First Department Unanimously Affirms Dismissal of Fraud Action Against Manulife

New York’s First Department on April 8, 2008 affirmed the dismissal of all claims against Kelley Drye client The Manufacturers Life Insurance Company (U.S.A.) (“Manulife”) (now known as John Hancock Life Insurance Company (U.S.A.)), in a case brought by two individuals asserting that Manulife made misrepresentations about the premiums required to keep two high value life insurance policies in force.

Kelley Drye originally secured dismissal of the entire case, on a motion to dismiss, over three years ago. Kelley Drye successfully argued that the all of the claims were barred by a prior class action settlement and the plaintiffs could not avoid dismissal by claiming that they did not receive notice of that settlement. The trial court agreed.

Several months later, however, the trial court vacated its decision as to one of the plaintiffs because she died before the earlier decision was issued. Thus, Kelley Drye moved again to dismiss the claims which were then being asserted by the decedent’s daughter, who argued that her claims were not barred by settlement of the federal class action lawsuit because the claims in the New York action did not come within the scope of the class action settlement.

The Kelley Drye team secured the dismissal of the entire case – a second time – in February 2007. In addition to finding that the prior class action settlement barred all of the claims in the action, the trial court also held that all claims against Manulife were barred by the applicable statutes of limitation.

The remaining plaintiff appealed the trial court’s February 2007 decision to the First Department, to which she had a right of appeal. Less than three weeks after oral argument, the First Department issued a written decision unanimously affirming the trial court’s dismissal order and awarding Manulife its costs on the appeal. Rejecting plaintiff’s argument that she should have been granted leave to replead her claims, the appellate court held that leave to replead was properly denied because plaintiff’s action clearly lacks merit.”

Kelley Drye partners Neil Merkl and Philip Robben, assisted by associate Damon Suden represented Manulife in this matter.