Prange v. Arszyla

1

MARYANN PRANGE, Plaintiff, v. KASZMER J. ARSZYLA, JR., Defendant.

CIVIL No. 3:22-CV-1133 (JCH)

United States District Court, D. Connecticut

December 11, 2024

RULING ON DEFENDANT'S MOTION TO DISMISS AND MOTION FOR JUDGMENT ON THE PLEADINGS (DOC. NO. 94)

JANET C. HALL UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Plaintiff Maryann Prange (“Ms. Prange”) brings claims of elder exploitation, fraudulent nondisclosure, and other Connecticut state law claims against her brother, defendant Kaszmer Arszyla (“Mr. Arszyla”), pursuant to the court's diversity jurisdiction. See Complaint (Doc. No. 18). Ms. Prange alleges that, while she and Mr Arszyla were acting as co-agents under a power of attorney for her aunt, he mislead her into signing documents that designated himself a partial beneficiary of an annuity instead of her.

Before the court is the defendant's Motion to Dismiss and Motion for Judgment on the Pleadings pursuant to Rules 12(b)(1) and 12(c). See Motion to Dismiss for Lack of Jurisdiction (“Def.'s Mot.”) (Doc. No. 94) see Memorandum of Law in Support of Defendant's Motion for Judgment on the Pleadings (“Def.'s Mem.”) (Doc. No. 94-1). Ms. Prange opposes the Motion. See Memorandum of Law in Opposition to the Defendant's Motion to Dismiss (“Pl.'s Opp.”) (Doc. No. 98). For the following reasons, the Motion is denied.

II. BACKGROUND AND PROCEDURAL HISTORY

A. Factual Background^[1]

In October of 2017, Ms. Prange became an agent under a springing durable power of attorney for her aunt, H. Monica Carroll (“Ms. Carroll”), after Ms. Carroll became incapacitated. See Complaint, Count One, at ¶ 5. In February of 2019, Ms. Prange, who is herself an elderly person, sought to have her brother, Mr. Arszyla, appointed as a co-agent under Ms. Carroll's springing durable power of attorney. See id. at ¶ 6. Ms. Prange did so with the agreement that Mr. Arszyla would take care of all financial matters for Ms. Carroll. See id. Ms. Carroll's power of attorney stated that if, at any time co-agents are acting, acts of co-agents require approval and signature from both agents acting jointly. See id. at ¶ 6.

Prior to June of 2020, Ms. Carroll owned a variable annuity contract with Jackson National Life Insurance Company (“Jackson Annuity”). See id. at ¶ 9. Ms. Prange was a 50 percent beneficiary of the Jackson Annuity; the other 50 percent beneficiary was her sister, Joan Lavorgna (“Ms. Lavorgna”). See id. at ¶¶ 13-14.

In June of 2020, Mr. Arszyla told Ms. Prange that the Jackson Annuity would terminate in August of 2020, and that the money would be lost if it was not transferred to a new annuity. See id. at ¶ 15. On June 2, 2020, Mr. Arszyla sent Ms. Prange an email with eight pages of an application for an exchange of the Jackson Annuity to an annuity with Jefferson National Life Insurance Company (“Jefferson Annuity”). See id. at ¶ 16. In the email, Mr. Arszyla told Ms. Prange to print the forms, sign them, scan them, and return them to Mr. Arszyla. See id. at ¶ 17. Ms. Prange then signed the eight pages of the application and returned them to Mr. Arszyla. See id. at ¶ 18.

However, those eight pages were not the full application that Mr. Arszyla prepared and later submitted. See id. at ¶ 19. Ms. Prange alleges that Mr. Arszyla submitted a 13-page application for the Jefferson Annuity, which application included a page that designated himself as a 40 percent beneficiary, and Ms. Lavorgna as a 60 percent beneficiary. Ms. Prange did not know about this redesignation, and she would not have approved it had she known. See id. at ¶¶ 22-24.

In December of 2022, Ms. Carroll passed away. See id. at ¶ 25. At the time, the value of the Jefferson Annuity was $363,058.54. See id. at ¶ 26. Ms. Prange learned that she was not a beneficiary of the annuity when Mr. Arszyla told her in January of 2021. See Id. at ¶ 29.

B. Procedural Background

On July 27, 2022, Ms. Prange filed a complaint in Connecticut state court. See Notice of Removal at 13 (Doc. No. 1). In conjunction with her Complaint, Ms. Prange filed an Application for a Prejudgment Remedy (“PJR”) that sought an attachment “to secure the sum of $544,587.81”. See Notice of Removal at 8 (Doc. No. 1).

Claiming diversity jurisdiction, Mr. Arszyla removed the case to this court on September 7, 2022. Id. at 1. Ms. Prange refiled her Complaint, see Complaint, (Doc.No. 18), as well as an affidavit in support of a Motion for Prejudgment Remedy, see Affidavit of Maryann Prange (Doc. No. 19).

In her Complaint, Ms. Prange brings the following claims: (1) elder exploitation in violation of Connecticut General Statutes (“C.G.S.”) § 17b-462; (2) fraudulent nondisclosure; (3) constructive fraud; (4) unjust enrichment; (5) conversion; (6) civil theft in violation of C.G.S. § 52-564; and (7) negligent infliction of emotional distress. See generally Complaint. Although listed as a separate count (8), she seeks a remedy of constructive trust over Arszyla's portion of the Jefferson Annuity. See id., Count Eight.

On January 5, 2023, following a two-day evidentiary hearing, the court granted Ms. Prange's Application for a Prejudgment Remedy and granted her an attachment to Mr. Arszyla's property in the amount of $221,529.27. See Ruling (Doc. No. 59). That figure encompassed Ms. Prange's claimed actual damages, plus reasonable interest and the cost of two years of litigation. See id. at 21. On July 2023, the court later granted an additional attachment of $337,467.13 to account for attorneys fees and possible punitive damages. See Ruling (Doc. No. 86).

On March 1, 2024, Mr. Arszyla filed the instant Motion. See Mot. to Dismiss. Ms. Prange opposes the Motion. See Pl.'s Opp. Mr. Arszyla did not file a reply.

III. LEGAL STANDARD

Under Rule 12(b)(1), a defendant may move to dismiss a complaint for “lack of subject matter jurisdiction”. Fed.R.Civ.P. 12(b)(1). “A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000).

“A Rule 12(b)(1) motion challenging subject matter jurisdiction may be either facial or fact-based.” Carter v. HealthPort Techs., LLC, 822 F.3d 47, 56 (2d Cir. 2016). When, as here,^[2] “the Rule 12(b)(1) motion is facial, i.e., based solely on the allegations of the complaint or the complaint and exhibits attached to it . . . the task of the district court is to determine whether the [p]leading alleges facts that affirmatively and plausibly suggest that the plaintiff has standing to sue.” Id. (internal citations and quotations omitted). When “standing is challenged on the basis of the pleadings,” the court “accept[s] as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party.” United States v. Vazquez, 145 F.3d 74, 81 (2d Cir. 1998) (quoting Warth v. Seldin, 422 U.S. 490, 501 (1975)).

Under Rule 12(c), a party may move for judgment on the pleadings. Fed.R.Civ.P. 12(c). “The standard for granting a Rule 12(c) motion for judgment on the pleadings is identical to that for granting a Rule 12(b)(6) motion for failure to state a claim.” Lively v. WAFRA Inv. Advisory Grp., Inc., 6 F.4th 293, 301 (2d Cir. 2021). To withstand a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), “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 Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The court liberally construes the claims, accepts the factual allegations in a complaint as true, and draws all reasonable inferences in the non-movant's favor. See La Liberte v. Reid, 966 F.3d 79, 85 (2d Cir. 2020).

IV. DISCUSSION

A. Standing

Mr. Arszyla argues that the court lacks subject matter jurisdiction because Ms. Prange does not have standing to sue. See Def.'s Mem. at 4-5. Mr. Arszyla's argument focuses principally on Ms. Prange's role as a coagent under the power of attorney. Mr. Arszyla argues that, because Ms. Prange signed the annuity application “in a representative capacity” and not “in a personal/individual capacity”, she now lacks standing to sue in her individual capacity. See id. For the reasons discussed below, the court disagrees.

To establish Article III standing, Ms. Prange must plausibly allege that “[she] (1) ‘suffered an injury in fact,' (2) that the injury ‘is fairly traceable' to the defendant's challenged conduct, and (3) that the injury ‘is likely to be redressed by a favorable judicial decision.' Soule v. Connecticut Ass'n of Sch., Inc., 90 F.4th 34, 45 (2d Cir. 2023) (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016)). To constitute an “injury in fact”, a harm must be “concrete, particularized, and actual or imminent”. TransUnion LLC v. Ramirez, 594 U.S. 413, 423 (2021). In the court's view, Ms. Prange has plausibly alleged facts satisfying each of these requirements. Ms. Prange suffered an “injury in fact” that was “concrete and particularized” in the amount of 50 percent of the value of the Jefferson Annuity upon Ms. Carroll's passing. TransUnion, 594 U.S. at 423. That alleged injury is fairly traceable to the actions of Mr. Arszyla, who allegedly induced her to sign the annuity application without disclosing the beneficiary change. Finally, the injury is redressable in the form of money damages.

For similar reasons, Ms. Prange has standing under Connecticut Law. See MidHudson Catskill Rural Migrant Ministry, Inc v. Fine Host Corp., 418 F.3d 168, 173 (2d Cir. 2005) (“[w]here, as here, jurisdiction is predicated on diversity of citizenship, a plaintiff must have standing under both Article...