Hawkins v. Globe Life Ins. Co.
| Decision Date | 12 May 2015 |
| Docket Number | Civil No. 13–7814 JS. |
| Citation | 105 F.Supp.3d 430 |
| Parties | Natasha HAWKINS, Administratrix of the Estate of Khalil Wallace, Plaintiff, v. GLOBE LIFE INSURANCE CO., Defendant. |
| Court | U.S. District Court — District of New Jersey |
Frederick Albert Jacob, Joseph M. Chiarello, Jacob & Chiarello, Millville, NJ, for Plaintiff.
Caroline S. Brizzolara, Riker, Danzig, Morristown, NJ, for Defendant.
This Opinion will address whether plaintiff can recover the proceeds of her $50,000 life insurance policy that she bought only weeks before her son was murdered. If the facts surrounding the case were fictional and not so tragic, they would produce a classic law school final examination.
In late August 2011, Natasha Hawkins (“Ms. Hawkins” or “plaintiff”) applied for a second policy of insurance on the life of her nineteen year-old son, Khalil Wallace (“Khalil”), from Globe Life Insurance Company (“Globe”). After Globe received plaintiff's enrollment form and premium payment, but before Globe formally approved the policy, plaintiff's son was murdered. Globe argues plaintiff's policy is void because the policy was not formally approved before Khalil was killed. In the alternative, Globe contends plaintiff's policy is voidable because material misrepresentations and omissions were made during the application process. In opposition plaintiff argues it was her reasonable expectation that she had interim coverage after Globe received her enrollment form and premium payment. Plaintiff also contests that her policy is voidable. Thus, plaintiff argues, since Khalil died while she had interim coverage, and her policy is not voidable, Globe must pay.
These facts give rise to two main legal questions. First: when did plaintiff's life insurance policy take effect? Plaintiff contends her policy took effect on either September 9, 2011, when Globe received her completed enrollment form with the first premium payment, or on September 12, 2011 when her premium check was cashed.2Globe argues plaintiff's policy did not become effective until it was formally approved on October 1, 2011, and by that time that Khalil was dead. Second: even if plaintiff's policy was in effect when her son died on September 20, 2011, is the policy voidable because of plaintiff's alleged material misrepresentations or omissions during the application process? Plaintiff maintains she honestly answered all of Globe's questions. Globe argues plaintiff made material misrepresentations and omissions during the application process which makes her policy voidable.
As discussed herein, the Court denies defendant's motion for summary judgment. The Court finds that Globe's solicitation materials were ambiguous as to the date the policy became effective. Based on the record presented, the Court finds that an objectively reasonable applicant expected to receive interim coverage when Globe received plaintiff's completed enrollment form and premium payment. Thus, since the Court interprets Globe's policy to effect the reasonable expectations of plaintiff, plaintiff had interim coverage as of September 9, 2011, the date Globe received her enrollment form and premium payment. As such, plaintiff's policy was in effect when Khalil died on September 20, 2011. The Court also finds that plaintiff did not make any material misrepresentations or omissions during the application process. Thus, plaintiff's policy is not voidable. Accordingly, defendant's motion for summary judgment will be DENIED.
The following background will provide a detailed chronology of the relevant undisputed facts.3Plaintiff previously purchased an insurance policy on the life of her son from Globe. In or around August 2011 Globe mailed plaintiff an advertisement for up to $50,000 in life insurance protection. Def.'s Statement of Material Facts (“SMF”) ¶ 1. The materials included two informational pamphlets (Court's Exs. A and B), a letter (Court's Ex. C), and an enrollment form (Court's Ex. D).4The following summary lists some of the relevant representations from these materials:
Pamphlet 1 (Court's Exhibit A)
Pamphlet 2 (Court's Ex. B)
• Start a Life Insurance Policy for Only $1*
Letter (Court's Ex. C)
Enrollment Form/Application (Court's Ex. D)
Globe's enrollment form contains four questions, three of which are health-related. At issue here is Question 2.b. This question asks whether in the past three years the proposed insured (Khalil) “had or been treated for ... drug or alcohol abuse.” Id.It is undisputed plaintiff was aware her son was previously arrested and charged with multiple drug offenses. SMF ¶ 7, Response to SMF ¶ 7. It is also undisputed that subsequent to one of Khalil's arrests, plaintiff arranged for Khalil to attend a few counseling sessions with a general therapist. SMF ¶ 14 (citing Hawkins Dep. 39:8–15); see alsoHawkins Dep. 41:15–42:36. However, plaintiff denied any knowledge of what her son discussed with his therapist during these sessions. SMF ¶ 13; Hawkins Dep. 42:4–6. She also denied any knowledge that her son used drugs. Hawkins Dep. 38:5–17. Plaintiff testified that despite her son's troubled past she did not believe he abused drugs. She noted that her son was an athlete and never showed symptoms of drug abuse.7SMF ¶ 14 (citing Hawkins Dep. 42:4–9, 44:12–19; 54:22–24; 55:6–7); see alsoHawkins Dep. 38:5–17.8
Plaintiff read and understood all of the statements contained in her enrollment form. SMF ¶ 16 (citing Hawkins Dep. 96:17–99:24; 100:21–101:24; 106:2–24 and 148:9–21). Plaintiff signed Globe's enrollment form on August 25 or 28, 2011 and mailed it to Globe with a check for the first month's premium of $1.00 for a $50,000 insurance policy on Khalil's life. SMF ¶¶ 6, 17. After plaintiff mailed the enrollment form, Khalil was charged on September 2, 2011 with possession of marijuana. SMF ¶ 18. Plaintiff learned about this arrest within a few days but did not inform Globe. SMF ¶ 19.
Globe received plaintiff's enrollment form and premium payment on September 9, 2011. SMF ¶ 20. Globe cashed plaintiff's check on September 12, 2011. Pl.'s Counter Facts ¶ 5. According to Globe's procedures, plaintiff's application was subject to a “Quality Assurance” (“QA”) follow-up call because she was not the proposed insured. SMF ¶ 23. Globe attempted to telephone plaintiff 21 times and sent two letters to verify the truth of the statements on her enrollment form. SMF ¶¶ 24, 25. There is no evidence that plaintiff attempted to purposely evade Globe's calls and letters.
On September 20, 2011, plaintiff's son disappeared into a van with unidentified individuals. SMF ¶ 26. On September 22, 2011 plaintiff was informed that her son was last seen two days prior and that his cell phone was found in Philadelphia. SMF ¶ 28. The same day plaintiff filed a missing persons report with the state police. SMF ¶ 29. Despite these events, plaintiff testified she was not concerned for her son's safety following his disappearance because he would often be away from home for periods of more than two weeks at a time. SMF ¶ 31 (citing Hawkins Dep. 168:16–23; 172:16–249); see alsoHawkins Dep. 178:11–14. Additionally, plaintiff testified that when she filed the missing persons report the police believed her son had run off to avoid charges from his recent arrest. Hawkins Dep. 166:12–20.
On September 28, 2011, plaintiff called Globe to complete the QA call. SMF ¶ 32.
During the call plaintiff stated that she “received several calls from [Globe] saying that you have a couple of questions to ask me regarding a policy that I was trying to initiate.” SMF ¶ 33 (citing Def.'s Ex. 11, Telephone Tr.). The Globe representative on the call asked plaintiff whether the proposed insured had a history of drug or alcohol abuse. SMF ¶ 34. Plaintiff again denied any knowledge that her son had a history of drug or alcohol abuse or treatment and affirmed that her answers were true to the best of her knowledge. SMF ¶¶ 34–35.
Following the QA call, Globe formally approved plaintiff's policy on October 1, 2011. SMF ¶ 36. On October 6, 2011, six days after the policy was issued, Khalil Wallace's body was found. SMF ¶ 39. The cause of death was determined to be multiple gunshot wounds
inflicted on September 20, 2011, the day Khalil went missing. SMF ¶ 39. Plaintiff called Globe to report her son's death on October 24, 2011 and submitted her claim for payment on February 6, 2012. SMF ¶¶ 40, 42. On February 21, 2012 Globe advised it was investigating the claim. SMF ¶ 43. Following an exchange of letters between Globe and plaintiff, on July 6, 2012, Globe advised that it was voiding its policy because plaintiff misrepresented material facts during the application process. SMF ¶ 53 (citing Def.'s Ex. 23).
In sum, the following chronology is critical:
Pursuant to Fed.R.Civ.P....
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