DeCoursey v. Am. Gen. Life Ins. Co.

• Decision Date: 17 May 2016
• Docket Number: Nos. 15–1927,15–1929.,s. 15–1927
• Citation: 822 F.3d 469
• Parties: Susan DeCOURSEY, Plaintiff–Appellant v. AMERICAN GENERAL LIFE INSURANCE COMPANY, Defendant–Appellee. Susan DeCoursey, Plaintiff–Appellee v. American General Life Insurance Company, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

822 F.3d 469

Susan DeCOURSEY, Plaintiff–Appellant

v.AMERICAN GENERAL LIFE INSURANCE COMPANY, Defendant–Appellee.

Susan DeCoursey, Plaintiff–Appellee

v.American General Life Insurance Company, Defendant–Appellant.

Nos. 15–1927

15–1929.

United States Court of Appeals, Eighth Circuit.

Submitted: March 17, 2016.

Filed: May 17, 2016.

Antwaun L. Smith, Smith Law Office, LLC, Kansas City, MO, argued, for appellant/cross-appellee Susan P. DeCoursey.

John Cowles Neiman, Jr., Maynard Cooper & Gale, P.C., Birmingham, AL, argued (Jeffrey M. Grantham, Janine McKinnon McAdory, on the brief), for appellee/cross-appellant American General Life Ins. Co.

Before WOLLMAN, ARNOLD, and SHEPHERD, Circuit Judges.

ARNOLD, Circuit Judge.

This case arises out of a dispute over a life insurance policy. When Susan DeCoursey sued American General Life Insurance Company (the company) for interest she claimed it owed her on a payout it made on a policy, the company counterclaimed, asking for its money back because it had paid DeCoursey by mistake and so DeCoursey was not entitled to the payout in the first place, let alone interest. After the district court granted the company summary judgment on DeCoursey's claims and granted her summary judgment on the company's counterclaim, both parties appealed.

In 1985, DeCoursey's husband purchased a $250,000 life insurance policy from the company's predecessor in interest. In August 1986, DeCoursey's husband and son died in a car accident. She submitted a claim on the policy, but her claim was denied because the policy had lapsed. DeCoursey took no further action. In June 2011, the company began an effort to determine if any life insurance beneficiaries had failed to notify it of an insured's death and were thus owed life insurance benefits. The company did so by reviewing Social Security Administration death records. The company may have undertaken this effort because of media and regulatory scrutiny of the life-insurance industry as well as pressure from states seeking to catalyze review of dormant policies in the hope that unclaimed payouts might eventually escheat to them.

As a result of the review, the company notified DeCoursey that she was entitled to benefits under the policy because the policy did not lapse until three months after her husband died, and so it paid her the policy's face value, $250,000, in January 2013. Unsatisfied, DeCoursey demanded that the company pay her 9% interest from the time it denied her claim in 1986. The company refused, maintaining that it owed her no interest because it had paid her the face value of the policy within 30 days after her renewed request for payment. See Mo.Code Regs. Ann. tit. 20, § 100–1.050(1)(H)

. The company's refusal prompted DeCoursey to file a complaint with the Missouri Department of Insurance (MODI). After it received a copy of the complaint, the company began investigating the policy more closely. Much of the information relating to the policy had been discarded, but the company discovered, after an exhaustive search of its records, that the policy had indeed lapsed nine days before DeCoursey's husband died.

The company then notified DeCoursey that it had erroneously paid her $250,000 because the policy had lapsed before her husband died, but it nonetheless offered to settle her claim by allowing her to keep the $250,000 along with an additional $25,000. DeCoursey declined the offer and instead filed an action in a Missouri state court that made numerous claims, including, as relevant here, ones for vexatious refusal to pay, unpaid statutory interest, breach of contract, and unjust enrichment. The company removed the case to federal court and counterclaimed for unjust enrichment.

The company then moved for summary judgment on DeCoursey's claims, asserting that DeCoursey had failed to bring suit within the limitations period. The district court agreed, holding that DeCoursey did not bring suit until after the ten-year limitations period had expired. The district court granted DeCoursey's motion for summary judgment on the company's counterclaim, holding that the company had voluntarily paid DeCoursey $250,000 because it “put forth no evidence to suggest that it did not have the opportunity to diligently investigate the Policy before it was paid out.”

We address DeCoursey's appeal first. She contends that her claims did not accrue until 2013 when she learned that the company's records indicated that the policy did not lapse until November 1986. The parties agree that Missouri law controls in this diversity case, see Midwestern Indem. Co. v. Brooks, 779 F.3d 540, 544–45 (8th Cir.2015)

, and that a ten-year limitations period applies. See Mo.Rev.Stat. § 516.110(1). Under Missouri law, a limitations period begins to run when a cause of action accrues, which is “when the damage resulting [from a wrong or the breach of contract or duty] is sustained and is capable of ascertainment.” Mo.Rev.Stat. § 516.100

. In other words, claims accrue “when the evidence was such to place a reasonably prudent person on notice of a potentially actionable injury,” and at this point the plaintiff is obliged to discover potential damages and to seek redress. Huffman v. Credit Union of Tex., 758 F.3d 963, 967–68 (8th Cir.2014). Importantly, “[d]amage is ascertainable when the fact of damage can be discovered or made known, not when the plaintiff actually discovers injury or wrongful conduct.” Id. at 967. We have recognized that Missouri courts applying these principles have routinely held that insurance-dispute claims accrue when the plaintiff receives notice that a claim was denied. See

Brown v. CRST Malone, Inc., 739 F.3d 384, 388 (8th Cir.2014).

DeCoursey fails to demonstrate how her claims can escape the general rule and accrue when she received notice of her claim's denial. Her argument that she did not learn of the allegedly wrongful basis for her claim's denial until 2013 makes no difference under Missouri law because accrual does not turn on when the plaintiff “discovers injury or wrongful conduct.” Huffman, 758 F.3d at 967

. In fact, the Missouri Supreme Court recently overturned the very decision of the Missouri Court of Appeals upon which DeCoursey relies for the proposition that the limitations statute begins to run when the wrongful conduct is discovered. See

Boland v. Saint Luke's Health Sys., Inc., 471 S.W.3d 703 (Mo.2015) (en banc). Since DeCoursey's claims accrued in 1986, the ten-year limitations period bars the claims she brought in 2013.

DeCoursey also maintains that, even if her claims accrued in 1986, the limitations period was tolled when the company paid her the policy's face value. Partial payment of a debt will generally toll a limitations period because it acknowledges the debt and carries an implied promise to pay the remaining balance. Heidbreder v. Tambke, 284 S.W.3d 740, 746–47 (Mo.Ct.App.2009)

. “Where nothing appears to show a contrary intention, the payment alone prevents the statute from barring the claim.” Id. at 747. Tolling also prevents a debtor from lulling a creditor into a limitations bar. Id. at 748.

Even if partial payment could restart, rather than merely toll, a limitations period, a proposition by no means obvious, see Corrales v. Murwood, Inc., 232 S.W.3d 609, 612 (Mo.Ct.App.2007)

, the company's repeated refusal to pay interest is completely inconsistent with an implied promise to pay the remainder of the alleged debt. DeCoursey admitted that the company explicitly refused to pay her interest even before it paid her the face value of the policy and continued to do so thereafter. And payment of the policy's face value did not lull DeCoursey into a limitations bar because the bar was in place years before the payment. The company's payment therefore did not toll or restart the limitations period.

DeCoursey further contends that a written acknowledgment of a promise to pay interest that a company employee executed tolled the limitations period. The acknowledgment at issue stemmed from a telephone conversation between representatives from the company and MODI: The company representative wrote in her notes from the call that she confirmed that the company would pay interest and that DeCoursey was entitled to the policy's face value.

But Missouri law provides that no acknowledgment of a debt or promise to pay a debt “shall be evidence of a new or continuing contract, whereby to take any case out of the [statute of limitations] or deprive any party of the benefit thereof, unless such acknowledgment or promise be made or contained by or in some writing subscribed by the party chargeable thereby.” Mo.Rev.Stat. § 516.320

. Whether an acknowledgment removes a contract from the statute of limitations is a question of law. Millington v. Masters, 96 S.W.3d 822, 831 (Mo.Ct.App.2002).

We reject DeCoursey's argument for two reasons. In the first place, the note was never delivered to her and Missouri courts have found a delivery requirement implicit in § 516.320

. See, e.g.,

id. at 831. Where the acknowledgment is not delivered to the creditor or prepared for her, it cannot toll the limitations period. Id. We disagree with DeCoursey's contention that the matter of delivery is merely a consideration in determining whether the acknowledgment contains a vague or uncertain promise. Missouri courts have regarded the question of delivery as distinct from the question of vagueness, see id., and anyway we cannot see how delivery of an acknowledgment can shed any light on its meaning. Here, the note was not given to DeCoursey or even to MODI, and it was not prepared for DeCoursey's benefit; therefore, under Missouri law, it cannot toll or restart the limitations period.

Missouri courts, moreover, have strictly construed § 516.320

's requirement that the acknowledgment be “subscribed by the party chargeable thereby.” To be “subscribed,” “the person must write his or her name underneath the writing in question,” and “[t]he text of the writing must be...