27-28. Tankersley continued paying the premiums.
2014, Tankersley approached NYL again regarding the problems
with his policy. Id. at ¶ 33. At some point, an
agent recommended that he reapply for a custom whole life
policy and file an “errors and omissions claim against
Moses.” Id. Tankersley viewed this option as
unsatisfactory because “it put the onus on Tankersley
to repair the problem … [and i]t also required
Tankersley to incur the costs of bringing a claim against
Moses, who did nothing wrong ….” Id. In
the middle of 2015, NYL tried “to make it right”
by converting the universal life policy to a custom whole
life policy but left it as a modified endowment contract
creating tax issues for Tankersley. Id. at ¶
custom whole life policy, dated June 2, 2015, with terminal
digits 90, lists “Jerry Deane Tankersley” as the
named insured and owner. Doc. #26-8 at 68-70. The monthly
premium is $9, 635.77. Id. at 71. The beneficiaries
are listed as Joy Campbell, Cheryl Wells, Suzy Bergner, and
Teresa Garner. Id. at 83.
Breach of contract
factual attack on standing, NYL argues Fried Alligator is
neither a party nor third party beneficiary to either
contract. Fried Alligator responds that it “is not
… seeking to enforce a life insurance policy; it is
seeking to hold NYL liable for selling a financial product
and insurance policy that did not do what NYL said it
would.” Doc. #30 at 14-15. More specifically, Fried
Alligator asserts that it, through Tankersley's
interactions with NYL, entered into an oral contract with NYL
to purchase “an insurance policy which NYL promised
would meet its financing needs, [and] the policy's
failure to do so constitutes a breach of [that oral]
contract.” Id. at 16. Alternatively, Fried
Alligator argues it is a third party beneficiary of oral
promises between Tankersley and NYL made for Fried
Alligator's benefit. Id. at 18-19.
Claims premised on written agreements
initial matter, the failure to raise an argument in response
to a motion to dismiss operates as a waiver of such argument.
See Jaso v. The Coca Cola Co., 435 F. App'x.
346, 358 n.12 (5th Cir. 2011) (“Jaso has waived this
argument on appeal by failing to raise it below in response
to Defendants' motion to dismiss.”) (citing
Miller v. Nationwide Life Ins. Co., 391 F.3d 698,
701 (5th Cir. 2004)). Accordingly, where a party's
standing to enforce a contract is challenged in a motion to
dismiss, the failure to address standing in a response
justifies dismissal on those grounds. Rutter v. Conseco
Life Insur. Co., No. 3:09-cv-680, 2011 WL 2532467, at *5
(S.D.Miss. June 24, 2011).
Fried Alligator asserts that it is not seeking to enforce the
written insurance policy between Tankersley and NYL, either
as a party or third party beneficiary, the Court deems waived
all claims by Fried Alligator based on breach of the written
policies. See generally Los Alamos Study Grp. v.
U.S. Dep't of Energy, 692 F.3d 1057, 1066 n.2 (10th
Cir. 2012) (“[W]e have no duty to investigate grounds
for jurisdiction not raised by a party.”) (emphasis
omitted). Thus, the Court will consider Fried Alligator's
breach of contract claim premised only on any oral agreements
between NYL and Fried Alligator, or between Tankersley and
Existence of oral contract
it is less than clear, it appears Fried Alligator argues that
it had an enforceable oral contract with NYL that NYL would
offer Tankersley a suitable insurance policy which could be
used as future collateral in a loan. See Doc. #30 at
basic contract law that a “formation of a contract,
either oral or written, requires (1) an offer, (2) acceptance
of the offer, and (3) consideration.” Reeves v.
Midcontinent Express Pipeline, LLC, 119 So.3d 1097, 1101
(Miss. Ct. App. 2013). Fried Alligator's oral contract
argument fails for lack of consideration.
has been defined as (a) an act other than a promise, or (b) a
forbearance, or (c) the creation, modification or destruction
of a legal relation, or (d) a return promise, bargained for
and given in exchange for the promise.” Estate of
Davis v. O'Neill, 42 So.3d 520, 527 (Miss. 2010)
(internal quotation marks omitted). “If an agreement is
to be held supported by consideration, that consideration
must come from the parties to the agreement.”
Daniel v. Snowdoun Ass'n, 513 So.2d 946, 949
(Miss. 1987). Fried Alligator has not alleged that it gave
NYL anything in return for the promise that the policy could
be immediately used as collateral. Accordingly, the facts
fail to establish the existence of an oral contract between
Fried Alligator and NYL.
Third-party beneficiary claim based on oral
Fried Alligator has failed to prove by a preponderance of the
evidence that it is a third-party beneficiary of an ...