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rN
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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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
1
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
fully set forth herein and states as follows.
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
fully set forth herein and states as follows.
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:
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