Kimmel v. WESTERN RESERVE LIFE ASSUR. CO. OF OHIO

• Decision Date: 14 January 2010
• Docket Number: Case No. 2:08-CV-55-PRC.
• Citation: 678 F. Supp.2d 783
• Parties: June L. KIMMEL, Individually, and as Personal Representative of the Estate of Richard Kimmel, Plaintiff, v. WESTERN RESERVE LIFE ASSURANCE COMPANY OF OHIO, Defendant.
• Court: U.S. District Court — Northern District of Indiana

678 F.Supp.2d 783

June L. KIMMEL, Individually, and as Personal Representative of the Estate of Richard Kimmel, Plaintiff, v. WESTERN RESERVE LIFE ASSURANCE COMPANY OF OHIO, Defendant.

Case No. 2:08-CV-55-PRC.

United States District Court, N.D. Indiana, Hammond Division.

January 14, 2010.

Richard M. Davis, Hoeppner Wagner and Evans LLP, Valparaiso, IN, for Plaintiff.

Elizabeth M. Bezak, Jill M. Grecco, Terence M. Austgen Singleton Crist Austgen & Sears LLP, Munster, IN, for Defendant.

OPINION AND ORDER

PAUL R. CHERRY, United States Magistrate Judge.

This matter is before the Court on (1) a Motion for Summary Judgment of Defendant Western Reserve Life Assurance Company of Ohio DE 19, filed by Defendant Western Reserve Life Assurance Company of Ohio ("Western Reserve") on July 15, 2009; (2) a Cross Motion for Partial Summary Judgment DE 26, filed by Plaintiff June L. Kimmel, Individually, and as Personal Representative of the Estate of Richard Kimmel on August 31, 2009; and (3) a Motion of Defendant, Western Reserve Life Assurance Company of Ohio, to Strike Affidavit of Newcomb DE 33, filed by Western Reserve on September 25, 2009. All motions are fully briefed and ripe for ruling.

Finding that the conditional receipt issued by Western Reserve to Mr. Kimmel at the time he made his application for life insurance on November 13, 2006, expired on its own terms after sixty days on January 12, 2007, which was prior to Mr. Kimmel's death in an automobile accident on February 26, 2007, the Court holds that the temporary coverage of the conditional receipt expired and Western Reserve is not liable for death benefits to Mrs. Kimmel under the conditional receipt. On Mrs. Kimmel's allegations of breach of the duty of good faith and fair dealing, the Court grants summary judgment in favor of Western Reserve, finding that Indiana does not recognize a common law duty to accept or reject an application for life insurance within a specific period of time and that Mrs. Kimmel has not raised a genuine issue of material fact that Western Reserve had knowledge that there was no legitimate basis for denying liability.

PROCEDURAL BACKGROUND

Mrs. Kimmel filed a Complaint against Western Reserve in the Lake Superior Court on January 7, 2008, alleging breach of a life insurance contract insuring her husband's life and seeking damages in the amount of $500,000 and prejudgment and post judgment interest. In Count I of her Complaint, Mrs. Kimmel seeks death benefits under a conditional receipt ("Conditional Receipt"), alleging that Western Reserve neither accepted nor rejected the application for insurance, that Western Reserve's "delay in processing the Application was unreasonable," and that the Kimmels would have sought and received insurance coverage from another source had the Application been timely denied during Mr. Kimmel's lifetime. In Count II, Mrs. Kimmel seeks death benefits under the Conditional Receipt, alleging that Mr. Kimmel answered all questions on the Application "truthfully, accurately and completely," that Western Reserve created pretextual reasons for denying benefits and wrongfully accused Mr. Kimmel of failing to fully disclose his mental health status, that Western Reserve wrongfully accused Mr. Kimmel of giving untrue and incomplete answers on his Application, and that Western Reserve falsely claims that changes in the insurability of Mr. Kimmel were discovered after his death, such that Mr. Kimmel was insurable as of the effective date of the Conditional Receipt. Finally, in Count III, Mrs. Kimmel seeks compensatory damages for a breach of the duty of good faith and fair dealing, alleging that Western Reserve's failure to accept or deny the application within the more than three months between the application and Mr. Kimmel's death was an unreasonable delay and that the reasons set forth in the denial letter are pretextual and based on false allegations.

On February 19, 2008, Western Reserve filed a Notice of Removal to this Court. On March 25, 2008, Western Reserve filed an Answer to the Complaint, denying the material allegations therein and asserting affirmative defenses. Specifically, Western Reserve maintains that the terms of the Conditional Receipt were enforceable and that Mr. Kimmel's application for life insurance had expired by the express terms of the Conditional Receipt. Western Reserve further maintains that Mrs. Kimmel is not entitled to recovery because of material misrepresentations on the insurance application and that any life insurance policy for Mr. Kimmel was void ab initio, void, and/or voidable. Finally, Western Reserve denies any bad faith or undue delay.

The parties filed forms of consent to have this case assigned to a United States Magistrate Judge to conduct all further proceedings and to order the entry of a final judgment in this case. Therefore, this Court has jurisdiction to decide this case pursuant to 28 U.S.C. § 636(c).

MOTION TO STRIKE

In response to the Motion for Summary Judgment and in support of her Cross Motion for Summary Judgment, Ms. Kimmel submits the affidavit of Richard D. Newcomb, the insurance agent who solicited and submitted Mr. Kimmel's life insurance application. In the Motion to Strike, Western Reserve asks the Court to strike the affidavit as a whole, arguing that Mrs. Kimmel holds Mr. Newcomb out as an expert witness but that she did not disclose him as an expert witness in accordance with Federal Rule of Civil Procedure 26(a)(2) or identify him as an expert in response to interrogatories. Specifically, Western Reserve objects to Mr. Newcomb's testimony as it relates to Western Reserve's underwriting or claims handling policies and procedures, specifically in paragraphs 13, 41, and 42.

Having reviewed Mr. Newcomb's Affidavit and in light of the basis for the Court's ruling on the pending cross-motions for summary judgment, the Court finds that the opinions on these topics in these and other paragraphs offered by Mr. Newcomb in his Affidavit are not relied on by the Court and thus the motion to strike as to these statements is denied as moot. However, to the extent that Mr. Newcomb makes statements of fact based on his personal knowledge of Mr. Kimmel's application process, the advice he gave Mr. Kimmel, and his personal knowledge of Mr. Kimmel's background and medical history in giving that advice, such as in paragraphs 1-9, 11-12, 14-15, 17, 19-23, 25-37, and 40, his statements comport with Federal Rule of Evidence 701, and the Court denies the motion to strike as to those statements. The Court notes that Western Reserve does not provide any specific analysis or reasoning in support of its motion to strike as to these identified paragraphs.

Accordingly, the Court denies in part and denies as moot in part the Motion to Strike.

MOTION FOR SUMMARY JUDGMENT

A. Summary Judgment Standard

The Federal Rules of Civil Procedure mandate that motions for summary judgment be granted "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Rule 56(c) further requires the entry of summary judgment, after adequate time for discovery, against a party "who fails to make a showing sufficient to establish the existence of an element essential to that 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). "Summary judgment is appropriate—in fact, is mandated—where there are no disputed issues of material fact and the movant must prevail as a matter of law. In other words, the record must reveal that no reasonable jury could find for the non-moving party." Dempsey v. Atchison, Topeka, & Santa Fe Ry. Co., 16 F.3d 832, 836 (7th Cir.1994) (citations and quotation marks omitted).

A party seeking summary judgment bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The moving party may discharge its "initial responsibility" by simply "`showing'—that is, pointing out to the district court—that there is an absence of evidence to support the non-moving party's case." Id. at 325, 106 S.Ct. 2548. When the non-moving party would have the burden of proof at trial, the moving party is not required to support its motion with affidavits or other similar materials negating the opponent's claim. See id. at 323, 325, 106 S.Ct. 2548; Green v. Whiteco Indus., Inc., 17 F.3d 199, 201 n. 3 (7th Cir.1994); Fitzpatrick v. Catholic Bishop of Chi., 916 F.2d 1254, 1256 (7th Cir.1990). However, the moving party, if it chooses, may support its motion for summary judgment with affidavits or other materials and thereby shift to the non-moving party the burden of showing that an issue of material fact exists. See Kaszuk v. Bakery & Confectionery Union & Indus. Int'l Pension Fund, 791 F.2d 548, 558 (7th Cir. 1986); Bowers v. DeVito, 686 F.2d 616, 617 (7th Cir.1982).

Once a properly supported motion for summary judgment is made, the non-moving party cannot resist the motion and withstand summary judgment by merely resting on its pleadings. See Fed.R.Civ.P. 56(e)(2); Donovan v. City of Milwaukee, 17 F.3d 944, 947 (7th Cir.1994). Rule 56(e) establishes that the opposing party's "response must—by affidavits or as otherwise provided in this rule—set out specific facts showing a genuine issue for trial." Fed. R.Civ.P. 56(e)(2); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Thus, to demonstrate a genuine issue of fact, the non-moving party must do more...