Opinion
001972/09.
October 23, 2009.
The following papers read on this motion:
Notice of Motion ......... XX Affirmation in Support ... X Reply Affirmation ........ X Memorandum of Law ........ XXXThis motion, by the defendants Financial Focus Group, LLC and Robert L. Dann, pursuant to CPLR 3211[a][1], [5], [7] for an order dismissing the complaint insofar as asserted against them; and a cross-motion, by the defendants AXA Equitable Life Insurance Company, AXA Advisors, LLC, and Paramount Group, pursuant to CPLR 3211[a][1], [5], [7] for an order dismissing the complaint insofar as asserted against them, are both determined as hereinafter set forth.
In June of 2006, and after retiring from his position in 2004 as a equity/trading manager at Pershing, LLC, the plaintiff "rolled over" and invested close to $1.4 million of his retirement savings into an annuity investment vehicle offered by codefendant AXA Equitable Life Insurance Company ["AXA"]. The plaintiff allegedly made the decision to rollover his retirement funds upon the recommendation of codefendant Robert L. Dann — an authorized AXA insurance agent with whom the plaintiff had made other investments over the years.
Prior to funding the proposed rollover investment, the plaintiff contends that he discussed his financial goals and expectations with Dann, informing Dann that the retirement assets were to be placed in a "conservative," "investment advisory arrangement where professional managers and management teams invest money for clients" (Bianco Aff., ¶ 3). As allegedly envisioned by the plaintiff at the time, this entailed investing the bulk of his money — some 75% — in a money market account, while the remaining assets were to "rest in a diversified portfolio of stocks and bonds" (Bianco Aff., ¶¶ 3, 6-7; 36; Cmplt., ¶ 11).
The plaintiff thereafter obtained two roll over distribution checks to fund the proposed investment in the amounts of $1,366,648.33 and $46,250.15, which he allegedly gave to Dann on June 2, 2006 during a weekend meeting at New York City restaurant.
At the time, Dann asked the plaintiff to sign "one or more" documents, which the plaintiff has not specifically described in his complaint — other than to allege that Dann told him they were "necessary" to complete the investment transaction (Cmplt., ¶ 12).
Dann then invested the plaintiff's money, but according to the plaintiff, he discovered only a few months later that Dann had not, in fact, placed the funds in a money market account and/or created a "diversified stock and bond" portfolio" — or anything resembling the "investment advisory" arrangement the plaintiff claims to have originally requested (Bianco Aff., ¶ 24). Instead, and allegedly without ever informing the plaintiff, Dann had actually purchased two AXA annuities, i.e., so-called, "Accumulator Combined Variable and Fixed Deferred" annuities ( see, Dann Exhs., "E," "F"; Bianco Aff., ¶¶ 2-3).
Additionally, in either mid-July or August of 2006, the plaintiff further ascertained that the annuities purchased by Dann contained an unfavorable fee provision — one commonly included in annuity contracts, known as a "surrender charge" provision, which is a contract-based fee charged by the insurer when invested funds are withdrawn during a so-called "surrender period" — which here, extended seven years, post-purchase (in descending percentages); and applied to yearly withdrawals exceeding 10% of the then current contract value.
According to the plaintiff, during the June 2 restaurant meeting, Dan allegedly never provided him with a prospectus or copies of the annuity contracts; nor did he provide any hint that he was going to purchase the subject annuities as the plaintiff's investment vehicle.
At some point in the fall of 2006, the plaintiff e-mailed and/or spoke to Dann and complained about the surrender charge provision, although neither the plaintiff's complaint nor his opposing affidavit alleges that, during these conversations, he accused Dann of purchasing a blatantly incorrect investment product bearing no relation to his stated requests and expectations.
Dann allegedly told the plaintiff not to worry and then allegedly promised that he would persuade AXA to waive the surrender provision and/or that he would "liquidate the entire annuity investment" — neither of which Dann was able to accomplish (Pltff's Exh., "D;" Pltff's Aff., ¶¶ 31-32; Cmplt., ¶¶ 26-28).
In early Spring 2007, the plaintiff contacted AXA directly and requested that AXA permit him to liquidate the entire investment without penalty, but AXA declined to waive the surrender fee, which the plaintiff claims would have amounted to some $100,000.00. Shortly thereafter, in May of 2007, the plaintiff claims to have finally received the contracts directly from AXA. Upon receiving the contracts, he requested that AXA permit him to exercise his "statutory right of revocation within (10) days of having received" the contracts (Cmplt., ¶¶ 31, 45-48).
The defendants contend, however, that the plaintiff was informed, in writing, that he would be acquiring an annuity and that subsequent letters which he wrote to AXA and Dann in the Fall of 2006 plainly establish that he was aware that he had acquired an annuity.
Specifically, the defendants have submitted, inter alia, two, six-page application/enrollment forms — allegedly signed by the plaintiff on June 2, 2004, and titled, "Accumulator Combination variable and fixed deferred annuity" (Dann Aff., Exhs., "A", "B"). These forms, together with other attached application materials, contain descriptions of both the nature of the product acquired by the plaintiff and its relevant terms and conditions.
More particularly, the subject enrollment forms — which are dated June 2, 2006 in Jersey City, New Jersey — provide in part that, "I acknowledge receipt of the most current prospectus for the Accumulator," which was provided to the plaintiff on a compact disc (Enrollment form, at 6). Notably, the contracts disclose the withdrawal/surrender fees applicable and the manner in which they would be calculated during the seven year surrender period.
The enrollment package submitted by Dann also contains: (1) a separately executed, New Jersey disclosure form entitled "replacement of life insurance and annuities," which includes a provision permitting the insured to cancel the contract within 30 days; and (2) a signed, one-page consent form further evidencing and confirming that the plaintiff had received the compact disc containing the annuity prospectus, which discusses the disputed surrender provision (Dann Aff., Exh., "B").
Notably, a review of the start-up, investment options into which the plaintiff's funds were initially deposited, reveals that some $997,000.00 of the larger, $1.33 million deposit was placed in AXA's so-called "guaranteed interest account," while the remaining portion of the deposit was placed in various non-guaranteed funds. The second, smaller deposit ($46,250.15) — none of which was placed in the "guaranteed interest account"-was allocated to a mix of bond, stock, equity options.
The defendants have also attached two letters dated September 13, and November 30, 2006, concededly written by the plaintiff only months after he claims to have first learned that Dann had purchased the annuities and never placed his assets in the investment vehicles which he had originally requested. Both letters expressly refer to the proprietary, brand name of the AXA annuity product the plaintiff had acquired — the "Accumulator" — and each references the personal contract numbers assigned to the two annuities. As to their content, the letters direct AXA "Accumulator," customer service personnel to reallocate portions of the two annuity funds in which the plaintiff's money had been invested. Specifically, the September, 2006 letter, after referencing the subject, AXA "Accumulator" contract numbers, states "[p]lease reallocate the above referenced contacts to the following percentage. This will apply to the current allocation and future contributions
AXA Conservative Allocation 50% AXA Conservative Plus Allocation 50%"There is also a handwritten note to Dann inscribed on the September 2006 letter which, among other things, refers, in a friendly tenor, to a prior conversation the two men apparently had about moving some $600,000.00 the plaintiff still had invested in the annuity's "Guaranteed Interest Account" ["GIA"] — another propriety term used in the AXA annuity contracts to describe that particular investment option.
Approximately a month later, on November of 2006, the plaintiff once again wrote to AXA's "Accumulator" customer service personnel and further modified the investment mix in the larger account by reallocating 40% of the funds the contained in the "guaranteed interest account" to four, non-guaranteed option funds.
By summons and verified complaint dated January 2009, the plaintiff commenced the within action against AXA, Dann, Paramount Planning (a division of AXA advisors) and Financial Focus Group, LLC ["Financial Focus"]. In substance, the plaintiff alleges that Dann/AXA never informed him that an annuity would be purchased later; failed to provide him with any relevant, documentary materials or contracts; and fraudulently, and with intent to deceive, failed to apprise him that the annuities contained, inter alia, the disputed, surrender charge provisions and other undisclosed fee provisions; and the ultimately refusal to permit him to withdraw the proceeds without charge or to rescind the agreement.
Based on these and other asserted claims, the plaintiff has advanced five causes of action sounding in fraud (through omission); breach of contract; rescission; and two largely repetitive, negligence causes of action founded, respectively, upon (1) a pleaded claim that the defendants collectively violated their duty to act with reasonable care (4th cause of action); and (2) a fifth, related claim that the defendants negligently failed to disclose the detriments of owning the subject annuity with a surrender provision included therein.
Notably, the rescission claim, as pleaded, is apparently based upon the statutory cancellation/refund provision set forth in Insurance Law §§ 3209[d][7], 3219[a][9]-although the complaint cites no specific statute and the annuity contracts extend the applicable grace period to 30 days.
The defendants Dann and Financial Focus now move to dismiss the complaint pursuant to CPLR 3211[a][1], [5], [7]. The AXA defendants similarly move to dismiss, adopting the claims and arguments advanced by Dann. The motions are granted.
Preliminarily, that branch of the motion which is to dismiss the complaint insofar as interposed as against Financial Focus is granted. Here, and as the defendants assert, the complaint contains only a single, vague reference to this defendant, alleging — upon "information and belief" — that Financial Focus is a limited liability company doing business in New York. There are no additional allegations which attribute any specific, tortious conduct to this particular defendant — either in the complaint or the plaintiff's opposing submissions.
Collective or generic references to the "defendants," in which one defendant is merely lumped together with several others, will not suffice to establish an actionable theory of recovery upon the facts and claims presented here ( see, Rand Intern. Leisure Products, Inc. v. Bruno, 22 Misc.3d 1111 (A), 2009 WL 130136 at 3, Supreme Court, Nassau County 2009; see also, Aetna Cas. Sur. Co. v. Merchants Mut. Ins. Co., 84 AD2d 736).
With respect to the remaining defendants, the law is settled that "[i]n order to prevail on a CPLR 3211(a)(1) motion, the moving party must show that the documentary evidence conclusively refutes plaintiff's allegations" ( AG Capital Funding Partners, L.P. v. State Street Bank and Trust Co., 5 NY3d 582, 591, 2005; Leon v. Martinez, 84 NY2d 83, 87-88, 1994; Daub v. Future Tech Enterprise, Inc., 65 AD3d 1004, 885 NYS2d 115, 2nd Dept., 2009).
Although on a motion pursuant to CPLR 3211(a)(7), the court will accept as true the facts "alleged in the complaint and submissions in opposition to the motion, and accord them "the benefit of every possible favorable inference" ( Sokoloff v. Harriman Estates Development Corp., 96 NY2d 409, 414, 2001), bare legal conclusions, "inherently incredible" assertions and/or claims "flatly contradicted by documentary evidence" are not entitled to favorable consideration and "should be dismissed" ( Daub v. Future Tech Enterprise, Inc., supra, quoting from, Well v. Yeshiva Rambam, 300 AD2d 580, 581).
Moreover, it is "settled that evidentiary material may be considered on a CPLR 3211(a)(7) motion to assess the viability of a complaint, and where such evidence is submitted, the court must determine whether the plaintiff has a cause of action, not whether the plaintiff has stated one" ( Steve Elliot, LLC v. Teplitsky, 59 AD3d 523, 524; see, Guggenheimer v. Ginzburg, 43 NY2d 268, 275-276, 1977). Where the evidence submitted demonstrates that a material fact alleged by the plaintiff to be true is "not a fact at all," the complaint should be dismissed ( Doria v. Masucci, 230 AD2d 764, 646 NYS2d 363, 2nd Dept., 1996).
At bar, the signed enrollment/application forms, prima facie flatly contradict the the plaintiff's claims and establish that his underlying factual assertions are not "facts at all", i.e., the plaintiff's claims that Dann misled and deceived him by concealing and/or omitting crucial information and by then negligently purchasing — without the plaintiff's consent and knowledge — the two AXA "Accumulator" annuities ( see, Jacobs v. Haber, 232 AD2d 372, 373, 648 NYS2d 638, 2nd Dept., 1996; see also, Vavruick v. Price Co., 245 AD2d 558, 559).
Specifically, the subject enrollment documents disclose that: (1) the investment which the plaintiff was purchasing was an annuity; and (2) that it contained the disputed surrender provision fee ( see, Perl v. Smith Barney Inc., 230 AD2d 664, 666 cf., Pautienis v. Legacy Capital Corp., 36 AD3d 462, 463). Moreover, the plaintiff twice acknowledged in two separately and contemporaneously executed documents, that he received the prospectus on compact disc and was able to review and access its contents ( see generally, Snyder v. Voris, Martini Moore, LLC, 52 AD3d 811, 812; Berardino v. Ochlan, 2 AD3d 556). It bears noting that, although the plaintiff claims he lacked experience with annuities, the record belies any inference — and the plaintiff does not seriously contend — that he was a neophyte or an unsophisticated investor at the time the annuities were purchased ( cf., Zanett Lombardier, Ltd. v. Maslow, 29 AD3d 495, 496).
The plaintiff's responsive submissions, to the effect that he never signed the enrollment documents are obscure and conclusory. Specifically, the plaintiff has alleged in obliquely framed allegations that he has "no recollection" of having signed the enrollment documents; that he is unable to determine "from the copy provided" whether the signatures are his; and/or alternatively, that he now does not "believe" the signatures are his ( Ullmann v. Norma Kamali, Inc., 207 AD2d 691 (Bianco Aff., ¶¶ 15-16, 18-19).
It is well settled, however, that "[s]omething more than a bald assertion of forgery is required to create an issue of fact contesting the authenticity of a signature" ( Banco Popular N. Am. v. Victory Taxi Mgt., 1 NY3d 381, 384.
Further buttressing the determinative import of the signed enrollment documents are the two letters written by the plaintiff in September and November of 2006 — authored only shortly after he claimed to have first learned of the surrender provision, and more fundamentally, that Dann had disregarded his instructions and deceptively purchased the wrong investment product. Indeed, the plaintiff twice exercised his option reallocation rights under the "Accumulator" annuity — as he himself described it — without raising the claim that he had not then received the contracts and/or that Dann had purchased the annuities without his consent.
The plaintiff's strained assertions, inter alia, that when he wrote the letters when he was "still tryg to learn exactly" what sort of investment Dann had "locked [him] into" are belied by the tone, tenor and content of the letters (Bianco Aff., ¶ 27, fn 1),
Specifically, both letters expressly reference AXA's proprietary term for the annuities issued, i.e., the "Accumulator", and also recite the personal contract numbers assigned to-and printed on — the annuity contracts contained in the record. The plaintiff has not addressed, much less disputed, the defendants' factual assertion that he could not possibly have been aware of the personal contract numbers assigned to his annuities if he were not then in possession of the subject contracts.
More fundamentally, the letters plainly evidence not only the plaintiff's knowledge that he was dealing with an annuity, but also further reveal that he was entirely conversant with the various investment funds listed in the "options" section of the written annuity contracts. Indeed, the courteously drafted letters addressed to AXA's "Accumulator customer service" department and his person handwritten note to Dann, at no point betray any hint of dissatisfaction with — or uncertainty about — the underlying nature and identity of the annuities in question, thereby undermining the claim that only months earlier, the plaintiff had supposedly discovered for the first time, that Dann had blatantly disregarded his directives by fraudulently investing some $1.4 million of his retirement nest egg in unrequested annuities. Notably "a court is not required to give credence to a story so inherently improbable as to leave no doubt that it is not true" ( Marti v. New York City Housing Authority, 192 AD2d 443, 444, 597 NYS2d 9, 1st Dept., 1993).
The Court further notes that while the plaintiff has not hesitated to produce certain evidentiary materials ( Guggenheimer v. Ginzburg, supra; Steve Elliot, LLC v. Teplitsky, supra), his submissions generally omit documents, e-mails, and/or other correspondence generated prior to, or contemporaneously with, the transmission of his two reallocation requests, i.e., contemporaneous materials supporting his contextual interpretation of the letters, which would dilute the otherwise negative, corroborating inference to be drawn therefrom.
In sum, and since the documentary evidence submitted conclusively refutes the plaintiffs allegations and claims, the defendants' motions for an order dismissing the complaint pursuant to CPLR 3211[a][1], should be granted.
The Court has considered the plaintiff's remaining contentions and concludes that they are lacking in merit.
Accordingly, it is,
ORDERED that motions, pursuant to CPLR 3211[a] by the defendants Financial Focus Group, LLC and Robert L. Dann, AXA Equitable Life Insurance Company, AXA Advisors, LLC, and Paramount Group for an order dismissing the complaint, are granted.
The foregoing constitutes the decision and order of the Court.
This order concludes the within matter assigned to me pursuant to the Uniform Rules for New York State Trial Courts.
So Ordered.