Opinion
Case No. 3:11cv2344
01-17-2013
John Hancock Life Insurance Company, Plaintiff v. The William R. Ufer, Sr., Irrevocable Trust, Defendant
MEMORANDUM OPINION
AND ORDER
INTRODUCTION
This matter is before me on the motion of Plaintiff John Hancock Life Insurance Company ("John Hancock") for summary judgment pursuant to Fed. R. Civ. Pro. 56. (Doc. No. 17). Defendant The William R. Ufer, Sr. Irrevocable Trust ("the Trust") has filed a response. (Doc. No. 21). John Hancock filed a reply. (Doc. No. 22). For the reasons stated below, John Hancock's motion is denied.
BACKGROUND
In September 2009, William R. Ufer, Sr., applied for a life insurance policy ("the Policy") with John Hancock, naming the Trust as the intended beneficiary of the Policy. (Doc. No. 1 at 2). The Policy took effect on November 20, 2009, when the first premium payment was made in full. (Doc. No. 1 at 3; Doc. No. 2 at 1). On November 24, 2009, Ufer was formally diagnosed with lung cancer, which ultimately led to his death on June 8, 2011. (Doc. No. 17-1 at 4-5). John Hancock states it learned about Ufer's diagnosis, and the testing that led to his diagnosis, only after Ufer passed away. (Id. at 5). Upon learning of this information, John Hancock denied the Trust's claim against the Policy and attempted to rescind the Policy. (Id.).
In its opposition to John Hancock's motion for summary judgment, the Trust argues that the Policy in fact became effective on November 11, 2009, because Ufer tendered a check for the first premium to his insurance broker on that date and, purportedly, Ufer had a reasonable belief the broker was John Hancock's agent. (Doc. No. 21 at 14-15). As John Hancock notes, the Trust fails to "attempt to reconcile [this] argument with its prior judicial admission." (Doc. No. 22 at 3). The Trust has not moved to strike or otherwise amend that admission and will be held to it.
Between November 9 and November 18, 2009, Ufer underwent a chest x-ray, a CT scan, and a PET scan. (Doc. No. 17-1 at 3-4, Doc. No. 17-6 at 12-32).
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In its Complaint, John Hancock requested a declaration "that the Policy was void or voidable and has been validly rescinded and that John Hancock owes no obligations under the Policy." (Doc. No. 1 at 4); see also, (Id. at 1)(arguing the Policy was validly rescinded "based upon [Ufer's] provision of materially false information in his application for insurance."). In its motion for summary judgment, however, John Hancock argues there was no binding agreement formed between it and Ufer "due to the failure of conditions precedent" and seeks a declaration that the Policy "never went into effect. . . ." (Doc. No. 17 at 1). John Hancock's contention that "the Policy was void or voidable and has been validly rescinded . . ." was not stated with particularity in its motion for summary judgment and therefore is not properly before me. See Fed. R. Civ. Pro. 56(f)(2)(a court may grant a motion for summary judgment on grounds not raised by a party only after giving the nonmovant notice and a reasonable time to respond); see also, Team Play, Inc. v. Boyer, 391 F. Supp.2d 695, 702 n. 2 (N.D. Ill. 2005)(declining to address plaintiff's argument because it was "outside the scope of the motion under consideration"). Accordingly, I will consider only John Hancock's assertion that the Policy did not take effect due to the failure of conditions precedent.
STANDARD
Summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed R. Civ. P. 56(a). The moving party bears the initial burden of "informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The movant may meet this burden by demonstrating the absence of evidence supporting one or more essential elements of the non-movant's claim. Id. at 323-25.
Once the movant meets this burden, the opposing party "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting Fed. R. Civ. P. 56(e)). Rule 56 "requires the [non-moving] party to go beyond the pleadings" and present some evidence in support of its position. Celotex, 477 U.S. at 324; see also Harris v. General Motors Corp., 201 F.3d 800, 802 (6th Cir. 2000). The non-moving party "need only present evidence from which a jury might return a verdict in his favor" in order to establish a genuine dispute as to a material fact. Anderson, 477 U.S. at 257. Summary judgment shall be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322.
ANALYSIS
The Policy is governed by Ohio law. (Doc. No. 17-4 at 1). "An insurance policy is a contract whose interpretation is a matter of law." Sharonville v. Am. Emp'rs Ins. Co., 846 N.E.2d 833, 836 (Ohio 2006). The terms of an insurance policy "are to be given their plain and ordinary meaning." Id.
John Hancock asserts that, "[d]ue to failure of conditions precedent, the Policy issued by John Hancock to Mr. Ufer never came into effect." (Doc. No. 17-1 at 6). John Hancock argues that the following language, found in the Declarations section of the life insurance policy application, constitutes conditions precedent to the formation of a binding agreement:
Any life insurance policy issued as a result of this application will be effective on the later of the date the first premium has been paid in full and the date the policy has been delivered, provided that since the date of the application there has been no deterioration in the insurability of the Proposed Life Insured(s), no changes in the lifestyle of the Proposed Life Insured(s), no change in the financial circumstances of the Owner, and nothing has occurred that would require a(Doc. No. 17-3 at 5)(emphasis added). John Hancock argues the emphasized language contains two conditions precedent to the effectiveness of the Policy. (See, e.g., Doc. No. 17-1 at 8).
change to any statement or answer in any part of this application in order to make the statement or answer true and complete as of the date the policy becomes effective.
Ohio law provides that "a condition precedent is one that is to be performed before the agreement becomes effective. It calls for the happening of some event, or the performance of some act, after the terms of the contract have been agreed on, before the contract shall be binding on the parties." Ohio Nat'l Life Assurance Corp. v. Satterfield, 956 N.E.2d 866, 870 (Ohio Ct. App. 2011) (quoting Mumaw v. W. & S. Life Ins. Co., 119 N.E. 132, 135 (Ohio 1917)); see also, id. (condition precedent is "an act of event, other than a lapse of time . . .").
As in Satterfield, it is clear that the language John Hancock cites does not constitute a condition precedent. The language "does not refer to a certain act or event." Satterfield, 956 N.E.2d at 871. Ufer agreed that the statements he made in the application would remain true and thus the Policy required only the passage of time before it would become effective, which is the very antithesis of a condition precedent. The language in the Policy which John Hancock used, and to which Ufer agreed, does not mandate the taking of any action or the occurrence of any event; it contemplates only the continued validity of the representations Ufer made. The intent of the parties to a contract "is presumed to reside in the language they chose to employ in the agreement." Kelly v. Med. Life Ins. Co., 509 N.E.2d 411, 413 (Ohio 1987). John Hancock is not entitled to a declaration that the Policy did not take effect due to the failure of conditions precedent because the language John Hancock cites does not create a condition precedent. John Hancock fails to carry its burden of proving it is entitled to judgment "as a matter of law." See Fed. R. Civ. Pro. 56(a).
CONCLUSION
For the reasons stated above, John Hancock's motion for summary judgment (Doc. No. 17) is denied.
So Ordered.
Jeffrey J. Helmick
United States District Judge