Vida Longevity Fund, LP v. Lincoln Life & Annuity Company of New York

Background

Vida Longevity Fund, LP brought a putative class action alleging that Lincoln Life & Annuity Company of New York breached life-insurance contracts by continuing to charge the same cost-of-insurance rates despite improved mortality experience. Vida alleged that it owned two policies issued by Lincoln in New York and that the policies contained standardized terms governing those charges.

Vida moved to amend the complaint to add Andrew Nitkewicz, in his capacity as trustee of the Joan C. Lupe Family Trust. The proposed amendment would have added a separate putative class claim alleging that Lincoln failed to refund premiums paid for periods after the end of the policy month in which an insured died, as allegedly required by Section 3203 of the New York Insurance Law.

Lincoln separately moved under 28 U.S.C. § 1404(a) to transfer the case to the United States District Court for the Eastern District of Pennsylvania. Lincoln relied principally on related cases pending there that involved similar cost-of-insurance allegations, but different plaintiffs, defendants, and insurance policies.

Motion to Amend

The court denied Vida’s motion to amend. It applied the liberal amendment standard under Rule 15 of the Federal Rules of Civil Procedure and the permissive-joinder requirements of Rule 20 because the proposed amendment would add a new plaintiff. Rule 20 requires the plaintiffs’ claims to arise from the same transaction or occurrence and to present a common question of law or fact material to the defendant’s liability.

The court found that Vida’s existing cost-of-insurance claim and the Trust’s proposed premium-refund claim involved separate policies, different alleged conduct, and different contract provisions. Vida’s claim concerned Lincoln’s alleged failure to adjust cost-of-insurance charges, while the Trust’s proposed claim concerned Lincoln’s alleged failure to issue certain premium refunds. The court also found that Vida identified no specific common legal or factual question material to Lincoln’s liability on both claims.

The court rejected Vida’s argument that possible overlap between members of the proposed classes justified joining the named plaintiffs. No class had yet been certified, and Vida had not identified a potential class member whose claims independently satisfied Rule 20. The court also rejected Vida’s concern that refusing joinder could later prevent class members from asserting premium-refund claims. It concluded that the proposed amendment would be futile because the proposed joinder was improper, and therefore denied the motion to amend. The court did not need to decide Lincoln’s additional arguments concerning delay, bad faith, or prejudice.

Motion to Transfer

The court concluded that the case could have been brought in the Eastern District of Pennsylvania because Lincoln either consented to personal jurisdiction there or could be deemed to reside there under the federal venue statute. The court nevertheless denied transfer because Lincoln did not make the required clear and convincing showing that transfer would promote convenience or the interests of justice.

The court found the witness-convenience, compulsory-process, party-convenience, document-location, and relative-means factors neutral. It found that the location of the operative facts favored New York because the insurance contracts at issue were made there. It also found that the governing-law factor favored New York, though modestly, because the claims were governed by New York law. Vida’s choice of forum favored retaining the case, although that choice received less weight because Vida sought to represent a nationwide class.

The court gave insufficient weight to the related cases pending in Pennsylvania. Those cases involved different plaintiffs, different defendants, and different insurance policies. The parties had also agreed to coordinate discovery, reducing the potential duplication that Lincoln identified. The court further concluded that the possibility of inconsistent rulings did not support transfer because Lincoln was not a party to the Pennsylvania cases and any rulings there would be persuasive rather than controlling in this case.

Disposition

The court denied Vida’s motion to amend and denied Lincoln’s motion to transfer. The Clerk was directed to close both motions on the docket. The opinion did not decide whether Lincoln breached the insurance contracts or whether either proposed class should be certified.

Judge

The order was signed by Debra Freeman, United States Magistrate Judge.