Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Guarantee Trust Life Insurance Company v. American Medical and Life Insurance Company

February 3, 2010

GUARANTEE TRUST LIFE INSURANCE COMPANY, PLAINTIFF,
v.
AMERICAN MEDICAL AND LIFE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Judge George M. Marovich

MEMORANDUM OPINION AND ORDER

Plaintiff Guarantee Trust Life Insurance Company ("GTL") filed a complaint against defendant American Medical and Life Insurance Company ("American Life"), and American Life filed counterclaims. GTL moves to dismiss American Life's counterclaims. For the reasons set forth below, the Court denies the motion.

I. Background

Plaintiff GTL is a mutual insurance company in Illinois, and defendant American Life is an insurance company in New York. The two were brought together by American Life's desire to do business in states where GTL, but not American Life, was licensed to sell policies.

In its complaint, GTL alleges that in 2008, GTL and American Life entered an agreement (the "American-as-Reinsurer Agreement") under which American Life sold policies using GTL's policy forms. American Life agreed to reinsure 40% of the liability under the policies it sold on GTL's forms, and GTL ceded premiums to American Life. GTL says it performed its obligations under the American-as-Reinsurer Agreement.

Things went awry due to an offset provision in the American-as-Reinsurer Agreement. The offset provision allowed each side to offset any amounts it owed the other based on amounts the other owed to it--even amounts owed under other agreements. GTL alleges that American Life refused to pay its share of claims and that American Life's justification was that GTL owed it money under a separate agreement. GTL alleges that "[t]here is no valid and enforceable agreement for which an offset would be available to American."

GTL filed suit. In Count I, GTL alleges that American Life breached the American-asReinsurer Agreement. In Count II, GTL alleges that American Life violated Section 155 of the Illinois Insurance Code by refusing to pay claims.

American Life answered the complaint, asserting nine affirmative defenses. American Life also filed six counterclaims. The Court takes as true the allegations in American Life's counterclaims.

According to American Life, at some point, the parties began discussing a reinsurance agreement (the "GTL-as-Reinsurer Agreement"), whereby GTL would reinsure part of the risk assumed by American Life under medical insurance policies. The GTL-as-Reinsurer Agreement was to begin in August 2008. American Life alleges that the parties ultimately reached a meeting of the minds. Between August 2008 and June 2009, American Life wrote policies and ceded to GTL approximately $500,000 in premiums.

By August 2009, a dispute erupted. In August 2009, GTL informed American Life that it believed it was not bound by the GTL-as-Reinsurer Agreement. GTL also informed American Life that GTL would not reinsure American Life's policies due to GTL's allegedly-mistaken belief that American Life had illegally issued policies without certificates of authority, which are required under state law. In September 2009, GTL mailed American Life a check for approximately $600,000.00, which was meant as a refund of the premiums American Life had ceded to GTL. American Life sent the check back.

In Count I of its counterclaim, American Life seeks a declaratory judgment that the GTLas-Reinsurer Agreement is enforceable. In Count II, American Life seeks a declaration that GTL ratified the GTL-as-Reinsurer Agreement. In Count III, American Life alleges that GTL breached the GTL-as-Reinsurer Agreement. In Count IV, American Life seeks a declaration that it is entitled to an offset against the sums it owes under the American-as-Reinsurer Agreement. In Count V, American Life seeks restitution. In Count VI, American Life seeks a declaration that if the GTL-as-Reinsurer Agreement is unenforceable then so is the American-as-Reinsurer Agreement.

II. Standard on a motion to dismiss

The Court may dismiss a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure if the plaintiff fails "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). In considering a motion to dismiss, the Court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in the plaintiff's favor. McCullah v. Gadert, 344 F.3d 655, 657 (7th Cir. 2003). Under the notice-pleading requirements of the Federal Rules of Civil Procedure, a complaint must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint need not provide detailed factual allegations, but mere conclusions and a "formulaic recitation of the elements of a cause of action" will not suffice. Bell Atlantic, 127 S.Ct. at 1964-1965. "After Bell Atlantic, it is no longer sufficient for a complaint 'to avoid foreclosing possible bases for relief; it must actually suggest that the plaintiff has a right to relief, by providing allegations that raise a right to relief above the speculative level.'" Tamayo v. Blagojevich, 526 F.3d 1074, 1084 (7th Cir. 2008) (quoting Equal Employment Opportunity Comm'n v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir. 2007)). To survive a motion to dismiss, a claim must be plausible. Iqbal, 129 S.Ct. at 1950. Allegations that are as consistent with lawful conduct as they are with unlawful conduct are not sufficient; rather, a plaintiff must include allegations that "nudg[e] their claims across the line from conceivable to plausible." Bell Atlantic, 127 S.Ct. at 1974.

Pursuant to Rule 12(f) of the Federal Rules of Civil Procedure, a court "may strike from a pleading any insufficient defense or any redundant, immaterial, impertinent, or ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.