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Berkshire Life Insurance Company of America v. Ochs

March 24, 2009

BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA, PLAINTIFF,
v.
STEVE E. OCHS, DEFENDANT.
STEVE E. OCHS, THIRD-PARTY PLAINTIFF,
v.
LAWRENCE H. HURWITZ AND PROFESSIONAL FINANCIAL PLANNERS, LLC, THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Denis R. Hurley, United States District Judge

MEMORANDUM & ORDER

HURLEY, Senior District Judge

Plaintiff Berkshire Life Insurance Company of America ("plaintiff" or "Berkshire") brought this declaratory judgment action against policy holder defendant Steve E. Ochs ("Ochs") seeking to void a disability income policy (the "policy") on the grounds of material misrepresentations in the application for disability income insurance. On April 2, 2008, Ochs filed a third-party complaint against third-party defendants Lawrence H. Hurwitz ("Hurwitz") and Professional Financial Planners, LLC ("PFP") (collectively "third-party defendants"), alleging breach of contract and negligence in connection with the policy. Presently before the Court is PFP's motion to dismiss the third-party complaint as to PFP pursuant to Federal Rule of Civil Procedure ("Rule")12(b)(6). For the reasons stated below, PFP's motion is granted, and Ochs is given thirty days to amend his pleading.

BACKGROUND

I. Factual Background

The following facts are taken from the third-party complaint (and the underlying complaint)*fn1 and are presumed true for purposes of this motion.

In November 2003, Ochs was advised by his insurance broker Hurwitz to upgrade his disability insurance coverage and to obtain whole life insurance. (Third-Party Compl. ¶ 7.) Hurwitz prepared Ochs's disability income insurance application (the "application"), securing the pertinent information from Ochs from responses to questions contained in the application. (Id. ¶¶ 7-9.) Hurwitz then provided the application to Ochs for his signature. (Id. ¶ 10.)

In December 2003, Ochs submitted an application to plaintiff Berkshire. (Id. ¶ 4.) In his application, Ochs stated, inter alia, that he had no other personal or business disability income insurance in force and that he had no prior hearing or throat impairments. (Id. ¶¶ 6-10.)

On February 4, 2004, Berkshire issued a policy to Ochs. (Id. ¶ 11.) On February 8, 2004 and March 9, 2004, Ochs reaffirmed the answers on the application in two Amendments to the application. (Id. ¶¶ 13-14.) In March or April 2005, Ochs submitted a notice of claim for benefits under the policy to Berkshire asserting that he had become disabled on February 4, 2005 based on "vocal chord scarring." (Id. ¶ 15.) By letter dated January 23, 2006, Berkshire rescinded Ochs's policy, declared it null and void and tendered a full refund of the premiums paid by Ochs. (Id. ¶ 24.)

II. Procedural Background

On or about February 1, 2006, Berkshire commenced the underlying action in New York Supreme Court, Nassau County seeking rescission of the policy it had issued to Ochs on the basis that he had made material misrepresentations and omissions in his policy application. Thereafter, on February 14, 2006, Ochs filed a Notice of Removal and the case was removed here. On March 27, 2006, Ochs filed an Answer and Counterclaim, on June 16, 2006, he filed an Amended Answer and Counterclaim, and on August 17, 2006, Ochs filed a Second Amended Answer and Counterclaim.

On August 17, 2007, he moved for leave to file a third-party complaint against Hurwitz and PFP. By Report and Recommendation, dated March 25, 2008, Magistrate Judge William D. Wall recommended that the motion be granted in part and denied in part, which this Court adopted by Order, dated March 31, 2008.*fn2 Thereafter, on April 2, 2008, Ochs filed a third-party complaint against Hurwitz and PFP. It is this pleading which is the subject of the instant motion. Third-party defendant PFP now moves by the instant motion to dismiss the third-party complaint as to it pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted.

III. Factual Allegations Relating to PFP

In the third-party complaint, the factual allegations relating to ...


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