                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


4-19-2004

Estate Gleiberman v. Hartford Life Ins Co
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-3319




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"Estate Gleiberman v. Hartford Life Ins Co" (2004). 2004 Decisions. Paper 811.
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                                                 NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEAL
                           FOR THE THIRD CIRCUIT


                                      No. 03-3319


                         ESTATE OF DAVID GLEIBERMAN;
                       CLOTIDES GLEIBERM AN, on behalf of
                       themselves and all others similarly situated

                                            v.

                  THE HARTFORD LIFE INSURANCE COMPANY

                   Estate of David Gleiberman; Clotildes Gleiberman,

                                                 Appellants


                    On Appeal from the United States District Court
                             for the District of New Jersey
                             (D.C. Civil No. 03-cv-00309)
                       District Judge: Hon. Garrett E. Brown, Jr.


                    Submitted Pursuant to Third Circuit LAR 34.1(a)
                                    April 12, 2004

               BEFORE: RENDELL, COW EN and LAY*, Circuit Judges

                                 (Filed: April 19, 2004)


                                       OPINION




*Honorable Donald P. Lay, Senior United States Circuit Judge for the Eighth Circuit,
sitting by designation.
COWEN, Circuit Judge.

          The Estate of David Gleiberman and Clotides Gleiberman (collectively “the

Gleibermans”) appeal the order of the District Court dismissing their claims against the

Hartford Life Insurance Company (“Hartford”). The Gleibermans contend that the

District Court erred in ruling on the motion to dismiss before deciding the issue of class

certification, erred in finding that Hartford’s notification procedure was not inadequate as

a matter of law, and incorrectly applied the standard for a motion to dismiss. We will

affirm.

                                        Background

          On April 19, 1993, Mr. Gleiberman signed an “Application for Variable Annuity

Contract” (“the application”) with Hartford. On May 18, 1993, Mr. Gleiberman made a

payment of $617,281.90 to Hartford and was given a copy of the application he had

previously filled out and signed, as well as a copy of Hartford’s “Individual Flexible

Premium Variable Annuity Contract” (“the contract”). The contract stated that Mr.

Gleiberman had the right to cancel within ten days, by returning the contract to Hartford

along with a written request for cancellation. It informed Mr. Gleiberman that the

Annuity Commencement Date was July 4, 2002. The contract explained that “[t]his date

may be changed by the Contract Owner with 30 days advance written notification, and

may be the fifteenth of any month before or including the month of the Annuitant’s 90th

birthday.” (App. vol. 2 at 37.) The contract further provided Mr. Gleiberman with four



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alternatives for the annuity payment and explained, “[i]n the absence of an election by the

Contract Owner the Termination Value without deduction for any contingent deferred

sales charge will be applied on the Annuity Commencement Date under the second option

to provide a life annuity with 120 payments certain.” 1 (Id. at 39.) Finally, the contract

stated that Mr. Gleiberman was the annuitant, and that his wife, Clotides Gleiberman was

the designated beneficiary.

       On April 30, 2002, Hartford sent Mr. Gleiberman a courtesy reminder, notifying

him that it was time to select one of the payment options, and that if no option was

selected, the annuity would be paid out as a life annuity with 120 months certain.

Hartford received no response to the notice. On August 6, 2002, Hartford sent Mr.

Gleiberman a notice indicating that the life annuity with 60 payments certain had been

selected, along with a check for the first annuity payment.

       Mr. Gleiberman’s son, Paul Gleiberman, wrote to Hartford in on August 14, 2002,

requesting copies of the contract and copies of any correspondence from Mr. Gleiberman

confirming the election of the life annuity option. Hartford responded, indicating that the

contract had stipulated that the life annuity option would be selected if Mr. Gleiberman

failed to select one of the other options before the annuity commencement date of July 4,



   1
    Although the contract indicated that the life annuity option with 120 months certain
would be selected, it also stated that IRS rules governed the contract. Those rules
required that the period-certain portion of an annuity contract not exceed the life
expectancy of the annuitant. Mr. Gleiberman’s life expectancy was 5 years at the time the
annuity began.

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2002. On October 3, 2002, Paul Gleiberman again wrote to Hartford, explaining that Mr.

Gleiberman had never received the reminder notice, that Mr. Gleiberman was rejecting

the forced annuitization of the contract because it was done without his consent, and that

Mr. Gleiberman would not be depositing any of the annuity checks. Hartford replied that

the forced annuitization had occurred pursuant to the clear language of the contract, but

that Hartford was willing to (1) reinstate the original contract and defer the annuity for an

additional five years, or (2) allow Mr. Gleiberman to select one of the other options. The

letter included a quote for payments under the fourth option, in response to a request by

Paul Gleiberman.

       The Gleibermans later filed this putative class action suit, alleging common law

claims for unjust enrichment, breach of the implied duty of good faith and fair dealing,

restitution, and breach of fiduciary duty. In addition, the Gleibermans filed a claim under

N.J. Stat. Ann. § 17:29C-1.1 to 1.2. On July 17, 2003, the District Court dismissed the

complaint, finding that the Gleibermans had failed to state a claim upon which relief

could be granted.

                                         Discussion

       We exercise plenary review over a district court’s decision to grant a motion to

dismiss under Rule 12(b)(6). Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173,

183 (3d Cir. 2000). A motion to dismiss may be granted only when, “accepting all

well-pleaded allegations in the complaint as true, and viewing them in the light most



                                              4
favorable to plaintiff, plaintiff is not entitled to relief.” Maio v. Aetna, Inc., 221 F.3d

472, 481-82 (3d Cir. 2000) (citations omitted). In reviewing the motion to dismiss, we

may also consider exhibits attached to and incorporated into the complaint. See ALA,

Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994). In this case, such documents

include the application, the contract, the reminder notice, and the correspondence between

Paul Gleiberman and Hartford.

       The Gleibermans argue that the District Court deviated from the proper standard in

deciding the motion to dismiss. They argue that, because the complaint provided fair

notice of the claims being asserted against Hartford, the District Court should have denied

the motion to dismiss and permitted discovery to go forward. They do not point to a

specific error, however, and we find none.

       Even accepting everything stated in the complaint and incorporated documents as

true the Gleibermans have failed to state a claim upon which relief can be granted. The

contract disclosed to Mr. Gleiberman that the Annuity Commencement Date would be

July 4, 2002, but that Mr. Gleiberman could change that date if he desired. It also

informed him of the four payout options and, if he had not yet selected one of the four

methods of payment listed in the contract by the Annuity Commencement Date, the

second option would be the default selection. The contract disclosed that it was governed

by IRS rules, which limited the guaranteed period of any annuity to the life expectancy of

the Annuitant at the time of the Annuity Commencement Date. Finally, the contract



                                               5
informed Mr. Gleiberman of his right to cancel the contract within ten days. All of these

provisions were laid out in clear, unambiguous language.

       As of July 4, 2004, Mr. Gleiberman had not changed the Annuity Commencement

date or selected a payout option. Hartford began making payments under the second

option, as was spelled out in the contract. The District Court assumed, as it was required,

that all of these facts were true. Nevertheless, it found that the Gleibermans had failed to

state a claim.

       The Gleibermans have asserted that the contract was a contract of adhesion.

As the District Court found, however, there is nothing inherently inequitable or unfair in

the contract. Mr. Gleiberman had an opportunity to cancel the contract if he did not like

the terms; he did not do so, indicating an intent to be bound by the contract. In addition,

the Gleibermans argue that the contract was unfair because the default selection provision

was not adequately disclosed, and that Hartford’s practice of sending a courtesy reminder

notice regarding the selection provisions was unreasonable and inadequate. The default

provisions are clearly stated on page 14 of the contract, however. Insurance purchasers

are obligated to read their policies, and are bound by the clear terms in those policies.

Edwards v. Prudential Prop. & Cas. Co., 357 N.J. Super. 196, 204-05 (App. Div. 2003)

certif. denied, 176 N.J. 278 (2003). Insurance providers are under no obligation to point

out provisions or to explain clear and unambiguous provisions within the policy. Id. In

addition, the contract does not require that Hartford send any reminder notice regarding



                                              6
the Annuity Date. As there is nothing inherently unfair or inequitable in the contract, it is

valid and enforceable.

       The Gleibermans argue that Hartford is legally required to provide a reminder

notice of some kind, but cite no authority for this proposition. In the alternative, they

argue that Hartford should follow the notice provisions of N.J. Stat. Ann. § 17:29C-1.2.

This provision provides that “[e]very insurer shall permit its senior citizen insureds to

designate a third party to whom the insurer shall transmit a copy of notices of

cancellation, nonrenewal and conditional renewal.” N.J. Stat. Ann. § 17.29C-1.2. The

section defines senior citizen as an individual who is at least 62 years old. N.J. Stat. Ann.

§ 17.29C-1.1. The section further spells out that the notice must be sent via certified mail

with a return receipt requested, and that the envelope must be clearly marked “Important

Insurance Policy Information: Open Immediately.” N.J. Stat. Ann. § 17.29C-1.2.

       As the Gleibermans concede, this statute does not provide a private right of action.

As such, the District Court correctly dismissed the statutory claim. Further, the statute is

inapplicable to this case. The reminder notice was not a notice of cancellation,

nonrenewal, or conditional renewal; it was a reminder that the Annuity Commencement

Date was approaching. At all times, Hartford acting in accordance with the clear terms of

the contract. Hartford was not required to follow the provisions of § 17.29C-1.2, and the

Gleibermans point to no other authority that either requires Hartford to send a reminder

notice at all, or to send such notice in a specific manner.



                                              7
       As the contract is valid and enforceable, the District Court correctly dismissed the

claims for unjust enrichment and restitution. Claims for unjust enrichment and the

corresponding remedy, restitution, are only supportable when the parties’ rights are not

governed by a valid, enforceable contract. Suburban Transfer Service, Inc. v. Beech

Holdings, Inc., 716 F.2d 220, 226-27 (3d Cir. 1983). Likewise, the District Court

properly dismissed the claim for breach of the covenant of good faith and fair dealing, as

Hartford acted in accordance with the terms of the contract at all times. See Rudbart v.

North Jersey Dist. Water Supply Comm’n, 127 N.J. 344, 365-66 ( 1992) (the principle of

fair dealing will not alter the written terms of a contract). Finally, the contract clearly

stated the Annuity Commencement Date, the payout options, the default payout option,

and the fact that all of the options were governed by IRS law, which required that any

payment certain period of the annuity be limited to the annuitant’s life expectancy at the

beginning of the annuity period. Hartford was under no obligation to point out these

provisions, and at all times, Hartford acted under the clear terms of the contract. Even

assuming that Hartford owed Mr. Gleiberman a fiduciary duty, Hartford did not breach

that duty.

       Finally, the Gleibermans argue that the District Court erred in granting Hartford’s

motion to dismiss before deciding the issue of class certification. We review decisions

regarding class certification for abuse of discretion. Zimmerman v. HBO Affiliate Group,

834 F.2d 1163, 1169-70 (3d Cir. 1987). The District Court did not abuse its discretion in



                                               8
determining that the named plaintiffs had failed to state a claim upon which relief could

be granted prior to deciding the issue of class certification. See Searles v. Southeastern

Pa. Transp. Auth., 990 F.2d 789, 790 n.1 & 794 (3d Cir. 1993) (affirming grant of motion

to dismiss for failure to state a claim and noting that “[t]he district court did not rule on

the class certification because it ultimately concluded that plaintiff failed to state a

claim.”); Zimmerman, 834 F.2d at 1169-70 (finding no error in district court’s refusal to

consider class certification before determining whether the named plaintiff had a cause of

action).

                                         Conclusion

       For the reasons discussed above, the judgment of the District Court will be

affirmed.




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