United States District Court, S.D. Georgia, Savannah Division
MINERVA BARRETT, executrix of the estate of Chester Barrett, and on behalf of all others similarly situated, Plaintiff,
UNITED INSURANCE COMPANY OF AMERICA, INC., Defendant.
STAN BAKER, UNITED STATES DISTRICT JUDGE.
putative class action lawsuit, Plaintiff, the executrix of
the estate of Chester Barrett, brings claims arising out of a
life insurance policy Mr. Barrett purchased from Defendant
United Insurance Company of America, Inc.
("United") on December 18, 1984. The thrust of
Plaintiff s claims is that United used racially
discriminatory practices in selling life insurance policies
to Mr. Barrett and other African-Americans. Specifically, she
contends that United charged Mr. Barrett a higher premium for
the policy than United charged white customers and sold him
an inferior product than those available to white customers.
(Doc. 29.) This matter is before the Court on United's
Motion to Dismiss Plaintiff s Amended Complaint. (Doc. 34.)
In this Motion, Defendant advances numerous arguments in
support of its position that Plaintiffs Amended Complaint
should be dismissed. United argues that all of Plaintiffs
claims are barred by the statute of limitations.
Additionally, United attacks Plaintiffs standing to bring
certain claims, and it contends that Plaintiffs state law
allegations fail to state a claim upon which this Court can
reasons set forth below, the GRANTS IN PART and
DENIES IN PART United's Motion to Dismiss, (doc.
34). The Court GRANTS United's Motion to
Dismiss for lack of standing as to Plaintiffs claims that
United failed to keep accurate records, allowed policies to
lapse, and failed to pay death benefits. However, the Court
DENIES United's Motion to Dismiss for
lack of standing as to all other claims. The Court also
GRANTS United's Motion to Dismiss for
untimeliness as to Plaintiffs claims that Mr. Barrett paid
premiums exceeding the face value of his policy. However, the
Court DENIES WITHOUT PREJUDICE United's
Motion to Dismiss for untimeliness as to all other claims.
Further, the Court DENIES United's
Motion to Dismiss for failure to state a claim as to
Plaintiffs claims for money had and received, negligent
misrepresentation, fraudulent inducement, and punitive
damages. The Court GRANTS AS UNOPPOSED
United's Motion to Dismiss for failure to state a claim
as to Plaintiffs claims for breach of contract, declaratory
relief, and injunctive relief. Additionally, for the reasons
stated below, the Court STAYS all
proceedings and deadlines in this case until further order of
the Court and DIRECTS the parties to each
file a status report with the Court within twenty-one
days of the date of this Order.
Barrett, a now-deceased African-American man, was a resident
of Liberty County, Georgia. (Doc. 29 at p. 1.) Defendant
United is an Illinois insurance entity that conducts business
throughout the United States, including in Georgia.
(Id.) Mr. Barrett purchased a life insurance policy
from United on December 18, 1984. (Id at p. 3.) That
transaction and policy form the basis of this lawsuit. Mr.
Barrett's policy had a face value of $5, 000 and was
designated as a "WHOLE LIFE" policy "though
its characteristics mirrored the Industrial Polices sold by
United." (Id at p. 3; doc. 29-2.)
brings this putative class action as the executrix of Mr.
Barrett's estate. Generally, Plaintiff contends that Mr.
Barrett, like others situated similarly to him, purchased an
inferior product and paid higher premiums on this insurance
policy due to United's unlawful scheme of discrimination
against African-Americans. (Id at pp. 3-8.) "As
part of its nationwide scheme, United targeted low income,
unsophisticated and minority segments of the population,
especially in the Southeastern United States, including
Chester Barrett, and developed insurance products for sale to
these consumers." (Id at p. 3.) Through this
scheme, United designed and marketed "Industrial
Life" insurance policies and policies similar to
them. (Id at p. 3.) These policies have
a relatively low face value and their premiums (which are
"designed to appear to the policyholder to be relatively
modest") are collected, often in person by United
agents, on a weekly, bi-weekly, or monthly basis.
(Id at pp. 3-4.) According to Plaintiff, "[f]or
many years, United, pursuant to its own practices and
procedures, routinely, knowingly, and intentionally charged
African-American individuals .. . more for the Policies than
it charged similarly situated Caucasians." (Id
at p. 4.) United, with discriminatory intent, took the
following actions to carry out this scheme:
• issuing rate books with "overly discriminatory
rates" for "negro" or "colored"
individuals as opposed to "white" customers;
• issuing rate books charging African-Americans
"substandard" or "standard" rates while
Caucasians received lower "preferred" rates;
• assigning African-Americans to less favorable
underwriting classifications resulting in higher premiums
that bore "no legitimate relationship to the actual
mortality risk of African-American Class Members, including
• utilizing rate books with "so-called
'socio-economic' underwriting without explicitly
asking for the insured's race"; and
• establishing "subjective and prejudicial
classifications bearing no legitimate relationship to the
actual mortality risk of African-American Class
alleges that by targeting this "disadvantaged segment of
the population" with "Industrial Polices and
Policies mirroring Industrial Policies" (as opposed to
ordinary life insurance products), United took advantage of
the consumers' alleged lack of sophistication.
(Id at p. 5.) United prohibited its "agents
from selling ordinary life insurance products and policies to
African-Americans." (Id.) Plaintiff essentially
maintains that United tricked African-Americans into buying
insurance policies even though these policies were a terrible
bargain for the insured, particularly as opposed to
traditional insurance policies that United sold to Caucasian
customers. (Id. at pp. 5-8.) For instance, Plaintiff
contends that the policies:
• required premium payments that, "over the normal
life expectancy of Class Members, " would greatly exceed
the face value of the policy;
• "were intentionally designed by United to create
the illusion that they would provide valuable yet affordable
death benefits" but in actuality provided "minimal
and ever-declining value to the insured";
• did not provide returns on premium overpayments;
• did not provide increasing death benefits over the
duration of the policies, unlike traditional whole life
• were designed to require class members "to
continue making premium payments after the premiums exceed
the face value of the policies or face losing all of their
paid premiums without receiving any meaningful or reasonable
cash value or death benefits."
(Id. at pp. 5-7.) Even after United ceased these
intentionally discriminatory practices, African Americans who
had purchased policies with race-based premiums, including
Mr. Barrett, continued to pay the higher premiums for the
inferior policies established under the prior discriminatory
pricing scheme. (Id at pp. 4-5.)
peddled these insurance products, including Mr. Barrett's
policy, through a targeted marketing scheme. (Id at
pp. 4-5, 7-8.) United agents were assigned to "debit
routes" and the agents "were trained to personally
visit the homes of Class Members, such as Chester Barrett,
residing on their routes to collect the premiums and develop
a personal relationship with the Class Members that would
facilitate the sale of additional Policies in the
future." (Id at p. 4.) Further, Plaintiff
contends that United induced customers to purchase Industrial
Life policies and policies similar to them by "approving
and dispersing-both by itself and through its agents-false
and misleading information and sales material containing
numerous misrepresentations and omissions to Chester Barrett
and Class Members." (Id at pp. 7-8.) "As
opposed to selling Class Members affordable versions of
traditional life insurance products, " United performed
no underwriting on these policies and instead sold policies
with higher premiums and lower cash value than
"traditional life insurance products." (Id
at p. 7.)
further contends that "United affirmatively and actively
concealed its fraudulent design, marketing and administration
of its industrial policies, as well as its racially
discriminatory pricing and Policy sales and administration
scheme from Chester Barrett and Class Members."
(Id. at p. 10.) Specifically, United told Mr.
Barrett that his life insurance policy "was a legitimate
'whole life' insurance policy with a valuable death
benefit." (Id at p. 19.) Additionally, United
"engaged in a systematic effort" to "eliminate
and confuse the administrative records of Class Members,
including [Mr.] Barrett" in an effort to prevent them
from discovering United's racial discrimination.
(Id at p. 10.) Thus, Mr. Barrett "could not
discover, was prevented from discovering, and did not have
any of the facts which might have led to the discovery of
United's chicanery." (Id.) United's
discriminatory practices caused Mr. Barrett to purchase an
insurance policy and pay approximately $14, 649.05 in
premiums for the policy. (Id at p. 13.) The policy
carried a death benefit of $5, 000. (Id.)
Barrett filed this lawsuit on September 20, 2017, in the
State Court of Liberty County, (doc. 1-1), and United then
removed the case to this Court, (doc. 1). Mr. Barrett passed
away on August 3, 2018 at the age of ninety-seven. (Doc. 29,
p. 1 n. 1.) On December 19, 2018, the Court ruled on several
dispositive motions and provided an opportunity to amend the
complaint. (Doc. 26.) Plaintiff Minerva Barrett, Executrix of
Mr. Barrett's estate, subsequently moved for substitution
as the Plaintiff and filed the Amended Complaint. (Docs. 29,
30.) Plaintiff seeks to bring this action on Mr.
Barrett's behalf as well as on behalf of a class of
others she describes as follows:
all persons who have, or had at the time of the policy's
termination, an ownership interest in: (1) one or more
Policies or Industrial Policies, issued, serviced or
administered by United that were in force on or after January
1, 1970 and for which United charged African-Americans higher
premiums tha[n] the premiums it charged to similarly situated
Caucasians; and/or (2) one or more facially nondiscriminatory
Policies and/or Industrial Policies issued, serviced or
administered by United that were in force on or after January
(Doc. 29, pp. 11-12.) Plaintiff brings claims for: violation
of civil rights pursuant to 42 U.S.C. § 1981; money had
and received; declaratory and injunctive relief; breach of
contract; fraudulent inducement; negligent misrepresentation;
and punitive damages. (Id at pp. 18-21.) Defendant
filed the instant Motion to Dismiss all of these claims,
(doc. 34), which has now been fully briefed, (docs. 35, 36).
Rule 12(b)(6) motion to dismiss, a court must "accept
the allegations in the complaint as true and constru[e] them
in the light most favorable to the plaintiff." Bel
anger v. Salvation Army, 556 F.3d 1153, 1155 (11th Cir.
2009). "A complaint must state a facially plausible
claim for relief, and '[a] claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.'" Reese v.
Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d
1211, 1215 (11th Cir. 2012) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)). "A pleading that
offers 'labels and conclusions' or 'a formulaic
recitation of the elements of a cause of action'"
does not suffice. Iqbal, 556 U.S. at 678 (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
plausibility standard is not akin to a probability
requirement, but it asks for more than a sheer possibility
that a defendant has acted unlawfully. Where a complaint
pleads facts that are merely consistent with a
defendant's liability, it stops short of the line between
possibility and plausibility of entitlement to relief."
Id. (internal quotation marks and citation omitted).
While a court must accept all factual allegations in a
complaint as true, this tenet "is inapplicable to legal
conclusions. Threadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, "
are insufficient. Id.
case, in addition to other arguments, United contends that
Plaintiffs Amended Complaint should be dismissed as untimely.
Dismissal on limitations grounds is only appropriate "if
it is apparent from the face of the complaint" that
plaintiffs claims are time-barred. Gonsalvez v. Celebrity
Cruises Inc., 750 F.3d 1195, 1197 (11th Cir. 2013).
"A statute of limitations defense can support dismissal
under Rule 12(b)(6) only if it is clear from the face of the
complaint that the statute of limitations has run, and it
appears beyond doubt that the plaintiff can prove no set of
facts that toll the statute." Valencia v. Universal
City Studios LLC, No. 1:14-CV-00528-RWS, 2014 WL
7240526, at *3 (N.D.Ga. Dec. 18, 2014) (citations omitted).
United's Motion to Dismiss Plaintiffs Claims for Lack of
contends that though Plaintiff alleges a "laundry
list" of illegal practices committed by United, she
fails to plausibly allege that Mr. Barrett suffered any
injuries from many of the practices on that list. (Doc. 34,
pp. 8-10.) Without an injury in fact, United maintains,
Plaintiff has no standing to complain of those practices.
(Id.) United argues that Plaintiff only has standing
to assert two claims: (1) that Mr. Barrett paid
discriminatory premiums; and (2) that he paid premiums that
exceeded the face amount of his policy. (Id.)
III of the United States Constitution limits the power of
federal courts to adjudicating actual "cases" and
"controversies." U.S. Const, art. III, § 2,
cl. 1. The most significant case-or-controversy doctrine is
the requirement of standing. See Georgia State Conference
of NAACP Branches v. Cox, 183 F.3d 1259, 1262 (11th Cir.
1999). "In essence the question of standing is whether
the litigant is entitled to have the court decide the merits
of the dispute or of particular issues." Nat'l
All, for the Mentally Ill. St. Johns Inc. v. Bd. of Cty.
Comm'rs, 376 F.3d 1292, 1294 (11th Cir. 2004)
(quoting Warm v. Seldin, 422 U.S. 490, 498 (1975)).
A plaintiff seeking to invoke federal jurisdiction carries
the burden to establish that she has standing to assert her
claim. See Lujan v. Defenders of Wildlife, 504 U.S.
555, 561 (1992).
are at least three distinct forms of standing: taxpayer
standing, individual standing, and organizational
standing." Nat'l Alliance for the Mentally
111, 376 F.3d at 1294 (citations omitted). To establish
standing under any of these forms a plaintiff must satisfy
three requirements: "(1) injury-in-fact; (2) a causal
connection between the asserted injury-in-fact and the
challenged action of the defendant; and (3) that the injury
will be redressed by a favorable decision." Houston
v. Marod Supermarkets, Inc., 733 F.3d 1323, 1328 (11th
Cir. 2013) (internal quotation marks omitted) (quoting
Shotz v. Cates, 256 F.3d 1077, 1081 (11th Cir.
2001)). To meet the injury-in-fact requirement, a plaintiff
must have suffered an invasion of a legally protected
interest which is: (1) "concrete and particularized,
" meaning the alleged injury affects the plaintiff
"in a personal and individual way"; and (2)
"actual or imminent, not conjectural or
hypothetical." Lujan, 504 U.S. at 560, 560 n. 1
(internal quotation marks and citation omitted). To be
"concrete, " an injury "must be 'de
facto'; that is, it must actually exist."
Spokeo, Inc. v. Robins, 578 U.S. ___, ___, 136 S.Ct.
1540, 1548 (2016). A plaintiff may not proceed in federal
court without establishing these three requirements at the
outset. When assessing standing "[a]t the pleading
stage, general factual allegations of injury resulting from
the defendant's conduct may suffice, for on a motion to
dismiss we presume that general allegations embrace those
specific facts that are necessary to support the claim."
United States v. Baxter Int'l, Inc., 345 F.3d
866, 881 (11th Cir. 2003) (quoting Nat'l Org, for
Women, Inc. v. Scheidler, 510 U.S. 249, 256 (1994)).
Court agrees that Plaintiffs Amended Complaint alleges some
practices that United employed generally without any
allegation that these practices affected Mr. Barrett.
Specifically, there are three areas of alleged wrongdoing
discussed below that appear to have not caused Mr. Barrett
any injury. Because Plaintiff has not alleged that Mr.
Barrett suffered a concrete and particularized ...