Barrett v. United Ins. Co. of Am.
| Decision Date | 03 June 2021 |
| Docket Number | CIVIL ACTION NO. 4:17-cv-00215 |
| Parties | MINERVA BARRETT, executrix of the estate of Chester Barrett, and on behalf of all others similarly situated, Plaintiff, v. UNITED INSURANCE COMPANY OF AMERICA, INC., Defendant. |
| Court | U.S. District Court — Southern District of Georgia |
This putative class action originates from a life insurance policy purchased from Defendant United Insurance Company of America, Inc. by Chester Barrett on December 18, 1984. (Doc. 29.) Plaintiff Minerva Barrett, the executrix of Mr. Barrett's estate, claims that United Insurance Company of America, Inc. ("United") used racially discriminatory practices in selling life insurance to Mr. Barrett and other African Americans in violation of 42 U.S.C. § 1981. (Id. at pp. 15-16.) Plaintiff also asserts state law claims for money had and received, fraudulent inducement, and negligent misrepresentation. (Id. at pp. 16-17, 19-20.) Presently before the Court is United's Motion for Summary Judgment. (Doc. 56.) In its Motion, United argues that Plaintiff cannot put forth sufficient evidence to create a genuine dispute of material fact for any of her claims. (Id. at pp. 6-11.) United also argues that Plaintiff's claims are barred by the applicable statutes of limitation. (Id. at pp. 11-13.) Also before the Court is Plaintiff's Motion for Class Certification. (Doc. 65.) Both Motions have been fully briefed. (Doc. 63; doc. 69; doc. 70; doc. 72.) For the following reasons, the Court GRANTS United's Motion for Summary Judgment, (doc. 56), and DENIES AS MOOT Plaintiff's Motion for Class Certification, (doc. 65).
United is an insurance company whose primary business is selling "relatively small fac[e] amount policies" to individuals, typically for the purpose of covering burial and end-of-life expenses. (Doc. 64, pp. 1-2.) United's insurance agents have historically collected premiums from policyholders in person, on a weekly or monthly basis. (Id. at p. 2.) In 2002, United settled a class action suit alleging that it discriminated against African Americans "by using rate scales that charged African American insureds higher insurance rates than similarly situated Caucasian insureds." (Doc. 57, p. 7; see also doc. 64, p. 6.) According to United's in-house counsel, who investigated the allegations in the 2002 class action, United "stopped selling policies with race-based rate scales and using race-based underwriting practices by the 1970s." (Doc. 57, p. 7.)
Chester Barrett purchased a whole life insurance policy from United in 1984. (Doc. 64, p. 3.) The face amount of the policy was $5,000 dollars and the policy required Mr. Barrett to pay a monthly premium of $36.35. (Doc. 29-2, pp. 4-5.) Although Plaintiff has provided no evidentiary support, Mr. Barrett allegedly paid United a total of roughly $14,649.05 under the policy prior to his death. (Doc. 29, p. 6; doc. 64, p. 7.) Notwithstanding the fact that the Amended Complaint alleges as much, Plaintiff has admitted during discovery that she does not know whether United gave Mr. Barrett any false or misleading information concerning the policy or whether United ever told him that his policy was a legitimate whole life policy. (Doc. 64, p. 8; doc. 57, pp. 139, 142.) Plaintiff also does not know whether United ever refused to provide Mr. Barrett with accurate information concerning the policy or concealed any facts about the policy from him. (Doc. 64, pp. 8-9; doc. 57, pp. 141-42.) In addition, neither party disputes that United stopped selling life insurance policies that used a different rate scale for African American customers and Caucasian customers "well before Mr. Barrett purchased his policy[.]" (Doc. 64, pp. 2-3.) Both parties also agree that United did not have "a policy or practice of marketing or underwriting life insurance policies based on the race of its customer[s]" at the time that Mr. Barrett purchased his policy. (Id.) Finally, there is no dispute that United paid the full $5,000 benefit of the policy after Mr. Barrett's death. (Id. at p. 7.)
Plaintiff submitted an affidavit of Dr. Robert Klein, who "is an Emeritus Professor in the Department of Risk Management and Insurance with Georgia State University and received a Ph.D. in Economics from the University of Michigan in 1986." (Doc. 63-1, p. 1.) In his affidavit, Dr. Klein states that "Mr. Barrett's policy was a type of industrial life insurance1 . . . policy that is heavily market[ed] to low-income [individuals], particularly African Americans, for the stated purposes of providing funds for their burial and other end-of-life expenses." (Id.) He also notes that, "[g]enerally, industrial life policies are directly linked to, and reliant upon[,] racial discrimination." (Id.) Dr. Klein also provided an expert report. (Doc. 65-1, pp. 23-64.) In that report, Dr. Klein provided a statistical analysis of the "Zip code data provided by United on the locations of the owners and insureds for the type of policy that it sold to Mr. Barrett."2 (Id. at p. 54.) The results of his analysis "indicate that United has significantly more policies in force (in relation to their populations) in high-minority Zip codes than in low-minority Zip codes." (Id. at pp. 58-59.) In addition, in his affidavit, he states that policies like the one purchased by Mr. Barrett are "typically high in premium costs relative to the actual benefit" and "[t]he marketing and sale of these policies seek to take unfair advantage of consumers who are 'unsophisticated' with respect to their understanding of what they are buying." (Doc. 63-1, pp. 1-2.) Finally, his affidavit posits that "United engaged in unfair practices in it marketing, sale, and administration of Mr. Barrett's policy." (Id. at p. 2.)
Mr. Barrett initially filed this putative class action in the State Court of Liberty County on September 20, 2017. (Doc. 1-1.) United then removed the case to this Court. (Doc. 1.) After removal, Mr. Barrett filed an Amended Complaint. (Doc. 29.) Mr. Barrett died on August 3, 2018, (doc. 29-1), and the Court substituted Plaintiff—the executrix of his estate—as the named plaintiff in the case, (doc. 33). United then filed a Motion to Dismiss. (Doc. 34.) The Court granted the Motion in part and denied it in part. (Doc. 38.) Specifically, the Court dismissed any of Plaintiff's claims that were "based solely on the fact that Mr. Barrett paid premiums to United that exceeded the amount of his life insurance policy." (Id. at p. 27.) United has now filed the at-issue Motion for Summary Judgment. (Doc. 56.) Plaintiff filed a Response, (doc. 63), and United filed a Reply, (doc. 69). Plaintiff also filed a Motion for Class Certification, (doc. 65), to which United has filed a Response, (doc. 70.) In her Reply in support of class certification, Plaintiff clarified that the "proposed class is for 'All African American persons in the State of Georgia who have purchased an Industrial life policy from United Life Insurance Company of America, Inc. [o]n which they were required to pay premiums in excess of the face value of the policy itself.'" (Doc. 72, p. 4.)
Summary judgment "shall" be granted if "the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is "material" if it "might affect the outcome of the suit under the governing law." FindWhat Inv'r Grp. v. FindWhat.com, 658 F.3d 1282, 1307 (11th Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A dispute is "genuine" if the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.
The moving party bears the burden of establishing that there is no genuine dispute as to any material fact and that it is entitled to judgment as a matter of law. See Williamson Oil Co. v. Philip Morris USA, 346 F.3d 1287, 1298 (11th Cir. 2003). Specifically, the moving party must identify the portions of the record which establish that there are no "genuine dispute[s] as to any material fact and the movant is entitled to judgment as a matter of law." Moton v. Cowart, 631 F.3d 1337, 1341 (11th Cir. 2011). When the nonmoving party would have the burden of proof at trial, the moving party may discharge his burden by showing that the record lacks evidence to support the nonmoving party's case or that the nonmoving party would be unable to prove his case at trial. See id. (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). If the moving party discharges this burden, the burden shifts to the nonmovant to go beyond the pleadings and present affirmative evidence to show that a genuine issue of fact does exist. Anderson, 477 U.S. at 257.
In determining whether a summary judgment motion should be granted, a court must view the record and all reasonable inferences that can be drawn from the record in a light most favorable to the nonmoving party. Peek-A-Boo Lounge of Bradenton, Inc. v. Manatee Cty., 630 F.3d 1346, 1353 (11th Cir. 2011) (citing Rodriguez v. Sec'y for Dep't of Corr., 508 F.3d 611, 616 (11th Cir. 2007)). However, "facts must be viewed in the light most favorable to the non-moving party only if there is a 'genuine' dispute as to those facts." Scott v. Harris, 550 U.S. 372, 380 (2007). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Id. (citation and emphasis omitted).
Plaintiff claims that United violated Section 1981 through its discriminatory practices in selling insurance to Chester Barrett and other African Americans. (Doc. 29, pp. 15-16.) She also brings state law claims for money had and received, fraudulent inducement, and negligent misrepresentation, which are all based on the same...
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