DeArman v. Liberty Nat. Life Ins. Co.
| Decision Date | 22 November 2000 |
| Citation | 786 So.2d 1090 |
| Parties | Harry DeARMAN and Cherry DeArman v. LIBERTY NATIONAL LIFE INSURANCE COMPANY and Johnny Dollar. |
| Court | Alabama Supreme Court |
Nat Bryan and Dennis E. Golasich, Jr., of Marsh, Rickard & Bryan, P.C., Birmingham, for appellants.
Charles D. Stewart and W. Gregory Smith of Spain & Gillon, L.L.C., Birmingham, for appellee Liberty National Life Insurance Company.
J. Fred Wood, Jr., and Christopher A. Bottcher of Dominick, Fletcher, Yeilding, Wood & Lloyd, P.A., Birmingham, for appellee Johnny Dollar.
The plaintiffs Harry DeArman and his wife Cherry DeArman appeal from a summary judgment entered in favor of the defendants Liberty National Life Insurance Company ("Liberty National") and its agent David B. "Johnny" Dollar. We reverse and remand.
In 1972, the DeArmans purchased a joint whole-life insurance policy from Liberty National. In the fall of 1984, the DeArmans agreed to meet with Dollar, an agent of Liberty National, to discuss the purchase of additional life insurance. Dollar represented the LifePlus policy as an "interest-sensitive" whole-life policy. To better explain the policy features, Dollar used a "LifePlus Summary Sheet" that stated the projected value of the DeArmans' whole-life policy as compared with the projected value of a Liberty National LifePlus policy over a specified period of time. The summary sheet proposed that, when Mr. DeArman reached age 65, the projected cash value of a LifePlus policy would be $52,807.83, as compared with a projected cash value of $2,830.24 for the joint whole-life policy the DeArmans had at that time. The LifePlus Summary Sheet, included in the record, stated that one of the "special features" of the policy was that it would "BE TOTALLY PAID UP IN ONLY 12 YEARS AT THE CURRENT INTEREST RATE." (Capitalization original.) This quoted phrase was not underlined by Dollar or by Liberty National, but Mrs. DeArman underlined the phrase "BE TOTALLY PAID UP IN ONLY 12," and she wrote on the summary sheet a note stating that the policy "[would] be paid up October 2, 1996."
Mr. DeArman applied for a $30,000 Life-Plus policy on October 3, 1984. Additionally, he signed a supplementary application for exchange, permitting Liberty National to use and exchange the available cash values of the DeArmans' existing joint policy to purchase a $3,343 "Single Premium Whole Life Rider" to the LifePlus policy.
Liberty National issued the LifePlus policy, effective January 1, 1985. The policy contained language advising the DeArmans to read the policy carefully. It notified the DeArmans that they had the right to cancel the policy within 10 days for a full refund of any premiums, and it stated that the cash values of the LifePlus policy "accumulate based on declared interest and risk rates, subject to guarantees."1 The DeArmans testified in their depositions that they did not review or read the LifePlus policy or documents until 1995.
The DeArmans had no further contact with Dollar regarding the LifePlus policy until 1995. That year, the DeArmans agreed to meet with a representative of Prime America, another insurance company. The agent from Prime America reviewed the LifePlus policy and summary sheet and told the DeArmans that the LifePlus policy would never attain the value projected on the summary sheet and that Mr. DeArman would have to pay premiums for the rest of his life. Following this meeting, Mr. DeArman telephoned Dollar. Dollar advised him that the Life-Plus policy had a current cash value of approximately $4,400 and that the LifePlus policy had not performed as well as projected because (1) the DeArmans had taken out a loan and had cashed in the single-premium-whole-life rider to the LifePlus policy, and had thereby substantially decreased the amount of money earning interest, and (2) the interest rate applicable to the DeArmans' policy had decreased steadily since 1984, when the DeArmans had purchased the LifePlus policy.
The DeArmans sued on January 17, 1996. They alleged that Dollar was an agent of Liberty National and that Dollar and Liberty National had misrepresented, failed to disclose, and fraudulently suppressed material facts surrounding their purchase of the LifePlus policy.2 Both Dollar and Liberty National denied all allegations, and both moved for a summary judgment. Following the submission of briefs, supporting evidence, and oral arguments, the trial court entered a summary judgment in favor of Dollar and Liberty National on August 3, 1999. The DeArmans appealed from that summary judgment.
Although this case arises from the trial court's entry of a summary judgment, we conclude, after reviewing the facts and the relevant caselaw, that no justiciable controversy had arisen at the time the DeArmans filed their complaint. Therefore, the trial court was without jurisdiction to issue its judgment. See Stringfellow v. State Farm Life Ins. Co., 743 So.2d 439 (Ala.1999).
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