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TRUSTMARK INSURANCE v. GENERAL COLOGNE LIFE RE OF AMERICA

January 20, 2004.

TRUSTMARK INSURANCE COMPANY, Plaintiff,
v.
GENERAL COLOGNE LIFE RE OF AMERICA, Defendant



The opinion of the court was delivered by: BLANCHE MANNING, District Judge

MEMORANDUM AND ORDER

Plaintiff Trustmark Insurance Company ("Trustmark") brought the instant action seeking: (1) a declaratory judgment that Defendant General Cologne Life Reinsurance of America ("Cologne") is obligated under an alleged joint venture agreement that it made with Trustmark to reinsure a block of individual disability insurance ("IDI Policies")*fn1 (Count I); (2) specific performance under the alleged agreement (Count II); (3) damages for breach of contract (Count III); (4) damages for breach of fiduciary duty (Count IV); and (5) damages for promissory estoppel (Count V). After extensive discovery and briefing, this Court GRANTED Cologne's Motion for Summary Judgment as to Counts I-IV but DENIED the motion as to Count V (promissory estoppel).

After a bench trial on the promissory estoppel claim, Cologne brought the present Amended and Restated Motion for Judgment as a Matter of Law, pursuant to Federal Rule of Civil Procedure 52. For the reasons set forth herein, the Court DENIES this motion. Page 2

  BACKGROUND*fn2

  From 1998 to 1999, Trustmark and Cologne investigated the possibility of reinsuring various blocks of IDI policies.*fn3 In researching the potential purchase of IDI blocks, Cologne and Trustmark did not codify their intentions in a single document. During the course of investigating various IDI blocks, Trustmark, Cologne, and John Hewitt & Associates ("JHA"), a subsidiary of Cologne, performed due diligence on a block of 7,000 IDI policies underwritten by Hartford Life Insurance Company ("Hartford") ("the Hartford Block"). On October 28, 1998, after conducting due diligence on the Hartford Block, Trustmark signed a Letter of Intent with Hartford to acquire the IDI block ("the Letter of Intent" or "Letter"). Cologne, however, did not sign, nor was mentioned, in the Letter of Intent.

  Trustmark contends that it only executed the Letter of Intent after Cologne reviewed the Letter and agreed to share in the risk of reinsuring the Hartford Block. Without Cologne's approval, Trustmark alleges that it would never have entered into the Letter of Intent. Cologne, on the other hand, denies that it agreed to participate in reinsuring the Hartford Block.

  The Letter of Intent stated that "time is of the. essence" and that the Final Purchase Agreement for the Hartford Block ("the Final Purchase Agreement") would be executed no later than December 1, 1998, "unless a later date is mutually agreed upon." The Final Purchase Page 3 Agreement, however, was not signed until December 28, 1999. Like the Letter of Intent, Cologne did not sign, nor was it mentioned, in the Final Purchase Agreement.

  Prior to the execution of the Final Purchase Agreement, on September 3, 1999, however, Cologne informed Trustmark that it was no longer interested in sharing in the risk on the Hartford Block.

  Although Cologne had disavowed any interest in reinsuring the Hartford Block and Trustmark was facing significant losses, Trustmark contends that it was bound to enter into the Final Purchase Agreement by the Letter of Intent. Cologne, on the other hand, contends that by December 1999, Trustmark was no longer bound by the Letter of Intent. Cologne asserts that the Final Purchase Agreement contained materially different terms from the Letter of Intent. Trustmark contests this assertion, and contends that any differences in the terms were slight and at most constitute a minor variance from the terms in the Letter of Intent.

  After Cologne refused to accept any liability on the Hartford Block, Trustmark brought the instant action. After extensive discovery and briefing, this Court GRANTED Cologne's Motion for Summary Judgment as to Counts I-IV but DENIED the motion as to the promissory estoppel claim (Count V). In ruling on this motion, this Court found that because Trustmark failed to present sufficient evidence that Trustmark and Cologne shared the requisite joint control, no joint venture exists as a matter of law, and therefore, summary judgment was appropriate as to Counts I-IV of Trustmark's Complaint because these counts were based on the existence of an alleged joint venture. In denying the motion as to the promissory estoppel claim, this Court found that there was a genuine material question of fact as to whether Trustmark Page 4 reasonably relied on an unambiguous promise to its detriment.*fn4

  After a bench trial on the promissory estoppel claim, Cologne brought the instant motion seeking a judgment as a matter of law, pursuant to Rule 52.*fn5

  ANALYSIS

  Cologne contends that it is entitled to a judgment as a matter of law because Trustmark has failed to establish: (1) the elements of its promissory estoppel claim; and (2) that it is entitled to invoke the partial performance exception to the statute of frauds. The Court will address each of these contentions in turn.

  I. Promissory Estoppel

  To prevail on its promissory estoppel claim, Trustmark must show: (A) an "unambiguous promise" by Cologne to Trustmark to reinsure the Hartford Block; (B) Trustmark relied on the promise in entering into the Letter of Intent with Hartford; (C) Trustmark's reliance was "expected and foreseeable" by Cologne; and (D) Trustmark actually relied on the promise to their detriment. Cohabaco Cigar Co v. United States Tobacco Co., 1999 WL 988805, at *10 ...


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