In Studley v. American Investors Life Insurance Company, plaintiffs brought a putative class action on behalf of individuals named as beneficiaries of deferred annuities purchased by seniors who have since passed away. The gist of plaintiffs’ complaint was that American Investors knew that the annuities purchased by seniors would be used as wealth transfer vehicles and thus the imposition of certain conditions on receiving the death benefits was intended to target and damage the beneficiaries.
American Investors moved to dismiss arguing, among other things, that the beneficiary class lacked standing under Article III or RICO and otherwise failed to state a claim. The court agreed, adopting nearly all of the arguments advanced in the motion to dismiss.
The court found as a threshold matter that the beneficiary class claims failed because plaintiffs were unable to demonstrate that they suffered an injury in fact, as required by Article III. The court noted that the “fundamental logical flaw” in plaintiffs’ damages theory was that, unlike the actual purchasers of the annuities, plaintiffs had no interest in the money prior to becoming beneficiaries of those annuities.
The court also found that plaintiffs failed to plead any loss or injury to property as required for RICO standing. Their complaint made no specific allegations that the senior annuity purchaser was misled or received anything other than was expressly bargained for. Consistent with its Article III analysis, the court noted that plaintiffs could not show that they suffered a concrete financial loss because they were no worse off than they were before the senior purchased the annuity and named them as beneficiaries.
The court also rejected plaintiffs’ negligence claims, which they contended encompassed a duty to ensure suitability of the annuities purchased, because, among other things, plaintiffs failed to identify any relevant duty that the insurer owed to them as beneficiaries of the annuities. Finally, the court noted that plaintiffs’ claims for unjust enrichment failed because they could not identify, as beneficiaries, any benefit that they had conferred upon the insurer. Plaintiffs have appealed the dismissal ruling. Jorden Burt acted as counsel in this case.