Frazier v. Metropolitan Life Ins. Co.

• Decision Date: 10 June 1985
• Citation: 214 Cal.Rptr. 883,169 Cal.App.3d 90
• Court: California Court of Appeals Court of Appeals
• Parties: Mary FRAZIER, Plaintiff and Respondent, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant and Appellant. Civ. B004240.

Page 883

214 Cal.Rptr. 883

169 Cal.App.3d 90

Mary FRAZIER, Plaintiff and Respondent, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant and Appellant.

Civ. B004240.

Court of Appeal, Second District, Division 5, California.

June 10, 1985.

Review Denied Sept. 13, 1985.

Rogers, Joseph, O'Donnell & Quinn, Joseph W. Rogers, Jr., Susan M. Popik, San Francisco, Adams, Duque & Hazeltine, Bruce A. Beckman, and Kimler G. Casteel, Los Angeles, Donald J. Harman, John L. Viola, New York City, for defendant and appellant.

Shernoff & Levine, William M. Shernoff, Claremont, Pollack Lintz Williams, Hal W. Williams, Jr., Los Angeles, and Leonard, Sacks, Encino, for plaintiff and respondent.

LAVINE, Associate Justice. ^*

Defendant Metropolitan Life Insurance Company (Metropolitan) appeals from a jury verdict and judgment entered against it. The dispute arises out of a life insurance policy insuring the life of plaintiff's husband, David Frazier (David), made available to him as part of his employment benefits by the federal government. The policy contained a basic death benefit payable in the event of Frazier's death, with double indemnity in the event the insured's death resulted solely from "violent, external and accidental means." The accidental means death benefit contained a suicide exclusion. The jury awarded plaintiff damages in the amount of $12,000 for the unpaid accidental means death benefit, $150,000 for emotional distress, and $8 million in punitive damages. The court ordered the award increased to $8,168,009.72 to reflect interest on the unpaid accidental means death benefit. Punitive damages were remitted to $2 million on the ground it was excessive.

BACKGROUND FACTS

On March 12, 1975, David, his mother, grandmother and younger brother, Curtis, boarded a charter fishing boat in Oxnard. Plaintiff was not aboard. After fishing, the boat headed back and entered the Channel Island Harbor about 6 p.m. on March 13 at a reduced speed. Shortly after the ship entered the harbor, David and Curtis Frazier came onto the starboard deck and walked forward toward the restroom. David then went overboard. There was conflicting testimony at the trial as to whether David went overboard voluntarily or somehow fell. A life preserver and wooden fillet board were thrown into the water but he swam to neither. Two crew members then jumped into the water and swam toward David. Crew members sought to save him, but he made no attempt to reach them and disappeared under the water.

Several days later plaintiff discovered that David had life insurance coverage, and submitted claims for the basic death benefit and the accidental means death benefit. She submitted a death certificate listing the The newspaper article indicated David had "lost his balance and fell overboard." Each of the official documents stated that David had jumped overboard and evaded rescue. The documents report that Curtis had said David told him that they were going to get him, and he told Curtis to duck as though he expected to be shot. A crew member reported he heard Curtis tell David "not to do it" and then David jumped. The report also stated that David's mother and brother had stated that David was a veteran of Vietnam and still suffered from fears of that experience, and that David had been acting "strange" all day. The report's statement that David's behavior was attributable to his Vietnam war experience was shown to be incorrect as he had never been in Vietnam.

                cause of death as "salt-water drowning," and stated David had walked off the boat as it entered the harbor.  In the space provided to specify whether the death was the result of an accident, suicide or homicide, the certificate contained the notation "undetermined."   Metropolitan paid plaintiff the basic benefit of $12,000, less an amount assigned to the funeral parlor, and requested that she submit any death reports, police reports, or newspaper clippings which might support her claim that David died as a result of accidental means.  Plaintiff provided Metropolitan with copies of the Ventura County Sheriff's Missing Person Report and Death Report, the Medical Examiner-Coroner's Autopsy Protocal, Coroner's Register and Accident Information, and an obituary notice
                

Marie Cassiano (Cassiano), Metropolitan's claims agent, originally assigned plaintiff's claim, wrote to Custom Line Service Retail Credit Company (Retail Credit) requesting it obtain additional information, requesting "a full report of investigation concerning any motive for suicide...." The Retail Credit inspector contacted David's mother, his brother, Curtis, and plaintiff. According to each, David had no motive to commit suicide. Curtis denied seeing his brother jump overboard, in contradiction to a statement credited to him in the missing person report. He said on deposition he was walking ahead of David and heard a slipping noise just before David went into the water. Plaintiff stated that David "would sometimes act strangely, sitting and staring into space for long periods of time." David's mother claimed that David was separated from plaintiff and resided with his mother at the time of his death, but plaintiff claimed they were not estranged and that David was living with her. Cassiano reviewed the material, but having no authority at that time to pay or deny the claim herself, she referred the file to her supervisor, Charles Pfaffenbach (Pfaffenbach), with the recommendation that the claim be denied because in her opinion, David did not die as a result of accidental means.

Pfaffenbach expressed concern over the conflicts between the statements attributed to David's mother and brother immediately following David's death, and their later statements contradicting reports attributed to them. Although Pfaffenbach had power to pay the claim he did not do so, but transmitted the file to his superior Albert Danz (Danz) with the opinion, "I don't think we could sustain a denial. What do you think?" Danz asked for a further investigation, which came up with the information that: David had been absent from work five times and late five times during the first two and one-half months of 1975; again his family reiterated that David had never served in Vietnam; and that the deck rail on the boat was 33 1/2 inches to 36 inches in height with a 6- to 10-inch wide rail cap and a toe rail, which configuration would have allowed David to place his feet in the toe rail and bend over the top railing with his head almost touching the side of the ship allegedly without any danger of him being able to slip. One of the crew members heard a voice say "no David, don't do it" and saw David place his hands on the rail and vault over it. Another crew member had tried to converse with David but had been met with a stare, and was told by David's mother that David had said "they are going to get me." Another crew member said David appeared to be a Based on this further investigation, Cassiano again referred the file to Pfaffenbach, who again reviewed the file and re-referred the file to Danz with a notation on February 19, 1976:

good swimmer, was only 50 feet from a rock jetty when he disappeared, and that he appeared to avoid rescue. A third crew member jumped into the water to rescue David but as he started to swim toward David, the latter swam away from him.

"Refer to your memo-dated 1-12-76

"We now have additional reports which only confirm what we already know. While there is considerable opinion that he did commit suicide I still doubt we could sustain a denial in court.

"Unless you want to deny now and try for a compromise later when she complains"

Danz disagreed with Pfaffenbach's opinion, and instructed Cassiano to deny the claim. She did so by letter dated February 24, 1976, which reads:

"Dear Mrs. Frazier

"...

"This letter relates to the claim which was made for the Accidental Means Death Benefit.

"...

"In this case, we have not been furnished with satisfactory proof that this additional amount is payable. On the contrary, the information we do have establishes that it is not payable.

"It is required by the policy that due proof be submitted that the insured sustained bodily injuries solely through violent, external and accidental means, resulting directly and independently of all other causes, in the death. It further provides that no Accidental Death Benefit will be paid if the death of the insured is caused by or the result of intentional self-destruction or intentionally self-inflicted injury while sane or insane.

"We have made a most thorough investigation into this matter. In the absence of satisfactory proof that the death of Mr. Frazier resulted from accidental means, we must conclude in the light of all the facts and circumstances that the death was the result of self-destruction.

"Since the death has not been established as one within the provisions and limitations of the policy, we regret we cannot justify payment of the Accidental Means Death Benefit."

Plaintiff did not contact Metropolitan in the period between the denial of her claim and the filing of this action. In the interim Curtis Frazier and Pfaffenbach had both died, and Danz had retired from Metropolitan.

On March 20, 1978, plaintiff filed her complaint against Metropolitan containing the following causes of action: (1) breach of contract, (2) fraud, (3) declaratory relief, (4) to recover benefits on insurance policy, (5) damages for outrageous conduct, (6) punitive damages, and (7) intentional infliction of emotional distress. In addition to contract damages plaintiff sought damages for emotional distress and punitive damages. In the certificate of assignment accompanying plaintiff's complaint, she designated the nature of her action as "tort."

PRETRIAL MOTIONS

On pretrial motions, including Metropolitan's motion to dismiss the complaint as time-barred, the court characterized plaintiff's complaint as stating claims for breach of contract, declaratory relief,...