973 F. Supp. 2d 950
W.D. Wis.2013Background
- Heather Johnson and her deceased husband purchased an annuity from Bankers Life, which allegedly included an annuity income preservation rider claimed to shield assets for Medicaid eligibility; Johnson sues for breach of fiduciary duty, negligent and intentional misrepresentation, civil theft, and WOCCA violations; Bankers moves to dismiss; court addresses standing, fiduciary duty, misrepresentation, and WOCCA claims; CAFA jurisdiction is noted; court considers outside documents central to claims; misrepresentation origins concern a pre-purchase sale pitch two years prior to purchase; policy language includes a disclaimer about Medicaid impact; dismissal granted for fiduciary duty and WOCCA claims, others survive for now; status of a second amended complaint to be addressed later at a hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of Johnson to sue | Johnson suffered injury and was present at sale | Johnson is not a party to the contract; lacks standing | Johnson has Article III standing |
| Breach of fiduciary duty by Bankers | Special circumstances or pre-purchase duty created fiduciary duty | No fiduciary duty before purchase; no special relationship | Dismissed for lack of fiduciary relationship |
| Misrepresentation and civil theft claims | Misrepresentation about Medicaid impact was false and material | Statements are predications or legal opinions; reliance undermined by disclaimer | Misrepresentation and civil theft claims survive for now; reliance issue fact-dependent |
| WOCCA enterprise requirement | Bankers conducted enterprise through pattern of racketeering | Bankers and enterprise not distinct; WOCCA fails | WOCCA claim dismissed with prejudice for lack of distinct enterprise |
Key Cases Cited
- Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Boeck, 127 Wis.2d 127 (Wis. 1985) (fiduciary duty not owed in nondiscretionary brokerage; disclosure duty arises from special relationship)
- Gries v. First Wis. Nat'l Bank of Milwaukee, 82 Wis.2d 774 (Wis. 1978) (financial services providers owe disclosure duties; information disclosure in transactions)
- Hartwig v. Bitter, 139 N.W.2d 644 (Wis. 1966) (promises with present intent not to perform may constitute misrepresentation)
- Bentley v. Fayas, 260 Wis. 177 (Wis. 1951) (policy misrepresentation as legal opinion not actionable)