Recitation in accordance with CPLR 2219 (a) of the papers considered on the notice of motion filed on December 9, 2024, under motion sequence number one, by Companion Life Insurance Company (hereinafter the defendant) for an order pursuant to CPLR 3211 dismissing the complaint of William Block (hereinafter the plaintiff) with prejudice. The motion is opposed.

Exhibits A, 1, and 2

On August 1, 2024, the plaintiff commenced the instant action against the defendant on [*2]behalf of himself, and others who are allegedly similarly situated for, among other things, breach of an insurance contract by filing a summons and complaint with the Kings County Clerk's office (KCCO).

The complaint alleges sixty-one allegations of fact in support of four denominated causes of action. The first cause of action is for breach of contract. The second cause of action is for breach of the duty of good faith and fair dealing. The third cause of action is for violation of New York State General Business Law § 349. The fourth cause of action is for declaratory and injunctive relief.

The complaint alleges the following salient facts, among others. The plaintiff purchased from the defendant a flexible premium life insurance policy bearing the policy number XXXXX^[FN1] , and a policy date of February 6, 2006, with an initial death benefit of $100,000. The defendant has administered all aspects of the policy, including collecting premiums, and setting, assessing, and deducting charges from the accumulation value.

Premium dollars are paid to the defendant and included in the accumulation value. The policies define "accumulation value" as "the accumulation at interest of the premiums paid and any additional payments made, less all applicable policy administrative charges, premium expense charges, and fees, less any partial withdrawals and withdrawal fees, less surrender charges applicable to reductions in the specified face amount, and less cost of insurance charges for the base plan and any rider charges." The policies define "interest rate" as "an annualized rate of interest." The accumulation value earns interest as provided by the policies. The policies contain provisions regarding the guaranteed interest rate for the accumulation value of each policy. The data pages for each policy list the guaranteed rate for that policy. The policies also state, as follows:

We guarantee to credit interest to the accumulation value each policy year at an Interest Rate not less than the guaranteed minimum interest rate shown on the data pages. Using a procedure approved by our board of directors, we may recredit Interest at a higher Interest Rate on the unloaned accumulation value. Any excess Interest credited is nonforfeitable except indirectly due to surrender charges, and will be credited no less frequently than annually and will be based on future expectations of expenses as well as investment earnings.

We will review these rates on a monthly basis. We will increase the current Interest Rate applied to the unloaned accumulation value by 0.5% in policy years six and later, if the then current Interest Rate is greater than the guaranteed minimum Interest Rate. Each excess interest rate increase reflects a corresponding decrease in our holdback margin for profit and expenses.

The policy issued to the plaintiff has a guaranteed minimum interest rate of 3%. The defendant has applied the minimum guaranteed interest rate since the inception of the policy, over 18 years ago. According to the policies' terms, however, the interest rates are supposed to increase by 0.5% after year six of the policy, which is after February 2012.

Upon information and belief, since 2012, the "current interest rate" has been "greater [*3]than the guaranteed minimum interest rate" because interest rates are significantly higher than 3%. For example, the current yield for a one-year U.S. Treasury Bill is 5.173%. The current federal funds rate is 5.5%. The current prime rate is 8.5%. Since August 2019, the defendant has applied the guaranteed minimum interest rate, contrary to the policies' terms. Upon information and belief, the defendant is not regularly reviewing the interest rates it applies. Upon information and belief, the defendant is not calculating interest rates in accordance with the policies' terms. As a direct and proximate result of the defendant's breaches, the plaintiff and the proposed class members have been damaged.

Although the defendant did not set forth in the notice of motion or affirmation in support the specific section of CPLR 3211 which it has invoked to seek dismissal, it did cite CPLR 3211 (a) (1) and (7) in its memorandum of law in support.

The defendant has made five arguments in support of its motion. The first argument is that all the plaintiff's claims are time-barred. The second is that the defendant did not breach the agreement. The third is that the defendant did not breach the duty of good faith and fair dealing. The fourth is that the plaintiff did not plead a cause of action for violation of New York General Business Law § 349. The fifth is that the plaintiff cannot recover under declaratory judgment and injunction theories.

A motion to dismiss based on CPLR 3211 (a) (1) may be granted "only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 [2002], citing Leon v Martinez, 84 NY2d 83, 88 [1994]). For evidence to be considered documentary, it "must be unambiguous and of undisputed authenticity" (Fontanetta v John Doe 1, 73 AD3d 78, 86 [2d Dept 2010]). "Judicial records, as well as documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable, would qualify as documentary evidence in the proper case" (Bedford-Carp Constr., Inc. v Brooklyn Union Gas Co., 215 AD3d 907, 908 [2d Dept 2023], quoting Fontanetta, 73 AD3d at 84-85 [internal quotation marks omitted]).

On a motion to dismiss a cause of action pursuant to CPLR 3211 (a) (5) on statute of limitations grounds, the movant "bears the initial burden of establishing, prima facie, that the time in which to sue has expired" (Silver v Silver, 162 AD3d 937, 938-39 [2d Dept 2018], quoting Cataldo v Herrmann, 154 AD3d 641, 642 [2d Dept 2017]). "In this regard, the movant must establish, inter alia, when the cause of action accrued" (Matter of Asch, 164 AD3d 787, 788 [2d Dept 2018], citing Rodeo Family Enters., LLC v Matte, 99 AD3d 781, 783-784 [2d Dept 2012]). If the movant "satisfies this burden, the burden shifts to the opponent to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether the plaintiff commenced the action within the applicable limitations period" (U.S. Bank N. A. v Gordon, 158 AD3d 832, 835 [2d Dept 2018], quoting Barry v Cadman Towers, Inc., 136 AD3d 951, 952 [2d Dept 2016]).

In considering a motion to dismiss a cause of action on the ground that it is barred by the statute of limitations, "a court must take the allegations in the complaint as true and resolve all inferences in favor of the plaintiff" (Silver, 162 AD3d at 939)

In assessing a motion pursuant to CPLR 3211 (a) (7) to dismiss a complaint, a court must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every [*4]possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88 [1994], citing Morone v Morone, 50 NY2d 481, 484 [1980]). Where "evidentiary material is submitted and considered on a motion pursuant to CPLR 3211 (a) (7), and the motion is not converted into one for summary judgment, the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one, and unless it has been shown that a material fact claimed by the plaintiff to be one is not a fact at all, and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate" (Graphic Arts Mut. Ins. Co. v Pine Bush Cent. Sch. Dist., 159 AD3d 769, 771 [2d Dept 2018], citing Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]).

The Court agrees with the defendant that the cause of action for breach of duty of good faith and fair dealing is duplicative of the breach of contract claim, since those causes of action are "based on the same facts and seek essentially identical damages" (see Pacella v Town of Newburgh Volunteer Ambulance Corps. Inc., 164 AD3d 809, 814 [2d Dept 2018], citing Federico v Brancato, 144 AD3d 965, 967 [2d Dept 2016]). It is therefore dismissed.

The plaintiff indicated an intent to withdraw this cause of action in his opposition papers, which the plaintiff subsequently confirmed in an appearance before this Court on April 10, 2025. The Court therefore had previously ordered that the claim be dismissed with prejudice on April 10, 2025.

To successfully assert a General Business Law § 349 claim, a plaintiff must allege that "a defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) plaintiff suffered injury as a result of the allegedly deceptive act or practice" (Eva Chen Fine Jewelry, Inc. v Recovery Racing IX, LLC, 222 AD3d 840, 842 [2d Dept 2023], quoting Aracena v BMW of N. Am., LLC, 159 AD3d 664, 666 [2d Dept 2018] [internal quotation marks omitted], quoting Koch v Acker, Merrall & Condit Co., 18 NY3d 940, 941 [2012].

The defendant has contended that (1) it did not engage in consumer-oriented conduct, (2) that its alleged conduct was neither deceptive nor misleading, and (3) that the plaintiff cannot demonstrate any loss separate from a breach of contract. The plaintiff took the exact opposite position.

The Court has considered the arguments and the applicable law and finds that the plaintiff has failed to plead facts alleging that the defendant's alleged conduct was consumer-oriented or a fraud intended to harm the public. Therefore, the Court dismisses the plaintiff's General Business Law § 349 claim with prejudice.

The plaintiff has alleged, in sum and substance, that the defendant breached the policy by failing to apply interest rates to the policy's accumulation value as allegedly required. Specifically, the plaintiff alleges that the defendant breached the policy's "credited interest" provision, which provides:

We guarantee to credit Interest to the accumulation value each policy year at an Interest Rate not less than the guaranteed minimum Interest Rate shown on the data pages. Using [*5]a procedure approved by our board of directors, we may credit Interest at a higher Interest Rate on the unloaned accumulation value. Any excess Interest credited is nonforfeitable except indirectly due to surrender charges, and will be credited no less frequently than annually and will be based on future expectations as well as investment earnings.

We will review these rates on a monthly basis. We will increase the current Interest Rate applied to the unloaned accumulation value by 0.5% in policy years six and later, if the then current Interest Rate is greater than the guaranteed minimum Interest Rate. Each excess interest rate reflects a corresponding decrease in our holdback margin for profit and expenses.

The policy's accumulation value "is the accumulation at interest of the premiums paid and any additional payments made, less all applicable policy administrative charges, premium expense charges, and fees, less any partial withdrawals, less surrender charges applicable to reductions in the specified face amount, and less cost of insurance charges for both the base plan and any rider added to the policy." The accumulation value earns a guaranteed amount of interest. Per the policy's "data page", the guaranteed minimum interest rate credited to the accumulation value is 3.00%.

The plaintiff alleges that the defendant breached the credited interest provision because "the current interest rate" as specified in the credited interest provision has at times been higher than the 3.00% guaranteed minimum, entitling the plaintiff to an additional 0.5% interest under its interpretation of the credited interest provision. In support of its position, the plaintiff alleges that "current interest rate" should be interpreted to mean interest rates in the market, including rates for a one-year U.S. Treasury Bill, the federal funds rate, and the prime rate.

At oral argument, the plaintiff further argued that, to the extent "current interest rate" refers to the interest rate applied by the defendant, the plaintiff is still entitled to an additional 0.5% increase above the guaranteed minimum rate. The plaintiff claims that pursuant to either interpretation of the defendant's alleged breach, the plaintiff's and putative class members' accumulation values are lower than they otherwise should have been, which has allegedly caused polices to lapse when they otherwise would not have.

On August 1, 2024, the plaintiff commenced this action against the defendant on behalf of himself and others who were allegedly similarly situated, arising out of a flexible premium life insurance policy issued by the defendant on February 6, 2006.

The defendant has moved to dismiss the plaintiff's complaint under CPLR 3211 as time-barred. The defendant argues that the plaintiff's lawsuit is untimely and barred by the statute of limitations applicable to each of his claims.

The applicable statute of limitations for breach of contract is six years (Laine v Empire HealthChoice Assurance, Inc., 234 AD3d 833, 834 [2d Dept 2025]). CPLR 213 (2) states that an action must be commenced within six years when it is "an action upon a contractual obligation or liability, expressed or implied." (Kamath v Building New Lifestyles, Ltd., 146 AD3d 765, 766 [2d Dept 2017]; CPLR 213 [2]). The statute of limitations commences to run when the breach occurs (Laine v Empire HealthChoice Assurance, Inc., 234 AD3d 833, 834 [2d Dept 2025], citing Houtenbos v Fordune Association, Inc., 200 AD3d 662, 662 [2d Dept 2021], and citing Ely-Cruikshank v Bank of Montreal, 81 NY2d 399, 402 [1993]; Lamednola v Mossa, 190 Misc [*6]2d 147, 149 [App Term, 2d Dept 2001], citing Ely-Cruikshank v Bank of Montreal, 81 NY2d 399, 402 [1993])

The defendant argues that the plaintiff was on notice in March of 2013 that it did not increase the interest rate above the guaranteed minimum, as the plaintiff alleges the defendant was contractually obligated to do. The defendant further argues that because the plaintiff did not file this action until August 1, 2024, more than 11 years later, the claim is time-barred.

The plaintiff argues that the defendant had a continuing obligation to review interest rates "on a monthly basis," and so plaintiff's claims accrued anew in each month during the limitations period in which the "current interest rate" was higher than the guaranteed minimum.

The Court has considered the arguments and the applicable law and finds that the plaintiff's claims are not time-barred. The Court finds that the defendant has a continuing obligation under the policy to determine what interest rate to apply to the accumulation value after policy year six and later, and that the plaintiff has sufficiently alleged that the defendant breached that obligation within the statute of limitations period. The Court further finds that the plaintiff is barred from recovering any damages outside the six-year statute of limitations for breach of contract.

The defendant moves to dismiss the breach of contract claim, primarily on the basis that the policy only guarantees 3.00% interest and that the defendant retained absolute discretion to increase rates above the guaranteed rate. First, the policy's "Policy Values" data page provides that the "guaranteed minimum interest rate credited to the Accumulation Value is 3%". Second, the policy's "Schedule of Benefits" data page provides, in relevant part: "the guaranteed minimum Interest Rate is 3.00%", "current Interest Rates are not guaranteed", and "Additional amounts are not guaranteed." Third, the "credited interest" provision provides:

We guarantee to credit Interest to the accumulation value each policy year at an Interest Rate not less than the guaranteed minimum Interest Rate shown on the data pages. Using a procedure approved by our board of directors, we may credit Interest at a higher Interest Rate on the unloaned accumulation value. Any excess Interest credited is nonforfeitable except indirectly due to surrender charges, and will be credited no less frequently than annually and will be based on future expectations of expenses as well as investment earnings.

We will review these rates on a monthly basis. We will increase the current Interest Rate applied to the unloaned accumulation value by 0.5% in policy years six and later, if the then current Interest Rate is greater than the guaranteed minimum Interest Rate. Each excess interest rate increase reflects a corresponding decrease in our holdback margin for profit and expenses.

The defendant argues that the plaintiff never had a right to expect more than the guaranteed rate of 3% and that the use of the word "may" does not mean "must" and is discretionary; it never guaranteed that a higher rate would be applied.

At oral argument, the plaintiff concedes that, contrary to the allegations of the Complaint, the defendant did at times pay more than the guaranteed minimum interest rate of 3%. However, the plaintiff argues that the defendant did not consistently increase the interest rate paid by 0.5% when the "current Interest Rate"—which the plaintiff alleges should be interpreted as [*7]referencing various market rates—was higher than 3%. The plaintiff further argues that even if the phrase "current Interest Rate", as used in the credited interest provision, should be interpreted as referencing the interest rate contemporaneously paid by the defendant (rather than market rates), the defendant similarly did not increase the interest rate by a further 0.5% when the "current interest rate" (under that definition) was higher than 3%.

The Court has considered the arguments and the applicable law and finds that the plaintiff has sufficiently plead a claim for breach of contract. While the defendant has introduced documentary evidence under CPLR 3211 (a) (7) to show that it from time to time paid more than 3% interest, the Court finds that fact does not impair the viability of the plaintiff's breach of contract claim. Under CPLR 3211 (a) (1), the breach of contract claim is not dismissed. The Court finds there is an ambiguity in the interpretation of the credited interest provision.

The Court is aware of the reading the defendant would like and is aware of the reading the plaintiff would like. The insurance agreement is a contract subject to principles of contract interpretation (see Rainbow v Swisher, 72 NY2d 106, 109 [1988]; see Cervera v Cervera, 218 AD3d 636, 638 [2d Dept 2023]). "Where ... the contract is clear and unambiguous on its face, the intent of the parties must be gleaned from within the four corners of the instrument, and not from extrinsic evidence" (Ireland v Ireland, 238 AD3d 753, 754 [2d Dept 2025], quoting Rainbow v Swisher, 72 NY2d 106, 109 [1988]; Douglas v Douglas, 7 AD3d 481, 482 [2d Dept 2004]). "Therefore, the court should construe the agreement in such a way as to "give fair meaning to all of the language employed by the parties to reach a practical interpretation of the expressions of the parties so that their reasonable expectations will be realized" (Ireland v Ireland, 238 AD3d 753, 754 [2d Dept 2025], quoting Rhoda v Rhoda, 175 AD3d 1572, 1573 [2d Dept 2017]). "Whether an agreement is ambiguous is a question of law for the courts" (Ireland v Ireland, 238 AD3d 753, 754 [2d Dept 2025], quoting Matter of Louie v Plissner, 174 AD3d 607, 609 [2d Dept 2019]). In the case at bar, the Court finds that the specific contested language is ambiguous, and the parties' intent cannot be determined as a matter of law. A jury must discern what the parties intended. Accordingly, the Court denies the defendant's motion to dismiss the plaintiff's breach of contract claim.

The motion by defendant Companion Life Insurance Company for an order pursuant to CPLR 3211 dismissing the complaint of William Block is granted in part and denied in part as follows:

The motion is denied as to the first cause of action for breach of contract.

The motion is granted as to the second cause of action for breach of the duty of good faith and fair dealing, the third cause of action for violation of New York State General Business Law § 349, and the fourth cause of action for declaratory and injunctive relief. These causes of action are dismissed.

The defendant must interpose an answer within thirty days of notice of entry of the instant decision and order.

The foregoing constitutes the decision and order of this Court.