mcdonough v. allianz life insurance company of north america, inc. complaint

8/9/2019 MCDONOUGH v. ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA, INC. complaint

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THE CIRCUIT COURT OF THE 11TH

JUDICIAL CIRCUIT IN AN D FOR

MIAMI-DADE COUN TY, FLORIDA

CHRISTOPHER MCDON OUGH,

EN ERAL JURISDICTION DIVISION

Plaintiff,

CASE NO.: 14-49727 CA 01

V

A L L IA N Z L IF E I N S U R A N C E CO M P A N Y

OF N ORTH AMERICA, IN C.,

Defendant.

COMPLAINT FOR NEGLIGENCE AND DECLARATORY RELIEF

COMES NOW, Plaintiff, CHRISTOPHER MCDONOUGH, (hereinafter, Plaintiff ),

sues Defendant, ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA, INC.,

(herein after, Defendan t ), and alleges the following:

PARTIES, JURISDICTION, AND VENUE

1

This is an action for damages in excess of fifteen thousand dollars ($15,000.00).

2.

Plaintiff, CHRISTOPHER MCDONOUGH is an individual over the age of

eighteen and resides in Miami-Dade County, Florida.

3.

Defendant, ALLIAN Z LIFE IN SURAN CE COMPAN Y OF N ORTH AMERICA,

INC., is a Minnesota corporation atithorized to transact insurance and annuity sales in the State

of Florida and at all times m aterial hereto has conducted business in this state and this county. Its

business includes the sale of annuities.

4.

Venue of this proceeding is prescribed by Sections 47.011 and 0.193, Florida

Statutes, because one or more of the causes of actions pled to accrued in Miami-Dade County,

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Case 1:15-cv-21137-JAL Document 1-1 Entered on FLSD Docket 03/20/2015 Page 5 of 19


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Florida, due to Allianz having committed negligent acts and/or omissions in Miami-Dade

County, Florida and having caused injury to P laintiff in Miami-Dade County, Flor ida.

5.

All conditions precedent and other obligations of Plaintiff herein alleged, and to

the institution of this action, have been fulfilled or excused.

FACTS RELEVENT TO ALL COUNTS

6. On or about July 2006, Plaintiff executed an annuity contract with Defendant in

the amount of $1,000,000.00, Account Number 70472933. A copy of the annuity contract is

attached to this complaint and m arked as

Exhibit A.

7. On or about July 2012, Plaintiff contacted Defendant indicating that he considered

using the Allianz annuity as a cond itional collateral for a cr edit line.

8. Defendant advised Plaintiff that there would be no tax consequence as he was not

withdrawing any funds from the annuity, and that a tax consequence would only apply should

Plaintiff default on the loan and funds be withdraw n.

9.

Upon information and belief, said telephone conversation was recorded by

Defendant.

10.

Relying on Defendant's representation, Plaintiff executed the contract with

Executive National Bank and assigned the Allianz annuity as collateral. A copy of the contract

for the line of credit is attached to this complaint and marked as

Exhibit B.

11.

On or about October 18, 2012, the line of credit was secured by an assignment

from the Allianz Annuity Account No.: 70472933, in the amount of $1,000,000.00.

Subsequently, Defendant issued an incorrect 1099-R noting a taxable amount of $449,028.94.

A copy of the 2012 1099-R for m is attached to this complaint and marked as

Exhibit C.

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12.

On or about June of 2014, Plaintiff was contacted by the IRS who purportedly

received a 2012 Form 1099-R from Defendant showing proceeds of $1,449,025.94, as income

for the year 2012. A copy of the IRS Notice is attached to this complaint and marked as

Exhibit

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13. Plaintiff contacted Defendant to correct the improperly issued 1099-R, and

Defendant failed to provide an amended 1099-R. The 1099-R should have shown a taxable

amount of $1,029,672.00 pursuant to IRS regulations and case law based on the 2012 value of

the annuity.

See Armstrong v. US.

366 F. 3d 6 22 (2004).

COUNT

NEGLIGENT ADVICE RELATING TO COLLATERAL AGREEMENT

14.

Plaintiff re-alleges and incorporates by reference paragraphs 1 through 13 as if

fully set forth herein and states as follows.

15.

Defendant owed a duty to Plaintiff as the owner of the policy it held with

Defendant.

16. Since Defendant had superior knowledge regarding annuities, loans and tax

consequences when assigning an annuity as collateral for a loan, Plaintiff justifiably relied on

Defendant's misrepresentations and omissions regar ding using the annuity as collateral.

17.

Defendant knew or should have known that Plaintiff would rely on the

misinformation and that the misinformation would likely lead Plaintiff to use the annuity as

collaterally and thus Plaintiff would suffer tax consequences.

18.

Relying on Defendant's representation, Plaintiff executed the contract with First

National Bank and assigned the annuity to Executive National Bank as collateral if Plaintiff

should default.

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19.

s a result of the foregoing, Plaintiff has suffered and will continue to suffer

damages, including, but not limited to, economic damages.

WHEREFORE,

Plaintiff, CHRISTOPHER MCDONOUGH, respectfully requests a

judgment against Defendant for dam ages, costs, and any other r elief as this Court deem s just and

appropriate.

COUN T II

NEGLIGENCE FOR ISSUANCE OF IMPROPER 1099-R FORM

20.

Plaintiff's re-alleges and incorporates by reference paragraphs 1 through 13 as if


21.

Defendant has superior knowledge regarding annuities, loans and tax

consequences when assigning an annuity as collateral for a loan.

22.

On or about January of 2012, Defendant issued an annual 1099-R Form based on

the annuity that Plaintiff used as collateral for a loan with Executive N ational Bank.

23.

The 1099-R form, prepared by Defendant, reported that Plaintiffs annuity had a

value of $1,449,025.94 (with a false net taxable amount of $499,025.94). When the actual value

as of annuity in 2012 was $1,029,672.00, thus having a taxable amount of $29,672.00.

24.

Defendant has a duty to proper ly repor t the correct amou nt of the annuity.

25.

Defendant incorrectly reported the amount of the annuity, resulting in tax

penalties against Plaintiff.

26.

Plaintiff has made repeated attempts to contact Defendant to correct the 2012

1099-R form with no avail.

27.

As a result of Defendant's negligence Plaintiff has suffered d amages.

WHEREFORE,

Plaintiff, CHRISTOPHER MCDONOUGH, respectfully requests a

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judgment against Defendant for damages, costs, and any other relief as this Court deem s just and

appropriate.

COUNT III

ACTION FOR DECLARATORY JUDGMENT

28.

Plaintiff re-alleges and incorporates by reference paragraphs 1 through 13 as if


29. This is an action for declaratory judgment brought pursuant to Chapter 86 of the

Florida Statutes.

30. An actual controversy exists between Plaintiff and Defendant, as to whether the

the 2012 1099-R form issued by Defendant showed the correct taxable amount of the annuity.

31. Plaintiff is entitled to a declaratory judgment declaring that the 1099-R issued for

the year 2012 by D efendant is incorr ect.

32.

Plaintiff is also entitled to a declaratory judgment declaring that Defendant must

issue a corrected 1099-R form for the year of 2012.

WHEREFORE,

Plaintiff, CHRISTOPHER MCDONOUGH, hereby respectfully

requests that the Court enter a declaratory judgment declaring the 1099-R issued by Defendant

for the tax year of 2012 is incorrect and direct Defendant to issue a corrected 1099-R and grant

Plaintiff costs and further relief as the Court may deem proper.

REQUEST FOR JURY TRIAL

Plaintiff hereby r espectfully requests a tr ial by jury on all issues so triable.

Dated on this 29

t h day of July, 2014.

Respectfully subniitted,

JON ATHAN M. DRUCKER, P.A.

Attorney for Plaintiff

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2605 Ponce de Leon Blvd

Coral Gables, Florida 33134

Telephone: 305-441-7091

Facsimile#: 305.4l-8166

BY:

rucker, Esq.

/s/ Jonathan M. Drucker, Esq.

By: tibNIITHAN M. DRUCICER, ESQ.

FLOTDA BAR #0056431

Direct-Email: [email protected]

For Service of Documents only:

[email protected]

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