Fraser et al v. Prudential Insurance Agency, LLC., No. 1:2014cv14161 - Document 208 (D. Mass. 2018)
Court Description: Judge George A. O'Toole, Jr: OPINION AND ORDER entered. Denying plaintiffs' requests for summary judgment and sanctions (dkt. nos. 171 , 179 , 181 ); granting 175 Prudential's Motion for Summary Judgment; adopting Report and Recommendations re 197 Report and Recommendations. (Halley, Taylor)
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Fraser et al v. Prudential Insurance Agency, LLC. Doc. 208 UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS CIVIL ACTION NO. 14-14161-GAO PAUL FRASER and DEBORAH FRASER, Plaintiffs, v. PRUDENTIAL INSURANCE AGENCY, LLC, and PRUDENTIAL INSURANCE COMPANY OF AMERICA, a/k/a PRUDENTIAL, Defendants. OPINION AND ORDER December 20, 2018 O’TOOLE, D.J. The magistrate judge to whom this matter was referred has filed a report and recommendation (dkt. no. 197) (“R&R”), recommending that the plaintiffs’ requests for summary judgment and sanctions (dkt. nos. 171, 179, 181) be denied and that Prudential’s Motion for Summary Judgment (dkt. no. 175) be granted. The plaintiffs filed timely objections to the recommendation, as well as a response to Prudential’s reply. After reviewing the R&R, the parties’ submissions, and the record, I OVERRULE the plaintiffs’ objections and ADOPT the R&R in its entirety. The Plaintiffs’ objections are meritless. I agree with the magistrate judge that the policy lapsed in accordance with its terms and that Prudential properly filed a Form 1099-R as a result. I am also in agreement with the magistrate judge on the imposition of sanctions: Prudential’s request for sanctions is GRANTED insofar as the plaintiffs are hereby enjoined from filing any further pleadings against Prudential Insurance Company of America or Prudential Dockets.Justia.com Insurance Agency, LLC, relating to this insurance policy or related tax assessment without prior leave of court, except for the purposes of appealing this judgment. Accordingly, the plaintiffs’ requests for summary judgment and sanctions (dkt. nos. 171, 179, 181) are DENIED. Prudential’s Motion for Summary Judgement (dkt. no. 175) is GRANTED and its request for sanctions is GRANTED as described above. Judgement shall enter for Prudential. It is SO ORDERED. /s/ George A. O’Toole, Jr. United States District Judge 2 UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS PAUL FRASER and DEBORAH FRASER, Plaintiffs, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, a/k/a PRUDENTIAL, Defendant. ) ) ) ) ) ) ) ) ) CIVIL ACTION NO. 14-14161-GAO REPORT AND RECOMMENDATION ON PRUDENTIAL’S MOTION FOR SUMMARY JUDGMENT AND PLAINTIFFS’ MOTIONS FOR SUMMARY JUDGMENT August 28, 2018 DEIN, U.S.M.J. I. INTRODUCTION The Plaintiffs1 originally brought this pro se action against Prudential Insurance Company of America and Prudential Insurance Agency, LLC alleging those entities wrongfully a elled Paul F ase s life i su a e poli , a d f audule tl to the I te al ‘e e ue “e i e I‘“ , the e epo ted a esulti g ta a le gai requiring Paul and Deborah Fraser to defend against a tax deficiency notice issued by the IRS. This court previously dismissed the action against Prudential Insurance Agency, LLC. (Docket No. 59). Therefore, the sole remaining 1 The named Plaintiffs are Paul and Deborah Fraser. The Frasers maintain that George E. Kersey serves as their New York based attorney and is the assignee of Deborah (see Docket No. 128), but Mr. Kersey has not been permitted to appear in this court. In connection with the pending motions, no party has raised the issue of who constitutes the proper plaintiffs. For convenience, the court will refer to Paul Fraser, Deborah Fraser, and George Kersey collectively as the Plai tiffs. defendant is Prudential Insurance Company of America, and that entity will be referred to he ei as P ude tial. Follo i g the ou t s uli g o a ious dispositi e otio s, the sole e ai i g ou t i this action is Count IV against Prudential for the alleged improper a ellatio of Paul F ase s insurance policy. (See Docket Nos. 53, 59). This matter is presently before the court on Plaintiffs O je tio to Ele t o i O de [si ] a d ‘e e ed Motio fo “u Plai tiffs O je tio a d ‘e e ed Motio Do ket No. a Judg e t , and P ude tial s Motio fo Summary Judgment. (Docket No. 175). The Plaintiffs filed an opposition and supplemental opposition to P ude tial s otio , i which they also seek entry of summary judgment in their favor and imposition of sanctions against Prudential, as well as default judgments against Prudential and Prudential Insurance Agency, LLC. (Docket Nos. 179, 181). The court has already ruled numerous times that there is no basis for a default judgment against Prudential Insurance Agency, LLC since it was dismissed from this case on November 25, 2015, or against Prudential since it filed a timely answer on December 9, 2015. (See, e.g., Docket Nos. 31, 48, 61, 67-69, 74, 157). Plaintiffs have proffered no reason for this court to revisit those rulings. Additionally, at the motion hearing on July 11, 2018, Prudential requested that the court issue sanctions and enjoin Plaintiffs from continuously filing such motions against them in this court. For all the reasons detailed herein, this court recommends to the District Judge to ho this ase is assig ed that P ude tial s Motio fo “u a Judg e t Do ket No. be ALLOWED, a d that Plai tiffs e uests for summary judgment in their favor (Docket Nos. 171, 179, 181) e DENIED. Additio all , this ou t e o [2] e ds that P ude tial s e uest fo sanctions be GRANTED in that the Plaintiffs be precluded from filing any further pleadings against Prudential or Prudential Insurance Agency LLC relating to the Policy (as defined herein) or related tax assessment without prior leave of court, except in connection with an appeal of the rulings on any of the motions for summary judgment. Finally, this court recommends that the Plai tiffs e uest fo sa tio s e DENIED. II. STATEMENT OF FACTS Scope of the Record The following facts are undisputed unless otherwise indicated. The facts are derived fo The P ude tial I su a e Co pa s “tate e t of Fa ts Do ket No. DF a d the exhibits attached to the Affidavit of Andrew Yonker Yo ke Aff. ), which is attached as Exhibit A to Defe da t The P ude tial I su a e Co pa No. s Motio fo “u a Judg e t Do ket Def. E . __ .2 Although Plaintiffs aver that the statements made by Prudential are o pletel false see Docket No. 179), they cite no contrary evidence. Plaintiffs did not submit a counterstateme t of fa ts o did the dispute P ude tial s “tate e t of Fa ts. As a esult, P ude tial s fa ts a e dee ed ad itted pu sua t to Lo al ‘ule . . In court during oral argument on those motions, Mr. Fraser submitted additional documents in support of his contention that he paid the overdue premium and that, as a result, his policy did not lapse. In addition, at this ou t s e uest, P ude tial p o ided the ou t ith relevant tax court filings that were referred to by Mr. Fraser. Prudential objected to the ou t s 2 The exhibit submitted by Prudential as Def. Ex. 3 did not contain the language quoted in DF ¶ 15. The court required Prudential to supplement its filing if the records existed. (Docket No. 193). In response to this order, Prudential filed a Noti e of Fili g atta hi g Def. E . A-7 and A-8, which correspond to the information contained in DF ¶ 15 (Docket No. 194). [3] consideration of these documents as not being properly filed. While the court agrees that they were not properly or timely filed, the documents are not in dispute and they form the basis of the claims at issue here. In order to fully address the outstanding issues, the documents have been considered by this court. This court has herewith filed the tax court decision and the go e e t s p e-t ial e o a du i the ta ou t p o ided P ude tial at the ou t s request as Docket No. 195, and the following documents provided by Mr. Fraser as Docket No. 196: a check dated June 15, 2010 (redacted), a letter dated July 6, 2010, a letter dated July 7, 2010, a letter dated October 4, 2010, and a letter dated February 2, 2011. Overview of the Policy Prudential issued Paul Fraser a whole life i su a e poli the Poli o O to e , 1991 with a face value of $500,000, insuring his life. (DF ¶ 3; Yonker Aff. ¶ 1). Deborah Fraser is the named beneficiary of the Policy. (DF ¶ 2). Under the Policy, Mr. Fraser was obligated to make premium payments of $525 on the first day of every month to keep the Policy in force. (Id. ¶¶ 4-6). If a premium was not paid by its due date, the Policy granted thirty-one days of g a e the G a e Pe iod ), which kept the Policy in force during those days. (Id. ¶ 7). If the premium was not paid before the Grace Period ended, the Policy provided that it ha e o alue, e ept as [P ude tial] state[s] u de Co t a t Value Optio s. ill e d a d Id.; Def. Ex. A-1 at 6). If the Policy ended, the Policy provided that the net cash value would be used to provide extended term insurance, which provided a different type of insurance using the cash value of the Policy. (DF ¶ 11; Def. Ex. A-1 at 8). The Policy did not contain a provision that states the cash value of the Policy automatically applies to past due premium payments. (DF ¶ 12). Mr. [4] Fraser would be able to reinstate his Policy after the Grace Period, but only after certain conditions were met, including an obligation that he give [Prudential] any facts we need to satisfy us that the I su ed is i su a le fo the o t a t a d a paid a k. o t a t de t . . . must be restored or Id. ¶ 8). The Policy allowed Mr. Fraser to borrow against the cash value of the Policy, thereby reducing the net cash value of the Policy. (Id. ¶ 10). Mr. Fraser did, in fact, routinely exercise his right to borrow against the cash value of the policy. (Id. ¶ 13). The loan requests Mr. Fraser completed provided that there might be tax consequences if the Policy ended. (Id. ¶ 15; Def. Ex. A-8). The Loan Request Form Mr. Fraser completed in 1998 provided that he understood that the e a e ta i pli atio s o the e uest s a d that the equest(s) (including tax reporting and income tax withholding) cannot be reversed once processed (because Prudential may not give legal or tax advice, you may want to consult your tax advisor)[.] (Id. ¶ 15; Def. Ex. A-7). Finally, according to Prudential, in the event the Policy ended, Prudential was obligated to report both to the policyholder and the IRS on Form 1099-R any loan amount that was outstanding on the Policy to the extent that it excluded the total premiums paid to the Policy. (DF ¶ 30).3 Failure to Pay Premium and Issuance of Form 1099-R On April 1, 2010, Mr. Fraser did not pay his $525 monthly premium. (Id. ¶ 16). As a result, the Policy entered into the Grace Period. (Id. ¶ 17). The Grace Period expired on May 2, 3 This understanding was confirmed by the IRS in its pretrial memorandum filed with the tax court in espo se to M . F ase s petitio . A op has ee i luded the ou t i Do ket No. 195. [5] 2010. (Id. . O Ma i fo , , P ude tial se t M . F ase a oti e the Ma i g M . F ase that the Poli had lapsed Lette e ause P ude tial had ot e ei ed his monthly premium payment on April 1, 2010.4 (Id. ¶ 18; Def. Ex. A-4). As explained in the May 10 Letter: We’re o er ed e ause e ha e ’t re ei ed your o thly pre iu payment that was due on April 1, 2010. As a result, your policy [number] lapsed o Ma , . But do t o , if you act quickly you can still reinstate your policy without having to answer any health questions. ... To reinstate your policy, just mail the attached payment coupon and a check made payable to Prudential for $1,050.00. This represents the past due payment for April plus the May payment now due. Please note that we must receive your payment by June 2, 2010 (be sure to mail your payment so that we receive it on time). (Def. Ex. A-4 (emphasis in original)). It is undisputed that Mr. Fraser did not make any payment prior to June 2, 2010. Rather, he points to a check he says he mailed to Prudential dated June 15, 2010 in the amount of $1,575.00, which he contends should have eliminated all of his tax liabilities. For the reasons detailed below, this court finds this argument unpersuasive. Follo i g M . F ase s o pa lette dated Ju e , e t o Ju e , that stated the Poli , P ude tial se t a Noti e of Lapse had lapsed e ause e ha e ot e ei ed the premium due on April 1, 2010. (Def. Ex. A-5). Therein, Mr. Fraser was informed that he would 4 Mr. Fraser does not deny receiving any of the correspondence from Prudential. In 2010, all notices to i su eds e e eated a d se t ele t o i all to P ude tial s thi d pa t e do , Mill ille. DF ¶ 19). Millville prepared the notices for mailing and delivery via the United States Postal Service. (Id.). This process was used for all notices, including those sent to Mr. Fraser. (Id. ¶ 20). [6] have to obtain and complete an application and needed to request a quote of the amount he would need to submit to reinstate the Policy. (Id.). As detailed more fully below, Prudential sent a Lapse-Fi al Noti e dated Jul , to M . F ase s ho e add ess. Id. ¶ 31; Def. Ex. A-6). Therein, Prudential confirmed that the Policy had lapsed because it had not received the premium due on April 1, 2010. (Id.). P ude tial asse ts that Jul , p o essi g date is i et da s f o as the lapse p o essi g date. the paid to date of the Poli DF ¶ 28). The lapse a d is the date that the administrative system processed the lapse for tax purposes. (Id.). On the lapse processing date, P ude tial s s ste uses the paid to date a d the lapse date to al ulate the ta a le amount. (Id.). For M . F ase s Poli , the paid to date was May 2, 2010. (Id. ¶ 29). As stated i the Jul , as Ap il , lette , a a d the lapse date loa a ou t that is out- standing on your contract at the time of lapse is taxable based on how much it exceeds the total premiums paid into the [P]olicy. We are required to report this information to both you and the Internal Revenue Service (IRS) on Form 1099-‘. (Def. Ex. A-6). When the Policy lapsed on May 2, 2010 for nonpayment of premium, there was an outsta di g loa se u ed the Poli s ash alue. DF ¶ 32). Prudential applied the cash value to repay the outstanding loan balance, including any interest. (Id. ¶ 33). The amount used to repay the loan was treated as an amount Mr. Fraser received and was taxable to the extent it exceeded the total premiums paid on the Policy. (Id. ¶ 34). At the time of the lapse, the Policy loan plus interest totaled $82,987.12. (Id. ¶ 35). The total premium paid was $66,669.61. (Id.). Prudential issued a Form 1099-R for the Policy for tax year 2010, reporting a [7] taxable gain to Mr. Fraser of $16,317.51. (Id.).5 While Mr. Fraser does not challenge Prudential s al ulatio s, he does halle ge P ude tial s o te tion that the Policy had lapsed. As noted supra, Mr. Fraser sent a check to Prudential dated June 15, 2010 in the amount of $1,575.00. (Docket No. 196). According to an affidavit filed by Mr. F ase , P ude tial aited u til ea l Jul to deposit the pa e t[.] Do ket No. above, Prudential sent a Lapse-Fi al Noti e dated Jul , at Ex. 1, ¶ 6). As noted , hi h M . Fraser admits receiving. (Def. Ex. A-6). The letter informed Mr. Fraser that the Policy had lapsed for failure to make the April 1, 2010 payment, and that, unless instructed otherwise, Prudential would, in accordance with the contract, continue to provide extended term insurance, i.e., a different coverage. (Id.). As further explained in the letter: Please be aware that any loan amount that is outstanding on your contract at the time of lapse is taxable based on how much it exceeds the total premium paid into the [P]olicy. We are required to report this information to both you and the Internal Revenue Service (IRS) on Form 1099-R. Reinstating your contract will not eliminate these tax reporting requirements. Because each situation is unique, we would suggest that you contact your tax advisor with any questions related to this taxable event. (Id. (emphasis added)). In a letter dated July 7, 2010, on which Mr. Fraser relies, Prudential confirmed that it had received his payment of $1,575.00 but stated that it was not processing the payment because the policy had lapsed. (Docket No. 196). P ude tial ote fu the , [i] o de to consider your request for reinstatement, we require an additional premium payment of $525.00, along with a fully completed Application for Reinstatement. (Id.). Mr. Fraser This apparently led to a tax assessment of $2,541.00 per Mr. F ase s petitio to the I‘“. Due to the confidential nature of the information contained therein, this court has not filed a copy of the petition, hi h P ude tial had p o ided at this ou t s e uest. 5 [8] apparently paid the additional amount and filled out the application, and Prudential reinstated the Policy on or around September 24, 2010, as it notified Mr. Fraser by letter dated October 4, 2010. (Docket No. 196). Mr. Fraser requested that Prudential reverse the Form 1099-R. Prudential believed that it was unable to do so for the reasons it explained fully in a letter dated February 2, 2011. (Docket No. 196). As Prudential wrote in part in an explanation relevant to the instant litigation: Please be aware that even though you reinstated the policy by paying the past-due premiums, under Internal Revenue Service (IRS) rules, the taxable gain resulting from the lapse in 2010 is still reportable. Additionally, upon reinstatement, any outstanding loan value was restored to its original condition. The taxable gain reported as a result of the lapse was then added to the cost basis so that it will not be reported as gain in the future. (Id.). The IRS issued a notice of deficiency to Mr. Fraser. He challenged it and requested a t ial. I a de isio dated Ja ua , , the U ited “tates Ta Cou t uled that [p]u sua t to the agreement of the parties in this ase, it as o de ed a d de ided [t]hat the e is o deficiency in income tax due from, nor overpayment due to, petitioners for the taxable year 2010. (Docket No. 195). Thus, there was no decision addressing the merits of Mr. F ase s claims. This litigation followed. Additio al fa tual details ele a t to this ou t s a al sis a e des i ed elo he e appropriate. III. STANDARD OF REVIEW The ole of su a judg e t is to pie e the pleadi gs a d to assess the p oof i o de to see hethe the e is a ge ui e eed fo t ial. [9] PC Interiors, Ltd. v. J. Tucci Constr. Co., 794 F. Supp. 2d 274, 275 (D. Mass. 2011) (quoting Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991)). The burden is upon the moving party to show, based upon the discovery and dis losu e ate ials o file, a d a affida its, that the e is o ge ui e dispute as to a material fact and the movant is entitled to judg e t as a [A] issue is ge ui e if it a easo a l atte of la . Fed. ‘. Ci . P. e esol ed i fa o of eithe pa t . a. Vineberg v. Bissonnette, 548 F.3d 50, 56 (1st Cir. 2008) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 48 ( st Ci . . A fa t is ate ial o l if it possesses the apa it to s a the out o e of the litigatio u de the appli a le la . Id. (internal quotation marks and citation omitted). O e the o i g pa t has satisfied its u de , the u de shifts to the non-moving pa t to set fo th spe ifi fa ts sho i g that the e is a ge ui e, t ia le issue. PC Interiors, Ltd., 794 F. Supp. 2d at 275. The opposing party can avoid summary judgment only by providing properly supported evidence of disputed material facts. LeBlanc v. Great Am. Ins. Co., 6 F.3d st Ci . 836, 841- . A o di gl , the o allegatio o de ials of his pleadi g[,] ut o i g pa t a ot est upo ee ust set fo th spe ifi fa ts sho i g that the e is a genuine issue for trial. Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S. Ct. , , L. Ed. d . The ou t affo ds o e ide tia eight to o luso allegations, empty rhetoric, unsupported speculation, or evidence which, in the aggregate, is less tha sig ifi a tl p o ati e. Tropigas de P.R., I . . Ce tai U de ite s at Llo d s of London, 637 F.3d 53, 56 (1st Cir. 2011) (internal quotation marks and citation omitted). Rather, [ ]he e, as he e, the o o a t ea s the burden of proof on the dispositive issue, it must poi t to o pete t e ide e a d spe ifi fa ts to sta e off su omitted). [10] a judg e t. Id. (citation C oss-motions for summary judgment do not alter the basic Rule 56 standard, but rather simply require [the court] to determine whether either of the parties deserves judgment as a F. d atte of la o fa ts that a e ot disputed. Ad ia I t l G oup, I . . Ferre Dev., Inc., 241 , st Ci . . Whe fa i g oss-motions for summary judgment, a court must rule on each motion independently, deciding in each instance whether the moving party has et its u de u de ‘ule . Peck v. City of Boston, 750 F. Supp. 2d 308, 312 (D. Mass. 2010) (quoting Dan Barclay, Inc. v. Stewart & Stevenson Servs., Inc., 761 F. Supp. 194, 197-98 (D. Mass. 1991)). IV. DISCUSSION A. Plai tiffs’ Requests for Summary Judgment Plaintiffs allege that statements made by Prudential are false and, thus, request the entry of summary judgment in their favor. Local Rule 56.1, which governs cases filed in the United States District Court for the District of Massachusetts, contains express requirements for summary judgment motions. As Local Rule 56.1 provides in relevant part, [ ]otio s fo summary judgment shall include a concise statement of the material facts of record[.] I the instant case, Plaintiffs have not provided a concise statement of material facts, and they have not sufficiently supported their allegations with references to materials in the record. Their failu e to do so o stitutes g ou ds fo de ial of the otio . Id. Even acknowledging that the Plaintiffs are pro se (although George Kersey has practiced law in the past), they are not excused from satisfying the requirements of Federal Rule of Civil Procedure 56 or Local Rule . . Cou ts ha e o siste tl held that a litiga t s p o se status does not absolve him from compliance with the Federal ‘ules of Ci il P o edu e. [11] FDIC v. Anchor Props., 13 F.3d 27, 31 (1st Cir. 1994) (quoting United States v. Heller, 957 F.2d 26, 31 st Ci . . This applies ith e ual fo e to a dist i t ou t s p o edu al ules. Id. Accord Linehan v. Harvard Univ., 29 F.3d 619 (table), 1994 WL 249763 (1st Cir. June 9, 1994) (per curiam). Failure to comply with the filing requirements for a Rule 56 motion in the instant case is ot a e e te h i alit . The Plai tiffs oppositio s a d e uests for summary judgment in their favor are replete with conclusory allegations of wrongdoing without a sufficient explanation of the underlying facts. They also make pronouncements of law without citation. Moreover, Plaintiffs added new exhibits to the summary judgment record at the hearing on July 11, 2018. This presentation makes it virtually impossible for Prudential to respond. For these procedural easo s, this ou t e o e ds that the Plai tiffs requests for summary judgment in their favor (Docket Nos. 179, 181) be denied. Moreover, as detailed below, the record does not support the Plai tiffs asi o te tio that M . F ase s Poli did ot lapse. ‘athe , the e o d establishes that the Policy did, in fact, end in accordance with its terms, and that Prudential a ted i a o da e ith the te s of the Poli . The efo e, the Plai tiffs e uests fo summary judgment should be denied for this reason as well. B. Prude tial’s Motio for Su ary Judg e t Prudential moves for summary judgment alleging Plaintiffs have failed to offer sufficient e ide e to sho a ge ui e dispute e ists as to Plai tiffs sole e ai i g lai fo i p ope cancellation of the Policy. While not very clear, Plaintiffs appear to argue that Prudential improperly cancelled the Policy because a policy with a net cash value cannot lapse, and because the payment had been made. (See Docket No. 179, ¶¶ 1-3). The undisputed facts [12] establish, however, that consistent with the terms of the Policy, Prudential used the net cash value to purchase extended term insurance, and that Mr. Fraser did not make a timely payment to prevent his life insurance policy from lapsing. The Policy Could Lapse for Non-Payment The i te p etatio of a i su a e poli U de ite s at Llo d s, Lo do i su a e poli atte of la . Certain Interested . “tol e g, 680 F.3d 61, 65 (1st Cir. 2012). Interpretation of an is o diffe e t f o construe the words of the poli is a the i te p etatio of a i thei usual a d o di a othe o t a t, a d e se se. Haki Insolvency Fund, 424 Mass. 275, 280, 675 N.E.2d 1161, 1164 (1997). A ust . Mass. I su e s iguous poli te s a e o st ued i fa o of the i su ed. Scottsdale Ins. Co. v. Torres, 561 F.3d 74, 77 (1st Cir. . Ho e e , a iguit does ot e ist si pl pretatio s of the poli e ause the pa ties offe diffe e t inter- la guage. Id.; see also Lumbermens Mut. Cas. Ins. Co. v. Offices Unlimited, Inc., 419 Mass. 462, 466, 645 N.E.2d 1165, 1168 (1995). In the instant case, the Policy states: We grant 31 days of grace for paying each premium except the first one. If a premium has not been paid by its due date, the contract will stay in force during its days of grace. If a premium has not been paid when its days of grace are over, the contract will end and have no value, except as we state under Contract Value Options. (Def. Ex. A-1 at 6). Although, as Plaintiffs allege, the Policy does not explicitly state the word lapse, it is u a iguous that the contract terminates at the end of the Grace Period. Under the Contract Value Options, the Policy provides nonforfeiture benefits in the form of extended term insurance. (Def. Ex. A-1 at 8). Nowhere in the Policy does it state the cash value will be applied to past due premium payments. Moreover, the Policy explicitly states that [13] the cash value will be used to provide the appropriate length of coverage for the extended term insurance. (Id.). The e is othi g to suppo t the Plai tiffs ontention that a policy with a net cash value cannot lapse. Rather, the Policy is quite clear, as were the notices sent to and received by Mr. Fraser. Mr. Fraser had the opportunity to prevent the Policy from ending by making the premium payment within the Grace Period, i.e., by May 2, 2010. He failed to do so. As detailed in the letter of May 10, 2010, he could have reinstated his whole life policy automatically by paying the amounts owed for April 1, 2010 and May 1, 2010 by no later than June 2, 2010. He failed to do that as well. Therefore, his Policy lapsed and the net cash value was used to purchase extended term life insurance. His whole life insurance policy was only reinstated in September 2010 — after he completed the necessary application and made all the payments then due. P ude tial is e titled to su a judg e t o the Plai tiffs e ai i g claim of improper cancellation of the Policy. The Form 1099-R was Properly Issued The e o d also suppo ts P ude tial s o te tio that it as o ligated to issue Form 1099-R to the IRS once the Policy lapsed, and the subsequent reinstatement of the Policy did ot egate P ude tial s o ligatio s. (See Docket No. 196 (Feb. 2, 2011 letter); see also Docket No. 195 (go e e t s pre-trial memorandum)). Prudential was required by federal law to issue a Form 1099-‘ e ause loa s agai st a life i su a e o t a t s ash alue . . . [ha e] the sa e effe t as pa i g the p o eeds di e tl to the poli holde . Ledger v. Co , IRS, 102 T.C.M. (CCH) 119 (T.C. 2011), 2011 WL 3299818 at *2 (citations omitted). The Plaintiffs have [14] failed to esta lish that the e as a thi g i p ope i P ude tial s issua e of the -R Form.6 The June 15th Check was Untimely Finally, the record does not support the Plai tiffs lai that the he k of Ju e , reinstated the Policy. As detailed above, Mr. Fraser was clearly advised that to prevent the Policy from lapsing he needed to make the payment by May 2, 2010, which he failed to do. After the Policy lapsed on May 2, 2010, Mr. Fraser was clearly advised that he could reinstate the Policy without having to answer any health questions if he paid $1,050.00 by June 2, 2010. (Def. Ex. A-4). Again, he failed to do so, after which he was clearly informed that in order to reinstate the Policy he would need to complete an application and obtain a quote and pay the amount which was then overdue. (Def. Ex. A-5). While Mr. Fraser did send a check in the amount of $1,575.00, the record indicates that he did not complete the application and pay the amount then due (which exceeded the amount of his June 15th check) until September 2010. (Docket No. 196 (Oct. 4, 2010 letter)). The undisputed facts establish that the June 15th check did not prevent the Policy from lapsing, and did not reinstate the Policy either. The Plai tiffs lai s of f aud i o e tio ith the issua e of the 1099-R Form were dismissed at the motion to dismiss stage as there were no allegations that Prudential either knew of the falsity of its representations in the Form or acted with the purpose of inducing the Plaintiffs to act in reliance thereon. (See Docket No. 53). See, e.g., Taylor v. Am. Chemistry Council, 576 F.3d 16, 31 (1st Cir. 2009) ( To esta lish a lai for fraud under Massachusetts law, a plaintiff must prove that the defendant made a false representation of material fact with knowledge of its falsity for the purpose of inducing the plaintiff to act thereon, and that the plaintiff reasonably relied upon the representation as true and a ted upo it to his da age. (internal quotation marks and citations omitted)). The summary judgment e o d fu the esta lishes that P ude tial s issua e of the -R form was consistent with its understanding of its reporting obligations. 6 [15] The Plaintiffs seem to contend that the Policy did not lapse before July 6, 2010, the date of the lette e titled Lapse-Fi al Noti e. that the i su a e Poli Def. E . A-6). However, that notice clearly states has lapsed e ause e ha e t e ei ed the premium due on April 1, . (Id.). It also explains, as quoted above, that because of the lapse Prudential would be filing a 1099-R Form. (Id.). The e is o asis fo the Plai tiff s o te tio that the Poli did ot lapse until July 6, 2010. Prudential is entitled to summary judgment for this reason as well. C. Plai tiffs’ O je tio a d Re e ed Motio for Su On February 2, 2018, in a Report and Re o p oposed s hedule to file a otio fo su [P]laintiffs may cross- o e fo su a a ary Judg e t e datio , this ou t adopted P ude tial s judg e t a d stated [i] thei espo se, the judg e t. Do ket No. at . Plai tiffs filed an objection to the Report and Recommendation, a o je tio to the Dist i t Judge s adoptio of the Report and Recommendation, a d a Co e ted Motio fo “u a Judg e t Do ket Nos. 163, 168, 169), which motion was not in accordance with the scheduling order entered by the court. Do ket No. Corrected Motio . O Ap il , , this ou t e te ed a o de st iki g Plai tiffs (Docket No. 170), and Plaintiffs filed their Objection and Renewed Motion on April 23, 2018. (Docket No. 171). In their objection to the Dist i t Judge s adoptio of the Report and Recommendation, Plaintiffs cited Mass. Gen. Laws ch. 175, § 110B and asserted that it applies to the Policy. (Docket No. 168). “e tio B add esses di e tl oti e e ui e e ts i the ase of a termination or lapse of coverage of a noncancellable accident and health insurance policy due to o pa e t of p e iu s[.] Kavanagh v. N.Y. Life Ins. Co., 170 F.3d 253, 256 (1st Cir. 1999). Section 110B states: [16] No policy of insurance referred to in section one hundred and eight and no policy of individual life insurance issued or delivered in the commonwealth, except a policy which by its terms is cancellable by the company or is renewable or continuable with its consent, or except a policy the premiums for which are payable monthly or at shorter intervals, shall terminate or lapse for nonpayment of any premium until the expiration of three months from the due date of such premium[.] Mass. Gen. Laws ch. 175, § 110B (emphasis added). It is undisputed that Plai tiffs p e iu pa e ts e e due o thl . DF ¶¶ -6). As a result, the Policy unambiguously falls into the exception created by the statute and past due premiums in this case are not subject to a three-month grace period. For this reason as well, Plai tiffs requests for summary judgment should be denied. D. The Court’s Authority to I pose Sa tio s As noted above, the Plaintiffs have renewed their request that Prudential and Prudential Insurance Agency, LLC be defaulted. (Docket No. 179 at 2-3). There is no merit to the request for default against the appropriately dismissed defendant, Prudential Insurance Agency, LLC. Nor have Plaintiffs established any wrongdoing on the part of Prudential which would warrant an order for default judgment. Moreover, Plaintiffs have been advised that the repetitive, baseless requests for default may result in sanctions. (See, e.g., Docket Nos. 31, 48, 61, 67-69, 74, 157). At the motion hearing on July 11, 2018, Prudential requested sanctions against Plaintiffs. (Tr. at 17-18). Under Federal Rule of Civil Procedure 11, the court may impose sanctions on an unrepresented party if he submits pleadings for improper purposes or with frivolous or malicious claims. Fed. R. Civ. P. 11(b)(1); Heller, 957 F.2d at 31 (pro se parties are required to comply with the Federal Rules of Civil Procedure). [17] A district court has the discretion to manage its own proceedings. See Cok v. Family Court of R.I., 985 F.2d 32, 34 (1st Cir. 1993). The law is well established that it is proper and necessary for an injunction to issue barring a party . . . from filing and processing frivolous and e atious la suits. Go do . U.“. Dep t of Justi e, 558 F.2d 618, 618 (1st Cir. 1977). Despite having been informed numerous ti es i this a tio that Plai tiffs e uests for default against Prudential Insurance Agency, LLC and Prudential could not proceed, Plaintiffs continue to move for default in this action. Additionally, Plaintiffs failed to follow the Federal Rules of Civil P o edu e a d the ou t s otio s hedule in connection with their repeated requests for summary judgment. The time has come to end these time consuming, distracting and meritless motions. Therefore, this ou t e o e ds that P ude tial s e uest fo sanctions be allowed in that the Plaintiffs be precluded from filing any further pleadings against Prudential or Prudential Insurance Agency LLC relating to the Policy or related tax assessment without prior leave of court, except in connection with an appeal of the rulings on any of the motions for summary judgment. Finally, this court recommends that the Plai tiffs e uest fo sa tio s e denied. IV. CONCLUSION For all the reasons detailed herein, this court recommends to the District Judge to whom this ase is assig ed that P ude tial s Motio fo “u a Judg e t Do ket No. be ALLOWED, and that Plai tiffs O je tio a d ‘e e ed Motio (Docket No. 171) and requests for summary judgment in their favor (Docket Nos. 179, 181) be DENIED. Additionally, [18] this ou t e o e ds that P ude tial s e uest fo sa tio s e ALLOWED as detailed herein and that Plai tiffs e uest fo sa tio s e DENIED.7 / s / Judith Gail Dein Judith Gail Dein United States Magistrate Judge 7 The parties are hereby advised that under the provisions of Fed. R. Civ. P. 72 any party who objects to these proposed findings and recommendations must file a written objection thereto with the Clerk of this Court within 14 days of the pa t s e eipt of this ‘epo t a d ‘e o e datio . The itte objections must specifically identify the portion of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The parties are further advised that the United States Court of Appeals for this Circuit has repeatedly indicated that failure to comply with this Rule shall preclude further appellate review. See Keati g . “e of Health & Hu a “e s., 848 F.2d 271, 275 (1st Cir. 1988); United States v. Valencia-Copete, 792 F.2d 4, 6 (1st Cir. 1986); Park Motor Mart, Inc. v. Ford Motor Co., 616 F.2d 603, 604-05 (1st Cir. 1980); United States v. Vega, 678 F.2d 376, 378-79 (1st Cir. 1982); Scott v. Schweiker, 702 F.2d 13, 14 (1st Cir. 1983); see also Thomas v. Arn, 474 U.S. 140, 153-54, 106 S. Ct. 466, 474, 88 L. Ed. 2d 435 (1985). Accord Phinney v. Wentworth Douglas Hosp., 199 F.3d 1, 3-4 (1st Cir. 1999); Henley Drilling Co. v. McGee, 36 F.3d 143, 150-51 (1st Cir. 1994); Santiago v. Canon U.S.A., Inc., 138 F.3d 1, 4 (1st Cir. 1998). 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