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Whitman v. Estate of Whitman

United States District Court, S.D. Ohio, Western Division, Dayton

May 3, 2018

BRUCE B. WHITMAN, et al., Plaintiffs,
v.
ESTATE OF ROY W. WHITMAN, ESTHER WHITMAN, EXTRX., et al., Defendants.

         ENTRY AND ORDER GRANTING DEFENDANT FREDERICK D. TUCKER'S MOTION FOR JUDGMENT ON THE PLEADINGS (DOC. 13), GRANTING DEFENDANT ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA'S MOTION FOR JUDGMENT ON THE PLEADINGS (DOC. 22), DENYING PLAINTIFF BRUCE B. WHITMAN'S MOTION TO CONVERT DEFENDANTS' MOTIONS FOR JUDGMENT ON THE PLEADINGS TO SUMMARY JUDGMENT MOTIONS (DOC. 38), DENYING MOTION FOR LEAVE TO FILE A FOURTH AMENDED COMPLAINT (DOC. 36), AND DENYING MOTION TO STAY DISCOVERY (DOC. 23)

          THOMAS M. ROSE UNITED STATES DISTRICT JUDGE

         This statutory interpleader case is before the Court on the Motions for Judgment on the Pleadings (Docs. 13, 22) filed by Defendant Frederick D. Tucker (“Tucker”) and Defendant Allianz Life Insurance Company of North America (“Allianz”), respectively. Also pending are Plaintiffs' Motion for Leave to File a Fourth Amended Complaint (Doc. 36) and Motion to Convert the Motions for Judgment on the Pleadings into Motions for Summary Judgment (Doc. 38). In addition, Tucker has moved to stay discovery pending the Court's ruling on these Motions. (Doc. 23.)

         For the reasons below, the Court GRANTS both Tucker's and Allianz's Motions for Judgment on the Pleadings (Docs. 13, 22). The Court DENIES Plaintiff's Motion for Leave to File a Fourth Amended Complaint (Doc. 36) as futile and DENIES Plaintiff's Motion to Convert the Motions for Judgment on the Pleadings into Motions for Summary Judgment (Doc. 38) because additional facts are not necessary to rule on Plaintiff's claims against Tucker and Allianz. The Court DENIES Tucker's Motion to Stay Discovery (Doc. 23) as moot.

         I. BACKGROUND

         This action concerns three Allianz annuity policies, which Roy Whitman (“Roy”), now deceased, purchased in 2001. Roy was survived by his wife, Esther Whitman (“Esther”), who serves as Executor of his Estate; and by his three children from a previous marriage: Plaintiffs Bruce B. Whitman (“Bruce”), Laura Whitman (“Laura”), and Joy P. Whitman Rush (“Joy”). Each annuity names one of his children as the annuitant: Policy Number 6949092 naming Joy; Policy Number 6949070 naming Laura; and Policy Number 6949081 naming Bruce (collectively, the “Allianz Annuities”). Each policy also states, however, that if Roy dies before the annuitant, his rights “will pass to the executor of [his] estate unless ownership has been otherwise assigned.” (Doc. 2-1.)

         In April 2017, Bruce, Laura, and Joy each made a claim for their respective annuity. (Doc. 7 at ¶ 2.) Esther rejected all three claims and Bruce thereafter commenced a civil case in the Court of Common Pleas of Hamilton County, Ohio (the “State Court Case”). (Id. at ¶ 3.) Allianz removed the case to this Court as a statutory interpleader action under 28 U.S.C. § 1335. (Doc. 1.) On December 27, 2017, the Court granted Allianz's motion to join Laura and Joy as indispensable parties. (Docs. 3, 24.)

         Allianz's interpleader claim asks this Court to decide whether the Allianz Annuities should be distributed to Esther, as Executrix, or to Bruce, Joy, and Laura. Plaintiffs allege that they are entitled to direct distribution of the Allianz annuities or proceeds as the named annuitants. (Doc. 7 at ¶ 16.) Esther asserts that other obligations take precedence over Plaintiffs' claims. (Id.)

         Plaintiffs allege that, upon his death, Roy intended for the annuities to be paid to Bruce, Laura, and Joy. Plaintiffs further allege that Allianz was negligent through its agent, Tucker, in failing to prepare the annuities according to Roy's intent. (Id. at ¶ 18.) Plaintiffs assert a claim for negligent misrepresentation against both Allianz and Tucker and a claim for bad faith against Allianz only for its handling of Plaintiffs' claims to the annuities.

         II. DEFENDANTS' MOTIONS FOR JUDGMENT ON THE PLEADINGS

         Allianz and Tucker move to dismiss Plaintiffs' claim for negligent misrepresentation as time barred and for failure to state a claim upon which relief can be granted. (Doc. 22 at 1; Doc. 13 at 1.) Allianz also moves to dismiss Plaintiffs' bad faith claim for failure to state a claim upon which relief can be granted. (Doc. 22 at 1.)

         A. Legal Standard

         A Rule 12(c) motion for judgment on the pleadings attacks the sufficiency of the pleadings and is subject to the same standard applicable to a motion to dismiss under Rule 12(b)(6). Ziegler v. IBP Hog Mkt., 249 F.3d 509, 511-12 (6th Cir. 2001). A “motion to dismiss for failure to state a claim is a test of the plaintiff's cause of action as stated in the complaint, not a challenge to the plaintiff's factual allegations.” Golden v. City of Columbus, 404 F.3d 950, 958-59 (6th Cir. 2005). A Rule 12(c) motion should be granted if there is an absence of law to support a claim of the type made or of facts sufficient to make a valid claim, or if on the face of the complaint there is an insurmountable bar to relief indicating that the plaintiff does not have a claim. Cmty. Mental Health Serv. v. Mental Health & Recovery Bd., 395 F.Supp.2d 644, 649 (S.D. Ohio 2004).

         B. Plaintiffs' Claim for Negligent Misrepresentation

         As mentioned, Allianz and Tucker move to dismiss the negligent misrepresentation claim on two grounds: first, as time barred under the statute of limitations and, second, for failure to state a claim. The Court does not reach the second ground for dismissal because, as discussed below, the claim is barred by the statute of limitations.

         The parties agree that the Supreme Court of Ohio's recent decision in LGR Realty, Inc. v. Frank & London Ins. Agency, 2018-Ohio-334, is directly relevant to whether the statute of limitations bars Plaintiffs' claim here. Plaintiffs argue that LGR Realty is “resoundingly favorable” to them, however, while Allianz and Tucker argue that LGR Realty confirms that Plaintiffs' claim is time-barred. (Doc. 33 at 2; Doc. 34 at 1; Doc. 35 at 1.) They both cannot be right.

         Under Ohio law, a four-year statute of limitations applies to professional negligence claims, like Plaintiffs' claim for negligent misrepresentation in this case. See Ohio Rev. Code 2305.09; Investors REIT One v. Jacobs, 46 Ohio St.3d 176, 546 N.E.2d 206 (1989); Allen v. Andersen Windows, Inc., 913 F.Supp.2d 490 (S.D. Ohio 2012). The Supreme Court of Ohio has long recognized that a “[s]tatute of limitations commences to run so soon as the injurious act complained of is perpetrated, although the actual injury is subsequent * * *.” LGR Realty, 2018-Ohio-334 at ¶ 14 (quoting Kerns v. Schoonmaker, 4 Ohio 331 (1831)). Yet, as the Supreme Court of Ohio has also observed, there are two primary exceptions to this rule:

One exception to the general rule is the discovery rule, which provides that “[w]hen an injury does not manifest itself immediately, the cause of action does not arise until the plaintiff knows or by the exercise of reasonable diligence should have known, that he had been injured by the conduct of the defendant, for purposes of the statute of limitations.” O'Stricker [v. Jim Walter Corp., 4 Ohio St.3d 84, 87, 447 N.E.2d 727 (1983)] at paragraph two of the syllabus.
The second exception to the general rule is the delayed-damage rule, which this court first adopted in Velotta v. Leo Petronzio Landscaping, Inc., 69 Ohio St.2d 376, 433 N.E.2d 147 (1982). Under the delayed-damage rule, “where the wrongful conduct complained of is not presently harmful, the cause of action does ...

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