Estate of Mintz v. Conn. Gen. Life Ins.

• Decision Date: 25 March 2009
• Docket Number: No. 49S05-0805-CV-214.,49S05-0805-CV-214.
• Citation: 905 N.E.2d 994
• Parties: ESTATE OF Jerome MINTZ, Appellant (Plaintiff below), v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY and Wayne E. Gruber, Appellees (Defendants below).
• Court: Indiana Supreme Court

905 N.E.2d 994

ESTATE OF Jerome MINTZ, Appellant (Plaintiff below), v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY and Wayne E. Gruber, Appellees (Defendants below).

No. 49S05-0805-CV-214.

Supreme Court of Indiana.

March 25, 2009.

Peter S. French, Sara R. Bradbury, Lewis & Kappes, P.C., Indianapolis, IN, Attorneys for Appellant.

Renée J. Mortimer, Scott B. Cockrum, Hinshaw & Culbertson LLP, Schererville, IN, Attorneys for Appellee, Connecticut General Life Insurance Company.

Michael E. Bown, Erick D. Johnson, Kightlinger & Gray, Indianapolis, IN, Attorneys for Appellee, Wayne E. Gruber.

On Petition To Transfer from the Indiana Court of Appeals, No. 49A05-0609-CV-532

RUCKER, Justice.

The Estate of Mintz appeals the trial court's grant of summary judgment in favor of Connecticut General Life Insurance Company and Agent Wayne Gruber. We affirm in part and reverse in part the judgment of the trial court.

Facts and Procedural History

By March 1995, then sixty-four-year-old Dr. Jerome Mintz had been a professor at Indiana University for over thirty years. As part of his employment benefits, Mintz received full basic and supplemental life insurance coverage under a group plan with Connecticut General Life Insurance Company. This coverage included two policies: a basic term policy with a death benefit of $50,000—premiums paid by the University—and a supplemental term policy with a death benefit of $128,000—premiums paid by Mintz. The University's benefit program provided that unless Mintz converted the group coverage into individual policies, coverage under the policies would be reduced upon Mintz turning age sixty-five on March 29, 1995, and again upon his retirement on June 1, 1995. To convert the policies, Mintz was required to complete an application for a conversion and submit a premium payment when each scheduled reduction was to occur.

On March 22, 1995, the University sent Mintz a letter advising him that his total life insurance coverage would be reduced from $178,000 to $115,700 on his sixty-fifth birthday unless he exercised a conversion option. The letter also instructed Mintz to contact Wayne Gruber with any questions regarding the conversion. Gruber was a servicing agent for the University. Although not an employee of the University, Gruber was "on call" year round to handle questions from University employees and would work with them to convert the Connecticut General life insurance policy or to purchase a policy from a different company.

Mintz and his wife Betty telephoned Gruber to make arrangements to convert the group coverage into individual policies. They informed Gruber that Mintz was terminally ill with lung disease and leukemia and wanted to convert the entire value of the group coverage to individual policies. According to Mrs. Mintz, Gruber responded, "Absolutely. Just leave it to me. I will do everything." App. at 609. When Mrs. Mintz inquired whether there was any downside to what they were doing or anything more Gruber would advise them to do, Gruber responded that he thought they were doing the right thing and that he would "take care of everything." App. at 374-75.

On March 28, 1995, Gruber sent Mintz a letter advising him that on April 29, 1995, his insurance benefits would be reduced from $178,000 to $115,700 and Mintz's premium to replace the $62,300 loss would be $1,160.75. The letter also advised:

Then, upon your retirement at the end of this spring semester, your group plan further reduces to $6,000, which remains for the rest of your life. This last reduction represents an additional loss of $109,700. Your personal-pay, quarterly premium to replace this amount is $2,013.63.

App. at 230. In April 1995 Gruber mailed Mintz a "Conversion Application." Gruber had completed much of the document including the coverage amount of $62,300. Mistakenly believing this application would convert the entire value of his group coverage to individual policies, Mintz signed the application and returned it with a premium payment of $1,160.75.

Because Gruber had misquoted the premium amount, Connecticut General soon thereafter notified Mintz by letter that his check was insufficient and instructed him to submit full payment of $1,204.55 within three weeks. On receiving the letter Mrs. Mintz telephoned Gruber. She later testified as follows:

Q. [Counsel] Did you talk to Mr. Gruber again, after receiving this letter?

A. [Mrs. Mintz] Immediately. They didn't say anything in the letter about why my check was insufficient or how it happened, so I called [Gruber] and I told him how upset I was, and I was worried about something going wrong with these policies, and that something bad could have happened if I hadn't caught that letter. Excuse me. I spoke to CIGNA first ... to Stacy Lambert, I think, first.

Q. [Counsel] And thereafter, you contacted [Gruber]?

A. [Mrs. Mintz] Yeah—because she told me that it was because of a mistake [Gruber] made.

Q. [Counsel] And so you called [Gruber] and ...

A. [Mrs. Mintz] Then I called him and told him I was upset, and he said yes, he knew that the amount was insufficient, that he had made a mistake on the premium. I thought it was kind of strange that he didn't call it to my attention so at least I'd be on the alert for all this. But he hadn't called me. And I said `Well, is everything all right with our work with Connecticut General, because this gives me a feeling that something bad is going to happen' and he said `No, no. You're fine. Just send the letter back ... the check back ... everything's fine.' And we talked about it quite a bit, I got a lot of reassurance from him that he was doing everything as we had originally agreed, that it was all going to be fine. `Just calm down, let it go, and send it back.'

App. at 618-19.

On June 1, 1995, Mintz retired from Indiana University. Thereafter the University sent him a letter dated June 15, 1995, referring to the second policy reduction. In relevant part the letter advised that Mintz could "purchase replacement insurance for the amount being terminated" within 31 days and that he should contact Gruber if he wished to exercise the second conversion option. App. at 684. However, thinking "everything" had been "take[n] care of," Mintz did not contact Gruber and took no further action.

In February 1996, Mrs. Mintz discovered that the entire value of the group coverage had not been converted into individual policies; but rather, only coverage worth $62,300 had been converted. The Mintzes contacted Gruber and both Gruber and the Mintzes contacted Connecticut General and requested the company to consider the circumstances and make an exception that would allow the Mintzes to submit a second conversion application even though the time limit for doing so had passed. After conducting an investigation, Connecticut General denied the request.

On April 21, 1997, Mintz filed a complaint against Gruber and Connecticut General alleging negligence, breach of contract, and intentional infliction of emotional distress. Mintz further alleged that Connecticut General was vicariously liable for Gruber's negligence. And Mintz sought punitive damages for bad faith. A few months later Mintz passed away and the Estate was substituted as plaintiff.¹ On Connecticut General's motion the trial court granted partial summary judgment in its favor on the breach of contract claim. During the jury trial that followed, the trial court granted judgment on the evidence in favor of Gruber on the bad faith claim, and in favor of Gruber and Connecticut General on the intentional infliction of emotional distress claim. The jury returned a verdict in favor of Gruber and Connecticut General on the remaining claims, namely, the negligence claim against Gruber and the negligence, bad faith, and vicarious liability claims against Connecticut General.

The Estate appealed challenging: (i) the partial summary judgment granted in Connecticut General's favor, (ii) three jury instructions, and (iii) the exclusion of a settlement offer. In an unpublished memorandum decision, the Court of Appeals affirmed the summary judgment, exclusion of the settlement offer, and two of the jury instructions. However the court reversed and remanded the cause based on an erroneous jury instruction involving the determination of negligence. Estate of Mintz v. Conn. Gen. Life Ins. Co., No. 49A05-0402-CV-91, 830 N.E.2d 1035 (Ind.Ct.App., June 6, 2005), trans. not sought ("Mintz I"). On remand, Gruber and Connecticut General filed motions for summary judgment on all the remaining claims. Based on the parties' Rule 56 submissions and the memorandum decision in Mintz I, the trial court granted both motions. The Estate again appealed. In an unpublished memorandum decision, a divided panel of the Court of Appeals affirmed the trial court's judgment. Estate of Mintz v. Conn. Gen. Life Ins. Co., No. 49A05-0609-CV-532, 877 N.E.2d 228 (Ind.Ct.App. Nov. 29, 2007) ("Mintz II"). Having previously granted transfer, we now affirm in part and reverse in part the judgment of the trial court.

Standard of Review

A party is entitled to summary judgment if no material facts are in dispute and as the facts stand, under the law, the party is entitled to a judgment in its favor. Ind. Trial Rule 56(C) ("The judgment sought shall be rendered forthwith if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law"). When reviewing the propriety of a ruling on a motion for summary judgment, this Court applies the same standard as the trial court. Atl. Coast Airlines v. Cook, 857 N.E.2d 989, 994 (Ind.2006). Review is limited to those materials designated to the trial court. Id. The Court accepts as true those facts alleged by the nonmoving party, construes the evidence in favor of the nonmoving party, and resolves all doubts against the moving party. Id. at 994-95. Summary judgment is...