United States District Court, D. South Carolina, Charleston Division
Lois Y. Rinehimer, as Trustee of the Edwin J. Rinehimer Trust - 1999, Plaintiff,
Transamerica Life Insurance Co., Defendant.
C. NORTON UNITED STATES DISTRICT JUDGE
matter comes before the court on Transamerica Life Insurance
Co.'s (“Transamerica”) motion to dismiss, ECF
No. 10. For the reasons set forth below, the court grants the
motion and dismisses the case.
case arises from a dispute over an insurance policy between
Transamerica and Edwin Rinehimer (“Mr.
Rinehimer”), the deceased husband of plaintiff Lois
Rinehimer (“Mrs. Rinehimer”). During his
lifetime, Mr. Rinehimer established the Edwin J. Rinehimer
Trust (the “Trust”), of which Mrs. Rinehimer is
the Trustee. In 2003, Mr. Rinehimer purchased a life
insurance policy with Transamerica (the
“Policy”), naming the Trust as the beneficiary.
In May of 2016, Transamerica informed the couple that the
premium on the policy would double. Mrs. Rinehimer argues
that this raise in the premium breached the Policy.
of 2016, the Rinehimers chose to surrender the policy in
exchange for its net cash value (the “Surrender
Agreement”). The Surrender Agreement reads: “I
elect to surrender the policy for its net cash value. It is
agreed that the entire liability of the Company, except for
payment of the net cash value, is hereby discharged and
terminated.” ECF No. 10, Ex. B. Mr. Rinehimer died on
September 24, 2017, after which Mrs. Rinehimer was named
personal representative of Mr. Rinehimer's estate.
Rinehimer originally filed this suit in the Charleston County
Court of Common Pleas, and on March 9, 2018, Transamerica
removed the case. Mrs. Rinehimer alleges that Transamerica
breached its contract with Mr. Rinehimer, that this breach
was accompanied by a fraudulent act, and that Transamerica
also breached the covenant of good faith and fair dealing.
She argues that, as a result of this breach, the Trust was
deprived of the $500, 000 it would have received under the
Policy had Mr. Rinehimer not entered into the Surrender
Agreement. On April 16, 2018, Transamerica filed a motion to
dismiss. ECF No. 10. Mrs. Rinehimer responded on May 30,
2018, ECF No. 13, and Transamerica replied on June 13, 2018,
ECF No. 23. The motion has been fully briefed and is now ripe
for the court's review.
challenging the court's subject-matter jurisdiction over
a pending action may bring a motion to dismiss under Federal
Rule of Civil Procedure 12(b)(1). Even when a party does not
move to dismiss on this ground, the court has the right and
obligation to ensure that it possesses subject-matter
jurisdiction over every case that comes before it.
Gonzalez v. Thaler, 565 U.S. 134, 141 (2012)
(“When a requirement goes to subject-matter
jurisdiction, courts are obligated to consider sua
sponte issues that the parties have disclaimed or have
not presented.”). When a federal court does not possess
subject-matter jurisdiction over a claim, it must sua
sponte dismiss the claim. Id.
Failure to State a Claim
12(b)(6) motion for failure to state a claim upon which
relief can be granted “challenges the legal sufficiency
of a complaint.” Francis v. Giacomelli, 588
F.3d 186, 192 (4th Cir. 2009) (citations omitted); see
also Republican Party of N.C. v. Martin, 980 F.2d 943,
952 (4th Cir. 1992) (“A motion to dismiss under Rule
12(b)(6) . . . does not resolve contests surrounding the
facts, the merits of a claim, or the applicability of
defenses.”). To be legally sufficient, a pleading must
contain a “short and plain statement of the claim
showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). A Rule 12(b)(6) motion should not be
granted unless it appears certain that the plaintiff can
prove no set of facts that would support his claim and would
entitle him to relief. Mylan Labs., Inc. v. Matkari,
7 F.3d 1130, 1134 (4th Cir. 1993). When considering a Rule
12(b)(6) motion, the court should accept all well-pleaded
allegations as true and should view the complaint in a light
most favorable to the plaintiff. Ostrzenski v.
Seigel, 177 F.3d 245, 251 (4th Cir. 1999); Mylan
Labs., Inc., 7 F.3d at 1134. “To survive a motion
to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
asks the court to dismiss the case under Federal Rule of
Civil Procedure 12(b)(1), arguing that Mrs. Rinehimer lacks
standing to bring the suit because: (1) the Policy terminated
upon surrender; (2) through the surrender agreement, Mr.
Rinehimer discharged and terminated Transamerica from
liability in exchange for the Policy's net cash value,
thus extinguishing all claims including those Mrs. Rinehimer
now seeks to assert; and (3) as a non-contracting party, Mrs.
Rinehimer is barred from asserting her claims, which are all
contract-based. ECF No. 10 at 2. Transamerica also argues
that it is entitled to dismissal under Rule 12(b)(6) because
Transamerica did not violate the Policy by raising the
Rinehimers' premium. Id. The court agrees with
Transamerica that the Surrender Agreement extinguished any
claims that the Rinehimers might have had under the Policy.
As such, the court declines to address Transamerica's
other grounds for dismissal.
complaint brings a breach of contract claim, alleging that
Transamerica violated the Policy by raising the monthly
premium. However, the court cannot even consider this breach
of contract claim and determine whether Transamerica violated
the Policy because Mr. Rinehimer surrendered any rights he
had under the Policy by entering into the Surrender
Agreement. Mrs. Rinehimer claims that Mr. Rinehimer's
decision to surrender the Policy was caused by
Transamerica's breach of the Policy. As such, she asks
the court to set aside the Surrender Agreement, reinstate the
Policy, and find that Transamerica must pay the full amount
of life insurance owed under the Policy. Although she does
not phrase it as such, Mrs. Rinehimer's argument sounds
as though she is asking the court to “rescind”
the Surrender Agreement because her husband was fraudulently
induced to entered into it. See Alderman v. Bivin,
106 S.E.2d 385, 389 (S.C. 1958) (“A contract may be
reformed or rescinded . . . under these circumstances . . .
where the mistake is not mutual, unilateral, and has been
induced by the fraud, deceit, misrepresentation, concealment,
or imposition in any form of the party opposed in interest ...