Belmont Holdings Corp. v. Unicare Life & Health Ins. Co.

Belmont Holdings Corp. v. Unicare Life & Health Ins. Co.

Opinion

MEMORANDUM AND ORDER

BECHTLE, J.

FEBRUARY 5, 1999

Presently before the court is defendant Unicare Life & Health Insurance Company's ("Unicare") motion to dismiss and plaintiff Belmont Holdings Corporation's ("Belmont") response thereto. For the reasons set forth below, the motion will be granted in part and denied in part.

I. BACKGROUND

The facts as alleged in Belmont's Complaint are as follows. Belmont is a corporation organized under the laws of Pennsylvania with its principal place of business in Pennsylvania. Unicare is a corporation organized under the laws of Delaware with its principal place of business in California and is the successor in interest to Massachusetts Mutual Life Insurance Company ("Massachusetts Mutual"). ¹ On May 15, 1992, Massachusetts Mutual sold insurance policy [*2]  number 113526A to General Refractories Company ("GRC"). The anniversary date for this policy was June 1st of each subsequent year. In late 1994 or early 1995, RGP Holding, Inc. ("RPG") became the successor company to GRC respecting policy number 113526A and succeeded to all rights under the policy with Massachusetts Mutual's consent. Effective November 1, 1994, policy number 113526A was redesignated as policy number 120210A. The anniversary date for policy number 120210A became November 1st of each subsequent year. Effective December 1, 1995, Belmont succeeded to the interests of RPG under policy number 120210A with Massachusetts Mutual's consent.

Belmont further alleges that effective November 1, 1995, the policy was changed from a fully insured minimum premium plan to a guaranteed cost dividend program. Under [*3]  this program, Belmont had a guaranteed annual minimum and maximum premium, depending on the amount of participation in the plan by Belmont's employees and their dependents. If minimum premium losses did not exceed the maximum premium, Massachusetts Mutual was to pay Belmont a dividend for the difference.

In 1997, Unicare acquired Massachusetts Mutual. Belmont alleges that Unicare decided to increase the premiums for policy number 120210A effective August 1, 1997. Belmont further alleges that it was forced to pay additional monthly payments of approximately $ 40,000.00 beginning in August 1997 or have the policy canceled if it did not pay the additional amount. Belmont also states that it was forced to agree to change the policy's annual renewal date from November 1st to August 1st, or otherwise face an additional increase in its premiums. Belmont alleges that it fully performed all of its obligations under the policy.

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