Jackson v. Hartford Life and Annuity Ins. Co., CIV. CCB-01-2496.

• Citation: 201 F.Supp.2d 506
• Decision Date: 15 May 2002
• Docket Number: No. CIV. CCB-01-2496.,CIV. CCB-01-2496.
• Parties: Valerie JACKSON v. HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
• Court: U.S. District Court — District of Maryland

201 F.Supp.2d 506

Valerie JACKSON v. HARTFORD LIFE AND ANNUITY INSURANCE COMPANY

No. CIV. CCB-01-2496.

United States District Court, D. Maryland.

May 15, 2002.

COPYRIGHT MATERIAL OMITTED

Aaron Robert Caruso, Curtis Perry Abod, Jacobs Abod and Caruso, Rockville, MD, for Plaintiff.

Charles R. Bacharach, Gordon Feinblatt Rothman, Hoffberger and Hollander LLC, Baltimore, MD, for Defendant.

MEMORANDUM

BLAKE, District Judge.

Now pending before this court is a motion for summary judgment brought by defendant Hartford Life and Annuity Insurance Company ("Hartford"). Plaintiff Valerie Jackson has brought suit against Hartford claiming that it has wrongfully withheld life insurance benefits payable as a result of the death of her fiancé, Edward C. Gray. Hartford claims that because of material misrepresentations made on the application for life insurance, it had the right to rescind the policy and deny benefits. This matter has been fully briefed and no hearing is necessary. See Local Rule 105.6. For the reasons stated below, the court will grant defendant's motion.

Background

On or about October 24, 1998, Ms. Jackson met with Hartford agent Larry Zanin to begin an application for a life insurance policy. Jackson applied for a universal life policy with a death benefit of $150,000.00, along with term riders covering her fiancé Edward Gray, and her daughter, son, and grandson. (Def.'s Mot. Ex. 2.) With regard to the term rider covering Mr. Gray, Jackson initially applied for a 20-year spouse rider with a $100,000 death benefit. (Id. at 2.) Because Jackson and Gray were not married, instead of a 20-year spouse rider, Hartford issued a 10-year rider with a $100,000 death benefit. (Id., Ex. 3 at ¶ 5.)

During the October 24 meeting, Jackson did not fill out the application herself, but apparently was asked the questions by Zanin, who filled in the answers on the application form. While Jackson argues in her opposition that Zanin "drafted and completed" the application, (Pl.'s Opp. at 8), the record reflects that Zanin posed the application questions to Jackson, and then transcribed her answers onto the application form. (Def.'s Mot. Ex. 1 at 29, 31-43.) She provided information about herself and her family members who were to be covered by term riders. (Id., Ex. 2.) Pertaining to Gray, she provided information on his employment history, medical history (including information about injuries sustained in a 1994 automobile accident), his height and weight, and whether he had other life or accidental death insurance. (Id., Ex. 1 at 35, 38, 41-43.) In her deposition, Jackson admitted that Zanin had correctly recorded the information provided to him. (Id. at 40-43.) Jackson signed the completed application on October 24, Gray and Jackson's daughter Kwanice signed the application at a later meeting. (Id. at 43-44.)

Approximately four months after the policy became effective, on March 22, 1999, Gray tragically was killed by a gunshot wound to the head while driving en route to Kwanice Jackson's home in Southeast D.C.¹ In April 1999, Ms. Jackson made a claim on the policy, seeking benefits in the amount of $100,000. (Def.'s Mot. Ex. 5 at 1.) Hartford then exercised its right to investigate because the claim was filed within two years of the issuing date of the policy. (Id.)² Through the investigation, Hartford learned that certain facts had been omitted on the insurance application. Apparently,

Hartford learned that Mr. Gray had been arrested and charged with two counts of forgery and felony theft in 1989.... In addition, Hartford learned that Mr. Gray had pleaded guilty to felony theft charges on June 11, 1996 and was sentenced to fifteen years, suspended. The court records further disclosed that Mr. Gray was placed on probation for three years and was on probation for that crime at the time he signed the application for insurance. In addition, Hartford learned that Mr. Gray had been treated for a gunshot wound to the head at Washington Hospital Center on January 24, 1998, less than a year before he signed the insurance application.

(Id. at 1-2.) Hartford then concluded that the omission of the above information from the insurance application constituted a material misrepresentation of Gray's medical and criminal history. (Id. at 2.) As a result, Hartford exercised its right to effect a recission of the insurance policy. (Id.) Hartford refused to pay the claim, canceled the policy, and refunded to Jackson all premiums paid for the policy. (Id.)

On August 22, 2001, Jackson filed a complaint in this court, alleging that Hartford breached the insurance contract by canceling the policy and failing to pay benefits due. Hartford filed the pending motion for summary judgment on March 12, 2002.

Standard of Review

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment

shall be rendered forthwith 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.

The Supreme Court has clarified that this does not mean any factual dispute will defeat the motion:

By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment the requirement is that there be no genuine issue of material fact.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (emphasis in original).

"The party opposing a properly supported motion for summary judgment may not rest upon mere allegations or denials of [its] pleading, but must set forth specific facts showing that there is a genuine issue for trial." Rivanna Trawlers Unlimited v. Thompson Trawlers, Inc., 840 F.2d 236, 240 (4th Cir.1988). The court must "view the facts and draw reasonable inferences in a light most favorable to the nonmoving party," Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir.1994), but it also must abide by its affirmative obligation to ensure that factually unsupported claims and defenses do not proceed to trial. Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir.1987) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).

Analysis

In its motion, Hartford argues, pursuant to MD. CODE ANN., Insurance, § 12-207(b), that it is entitled to rescind the policy and deny benefits because Gray made material misrepresentations on the insurance application, and because it would have not issued the policy had it known the correct facts. Jackson does not dispute that Gray was convicted of felony forgery in 1996 and was on probation when he signed the application, or that Gray was treated for a gunshot wound in 1998. (Pl.'s Opp. at 1-2.) She argues in her opposition, however, that since Gray was never himself posed the questions on the insurance application, but was only asked to sign the completed form, Hartford has either waived its right to rescind the policy or should be estopped from the same. (Id. at 2.) Jackson argues further that any misrepresentations contained in the insurance application were not material, and thus are not a proper basis for recission of the insurance contract. (Id. at 6.) Finally, based on the testimony of proposed expert witness Dr. Will Johnston, and on Hartford's written underwriting guidelines, Jackson argues that Hartford would have issued the term rider on Gray's life even if it had known about Gray's criminal and medical history. (Id. at 2.)

1. Waiver and Estoppel

Jackson argues that "Zanin's failure to make even perfunctory requests for information from any of the other insureds estops the defendant from rescinding the policy and waives their [sic] right to rescind the policy." (Pl.'s Opp. at 8.) Jackson, based on Zanin's deposition testimony, argues that Zanin "prepared, drafted and completed the application that is now the Defendant's basis for summary judgment" and that she herself "wrote nothing on the application, save her signature on the required line where Zanin had conveniently marked an "X" for her and the other adult proposed insureds." (Id.) According to Jackson, when Zanin presented the application to Gray and to Kwanice Jackson for signature, he "wrongly failed to verify, append, or supplement the application by asking Mr. Gray or Kwanice any of the questions that he had asked of Ms. Jackson." (Id.) Jackson thus argues that any omissions in the application cannot be relied upon by Hartford because the omissions themselves are the product of its agent's mistake or wrongdoing. According to Jackson, Hartford could only rely on omissions in the application if Jackson and Gray had physically filled out the insurance application. (Id.) In this case, Jackson argues, "Zanin was completely and solely responsible for obtaining the information requested on the application and Mr. Zanin failed miserably in this regard." (Id.)

Jackson's arguments on this point are without merit. Under Maryland law, an applicant for insurance is held to the representations in an application that he or she has signed, even if a third party filled out the application. Serdenes v. Aetna Life Ins. Co., 21 Md.App. 453, 319 A.2d 858, 863 (1974); see also Shepard v. Keystone Ins. Co., 743 F.Supp. 429, 432-33 (D.Md.1990); Foreman v. Western Reserve Life Assurance Co. of Ohio, 716 F.Supp. 879, 883 (D.Md.1989). This holds true even if the third party deliberately inserts misleading or false information on the application form. Id. If an application contains a false statement, "[i]t is immaterial that it is the agent who inserts false statements about material matters in an application for insurance, because if the assured has the means to ascertain that the application contains false statements, he is charged with the misrepresentations just as if ...