Duggan v. Massachusetts Mut. Life Ins. Co., Civ. A. No. 89-4032-S.

• Decision Date: 17 April 1990
• Docket Number: Civ. A. No. 89-4032-S.
• Parties: Joan H. DUGGAN, individually, as heir at law of John M. Duggan, and as executrix of the Estate of John M. Duggan, Plaintiff, v. MASSACHUSETTS MUTUAL LIFE INSURANCE CO., and Richard D. Rooney, Defendants.
• Court: U.S. District Court — District of Kansas

736 F. Supp. 1072

Joan H. DUGGAN, individually, as heir at law of John M. Duggan, and as executrix of the Estate of John M. Duggan, Plaintiff, v. MASSACHUSETTS MUTUAL LIFE INSURANCE CO., and Richard D. Rooney, Defendants.

Civ. A. No. 89-4032-S.

United States District Court, D. Kansas.

April 17, 1990.

Thomas E. Wright, Davis, Wright, Unrein, Hummer & McCallister, Topeka, Kan., for plaintiff.

Charles R. Hay, Goodell, Stratton, Edmonds & Palmer, Frank Eschmann, Ascough, Eschmann, Oyler, P.A., Topeka, Kan., for defendants.

MEMORANDUM AND ORDER

SAFFELS, District Judge.

This matter is before the court on plaintiff's motion for summary judgment against defendant Massachusetts Mutual Life Insurance Company (hereafter referred to as "Massachusetts Mutual"). Because plaintiff is not seeking summary judgment against defendant Richard D. Rooney, the court will consider plaintiff's motion as a motion for partial summary judgment under Rule 56 of the Federal Rules of Civil Procedure.

Defendant Massachusetts Mutual's Motion for Certification

In addition, Massachusetts Mutual has moved the court to certify to the Kansas Supreme Court the question of law presented in this case regarding the effect of a conditional receipt of insurance. Because the court finds that controlling precedent exists, defendant's request for certification will be denied. See Fretz v. Keltner, 109 F.R.D. 303, 305 (D.Kan.1985) (stating that use of the certification procedure provided by K.S.A. 60-3201 is discretionary with the court).

Plaintiff's Motion for Summary Judgment

With regard to plaintiff's motion for summary judgment against defendant Massachusetts Mutual, the general standard may be stated as follows. A moving party is entitled to summary judgment only when the evidence indicates that no genuine issue of material fact exists. Fed.R.Civ.P. 56(c); Maughan v. SW Servicing, Inc., 758 F.2d 1381, 1387 (10th Cir.1985). The requirement of a "genuine" issue of fact means that the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The moving party has the burden of showing the absence of a genuine issue of material fact. This burden "may be discharged by `showing' —that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). "A party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Id. The court must consider factual inferences tending to show triable issues in the light most favorable to the existence of those issues. The court must also consider the record in the light most favorable to the party opposing the motion. Bee v. Greaves, 744 F.2d 1387, 1396 (10th Cir. 1984), cert. denied, 469 U.S. 1214, 105 S.Ct. 1187, 84 L.Ed.2d 334 (1985).

STATEMENT OF FACTS

The court finds that the following facts are not genuinely disputed. In May 1988, John M. Duggan met with Richard D. Rooney, an agent of defendant Massachusetts Mutual Life Insurance Company, to discuss planning for his retirement and to purchase life insurance. Massachusetts Mutual is a life insurance company with its principal place of business in Springfield, Massachusetts. Rooney is a resident of Anapolis, Maryland. Part two (the medical portion) of the application for insurance with defendant Massachusetts Mutual was completed on September 14, 1988 by Barbara L. Simmer, L.P.N., at Topeka, Kansas. The application reports an examination by Dr. Howard Ward on September 6, 1988. John Duggan completed part one of the application on September 19, 1988. The application material was mailed by Rooney from Anapolis, Maryland to Duggan in Topeka, Kansas; upon completion in Topeka, Duggan mailed the application materials and check back to Rooney in Maryland.

On September 19, 1988, John Duggan and Richard Rooney executed a conditional receipt whereby Massachusetts Mutual acknowledged receipt of the first premium for the proposed policy from Duggan in the amount of $732.11. The conditional receipt indicates that it was signed at Topeka, Kansas. The conditional receipt issued to Duggan contained the following language, typewritten in boldface:

This receipt does not create any temporary or interim insurance. However, it does set the date when the insurance under the policy (or reinstatement) applied for will become effective if all required conditions are met. For example, that date could be the date this receipt is signed.

. . . . .

I have read this receipt and have received a signed copy of it. I understand that it states when the insurance (or reinsurance) applied for will become effective if all required conditions are met, but that it does not provide any temporary or interim insurance. I agree to the terms, conditions, and limits of this receipt.

On September 26, 1988, Rooney submitted the completed application to Massachusetts Mutual. On September 28, 1988, Massachusetts Mutual deposited the $732.11 check for the initial premium.

On October 27, 1988, Massachusetts Mutual conditionally issued the policy on the life of John Duggan. On October 28, 1988, Massachusetts Mutual sent a request for an attending physician statement to Dr. Howard Ward, Duggan's personal physician. The request was misaddressed and was not received by Dr. Ward. On October 31, 1988, the policy which had been conditionally issued on October 27, 1988 was mailed from Massachusetts Mutual to Rooney. On November 9, 1988, November 17, 1988, and November 21, 1988, Massachusetts Mutual sent attending physician statement requests to Dr. Howard Ward.

On November 30, 1988, John Duggan died. On December 1, 1988, Dr. Ward sent a copy of Duggan's medical records for the period of September 1988 until Duggan's death to Massachusetts Mutual. Upon review of the attending physician's statement, Massachusetts Mutual determined that Duggan was uninsurable. On December 28, 1988, Massachusetts Mutual informed plaintiff Joan Duggan that the policy would not issue and attempted to return the initial premium in the amount of $732.11.

DISCUSSION AND CONCLUSIONS OF LAW

As an initial matter, the court finds that defendant's argument that plaintiff has not pled a breach of contract claim is without merit, since a breach of contract claim clearly appears in plaintiff's amended complaint (¶ 26).

Defendant contends that the law of Massachusetts, not Kansas, should apply in this case. In determining which state's law applies in this situation, this court must look to Kansas choice of law rules. See Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 491, 61 S.Ct. 1020, 1020, 85 L.Ed. 1477 (1941). Under the traditional approach to choice of law still applied in Kansas, the law of the state where the contract is made controls its construction. St. Paul Surplus Lines Ins. Co. v. International Playtex, Inc., 245 Kan. 258, 269, 777 P.2d 1259, 1267 (1989), cert. denied, ___ U.S. ___, 110 S.Ct. 758, 107 L.Ed.2d 774 (1990). The contract is made where the last act necessary for contract formation is completed. Id. Defendant argues that the last act to be done in issuing the insurance policy in this case was the determination by the company that the proposed insured was an acceptable risk. Because this determination would have occurred in Massachusetts Mutual's home office in Springfield, Massachusetts, defendant argues that Massachusetts law should apply in determining the effect of the conditional receipt issued to Duggan.

The court, however, finds that plaintiff seeks to recover under a contract of temporary insurance which was made when a receipt was issued for the initial premium. The conditional receipt in this case was prepared by Massachusetts Mutual's agent, Richard Rooney, in Maryland and mailed to Kansas, where it was signed by the applicant, John Duggan, a Kansas resident. Duggan paid the initial premium by mailing a check from Kansas to the agent in Maryland. The receipt states that it was "signed at Topeka, Kansas." The court finds that the contract of temporary insurance at issue in this case was made in Kansas where the conditional receipt was signed and from which the initial premium payment was sent. Therefore, Kansas law applies. See Tripp v. Reliable Life Ins. Co., 210 Kan. 33, 499 P.2d 1155, 1156 (1972) (applying Kansas law although the defendant company had its home office in Missouri and the application was to be reviewed in Missouri); See v. United Ins. Co., 171 Kan. 146, 230 P.2d 1008, 1011 (1951) (finding that where the proposed insured fills out an application in Kansas and mails it and the premium to an out-of-state company and the company issues the policy, mailing it back to the Kansas resident, the insurance policy is made in Kansas). In addition, the...