Glushchak v. Transamerica Life Ins. Co.

• Citation: 596 F.Supp.3d 1310
• Decision Date: 31 March 2022
• Docket Number: CIVIL ACTION NO. 1:20-cv-4432-AT
• Parties: Olga GLUSHCHAK, Plaintiff, v. TRANSAMERICA LIFE INSURANCE COMPANY, Defendant.
• Court: United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia

596 F.Supp.3d 1310

Olga GLUSHCHAK, Plaintiff,
v.
TRANSAMERICA LIFE INSURANCE COMPANY, Defendant.

CIVIL ACTION NO. 1:20-cv-4432-AT

United States District Court, N.D. Georgia, Atlanta Division.

Signed March 31, 2022

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Shaun M. Daugherty, I, Steven Loube, Lowe Law Firm, P.C., Atlanta, GA, for Plaintiff.

Covert J. Geary, Pro Hac Vice, Jones Walker LLP, New Orleans, LA, David John Forestner, Christopher Henry, Jones Walker LLP, Atlanta, GA, for Defendant.

ORDER

Amy Totenberg, United States District Judge

This is an action by Plaintiff Olga Glushchak seeking the proceeds of her deceased husband's life insurance policy with Defendant Transamerica Life Insurance Company. This matter is before the Court on Defendant's Motion for Summary Judgment [Doc. 52]. For the following reasons, Defendant's Motion for Summary Judgment is DENIED .

I. Background¹

On May 27, 2017, Mr. Orest Glushchak submitted Part 1 of his application for a life insurance policy with Transamerica Life Insurance Company ("Transamerica"). (Glushchak Ins. Application – Part 1, Doc. 52-5.) At the time, Mr. Glushchak was 44 years old. (Id. )

Part 1 of his application contained the following key paragraphs, which indicated that the life insurance policy he applied for would not take effect unless certain conditions—related to payment of the first premium, the "good health" of the proposed insured, and the truthfulness of all statements made in the application—were met:

I, the Proposed Insured, and I, the Owner if different, hereby represent that the statements and answers in this application are true, complete and correctly recorded. I/we agree: (1) this application shall consist of Part 1, Part 2, and any required application supplement(s)/amendment(s), and shall be the basis for any contract issued on this application; (2) except as otherwise provided in the conditional receipt, if issued, with the same Proposed Insured as on this application, any contract issued on this application shall not take effect until after all of the following conditions have been met: (a) the full first premium is paid, (b) the Owner has personally received the contract during the lifetime of and while the Proposed Insured is in good health, and

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(c) all of the statements and answers given in this application must be true and complete as of the date of Owner's personal receipt of the contract and that the contract will not take effect if the facts have changed ; (3) no waiver or modification shall be binding upon Transamerica Life Insurance Company (the Company) unless in writing and signed by the President or a Vice President and the Secretary or an Assistant Secretary.

I/we understand that omissions or misstatements in this application could cause an otherwise valid claim to be denied under any contract issued from this application.

(Id. at 2 (italicized emphasis added.)) "Good health" is not defined in the application. (See id. ) By signing Part 1 of his application, Mr. Glushchak agreed to be bound by the above paragraphs.

Mr. Glushchak was also asked in Part 1 of his Transamerica life insurance application a series of questions regarding other insurance policies, including (1) whether he had any existing life insurance policies or annuities at the time of his application, (2) whether he "intend[ed]" to replace any existing policy with the Transamerica policy if it were issued, and (3) whether he had any life insurance applications pending with other companies at the time of his application. (Id. at 1–2.) Mr. Glushchak responded that: (1) he had a $1,000,000 policy in force with State Farm, (2) he intended to replace his State Farm policy with the Transamerica policy (if issued), and (3) that he had no life insurance applications pending with other companies at the time of his application. (Id. )

Because Mr. Glushchak represented that he intended to replace his State Farm life insurance policy, he also executed a Transamerica Replacement Notice on May 27, 2017. (Defendant's Statement of Material Facts ("DSOF"), Doc. 52-69 ¶ 4; Pl. Resp. to DSOF, Doc. 64 ¶ 4.) The Replacement Notice began with the following statement: "Are you thinking about buying a new policy and discontinuing or changing an existing policy? If you are, your decision could be a good one – or a mistake. You will not know for sure unless you make a careful comparison of your existing policy and the proposed policy." (Replacement Notice, Doc. 52-7 at 1.) The Notice then provided a checklist of factors that a potential insured should consider when determining whether he or she should replace his or her existing life insurance policy with a new one. (Id. at 1–2.) That list included a caution and a fact to remember:

Caution , you are [ ] urged not to take action to terminate, assign, or alter your existing life insurance coverage until after you have been issued the new policy, examined it and have found it to be acceptable to you.

and

Remember , you have ten (10) days following receipt of any individual life insurance policy to examine its contents. If you are not satisfied with it for any reason, you have the right to return it to the insurer at its home or branch office or to the agent through whom it was purchased, for a full refund of premium.

(Id. at 2.)

Although a potential insured is required to review and sign the Replacement Notice as a part of his or her Transamerica life insurance application, there is no duty on behalf of a Transamerica underwriter to confirm that the potential insured actually replaced his or her existing insurance after the Transamerica policy is issued. (Transamerica 30(b)(6) Rep. Michael Shepard ("Shepard") Deposition, Doc. 61-7 at 72:6–24.)

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Independent Agent Toni Ly received Part 1 of Mr. Glushchak's life insurance application, and Morgan Tillotson of Transamerica conducted the underwriting review of his application. (DSOF, Doc. 52-69 ¶¶ 3, 5; Pl. Resp. to DSOF, Doc. 64 ¶¶ 3, 5.) On May 29, 2017, Ms. Ly executed and submitted an Agent's Report to Transamerica indicating that the purpose of Mr. Glushchak's life insurance policy was "Employer Provided," although Part 1 of Mr. Glushchak's application does not indicate a policy purpose. (Ly Agent's Report, Doc. 52-8; see Glushchak Ins. Application – Part 1, Doc. 52-5; Shepard Deposition, Doc. 61-7 at 76:3–23.) Transamerica's internal records show that on June 2, 2017, Ms. Tillotson indicated that she needed further explanation regarding why Mr. Glushchak's coverage was "Employer Provided." (Doc. 52-4 at 2.) On June 8, 2017, Ms. Tillotson noted that Mr. Glushchak's desired policy was a "KEY EMPLOYEE policy." (Id. ) On June 9, 2017, Transamerica informed Ms. Ly that additional requirements were added to Mr. Glushchak's application, including two "Other Underwriting Requirement[s]." (Transamerica Additional Requirements June 2017 Letter, Doc. 52-10 at 8.) The two additional requirements were as follows:

Other Underwriting Requirement

• Comments: please advise why a key man policy needed [sic] for maintenance personal?

....

Other Underwriting Requirement

• Comments: as we have been informed that this is key person coverage[,] we will only allow 10x income (480K)[. H]owever please advise why it would take the company 480K to replace a person with the tile [sic] appliance tech/maintenance?

(Id. ) Transamerica's internal records indicate that Ms. Ly responded to Transamerica's notice of "Other Underwriting Requirement[s]" on June 23, 2017 and reported that Mr. Glushchak's desired policy was a personal policy rather than a "key person" policy. (Doc. 52-4 at 7.)

Transamerica's internal records also show that Ms. Ly called Transamerica on June 1, 2017 to report that Mr. Glushchak would not be replacing his State Farm policy with the Transamerica policy if it were issued. (Doc. 52-4 at 8; see Tillotson Affidavit, Doc. 52-3 ¶ 8.) But on June 6, 2017, Ms. Ly reported that she was confused and that Mr. Glushchak would in fact cancel his existing policy if the Transamerica policy was approved. (Id. )

On September 29, 2017, Mr. Glushchak completed and submitted Part 2 of his life insurance application after meeting with a medical examiner selected by Ms. Ly. (Glushchak Ins. Application – Part 2, Doc. 52-15; DSOF, Doc. 52-69 ¶ 9; Pl. Resp. to DSOF, Doc. 64 ¶ 9; Doc. 52-16.) In connection with Part 2 of Mr. Glushchak's application, Transamerica received forms prepared by the medical examiner as well as blood and urine tests completed by Mr. Glushchak. (Id. ; Doc. 52-16; Doc. 52-17; Doc. 52-18.) Ms. Tillotson reviewed the statements made by Mr. Glushchak in Part 2 of his application and the accompanying documents from the medical examiner. (DSOF, Doc. 52-69 ¶ 10; Pl. Resp. to DSOF, Doc. 64 ¶ 10.) Mr. Glushchak had reported a routine visit with a doctor in 2016, which included normal EKG and blood test results. (Glushchak Ins. Application – Part 2, Doc. 52-15.) According to Ms. Tillotson, the medical history reported by Mr. Glushchak was basically "clean." (DSOF, Doc. 52-69 ¶ 10; Pl. Resp. to DSOF, Doc. 64 ¶ 10; Tillotson Affidavit, Doc. 52-3 ¶ 8.)

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After signing Part 2 of his life insurance application the morning of September 29, 2017, Mr. Glushchak went to see Dr. Galinda Vayner of the Georgia Clinic. (Doc. 52-48 at 3.) Mr. Glushchak reported abdominal pain, loss of appetite, stress, and the loss of ten pounds over the previous two months. (Id. ) Dr. Vayner prescribed omeprazole, a stomach medication, and ordered tests. (Id. ) The test results included a positive fecal occult blood test, a normal complete blood count, a normal abdominal ultrasound, and a positive H. pylori test. (Id. at 7–10.) Given Mr. Glushchak's two positive tests, Dr. Vayner ordered more tests. (DSOF, Doc. 52-69 ¶ 20; Pl. Resp. to DSOF, Doc. 64 ¶ 20.) On October 2, 2017, a follow-up fecal occult blood test was completed and came back negative. (Doc. 52-48 at 6.)

On October 4, 2017, Mr. Glushchak saw Dr. Vayner again. (Id. at 2.) He...