Guardian Life Ins. Co. of America v. Goduti-Moore
| Decision Date | 29 January 1999 |
| Docket Number | Civil Action No. 97-1418(MLC). |
| Citation | 36 F.Supp.2d 657 |
| Parties | THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA, Plaintiff, v. Donna M. GODUTI-MOORE, individually and as Executrix of the Estate of Kevin H. Moore, Defendant, Donna M. Goduti-Moore, Counter-Claimant, v. The Guardian Life Insurance Company of America, Counter-Defendant, Donna M. Goduti-Moore, Third-Party Plaintiff, v. Robert Beckett and National Pension Consultants, Third-Party Defendants. |
| Court | U.S. District Court — District of New Jersey |
Steven P. Del Mauro, Del Mauro, Digiaimo & Knepper, P.C. Morristown, NJ, for Plaintiff.
Donald R. Belsole, Belsole & Kurnos, L.L.C., Morristown, NJ, for Defendant.
Jonathan S. Reed, Traub, Eglin, Lieberman, Straus, Hackensack, NJ, for Third-Party Defendants.
This matter comes before the Court on cross-motions for summary judgment by plaintiff The Guardian Life Insurance Company of America ("Guardian-Life"), defendant Donna M. Goduti-Moore ("Goduti-Moore"), and third-party defendants Robert Beckett and National Pension Consultants ("NPC"). For the reasons stated, plaintiff's motion for summary judgment is granted, defendant's motion for summary judgment is denied as moot, and third-party defendants' motion for summary judgment is granted.
On October 4, 1994, Guardian Life, a New York company, issued a life insurance policy ("the Policy") in the amount of $500,000 to decedent Kevin Moore ("Moore"), a New Jersey resident. (See Certif. of Janemary S. Belsole, Esq. dated 5-29-98 ("Belsole Certif."), Ex. 6: the Policy.) Third-party defendant and insurance broker Robert Beckett ("Beckett") procured the Policy which named Moore's wife, defendant Goduti-Moore, as the primary beneficiary. (Id. at I.)1
Moore initially applied to pay the insurance premium on an annual basis. (Id. at J.) The Policy allowed a change in payment frequency but required that the change "result in a premium falling due on each policy anniversary." (Id. at O.) The Policy stated that any premium not paid on its due date would be in default. (Id.) However, the Policy also contained a 31-day grace period and stated that the Policy would not lapse if payments were made within that time. (Id.) The Policy identified the policy date as October 4, 1994 and stated that "[p]olicy years, policy months, and policy anniversaries are measured from the policy date." (Id. at C, T.)
On October 25, 1994, Moore executed a "Request for Guard-O-Matic Premium Arrangement Form" by which Moore enabled Guardian Life to draw checks against Moore's checking account on a monthly basis to pay the Policy premium. (Id., Ex. 10.) Moore signed a form stating: "If the Guard-O-Matic premium arrangement is terminated, premiums falling due thereafter shall be payable directly to the Company monthly at the monthly premium rate which would have been applicable to the policy if it had not been placed under the Guard-O-Matic premium arrangement." (Id. at A.)
Moore also issued a check to Guardian Life on October 31, 1994 in the amount of $366 as an initial premium payment. (Id., Ex. 33.) On November 4, 1994, Guardian Life sent Moore a policy statement which divided the $366 payment into payments of $122.31 for the periods from October 4, 1994 to November 4, 1994, November 4, 1994 to December 4, 1994, and December 4, 1994 to January 4, 1995. (Id., Ex. 11.) The policy statement also noted: "Starting January 1995, on or about the 15th of each month, a withdrawal of $122.31 will be made automatically for this policy." (Id.) Guardian Life withdrew $122.31 on the 15th of each month unless the 15th fell on a Saturday, Sunday, or legal holiday in which case the money was withdrawn on the following business day. (See Aff. of Robert Ryan dated 5-22-98 ("Ryan Aff.") ¶ 10.) On September 15, 1995, Guardian sent Moore a policy statement announcing that Guardian Life would collect $129.61 as the monthly premium beginning in October 1995. (Belsole Certif., Ex. 12.)
It is undisputed that Guardian Life was unable to withdraw the amount of $129.61 from Moore's bank account on August 15, 1996. (See Pl.'s Br. in Supp. at 24; Def.'s Br. in Supp. at 9.) On August 20, 1996, Guardian Life received notification from its collecting bank that the electronic transfer debit had been returned because Moore's account had been closed. (Ryan Aff. ¶ 12.) Guardian Life consequently issued a policy statement on August 21, 1996 to Moore that read:
THE DETAILS OF A TRANSACTION ON YOUR POLICY ARE SHOWN BELOW
REMOVAL FROM GUARD-O-MATIC
YOUR AUGUST GUARD-O-MATIC PREMIUM WAS RETURNED FOR
ACCOUNT CLOSED
METHOD OF PAYMENT CHANGED TO REGULAR BILLING
FUNDS TO BE USED 129.61
REVERSAL OF PREMIUM FROM 09/04/96 TO 08/04/96 129.61
PREMIUMS ARE PAID TO 08/04/96
PREMIUM DUE 08/04/96 $133.50
PREMIUM DUE 09/04/96 $133.50
AMOUNT DUE $267.00
Kevin Moore died on September 5, 1996 as the result of a car accident. (Id., Ex. 27.) On November 6, 1996, Guardian Life informed Goduti-Moore that the Policy had lapsed and that Guardian Life therefore rejected her claim for proceeds. (Id., Ex. 32.) Guardian Life argues that the 31-day grace period expired on September 4, 1996, one day before Moore's death. (Pl.'s Br. in Supp. at 25.)
Guardian Life filed a Complaint on March 7, 1997 against Goduti-Moore seeking a declaration of the parties' rights and obligations under the Policy. (Compl. ¶ 25.) Goduti-Moore filed a Counterclaim, also seeking a declaration of rights. (See Counterclaim, Am. Counterclaim.)2 In addition, Goduti-Moore alleges that insurance broker Robert Beckett and his agency NPC breached a duty to keep Moore informed as to the status of the Policy. (See Third-Party Compl., Am. Third-Party Compl.) Guardian Life and the third-party defendants have filed cross-claims against each other for contribution and indemnification.
Both Guardian Life and Goduti-Moore have moved for summary judgment on their claims against each other. Beckett and NPC have also moved for summary judgment on the claims filed against them by Goduti-Moore and the cross-claims filed by Guardian Life. We heard oral argument concerning these pending motions on October 30, 1998.
Federal Rule of Civil Procedure 56(c) provides that summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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." In Anderson v. Liberty Lobby, 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), the Supreme Court noted that Rule 56(c) asks "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Summary judgment is appropriate where there is no genuine issue of material fact in the case which requires a trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
We will begin our analysis with the summary judgment motions by Guardian Life and Goduti-Moore. Guardian Life argues that it is entitled to summary judgment because the Policy lapsed due to the nonpayment of the August 4, 1996 premium and the expiration of the resulting grace period. (See Pl.'s Br. in Supp. at 30.) Goduti-Moore argues that the insurance premium fell due on a later date. (Def.'s Br. in Supp. at 17.) She notes that August 4, 1996 was a Sunday and argues that the grace period therefore did not begin to run until Monday, August 5, 1996. (Id. at 18.) Alternatively, Goduti-Moore argues that: (1) Guardian Life's use of the Guard-O-Matic system created a premium due date of August 15, 1996, or (2) the August 21, 1996 policy statement created a premium due date of August 21, 1996. Under a premium due date of August 5, 15, or 21, Moore would have died within the 31-day grace period and the Policy would not have lapsed. Finally, Goduti-Moore argues that, under New York law, a life insurance policy cannot lapse unless the insurance company provides notice at least fifteen days before payment of the premium is due and that Guardian Life did not provide the required notice. (Id. at 34) (citing N.Y. Ins. Law § 3211.)
Our first task is to address the choice-of-law question presented by Moore's residency in New Jersey and Guardian Life's location in New York. As a federal court sitting in diversity jurisdiction, this Court applies the choice-of-law rules of New Jersey, our forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Under choice-of-law principles, however, where the laws of the two jurisdictions would produce the same result, there is a "false conflict," and a court should avoid the choice-of-law question. See Williams v. Stone, 109 F.3d 890, 893 (3d Cir.1997); Polar Int'l Brokerage v. Investors Ins., 967 F.Supp. 135, 141 (D.N.J.1997). Our conclusion that Guardian Life's summary judgment motion would succeed under the law of either New York or New Jersey precludes our analysis of the choice-of-law question.3
We will now explain the relevant contract principles underlying our analysis. The court determines whether a contract term is ambiguous. See Nester v. O'Donnell, 301 N.J.Super. 198, 210, 693 A.2d 1214, 1219 (App.Div.1997); Horn v. Mazda Motor of Am., 265 N.J.Super. 47, 60 n. 5, 625 A.2d 548, 555 (App.Div.1993); Kaufman v. Provident Life & Cas. Ins. Co., 828 F.Supp. 275, 282-83 (D.N.J.1992) (), aff'd, 993 F.2d 877 (3d Cir.1993). A contract is...
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