Dun v. Transamerica Premier Life Ins. Co.

• Decision Date: 05 March 2020
• Docket Number: Civil Action No. 19-40 (JEB)
• Citation: 442 F.Supp.3d 229
• Parties: William DUN, et al., Plaintiffs, v. TRANSAMERICA PREMIER LIFE INSURANCE COMPANY, et al., Defendants.
• Court: U.S. District Court — District of Columbia

442 F.Supp.3d 229

William DUN, et al., Plaintiffs,

v.TRANSAMERICA PREMIER LIFE INSURANCE COMPANY, et al., Defendants.

Civil Action No. 19-40 (JEB)

United States District Court, District of Columbia.

Signed March 5, 2020

Daniel Buckley, Pro Hac Vice, Buckley Law Office, Bozeman, MT, Lawrence A. Anderson, Pro Hac Vice, Lawrence A. Anderson, Attorney at Law, P.C., Great Falls, MT, Micah Salb, Lippman Semsker & Salb, LLC, Bethesda, MD, for Plaintiffs.

Markham R. Leventhal, Pro Hac Vice, Scott Michael Abeles, Carlton Fields Jorden Burt, P.A., Washington, DC, Carlton Fields Jorden Burt, P.A., Miami, FL, for Defendants.

MEMORANDUM OPINION

JAMES E. BOASBERG, United States District Judge

In March 2013, Irmadell Dun, a 79-year-old resident of Bozeman, Montana, tripped on the sidewalk, struck her head, and died within a week from ensuing complications. This case asks whether Dun's five adult children — Plaintiffs William Dun, Irene Dun, Sheryl Dun, Pat Ruggieri, and Dora Mengel — can recover accidental-death benefits from Defendant Transamerica Premier Life Insurance Company, which issued a group insurance policy here in the District of Columbia. Transamerica denied their claim, explaining that Dun's insurance only covered deaths resulting from a motor-vehicle or common-carrier accident, as opposed to any other sort of mishap. In their suit, Plaintiffs not only challenge Transamerica's interpretation of the policy, but they also allege that Defendants Financial Planning Services, Inc. (FPS) and Aegon Direct Marketing Services, Inc. (ADMS), Trustee and Administrator respectively of a trust established to maintain insurance policies including Dun's, breached various trust laws and fiduciary duties owed to Plaintiffs.

Following Plaintiffs' twice amending their Complaint and the case's transfer from the District of Montana, both parties have filed Cross-Motions for Summary Judgment on all claims asserted therein. While the parties' submissions are mired in the weeds of standing doctrine and the law of trusts, these discussions miss the forest for the trees. The case remains, at its core, a straightforward dispute over contract interpretation. Because the Court finds that the deceased's insurance policy did not cover the accident in question, it will grant Defendants' Motion and deny Plaintiffs'.

I. Background

A. Factual Background

At the summary-judgment stage, given the Court's ruling, it would typically set out the facts in the light most favorable to Plaintiffs, but that is not necessary here, as the parties generally agree on what happened. See Talavera v. Shah, 638 F.3d 303, 308 (D.C. Cir. 2011). In 2001, Peoples Benefit Life Insurance Company (a predecessor of Defendant Transamerica) developed an accidental-death group insurance policy geared toward the elderly. See ECF No. 97-2 (Def. Statement of Material Facts), ¶¶ 1, 6; see also ECF No. 28 (Second Amended Complaint), ¶ 49 (same). The District of Columbia supplied the requisite regulatory approval of that group policy. Peoples Benefit then issued the approved policy to Defendant FPS in its capacity as Trustee of the Peoples Benefit Group Insurance Trust (now known as Monumental Group Insurance Trust and hereinafter labeled simply "the Trust"). See ECF No. 97 (Def. MSJ), Exh. A (Declaration of Douglas Simino).

First established in 1982, the Trust reduced both administrative and regulatory burdens on the insurer, Peoples Benefit. As to the former, it provided a mechanism by which insurance plans could be administered on a group, rather than on an individual, basis. Id., ¶ 7. This collective administration of insurance policies decreases operating costs by allowing insurers to use group underwriting and impose consistent premium rates and terms of insurance certificates sold across multiple states. Id.; see also Simino Decl., Exh. 3 (Agreement and Declaration of Trust) at 1 ("[T]he Trustors desire to establish the said group insurance plans collectively, rather than individually, so as to minimize the costs of operation."). As to regulatory issues, while neither side offers a complete description, it appears that the Trust provided a mechanism whereby Peoples Benefit could issue a single "master policy," hold that policy in trust in one state, and then supply individual insurance certificates across all fifty states "without dealing with fifty different regulators." ECF No. 90 (Feb. 14, 2019, Hearing Transcript) at 12. Defendant ADMS is the current Administrator of the Trust, which is declared under the laws of, and has its principal place of business in, Washington, D.C. See Def. SMF, ¶ 48; Agreement and Declaration of Trust at 1, 11.

After issuing the group policy to FPS, Transamerica's predecessor began marketing individual insurance certificates, primarily via "direct mail" solicitations. These materials were sent to prospective customers in a variety of states, including Montana. See Def. SMF, ¶ 6. Irmadell Dun, a resident of Bozeman, received one such solicitation — referred to by both parties as the "Flyer" — most likely in late 2003. Id., ¶¶ 6, 11. The Flyer consisted of a double-sided piece of paper with a description of the coverage provided by the policy. Id., ¶ 7. It began with the following pitch:

Motor vehicle deaths are on the rise.... And the older driver is 2 times more likely to be the one who gets hit. That's why I want you to know about our "Ride and Drive" Accidental Death Insurance Coverage.

It covers you every time you get into your car with $100,000 of protection for just $4.33 monthly.

Def. MSJ, Exh. B (Declaration of Mary E. Pieschel), Exh. 3 (Flyer) at 1. At the bottom of this first page lay a "tear-off" Enrollment Form that could be used by customers to purchase an insurance certificate. Prospective customers such as Dun were instructed to "Sign Below" on the Enrollment Form to "authorize your new coverage." Id. The words "Yes, I want $100,000 of this Accidental Death coverage" were displayed directly below the signature line on the Enrollment Form. Id.

The Flyer continued on the other side of the page with further information about the insurance. The first section, labeled "[e]veryday travel accident benefits you need now more than ever," declared:

As motor vehicle deaths continue to rise, this protection covers the very real risks you take every time you get into a car.... This ‘Ride and Drive’ accidental death coverage pays $100,00.00 benefits if you die from a covered injury as a result of: 1) driving a car ...; 2) riding in a car or as a fare-paying passenger in a common carrier ...; 3) being struck by any motor vehicle as a pedestrian.

Flyer at 2. This side of the Flyer also outlined "Exclusions" from the policy such as "death caused by ... intentionally self-inflicted injury[,] ... the insured having a blood alcohol of .10% [or higher,] ... any sickness[,] ... [and] participating in any race or speed contest involving motor vehicles of any type." Id.

Dun, then 70 and a bookkeeper by trade, signed the Enrollment Form on November 7, 2003. See Peischel Decl., Exh. 2 (Enrollment Form); Def. MSJ, Exh. H (Deposition of Sheryl Dun) at 24. Once Peoples Benefit received a signed Enrollment Form, it issued applicants the Insurance Certificate, which set forth the specific terms of coverage and provides the operative insurance contract here. See Pieschel Decl., Exh. 1 (Certificate). The Certificate provided insureds with 30 days to examine it, and if the insured was "not satisfied with his Certificate, he [could] return it" and be refunded any paid premiums. Id. at 1. The Certificate was labeled "Group Accidental Death Insurance Certificate," and it explained that the policy "pays benefits for death due to an accident." Id. The Certificate continued:

PART III: ACCIDENTAL DEATH BENEFIT

We pay a benefit if an Insured dies as the result of an Injury that occurs from one of the Accident Hazards described below. The Accidental Death Benefit is shown on your Certificate Schedule. Death must occur within 90 days (180 days if this Certificate is issued in New Mexico) of the accident causing the Injury.

Motor Vehicle Hazard: This Hazard occurs if an Insured dies as a result of being Injured:

a. while riding in or driving a Private Passenger Automobile;

b. if struck, as a pedestrian, by a Private Passenger Automobile or any other Land Motor Vehicle; or

c. while driving for hire a Land Motor Vehicle.

Common Carrier Hazard: This Hazard occurs if an Insured dies as a result of being Injured while:

a. riding as a fare paying passenger on a Common Carrier; or

b. getting on or off a Common Carrier.

Id. at 3.

After enrolling in November 2003, Dun dutifully paid the $4.33 per month she owed under the policy for nearly a decade, remitting almost $500 in total over the remainder of her life. See Def. SMF, ¶ 19; SAC, ¶ 79. During that period, Monumental Life Insurance (formerly Peoples Benefit) sent her a letter dated August 2011 confirming her enrollment in "Motor Vehicle and Common Carrier Accidental Death Benefit Coverage." Def. MSJ, Exh. 7 (Monumental Statement of Insurance Coverage) at 2. On March 8, 2013, Dun tripped and struck her head, dying several days later. See SAC, ¶ 80.

Following her death, Plaintiffs — Dun's five children — filed a claim for $100,000 with Monumental Life (now Defendant Transamerica) under the Certificate. Defendant denied the claim on the ground that Dun's death was not the result of an accident involving a "motor vehicle" or "common carrier" and therefore was "not covered" by the Certificate. See Def. MSJ, Exh. F (Claim Letter from Monumental Life).

B. Procedural History

On December 11, 2015, Plaintiffs filed suit against Defendant Transamerica Premier in Montana state court alleging that it had improperly denied their insurance claim. Transamerica removed the case to federal court in Montana on diversity-jurisdiction grounds. See 28 U.S.C. § 1332. The parties proceeded to discovery, which revealed that the Insurance Certificate at issue had been sold to...