Cohen v. Companion Life Ins. Co., 891/16.

CourtUnited States State Supreme Court (New York)
Citation63 N.Y.S.3d 304 (Table)
Docket NumberNo. 891/16.,891/16.
Parties Jean COHEN, Plaintiff(s), v. COMPANION LIFE INSURANCE COMPANY and Mutual of Omaha, Defendant(s).
Decision Date13 June 2017

Hal Winter, Esq., Garden City, Attorney for Plaintiff.

Locke & Herbert, LLP, New York, Attorneys for Defendants.


The following papers were read on this motion: E File Docs Numbered MS 1, MS 2

Notice of Motion, Affidavits (Affirmations), Exhibits Annexed 21, 24

Answering Affidavit 24, 66

Reply Affidavit 66, 68

In this action to collect the proceeds of a life insurance policy both plaintiff and defendants move for summary judgment. Plaintiff, Jean Cohen, was the wife of insured Stanley H. Cohen and was the beneficiary of his life insurance policy issued by defendant Companion Life Insurance Policy (Companion). Stanley Cohen passed away on October 29, 2014 and on November 8, 2014, plaintiff made a claim for the death benefit. Plaintiff alleges that her claim was wrongfully denied because no notice of termination was sent to the insured and, thus, defendants did not properly cancel, terminate, or otherwise provide notice pursuant to New York Insurance Law § 3211. Defendants dispute plaintiff's contentions and assert that the policy in question was a term policy that ended in May 2014, at which point the term could have been extended but the premium would have increased some 800%. According to the defendants, a premium notice was sent to the insured on April 17, 2014, which met the statutory requirements of Insurance Law § 3211. In addition, defendants assert that on June 6, 2014, the insured called the company to notify it that he would not be extending the term of the policy at the higher premium rate.

The plaintiff does not contend or offer evidence to show that the May 2014 premium amount was paid. Thus, these motions raise two primary issues: (1) whether the insured was sent a premium notice on April 17, 2014 and whether that notice met the statutory requirements of New York Insurance Law § 3211 ; and (2) whether Companion can introduce evidence of the telephone call between the insured and a company representative despite the prohibition of New York's Dead Man Statute CPLR 4519.

It is well settled that a the proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law by providing sufficient evidence to demonstrate the absence of material issues of fact ( Sillman v. Twentieth Century Fox, 3 N.Y.2d 395 [1957] ; Alvarez v. Prospect Hospital, 68 N.Y.2d 320 [1986] ; Zuckerman v. City of New York, 49 N.Y.2d 557 [1980] ; Bhatti v. Roche, 140 A.D.2d 660 [2d Dept 1998] ). To obtain summary judgment, the moving party must establish its claim or defense by tendering sufficient evidentiary proof, in admissible form, sufficient to warrant the Court, as a matter of law, to direct judgment in the movant's favor ( Friends of Animals, Inc. v. Associated Fur Mfrs., Inc., 46 N.Y.2d 1065 [1979] ). Such evidence may include deposition transcripts, as well as other proof annexed to an attorney's affirmation ( CPLR § 3212[b] ; Olan v. Farrell Lines, 64 N.Y.2d 1092[1985] ).

If a sufficient prima facie showing is demonstrated, the burden then shifts to the non-moving party to come forward with competent evidence to demonstrate the existence of a material issue of fact, the existence of which necessarily precludes the granting of summary judgment and necessitates a trial ( Zuckerman v. City of New York, 49 N.Y.2d 557 [1980], supra ). It is incumbent upon the non-moving party to lay bare all of the facts which bear on the issues raised in the motion ( Mgrditchian v. Donato, 141 A.D.2d 513 [2d Dept 1998] ). Conclusory allegations are insufficient to defeat the application and the opposing party must provide more than a mere reiteration of those facts contained in the pleadings ( Toth v. Carver Street Associates, 191 A.D.2d 631 [2d Dept 1993] ). When considering a motion for summary judgment, the function of the court is not to resolve issues but rather to determine if any such material issues of fact exist ( Sillman v. Twentieth Century Fox, 3 N.Y.2d 395 [1957], supra).

(Recine v. Margolis, 24 Misc.3d 1244A; 901 N.Y.S.2d 902 [Sup.Ct. Nassau County 2009] ).

The life insurance policy at issue, dated May 15, 2004, stated both on its face and on page 3 that it was "term insurance annually renewable to age 80, current premiums are level for the first ten years and increase each year thereafter. Premiums may be adjusted after the tenth policy year, but will not exceed the guaranteed maximum premiums." (Companion Exh. G, at 1, 3). The policy further provided that the initial annual premium was $5,930.00, which was payable for 10 years and "after the tenth policy year premiums are subject to change annually but will never exceed the guaranteed maximum premium shown ... Companion will notify you before the beginning of the policy year if the premiums applicable to future policy years will differ from the current renewal premiums shown below." (Companion Exh. G, at 3). The policy indicated that as of May 15, 2014, under the prevailing premium schedule, the annual premium would increase to $55,430.00 and would increase annually thereafter. (Companion Exh. G, at 4). The method of premium payment selected by the insured was indicated as quarterly. Finally, the policy allowed for a grace period, stating that "we will allow a grace period of 31 days for the payment of each premium except the first. This policy will remain in force during the grace period .... if any premium is not paid by the end of the grace period, this policy will terminate as of the due date. You may reinstate this policy to a premium-paying basis by meeting the requirements of provision 13."

Companion contends that on April 17, 2014, prior to the end of the term, it sent a premium notice to the insured, which advised him that the policy would lapse if the premium was not paid prior to the expiration of the grace period. The notice that Companion submits on the motion is addressed to the insured, lists the policy number and states that the amount due on May 15, 2014 is $15,243.25 for a three-month period. In addition, the notice expressly states that "[u]nless each premium billed on this Notice is paid on or before the due date or within the grace period, each policy on which the premium is not paid will lapse and all payments thereon will become forfeit except as otherwise stated in the contract." (Companion Exh. K). As evidence of mailing of this notice, Companion provides that affidavits of Frank Thiesen, Pat Gottsch, James Murphy, Kevin Ziska, and Lawrence Morlan.

Frank Thiesen states that has been a Process Specialist in the Life Claims Department of defendant Mutual of Omaha Insurance Company (Mutual) since 2015, but has been employed with Mutual since 1983. Mr. Thiesen states that Mutual performs various underwriting, policy issuance, administrative, claims, and other "back office" functions for Companion, as well as for Mutual's other insurance company affiliates. Mr. Thiesen has responsibility for death claims of the Mutual affiliates, including Companion. Mr. Thiesen states that after receiving the claim for the insured's death benefit, he reviewed the file and determined that payment should be denied as the policy was not in force on the date of death because "[d]espite receiving a premium notice and a reminder notice from Companion," the insured failed to pay the premium due May 15, 2014.

Pat Gottsch states that he has been a Business Systems Analyst in the Business Service Department of defendant Mutual of Omaha Insurance Company ("Mutual") since February 1, 2010. Mr. Gottsch likewise states that Mutual performs various underwriting, policy issuance, administrative, claims and other "back office" functions for Companion, as well as for Mutual's other insurance company affiliates. Mr. Gottsch provides the following details regarding notices processed by Mutual.

According to Mr. Gottsch, at all relevant times Companion utilized Mutual's integrated computer systems for processing, producing and mailing notices to policy holders, including premium notices and reminder notices. The CAPSIL system batch processes and issues a billing schedule to generate a billing notice thirty days (with exceptions for weekends and holidays) before each policy's premium due date. The policies which are due to receive a billing notice are identified by the system and automatically placed in a billing file layout which includes, among other things, the policy number, name, last known address, premium amount and due date. The system utilizes the last known address of the policyholder and it appears on the company records. The billing file layout is then automatically transmitted to the IBM Integration Bus software/process which translates the billing file data into an XML format (formatted to fit the billing notice) and sends the translated data to the Order Integrator system to create a job. This process also creates a "Premium Billing Activity" report. The Order Integrator is a scheduling and organizing system which sends the job to the NearStar queue to print. The Order Integrator also sends the job to the FileNet system to place an electronic copy of the bill in the Web Folder, a digital policy file folder. The NearStar system prints the notice which contains (i) certain policyholder-specific information and (ii) generic information that does not vary by policyholder. Once this process is completed, the Order Integrator system automatically generates an email entitled "Production—Order Integrator Mail Confirmation" (O I Mail Confirmation) setting forth an Order code, a count of the notices, an OI Order number, an IDF Name and the date the job was completed.

Mr. Gottsch states that he is, and at all relevant times has been, the recipient of the OI Mail Confirmation emails. Mr. Gottsch attaches a copy of the OI Mail Confirmation dated April...

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