Kersh v. Manulife Financial Corp..

• Decision Date: 31 May 2011
• Docket Number: Civil No. 09–00049 JMS/BMK.
• Citation: 792 F.Supp.2d 1111
• Parties: David KERSH, Plaintiff,v.MANULIFE FINANCIAL CORPORATION, a foreign corporation, John Hancock Financial Services, Inc. aka John Hancock Life Insurance Company (USA), a foreign corporation, and North American Life Assurance Co., a foreign corporation, Jointly and Severally, Defendants.
• Court: U.S. District Court — District of Hawaii

792 F.Supp.2d 1111

David KERSH, Plaintiff,

v.MANULIFE FINANCIAL CORPORATION, a foreign corporation, John Hancock Financial Services, Inc. aka John Hancock Life Insurance Company (USA), a foreign corporation, and North American Life Assurance Co., a foreign corporation, Jointly and Severally, Defendants.

Civil No. 09–00049 JMS/BMK.

United States District Court, D. Hawai‘i.

May 31, 2011.

Grant K. Kidani, Joann K. Takara, Honolulu, HI, for Plaintiff.Trevor A. Brown, H. Shan Wirt, Shyla Pualani Young Cockett, Starn O'Toole Marcus & Fisher, Honolulu, HI, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

J. MICHAEL SEABRIGHT, District Judge.

I. INTRODUCTION

On February 4, 2009, Plaintiff David Kersh (“Plaintiff”) filed this action against Defendants Manulife Financial Corporation (“Manulife”), John Hancock Financial Services, Inc. aka John Hancock Life Insurance Company (USA) (“John Hancock”), and North American Life Assurance Co. (“NALA”), (collectively, “Defendants”), asserting state law claims stemming from a life insurance policy Plaintiff purchased on March 20, 1978. Defendants assert that Plaintiff purchased a whole life insurance policy requiring annual payments and that the policy lapsed in 1984 after Plaintiff stopped making payments. In comparison, Plaintiff asserts that he purchased a universal life insurance policy requiring him to make certain payments within the first seven years of the policy, and that the policy is paid in full.

Currently before the court is Defendants' Motion for Summary Judgment in which they argue, among other things, that Plaintiff's claims are time-barred. Based on the following, the court finds that there is no genuine issue of material fact that all of Plaintiff's claims are time-barred and GRANTS Defendants' Motion for Summary Judgment.

II. BACKGROUND

A. Factual Background1. Plaintiff's Assertions Regarding the Insurance Policy

According to Plaintiff, he received a universal life insurance policy from Defendants. Specifically, in 1978 he approached Max Wayburn, a friend and insurance agent with NALA, to obtain a universal life insurance policy in which payments needed to be made in four out of seven years to be paid in full. Max Wayburn Decl. ¶¶ 1–4. Wayburn was aware that Plaintiff was not interested in whole life insurance (requiring payments during the entire lifetime of the insured), and that Plaintiff was only interested in either term life insurance through B'nai Brith or a “four year and out” universal life insurance policy. Id. ¶ 11. As a result, Wayburn offered Plaintiff a $200,000 life insurance policy with NALA that allowed Plaintiff to pay $16,960 any time within the first seven years (or four payments of $4,240 in any four of the first seven years) for the policy to be paid in full. Id. ¶¶ 6–7. Plaintiff asserts that he made four full premium payments by May or June 1981, resulting in a fully-paid life insurance policy. See Wayburn Decl. ¶ 15; Pl.'s Ex. 3.

2. Defendants' Assertions Regarding Plaintiff's Life Insurance Policy

According to Defendants, Plaintiff did not receive a universal life insurance policy and Plaintiff may have confused the insurance policy he received with a tax concept providing that so long as a policyholder pays the annual premium for four of the first seven years of a life insurance policy, the policy becomes tax qualified. See David Crawford Decl. ¶ 34; Defs.' Ex. H. Rather than a universal life insurance policy, Defendants ¹ assert that a review of their files shows that Plaintiff purchased a participating whole life insurance policy requiring premium payments for the life of the policy. See Crawford Decl. ¶¶ 11–12. Defendants have been unable to find a copy of Plaintiff's policy and assert that NALA may not have forwarded Manulife a copy due to document retention policies and because they believed the policy had lapsed. See Souzan Sarras Decl. ¶¶ 6–7; Crawford Decl. ¶¶ 10. Defendants' records, however, nonetheless indicate that Plaintiff purchased a whole life insurance policy. For example: (1) a data sheet outlines that the policy was a whole life policy with an annual premium of $4,242, see Defs.' Exs. A (data sheet), B (explanation of codes); Crawford Decl. ¶¶ 14–16 (explaining codes on data sheet); (2) NALA did not offer universal life insurance policies in the United States until 1985, Crawford Decl. ¶¶ 39–40; Defs.' Ex. J (announcing universal life insurance policies in the United States); and (3) Plaintiff's $4,242 per year premium was consistent with NALA's whole life insurance rates and policies offered to other similarly-situated people. Defs.' Exs. C (product manual explaining rates), I (sample policy); Crawford Decl. ¶¶ 18–20, 36–38.

According to Defendants' records, Plaintiff made two full premium payments totalling $8,484 and a partial payment of $250. See Defs.' Ex. F; Crawford Decl. ¶ 25. Sometime in 1983, Defendants advised Plaintiff via letter that additional payments were needed to prevent the policy from terminating, and in response the $250 payment was made. See Defs.' Ex. N (letter from Plaintiff discussing letter he received from Defendants). Ultimately, however, no further payments were received and the policy lapsed on February 20, 1984 after automatic premium loans and dividends were exhausted. See Defs.' Exs. D (providing rates to calculate automatic premium loans from a policy); G (showing calculations for lapse of policy); Crawford Decl. ¶¶ 19–21, 25–30 (explaining calculation of lapse of policy).

3. Plaintiff's Communications with Defendants

Starting in 1997, Plaintiff began challenging Defendants' assertions that the policy has lapsed. Defs.' Concise Statement of Facts (“CSF”) ¶ 7.² For example, in October 1997, Plaintiff made express allegations that he had been “defrauded” or “lied to” by NALA and/or Manulife. Id. ¶ 10. In response, Defendants have been explaining the nature of the policy-and why it lapsed-to Plaintiff since 1997. Id. ¶ 7; Crawford Decl. ¶¶ 23–24 (explaining documents provided to Plaintiff); Defs.' Exs. E, F (documents provided to Plaintiff). Indeed, as early as 1997, Manulife sent several letters to Plaintiff explaining that he had purchased a whole life policy requiring him to pay premiums payable for his entire life and that the policy had therefore expired. See Defs.' Exs. H, K, L, M; see also Defs.' Ex. N (Plaintiff's response to a letter).

As early as April 28, 1998, Plaintiff was aware that NALA had terminated the policy in 1984. Defs.' CSF ¶ 11. Upon receipt of an April 28, 1998 letter providing this information, Plaintiff “was really upset and emotional that they were trying to take my money and tell me I don't have a policy.... I probably called them crooks. They stole my money and they're defrauding me, and I was extremely upset that day.” Id. ¶ 13. As a result, Plaintiff began to threaten filing suit against Defendants regarding the policy. Id. ¶ 8.

In or around January 27, 2003, Plaintiff alleged that “someone screwed around with this policy and faked it and lied to me” such that he became “extremely upset and really, really upset over this.” Id. ¶ 14. As of January 31, 2003, however, Defendants informed Plaintiff that they considered the matter closed because they had already endeavored to answer Plaintiff's questions regarding his policy, and, at Plaintiff's request, provided duplicates of documents previously provided. Id. ¶ 9.

B. Procedural Background

Plaintiff filed this action on February 4, 2009, and his First Amended Complaint (“FAC”) asserts claims titled: (1) Breach of Contract (Count I); (2) Unfair Business Practices—HRS § 480–2 (Count II); (3) Recklessness (Count III); ³ (4) Misrepresentation (Count IV); and (5) Intentional Infliction of Emotional Distress (“IIED”) (Count V).

On January 12, 2011, Defendants filed their Motion for Summary Judgment. Plaintiff filed his Opposition on March 21, 2011, and Defendants filed their Reply on March 28, 2011. A hearing was held on April 11, 2011. On May 9, 2011, the parties submitted supplemental briefing regarding accrual of Plaintiff's breach of contract claim and the statute of limitations. Defendants filed a further supplemental reply on May 13, 2011.

III. STANDARD OF REVIEW

Summary judgment is proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Rule 56(a) mandates summary judgment “against a party who fails to make a showing sufficient to establish the existence of an element essential to the party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Broussard v. Univ. of Cal. at Berkeley, 192 F.3d 1252, 1258 (9th Cir.1999).

“A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir.2007) (citing Celotex, 477 U.S. at 323, 106 S.Ct. 2548); see also Jespersen v. Harrah's Operating Co., 392 F.3d 1076, 1079 (9th Cir.2004). “When the moving party has carried its burden under Rule 56 [ (a) ] its opponent must do more than simply show that there is some metaphysical doubt as to the material facts [and] come forward with specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and internal quotation signals omitted); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (stating that a party cannot “rest upon the mere allegations or denials of his pleading” in opposing summary judgment).

“An issue is ‘genuine’ only if there is a sufficient evidentiary basis on which a...