Opinion
0100975/2007.
September 24, 2008.
DECISION ORDER
Plaintiffs Robert Buck and Ottilie Jarmel ("Plaintiffs"), the co-owners and equal beneficiaries on a life insurance policy, brought this action against the insurer to recover the policy's full death benefit. Defendant Columbian Mutual Life Insurance Company ("Defendant") moved for summary judgment dismissing the Complaint on the ground that the death benefit on the policy had been reduced due to the nonpayment of premiums and that the reduced amount was tendered by the insurer, but was rejected by Plaintiffs. As set forth below, Defendant's motion is granted.
Plaintiff's mother Joan Buck Jarmel was the insured on a life insurance policy issued by the Defendant. The death benefit on the Policy would have been $225,000 had the quarterly premium payments been timely made by Plaintiffs. However, because certain premium payments were not made, the cash value of the policy was used to satisfy the premium payments.
When the cash value on the policy was depleted to the extent that the cash value could not satisfy the next premium payment, pursuant to the policy, the insurer used the remaining cash value to purchase a death benefit according to the method get forth in the policy. The insurer used the remaining cash value in the policy to purchase a death benefit of $16,957 and tendered this amount to Plaintiffs upon the death of their mother. The insurer's checks were returned by Plaintiffs.
Plaintiffs, the co-owners of the insurance policy, designated the address of their mother as the address at which they were to receive all premium notices. Defendant sent a notice to Plaintiffs which advised Plaintiffs that a premium payment in the amount of $1,637 was due on December 24, 2004 and that this payment must be received by the insurer by "JANUARY 24, 2005 in order to: — Maintain your scheduled death benefit and any riders or supplemental benefits; Avoid any overdue premium adjustments; Avoid any reinstatement requirements."
The notice also provided that inquiries regarding the notice could be made by telephone at the number and extension indicated therein. After the payment specified in the notice was not received, as a result of the history of missed premium payments on the policy and the concomitant erosion of the policy's cash value, a new death benefit was purchased as provided for by the terms of the policy.
Plaintiffs commenced the instant action to recover the full death benefit listed in the policy ($225,000) under the following theories: (a) breach of contract; (b)estoppel; (c)unjust enrichment. Defendant has made a prima facie showing of entitlement to summary judgment. Defendant has established that it does not owe Plaintiffs the full death benefit because the death benefit was reduced pursuant to the terms of the policy.
In opposition, Plaintiffs have not raised a triable issue of fact. It is well settled that "[a]n insurer is entitled to have its contract of insurance enforced in accordance with its provisions and without a construction contrary to its express terms." Broad Street, LLC v. Gulf Ins. Co., 37 A.D.3d 126, 131 (1st Dept. 2006).
Significantly, in this case, Plaintiffs do not take issue with Defendant's interpretation of the policy provisions pursuant to which the death benefit was reduced. Nor do Plaintiffs refute the specific calculations used by the insurer in arriving at the reduced death benefit. Further, Plaintiffs do not deny that they failed to make all of the requisite premium payments which, if made, would have kept the full death benefit listed in the policy in force. Nevertheless, Plaintiffs maintain that the insurer is responsible for the full death benefit.
Plaintiff's principal argument is that there is a question of fact as to whether Defendant is estopped from refusing to pay Plaintiffs the full amount of the death benefit listed in the policy. Plaintiffs reason that Defendant was required to send premium notices not only to the address designated by Plaintiffs for that purpose, but also to Plaintiffs' insurance broker since, in the past, some insurance information was sent to the broker.
Plaintiffs do not point to any authority whatsoever for the proposition that the insurer was required to send premium notices to the broker who procured the policy. It is undisputed that Plaintiffs are the co-owners of the policy, designated the address of their mother as the address at which they were to receive premium notices, and that premium notices were received at this address for years. In fact, it is conceded that the notice concerning the premium payment due on December 24, 2004, was received at this address. Plaintiff's Memorandum of Law in Opposition, at p. 5; Mosenson Affidavit in Opposition, at ¶ 20. Although it is apparently argued that the notice was not read until after the premium was due, it is clear that Defendant complied with all applicable notice requirements by mailing the notice to the designated address.
Plaintiffs make much of the fact that some insurance information concerning the policy had been sent to the insurance broker as well as Plaintiffs, however, that is irrelevant since Defendant was not required to send premium notices to the insurance broker. The fact that the insurer may have sent some insurance information to the broker as a courtesy does not impose on the insurer a greater obligation with respect to all premium notices. Accordingly, Plaintiffs' contention that there is an issue of fact regarding their estoppel argument that they relied on the insurer's actions in giving some information concerning the policy to the insurance broker is without merit.
With respect to Plaintiffs causes of action for breach of contract and unjust enrichment, it is clear that Defendant did not breach the insurance contract and was not unjustly enriched since Defendant gave sufficient notice to Plaintiffs concerning the reduction of the death benefit amount and properly attempted to tender the death benefit due under the policy to Plaintiffs. Further, it is axiomatic that unjust enrichment is a quasi-contractual claim and where, as here, a matter is controlled by contract a cause of action for unjust enrichment cannot lie. Goldman v. Metropolitan Life Ins. Co., 5 N.Y.3d 561 (2005).
Based on the foregoing, Defendant's motion is granted to the extent that its liability to Plaintiffs under the subject policy is limited to $16,957 and the Complaint is dismissed. The Clerk is directed to enter judgment accordingly with costs and disbursements as taxed.