Kyla Asbury Jun. 6, 2014, 3:53pm

BOSTON (Legal Newsline) - The U.S. Court of Appeals for the First Circuit has ruled that John Hancock Life Insurance Company did not breach its contract in a class action lawsuit in regard to how it handed unclaimed insurance policy proceeds.

The appeals court ruled that Richard Feingold's class action lawsuit against John Hancock Life Insurance Company and John Hancock Life & Health Insurance Company was properly dismissed for failure to state a claim, according to the May 27 opinion.

Sandra Lynch, Bruce M. Selya and William J. Kayatta made the ruling, while Lynch authored the opinion.

Feingold sued the defendants for damages said to have arisen from Hancock's adherence to contractual terms requiring that it be given notice of the death of its insureds before death benefits are paid out to beneficiaries, according to the opinion.

"Specifically, Hancock is said to have an obligation, stemming from a regulatory agreement between Hancock and several states, to discover such deaths and notify beneficiaries," the opinion states. "The district court dismissed the complaint for failure to state a claim."

On appeal, Feingold primarily argued the agreement Hancock entered with several state governments in June 2011 regarding its handling of unclaimed insurance policy proceeds imposed new obligations on Hancock as to beneficiaries of its insureds under state law.

The appeals court disagreed and affirmed the district court's decision to dismiss the class action lawsuit.

Feingold filed the class action complaint on Jan. 30, 3013, alleging that Hancock owed Feingold damages based on its handling of unclaimed benefits under its life insurance policies.

On Feb. 26, 2013, Hancock moved to dismiss the complaint and the district court held a hearing on July 25, 2013, and issued a memorandum and order granting Hancock's motion to dismiss on Aug. 19, 2013.

The court applied both Massachusetts and Illinois law to Feingold's claims because it concluded that the relevant laws of both states were the same and so it did not need to resolve the choice of law issue, according to the opinion.

"On appeal, Feingold challenges the district court's refusal to consider the GRA in assessing the plausibility of his claims for unjust enrichment, conversion, and breach of fiduciary duty," the opinion states. "He argues that Hancock breached the GRA and that this breach makes his common law claims plausible because he is a third-party beneficiary to the GRA."

Feingold also argues, in the alternative, that Hancock's breach of the Global Resolution Agreement supports his common law claims even if he is not a GRA third-party beneficiary, according to the opinion.

"These arguments fail because Feingold is not a third-party beneficiary to the GRA, and so Hancock owes Feingold no enforceable duties under that agreement," the opinion states.

"At most, Feingold is an incidental, as opposed to direct, beneficiary of the GRA. This is particularly so given that the GRA is a contract with state governments.

"Hancock's compliance with a different section of the Unclaimed Property Act based on an event unrelated to Mollie Feingold's death does not state a plausible violation of Illinois law."

U.S. Court of Appeals for the First Circuit case number: 13-2151

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