Graff v. Brighthouse Life Insurance Company

Background

Daniel Graff sued Brighthouse Life Insurance Company, also known as Brighthouse Financial Life Insurance Company. The case began in state court and Brighthouse removed it to federal court based on diversity jurisdiction. Graff owns a flexible-premium adjustable life insurance policy issued in 2004 by The Travelers Life and Annuity Company, which eventually became Brighthouse. His father, Robert Graff, is the insured.

The policy has a maturity date of November 28, 2026, when Robert turns 100, and provides an $800,000 death benefit. Graff alleged that he had already paid more than $874,000 in premiums and that a 2022 ledger showed he might have to pay another $755,500 if Robert lived to the maturity date. He alleged that the total premiums could therefore reach approximately $1.6 million for a policy with a maximum payout of $800,000.

Claims

Count One alleged that the policy violated Minnesota Statutes § 72C.06 because it did not use language that was easily readable and understandable to a person of average intelligence and education. Count Two alleged that the same alleged lack of clarity breached the implied covenant of good faith and fair dealing. Count Three asserted unjust enrichment based on the anticipated future premium payments. Graff sought declarations that the policy language was unclear, that further payments were not required, that the policy was null and void, and that the policy should be treated as paid up.

Statute of Limitations

The court applied the parties’ agreed six-year limitations period. It concluded that Counts One and Two accrued when the policy was provided to Graff in November 2004, because both claims were based on the policy’s language. Graff filed the action on March 9, 2023, more than six years later. The court therefore held that both claims were untimely on the face of the complaint.

The court rejected Graff’s argument that a discovery rule delayed accrual until 2022, when he learned about Minnesota’s readability statute and received the ledger. The court explained that ignorance of a legal right generally does not extend the limitations period, and that the policy itself described how premiums would be calculated and could increase over time. The court also noted that Graff did not allege that Brighthouse fraudulently concealed the facts underlying Counts One and Two.

The court did not dismiss the unjust-enrichment claim on limitations grounds. It stated that the accrual issue for that claim raised unresolved or novel questions, but concluded that the claim failed for other reasons.

Private Right of Action

The court separately held that Count One failed because Minnesota Statutes § 72C.06 does not expressly or by clear implication create a private right of action. The court reasoned that Minnesota’s insurance laws give the Minnesota Commissioner of Commerce enforcement authority and require insurers to submit policies for approval. The statutory scheme therefore did not support a private lawsuit by Graff to enforce the readability requirement.

Unjust Enrichment

The court held that Count Three failed to state a claim for unjust enrichment. Unjust enrichment is an equitable remedy generally unavailable when a valid contract governs the parties’ rights. Graff’s allegations identified the insurance policy as the agreement governing the parties’ relationship. In addition, the alleged benefit was the future premium money Brighthouse would receive if Robert lived until the policy’s maturity date. Accepting Graff’s allegations as true, those payments would be benefits Brighthouse was entitled to receive under the policy, which defeated the unjust-enrichment claim.

Because it resolved the case on these grounds, the court declined to address Brighthouse’s filed-rate-doctrine argument. It also rejected the suggestion that requesting declaratory relief prevented dismissal on limitations grounds or created a private right of action.

Disposition

The court granted Brighthouse’s motion to dismiss and dismissed the complaint with prejudice. It directed that judgment be entered. The order was signed by United States District Judge Katherine Menendez.