Brown v. Sav. Bank Life Ins. Co. of Mass.
| Citation | 93 Mass.App.Ct. 572,107 N.E.3d 1163 |
| Decision Date | 18 July 2018 |
| Docket Number | No. 16-P-1106.,16-P-1106. |
| Parties | Michelle BROWN v. SAVINGS BANK LIFE INSURANCE COMPANY of Massachusetts. |
| Court | Appeals Court of Massachusetts |
Anil Madan (Marc Redlich, Boston, also present) for the plaintiff.
Megan C. Deluhery, Boston (Edward Kelley Kimball, Woburn, also present) for the defendant.
Present: Trainor, Vuono, & Sullivan, JJ.
The plaintiff, Michelle Brown (Michelle), appeals from a judgment entered in favor of the defendant, Savings Bank Life Insurance Company of Massachusetts (SBLI or insurer), on the parties' cross motions for summary judgment. The plaintiff's claims brought against the insurer arose from the loss of life insurance coverage for her deceased husband, Daniel Brown (Daniel).1 On appeal Michelle2 concedes that her contract and contract-related claims were properly dismissed because they were time barred under the insurance policy, but maintains that the judge erred when he dismissed her tort and tort-related G. L. c. 93A claims on the merits. The insurer asserts that the judge's ruling was correct not only for the substantive reasons stated by the motion judge, but because all of Michelle's contract, tort, and statutory claims are barred by the limitations period in the policy requiring that claims "on or in respect to this policy" be filed no later than two years after her cause of action accrued. Michelle also appeals from the judge's order denying her motion to amend her complaint, and from the order denying her motion for partial summary judgment. We affirm in part and reverse in part.
Background. Viewed in the light most favorable to the plaintiff, see Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120, 571 N.E.2d 357 (1991), the material facts are as follows. Michelle and her husband, Daniel, purchased three life insurance policies from SBLI in 2001 and 2002. Daniel's policy, in the amount of one million dollars, named Michelle as the beneficiary.3 All three policies contained terms that stated the annual premium for the initial ten-year term would be a level premium. At the end of the ten-year term, the premium on each policy increased significantly. In Daniel's case, the premium increased from $440 to $5,340 annually.
Daniel's policy and one of Michelle's policies reached the end of the ten-year term on November 28, 2011. Before the end of the term, employees of the insurer called the Browns' home in Hopedale regarding the increase in the policy premium applicable to each policy. The insurer, as a matter of business practice, recorded telephone calls by way of a voice-call recording system. Transcripts of several calls were included in the summary judgment record, and the content of the recorded calls is undisputed.
On August 2, 2011, SBLI sales agent Terry Melville called and left a message at the Hopedale house stating Michelle testified to a similar telephone call from SBLI employee David Wood during August or September (the 2011 conversation), in which they discussed the options available under both spouses' policies, although this call was not recorded.4 According to Michelle, Wood recommended that both Michelle and Daniel purchase new policies. Melville made a third call on the date the policy term ended, November 28, 2011. In this call he left a message using substantially the same language, and made reference to both Michelle's and Daniel's policies.
In deposition testimony, Wood acknowledged that it was SBLI company policy to tell an insured to keep a policy in place until a new policy issues if the new policy is a replacement policy -- that is, a policy issued before the old policy lapses. In this situation, SBLI requires the agent5 to fill out a disclosure form approved by the Commissioner of Insurance. See generally G. L. c. 175, § 204 ; 211 Code Mass. Regs. §§ 34.00, et seq. (1995). Wood, who had been both a sales manager and a sales agent, said that it was "the practice of the sales division to make sure that everybody keeps their insurance in force while they are going through underwriting" because they could be refused, and He considered the failure to do so to be grounds for termination.6
Daniel did not pay any portion of the $5,340 premium as of November 28, 2011, nor did he apply for a new policy before the policy lapsed. The policy contained a thirty-day grace period, but this too passed without payment. On January 6, 2012, the insurer sent a notice of policy lapse to Daniel at the parties' home in Hopedale. The letter notified Daniel that he could seek to revive the policy by filling out an application for reinstatement of coverage and returning it with the overdue premium.
On January 11, 2012, Wood called the Brown home in Hopedale regarding the policies. At that juncture, Daniel and Michelle were separated (although not legally so) and Daniel had moved to their summer home in Sandwich. Wood spoke with Michelle and reiterated that the original policy premiums jumped dramatically and that is "why you didn't pay them," further stating: "I think when you saw the bill you probably said, ‘This is crazy.’ " When Michelle asked, "What are our options [for coverage] at this point?" Wood stated, "If you still need coverage you need to reapply for new contracts."
Michelle was concerned that Daniel's policy had already lapsed and she was "nervous that Dan is not covered at all at this point." Wood's response was that if she wanted to At no time during this conversation did Wood offer reinstatement of Daniel's policy as an option pending approval of the new policy. Although the policy provided for installment payments, Wood did not discuss with Michelle whether she could make an installment payment to maintain coverage while the new application was pending, or whether any portion of the premium (in whatever amount paid) could be refunded in the event that a new policy was issued.7
Michelle again expressed concern, telling Wood, "[L]ike I said I'm nervous that now we have nothing." In response, Wood explained the application process and stated that Daniel is "probably going to be without insurance probably for about [thirty] days." Michelle told Wood to send an application for a new one million dollar policy for Daniel.
The application called for a release of medical records, and contained several questions regarding medical status. Acting on Wood's instructions, Michelle told Daniel via electronic mail message (e-mail) about the application and an impending visit from a paramedic for a blood draw.8
Daniel complied with all requests for medical information. On March 14, 2012, Wood spoke directly to Daniel, requesting that he sign and send certain forms, and Daniel complied. Reinstatement pending approval of the new policy was not mentioned.
At Wood's deposition, he acknowledged that the "only way" he could earn a commission was if Daniel purchased a new policy. Wood would not have received a commission if Daniel had continued his old policy.
On May 2, 2012, SBLI notified Daniel that his application for a new term life insurance policy was denied. Although Wood had promised Michelle that all correspondence would be sent to her as well, the letter was addressed only to Daniel at the Sandwich address. As a result, Michelle was unaware of the denial until after Daniel died on June 6, 2012. Under the policy, Daniel was permitted to seek reinstatement of the policy for up to five years after the end of the grace period for the unpaid premium, but there was no right to reinstatement of the lapsed policy once Daniel had died.
On December 4, 2012, Michelle wrote to the insurer asking for a claim form for Daniel's death benefits, stating that she did not timely receive the notice denying Daniel's application for a term life insurance policy. The insurer responded on December 10, 2012, stating that Daniel's original policy had lapsed and no new policy had issued.
After an exchange of G. L. c. 93A demand letters and responses, the complaint in this action was filed on March 20, 2015, claiming: breach of contract for failure to automatically renew the original ten-year term life insurance policy (count I); deceit (count II); negligent supervision of employee Wood (count III); and breach of G. L. c. 93A (count IV). In its motion for summary judgment, the insurer argued that Michelle's complaint was time barred because it was brought more than two years after the policy at issue had lapsed and/or the application for a new policy had been denied. The argument was based in part on the following language in the policy.
In a memorandum of decision, the motion judge ruled that the contract claims were barred by the two-year statute of limitations contained in the policy, and that there was no deceit, negligence, or violation of the consumer protection statute as a matter of law. The judge also denied Michelle's motion to file an...
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