European Pensions Mgmt. Ltd. v. Columbus Life Ins. Co.
| Decision Date | 11 October 2017 |
| Docket Number | Case No. 1:16-cv-542 |
| Parties | European Pensions Management Limited, Plaintiff, v. Columbus Life Insurance Company, Defendant. |
| Court | U.S. District Court — Southern District of Ohio |
This matter is before the Court on Defendant's Motion for Summary Judgment (Doc. 25), Motion to Exclude the Report and Testimony of Richard Mintzer (Doc. 28), and Motion to Strike the Errata Sheet (Doc. 29). Plaintiff European Pensions Management Limited ("EPM"), the owner of a lapsed life insurance policy originally issued to Harry Harrison, a now-deceased third-party, filed suit for breach of contract and bad faith against Defendant Columbus Life Insurance Company ("Columbus Life"), the issuer of the lapsed life insurance policy. EPM has abandoned its claim that Columbus Life wrongfully terminated the insurance policy for late payment, but it alleges that Columbus Life wrongfully refused to reinstate the insurance policy despite Harrison's failing health.
In the latter two motions, Columbus Life seeks to exclude the Expert Report and testimony of Richard Mintzer, EPM's purported expert witness, and to strike the errata sheet proffered by EPM for the deposition of Francis Moore, EPM's Federal Rule of Civil Procedure 30(b)(6) witness. The Court will GRANT both motions for the reasons that follow. Likewise, the Court will GRANT summary judgment to Columbus Life because it was not obligated to reinstate the policy.
The factual history is derived from Columbus Life's Statement of Proposed Undisputed Facts (Doc. 25-1) and EPM's Response thereto (Doc. 27 at PageID 972-1021), plus EPM's Proposed Disputed Issues of Fact (Doc. 27 at PageID 1022-28) and Columbus Life's Responses thereto (Doc. 30-3), unless specifically noted otherwise. Pursuant to the Court's Standing Order, proposed factual statements properly supported with record evidence and not specifically denied by the opposing party are deemed admitted.
Columbus Life issued a Flexible Premium Universal Life Insurance Policy No. CM5015628U ("the Policy") to Harry Harrison, the insured and original owner of the Policy, effective February 2, 2005. (Doc. 24-1 at PageID 568.) The Policy provided a $1,000,000 benefit upon the death of Harrison. (Id.) It listed a planned premium of $44,251 annually and a five-year no-lapse guarantee minimum monthly premium of $2,793. (Id.) Harrison was age 76 at the inception of the Policy. (Id.) Columbus Life knew when it issued the Policy that Harrison had a pacemaker inserted in July 2000 and had been diagnosed with mild chronic obstructive pulmonary disease. (Wolf Dec. at PageID 819; Doc. 22-1 at PageID 188.)1 Nonetheless, Columbus Life assigned Harrison a "standard (non-tobacco user)" mortality class rating—a rating that meant that Columbus Life determined that Harrison "was at no greater risk of dying than the average person." (Doc. 24-1 at PageID 568; Wolf Dec., Doc. 25-3 at PageID 818.) Columbus Life's mortality class ratings range from "preferred, to standard, to several degrees of substandard, and ultimately to uninsurable." (Wolf Dec., Doc. 25-3 at PageID 817.)
The Policy provided for a sixty-one day "Grace Period" if the owner failed to pay sufficient premiums to maintain coverage, and it lapsed if the premium payment was not made during the Grace Period. The Policy stated, "[i]f You do not pay or mail the needed premium within the 61-day Grace Period, all coverage provided by this policy will terminate without value at the end of the 61-day period." (Doc. 24-1 at PageID 582.) Payments mailed were considered paid on the postmarked date. (Id.) The Policy did not provide extensions for nor address in any manner payment deadlines that fell on weekends or holidays. Upon termination of the Policy for non-payment, the Policy allowed for the policy owner to apply for reinstatement:
If the Grace Period expires and Your policy terminates because You have not paid the needed premium, You may apply to reinstate the policy within five years after the expiration of the Grace Period if the Insured is still living. The reinstatement is subject to evidence of insurability satisfactory to [Columbus Life].
(Id. (emphasis added).)
Ownership of the Policy has transferred two times after it was issued to Harrison. Harrison sold the Policy to an individual named Ian Dike in 2007, and Dike sold it to EPM, a British pension management scheme, in 2009. The Policy entered the Grace Period five times during the three years EPM owned the Policy.
Most relevantly, EPM failed to make a sufficient premium payment due on April 2, 2012. Columbus Life sent EPM a written Grace Period Notice dated April 2, 2012 stating that a payment of $8,048.37 was due by June 2, 2012 "[i]n order to maintain your insurance coverage" or "your policy will terminate at the end of the Grace Period without value." (Doc. 24-1 at PageID 662.) The Grace Period Notice also informed EPM of its right to seek reinstatement if the Policy lapsed:
If your policy lapses, you may later apply to reinstate it. In order to reinstate, you will need to provide evidence of insurability and pay all post-due charges as specified in your policy.
(Id.) EPM did not make the payment required by June 2, 2012, and the Policy lapsed by its terms. June 2 and 3, 2012 were weekend days and June 4 and 5, 2012 were bank holidays in the United Kingdom. EPM wired payment to Columbus Life on June 6, 2012.
On June 7, 2012, Columbus Life sent EPM a written Notice of Loss of Coverage explaining that the Policy had lapsed. (Id. at PageID 664.) The Notice of Loss of Coverage stated as follows regarding reinstatement:
(Id.) The next day, Columbus Life sent EPM a letter regarding the lapse and included as attachments (1) a check to EPM for the value of the late premium payment EPM had wired to Columbus Life and (2) a blank application for reinstatement. (Id. at PageID 665-66.)
On July 19, 2012, EPM submitted by electronic mail a Reinstatement Application signed by Harrison on June 26, 2012. (Id. at PageID 690-96.) Harrison had been diagnosed with Parkinson's disease, dementia, peripheral vascular disease, and chronic kidney disease before he signed the Reinstatement Application. However, he answered questions on the Reinstatement Application about adverse medical conditions in the negative. (Id. at PageID 695.) Columbus Life then asked an agent named Doug Bailey to assist EPM and Harrison with the reinstatement process. (Doc. 30-3 at PageID 1135-36.) Columbus Life determined during its subsequent investigation that Harrison no longer qualified for a standard mortality class rating. (Wolf Dep., Doc. 22 at PageID 147-48.) Columbus Life will not grant an application for reinstatement unless the insured qualifies for the same mortality class rating at the time of reinstatement that he or she qualified for when the policy was first issued. (Wolf Dec., Doc. 25-3 at PageID 817.) In August 2012, Columbus Life declined to reinstate the Policy insuring Harrison "due to overall medical history which includes pacemaker, Parkinson's disease, peripheral vascular disease, and chronic kidney disease." (Doc. 22-1 at PageID 215-16.) Columbus Life re-stated the denial in a December 14, 2012 letter based on the "overall current medical history" of Harrison. (Id. at PageID 217-19.)
On July 22, 2013, Harry Harrison died at the age of 85.
EPM filed this suit against Columbus Life on May 12, 2016 alleging that Columbus Life breached the Policy and acted in bad faith first by terminating the Policy and then by refusing to grant the Reinstatement Application. Following discovery, Columbus Life moved for summary judgment as to both the claims for wrongful termination of the Policy and for wrongful refusal to reinstate the Policy. It argues that (1) it did not breach the Policy or act in bad faith when it terminated the Policy because EPM failed to make the premium payment before expiration of the Grace Period; (2) it did not breach the Policy or act in bad faith when it denied reinstatement because EPM did not provide satisfactory evidence of Harrison's insurability. Significant to the analysis below, EPM argues in rebuttal only that there are genuine issues of material fact in dispute whether Columbus Life breached the Policy and acted in bad faith when it refused to reinstate the Policy. (Doc. 26.) EPM does not challenge Columbus Life's initial decision to terminate the Policy for non-payment, and the Court considers EPM to have withdrawn its breach of contract and bad faith claims based upon the termination of the Policy.
EPM relies on the testimony of Richard Mintzer, its purported expert witness, and Francis Moore, its Rule 30(b)(6) corporate representative, to support its opposition to the summary judgment motion. Columbus Life, however, moves to exclude the Expert Report and deposition testimony of Mintzer and to strike the errata sheet proffered by EPM to correct Moore's response to one deposition question. The Court will resolve the Mintzer and Moore testimony issues before addressing the summary judgment motions.
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