Souran v. Travelers Ins. Co.
| Decision Date | 21 January 1993 |
| Docket Number | Nos. 90-3341,90-3703,s. 90-3341 |
| Citation | 982 F.2d 1497 |
| Parties | George SOURAN, as Personal Representative of the Estate of Linda Rebstock Von Bergen, George Souran, Individually, Plaintiff-Appellant, v. TRAVELERS INSURANCE COMPANY, Defendant-Appellee. George SOURAN, as Personal Representative of the Estate of Linda Rebstock Von Bergen, and George Souran, individually, Plaintiff-Appellant, R. Ronald Fraley, Peter J. Kelly, Richard M. Zabak, Daniel P. Mitchell, Appellants, v. TRAVELERS INSURANCE COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
George K. Rahdert, Alison M. Steele, Rahdert & Anderson, St. Petersburg, FL, for plaintiff-appellant.
Kirk M. Gibbons, Tampa, FL, Eliott R. Good, Chorpenning, Good & Mancuso Co. LPA, Columbus, OH, for defendant-appellee.
John A. DeVault, Jane A. Lester, Bedell, Dittmar, DeVault & Pillans, Jacksonville, FL, for Fraley, Kelly, Zabak.
Daniel P. Mitchell, Mitchell and Carter, P.A., Tampa, FL, for George Souran.
Glenn Waddell, Waddell and Ready, P.A., Auburndale, FL, for Daniel Mitchell.
Thomas M. Byrne, John H. Fleming, Sutherland, Asbill & Brennan, Atlanta, GA, for Travelers Ins. Co.
Appeals from the United States District Court for the Middle District of Florida.
Before TJOFLAT, Chief Judge, COX, Circuit Judge, and GODBOLD, Senior Circuit Judge.
These consolidated appeals present two related issues stemming from a truly novel set of facts. George Souran appeals the district court's entry of summary judgment dismissing his negligence action against The Travelers Insurance Company (Travelers), his deceased daughter's life insurance carrier. Souran and his lawyers also appeal the court's imposition of Fed.R.Civ.P. 11 sanctions against them. We find that the court improvidently granted both summary judgment and sanctions. Accordingly, we reverse the grant of summary judgment, reverse the imposition of sanctions, and remand the case for further proceedings.
On May 17, 1986, Linda Von Bergen (Mrs. Von Bergen) drowned off the coast of Puerto Rico while on a fishing trip aboard the Makaira Hunter with her husband Harry Von Bergen (Mr. Von Bergen), three other passengers, and a crew of two. Although the sea was calm and the weather clear, Mrs. Von Bergen and one of the other passengers, Mike Trial, disappeared overboard from their positions on the deck of the boat. Nearly a quarter of an hour passed before Mr. Von Bergen and the others noticed his wife's absence. Incredibly, the captain, unwilling to cut his fishing lines, refused to search for the missing passengers for yet another thirty minutes. About three hours after their disappearance, the Makaira Hunter located Mrs. Von Bergen and Trial in the water. Trial was treading water and clinging to Mrs. Von Bergen's naked, lifeless body. The day after Mrs. Von Bergen's death, Mr. Von Bergen's ex-wife Duanita Von Bergen (Duanita), with whom he had occasionally cohabited during his marriage to Mrs. Von Bergen, stayed with him in his hotel room in Puerto Rico.
Only four days before Mrs. Von Bergen's death, Mr. Von Bergen purchased a travel accident policy from Travelers. The four-day policy insured Mr. and Mrs. Von Bergen's lives during their vacation and fishing trip in Puerto Rico. The policy obligated Travelers to pay $150,000 for either Mr. or Mrs. Von Bergen's "accidental death," and $5,000 for either's "accidental medical expenses." 1
On May 23, 1986, the travel agent who had sold Mr. Von Bergen the Travelers insurance policy telephoned Travelers' Hartford, Connecticut office, informed Travelers that Mrs. Von Bergen had died during the covered period, and requested that claim forms be sent to Mr. Von Bergen. Shortly thereafter, James R. McGann, the assistant manager of Travelers' Life Claims Department in the Accidental Death Unit, sent Mr. Von Bergen a letter and claim forms, and requested that he provide copies of Mrs. Von Bergen's death certificate and any newspaper articles concerning her demise.
Over four months later, Harvey V. Delzer, an attorney representing Mr. Von Bergen in connection with this and other accidental death claims, wrote Travelers and enclosed Mr. Von Bergen's completed claim form and related documents. Delzer's letter requested that Travelers direct all correspondence and inquiries related to Mr. Von Bergen's claim to Delzer and inform him of any anticipated delay in processing the claim. Eleven days later, McGann, on behalf of Travelers, sent a check for $150,000 to Mr. Von Bergen at his home. McGann recorded the existence of Mr. Von Bergen's claim and Travelers' payment on an index card in the Accidental Death Unit's handwritten registration files. Neither the claim nor its payment were recorded in Travelers' computer system when it went on-line about a month later.
On April 3, 1987, William A. Narducci, an attorney representing George Souran, Mrs. Von Bergen's father, wrote Travelers and indicated that Souran and Mrs. Von Bergen's "other heirs" intended to assert their claim to the proceeds of the Travelers insurance policy. 2 Narducci sent the letter to the attention of the "Individual Claims Dept." of Travelers' Hartford, Connecticut office. The letter's caption referred to "Linda Von Bergen, deceased" and the correct Travelers policy number. Narducci's letter cryptically demanded that Travelers not disburse any proceeds from the policy until the issue of the "circumstances" surrounding Mrs. Von Bergen's death were resolved. Of course, Travelers had already disbursed the proceeds to Mr. Von Bergen over five months earlier.
Within Travelers, the Accidental Death and Medical Reimbursement units are located on the same floor in the same building. The units handle different types of reimbursement under policies like Mrs. Von Bergen's which provide both death and medical benefits. Not surprisingly, the Accidental Death Unit handles accidental death and dismemberment claims, and the Medical Reimbursement Unit handles medical reimbursement for other accidents, sicknesses, and the like.
Following Travelers' procedure, a mail-room employee opened and read Narducci's letter and then routed it to Traveler's Medical Reimbursement Unit. Once in that unit, the letter was routed to Kathleen Barsom, an assistant claims coordinator. Barsom received the letter because she was a supervisor and nonsupervisors do not handle attorney mail. Although Narducci's letter indicated that Mrs. Von Bergen was "deceased," referred to "the circumstances of [her] death" and to her "heirs," and inquired about "life insurance on [her] life," Barsom did not forward Narducci's letter to the Accidental Death Unit.
Upon receiving Narducci's letter, Barsom searched Travelers' computer files and found no record of prior claims or payments. Barsom neither searched the Accidental Death Unit's manual registration files nor consulted with anyone in that unit regarding Mrs. Von Bergen's policy. Barsom testified in her deposition that she thought Travelers' computer system went on-line in November 1986 and was not sure whether pre-November 1986 claims had been recorded in the system.
On April 24, 1987, unaware that Travelers had paid the proceeds of Mrs. Von Bergen's policy back in October 1986, Barsom sent claim forms to Narducci. Both Barsom and McGann testified that if Barsom had known that Travelers had previously paid a claim on the policy, someone at Travelers would have so notified Narducci. When Narducci did not return the claim forms, Barsom telephoned his office on May 20 and 21, 1987. Narducci did not return the calls. A few days later, Barsom sent Narducci a letter and a second set of claim forms. The letter referenced both Mrs. Von Bergen's policy number and the claim number that Travelers had assigned Souran's expected claim based on Narducci's April 3, 1987 letter. Barsom's letter briefly explained the type of coverage provided by Mrs. Von Bergen's policy, including both accidental death and medical expense reimbursement coverage. Around this time, another insurance company informed Travelers that several insurance companies intended to dispute their liability on their insurance policies because they suspected that Mr. Von Bergen murdered Mrs. Von Bergen.
Contemporaneous with the above, a parallel set of circumstances developed. Three days before her death, Mrs. Von Bergen had executed a new will naming Duanita and Mr. Von Bergen as her beneficiaries, even though Mrs. Von Bergen's father and two sisters were alive. On October 20, 1986, five months after his daughter drowned, Souran filed a petition to revoke probate of Mrs. Von Bergen's will in which he alleged that Duanita and Mr. Von Bergen arranged to have Mrs. Von Bergen murdered. Souran also filed a wrongful death action against Duanita and Mr. Von Bergen in which he alleged that they had conspired to procure Mrs. Von Bergen's death in order to collect over $5 million in life insurance proceeds.
On July 16, 1987, in settlement of Souran's wrongful death action, Duanita and Mr. Von Bergen assigned Souran all their rights to the insurance proceeds payable on Mrs. Von Bergen's policies. Although Travelers had already paid him $150,000, Mr. Von Bergen represented that he had received no insurance proceeds based on any of Mrs. Von Bergen's policies. Souran testified in his deposition that he did not know Travelers had already paid Mr. Von Bergen and, if he had known, he would not have agreed to the settlement without relieving Mr. Von Bergen of the proceeds.
On August 10, 1987, Souran's attorney, Peter J. Kelly of Shackleford, Farrior, Stallings & Evans of Tampa, Florida, sent the completed claim forms to Barsom, demanding that Travelers pay the proceeds of Mrs. Von Bergen's policy to Souran. Barsom referred Kelly's letter to McGann, who, on September 3, 1987, called Kelly and explained that Travelers had paid the policy proceeds to Mr. Von Bergen in October 1986. This...
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