Maltz v. Pruco Life Insurance Company

Background

Jason Maltz, Jeffrey Maltz, and Michele Maltz-Matyschsyk sued Pruco Life Insurance Company in state court, alleging that they were beneficiaries of a life-insurance policy issued by Pruco on the life of their deceased mother, Barbara Maltz, and that Pruco refused to pay their claim. Pruco removed the action to federal court and filed an answer and counterclaim seeking rescission, meaning cancellation, of the policy based on alleged misrepresentations by Barbara Maltz in her application.

The court stated that it had subject-matter jurisdiction under 28 U.S.C. § 1332(a). The pending motion was the plaintiffs’ request for permission to amend their complaint to add a claim for equitable estoppel. Equitable estoppel is a legal theory that can prevent a party from taking a position inconsistent with a representation on which another party reasonably relied.

Legal standard

Under Federal Rule of Civil Procedure 15(a)(2), courts should generally allow an amended pleading when justice requires. A court may deny leave to amend for undue delay, bad faith, prejudice, or futility. Because the plaintiffs sought amendment after the court-ordered deadline, Rule 16(b)(4) also required them to show good cause, which depends on their diligence.

Court’s analysis

The court found good cause because the plaintiffs said they discovered the information supporting their new claim in a document Pruco produced in December 2020 and confirmed the basis for the claim during a deposition in late February 2021. The original deadline for amended pleadings was November 20, 2020. The court therefore found that the plaintiffs had acted diligently and had not delayed unduly.

The court found no indication that the request was made for an improper purpose or in bad faith. It also found that Pruco had not persuasively shown prejudice because discovery was not scheduled to end until July 2021, leaving time for additional discovery related to the amendment.

The court further found that the amendment would not be futile. The proposed complaint alleged that Pruco sent Barbara Maltz a letter indicating that the policy was valid, after which she sought medical attention. The plaintiffs alleged that she would not have sought medical attention had she known the policy was invalid. They argued that the letter prevented Pruco from seeking rescission. The court concluded that the proposed complaint plausibly alleged a prima facie equitable-estoppel claim under Connecticut law. The court noted that this determination did not prevent Pruco from seeking summary judgment after discovery or raising an appropriate defense at trial.

Disposition

The court granted the plaintiffs’ request for leave to file an amended complaint. It ordered them to file the amended complaint by April 30, 2021, and ordered Pruco to answer, move, or otherwise respond within 21 days after the filing. The clerk was instructed to terminate the letter-motion.