Rice v . Wal-Mart Stores, et a l . CV-02-390-B 07/23/04
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Vicki Rice, et a l .
v. Civil N o . 02-390-B Opinion N o . 2004 DNH 108 Wal-Mart Stores, Inc., et a l .
MEMORANDUM AND ORDER
Vicki Rice and Patricia Keenan, the widows of former
employees of Wal-Mart Stores, Inc., have brought this class
action challenging a program in which Wal-Mart purchased
corporate-owned life insurance (“COLI”) policies on the lives of
more than a thousand of its rank-and-file employees in New
Hampshire. In my order of September 3 0 , 2003, Rice v . Wal-Mart
Stores, Inc., 2003 DNH 166, 2003 WL 22240349, I dismissed all
claims against Hartford Life, one of the insurance companies that
issued the COLI policies, except for plaintiffs’ claims for civil
conspiracy and unjust enrichment. Hartford Life now moves for
summary judgment on those claims based on a statute of
limitations defense.1 I agree with Hartford Life that Rice’s
1 On July 1 1 , 2003, I found that the statute of limitations barred Patricia Keenan’s claims against AIG Life Insurance Company for its role in selling a policy on her husband’s life to Wal-Mart in the companion case to this one. Keenan v . AIG Life claims are barred by the applicable statute of limitations. See
N.H. Rev. Stat. Ann. § 508:4.
I. BACKGROUND2
Michael Rice worked as an employee for Wal-Mart during the
ten years preceding his death in 1999. In December 1993, he
worked at the Palmyra, Maine Wal-Mart store, and in 1998 and
1999, he worked as a manager in the Hooksett, Tilton, and
Concord, New Hampshire stores.
On December 1 4 , 1993, Wal-Mart informed its employees that
it planned to purchase life insurance polices on their lives,
naming itself as the beneficiary. (Aff. of Emerick, Ex. A to
Def.’s Mot. for Summ. J.) Tom Emerick, Vice-President of
Wal-Mart’s Benefits Department, distributed a memorandum to all
store managers with instructions to give a notice (provided to
them for that purpose) to each employee. The notice stated:
Ins. C o , 2003 DNH 126, 2003 WL 21696185. Because the facts and analysis are substantially identical, I discuss them more briefly here. 2 As is required by Fed. R. Civ. P. 12(b)(6), the following facts are described in a light most favorable to the nonmoving parties, in this case, the plaintiffs. See Martin v . Applied Cellular Tech., Inc., 284 F.3d 1 , 6 (1st Cir. 2002).
-2- Wal-Mart is providing these new death benefits as a result of financial gains from life insurance policies Wal-Mart will purchase which will cover the lives of associates who participate in the group health plan. Th[e] Wal-Mart owned life insurance will result in financial benefits for the corporation. Any net life insurance proceeds payable to Wal-Mart from this life insurance as a result of the death of an active associate will be contributed to the profit sharing plan.
(Def.’s Mot. for Summ. J.) The notice also clearly indicated
that each employee had the option to not participate and listed
the contact information for the Benefits Department. (Id.)
That same month, Wal-Mart purchased a policy on the life of
Michael Rice. Vicki Rice alleges that Wal-Mart used private,
confidential information from Michael’s personnel file to obtain
a COLI policy on his life. She states that she and Michael
neither knew about, nor consented t o , the purchase of such a
policy. In support of this assertion, she has provided
affidavits from numerous Wal-Mart employees, including Nick
Ballstrom, manager of the Palmyra store during December 1993,
stating that none of them remember ever receiving such a notice
or otherwise being informed of Wal-Mart’s COLI policies on
associates until this law suit was filed.
Wal-Mart’s COLI policies became effective in 1994 and saved
Wal-Mart over $36 million dollars in tax payments that year.
-3- News of the COLI policies on non-key employees spread throughout
the media. In its October 2 3 , 1995 issue, Newsweek published an
article entitled “Deal of Lifetime: How America’s biggest
corporations are cashing in on your mortality.” (Ex. B to Def.’s
Mot. for Summ. J.) The article begins, in capital letters,
“Wal-Mart Stores” and continues by describing the COLI scheme,
and Wal-Mart’s use of i t , in somewhat harsh detail. Emerick was
quoted in the article. A month earlier, on September 2 4 , 1995,
the New York Times printed an article entitled “Earning i t ; A Tax
Threat to Company Insurance” stating that Wal-Mart had COLI
policies and described how a typical plan may work. (Ex. B to
Def.’s Mot. for Summ. J.) It also noted that Wal-Mart “informs
its workers of the policies,” but that other companies that held
COLI policies did not. Id.
When Michael Rice died in 1999, Hartford Life paid Wal-Mart
the benefits from the policy on Rice’s life. Wal-Mart
surrendered and terminated its remaining COLI policies in January
2000.
II. STANDARD OF REVIEW
Summary judgment is appropriate where “the pleadings,
-4- depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” Fed. R. Civ. P.
56(c). The party seeking summary judgment must first demonstrate
the absence of a genuine issue of material fact in the record.
See Celotex Corp. v . Catrett, 477 U.S. 3 1 7 , 323 (1986). In this
context, “a fact is ‘material’ if it potentially affects the
outcome of the suit and a dispute over it is ‘genuine’ if the
parties’ positions on the issue are supported by conflicting
evidence.” Int’l Ass’n of Machinists & Aerospace Workers v .
Winship Green Nursing Ctr., 103 F.3d 196, 199-200 (1st Cir. 1996)
(citations omitted). Once the moving party carries its burden,
the burden shifts to the nonmoving party to “produce evidence on
which a reasonable finder of fact, under the appropriate proof
burden, could base a verdict for i t ; if that party cannot produce
such evidence, the motion must be granted.” Ayala-Gerena v .
Bristol Myers-Squibb Co., 95 F.3d 8 6 , 94 (1st Cir. 1996) (citing
Celotex, 477 U.S. at 323; Anderson v . Liberty Lobby, Inc., 477
U.S. 2 4 2 , 249 (1986)). If the non-moving party provides
“evidence that is merely colorable or is not significantly
-5- probative,” summary judgment should be granted. Wynne v . Tufts
Univ. Sch. of Med., 976 F.2d 7 9 1 , 794 (1st Cir. 1992) (quoting
Anderson, 477 U.S. at 249-50) (internal quotation marks omitted).
III. ANALYSIS
Hartford Life contends that Rice’s claims are time-barred by
the three-year statute of limitations set forth in N.H. Rev.
Stat. Ann. § 508:4. Rice rightfully concedes that § 508:4 states
the statute of limitations applicable to all of her claims
against Hartford Life. As an affirmative defense, Hartford Life
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Rice v . Wal-Mart Stores, et a l . CV-02-390-B 07/23/04
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Vicki Rice, et a l .
v. Civil N o . 02-390-B Opinion N o . 2004 DNH 108 Wal-Mart Stores, Inc., et a l .
MEMORANDUM AND ORDER
Vicki Rice and Patricia Keenan, the widows of former
employees of Wal-Mart Stores, Inc., have brought this class
action challenging a program in which Wal-Mart purchased
corporate-owned life insurance (“COLI”) policies on the lives of
more than a thousand of its rank-and-file employees in New
Hampshire. In my order of September 3 0 , 2003, Rice v . Wal-Mart
Stores, Inc., 2003 DNH 166, 2003 WL 22240349, I dismissed all
claims against Hartford Life, one of the insurance companies that
issued the COLI policies, except for plaintiffs’ claims for civil
conspiracy and unjust enrichment. Hartford Life now moves for
summary judgment on those claims based on a statute of
limitations defense.1 I agree with Hartford Life that Rice’s
1 On July 1 1 , 2003, I found that the statute of limitations barred Patricia Keenan’s claims against AIG Life Insurance Company for its role in selling a policy on her husband’s life to Wal-Mart in the companion case to this one. Keenan v . AIG Life claims are barred by the applicable statute of limitations. See
N.H. Rev. Stat. Ann. § 508:4.
I. BACKGROUND2
Michael Rice worked as an employee for Wal-Mart during the
ten years preceding his death in 1999. In December 1993, he
worked at the Palmyra, Maine Wal-Mart store, and in 1998 and
1999, he worked as a manager in the Hooksett, Tilton, and
Concord, New Hampshire stores.
On December 1 4 , 1993, Wal-Mart informed its employees that
it planned to purchase life insurance polices on their lives,
naming itself as the beneficiary. (Aff. of Emerick, Ex. A to
Def.’s Mot. for Summ. J.) Tom Emerick, Vice-President of
Wal-Mart’s Benefits Department, distributed a memorandum to all
store managers with instructions to give a notice (provided to
them for that purpose) to each employee. The notice stated:
Ins. C o , 2003 DNH 126, 2003 WL 21696185. Because the facts and analysis are substantially identical, I discuss them more briefly here. 2 As is required by Fed. R. Civ. P. 12(b)(6), the following facts are described in a light most favorable to the nonmoving parties, in this case, the plaintiffs. See Martin v . Applied Cellular Tech., Inc., 284 F.3d 1 , 6 (1st Cir. 2002).
-2- Wal-Mart is providing these new death benefits as a result of financial gains from life insurance policies Wal-Mart will purchase which will cover the lives of associates who participate in the group health plan. Th[e] Wal-Mart owned life insurance will result in financial benefits for the corporation. Any net life insurance proceeds payable to Wal-Mart from this life insurance as a result of the death of an active associate will be contributed to the profit sharing plan.
(Def.’s Mot. for Summ. J.) The notice also clearly indicated
that each employee had the option to not participate and listed
the contact information for the Benefits Department. (Id.)
That same month, Wal-Mart purchased a policy on the life of
Michael Rice. Vicki Rice alleges that Wal-Mart used private,
confidential information from Michael’s personnel file to obtain
a COLI policy on his life. She states that she and Michael
neither knew about, nor consented t o , the purchase of such a
policy. In support of this assertion, she has provided
affidavits from numerous Wal-Mart employees, including Nick
Ballstrom, manager of the Palmyra store during December 1993,
stating that none of them remember ever receiving such a notice
or otherwise being informed of Wal-Mart’s COLI policies on
associates until this law suit was filed.
Wal-Mart’s COLI policies became effective in 1994 and saved
Wal-Mart over $36 million dollars in tax payments that year.
-3- News of the COLI policies on non-key employees spread throughout
the media. In its October 2 3 , 1995 issue, Newsweek published an
article entitled “Deal of Lifetime: How America’s biggest
corporations are cashing in on your mortality.” (Ex. B to Def.’s
Mot. for Summ. J.) The article begins, in capital letters,
“Wal-Mart Stores” and continues by describing the COLI scheme,
and Wal-Mart’s use of i t , in somewhat harsh detail. Emerick was
quoted in the article. A month earlier, on September 2 4 , 1995,
the New York Times printed an article entitled “Earning i t ; A Tax
Threat to Company Insurance” stating that Wal-Mart had COLI
policies and described how a typical plan may work. (Ex. B to
Def.’s Mot. for Summ. J.) It also noted that Wal-Mart “informs
its workers of the policies,” but that other companies that held
COLI policies did not. Id.
When Michael Rice died in 1999, Hartford Life paid Wal-Mart
the benefits from the policy on Rice’s life. Wal-Mart
surrendered and terminated its remaining COLI policies in January
2000.
II. STANDARD OF REVIEW
Summary judgment is appropriate where “the pleadings,
-4- depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” Fed. R. Civ. P.
56(c). The party seeking summary judgment must first demonstrate
the absence of a genuine issue of material fact in the record.
See Celotex Corp. v . Catrett, 477 U.S. 3 1 7 , 323 (1986). In this
context, “a fact is ‘material’ if it potentially affects the
outcome of the suit and a dispute over it is ‘genuine’ if the
parties’ positions on the issue are supported by conflicting
evidence.” Int’l Ass’n of Machinists & Aerospace Workers v .
Winship Green Nursing Ctr., 103 F.3d 196, 199-200 (1st Cir. 1996)
(citations omitted). Once the moving party carries its burden,
the burden shifts to the nonmoving party to “produce evidence on
which a reasonable finder of fact, under the appropriate proof
burden, could base a verdict for i t ; if that party cannot produce
such evidence, the motion must be granted.” Ayala-Gerena v .
Bristol Myers-Squibb Co., 95 F.3d 8 6 , 94 (1st Cir. 1996) (citing
Celotex, 477 U.S. at 323; Anderson v . Liberty Lobby, Inc., 477
U.S. 2 4 2 , 249 (1986)). If the non-moving party provides
“evidence that is merely colorable or is not significantly
-5- probative,” summary judgment should be granted. Wynne v . Tufts
Univ. Sch. of Med., 976 F.2d 7 9 1 , 794 (1st Cir. 1992) (quoting
Anderson, 477 U.S. at 249-50) (internal quotation marks omitted).
III. ANALYSIS
Hartford Life contends that Rice’s claims are time-barred by
the three-year statute of limitations set forth in N.H. Rev.
Stat. Ann. § 508:4. Rice rightfully concedes that § 508:4 states
the statute of limitations applicable to all of her claims
against Hartford Life. As an affirmative defense, Hartford Life
has the burden of proving that a statute of limitations applies
and acts to bar Rice’s claims. See Glines v . Bruk, 140 N.H. 1 8 0 ,
181 (1995) (citing Exeter Hosp. v . Hall, 137 N.H. 3 9 7 , 399
(1993)); see also Pichowicz v . Watson Ins. Agency, Inc., 146 N.H.
166, 167 (2001). Once Hartford demonstrates that the action was
not “brought . . . within [three] years of the act or omission
complained of,” it meets its burden. Glines, 140 N.H. at 181.
Rice then must show that discovery rule applies to toll the
statute of limitations. Id. While Hartford has met its burden,
Rice has failed to produce sufficient evidence to support her
reliance on the discovery rule.
-6- Hartford Life contends, and I agree, that the claims at
issue arose in December 1993 when Wal-Mart paid Hartford Life a
substantial premium in exchange for the COLI policy it purchased
on Michael’s life. See Pichowicz, 146 N.H. at 167 (“[a] cause of
action arises once all the necessary elements are present”)
(internal citation omitted). This is so because in December
1993, all the necessary elements of the claims were in place.
Hartford allegedly obtained Michael’s personal and confidential
information in December 1993, when Wal-Mart obtained the COLI
policy. Earlier that same month, Wal-Mart supplied all of its
employees with notification of its intention to obtain COLI
policies on the lives of its employees.
Rice argues, as Keenan did in the companion case, that
neither she nor Michael discovered, nor could they have
reasonably discovered, that Hartford Life supplied Wal-Mart with
the COLI policy in 1993. Rice submits substantially similar
affidavits to those provided by Keenan. Her affidavit states
that she only heard of the COLI policy when she became involved
in a worker’s compensation case after Michael’s death. The other
affiants state that they first heard of it when contacted by the
attorney in this case. (Aff. of Rice, Ex. 1 ; Aff. of
-7- Ballsmith, Ex. 2 ; Affs. of Lehman, Joyce Moody, Rubin Moody, and
Fortune, Ex. 3 to Pl.’s O b j . to Def.’s Mot. for Summ. J.) As I
noted in Keenan’s case, none of the affiants directly challenge
Emerick’s claim that all Wal-Mart employees received the
memorandum informing them of the COLI policies in December 1993.
Even Nick Ballsmith, who did not provide an affidavit in Keenan’s
case, merely states that he does not remember having ever
received or passed on any information relating to COLI policies
on rank-and-file employees.
Even when I construe this evidence in the light most
favorable to Rice, she has not undermined Wal-Mart’s evidence
demonstrating that all of its employees received the December
1993 memorandum notifying them about Wal-Mart’s intention to
purchase the COLI policies. The notice clearly provided
information that Wal-Mart was going to purchase life insurance
policies on its employees’ lives, and that it - not the
employees’ survivors - would receive the financial gains. The
fact that the notice did not disclose the magnitude of the
financial gain to Wal-Mart is not relevant. Rice has failed to
produce sufficient responsive evidence to permit a reasonable
jury to conclude that the discovery ruled tolled the running of
-8- the statute of limitations.3 Her claims, therefore, are
time-barred pursuant to N.H. Rev. Stat. Ann. § 508:4.
III. CONCLUSION
For the reasons discussed above, I grant Hartford Life’s
motion for summary judgment (Doc. N o . 4 6 ) . Hartford Life is
therefore dismissed as a defendant in this case.
SO ORDERED.
/s/Paul Barbadoro Paul Barbadoro Chief Judge
July 2 3 , 2004
cc: David P. Slawsky, Esq. William Pandolph, Esq. W . Michael Dunn, Esq. Barry Chasnoff, Esq.
3 To the extent that Rice argues I should be persuaded by the result reached in similar litigation in Texas, I note that Mayo v . Hartford Life Ins. Co., 220 F. Supp. 2d 714 (S.D. Tex. 2002) applied Texas law, whereas I apply New Hampshire law.
-9-