HOLJES v. LINCOLN NATIONAL LIFE INSURANCE COMPANY (2025)

MEMORANDUM & ORDER GRANTING DEFENDANT'S MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS

After being denied long-term disability benefits, Paul Holjes brought this suit against The Lincoln National Life Insurance Company (“Lincoln”). Plaintiff alleges the following causes of actions: (1) breach of contract under California or, alternatively, Connecticut or North Carolina law, (2) violation of Cal. Civ. Code § 3345, (3) violation of Cal. Bus & Prof. Code § 17200 by violation of Cal. Ins. Code § 270.03(h), (4) breach of the covenant of good faith and fair dealing/bad faith, (5) violation of the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. § 42-110b, et seq., (6) violation of N.C. Gen. Stat. § 75-1.1; (7) intentional misrepresentation, and (8) promissory estoppel. Before the Court is Defendant's motion for partial judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). For the reasons stated herein, the motion for partial judgment on the pleadings is granted.

I. BACKGROUND 1

A. Factual Background

Plaintiff, a financial advisor based in Hartford, obtained coverage under a group disability insurance policy (“Group Policy”) issued by Lincoln, an insurance company doing business in Connecticut with a principal place of business in Indiana.² (FAC, ECF No. 87, ¶¶ 1, 2, 8, 9, 11.) Plaintiff obtained this coverage through his association with LPL Financial LLC. (“LPL”), a broker-dealer headquartered in California. (Id. ¶¶ 8, 9.)

After enrolling for coverage under the Group Policy, Plaintiff was involved in an automobile accident while driving on Interstate 91 in Connecticut. (Id. ¶¶ 11, 16; Def. Ex. B, ECF No. 140-3.) Plaintiff alleges that the injuries he sustained in the accident rendered him disabled, unable to perform his own occupation and entitled to benefits under the Group Policy. (FAC ¶¶ 17–19.)

After initially approving Plaintiff's claim and paying him for eighteen months, Lincoln discontinued payments upon learning that Plaintiff had affiliated with Kestra Investment Services, LLC (“Kestra”), a new broker-dealer. (Id. ¶¶ 21–23.) Lincoln justified the discontinuation on the grounds that Plaintiff's association with Kestra indicated that he was able to work as a financial advisor. (Id. ¶¶ 22, 23.) Following a series of unsuccessful appeals, Plaintiff filed the instant lawsuit. (Id. ¶¶ 28, 29, 33, 34.)

B. Procedural Background

On September 13, 2021, Plaintiff commenced this action in the Superior Court, Judicial District of Hartford. (Pl. Compl., ECF No. 1-1.) On September 23, 2021, Lincoln filed a Notice of Removal. (ECF No. 1.) Over the course of the following two years, Plaintiff amended his complaint three times until finally filing his Fourth Amended Complaint on November 14, 2023. (ECF Nos. 26, 44, 50, 87.) Defendant filed its Answer to the Fourth Amended Complaint on November 28, 2023. (ECF No. 89.)

On June 3, 2024, Lincoln filed a motion for partial judgment on the pleadings. (ECF No. 140.) Plaintiff filed a memorandum in opposition to the motion on June 24, 2024. (ECF No. 144.) On July 8, 2024, Lincoln filed a reply brief. (ECF No. 147.)

II. LEGAL STANDARD

“After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). In assessing a motion for judgment on the pleadings, a district court “may consider all documents that qualify as part of the non-movant's ‘pleading,’ including (1) the complaint or answer, (2) documents attached to the pleading, (3) documents incorporated by reference in or integral to the pleading, and (4) matters of which the court may take judicial notice.” Lively v. WAFRA Inv. Advisory Grp., Inc., 6 F.4th 293, 306 (2d Cir. 2021). Drawing all reasonable inferences in a non-movant's favor, a court's task in evaluating a Rule 12(c) motion is “to assess the legal feasibility of the complaint; it is not to assess the weight of the evidence that might be offered on either side[.]” Lynch v. City of New York, 952 F.3d 67, 75 (2d Cir. 2020). “[A] court may consider undisputed allegations of fact on a Rule 12(c) motion under the same standard as Rule 12(b)(6), but it may not use a motion for judgment on the pleadings to weigh disputed factual allegations.” Lively, 6 F.4th at 302.

“To survive a motion for judgment on the pleadings, ‘a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” ’ ” Matzell v. Annucci, 64 F.4th 425, 433 (2d Cir. 2023) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. A court is not required to accept as true “conclusory allegations or legal conclusions masquerading as factual conclusions.” Rolon v. Henneman, 517 F.3d 140, 149 (2d Cir. 2008) (quoting Smith v. Local 819 I.B.T. Pension Plan, 291 F.3d 236, 240 (2d Cir. 2002)).

III. DISCUSSION

Defendant moves for partial judgment on the pleadings on all Plaintiff's common law claims, to the extent he asserts California law applies, and to dismiss Plaintiff's Second, Third, and Sixth Counts in their entirety. (Def. Mot., ECF No. 140, at 1). As discussed below, the Court concludes that California law does not apply to Plaintiff's common law claims and judgment on the pleadings is granted to Lincoln on Counts Two, Three, and Six.

A. Plaintiff's Common Law Contract Claims

Defendant first contends that Plaintiff's common law claim sounding in contract, Count One, is not governed by California law because there are not sufficient contacts with California and the choice-of-law provision in the Group Policy identifies North Carolina law as governing the contract. (Def. Mem., ECF No. 140-1, at 5–11.) For the following reasons, the Court agrees.

As a preliminary matter, a federal court sitting in diversity follows the choice-of-law rules of the forum state. See, e.g., Thea v. Kleinhandler, 807 F.3d 492, 497 (2d Cir. 2015); Bigio v. Coca-Cola Co., 675 F.3d 163, 169 (2d Cir. 2012); Curley v. AMR Corp., 153 F.3d 5, 12 (2d Cir. 1998). Connecticut courts have adopted the “most significant relationship approach of the Restatement (Second) for analyzing choice of law issues involving contracts.” Gen. Accident Ins. Co. v. Mortara, 314 Conn. 339, 101 A.3d 942, 946 (2014) (cleaned up). Accordingly, a choice-of-law analysis for a long-term disability contract involves an analysis of §§ 188, 192,³ and 6 of the Restatement (Second) of Conflict of Laws (“Restatement”). Id.

Section 192 of the Restatement provides:

“The validity of a [disability] insurance contract issued to the insured upon his application and the rights created thereby are determined, in the absence of an effective choice of law by the insured in his application, by the local law of the state where the insured was domiciled at the time the policy was applied for, unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 to the transaction and the parties, in which event the local law of the other state will be applied.”

Restatement (Second) of Conflict of Laws § 192. Connecticut courts give effect to choice-of-law provisions unless (1) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties’ choice or (2) application of that state's law would contradict a fundamental policy of a state that has a materially greater interest in the action and whose law would otherwise apply had it not been for the parties’ choice. Elgar v. Elgar, 238 Conn. 839, 679 A.2d 937, 943 (1996); Restatement (Second) of Conflict of Laws § 187.

However, in the absence of a valid choice-of-law provision, the Restatement establishes a special presumption in favor of application of the law of the jurisdiction where the insured was domiciled at the time the policy was applied for. See Restatement (Second) of Conflict of Laws § 192; Gen. Accident Ins. Co., 101 A.3d at 946 (concluding that the principals identified in § 193 of the Restatement are given particular weight when considering a conflict of laws dispute governed by that particular section); Cunninghame v. Equitable Life Assur. Soc. of U.S., 652 F.2d 306, 308 n.1 (2d Cir. 1981) (“In contracts of [disability] insurance, if as here the contract does not have a choice-of-law provision, then the principal location of the insured risk is given particular emphasis in determining the choice of the applicable law.”).

To overcome this presumption, another state's interests must outweigh those of the state where the insured is domiciled and be sufficiently compelling to outweigh the § 192 presumption. Gen. Accident Ins. Co., 101 A.3d at 947. Section 6(2) of the Restatement provides the criteria by which that overriding interest should be evaluated: “(a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied.” Restatement (Second) of Conflict of Laws § 6(2). However, even if another state has a substantial interest under § 6(2), that interest will not defeat the § 193 presumption unless it is sufficiently compelling. See Gen. Accident Ins. Co., 101 A.3d at 947 (concluding that a state's substantial interest under the generalized § 6 will not defeat the presumptions created by the sections specific to particular types of contracts).

Additionally, § 188(2) of the Restatement lists five further considerations in applying the principles of § 6 to a contract dispute: “(a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties.” Restatement (Second) of Conflict of Laws § 188(2). Comment (e) to § 188(2) further provides that “the forum, in applying the principles of § 6 to determine the state of most significant relationship, should give consideration to the relevant policies of all potentially interested states and the relative interests of those states in the decision of the particular issue. The states which are most likely to be interested are those which have one or more of the [enumerated] contacts with the transaction or the parties.” Id. § 188(2) cmt. (e).

In applying these principles to the present case, it is clear that California law does not apply to Plaintiff's claims sounding in contract law. It must first be noted that the parties’ contract contains a choice-of-law provision, which states, “This Policy is delivered in the state of North Carolina and subject to the laws of that jurisdiction (Effective September 1, 2008).” (Def. Ex A, ECF No 140-2, at 3.) This alone is a sufficient basis to establish that the contract contains a valid choice-of-law provision under §§ 187 and 192 of the Restatement. See, e.g., Odyssey Reinsurance Co. v. Cal-Regent Ins. Servs. Corp., 123 F. Supp. 3d 343, 350 (D. Conn. 2015) (concluding that there was sufficient contact with Texas where a contract was entered into in Texas); Mariculture Prods. Ltd. v. Underwriters at Lloyd's of London, 84 Conn.App. 688, 854 A.2d 1100, 1115 (2004) (“The delivery of the insurance policy to the insured is sometimes the controlling factor, even though the policy may have been issued in another jurisdiction or is payable elsewhere.”) (internal quotation omitted).

Regardless, even if the choice-of-law provision were not enforceable, California law would still not govern the contract because Plaintiff is domiciled in Connecticut and the relevant considerations set out in §§ 6 and 188 of the Restatement establish that Connecticut has the most significant relationship to the transaction. The contract “provides disability income protection ․ in the event [Plaintiff] were to become disabled,” (FAC at ¶ 9), and Plaintiff “is, and at all times relevant herein was, an individual residing in the City of Hartford.” (Id. at ¶ 1.) The automobile accident and the alleged onset of Plaintiff's disability both took place in Connecticut, and Lincoln paid disability benefits to Plaintiff in Connecticut for approximately eighteen months. (FAC ¶¶ 18, 22; Def. Ex. B.)

Plaintiff fails to analyze—or even mention—the factors provided by § 188 of the Restatement, relying solely on those factors listed in § 6, namely, California's strong interest in regulating insurance policies issued to its residents and the expectations of the parties protected from unfair practices. What Plaintiff fails to consider is that Connecticut, too, has a strong interest in regulating insurance policies and protecting its citizens from unfair practices. Moreover, Plaintiff's contention that the justified expectations of the parties also favor California law is similarly unpersuasive. While it may be true that “[i]t is far more reasonable for LPL and its covered employees to expect that the policies would be governed by the protective laws of LPL's home state,” (Pl. Opp., ECF No. 144, at 5), it would be so only if the insured individual also lived, worked, and was injured in California. Accordingly, the factors provided by the Restatement clearly establish that Connecticut has the most substantial relationship to the transaction. Accordingly, the Court concludes that Plaintiff's common law contract claims are not governed by California law.⁴

B. Statutory and Common Law Tort and Equity Claims

Defendant next contends that California law does not apply to Plaintiff's common law tort and equity claims, Counts Seven and Eight, and that Plaintiff's California and North Carolina statutory claims, Counts Two, Three, and Six, fail as a matter of law because Connecticut has the most significant relationship with the transaction. (Def. Mem. at 14–16.) Because Connecticut law governs these claims, the Court agrees.

When analyzing choice-of-law questions with respect to statutory and common law claims sounding in tort or equity, Connecticut courts, again, apply the “most significant relationship” test, utilizing the factors set forth in §§ 6 and 145 of the Restatement. See, e.g., Reclaimant Corp. v. Deutsch, 332 Conn. 590, 211 A.3d 976, 982–83 n.1 (2019); W. Dermatology Consultants, P.C. v. VitalWorks, Inc., 322 Conn. 541, 153 A.3d 574, 584 (2016); Jaiguay v. Vasquez, 287 Conn. 323, 948 A.2d 955, 972 (2008). Section 145 of the Restatement provides, in relevant part, “[t]he rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6.” Restatement (Second) of Conflict of Laws § 145(1). To assist in evaluating the policy choices set forth in §§ 145(1) and 6(2) of the Restatement, Connecticut courts utilize the factors set forth in § 145(2): “(a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered.” Id. § 145(2); W. Dermatology Consultants, P.C., 153 A.3d at 584. Connecticut courts use these same factors in analyzing choice-of-law issues involving statutes concerning unfair or deceptive practices. See, e.g., W. Dermatology Consultants, P.C, 153 A.3d at 584. “These contacts are to be evaluated according to their relative importance with respect to the particular issue.” Id. (citing Restatement (Second) of Conflict of Laws § 145(2)). It is the “significance, and not the number” of these contacts that determines the choice-of-law outcome. Id. at 585 (citing Jaiguay, 948 A.2d at 974).

In the present case, these factors all strongly favor Connecticut. The events that gave rise to Plaintiff's claims all took place in Connecticut. In Connecticut, Plaintiff relied on Lincoln's alleged misrepresentations, purchased the Group Policy, paid his premiums, and allegedly did not receive his allegedly promised benefits. (FAC at ¶¶ 10, 117–23.) Moreover, throughout the course of the parties’ relationship, Plaintiff was located in and a resident of Connecticut. Conversely, Plaintiff fails to allege that any event giving rise to these claims took place in California or North Carolina.

Plaintiff, again, fails to analyze the factors provided by the pertinent section of the Restatement, instead relying solely on “fundamental policy-based interest” and “justified expectations of the parties.” (Pl. Opp. at 3, 5.) Plaintiff's argument that California has a stronger interest in protecting their citizens from unfair practices is particularly unpersuasive, as Connecticut has the same interest—even more so in the present case since Plaintiff is a citizen of Connecticut. Indeed, Connecticut has developed a statute to do just that, namely, CUTPA—an act under which Plaintiff brought his fifth cause of action. For the same reasons that these arguments fail as to Plaintiff's common law contract claims, they fail as to Plaintiff's common law claims sounding in tort and equity.

Accordingly, the Court concludes that California law does not apply to Plaintiff's tort and equity claims, Counts Seven and Eight, and that Plaintiff's California and North Carolina statutory claims, Counts Two, Three, and Six, fail as a matter of law because Connecticut has the most significant relationship with the occurrence and parties. Consequently, the Court dismisses Counts Two, Three, and Six of the complaint.

C. Certification to the Connecticut Supreme Court

Plaintiff requests that the Court certify the following question to the Connecticut Supreme Court: “Does Connecticut law require that ‘total disability’ provisions in occupational disability insurance policies, such as the policy at issue in this case, be interpreted to provide coverage whenever the insured is unable to perform the substantial and material duties of his or her occupation in the usual and customary way with reasonable continuity?” (Pl. Opp. at 9.)

Under Connecticut law, this Court may certify a question to the Connecticut Supreme Court “ ‘if the answer may be determinative of an issue’ in a case before [it] and ‘if there is no controlling appellate decision, constitutional provision or statute.’ ” Munn v. Hotchkiss Sch., 795 F.3d 324, 334 (2d Cir. 2015) (quoting Conn. Gen. Stat. § 51-199b(d)). When deciding whether to certify, the Court should consider: “(1) the absence of authoritative state court decisions; (2) the importance of the issue to the state; and (3) the capacity of certification to resolve the litigation.” Bifolck v. Philip Morris, Inc., No. 06-CV-1768 (SRU), 2014 WL 585325, at *2 (D. Conn. Feb. 14, 2014).

Upon consideration, the Court concludes that certification is not necessary. Connecticut has long held that insurance policies are to be interpreted “by the same general rules that govern the construction of any written contract” and that if “the terms of the policy are clear and unambiguous, then the language ․ must be accorded its natural and ordinary meaning.” See e.g., Karas, 228 A.3d at 1020 (quoting Lexington Ins. Co., 84 A.3d at 1173) “If the terms of the [group disability] policy are clear and unambiguous, then the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning.” Galgano v. Metro. Prop. and Cas. Ins. Co., 267 Conn. 512, 838 A.2d 993, 997 (2004) (citing Schilberg Integrated Metals Corp. v. Cont'l Cas. Co., 263 Conn. 245, 819 A.2d 773, 789 (2003)). Indeed, Connecticut courts “cannot indulge in a forced construction ignoring provisions or so distorting them as to accord a meaning other than that evidently intended by the parties.” Galgano, 838 A.2d at 997. To have a judicially-mandated definition of “total disability” where the contractual provisions provide a contradictory one would run counter to this long-standing practice. Moreover, this question has previously been answered by this Court and affirmed by the Second Circuit. See Klein v. Nw. Mut. Life Ins. Co., 562 F. Supp. 2d 251, 256–59 (D.Conn. 2008), aff'd 337 F. App'x 4 (2d Cir. 2009) (declining to adopt an expansive definition of “total disability” where the plain language of the contract was narrower).

Accordingly, the Courts declines Plaintiff's request for certification to the Connecticut Supreme Court.

D. Leave To Amend

Because Plaintiff has amended the complaint four times, and he has not indicated “how further amendment would permit him to cure the deficiencies in the [amended] complaint,” leave to amend is denied as futile. Wilson v. Merrill Lynch & Co., 671 F.3d 120, 140 (2d Cir. 2011); see also Fort Worth Emps.’ Ret. Fund v. Biovail Corp., 615 F. Supp. 2d 218, 233 (S.D.N.Y. 2009) (“Because plaintiff has already amended its complaint once, and because the flaws in pleading are incurable on the facts of this case, dismissal is with prejudice.”).

IV. CONCLUSION

For these reasons, the Court concludes that Plaintiff's tort, equity, and contract claims under the common law are not governed by California law and Defendant's motion for judgment on the pleadings is granted as to Plaintiff's California and North Carolina statutory claims, Counts Two, Three, and Six.

SO ORDERED.

FOOTNOTES

2.   The parties dispute whether Lincoln's principal place of business is in Indiana or Pennsylvania. (Def. Mem., ECF No. 140-1, at 2 n.1.) For the purposes of Defendant's motion, the Court will presume that Lincoln's primary place of business is in Indiana.

3.   Although § 192 specifically governs life insurance contracts, as explained in the comments to the rule, “[t]he rule of this Section ․ are applicable to [contracts for disability insurance].” Restatement (Second) of Conflict of Laws § 192 cmt. I (Am. L. Inst. 1971).

4.   At this juncture, it is not necessary to determine whether Count One is governed by the law of North Carolina or Connecticut, because both states use the same rules for contract interpretation. Namely, in both states, “an insurance policy is to be interpreted by the same general rules that govern the construction of any written contract.” Karas v. Liberty Ins. Corp., 335 Conn. 62, 228 A.3d 1012, 1020 (2019) (cleaned up) (quoting Lexington Ins. Co. v. Lexington Healthcare Grp., Inc., 311 Conn. 29, 84 A.3d 1167, 1173 (2014)); Meinck v. City of Gastonia, 263 N.C.App. 414, 823 S.E.2d 459, 463 (2019) (“If the meaning of the policy is clear and only one reasonable interpretation exists, the courts must enforce the contract as written; they may not, under the guise of construing an ambiguous term, rewrite the contract or impose liabilities on the parties not bargained for and found therein.”. Consequently, there is no “outcome determinative” difference between the law of the potentially interested states. Cohen v. Roll-A-Cover, LLC, 131 Conn.App. 443, 27 A.3d 1, 16 (2011), cert. denied, 303 Conn. 915, 33 A.3d 739 (2011) (“The threshold choice of law issue in Connecticut, as it is elsewhere, is whether there is an outcome determinative conflict between applicable laws of the states with a potential interest in the case. If not, there is no need to perform a choice of law analysis, and the law common to the jurisdiction should be applied.”) (internal quotation omitted); Walzer v. Walzer, 173 Conn. 62, 376 A.2d 414, 421 (1977) (“When the applicable law of a foreign state is not shown to be otherwise, we presume it to be the same as our own.”).

VERNON D. OLIVER, United States District Judge: