Opinion
A101000.
10-31-2003
LUZVIMINDA ANDAL, Plaintiff and Appellant, v. AIG LIFE INSURANCE COMPANY et al., Defendants and Respondents.
Plaintiff Luzviminda Andal appeals from summary judgments dismissing her claims against AIG Life Insurance Company (AIG) and its agent, Bernard Tan. The claims arise from AIGs refusal to pay life insurance benefits under a policy it issued to plaintiffs husband a few days before he died of cancer in 1998. The trial court granted the summary judgments on the grounds that the claims were barred by the statute of limitations and the insured failed to satisfy conditions precedent to coverage under the policy. Plaintiff asserts that she has shown triable issues of material fact. We affirm the judgments in favor of defendants.
FACTUAL AND PROCEDURAL BACKGROUND
Facts
The following facts were undisputed for purposes of the summary judgment motions in issue:
On February 1, 1998, plaintiffs late husband, Dr. Cesar Andal, executed a life insurance application for a $500,000 HiFlex Universal Life insurance policy from AIG, in the select non-smoker risk class, with his wife as the beneficiary. Tan was the agent who assisted the Andals in making this application. According to the application, Dr. Andal had never been treated for or had any indication of cancer. The application contained the following language: "This application and any amendments shall be a part of any contract issued by the Company. No medical examiner or agent can make or change a contract or waive any of the Companys rights or requirements. Unless otherwise provided by the Receipt for Conditional Temporary Insurance, if applicable, no policy will take effect unless and until, while the insured is living, the application is approved, the full initial premium is paid, the policy is delivered to [and] accepted by the owner, and answers and statements in the application continue to be complete and true at the time of payment and acceptance."
On February 19, 1998, Tan submitted Dr. Andals application to AIG along with a memorandum requesting two policies on Dr. Andals life, one $500,000 HiFlex Universal Life policy with plaintiff as beneficiary and one $500,000 policy to be assigned to a bank as collateral. On February 27, plaintiff wrote a check covering the amount of $733.98 for Dr. Andals policy application.
By plaintiffs account, she and Dr. Andal learned on March 4, 1998 that Dr. Andal had cancer. On March 6, AIG sent Tan a letter informing him that Dr. Andal had been rejected for coverage in the select non-smoker risk class because his blood test revealed elevated liver function. On April 3, AIG wrote to Tan offering to issue Dr. Andal a policy with a Table 3 class rating. On April 6, Tan wrote back asking AIG to cancel the previous policy requests and instead issue a $1 million HiFlex Universal Life policy at the Table 3 risk class, with a $1 million term rider, also at the new Table 3 risk class.
On April 9, 1998, AIG sent Tan policy documents for AIG Life Insurance policy No. L98400695 providing life insurance coverage to Dr. Andal of $1 million with a $1 million rider. The cover letter accompanying the policy stated, in part, the following: "We are pleased to enclose the above policy. Before coverage can be placed in effect, please complete the following requirements and return them to the Home Office. These requirements must be received in the Home Office within 30 days or we will close the application as Not Taken. [¶] First 2 monthly premiums: $ 6,508.68 [¶] Amount Paid: $733.98 [¶] Amount Due: $5,774.70 [& para;] Other requirements: [¶] Delivery Receipt to be signed on delivery. Illustration to be signed on delivery. Amendment to be signed on delivery."
The policy documents sent to Tan included (1) a one-page Amendment to Application for Life Insurance and (2) a Policy Delivery Receipt, both containing blank signature spaces for the insured. The amendment referenced policy No. L98400695 and specified that the insureds application would be amended to provide that the face amount of the policy applied for was "$1,000,000 with a $1,000,000 Primary Insured Rider in the face amount of $1,000,000." The amendment also included the following: "I hereby affirm that the statements, representations [and] answers . . . made in my Life Insurance Application . . . continue without change to remain full, complete, true, and effective as of the date [of signature]." The Policy Delivery Receipt stated that "[b]y accepting this policy, I represent that the statements in the life insurance application . . . continue to be complete and true to the best of my knowledge, information, and belief."
Dr. Andal died on Sunday, April 12, 1998, without having received the policy or signed the amendment or delivery receipt. On April 15, 1998, AIG sent plaintiff a letter referring to Dr. Andals death and informing her that since AIG had not received the necessary requirements to put coverage under the policy in force it was closing the file and returning the $733.98 premium remitted by her with the application. Plaintiff was very upset by the letter.
This action was filed on August 16, 2001.
Pleadings
Plaintiffs first amended complaint asserted causes of action for negligence (both defendants), breach of contract (AIG only), breach of implied contract of insurance (AIG only), breach of the covenant of good faith and fair dealing (AIG only), breach of contract to procure insurance (Tan only), fraud (both defendants), and intentional infliction of emotional distress (both defendants).
Tan moved for summary judgment on the grounds that: (1) all of plaintiffs causes of action against him were barred by the applicable statutes of limitations; and (2) as a matter of law, plaintiffs injury resulted not from any wrong committed by Tan but from the fact that Dr. Andals post-application cancer diagnosis precluded coverage under the policy from going into effect. AIG sought summary adjudication on statute of limitations grounds of all causes of action against it except breach of insurance contract, which is subject to a four-year statute. It sought summary judgment as to plaintiffs breach of contract claims and all other causes of action on the ground that Dr. Andals change in health condition would have precluded coverage under the policy as a matter of law.
The trial court granted summary judgment to both defendants and this timely appeal followed.
DISCUSSION
Plaintiff contends that the trial court erred in: (1) failing to recognize that the statute of limitations on plaintiffs causes of action did not begin to run until she discovered all of the facts essential to them; (2) excluding a declaration by plaintiffs expert concerning customs and practices of the insurance industry; and (3) failing to find that there were triable issues of material fact independent of her experts declaration.
Standard of Review
We review a summary judgment de novo. (Galanty v. Paul Revere Life Ins. Co. (2000) 23 Cal.4th 368, 374; Rodeo Sanitary Dist. v. Board of Supervisors (1999) 71 Cal.App.4th 1443, 1446; Code Civ. Proc., § 437c, subd. (c).) "In practical effect, we assume the role of a trial court and apply the same rules and standards which govern a trial courts determination of a motion for summary judgment." (Lenane v. Continental Maritime of San Diego, Inc. (1998) 61 Cal.App.4th 1073, 1079.) We may affirm an order granting summary judgment on any theory of law applicable to the case, including but not limited to the theory adopted by the trial court, provided appellant was afforded an adequate opportunity to address that legal theory in the trial court. (Western Mutual Ins. Co. v. Yamamoto (1994) 29 Cal.App.4th 1474, 1481; Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2002), ¶ 8:168.5a, pp. 8-93.3 - 8-93.4.)
Statute of Limitations
There is no dispute that this action was filed more than three and one-half years after plaintiff received a letter from AIG informing her that there was no coverage under the $2 million policy issued on Dr. Andals life. There is also no dispute that all of her tort and breach of oral or implied contract causes of action would be time-barred unless the running of the applicable limitations period was tolled or delayed by operation of law.
Plaintiff contends that Tan and AIG falsely represented to her that AIG had refused to issue life insurance on Dr. Andals life because it had concluded that Dr. Andal knew he had cancer when he originally applied for insurance. According to plaintiff, these false representations hindered plaintiff from discovering the true facts and asserting her legal rights because the legal rights and liabilities involved in a carriers refusal to accept an insurance risk are different than those implicated by an agents or carriers delay in delivering an issued policy to its insured. Plaintiff maintains that the limitations periods applicable to her tort claims did not begin to run until she learned that AIG had in fact issued a $2 million policy and mailed it to Tan.
We are unpersuaded. A cause of action normally accrues for purposes of the statute of limitations, and the applicable limitations period begins to run, when the plaintiff has suffered damages from a wrongful act. (Samuels v. Mix (1999) 22 Cal.4th 1, 9 (Samuels); Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397 (Norgart).) However, this rule has an important exception, referred to as the "discovery rule," upon which plaintiff in this case is relying. The operation of this exception was explained in Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103 (Jolly) and Norgart, supra. Jolly held that after a plaintiff has suffered injury or loss, the applicable limitations period will not begin to run until "the plaintiff suspects or should suspect that her injury was caused by wrongdoing, [i.e.] that someone has done something wrong to her." (Jolly,supra, 44 Cal.3d at p. 1110, fn. omitted, italics added.)
Thus, two alternative tests have been applied to determine when a cause of action has accrued under the discovery rule: (1) a subjective test requiring actual suspicion by the plaintiff that the injury was caused by wrongdoing; and (2) an objective test requiring a showing that a reasonable person would have suspected the injury was caused by wrongdoing. (Jolly, supra, 44 Cal.3d at pp. 1110-1111.) Under the discovery rule, the plaintiff need not be aware of the specific facts or legal theory necessary to establish the claim. (Norgart, supra, 21 Cal.4th at p. 398.) She need not even know the identity of the wrongdoer. (Id. at p. 399.) Rather, the plaintiff need only be aware of her injury and have knowledge of sufficient facts to place her on actual or inquiry notice that her injury has a negligent cause. (Id. at pp. 397-398.)
As of mid-April 1998, plaintiff knew that AIG was denying her a very substantial $2 million insurance benefit under a policy that she and her husband had done everything in their power to obtain. She also knew that AIGs asserted ground for denying these benefits was that it "never received the necessary requirements to put the coverage in force." Thus, more than three years before filing suit, plaintiff knew that she had suffered appreciable harm, the loss of $2 million in insurance benefits, and knew or should have suspected from AIGs own explanation of the denial that someone, possibly Tan or a home office employee of AIG, had failed to ensure that all requirements to put the coverage in force had been satisfied. That was all the knowledge required to start the statute of limitations running on her tort claims. She knew or had good reason to suspect from AIGs letter that "someone ha[d] done something wrong to her." (Jolly,supra, 44 Cal.3d at p. 1110, fn. omitted.) In fact, plaintiff retained counsel to investigate the denial of coverage at some point within the first year after her husbands death. She did not also need to be aware of the specific facts or legal theory necessary to establish her claim. (Norgart, supra, 21 Cal.4th at p. 398.)
Vu v. Prudential Property & Casualty Ins. Co. (2001) 26 Cal.4th 1142 (Vu) does not assist plaintiff. In Vu, a homeowners earthquake insurer inspected the homeowners property after an earthquake and told him that his property damage did not exceed the policy deductible. (Id. at p. 1147.) In reliance on the insurers representation, the homeowner did not file a claim for coverage. (Ibid.) After the one-year statute of limitations for bringing claims against the insurer expired, the homeowner discovered substantial additional damage. (Ibid.) He sued the insurer, asserting that the insurer was estopped from invoking the one-year statute of limitations because his failure to bring an action within one year resulted from reasonable reliance on the insurers false representation about the damage sustained to his home. (Id. at pp. 1147-1148.) The California Supreme Court held that an estoppel might apply on these facts if the insureds reliance on the insurers damage estimate was shown to be reasonable. (Id. at p. 1154.)
Thus, in Vu the insurer induced its insured to refrain from filing a claim by representing to him that he would suffer no loss of insurance benefits if he failed to act. No such situation existed here. Immediately after plaintiffs husband died, AIG advised her that the coverage they had applied for had never gone into effect and explained that it had "never received the necessary requirements" to effectuate the coverage. Even if plaintiff was subsequently told that AIG had never issued the policy because it believed Dr. Andal knew of the cancer when he applied, this would not be an estoppel under Vu. First, AIGs own letter to plaintiff contradicts the assertion that it denied coverage because it believed the insured had known of his illness. It would not have been reasonable for plaintiff to rely on one of two conflicting reasons AIG offered for refusing coverage without noticing the conflict or conducting her own investigation of the facts. Second, AIGs alleged false representation did not cause plaintiff to refrain from asserting claims. If plaintiff believed that AIG denied coverage based on an unfounded belief that Dr. Andal deliberately misrepresented his medical condition when he applied for coverage, that would be a reason to pursue potential claims against AIG and Tan, not a reason to refrain from pursuing such claims. Thus, unlike the homeowner in Vu, plaintiff in this case cannot establish that she refrained from pursuing claims against Tan and AIG in reasonable reliance on any false representations they made to her.
Accordingly, the trial court properly dismissed all of plaintiffs tort and breach of implied and oral contract claims against both Tan and AIG on statute of limitations grounds.
Breach of Written Insurance Contract
Plaintiff sued AIG for breaching a written contract to insure the life of Dr. Andal for $2 million. AIG contends, and we agree, that as a matter of law based on the undisputed facts, no such contract of insurance was ever formed and, therefore, AIG is entitled to summary judgment.
In opposing AIGs summary judgment motions in the trial court, plaintiff asserted that: (1) she told Tan in a private conversation on March 11, 1998 that her husband had been diagnosed with cancer; (2) Tans knowledge as of that date must also be attributed to AIG because Tan was AIGs employee; (3) AIGs subsequent conduct in issuing a $2 million policy on Dr. Andals life shows that it was willing to insure him for a rated premium notwithstanding his cancer; and (4) AIGs issuance of the policy coupled with the transmittal by plaintiff to Tan of a check for the initial premium due under the $2 million HiFlex policy created a binding insurance contract under industry custom and practice.
Plaintiff relied on a declaration from Irwin Phillips, who plaintiff offered as an "expert in insurance customs, practices and standards." AIG objected to the Phillips declaration on the grounds, in part, that Phillipss opinion as to whether a binding insurance contract was formed lacked foundation and constituted an improper legal conclusion. Reviewing the trial courts evidentiary ruling de novo, Williams v. Saga Enterprises, Inc. (1990) 225 Cal.App.3d 142, 149, footnote 2, we find that Phillipss declaration and opinions were properly excluded from consideration.
An expert declaration may be rejected at the summary judgment stage if it is speculative or lacks foundation. (Sanchez v. Hillerich & Bradsby Co. (2002) 104 Cal.App.4th 703, 718.) The declaration must establish the matters relied upon, that the opinion rests on matters of a type reasonably relied upon, and the bases for the opinion. (Kelley v. Trunk (1998) 66 Cal.App.4th 519, 524.) "[A]n opinion unsupported by reasons or explanations does not establish the absence of a material fact issue for trial, as required for summary judgment." (Ibid.)
Phillipss resume showed that he had served in the past as a general agent for four insurance carriers. The resume did not specify the length of time or time period in which Phillips worked as an agent or describe the nature of his duties and responsibilities. There is no indication in the declaration that Phillips is an attorney or that he has ever worked as an underwriter or claims examiner for any insurance company. His declaration merely recited a series of custom and practice opinions framed in conclusory language to echo plaintiffs positions in the litigation. The declaration fails to specify what facts or information Phillips relied on to reach his opinions, or the bases for them. The trial court properly refused to consider the Phillips declaration because it is unsupported by any reasons or explanations supporting his opinions about alleged industry custom and practice.
Phillipss opinion about whether AIG became obligated to pay policy benefits to plaintiff was also improper because it invades the province of the fact-finder to determine that issue. (See Mabee v. Nurseryland Garden Centers, Inc. (1978) 84 Cal.App.3d 968, 972 [whether enforceable contract formed presents question of fact].) Although opinion testimony is not objectionable merely because it embraces the ultimate issue to be decided by the trier of fact (Evid. Code, § 805), the rule permitting such testimony is not a "carte blanche [for the expert] to express any opinion he or she wishes. [Citation.]" (Summers v. A. L. Gilbert Co. (1999) 69 Cal.App.4th 1155, 1178.) Opinion testimony about an ultimate issue is not admissible if it invades the province of the jury to decide a case: "[W]hen an experts opinion amounts to nothing more than an expression of his or her belief on how a case should be decided, it does not aid the jurors, it supplants them." (Id. at p. 1183.)
Because Phillipss opinions lacked foundation and were little more than conclusory statements as to how the case should be decided, they are insufficient to establish factual issues for trial.
Reviewing the record de novo, we find no triable issue of fact with regard to whether a binding insurance policy covering the life of Dr. Andal ever went into effect. The undisputed facts demonstrate that conditions precedent to the formation of such a contract were never satisfied. Dr. Andals insurance application stated that "[t]his application and any amendments shall be a part of any contract issued by the Company." The application specifies at least four conditions precedent to the inception of coverage: "[N]o policy will take effect unless and until, while the insured is living, [1] the application is approved, [2] the full initial premium is paid, [3] the policy is delivered to [and] accepted by the owner, and [4] answers and statements in the application continue to be complete and true at the time of payment and acceptance." Conditions 3 and 4 were never satisfied in this case. The policy was never delivered to nor accepted by Dr. Andal, and Dr. Andals answer in his application that he had never been treated for nor had indications of cancer had ceased to be true after the application was submitted.
For purposes of its summary judgment motion, AIG did not dispute that plaintiff had given Tan two checks made out to AIG at the end of March, including one left blank at Tans request, for the purpose of covering any initial premiums to be required under the $2 million policy once it was issued. We assume for purposes of analysis that delivery to Tan of these checks would have satisfied condition 2.
Further, when AIG issued policy No. L98400695, it specified that before the coverage could take effect Dr. Andal had to sign and return the delivery receipt and amendment to his application that accompanied the policy. The amendment and delivery receipt both included affirmations that the statements and answers contained in his application continued to be true to the best of his knowledge, information, and belief. Dr. Andal could not have truthfully signed these documents at any time after the policy was issued even if he had been physically able to do so.
Plaintiff contends that AIG waived its own contractual requirement that Dr. Andals health status be unchanged by issuing a $2 million policy at a rated premium after receiving blood test results showing an elevated liver function and despite allegedly knowing, through Tan, that Andal had been hospitalized after submitting the application. This claim is unsupported by the record. There is no evidence that AIG ever informed Tan or Dr. Andal orally or in writing that: (1) Dr. Andal need not reaffirm his health status in order for the coverage to go into effect; (2) Dr. Andals cancer diagnosis would not affect AIGs willingness to provide coverage; or (3) the policy did not have to be delivered to and accepted by Dr. Andal in order to go into effect. To the contrary, the documents and instructions sent to Tan with the insurance policy demonstrate AIGs continuing intent that all of the conditions precedent to coverage must be satisfied. The amendment to the application included no language proposing to amend Dr. Andals representation that he did not have cancer. No correspondence to or from Tan or AIG makes any reference to Dr. Andals changed medical condition. Plaintiffs argument also flies in the face of common sense. She offers no plausible reason why an insurance carrier would waive conditions designed to protect its interests and rush to put a $2 million policy in place on the life of a terminally ill patient.
The absence of any reference to the blood test results shows nothing. AIG ordered the testing as part of the application process and was not relying on any representation by Dr. Andal about the results in issuing insurance.
Summary judgment was properly granted on behalf of both defendants.
DISPOSITION
The judgments in favor of defendants Tan and AIG are affirmed.
We concur: Marchiano, P.J. and Stein, J.