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Benacquisto v. American Express Financial Corp.

United States District Court, D. Minnesota

May 23, 2018

Lesa Benacquisto, Daniel Benacquisto, Richard Thoresen, Elizabeth Thoresen, Arnold Mork, Isabella Mork, Ronald Melchert and Susan Melchert, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
American Express Financial Corporation, American Express Financial Advisors, American Centurion Life Assurance Company, American Enterprise Life Insurance Company, American Partners Life Insurance Company, IDS Life Insurance Company and IDS Life Insurance Company of New York, Defendants.

          ORDER

          David S. Doty, Judge

         This matter is before the court upon the motions to enforce class-action settlement and judgment and for sanctions by defendant Ameriprise Financial Services, Inc.[1] Based on a review of the file, record, and proceedings herein, and for the following reasons, the motion is granted in part.

         BACKGROUND

         On May 15, 2001, the court issued a final order and judgment in this case, the Benacquisto Action, approving the class action settlement and dismissing the complaint. See Chen Aff. Ex. 1. As part of the final judgment the court permanently enjoined, among other things,

[a]ll class Members ... from ... filing, commencing, prosecuting, maintaining, intervening in, participating in ... any other lawsuit, arbitration, or administrative, regulatory or other proceeding or order ... based on or relating to the Claims and Causes of Action, or the facts and circumstances relating thereto, in the Action and/or Release Conduct as to that Policy or Annuity.

Id. ¶ 14. Additionally, under the terms of the settlement, the class members agreed to release all past and present claims “that are based upon, related to, or connected with, directly or indirectly, in whole or in part to the Benacquisto Action or the “released conduct.” Id. ¶ 13(A)(1). The released conduct includes representations, omissions, and communications related to or connected with the sale, administration, servicing, or performance of issued policies or annuities. Id. ¶ 13(B)(2).

         Charles Fotheringham is a class member who is bound by the terms of the final judgment and settlement. See ECF No. 567 at 3-4. On June 24, 2015, Fotheringham filed a complaint in New York state court against defendants RiverSource Life Insurance Company and Ameriprise Financial Services, Inc. See Chen Aff. Ex. 2. He alleged that, when he bought a life insurance policy in 1997, defendants falsely stated that his monthly premium was $1, 200. Id. ¶ 49. On November 10, 2015, the court enjoined Fotheringham from pursuing the state court action because it found that his claims arose from, or were at least related to, the same misrepresentations in 1997 that were covered by the settlement. See ECF No. 567 at 5-6. Pursuant to the court's enforcement order, the New York state court dismissed the complaint, Chen Aff. Ex. 5, and the Appellate Division of the New York State Supreme Court affirmed. See Fotheringham v. Riversource Life Ins. Co. of N.Y., 148 A.D.3d 1519 (N.Y.App.Div. 2017).

         On December 20, 2017, Fotheringham filed a Statement of Claim before the Financial Industry Regulatory Authority (FINRA) alleging that Ameriprise violated various FINRA rules by (1) recommending unsuitable investment and insurance products; (2) failing to advise him of the increasing costs of the 1997 life insurance policy; and (3) failing to establish an adequate supervisory system. See Chen Ex. 9.[2]

         Ameriprise now moves to enforce the settlement agreement, arguing that it precludes the FINRA claims.

         DISCUSSION

         I. Motion to Enforce Settlement

         The Estate argues that the settlement agreement does not preclude its claims in the FINRA arbitration because those claims are factually distinct from the claims covered by the settlement. In support, the Estate points to the settlement agreement, which states

[n]othing in this Release shall be deemed to alter ... (ii) a Class Member's right to assert any claim that independently arises from acts, facts or circumstances that occur for the first time after the last day of the Class Period; ... or (v) a Class Member's right to assert any claim peculiar to the Class Member that falls outside the general categories of claims or conduct described in the complaints in the Actions or the Release in this settlement and is ...

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