Full opinion text
OPINION DEBORAH A. BATTS, District Judge. Plaintiff Alice Kramer, on behalf of the estate of Arthur Kramer, seeks a declaratory judgment that death benefits from insurance policies on the life of her deceased husband, Arthur Kramer, are properly paid to her. Plaintiff alleges that her husband established two insurance trusts following which various insurance policies were issued naming the insurance trusts as the beneficiaries. At the time the trusts were established, Arthur Kramer named his adult children, either Andrew, Rebecca or Liza (“Kramer Children”) as “putative beneficiaries” of the trusts. Plaintiff alleges that her husband directed the adult Kramer Children to execute assignments of their beneficial interests in the trusts to “stranger investors.” It is elsewhere alleged that these assignments were made for cash consideration. Plaintiff alleges that the Kramer Children never paid any premiums on those policies. It is elsewhere alleged that the “investors” paid the premiums. After Arthur Kramer’s death, Plaintiff alleges the “investors”, now holding the beneficial interest in the insurance trusts, submitted claims on the insurance policies for the death benefits. According to Plaintiff, the insurance claims now equal approximately $56,200,000.00 in death benefits. The Defendants in this action are variously, insurance companies who issued the policies, trustees of the insurance trusts, and insurance brokers who were also “investors” in the insurance arrangement. These Defendants in turn have counterclaimed against the Plaintiff, cross claimed against each other and brought third-party complaints against yet others. The insurance companies seek, inter alia, to have the policies voided and therefore not paid to anyone, as well as the broker/investors held liable for their conduct. The trustees as well as the broker/investors argue, inter alia, that the benefits are properly paid to those who currently hold the beneficial interest, which they acquired from the adult Kramer Children for cash consideration. I. PARTIES TO THIS ACTION: Plaintiff is a citizen of the state of Connecticut and resides in Stamford, Connecticut; she is the widow of Arthur Kramer and the Personal Representative of his Estate. (Dkt. No. 31, Am. Compl. ¶ 1.) Mr. Kramer died on January 26, 2008; at the time of his death, Mr. Kramer was a citizen of Connecticut. (Id ¶ 2.) Plaintiff alleges that Defendant Lockwood Pension Services, Inc. is a New York corporation with its principal place of business located in New York, New York. (Dkt. No. 31 at ¶ 3.) Plaintiff alleges that Defendant Tall Tree Advisors, Inc. is a New York corporation with its principal place of business located in Pleasantville, New York. (Id at ¶ 4.) Plaintiff alleges that Defendant Life Product Clearing, LLC is a Delaware limited liability company with its principal place of business located in New York, New York. (Id at ¶ 5.) According to Life Product Clearing it “is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business in New York, New York, which, inter alia, acts as an agent with respect to beneficial interests under certain life insurance trusts ... (Dkt. No. 59 at ¶ 69.) Plaintiff alleges that Defendant Transamerica Occidental Life Insurance Co. (“Transamerica”) is an Iowa corporation ■with its principal place of business located in Cedar Rapids, Iowa. (Dkt. No. 31 at ¶ 6.) Plaintiff alleges that Defendant Phoenix Life Insurance Co., (“Phoenix”) is a New York corporation with its principal place of business located in Syracuse, New York. (Id. at ¶ 7.) Plaintiff alleges that Defendant Lincoln Life & Annuity Co. of New York" (“Lincoln Life”) is a New York corporation with its principal place of business located in Syracuse, New York. (Id. at ¶ 8.) Phoenix alleges that Steven Lockwood is the owner and chief executive officer of Lockwood Pension Services, Inc. and Tall Tree Advisors, Inc. (Dkt. No. 43 at ¶ 2.) Phoenix alleges that Steven Lockwood, Lockwood Pension Services and Tall Tree Advisors all reside at the same address: 2 Tall Tree Lane, Pleasantville, NY. (Id. at 3.) Plaintiff alleges that Jonathan Berck is a citizen of the state of New Jersey. (Dkt. No. 31 at ¶ 9.) Phoenix alleges that Berck has served and continues to serve as the trustee for various life insurance trusts that Lockwood helped to establish. (Dkt. No. 43 at ¶ 4.) Berck alleges that he is a citizen of the state of New York and is the Successor Trustee of the Arthur Kramer 2005 Insurance Trust pursuant to the Trust Agreement of Arthur Kramer 2005 Insurance Trust dated August 29, 2005. (Dkt. No. 90 at ¶ 69) Life Product Clearing alleges that Liza Kramer is a citizen of the state of California with an address at 1940 Los Angeles Avenue, Berkley, California 94707, and is the “daughter and heir of the plaintiff Estate’s decedent, Arthur Kramer.” (Dkt. No. 59 at ¶ 8.) Life Product Clearing alleges that Andrew B. Kramer is a citizen of the state of New York with a business address c/o Kramer Capital Management, Inc., 622 Third Avenue, 32nd Floor, New York, N.Y. 10017, and is the son and heir of the plaintiff Estate’s decedent, Arthur Kramer. (Id. at ¶ 9.) Lincoln Life and Annuity alleges that Joel B. Miller is an individual residing at 721 NW 108 Ave., Plantation, Florida 33324. (Dkt. No. 140 at ¶ 4.) Lincoln Life and Annuity alleges that TD Bank, N.A. f/k/a TD Banknorth, N.A. (“TD Bank”), is a national association with its principal place of business located at One Portland Square, Portland Maine, 04112. (Id. at ¶ 7.) Lincoln Life alleges that TD Bank acquired Hudson United Bank in January 2006 and is the successor in interest to Hudson. (Id.) II. JURISDICTION This action is founded solely on diversity jurisdiction. Plaintiff is a citizen and resident of Connecticut. She is the representative of the estate of her husband, Arthur Kramer, who at the time of his death was also a Connecticut resident. 28 U.S.C. § 1332(a), (c). The Court exercises jurisdiction over the third party actions pursuant to supplemental jurisdiction under 28 U.S.C. § 1367 because the third party actions, except those against Joel Miller and TD Bank (as set forth further herein), share a common nucleus of operative fact with the claims set forth by Plaintiff. III. FACTUAL BACKGROUND The following facts were alleged by Plaintiff in her Amended Complaint filed on May 7, 2008. Plaintiff alleges that this action “involves an arrangement to procure life insurance policies with the purpose of immediately transferring the beneficial interests in those policies to stranger investors, in contravention of the ‘insurable interest rule’ ”. (Dkt. No. 31 at ¶ 12.) The relevant provision of the New York Insurance Law contains the following definitions provisions: (1) The term, “insurable interest” means: (A) in the case of persons closely related by blood or by law, a substantial interest engendered by love and affection; (B) in the case of other persons, a lawful and substantial economic interest in the continued life, health or bodily safety of the person insured, as distinguished from an interest which would arise only by, or would be enhanced in value by, the death, disablement or injury of the insured. (2) The term “contract of insurance upon the person” includes any policy of life insurance and any policy of accident and health insurance. (3) The term “person insured” means the natural person, or persons, whose life, health or bodily safety is insured. New York Insurance Law § 3205. Additional relevant sections of New York Insurance Law state: (b)(1) Any person of lawful age may on his own initiative procure or effect a contract of insurance upon his own person for the benefit of any person, firm, association or corporation. Nothing herein shall be deemed to prohibit the immediate transfer or assignment of a contract so procured or effectuated. (2) No person shall procure or cause to be procured, directly or by assignment or otherwise any contract of insurance upon the person of another unless the benefits under such contract are payable to the person insured or his personal representatives, or to a person having, at the time when such contract is made, an insurable interest in the person insured. New York Insurance Law § 3205. Plaintiff alleges that as early as 2003, Steven Lockwood, the principal of Lockwood Pension Services approached Mr. Kramer to solicit his participation in a “stranger-owned life insurance” (“SOLI” or “STOLI”) arrangement. (Dkt. No. 31 at ¶ 18.) Plaintiff alleges that during 2005 Mr. Lockwood introduced Mr. Kramer to the SOLI arrangement that is the subject matter of this litigation. (Id. at ¶ 189.) As detailed further herein, the Amended Complaint alleges that two trusts were created, the June Trust and the August Trust which held insurance policies issued by the three insurance company Defendants in this case: Lincoln Life and Annuity, Transamerica, and Phoenix Life Insurance. The beneficial interest in those trusts came to be owned by “strangers” to the decedent. Plaintiff alleges that on or about June 6, 2005, Mr. Kramer, at the direction of Lockwood Pension Services and possibly other defendants, established the Arthur Kramer Insurance Trust (the “June Trust”) and named Lori Callegari as trustee. (Dkt. No. 31 ¶ 23.) Mr. Kramer listed two of his three children with Plaintiff, Andrew and Rebecca, as the putative beneficiaries thereunder. (Dkt. No. 31 ¶ 23.) Plaintiff alleges that the June Trust agreement was prepared by counsel for Lockwood Pension Services, and Mr. Kramer had no involvement in its drafting. (Dkt. No. 31 ¶ 24.) At the time Callegari was employed by Lockwood Pension Services or Tall Tree Advisors, and was at the time of the Amended Complaint a Vice President of Lockwood Pensions Services. (Dkt. No. 31 ¶ 25.) Callegari is no longer the trustee of June Trust; Defendant Berck, is the current trustee. In June and July 2005, Transamerica issued one or more insurance policies on the life of Mr. Kramer to the June Trust having a total death benefit of approximately $18,200,000.00 (the “Transamerica Policies”). (Dkt. No. 31 ¶ 28.) Plaintiff alleges “upon issuance of the policies, and at the direction of Lockwood Pension Services and possibly other defendants, Mr. Kramer directed Andrew and Rebecca to execute putative assignments of their beneficial interest in the June Trust to stranger investor TTA [Tall Tree Advisors].” (Dkt. No. 31 ¶ 29.) Plaintiff alleges that at the direction of Lockwood Pension Services and possibly other defendants, in 2 007, defendant Mr. Berck in his capacity as trustee of the June Trust, sold the ownership interests in the Transamerica Policies to a non-party individual or entity. (Dkt. No. 31 ¶ 30.) Neither Mr. Kramer, Andrew nor Rebecca ever paid any premiums on the Transamerica Policies, and according to Plaintiff “there was no period of time when Andrew and Rebecca were the true beneficiaries of the June Trust after the Transamerica Policies were issued.” (Dkt. No. 31 at ¶ 31.) Plaintiff further alleges that on or about August 29, 2005, Mr. Kramer, at the direction of LPS and possibly other defendants, established the Arthur Kramer 2005 Insurance Trust (“the August Trust”) and named Hudson United Bank as trustee. (Dkt. No. 31 ¶ 32.) Mr. Kramer listed his third child with Plaintiff, Liza, as the beneficiary. Mr. Lockwood and one of his associates witnessed the August Trust Agreement. (Dkt. No. 31 ¶ 32.) Plaintiff alleges that the August Trust agreement was prepared by counsel for LPS and Mr. Kramer had no involvement in its drafting. (Dkt. No. 31 ¶ 33.) Hudson is no longer the trustee of the August Trust; Defendant Berck is the current trustee. (Dkt. No. 31 ¶ 36.) Plaintiff alleges that in July 2005, Phoenix issued one or more insurance policies to the August Trust having a total death benefit of approximately $28,000,000.00 (the “Phoenix Policies”) on the life of Mr. Kramer. (Dkt. No. 31 ¶ 37.) Plaintiff alleges that “upon issuance of the policies, and at the direction of LPS [Lockwood Pension Services] and possibly other defendants, Mr. Kramer directed Liza to execute putative assignments of her beneficial interest in the August Trust to stranger investor TTA [Tall Tree Advisors].” (Dkt. No. 31 ¶ 38.) Plaintiff alleges that at the direction of Lockwood Pensions Services and possibly other Defendants, in 2007, Defendant Berck, as trustee of the August Trust, sold the ownership interest in the Phoenix Policies to a non-party individual or entity. (Dkt. No. 31 IT 39.) Plaintiff alleges that Mr. Kramer and Liza never paid any premiums on the Phoenix Policies, and “there was no period of time when Liza was the true beneficiary of the August Trust after the Phoenix Policies were issued.” (Dkt. No. 31 ¶ 40.) Finally, Plaintiff alleges that on or about November 28, 2005, Lincoln issued one or more insurance policies to the August Trust having a total death benefit of $10,000,000.00 (the “Lincoln Policies”) on the life of Mr. Kramer. (Dkt. No. 31 at ¶ 41.) Plaintiff alleges that “upon issuance of the policies, and at the direction of LPS [Lockwood Pension Services] and possibly other defendants, Mr. Kramer directed Liza to execute putative assignments of her beneficial interest in the August Trust to stranger investor Life Products.” (Dkt. No. 31 ¶ 42.) Mr. Kramer and Liza never paid any premiums on the Lincoln Policies, and according to Plaintiff “there was no period of time when Liza was the true beneficiary of the August Trust” after the Lincoln Policies were issued. (Dkt. No. 31 ¶ 43.) Mr. Kramer died on January 26, 2008. (Dkt. No. 31 ¶ 44.) Subsequently, Plaintiff has refused requests by representatives of Defendant Lockwood Pension Services and “certain stranger investors” for a copy of Mr. Kramer’s death certificate. (Dkt. No. 31 at ¶ 45.) Plaintiff alleges that the “arrangement to procure life insurance policies with the purpose of immediately transferring the beneficial interests in those policies to stranger investors” in which her husband participated/violates the New York Insurance Law “Insurable Interest Rule.” (Dkt. No. 31 at ¶ 12.) Plaintiff alleges that “where the procurement of life insurance violates the insurable interest rule, the remedy is either that the death benefits be paid to the personal representative of the decedent’s estate (in this case, the Plaintiff) or, if already paid to a stranger investor, that they be disgorged and paid to the personal representative.” (Dkt. No. 31 ¶ 12.) She argues that pursuant to New York Insurance Law 3202(a)(3), “all of the aforementioned life insurance policies are incontestable because they were in force during the life of Mr. Kramer for more than two years.” (Dkt. No. 31 ¶ 46.) Plaintiff seeks declaratory judgment that the insurance company defendants must pay the death benefits under the policies to her (Dkt. No. 31 ¶ 52), or in the alternative, if some or all of the death benefits have already been paid to Lockwood Pension Services, Tall Tree Advisors, Life Product Clearing, Berck or their representatives or assignees, then Plaintiff is entitled to recover such death benefits. (Dkt. No. 31 ¶ 58.) Defendant Berck filed his Answer, with cross claims and counterclaims, and also filed a third-party complaint on August 1, 2008. (Dkt. No. 90.) Berck alleges the following relevant facts that are different from, a clarification of, or in addition to the facts alleged by Plaintiff. Berck is the Successor Trustee of both the August and June Trusts. Regarding the August Trust, he alleges that at the time the Lincoln Policy issued its policy to the August Trust, Liza Kramer “owned the entire beneficial interest in the August Trust.” (Dkt. No. 90 at ¶ 74.) He alleges that Liza Kramer, the named beneficiary of the August Trust “had an insurable interest in the Lincoln Policy at the time the Lincoln policy was procured.” (Dkt. No. 90 ¶ 75.) The Lincoln Policy also provided that it “will be incontestable after it has been in force during the Insured’s lifetime for 2 years from its Date of Issue.” (Dkt. No. 90 at ¶ 77.) The Lincoln Policy was in force during Arthur Kramer’s lifetime from on or about November 23, 2005 to January 26, 2008. (Dkt. No. 90 at ¶ 78.) “After the Lincoln Policy was issued, and in consideration for a payment of $100,000.00 (the “Cash Consideration”), Liza Kramer sold her rights to the August Trust’s interest in the Lincoln Policy to Defendant Life Product Clearing, LLC pursuant to a Beneficial Interest Transfer Agreement dated November 29, 2005 (the “Transfer Agreement”).” (Dkt. No. 90 at ¶ 79.) Berck alleges that in connection with that transaction, Arthur and Liza Kramer also executed a document entitled Acknowledgments and Consents relating to Sale of Beneficial Interest dated November 29, 2005 (“Acknowledgments and Consents Form”). Berck alleges that after the death of Kramer, the “Lincoln Policy was properly made payable to the August Trust (or to LPC),” but “Lincoln has failed and refused to pay the proceeds of the Lincoln Policy to the August Trust.” (Dkt. No. 90 at ¶¶ 82-84.) In addition, Berck and Life Product Clearing have filed Third Party Complaints against Liza and Andrew Kramer. They make the following relevant allegations. Liza Kramer and/or Andrew Kramer proximately caused the Estate of Arthur Kramer to file the main action, (Dkt. No. 91 at ¶ 30) and that filing of the original Complaint constituted a “knowing, intentional and unjustified interference with the August Trust’s contractual relationship with Lincoln under the Lincoln Policy and a knowing, intentional and unjustified inducement of Lincoln to breach the Lincoln Policy by refusing to pay the proceeds to the August Trust and/or LPC.” (Dkt. No. 91 at ¶ 29.) Further, despite Liza Kramer’s “express warranty to LPC in the Acknowledgments and Consents Form that she would provide a death certificate to LPC within a reasonable time following Arthur Kramer’s death, Liza Kramer and the Estate failed and refused to do so.” (Dkt. No. 60 at ¶ 31.) Liza Kramer is an heir to the Estate of Arthur Kramer, and the Estate’s claim in the main action “represents an indirect attempt by Liza Kramer to assert a claim for the proceeds of the Lincoln Policy, in violation of her express waiver of that claim in the Acknowledgments and Consents Form.” (Dkt. No. 60 at ¶40.) LPC alleges that it relied on Liza Kramer’s acknowledgments, consents and representations in the Acknowledgments and Consents Form in deciding to pay the Cash Consideration to her to purchase her beneficial interest in the August Trust. (Dkt. No. 60 at ¶ 41.) In addition to the cross claims, counterclaims and third-party claims asserted by Berck and Life Product Clearing, two life insurance company Defendants, Lincoln Life and Annuity and Phoenix Life Insurance Co. have asserted cross claims, counterclaims and third-party claims. Defendant Phoenix Life Insurance filed its Answer to the Amended Complaint, counterclaims, cross claims and filed a Third-Party Complaint on April 9, 2008. (Dkt. No. 43.) Phoenix alleges that “Lockwood, LPS [Lockwood Pension Services], Tall Tree, Life Product Clearing, and Berck have developed a formulaic method of circumventing New York’s insurable interest rule, using elderly persons, and the trusts they encourage or aid them in establishing, as strawmen to acquire life insurance policies for the benefit of strangers who have no insurable interest in the lives of the insureds (ie., a ‘SOLI’ scheme).” (Dkt. No. 43 at ¶ 7.) Phoenix claims that, Lockwood colluded with Arthur Kramer to participate in one or more fraudulent SOLI arrangements. In particular, Lockwood colluded with Mr. Kramer (a) to establish a life insurance trust, (b) to apply for one or more life insurance policies in which the trust would be both the policyholder and beneficiary of the policies, (c) upon the issuance of the policies, to immediately transfer the beneficial interest in the trust to Tall Tree and/or Life Product in exchange for monetary compensation, and (d) to replace the financial institution trustee of the trust with Berck. (Id. at ¶ 8.) Phoenix alleges that, on or about July 1, 2005, Lockwood and Phoenix entered into a contract pursuant to which Lockwood would serve as an independent producer of various Phoenix products, including life insurance policies. (Id. at ¶ 9.) On or about August 30, 2005, Phoenix approved the Independent Producer Contract (the “IPC”). (Id. at ¶ 10.) Phoenix claims that Mr. Kramer submitted (through Lockwood) a life insurance application to Phoenix in early September 2005 (the “Phoenix Application”). (Id. at ¶ 13.) Phoenix alleges that Mr. Kramer did not apply for life insurance on his own initiative, but rather was induced to do so by the offer of ready cash. (Id. at ¶ 14.) Phoenix claims that at the time he submitted the Phoenix Application, Mr. Kramer had no intention of procuring life insurance for the benefit of himself or his family; rather, Mr. Kramer was attempting to procure a policy for the benefit of a stranger investor with no insurable interest in his life. (Id. at ¶ 15.) According to Phoenix, in Sections II and III of Part I of the Phoenix Application, Mr. Kramer represented that the owner and beneficiary of the policies applied for would be the Kramer August Trust. (Phoenix Cross-Compl. ¶ 17.) Mr. Kramer signed Part I of the Phoenix Application on or about September 2, 2005. (Phoenix Cross-Compl. ¶ 18.) Above Mr. Kramer’s signature on Part I of the Phoenix Application, the application states, in relevant part: I have reviewed this application, and the statements made herein are those of the proposed insured and all such statements made by the proposed insured in Part I or and [sic] in Part II of this application are full, complete, and true to the best knowledge and belief of the undersigned and have been correctly recorded ... I understand and agree that the Insurance applied for shall not take effect unless and until each of the following has occurred: the policy has been issued by the Company; the premium required for the issuance of the policy has been paid in full during the lifetime of the insured; all the representations made in the application remain true, complete and accurate as of the latest of such dates; and there has been no change in the health of any proposed insured that would change the answers to any of the questions in the application (Phoenix Cross-Compl. ¶ 19.) Lockwood signed Part I of the Phoenix Application as the producer of the Phoenix policies numbered 97303913, '97303935, and 97303936 (the “Phoenix Policies”) for a total amount of $28,000,000.00. (Phoenix Cross-Compl. ¶ 20.) Above Lockwood’s signature on Part I of the Phoenix Application, the Application states, in relevant part, that “The Producer hereby confirms he/she has truly and accurately recorded on the application the information supplied by the Proposed Insured; and that he/she is qualified and authorized to discuss the contract herein applied for.” (Phoenix Cross-Compl. ¶ 21.) Phoenix alleges that, given Section 3205 of the New York Insurance Law and New York’s long-standing public policy against “wager” life insurance policies, Mr. Kramer, Lockwood, and the Trustee “implicitly represented” that (a) the Kramer August Trust would be the true owner and beneficiary of the requested Phoenix Policies (ie., not just a straw-man), and (b) the Kramer August Trust and its intended beneficiary had an insurable interest in Mr. Kramer’s life. (Phoenix Cross-Compl. ¶ 22.) While Phoenix was processing and underwriting Mr. Kramer’s Phoenix Application, Lockwood informed Phoenix that Mr. Kramer would like a total of $28,000,000.00 of life insurance, issued to the Kramer August Trust in three separate policies, based on the same Phoenix Application. (Phoenix Cross-Compl. ¶ 23.) In reliance upon the truth of the representations made in the Phoenix Application, Phoenix issued the Phoenix Policies. (Phoenix Cross-Compl. ¶ 24.) Phoenix delivered the Phoenix Policies to Lockwood in or about October 2005. (Phoenix Cross-Compl. ¶ 25.) Phoenix alleges that the beneficial interest in the Kramer August Trust was transferred to Tall Tree on or about October 13, 2005. (Phoenix Cross-Compl. ¶ 26.) On October 21, 2005, Mr. Kramer signed three Policy Acceptance Forms acknowledging receipt of the Phoenix Policies. (Phoenix CrossCompl. ¶ 27.) Above Mr. Kramer’s signature on each Policy Acceptance Form, the Form stated, in relevant part, that “The insured(s) declares that the statements made in the application remain full, complete, and true as of this date .... ” (Phoenix Cross-Compl. ¶28.) Phoenix avers that Berck was appointed the successor trustee of the Kramer August Trust on or about July 10, 2006 and that Lockwood had a relationship with Berck that involved similar SOLI arrangements; Berck’s appointment as successor trustee allowed Lockwood to control tightly the Phoenix Policies. (Phoenix Cross-Compl. ¶ 29.) According to Phoenix, the identity of the parties, the clear characteristics of a SOLI scheme, the timing of the applications and transfers, and the sheer number and value of policies involved provide clear and convincing evidence of an intent to procure the Phoenix Policies for the benefit of a stranger-investor who had no valid insurable interest. (Phoenix CrossCompl. ¶ 32.) The other life insurance company to enter a Complaint in this action is Lincoln Life and Annuity. (Dkt. No. 140.) Lincoln asserts claims relating to insurance policies on the life of Arthur Kramer, and on the life of another individual, Leon Lobel. On or around April 6, 1999, Lockwood entered into a Broker Agreement with Lincoln (the “Lockwood Broker Agreement”). (Dkt. No. 140 at ¶ 22.) Pursuant to the Lockwood Broker Agreement, Lockwood agreed, inter alia, “to comply with all applicable state and federal laws and with all rules and regulations of the regulatory agencies having jurisdiction with respect to the sales of the Policies”; to offer “Policies for sale in accordance with all [Lincoln’s] rules and procedures then in effect”; to review insurance applications “for completeness and suitability”; that “all policyholder files, records and premium accounts are the property of’ Lincoln; and that “all such property shall be returned to” Lincoln “upon termination of’ the Lockwood Broker Agreement. (Id. at ¶ 22.) Pursuant to the Lockwood Broker Agreement, Lockwood also agreed to indemnify and hold Lincoln harmless “for all costs, expenses, losses, claims, damages or liabilities (or actions in respect thereof), including reasonable attorneys’ fees, resulting from any negligent, fraudulent or unauthorized acts or omissions by” Lockwood or “any unlawful sales practices” by Lockwood in connection with the sale of Lincoln policies. (Id. at ¶ 22.) Lincoln alleges, in early 2003, Lockwood, Lockwood Pension Services, and/or other entities engaged in secondary life insurance market transactions and solicited Kramer’s participation in a “STOLI” arrangement. (Id. at ¶ 22.) The insurance was placed through M & M Brokerage Services, Inc. (“M & M”) with Lockwood as the producer. (Id. at ¶ 23.) Based on medical information available at the time, in July 2005, Lincoln declined to make an offer on a policy for Kramer. (Id. at ¶ 26.) Lincoln alleges that on August 29, 2005, Kramer, at the direction of Lockwood, LPS, and/or other entities engaged in secondary life insurance market transactions, established the Arthur Kramer 2005 Insurance Trust dated August 29, 2005 (the “Kramer Trust”), in which Hudson was named as the trustee. (Id. at ¶ 27.) The original beneficiary of the Kramer Trust was Kramer’s daughter, Liza. (Id. at ¶ 27.) Lincoln, like the Plaintiff, alleges that the Kramer Trust documents were prepared by legal counsel for Lockwood Pension Services at the direction of Lockwood, Lockwood Pension Services, and/or other entities engaged in secondary life insurance market transactions. (Id. at ¶ 28.) On September 30, 2005, Lincoln, from its offices in Hartford, Connecticut, again declined to make an offer on a policy for Kramer based on the medical information provided. (Id. at ¶ 30.) On October 5, 2005, Lincoln, from its offices in Hartford, Connecticut, made a tentative offer to insure Kramer’s life based upon updated medical information provided. (Id. at ¶ 31). On October 24, 2005, Kramer submitted an application for the Lincoln policy with the Kramer Trust (Id. at ¶ 32.) The Kramer Application was witnessed by Lockwood. (Id. at ¶ 33.) In the agent’s certification to the Kramer Application, Lockwood (i) “recommended] this risk to the Company without reservation”; and (ii) represented that the purpose of the insurance policy was for estate planning; that the client did not intend to use the policy for any type of viatical settlement, senior settlement, life settlement or for any other secondary market; and that Kramer’s total net worth (exclusive of life insurance) was $70 million plus $3 million in other income. (Id. at ¶ 33.) On or about November 23, 2005, in reliance upon the actions and conduct of the defendants and Kramer, Lincoln issued, a universal life insurance policy number 7214471 in the face amount of $10 million insuring Kramer’s life. (Id. at ¶ 34.) Lincoln alleges that at all relevant times, Kramer expected and understood that the right to receive the death benefit payable under any policy acquired from Lincoln would be sold to a third party having no insurable interest in Kramer’s life. (Id. at ¶ 35.) Further, it alleges that at no time did Liza intend to retain her beneficial interest in the Kramer Trust and, consequently, the right to receive the death benefit payable under the Kramer Policy. (Id. at ¶ 37.) At no ■ time did Kramer believe that the premiums due would be paid by Kramer or the Kramer Trust; Kramer expected and understood that the premiums due under the Kramer Policy would be advanced and/or financed by a third party. (Id. at ¶ 39.) Lincoln alleges that the submission of the Kramer Application and the Kramer Policy that resulted were part of a collaborative effort by Lockwood, LPS, Life Product Clearing, and/or other entities engaged in secondary life insurance market transactions, to profit at Lincoln’s expense from a gamble upon the life of Kramer. (Id. at ¶ 41.) Lincoln alleges that upon issuance of the Kramer Policy, at the direction of Lockwood, Lockwood Pension Services, Life Product Clearing and/or other entities engaged in secondary life insurance market transactions, Kramer instructed his daughter, Liza, to execute putative assignments of her beneficial interest in the Kramer Trust to a stranger investor. Life Product Cleaiing. (Id. at ¶ 42.) Subsequently, Hudson, then Life Product Clearing, then later Berck began paying the premiums on the Kramer policy. (Id. at ¶¶ 44, 47.) On January 31, 2006, Hudson was acquired by and merged with TD Bank, and TD Bank became the successor trustee to the Kramer Trust. (Id. at ¶ 46.) On or about July 10, 2006, Berck succeeded TD Bank as trustee to the Kramer Trust. (Id. at ¶ 49.) On September 5, 2006, Berck submitted a premium payment to Lincoln in the amount of $400,000.00 on the Kramer Policy. Lincoln alleges, upon information and belief, subsequent to Kramer’s death, the Estate of Arthur Kramer received various communications from representatives of Lockwood Pension Services and certain stranger investors demanding copies of Kramer’s death certificate so they could submit claims to Lincoln and other insurance companies for the payment of death benefits on policies insuring the life of Arthur Kramer. (Id. at ¶ 54.) In addition to the facts alleged with respect to the Kramer Policy, Lincoln brings an entirely new set of facts, concerning insurance policies on the life of Leon Lobel. Similar facts were litigated in Life Product Clearing LLC v. Linda Angel, Personal Representative of the Estate of Leon Lobel v. Leon Lobel Insurance Trust and Jonathan S. Berck, as Trustee of the Leon Lobel Insurance,; Judge Chin denied Life Product Clearing’s motion for judgment on the pleadings on January 22, 2008. 530 F.Supp.2d 646 (2008). That case was terminated by stipulation on June 18, 2008. Lincoln Life and Annuity filed a Complaint in Connecticut state court (Superior Court, J.D. of Hartford) on April 16, 2008, asserting facts that relate to insurance policies on both the lives of Arthur Kramer and Leon Lobel. That action involves facts similar to those asserted by Lincoln in their Complaint in this action as well as some similar parties. The Defendants in that action include common Defendants Lockwood Pension Services, Inc., Steven Lockwood, Jonathan Berck, Life Product Clearing, LLC and TD Banknorth, N.A.. Lincoln’s allegations in their third-party complaints in this case, with respect to the Lobel Policy, are substantially different from their allegations regarding the Kramer Policy. For example, the Broker in the Lobel case was a man named Joel Miller, who is not otherwise a party to this action. (Dkt. No. 140, at ¶ 58.) According to the third-party complaint, Lobel died less than a year after the policy was issued, such that incontestability would not be an issue. (Id. at ¶¶ 67, 75). And, unlike the Kramer action in which, thus far, it appears that no benefits have been paid, in the Lobel case, Lincoln paid a death benefit of $10,712,328.77 to the Lobel Trust on January 11, 2007. (Id. at ¶ 81.) Only now, after the conclusion of the prior action in this District, and after the benefits have been paid, does Lincoln seek declaratory judgment that inter alia, “the Lobel Trust is void, the transfer of the beneficial interest in the Lobel Trust is void”. (Id. at ¶ 82.) For reasons stated infra, all counts based on facts relating to the life of Leon Lobel are not properly before this Court. IV. THE MOTION TO DISMISS STANDARD For a complaint to survive dismissal under Rule 12(b)(6), the plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “A claim has facial plausibility,” the Supreme Court has explained, “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it stops short of the line between possibility and plausibility of ‘entitlement to relief.’ ” Ashcroft v. Iqbal, — U.S.—, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 556-57, 127 S.Ct. 1955). “[A] plaintiffs obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal quotation marks omitted). “In keeping with these principles,” the Supreme Court has stated, “a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 129 S.Ct. at 1950. In ruling on a 12(b)(6) motion, a court may consider the complaint as well as “any written instrument attached to the complaint as an exhibit or any statements or documents incorporated in it by reference.” Zdenek Marek v. Old Navy (Apparel) Inc., 348 F.Supp.2d 275, 279 (S.D.N.Y.2004) (citing Yak v. Bank Brussels Lambert, 252 F.3d 127, 130 (2d Cir. 2001) (internal quotations omitted)). V. THE PENDING MOTIONS: The issue between the Plaintiff and the insurance companies on one hand, and the trustees, insurance brokers, and “investors” on the other, is whether the circuitous route of establishing trusts for the adult Kramer children and then having the children sell them created policies violative of New York Insurance Law. The issue dividing the insurance companies and the Kramer Family (including Plaintiff) is, even assuming the scheme was illegal, to whom are the benefits to be paid? The insurance companies allege that the Kramer Family cannot benefit from their allegedly knowing participation in an allegedly illegal scheme. The Plaintiff alleges that the policies are now incontestable. The Defendants in the various complaints, counterclaims, cross claims and third-party claims have filed motions to dismiss causes of action for, inter alia fraud, aiding and abetting fraud, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, breach of warranty, tortious interference with contractual relations, negligence, unjust enrichment and Civil RICO. Those motions are each addressed herein. A. Motions to Dismiss Plaintiffs Complaint 1. Lincoln Life and Annuity has Moved to Dismiss Plaintiffs Complaint for Lack of Standing Lincoln Life and Annuity alleges that Plaintiff lacks standing to pursue a claim under the Lincoln policy. (Dkt. No. 56, Mem. of Law at 56.) Lincoln claims that “[t]he allegations contained in Plaintiffs amended complaint — disclaiming that (i) Mr. Kramer ever held any interest as owner or purchaser of the Lincoln Policy, (ii) his family members ever had any genuine interest as beneficiaries of the Lincoln Policy, and (iii) the noninsurance company defendants that did have an interest in the Lincoln Policy had any insurable interest in Mr. Kramer’s life — can only lead to the one logical conclusion — which is that Plaintiff lacks standing to assert any claim under the Lincoln Policy.” (Id.) In further support of its argument, Lincoln quotes that section of the Complaint which alleges “[a]t no time were Mr. Kramer or any of his family members the true owners of the beneficial interests in the policies.” (Id.) Although Lincoln asserts that the insurable interest statute does not vest Plaintiff with any right in the policy, such an allegation belies the plain language of New York Insurance Law Section 3205(b)(4) which states: If the beneficiary, assignee or other payee under any contract made in violation of this subsection ((b)) receives from the insurer any benefits hereunder accruing upon the death, disablement or injury of the person insured, the person insured or his executor or administrator may maintain an action to recover such benefits from the person receiving them. (Emphasis added.) In response, Lincoln argues that the statute is “conditional” in that “there must be receipt of proceeds from the insurer, and only then does the main clause come into play.” (Dkt. No. 74, Rep. Mem. of Law at 2.) Such a reading would clearly frustrate the intent of Section 3205(b)(4). But, even more, it would frustrate the clear goal of the Declaratory Judgment Act, under which the Plaintiff has brought suit. The Declaratory Judgment Act empowers a federal court, “[i]n a case of actual controversy within its jurisdiction, ... [to] declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201. Further, the Circuit has repeatedly held that the mere fact that liability may be contingent does not necessarily defeat jurisdiction of a declaratory judgment action. Employers Ins. of Wausau v. Fox Entertainment Group. Inc., 522 F.3d 271, 278 (2d Cir.2008) (quoting Associated Indem. Corp. v. Fairchild Industries, Inc., 961 F.2d 32, 35 (2d Cir.1992)). Rather, the Circuit has instructed. Courts should focus on the practical likelihood that the contingencies will occur. Id. This entire case turns on a reading of New York State Insurance Law that, although hotly contested, is largely unresolved. There is certainly a practical likelihood, among many others, that the Plaintiff will prevail. As such, standing under the Declaratory Judgment Act is appropriate. Luckenbach S.S. Co. v. U.S., 312 F.2d 545, 548 (2d Cir.1963) (finding “[t]he purpose of the declaratory remedy is to ‘avoid accrual of avoidable damages to one not certain of his rights and to afford him an early adjudication without waiting until his adversary should see fit to begin suit, after damage had accrued.’ ”). Lincoln’s argument suggests that in order for Plaintiff to have standing to bring suit, Lincoln must first pay the proceeds to Life Product, an entity Plaintiff claims is not entitled to those proceeds. Only then, Lincoln’s argument goes, would Plaintiff have standing to sue Life Product to recover those proceeds. Such an inefficient process was exactly what the Declaratory Judgment Act was designed to prevent. Accordingly, Defendant Lincoln’s Motion to Dismiss Plaintiffs Complaint for lack of standing is HEREBY DENIED. 2. Lockwood Pension Services and Tall Tree Advisors Motion to Dismiss Plaintiffs Complaint Both Lockwood Pension Services and Tall Tree Advisors have moved to dismiss Plaintiffs Complaint alleging that neither are proper parties to a Declaratory Judgment Act suit. Plaintiffs claim to relief from Lockwood Pension Services and Tall Tree Advisors is in the form of Declaratory Judgment in which she asks this Court to declare that “if some or all of the death benefits of the aforementioned [insurance] policies [on the life of Arthur Kramer] have already been paid to LPS [Lockwood Pension Services], TTA [Tall Tree Advisors], Life Product, Mr. Berck or their representatives or assignees, or to other persons or entities that may claim the right to receive such’ death benefits, then pursuant to this statute. Plaintiff is entitled to recover such death benefits.” (Dkt. No. 31 at ¶ 58.) Lockwood Pension Services and Tall Tree Advisors move to dismiss arguing that Plaintiff has “failed to allege any facts demonstrating a right to relief against either LPS [Lockwood Pension Services] or Tall Tree.” (Dkt. No. 70 at 4.) They argue that “Plaintiff has not alleged — nor could she — that either LPS [Lockwood Pension Services] or Tall Tree has or is scheduled to receive any of the death benefits from the Kramer Policies or asserted any claims to them.” (Id.) Indeed, Plaintiff seems to concede that neither Tall Tree Advisors nor Lockwood Pension Services would be subject to the declaratory judgment she seeks. She argues that “[w]hether or not LPS [Lockwood Pension Services] and TTA [Tall Tree Advisors] were ‘beneficiaries’ or ‘owners’ of the policies at issue, or entitled to death benefits, in no way diminishes their substantial involvement in the illegal activity that is the crux of Plaintiffs Amended Complaint.” (Dkt. No. 94, PL Mem. of Law in Opp. Lockwood Pension’s Motion to Dismiss at 2.) Throughout her brief. Plaintiff argues that she can seek declaratory judgment “against all entities — including LPS [Lockwood Pension Services] and TTA [Tall Tree Advisors]— that actively participated in the illegal SOLI scheme.” This argument is facially illogical. Plaintiff has failed to allege any facts that suggest that either Lockwood Pension Services or Tall Tree Advisors have any claim on the death benefits at issue in this case, nor has she alleged any facts to suggest that either entity now possesses or may in the future obtain the disputed death benefits. As such, there is no claim for Declaratory Judgment to be had against either entity. A Declaratory Judgment action is ripe for adjudication where “there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Duane Reade, Inc. v. St. Paul Fire and Marine Ins. Co., 411 F.3d 384, 388 (2d Cir.2005). The Second Circuit has repeatedly held that in order to decide whether to entertain an action for declaratory judgment, a District Court must ask: (1) whether the judgment will serve a useful purpose in clarifying or settling the legal issues involved; and (2) whether a judgment would finalize the controversy and offer relief from uncertainty. Duane Reade, Inc. v. St. Paul Fire and Marine Ins. Co., 411 F.3d 384, 388 (2d Cir.2005). Plaintiff has made no such allegations as to Tall Tree Advisors or Lockwood Pension Services. Merely alleging involvement in what Plaintiff terms “an illegal SOLI scheme” is not sufficient to maintain an action for declaratory judgment where Plaintiff has not alleged an actual controversy between parties having adverse legal interests. To the extent that the Plaintiff is arguing that New York Insurance Law creates an independent cause of action for creating a SOLI scheme, such a cause of action (if one exists) is not pled in the Complaint. Although Plaintiff seeks to rely on Fed.R.Civ.P. 57 to argue that “the existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate” such an argument is entirely inapposite where Plaintiff has not asserted any claim other than one for declaratory judgment. The fact of the matter remains that Plaintiff has not alleged any facts or pled any causes of action which, if proved, would entitle her to relief against Tall Tree Advisors or Lockwood Pension Services. Consequently, Tall Tree Advisors and Lockwood Pension Services Motion to Dismiss the Complaint is GRANTED. B. Plaintiffs Motions to Dismiss Counterclaims by Various Defendants The following Defendants have counterclaimed against the Plaintiff: Phoenix Life Insurance, Lincoln Life and Annuity, Life Product Clearing and Jonathan Berck. The Plaintiff has moved to dismiss each of these Counterclaims. 1. Plaintiffs Motions to Dismiss Phoenix’ Counterclaims a. Fraud Phoenix answered Plaintiffs Amended Complaint, indicating its intention not to pay any death benefits in connection with the Phoenix Policies and simultaneously asserting claims against Plaintiff for fraud (Dkt. 43 at ¶¶ 35-34), aiding and/or abetting breach of fiduciary duty {id. at ¶¶ 42-47), and unjust enrichment. {Id. at ¶¶ 48-52.) Plaintiff moved to dismiss those counterclaims arguing, inter alia, that New York’s two year incontestability period for life insurance policies bars Phoenix from asserting claims of fraud, or claims like aiding and abetting a breach of fiduciary duty, which is merely a fraud claim in another form. (PI. Mem. of Law, Dismiss Phoenix Counterclaims, Dkt. 62 at 10-21.) The New York Insurance Law contains a provision which requires: “All life insurance policies ... shall contain in substance the following provisions, or provisions which the superintendent deems to be more favorable to policyholders: ... that the policy shall be incontestable after being in force during the life of the insured for a period of two years from its date of issue ...” New York Insurance Law § 3203(a)(3). The New York Court of Appeals addressed the issue of incontestability in New England Mut. Life Ins. Co. v. Caruso, opining that “[t]he requirement rests on the legislative conviction that a policyholder should not indefinitely pay premiums to an insurer, under the belief that benefits are available, only to have it judicially determined after the death of the insured that the policy is void because of some defect existing at the time the policy was issued.” 73 N.Y.2d 74, 78, 538 N.Y.S.2d 217, 535 N.E.2d 270 (1989). Ca ruso, like this case, involved an insurance company’s refusal to pay benefits, alleging that the beneficiary lacked an insurable interest in the decedent. The Court wrote in Caruso, “[t]he policy at issue in this case is the general public interest in preventing gambling and, in the case of life insurance contracts, of compromising public safety by furnishing a temptation to bring about the event upon which payment is conditioned to those who insure the lives of others.” Caruso, 73 N.Y.2d 74, 81, 538 N.Y.S.2d 217, 535 N.E.2d 270 (1989). Nevertheless the Court of Appeals held that, “Decedent consented to the policy’s issuance and plaintiff accepted the application on the strength of the representations contained in it. If it doubted defendant’s interest, the burden rested on it to investigate in a timely manner or ignore the matter at its peril.” Caruso, 73 N.Y.2d 74, 82-83, 538 N.Y.S.2d 217, 535 N.E.2d 270 (1989). Ten years after Caruso, the Court of Appeals again addressed the reach of the incontestability period, this time in a case involving the life insurance applicant’s failure to disclose his HIV status at the time he made his application. In that case the insurance companies argued (similar to Phoenix’s argument here) that the Legislature could not have intended the policyholder to conceal wilfully a fact (there, a known condition) and eventually collect benefits. New England Mut. Life Ins. Co. v. Doe, 93 N.Y.2d 122, 130, 688 N.Y.S.2d 459, 710 N.E.2d 1060 (1999). The Court of Appeals rejected that argument and found that the insurance carriers “proposed interpretation would undermine the predictability that the statute was designed to engender.” Id. However, the Court of Appeals stated in dicta that: We are not insensitive to the carrier’s concern that the policyholder’s interpretation may encourage fraud. Were we faced with a choice between fraud and statutory design, a far more difficult case would be presented. It would be difficult for us to conclude that the Legislature knowingly enacted a statute that would encourage fraud. But that is not the case. A carrier may, compatibly with the incontestability clause, protect itself by including a provision in its incontestability clause creating an exception for “fraudulent misstatements.” The carrier here purposely chose not to include a fraud exception and is bound by that choice — a calculation that includes marketing inducements. Id. Subsequently, other Courts applying New York law have held insurance carriers to the language of their incontestability clauses. Galanty v. Paul Revere Life Ins. Co., 23 Cal.4th 368, 382, 97 Cal.Rptr.2d 67, 1 P.3d 658 (Cal.2000); Security Mut. Life Ins. Co. of New York v. Herpaul, 36 A.D.3d 449, 827 NY.S.2d 141, 143 (1st Dept.2007 (quoting Appleman, Insurance Law & Practice § 332 as “where a policy provides that it shall be contestable except for certain matters and fails to list among those defenses fraud, the defense of fraud is barred”)). The rule expressed in Doe, that a carrier may protect itself by including a provision in its incontestability clause creating an exception for “fraudulent misstatements,” strikes the proper balance between the policy goals expressed in Caruso and Doe, predictability and discouraging fraud. This rule is also consistent with the holding of Caruso insofar as it requires that insurers investigate claims within two years. Further, as the Court of Appeals stated in Caruso, “[generally, parties may contract as they wish and the courts will enforce their agreements without passing on the substance of them ... Freedom of contract itself is deeply rooted in public policy, however, and therefore a decision to refrain from enforcing a particular agreement depends upon a balancing of the policy considerations against enforcement and those favoring the encouragement of transactions freely entered into by the parties.” Caruso, 73 N.Y.2d 74, 81, 538 N.Y.S.2d 217, 535 N.E.2d 270 (1989). The incontestability rule should be available as a shield, but not a sword; enforcing the contract terms protects insurers from a collusion which disguises a fraud until after two years have passed. Turning to the terms of the Phoenix policy at issue, the incontestability clause states: We rely on all statements made by or for the insured in the written application and in any supplemental application. These statements are considered to be representations not warranties. We can contest the validity of this policy and coverage under it for any material misrepresentation of fact. To do so, however, the misrepresentation must be contained in an application and the application must be attached to this policy when issued or made a part of this policy when a change is made. We cannot contest the validity of the original face amount of this policy after it has been in Force during the Insured’s lifetime for two years from its Policy Date (or two years from any reinstatement, if applicable). It appears from the terms of this contract, that Phoenix endeavored to protect itself by including a provision in its incontestability clause creating an exception for misrepresentations of fact if the misrepresentation was contained in an application attached to the policy when issued. Therefore, contrary to Plaintiffs argument. Phoenix’s claims may not be bound by incontestability. It is another question, of course, whether the alleged fraud was discoverable within the two year period, which, if it were, would make the incontestability clause applicable. See Ilyaich v. Bankers Life Ins. Co. of New York, 47 A.D.3d 614, 849 N.Y.S.2d 595 (2d Dept. 2008). However, even if perhaps exempted from incontestability, Phoenix’s counterclaims nevertheless fail to allege sufficiently misrepresentations by Kramer in the life insurance application. In order to establish a cause of action for fraud, a plaintiff must plead the following elements: (1) a false representation; (2) of material fact; (3) with intent to defraud; (4) reasonable reliance on the representation; (5) causing damages to the plaintiff. Barker v. Time Warner Cable, Inc., 24 Misc.3d 1213(A), 2009 WL 1957740, 8 (N.Y.Sup. 2009) (citing Lama Holding Co. v. Smith Barney, 88 N.Y.2d 413, 646 N.Y.S.2d 76, 668 N.E.2d 1370 (1996)). Further, all claims of fraud must be pled with particularity. Fed.R.Civ.P. 9(b); CPLR § 3016(b). Merely alleging an “illegal SOLI scheme” is not sufficient to satisfy the elements of fraud, each of which must be met in order to survive a motion to dismiss. In this case Phoenix has failed to allege either a false representation or damages and therefore its cause of action for fraud must be dismissed. Although Phoenix pled the existence of a “SOLI” scheme in great detail, nowhere in their counterclaim against the Plaintiff is there an articulation of an actual misrepresentation made by one of the Kramers. The closest Phoenix comes to pleading fraud at any point in their counterclaims is their allegation that “[gjiven the applicable law and public policy prohibiting ‘wager’ life insurance policies, Mr. Kramer, Lockwood and the Trustee implicitly represented that (a) the Kramer August Trust would be the true owner and beneficiary of the requested Phoenix Policies (i.e. not just a strawman) and (b) the Kramer August Trust and its intended beneficiary had an insurable interest in Mr. Kramer’s life.” (Dkt. 42, Answer, at ¶ 22.) These “implicit” representations are just that, implicit, and do not appear on the face of the application for life insurance. Kramer never represented, nor omitted to disclose who the eventual beneficiary of his insurance trust would be, as that question was never asked of him in the application. The beneficiary of the policy is listed as the Arthur Kramer Insurance Trust. If Phoenix needed to know the beneficiaries of the Arthur Kramer Insurance Trust prior to determining whether to issue the policy it could have asked for that documentation or conducted an investigation. They cannot now claim that failure to disclose the identity of the beneficiaries of the Trust is fraud. Further, Phoenix has failed to allege the damages element of the fraud claim. Phoenix alleges that “[a]s result of Mr. Kramer’s misrepresentation, Mr. Kramer knowingly induced Phoenix to issue life insurance policies that it would not have issued but for Mr. Kramer’s misrepresentation.” (Dkt. NO. 43, at ¶ 40.) Leaving aside plausibility of the claim that Phoenix would not have issued the policies if it had known the “true” beneficiary, despite not inquiring about the beneficiaries of the Trust, it is nevertheless the case that Phoenix entered into a calculated business transaction in which it risked paying a large death benefit, but stood to gain from years of large premiums. The damage as alleged by Phoenix here, potentially having to pay the large death benefits, was not caused by Kramer’s alleged misrepresentation, but was always part of the bargain Phoenix entered. On the issue of damages to insurance companies, the facts of Universal Acupuncture Pain Services, P.C. v. State Farm Mut. Auto. Ins. Co., are instructive. 196 F.Supp.2d 378 (S.D.N.Y.2002). In that case the Court held that, under New York law, an automobile insurer, State Farm Mutual Auto Insurance Company, had no cause of action against an unlicensed acupuncture clinic which had received no-fault benefits from the insurer, based on the clinic’s violation of the state’s professional services corporation statute. Id. The Court found that, although the acupuncture clinic had indeed violated the statute, the insurer’s recovery • under a common law fraud theory was precluded by the fact that it had lost no benefit and suffered no injury independent of the clinic’s statutory violation. Id. Dismissing State Farm’s Counterclaims, the Court opined that, “State Farm claims that it suffered injury in the amount of $190,000 of payments to Universal that it was not legally required to make. Id. Thus, State Farm’s only injury resulted from Universal’s noncompliance with section 1503.” Id. at 387. The same would be true here; Phoenix’s only injury, to the extent it was injured at all, resulted from Kramer’s alleged noncompliance with New York Insurance Law. See also Kirk v. Heppt, 532 F.Supp.2d 586 (S.D.N.Y.2008) (finding that, to maintain a claim for common law fraud under New York law, a plaintiff must be able to show a causal link between the alleged fraud and his claimed damages); Glidepath Holding B.V. v. Spherion Corp., 590 F.Supp.2d 435 (S.D.N.Y.2007) (finding that many considerations enter into the proximate cause inquiry, to establish loss causation for claims of fraud and negligent misrepresentation, under New York law, including the foreseeability of the particular injury, the intervention of other independent causes, and the factual directness of the causal connection). Failing to comply with New York Insurance Law was not causally related to the damages Phoenix alleges. Consequently, Phoenix has failed to plead sufficiently its counterclaim of fraud; Plaintiffs motion to dismiss that cause of action is therefore, GRANTED. In addition, although leave to replead should be “freely granted”; leave is not required here where any attempt to replead would be futile. b. Aiding and Abetting Breach of Fiduciary Duty Plaintiff further moves to dismiss Phoenix’s counterclaim for aiding and abetting breach of fiduciary duty. “A claim for aiding and abetting a breach of fiduciary duty requires: (1) a breach by a fiduciary of obligations to another, (2) that the defendant knowingly induced or participated in the breach, and (3) that plaintiff suffered damage as a result of the breach”. AHA Sales, Inc. v. Creative Bath Products, Inc., 58 A.D.3d 6, 867 N.Y.S.2d 169, 182 (2d Dept.2008) (citing Kaufman v. Cohen, 307 A.D.2d 113, 760 N.Y.S.2d 157). “Although a plaintiff is not required to allege that the aider and abettor had an intent to harm, there must be an allegation that such defendant had actual knowledge of the breach of duty.... Constructive knowledge of the breach of fiduciary duty by another is legally insufficient to impose aiding and abetting liability.” Id. Phoenix alleges that “Mr. Kramer knew or should have known that [