Plaintiff, William Harvey, commenced this action against his liability insurance carrier, defendant Metropolitan Life Insurance Company (MetLife), to recover premiums that are alleged to have been improperly charged for a "Children's Term Insurance Benefit" (the Child Rider), after Harvey's children were no longer eligible for coverage under the policy.

MetLife moves to dismiss, asserting the statute of limitations and failure to state a cause of action, and based on the terms of an injunction issued in a related federal action. CPLR 3211 (a) (5) and (7).

The complaint alleges that Harvey purchased a Flexible-Premium Life Insurance Policy from MetLife in 1985, when he was 35 years old, married with two children, aged 11 and 12 years old. The Child Rider, contained in the policy, insured Harvey's children until they reached the age of 25. The $84 monthly premium was for a life insurance benefit of $50,000, and the Child Rider. According to the policy, the premium was paid into the policy's "Accumulation Fund." The cost of the Child Rider was to have been deducted on a monthly basis from the Accumulation Fund. The complaint alleges that the cost of $1000 of term coverage under the Child Rider was never to exceed $.60 for each $1000 of coverage. MetLife did not provide monthly statements of the amounts deducted from the Accumulation Fund for the Child Rider.

Plaintiff's children turned 25 years of age in 1998 and 1999, respectively. The children's eligibility for coverage under the Child Rider expired on their respective 25th [*2]birthdays. However, MetLife continued to charge plaintiff for the Child Rider, from 1999 until he surrendered the policy in 2003, despite the fact that none of his children were eligible for coverage during that period of time.

The complaint further alleges that MetLife knew that plaintiff's children were no longer eligible for coverage after 1999, but never informed plaintiff that the coverage had expired, all the while continuing to collect the premium for the Child Rider.

In three causes of action, plaintiff alleges that defendant's failure to notify him that coverage under the Child Rider had expired, and its continued collection of premiums after coverage was no longer in effect, violated General Business Law §349 (a) (GBL §349 (a)), and constituted fraud.

Defendant seeks dismissal of all three claims. It points to an order issued in In re Metropolitan Life Insurance Co. Sales Practices Litigation, Docket No. 96-179 (WD Pa. 1996) (MetLife MDL action) as a complete bar to this action. Defendant argues further that plaintiff failed to state a claim under GBL §349 (h) and that the three-year statute of limitations under CPLR 214 (2), applicable to GBL §349, required the action to be commenced in 2003, while it was commenced only in 2004; that plaintiff's quantum meruit claim is barred by an existing contract between the parties; and that plaintiff has failed to specifically plead a claim for fraud.

The MetLife MDL action was settled by a class action settlement covering policies that had been issued by MetLife during the Class Period. The District Court found that Harvey conceded that he had participated in the class settement with respect to his MetLife insurance policy, "although on a different basis for recovery than that presently asserted." Metropolitan Life Ins. Co. Sales Practices Litigation, Docket No. 96-179, at 2. Harvey had argued before the District Court that his claims arose from actions which occurred outside of the Class Period, and had been neither raised, nor settled, by the class action litigation.

The District Court examined the release and waiver which had been entered into by the settlement class and found the following language determinative of Harvey's right to proceed in state court:

75. "Released Transactions" means any and all claims arising out of, concerning, or in any way relating to the marketing, solicitation, application, underwriting, issuing, pricing, charging, rates, acceptance, sale, purchase, operation, retention, administration, serving or performance or any Policy; and any and all claims arising out of, concerning, or in any way relating to the matters alleged in the Complaint and Amended Complaint. (Emphasis added).

Id., at 3.

The release also stated that nothing in the release altered a class member's right to assert any claim which arose independently from the facts or circumstances of the class [*3]action claims, after the end of the class period.

The District Court found that there were no specific claims in the class action that mirrored Harvey's state court claim based on his alleged payment of Child Rider premiums without receiving any benefit.

After examining precedents urged by MetLife, the District Court found that Harvey was not "relying upon the common nucleus of operative facts underlying" the class settlement:

[T]he fact is that no "Child Rider" claim was raised by the Consolidated Class Action Complaint in the MetLife MDL action, and the facts in the instant state court complaint, while relating to a Class Policy, all occurred after the Class Period."

Id., at 9.

Since no similar factual claims had been raised in the class action, and the acts complained of in the instant state court action were found to have arisen after the Class Period, the District Court found that Harvey should not be enjoined from pursuing his individual claims in state court.

With respect to Harvey's class claims, however, the District Court found that the putative state court class would include persons who had purchased policies during the Class Period, that the state claims involved the sale and operation of a Class Policy, and that there was no indication that the state claims of class members would be based on "independently arising" facts after the Class Period. Harvey's state court class claims are thus held to be enjoined, and the allegations relating to such class claims are stricken, and such claims dismissed.

GBL § 349 (a) makes it unlawful to engage in deceptive acts or practices in conducting a business or furnishing a service. As a threshold for pleading a claim for relief under that statute, plaintiff must "charge conduct that is consumer oriented." New York Univ. v Continental Ins. Co., 87 NY2d 308, 320 (1995).

[D]efendant's acts or practices must have a broad impact on consumers at large; "[private] contract disputes unique to the parties ...would not fall within the ambit of the statute."

Id. (Citations omitted).

Harvey has adequately alleged a claim under GBL §349 (h). The complaint alleges that Harvey is a member of the consuming public, that he purchased an insurance policy from MetLife for his personal and family protection, that MetLife is in the business of selling insurance policies, and that the harm alleged might have a broad impact on consumers at large.

MetLife urges that the three-year statute of limitations under CPLR 214 (2) bars Harvey from pursuing his individual claims under GBL §349 (h). Avdon Capitol Corp. v Nationwide Mut. Fire Ins. Co. (240 AD2d 353 [2d Dept 1997]), cited by MetLife, turned [*4]on plaintiff's failure to give defendant notice of the grounds for amending his complaint before the limitations period expired; and Rabouin v Metropolitan Life Ins. Co. (182 Misc 2d 632 [Sup Ct, NY County 1999], affd 282 AD2d 381 [2001]), also cited by MetLife, found the allegations of the complaint conclusory, and insufficient to bar defendant from asserting the defense of the statute of limitations. Neither of these cases is controlling under the present circumstances.

Defendant cites Gaidon v Guardian Life Insurance Co. of America (96 NY2d 201 [2001]) for the principle that the "accrual of a section 349 (h) private right of action first occurs when plaintiff has been injured by a deceptive act or practice violating section 349." Id. at 210. Plaintiff's youngest child turned 25 in 1999, and the first allegedly unearned premium was paid in 2000. The statute of limitations began to run on that date, and expired at the end of 2003, before this 2004 action was commenced. Therefore, argues MetLife, the action is untimely and must be dismissed.

Plaintiff argues that, under Gaidon, the "operative allegations" of a violation of GBL §349 must be considered in determining the accrual date for a cause of action. Plaintiff claims that defendant's deceptive behavior occurred each month that MetLife deducted money from the policy's Accumulation Fund for coverage that was not being provided, and that the limitations period accrued anew with each improper deduction.

Defendant argues that plaintiff has failed to allege a "continuing violation."

The "continuing violation" doctrine is usually employed where there are a series of continuing wrongs, effectively tolling the limitations period until the date of the commission of the last wrongful act. Selkirk v State of New York, 249 AD2d 818 (3d Dept 1998). A finding of a continuing violation will be predicated on a showing of continuing unlawful acts. Id. Here, Harvey has met this standard by alleging that each deduction from the policy's Accumulation Fund, after the youngest child turned 25, constituted an unlawful act. Since Harvey alleges that deductions for the Child Rider continued until he surrendered the policy, in 2003, this action, commenced in 2004, and the alleged violation of GBL §349, were interposed in a timely fashion.

The existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter. Clark-Fitzpatrick, Inc. v Long Is. R. R. Co., 70 NY2d 382, 388 (1987). Plaintiff argues that the claim for quantum meruit is needed to provide a remedy beyond the terms of the contract, to prevent unjust enrichment. Unlike Rand Products Co. v Mintz (72 Misc 2d 621 [App Term, 1st Dept 1973]), this is not a case involving possession of land, and compensation for its wrongful use. The claim based on quantum meruit is, therefore, dismissed.

In order to adequately plead a claim for fraud, plaintiff must allege defendant's representation of a material fact, falsity, scienter, reliance and injury. Orbit Holding Corp. v Anthony Hotel Corp., 121 AD2d 311 (1st Dept 1986). The circumstances constituting the fraud must be pleaded with specificity. CPLR 3016 (b). In order to [*5]allege a claim for fraudulent concealment, plaintiff must allege that defendant failed to disclose material information which it had a duty to disclose; that defendant intended to defraud plaintiff by such nondisclosure; that plaintiff reasonably relied upon the nondisclosure; and that plaintiff suffered damage as a result of its reliance. Swersky v Dreyer and Traub, 219 AD2d 321 (1st Dept 1996).

Harvey alleges that MetLife intentionally designed a system for collecting premiums that concealed the fact that policyholders in plaintiff's position were continuing to pay for non-existent coverage. However, Harvey has no basis for alleging a fiduciary duty on the part of MetLife, since it is well-settled that an insurer does not have a fiduciary relationship with its policy holders. Rabouin v Metropolitan Life Ins. Co., supra.

The damages recoverable under the remaining cause of action, for a violation of GBL §349 (h), fall within the jurisdiction of the Civil Court of the City of New York; and there is no reason why that court could not exercise jurisdiction in this matter.

Accordingly, it is

ORDERED that defendant's motion to dismiss the complaint is granted in part, and the second and third causes of action, based on theories of fraud and quantum meruit, are dismissed, and it is further

ORDERED that the motion is denied in all other respects; and it is further

ORDERED that the action shall be transferred to the Civil Court of the City of New York, pursuant to CPLR 325 (d), and it is further

ORDERED that plaintiff shall serve a copy of this order on the Clerk of the Court, with proof of service, within 20 days.

Dated: April 18, 2005

ENTER/s/

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J.S.C.