C&C Family Trust 04/04/05 v. AXA Equitable Life Insurance Company , 654 F. App'x 429 ( 2016 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-12534
Non-Argument Calendar
________________________
D.C. Docket No. 3:14-cv-00062-TCB
C&C FAMILY TRUST 04/04/05,
by and through its Trustees, Cynthia Cox-Ott and Patricia Ann Cox,
Plaintiff-Appellant,
versus
AXA EQUITABLE LIFE INSURANCE COMPANY,
AXA ADVISORS LLC,
ARMEN HOVAKIMIAN,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(June 20, 2016)
Before MARTIN, ROSENBAUM, and ANDERSON, Circuit Judges.
PER CURIAM:
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Plaintiff C&C Family Trust 04/04/05 (the “Trust”) filed this diversity action
against Defendants AXA Equitable Life Insurance Company and AXA Advisors
LLC (collectively, “AXA”) and Defendant Armen Hovakimian, alleging that one
of its trustees, Cynthia Cox-Ott (“Cynthia”), had been induced by the fraud or
negligent misrepresentations of AXA’s employee/agent Hovakimian and AXA to
purchase a life insurance policy. The Trust primarily alleged that Hovakimian had
represented to Cynthia that the insurance policy provided for fixed annual premium
payments in exchange for a $4,000,000 death benefit, but in actual fact the policy
was a “flexible premium” life insurance policy that required increasing premium
payments in order to keep the policy in force. The district court granted AXA’s
motion to dismiss the complaint, concluding that the Trust had not shown
justifiable reliance on the misrepresentations because of a merger clause in the
policy and because the terms of policy unambiguously contradicted the
misrepresentations. The court dismissed Hovakimian because he had not been
located or served.1 On appeal, the Trust contends that AXA’s motion to dismiss
was erroneously granted. After careful review, we affirm the dismissal of the
Trust’s complaint.
1
The Trust does not challenge this ruling on appeal, so we deem the issue abandoned.
See Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 680-81) (11th Cir. 2014) (issues not
raised prominently on appeal are deemed abandoned).
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I.
Cynthia married Claude Ott (“Claude”) in 1988. 2 They divorced in 2005.
Part of the divorce settlement included the establishment of a trust, to be funded by
a life insurance policy on the life of Claude, who was 67 years old at the time. In
2005 and 2006, Cynthia had numerous discussions with Hovakimian, “an
employee and/or legal agent of AXA,” Doc. 1–1 ¶ 9, who provided Cynthia with
various projections and illustrations for life insurance policies offered by AXA.
Hovakimian represented that the projections and illustrations were “guaranteed.”
In August 2005, Cynthia, as trustee, selected a policy, which she believed provided
for a flat annual premium of $88,000 until Claude turned the age of 90 3, with no
premiums required thereafter. The policy provided for a $4,000,000 net death
benefit payable to the Trust.
The policy was delivered to the Trust on February 16, 2006. Eight days later
on February 24, Hovakimian, as agent for AXA, provided Cynthia with an
2
We take these factual allegations primarily from the complaint and accept them as true
for purposes of this appeal. See Miyahira v. Vitacost.com, Inc., 715 F.3d 1257, 1265 (11th Cir.
2013). We also rely on a 2006 policy illustration because it was attached to the complaint, see
Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1215-16 (11th Cir. 2012), as
well as a copy of the life insurance policy attached to AXA’s motion to dismiss because it is
central to the Trust’s claims and its authenticity is not disputed, see Day v. Taylor, 400 F.3d
1272, 1276 (11th Cir. 2005). We do not rely, and neither did the district court, on a 2005
illustration attached to AXA’s motion to dismiss.
3
The complaint alleges that Hovakimian told Cynthia that the policy would be paid up
when Claude reached the age of 83, but then seeks reformation of the policy to provide that it
would be considered paid up when Claude reached the age of 90. This discrepancy is not
explained. In any case, the Trust uses age 90 in its initial brief on appeal, so we do so as well.
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“Original Illustration” listing the guaranteed annual premium amount ($88,000)
and net death benefit ($4,000,000). Based on these representations, the Trust
decided to keep the policy in force. In her capacity as Trustee, Cynthia made an
initial premium payment of $165,800, and she has paid the annual premium of
$88,000 each year since the policy issued.
In July 2012, the Trust received from AXA an “Annual Report,” which
contained “conflicting notices, projections and illustrations.” Id. ¶ 17. Cynthia
retained counsel, who asked AXA to confirm both the amount of the annual
premium and when the policy would be considered paid up. AXA did not answer.
In April 2013, Cynthia submitted a formal complaint to the Office of the Insurance
Commissioner of the State of Georgia. Two months later, AXA informed Cynthia
that “premium increases would be required on the Policy to keep it in force,”
despite previous representations about guaranteed values. Id. ¶ 21.
In March 2014, the Trust filed suit against AXA and Hovakimian in Georgia
state court. Shortly thereafter, AXA removed the action to the United States
District Court for the Northern District of Georgia. In its complaint, the Trust
alleged three causes of action: (1) fraud as to all defendants; (2) negligent
misrepresentation as to all defendants; and (3) reformation as to AXA. The Trust
alleged in broad terms that Cynthia reasonably relied on the misrepresentations
about “guaranteed” premium values when she purchased the life insurance policy,
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and she sought to reform the contract to conform to her reasonable understanding
of what the policy provided.
AXA moved to dismiss the complaint with prejudice on various grounds.
Relevant to this appeal, AXA contended that the Trust’s negligent
misrepresentation and fraud claims, based on the alleged oral and written
misrepresentations by Hovakimian, were barred by a comprehensive merger clause
in the life-insurance policy. AXA also argued that the Trust’s reformation claim
failed as a matter of law because it was derivative of the claims for fraud and
negligent misrepresentation.
AXA attached to its motion to dismiss a copy of the life insurance policy.
Page 1 of the policy states that it is a “Flexible Premium Universal Life Insurance
Policy,” 4 which, the policy explains, means that the policyholder could, within
limits, “make premium payments at any time and in any amount”; “change the
Death Benefit Option”; and “reduce the face amount of insurance.” A section
entitled “Policy Information” beginning on Page 3 describes the Trust’s policy in
more detail. This section contains the following language contradicting
Hovakimian’s representations that the premium amounts were guaranteed: “THE
PLANNED PERIOD PREMIUMS SHOWN ABOVE MAY NOT BE
4
This Court has addressed claims arising from similar “flexible premium” policies once
before, albeit in a different context. See Adams v. S. Farm Bureau Life Ins. Co., 493 F.3d 1276
(11th Cir. 2007). Adams describes the genesis and operation of these policies in more detail. See
id. at 1279 nn. 1 & 2.
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SUFFICIENT TO CONTINUE THE POLICY AND LIFE INSURANCE
COVERAGE IN FORCE.” Doc. 3–2 at 4. This section further provides that
various factors could affect the premium amount and whether the policy would
continue in force, and that changes to interest rates or the cost of insurance “MAY
REQUIRE MORE PREMIUM TO BE PAID THAN WAS ILLUSTRATED OR
CAUSE THE CASH VALUES TO BE LESS THAN ILLUSTRATED.” Id.
Later sections in the policy explain in more detail how the policy operates.
The planned periodic premium payments (“the amount for which you [the
policyholder] asked us [AXA] to bill you”—here, $88,000) are placed into a policy
account. AXA credits interest to the policy account based on interest rates it
determines, at a rate guaranteed to be not less than 3%, and also makes monthly
deductions to pay administrative charges, the actual cost of insurance for the
insured person, and the cost of any benefits provided by riders to the policy. The
monthly cost of insurance is determined by AXA within limits set in the policy.
So long as the net value of the policy account is sufficient to cover the monthly
deductions, the policy remains in force.
In August 2014, the district court granted AXA’s motion to dismiss. In
relevant part, the court concluded that the policy contained a merger clause that,
under Georgia law, barred the Trust’s claims for fraud and negligent
misrepresentation based on written and oral statements made before the insurance
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policy was delivered to the Trust in February 2006. The court also concluded that
the policy unambiguously provided that the scheduled premium payments may not
be sufficient to keep the policy in force, making reliance on misrepresentations to
the contrary unreasonable as a matter of law. Finally, the court found that the
Trust’s reformation claim failed because it was derivative of the claims for fraud
and negligent misrepresentation. The court dismissed the claims against AXA and
ordered the Trust to serve Hovakimian by October 15, 2014.
The Trust moved the court to reconsider its order granting AXA’s motion to
dismiss and to extend the time to serve Hovakimian. In May 2015, the court issued
an order denying both requests. The Trust now appeals.
II.
We review the grant of a motion to dismiss de novo, applying the same
standards as the district court. Davila v. Gladden, 777 F.3d 1198, 1203 (11th Cir.),
cert. denied, 136 S. Ct. 78 (2015). We accept the allegations in the complaint as
true and draw all reasonable inferences in favor of the plaintiff. Id. “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, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570, 127 S. Ct. 1955, 1974 (2007)).
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III.
“Insurance is a matter of contract law and contract rules and interpretations
will apply.” Life Ins. Co. of Va. v. Conley, 351 S.E.2d 498, 500 (Ga. Ct. App.
1986). 5 Insurance policies are liberally construed in favor of the insured and the
object to be accomplished by the policy. Barrett v. Nat’l Union Fire Ins. Co. of
Pittsburgh, 696 S.E.2d 326, 330-31 (Ga. Ct. App. 2010). In construing an
insurance policy, the test is what a reasonable person in the position of the insured
would understand the words of the policy to mean. Id.
Under Georgia law, a party alleging that she was fraudulently6 induced to
enter into a contract can either (1) affirm the contract and sue for damages from the
fraud or breach or (2) rescind the contract and sue in tort for fraud. Ekeledo v.
Amporful, 642 S.E.2d 20, 22 (Ga. 2007). Here, by seeking reformation of the
contract rather than rescission, the Trust affirmed the contract. Harkins v.
Channell, 618 S.E.2d 129, 132 (Ga. Ct. App. 2005). By affirming the contract, the
Trust as a general matter is bound by the policy’s terms and subject to defenses
5
There is no dispute that Georgia substantive law applies in this diversity case. See
McMahan v. Toto, 256 F.3d 1120, 1131 (11th Cir. 2001).
6
We address the Trust’s claims for fraud and negligent misrepresentation collectively
because Georgia courts recognize “that the only real distinction between negligent
misrepresentation and fraud is the absence of the element of knowledge of the falsity of the
information disclosed,” Holmes v. Grubman, 691 S.E.2d 196, 640-41 (Ga. 2010), and the parties
do not suggest that knowledge of the falsity of the information disclosed is at issue in this case.
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based on the contract. Stephen A. Wheat Trust v. Sparks, 754 S.E.2d 640, 648-49
(Ga. Ct. App. 2014).
An essential element of claims for fraud and negligent misrepresentation
under Georgia law is “justifiable reliance” on the misrepresentations by the
allegedly defrauded party. Novare Grp., Inc. v. Sarif, 718 S.E.2d 304, 309 (Ga.
2011). The Supreme Court of Georgia has identified two barriers that may
preclude a party from showing justifiable reliance as a matter of law.
First, when an allegedly defrauded party “affirms a contract that contains a
merger or disclaimer provision, he is estopped from asserting reliance on a
representation that is not part of the contract.” Id.; Ekeledo, 642 S.E.2d at 22
(stating that an allegedly defrauded party who affirms a contract containing a
merger clause generally is barred “from asserting that [she] relied upon the other
party’s misrepresentation and [her] action for fraud must fail.” (quoting Authentic
Architectural Millworks v. SCM Grp. USA, 586 S.E.2d 726 (Ga. Ct. App. 2003));
see First Data POS, Inc. v. Willis, 546 S.E.2d 781, 784 (Ga. 2001). “In essence, a
merger clause operates as a disclaimer of all representations not made on the face
of the contract.” Ekeledo, 642 S.E.2d at 22.
Second, “when one is bound by a contract that includes terms that expressly,
conspicuously, unambiguously, and squarely contradict precontractual
representations, any reliance upon those precontractual representations may be
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deemed unreasonable as a matter of law.” Raysoni v. Payless Auto Deals, LLC,
766 S.E.2d 24, 26 (Ga. 2014).
“There is a low threshold for establishing ambiguity in an insurance policy”
under Georgia law. St. Paul Mercury Ins. Co. v. Fed. Deposit Ins. Co., 774 F.3d
702, 709 (11th Cir. 2014). “Ambiguity in an insurance contract is duplicity,
indistinctiveness, uncertainty of meaning of expression, and words or phrases
which cause uncertainty of meaning and may be fairly construed in more than one
way.” Id. (quotation marks omitted). An insurance policy is ambiguous if it is
susceptible to two or more reasonable and logical constructions. Id.
The district court found that the following provision in the insurance policy
was a “merger clause” that barred the Trust from relying on representations outside
of the policy itself: “This policy, any riders or endorsements, and the attached
copy of the initial application and all subsequent applications to change this policy,
and all additional Policy Information sections added to this policy, make up the
entire contract. . . . Only our Chairman of the Board, our President or one of our
Vice Presidents can modify this contract or waive any of our rights or requirements
under it.” The Trust contends that this clause does not operate to bar its claims of
fraudulent inducement for at least three reasons.
First, the Trust argues that the purported “merger clause” is not a
“comprehensive” clause that bars its claims because the clause does not disclaim
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reliance on prior agreements not contained in the contract itself. However, while
disclaimer language is generally included in a “standard merger clause,” see First
Data POS, Inc., 546 S.E.2d at 783, such language is not a required element of a
valid merger clause under Georgia law. For example, the Supreme Court of
Georgia in Ekeledo characterized the following provision as a valid “merger” or
“entire agreement” clause that barred claims of fraudulent inducement: “This
contract constitutes the sole and entire agreement between the parties and no
modifications of this contract shall be binding unless attached hereto and signed by
all parties to this agreement.” 642 S.E.2d at 21; see also Herman Homes, Inc. v.
Smith, 547 S.E.2d 591, 592 (Ga. Ct. App. 2001) (“[A]ny other agreement entered
into by any parties in connection with this transaction is attached to the sales
contract. This contract constitutes the entire agreement between the parties, and no
change or modification shall be made without the prior written consent of both
parties.”).
Here, the disputed provision states that certain specified documents “make
up the entire contract,” and that only certain executives with AXA may modify the
policy. Like the clause in Ekeledo, this provision states that the policy is the entire
agreement without disclaiming all prior written or oral agreements between the
parties regarding the subject matter of the contract.
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The Trust also relies on Raysoni in arguing that the clause is not
comprehensive. However, we find the Trust’s reliance on Raysoni misplaced. In
Raysoni, the Supreme Court of Georgia held that a clause in a sales contract
providing that “NO SALESMAN VERBAL REPRESENTATION IS BINDING
ON THE COMPANY” was at most only a “partial merger clause” limited to verbal
representations. 766 S.E.2d at 26. As a result, the Court held, the clause did not
bar a plaintiff’s fraud claims because the plaintiff also relied on a written document
given to him by the defendant. Id. In this case, the merger clause lists the
documents constituting the “entire contract”; it does not state, as in Raysoni, what
is not part of the contract. Because the alleged misrepresentations are not
contained within those documents constituting the “entire contract,” the entire-
agreement clause in the policy, though non-standard, operates as a disclaimer
against reliance on those representations. See Ekeledo, 642 S.E.2d at 22.
Second, the Trust contends that the merger clause is ambiguous because
Cynthia could reasonably have understood that the illustrations and projections
provided by AXA and Hovakimian were “additional Policy Information sections
added to this policy,” and therefore part of the “entire contract.” However, the
illustration itself plainly disclaims near the bottom of the page, “THIS
ILLUSTRATION IS NOT PART OF THE LIFE INSURANCE POLICY OR
CONTRACT.” Nor did the Trust allege that the illustration was delivered with the
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policy, which may have indicated that it was part of the policy. As a result, we
agree with the district court that the merger clause was not ambiguous.
Third, the Trust contends that the merger-clause doctrine does not apply to
adhesion contracts such as the insurance policy at issue, but rather applies only in
situations where a contract was negotiated by parties with equal bargaining power,
such as “sophisticated business parties or persons represented by counsel.” The
Trust does not cite, and research has not revealed, any Georgia authority directly
addressing this question.7
However, our review of Georgia law does not support the Trust’s position.
While insurance policies are contracts of adhesion, Barrett, 696 S.E.2d at 331,
“contracts of adhesion are enforceable in Georgia, even though they are strictly
construed against the drafter,” Mathis v. Orkin Exterminating Co., Inc., 562 S.E.2d
213, 215 (Ga. Ct. App. 2002). And by affirming the insurance policy, the Trust is
bound by its terms. Sparks, 754 S.E.2d at 648. Of course, we construe any
7
The Sixth Circuit has addressed the effect of a merger clause in a similar “flexible
premium” life insurance policy under Ohio law, finding that the clause barred reliance on
misrepresentations not contained within the contract. Greenberg v. Life Ins. Co. of Va., 177 F.3d
507, 518 (6th Cir. 1999). Nonetheless, the court held that the clause did not bar reliance on
representations within the contract itself, and, relying on those representations, the court found
that the contract was ambiguous. See id. at 518-19. This analysis appears to be consistent with
Georgia law, which holds that a merger clause “does not prevent a claim of fraud arising from
representations in the contract itself.” Conway v. Romarion, 557 S.E.2d 54, 58 (Ga. Ct. App.
2001). In this case, however, the Trust’s complaint does not allege that Cynthia was misled by
any representation in the contract itself.
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ambiguity in the policy against the insurer, but still we must find some ambiguity
first.
In addition, recent statements of the merger-clause doctrine by the Supreme
Court of Georgia make no reference to the relative sophistication of the parties.
See, e.g., Raysoni, 766 S.E.2d at 26 (“[W]hen one has entered a contract with a
binding and comprehensive merger clause, any reliance upon precontractual
representations is, generally speaking, unreasonable as a matter of law.”); see also
Legacy Acad., Inc. v. Mamilove, LLC, 771 S.E.2d 868, 872 (Ga. 2015). For
example, in Raysoni, an individual plaintiff purchased a used car from a used car
lot. 766 S.E.2d at 25-27. The Court did not indicate that the merger-clause
doctrine would not apply in that situation. Instead, it found that the purported
merger clause was not comprehensive.
The most favorable case to the Trust’s position arguably is Collins v. Life
Ins. Co. of Ga., 491 S.E.2d 514 (Ga. Ct. App. 1997). In Collins, the plaintiff,
Collins, alleged that an agent of the insurer negligently misrepresented the extent
of his coverage. Id. at 515. Collins had been given a “proposal/worksheet”
showing coverage for prosthesis, but the actual policy did not provide such
coverage. Id. There, as here, the insurer contended that the plaintiff could not
have been misled by the proposal/worksheet because “the policy states that the
policy constitutes the entire contract.” Id. The court ultimately concluded that the
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plaintiff’s claims survived summary judgment because a jury reasonably could
conclude that “the defendant’s agents presented and demonstrated the
proposal/worksheet to Collins as a means to solicit his purchase of the policy and
explain its meaning” and that Collins reasonably relied on the proposal in buying
the policy. Id. at 516.
Despite its similarities to the instant case, we do not find Collins persuasive
in these circumstances because it did not discuss the effect or significance of the
merger clause, or even whether the insurer’s contention that there was a merger
clause was in fact accurate. The court’s sub silentio treatment of the merger clause
provides no guidance in these circumstances. And the decision is difficult to
reconcile with the decisions of the Supreme Court of Georgia discussed above.
Nor did Collins state the general rule that an insured is required “to read and
examine an insurance policy to determine whether the coverage desired has been
furnished.” See Heard v. Sexton, 532 S.E.2d 156, 158 (Ga. Ct. App. 2000). Since
it was decided in 1997, our research reveals that Collins has been cited only once
for its holding with respect to negligent representation. In that case, Heard, the
court explained that there were two exceptions to the rule requiring insureds to
read and examine an insurance policy. Id. The court indicated that Collins fell
within the second exception, applicable “where the evidence reflects a special
relationship of trust or other unusual circumstances which would have prevented or
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excused plaintiff of his duty to exercise ordinary diligence.” See id. (ellipsis,
brackets, and internal quotation marks omitted).
Here, however, the Trust has not alleged sufficient facts to show a special
relationship of trust or other unusual circumstances that would excuse the Trust
from its duty to exercise ordinary diligence. To the contrary, the Trust specifically
alleged that Hovakimian was an agent or employee of AXA. 8 As a general matter
under Georgia law, no fiduciary or confidential relationship exists between an
insured and the insurer or the insurer’s agents. Fowler v. Prudential Prop. & Cas.
Ins. Co., 449 S.E.2d 157, 158 (Ga. Ct. App. 1994). Absent a fiduciary or
confidential relationship, a party to a contract who can read must read the contact
and will be bound by its terms unless she was prevented from reading the contract.
See State Farm Fire & Cas. Co. v. Fordham, 250 S.E.2d 843, 845 (Ga. Ct. App.
1978); see Sarif, 718 S.E.2d at 308 (“[T]he only type of fraud that can relieve a
party of his obligation to read a written contract and be bound by its terms is a
fraud that prevents the party from reading the contract.”). The Trust does not
allege that Cynthia was prevented from reading the contract or that she relied on
anything other than Hovakimian’s misrepresentations and the policy illustrations
8
The Trust claims that the district court failed to analyze whether Hovakimian was
AXA’s agent, such that AXA could be held liable for Hovakimian’s misrepresentations.
However, the Trust alleged in its complaint that Hovakimian was AXA’s agent or employee, or
both, an allegation we accept as true. The district court’s analysis did not turn on whether an
agency relationship existed between AXA and Hovakimian, and we presume that AXA could be
held liable for Hovakimian’s representations.
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and projections. Under Georgia law, “[t]here is no legal relief afforded when one
blindly relied on the representations of the [other party] as to matters of which he
could have informed himself.” Williams v. Dresser Indus., Inc., 120 F.3d 1163,
1171 (11th Cir. 1997).
The unambiguous terms of the insurance policy preclude the Trust from
claiming justifiable reliance on the alleged misrepresentations. Raysoni, 766
S.E.2d at 26. As the district court recognized, the Trust’s fraud and negligent-
misrepresentation claims were based on misrepresentations that the annual
premium payments were fixed, as opposed to variable, and subject to increase in
order to keep the policy in force. Thus, the critical question is whether the
insurance policy itself unambiguously discloses that additional payments beyond
the planned premium amount may be necessary to keep the policy in force. We
find, as the district court did, that the policy does so: “THE PLANNED PERIODIC
PREMIUMS SHOWN ABOVE MAY NOT BE SUFFICIENT TO CONTINUE
THE POLICY AND LIFE INSURANCE COVERAGE IN FORCE.” Doc. 3–2 at
4. Further, the policy states that more premium may be required than was
illustrated based on the amount of interest credited to the policy and the amount of
cost of insurance and other expenses.
The Trust asserts that the policy is ambiguous because the statement that
more premiums may be required is preceded by the clause “SUBJECT TO
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GUARANTEES.” The Trust claims that such “guarantees” could reasonably be
understood to cover the guaranteed premium values reflected in the illustrations.
However, “subject to guarantees” plainly qualifies the insurer’s “right to change
the amount of interest credited to the policy and the amount of the cost of
insurance or other expense charges deducted under the policy,” and cannot
reasonably be construed as referring to a guaranteed premium amount, given that
the sentence then states that the interest-rate and cost-of-insurance changes “may
require more premium to be paid than was illustrated.” We are unpersuaded by the
Trust’s other attempts to insert ambiguity into the policy. 9
While we are troubled by the allegations in the Trust’s complaint, we are
constrained to conclude that, because the Trust affirmed the contract, the merger
provision in the insurance policy and the unambiguous terms of the policy itself
preclude the Trust from showing “justifiable reliance” as a matter of law under
Georgia law. See Raysoni, 766 S.E.2d at 26. The policy is clear that the $88,000
premium amount may not be sufficient to keep the policy in force. Accordingly,
the district court properly dismissed the Trust’s claims for fraud and negligent
misrepresentation.
9
The Trust relies on several similar federal district-court opinions finding flexible life
insurance policies to be ambiguous under Georgia law. See, e.g., McBride v. Life Ins. Co. of Va.,
190 F. Supp. 2d 1366, 1377-78 (M.D. Ga. 2002). We express no opinion on the merits of these
rulings but find these cases distinguishable because the language of the policies and the bases for
the plaintiffs’ claims in those cases are not identical to the policy and claims in this case.
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IV.
We also affirm the district court’s dismissal of the Trust’s claim for
reformation of the contract. Reformation of a written instrument is an equitable
remedy available when, inter alia, the unilateral mistake of one party is
accompanied by the fraud or inequitable conduct of the other party. Frame v.
Hunter, Maclean, Exley & Dunn, P.C., 511 S.E.2d 585, 587 (Ga. Ct. App. 1999);
see Lee v. Am. Cent. Ins. Co., 530 S.E.2d 727, 730 (Ga. Ct. App. 1999) (“The
remedy is not available for the purpose of making a new and different contract for
the parties, but is confined to establishment of the actual agreement.”). However,
reformation is not available “if a party by reasonable diligence could have known
the truth.” Frame, 511 S.E.2d at 587. In light of our holding that the Trust could
have by reasonable diligence known the truth of the insurance policy, the Trust
cannot proceed on its reformation claim.
V.
Finally, the district court did not abuse its discretion by not granting the
Trust leave to amend the complaint. When the Trust requested leave to amend its
complaint in its brief in opposition to AXA’s motion to dismiss, it was within the
discretion of the district court to deny that request sub silentio. See Rosenberg v.
Gould, 554 F.3d 962, 967 (11th Cir. 2009). “Where a request for leave to file an
amended complaint simply is imbedded within an opposition memorandum, the
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issue has not been raised properly.” Id. (quoting Posner v. Essex Ins. Co., 178
F.3d 1209, 1222 (11th Cir.1999)). The Trust also failed to attach a copy of its
proposed amendment or to describe the substance of its proposed amendment. See
id. In addition, the Trust asked for leave to amend its complaint only “should the
Court agree with AXA that Plaintiffs have not met Rule 9(b)’s standard.” But the
court did not with agree with AXA in that respect, so it is understandable that the
court found no reason to grant leave to amend.
VI.
In sum, we AFFIRM the district court’s dismissal of the Trust’s complaint
against AXA.
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