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Sun Life Assurance Company of Canada v. U.S. Bank N.A.

United States District Court, D. Delaware

May 17, 2019

U.S. BANK NATIONAL ASSOCIATION, as Securities Intermediary, Defendant.

          Thomas J. Francella, Gregory F. Fischer, COZEN O'CONNOR, Wilmington, DE Michael J. Miller, Charles J. Vinicombe, Barry Golob, Daniel P. Thiel, Lezlie Madden, Kristin Parker, COZEN O'CONNOR, Philadelphia, PA Attorneys for Sun Life Assurance Company Canada

          David J. Baldwin, POTTER ANDERSON & CORROON LLP, Wilmington, DE John E. Failla, Nathan Lander, Elise A. Yablonski, PROSKAUER ROSE LLP, New York, NY Attorneys for U.S. Bank National Association



         Pending before the Court is Sun Life Assurance Company Canada's ("Sun Life") renewed motion for summary judgment on U.S. Bank National Association's ("U.S. Bank") counterclaims.[1] (D.I. 201) The Court heard argument on April 30, 2019. ("Tr.") Trial on the counterclaims is scheduled to begin next week, on May 20. For the reasons set forth below, the Court will deny Sun Life's motion.


         Pursuant to Rule 56(a) of the Federal Rules of Civil Procedure, "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." The moving party bears the burden of demonstrating the absence of a genuine issue of material fact See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986). An assertion that a fact cannot be - or, alternatively, is - genuinely disputed must be supported either by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials," or by "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1)(A) & (B). If the moving party has carried its burden, the nonmovant must then "come forward with specific facts showing that there is a genuine issue for trial." Matsushita, 475 U.S. at 587 (internal quotation marks omitted). The Court will "draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).

         To defeat a motion for summary judgment, the nonmoving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586; see also Podobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir. 2005) (stating party opposing summary judgment "must present more than just bare assertions, conclusory allegations or suspicions to show the existence of a genuine issue") (internal quotation marks omitted). The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment;" a factual dispute is genuine only where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., Ml U.S. 242, 247-48 (1986). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50 (internal citations omitted); see also Celotex Corp. v. Catrett, Ml U.S. 317, 322 (1986) (stating entry of summary judgment is mandated "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial"). Thus, the "mere existence of a scintilla of evidence" in support of the nonmoving party's position is insufficient to defeat a motion for summary judgment; there must be "evidence on which the jury could reasonably find" for the nonmoving party. Anderson, Ml U.S. at 252.


         U.S. Bank agrees that it cannot prevail on its counterclaims for breach of contract and breach of the implied covenant of good faith and fair dealing as long as the Court's prior determination that the life insurance policy at issue in this litigation (the "Policy") stands, which it does for purposes of the remaining proceedings in this Court.[2] Summary judgment will be granted to Sun Life on these counterclaims. See generally Encite LLC v. Soni, 2008 WL 2973015, at *12 (Del. Ch. Aug. 1, 2008) (unpublished) ("The implied covenant of good faith and fair dealing 'attaches to every contract.' That no such covenant can exist in the absence of a contract is the obvious, and logical, corollary to this fundamental proposition.") (quoting Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434, 442 (Del. 2005)).

         Remaining at issue are U.S. Bank's counterclaims asserting Sun Life engaged in an unfair or deceptive business practice, in violation of Massachusetts General Laws Chapter 93 A ("93A claim"), and asserting promissory estoppel. The Court will deny Sun Life's motion for summary judgment with respect to each of these claims.

         A. 93A Claim

         Under Massachusetts law, a party "who engages in the conduct of any trade or commerce" is liable under Chapter 93A for any "unfair or deceptive act." See MASS. GEN. LAWS ch. 93A, §§ 2(a), 11 (emphasis added).

         Whether an act is "unfair" must be determined based on "the circumstances of each case." Kattar v. Demoulas, 739 N.E.2d 246, 257 (Mass. 2000). Massachusetts courts apply a three-step framework, inquiring: "(1) whether the practice is at least within the penumbra of some common-law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; and (3) whether it causes substantial injury to consumers." Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 412 F.3d 215, 243 (1st Cir. 2005). "[I]t is neither necessary nor sufficient that a particular act or practice violate common or statutory law." Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 552 F.3d 47, 69 (1st Cir. 2009); see also Mass. Farm Bureau Fed'n, Inc. v. Blue Cross of Mass., Inc., 532 N.E.2d 660, 664 (Mass. 1989) (stating violation of Chapter 93 A "need not be premised on a violation of an independent common law or statutory duty"). Rather, courts leave "the determination of what constitutes an unfair business practice to the finder of fact, subject to the court's performance of a legal gate-keeping function." Mass. Eye, 552 F.3d at 69.

         Conduct is "deceptive" "if it could reasonably be found to have caused a person to act differently from the way he otherwise would have acted." Gabriel v. Jackson Nat'l Life Ins. Co., 2015 WL 1410406, at *16 (D. Mass. Mar. 26, 2015) (internal citations omitted). "[P]roof of actual reliance ... on a representation is not required," however. Slaney v. Westwood Auto, Inc., 322 N.E.2d 768, 779 (Mass. 1975); see also Lincoln Ventures, Inc. v. FSL Associates, Inc., 2006 WL 1745804, at *4 (Mass. Super. Apr. 25, 2006) ("[P]laintiffs may prevail on a c. 93A action founded on a misrepresentation without satisfying the common-law requirements of reasonable reliance ....").

         Reviewing the record in the light most favorable to U.S. Bank as the nonmoving party, the Court concludes that a reasonable factfinder could find that Sun Life engaged in an unfair and/or deceptive act in connection with its handling of the Policy. These conclusions arise from the Court's determination that, based on all the circumstances of the case, a reasonable jury could find that Sun Life unfairly, unethically, and unscrupulously misrepresented the state of the Policy to induce U.S. Bank (and/or FCI[3]) to continue making hundreds of thousands of dollars in premium payments, when, in fact (as a reasonable jury could find) Sun Life had already determined that it would not honor the Policy. For the same reasons, a reasonable jury could find that Sun Life acted deceptively in making the statements it made, and thereby caused U.S. Bank to act differently than it otherwise would have. Even accepting, arguendo, that Sun Life had no affirmative ...

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