Allgood v. Metropolitan Life Ins. Co.
| Decision Date | 18 March 2008 |
| Docket Number | Civil Action No. 2:07cv98-KS-MTP. |
| Parties | Brenda K. ALLGOOD, Plaintiffs, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Mississippi |
S. Wayne Easterling, Thomas Jack Riley, Riley & Reed Law Office, Hattiesburg, MS, for Plaintiffs.
Kenna L. Mansfield, Jr., Richard Gerald Norris, II, Wells, Marble & Hurst, Jackson, MS, for Defendant.
This cause is before the Court on the motion for summary judgment [# 21] filed by the Defendant. Because the clear and unambiguous terms of the insurance contract stated that the policy would cease on divorce, the former-spouse of the deceased is not entitled to benefits under the subject insurance policy. Because the Plaintiff has failed to raise any genuine issue of material fact, the motion for summary judgment should be granted.
This case centers on a mistaken belief about an insurance contract. After her exhusband died, the former spouse of the decedent made a claim on the insurance policy she carried on his life. Unknown to her, a contract provision caused the policy to lapse when she divorced him less than six months prior to his death. The former spouse has now brought suit against the insurer for benefits under the policy, alleging that she was unaware of the term and that it illegally violates her reasonable expectations as the insured.
In January 1993, Brenda Allgood purchased a life insurance policy offered as a benefit by her employer, Sears. At that time, Sears employees could purchase insurance from Metropolitan Life Insurance Company ("MetLife") for themselves and their families. Brenda purchased a policy on her life and a separate policy on the life of her husband, Charles Allgood, from MetLife. The effective date on both policies was January 1, 1997.
The policy Brenda purchased included a "termination of marriage" clause relevant to this action. The clause stated that "if your marriage to the covered Person ends while the covered person is still covered for an amount of term insurance ... coverage under this certificate will end." See Def.'s Ex. 4 at 2 (Feb. 14, 2008). There is no evidence that Ms. Allgood was ever given specific notice of this clause outside the context of the main policy document.
Ms. Allgood and her husband, Charles divorced on April 27, 2006. Ms. Allgood continued making quarterly payments to MetLife, and the company continued crediting those payments to her account. She never contacted MetLife to inform them about the divorce, and no MetLife representative spoke to her after the divorce to inquire about renewing the policy on her former spouse. The ex-spouses had an amicable relationship after divorce, residing near one another and sharing their parenting duties.
Charles Allgood died on October 16, 2006. Following his death, Brenda made a claim with MetLife on the policy she owned that insured Mr. Allgood's life. Upon receipt of his certificate of death, MetLife denied Ms. Allgood's claim based on the termination of marriage clause in the contract. Because the certificate of death revealed that Charles was divorced, MetLife refused to pay any benefits to Ms. Allgood.
Ms. Allgood filed suit against MetLife in the Circuit Court of Lamar County in May of 2007. After removal, MetLife moved for summary judgment on all of Brenda's claims. In response, Brenda has admitted that "the language of the certificate, if strictly applied, defeats her claim for benefits." See Pl's Res. Br. at 3 (Feb. 28, 2008). She instead argues that because the contract violated her "reasonable expectations" as a beneficiary of the policy, Mississippi law allows her to recover.
Summary judgment is warranted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). To support a motion for summary judgment, "the moving party ... [has] the burden of showing the absence of a genuine issue as to any material fact." Burleson v. Tex. Dept. of Criminal Justice, 393 F.3d 577, 589 (5th Cir.2004). Material facts are those that "could affect the outcome of the action." Weeks Marine, Inc. v. Fireman's Fund Ins. Co., 340 F.3d 233, 235 (5th Cir.2003) (internal citations omitted). Disputes about material facts are genuine "if the evidence is such that a reasonable jury could return a verdict for the non-moving party" on that issue. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
In evaluating a motion for summary judgment, the court views all evidence "in the light most favorable to the non-moving party" and "draw[s] all reasonable inferences in its favor." Breen v. Texas A & M Univ., 485 F.3d 325, 331 (5th Cir.2007). If the movant satisfies its initial burden, then the burden shifts back to the nonmoving party to produce evidence indicating that a genuine issue of material fact exists for each essential element of its case. Rivera v. Houston Indep. Sch. Dist, 349 F.3d 244, 246-47 (5th Cir.2003). The nonmovant is not entitled to merely rest on her pleadings, but must set forth "specific facts showing there is a genuine issue for trial." DIRECTV, Inc. v. Robson, 420 F.3d 532, 536 (5th Cir.2005). If the nonmovant responds and still "no reasonable juror could find for the nonmovant, summary judgment will be granted." Caboni v. General Motors Corp., 278 F.3d 448, 451 (5th Cir. 2002).
When an insurance contract is clear and unambiguous, the court is bound to construe it as written. Lowery v. Guaranty Bank & Trust Co., 592 So.2d 79, 82 (Miss. 1991). Insureds themselves have an affirmative duty to read the terms and conditions of their policies. Titan Indent. Co. v. City of Brandon, Miss., 27 F.Supp.2d 693, 697 (S.D.Miss.1997). An insured cannot avoid the terms of the contract "merely because [they] failed to read it." Oglesbee v. Nat'l Sec. Fire & Cas. Co., 788 F.Supp. 909, 913 (S.D.Miss.1992).
Ms. Allgood alleges MetLife's decision to enforce the termination of marriage clause and to deny her benefits violates her reasonable expectations as the insured. She argues that "the defendant had an obligation to advise its policy holders that (1) divorce would terminate policy benefits and (2) in that event, alternate coverage could be issued or otherwise obtained." See Pl's Res. Br. at 6 (Feb. 28, 2008).
Ms. Allgood cites three cases to argue that the language of the policy should not be strictly enforced. In Pitts, the Fifth Circuit upheld a trial court's ruling that an insured who had "a reasonable expectation of continued benefits" could retain coverage when an insurer tried to withdraw it. Pitts v. American Security Life Ins. Co., 931 F.2d 351, 356 (5th Cir.1991). But unlike this action, the Pitts case involved an insurer with knowledge that the insureds were not eligible for coverage, but continued accepting premiums before acting to deny their claim. Id. The appeals focused on "the unilateral action of the insurer in failing to raise at the outset a known defense to the claim" when it accepted premiums from, yet attempted to deny benefits for, the insured. Id. Because the insurer waived the right to cancel the policy when it knew the insured was ineligible, it could not cancel after the insured suffered a compensable injury. Id. at 357.
Although MetLife continued accepting premiums from Ms. Allgood, there is no evidence that the insurer knew that the couple had divorced. Because they were unaware of the divorce, MetLife could not know that the...
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