Federal Court Relies on Annuity Issuer’s Exhibit to Dismiss Class Action
The Northern District of Alabama, in Nichols v. John Hancock Life Ins. Co., No. 2:09:CV-00840-LSC, 2009 WL 3019785 (N.D.Ala. Sep. 22, 2009) recently dismissed a class action involving an alleged breach of an annuity contract, and found that based on the “plain language of the Contract itself, Plaintiff has failed to allege facts establishing nonperformance amounting to a breach of the Contract.”
Plaintiff had alleged that the annuity contract provided that a mortality charge would be collected in exchange for providing a death benefit, and that “Hancock breached the contract by collecting a mortality charge when there is no death benefit provided in the annuity.” Id. at *1.
The defendant John Hancock moved to dismiss and attached to its motion a copy of the annuity contract at issue. Id. at *2. The court recognized the general rule in the Eleventh Circuit that documents outside the complaint are not considered when analyzing a motion to dismiss, but then noted the exception when “a plaintiff refers to a document in its complain, the document is central to its claim, its contents are not in dispute, and the defendant attaches the document to its motion to dismiss.”
Based on its review of the annuity contract, the court concluded that “it is evident that there are no provisions that a mortality charge or any fee would be collected in exchange for a death benefit” and that “[n]othing in the Contract ties any fee solely to the guarantee of a death benefit.” Id.
The court rejected plaintiff’s assertion that the “mortality risk only includes the risk predicated on the award of a death benefit.”
The court relied on this exception to consider the annuity contract, exhibited to John Hancock’s motion to dismiss, because the plaintiff referenced the contract in the complaint, and “the plaintiff had not challenged the contents of the document or disputed its authenticity.” Id. at *2.