Kirby v. AXA Equitable Fin. Servs., LLC
| Decision Date | 21 December 2015 |
| Docket Number | Case No. 1:13cv837 |
| Parties | Michelle Kirby, et al., Plaintiffs, v. AXA Equitable Financial Services, LLC, et al., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
OPINION & ORDER
This matter is before the Court upon Defendants' Motion for Summary Judgment (Doc. 15) and Plaintiffs' Motion for Summary Judgment (Doc. 16). These motions have been fully briefed. (Docs. 21, 22, 23, 24).
On February 7, 1991, Charles B. Wilmer purchased a life insurance policy (the "Policy") from Defendant AXA Equitable Life Insurance Company ("AXA"). . Wilmer named his wife, Carolyn Wilmer, and his stepchildren, Plaintiffs Michelle Kirby and James Spivey, as the beneficiaries. (Id., PAGE ID # 160).
The Policy was a flexible premium variable life insurance policy which acts as an investment vehicle and provides for a $200,000.00 cash benefit upon the policyholder's death. (Id.)
As part of the policy, Mr. Wilmer executed a "Request for System-Matic Payment Plan" (the "Payment Authorization") which authorized AXA to withdraw $182.75 from the Wilmers' joint bank account and deposit those funds into an AXA Policy Account. (Long Aff., Ex. B, PAGEID # 190). Funds were deducted from the AXA Policy Account to cover monthly insurance premiums. However, the Policy provided: "The premium payments shown above may not be sufficient to continue the policy and life insurance coverage in force . . ." . If the funds being withdrawn through the Payment Authorization were insufficient to cover premium payments, the Policy provides that AXA will:
send written notice to you and any assignee on our records at last known addresses stating that a grace period of 61 days has begun, starting with the beginning of that policy month. The notice will also state the amount of the premium payment sufficient to cover monthly deductions for 3 months.
(Id., PAGEID # 169). The Policy also provides: "If we do not receive such amount at our Administrative Office before the end of the grace period, we will then . . . send a written notice to you and any assignee on our records at last known addresses stating that the policy has ended without value." (Id.)
During the life of the policy, AXA sent Mr. Wilmer three Notices of Policy Lapse, which informed him that the net cash surrender value of the Policy was not sufficient to cover the monthly deductions. (Long Aff., ¶¶ 12, 15, 16). Each time, Mr. Wilmer paid the amount necessary to cover the shortfall. (Id.) Twice, in December of 2006 and November of 2010, Mr. Wilmer requested that the Payment Authorization amount be increased, first to $220.00, and then to $300.00 per month in order to adequately fund the AXA Policy Account. (Id., ¶¶ 13, 17).
There appears to be no dispute that from 1991 through January 2013, Mr. Wilmer made all required monthly premium payments on the life insurance policy.
In February 2013, the total monthly insurance premium, plus administrative fees,which AXA claimed was due was $342.15. (Doc. 18, Valerie Long Dep. at 27, 34). This amount, which was scheduled to be withdrawn on January 27, 2013, exceeded the $335.66 available in the Policy Account by $6.49. (Id. at 28-29). AXA claims that on January 28, 2013, it sent Mr. Wilmer a Notice of Policy Lapse advising him that the net cash surrender value was not sufficient to cover the monthly deduction. (Long Aff. ¶ 18).
In January 2013, Mr. Wilmer, who was battling cancer, entered a hospice facility. (Doc. 17-1, Michelle Kirby Dep. at 33). Mrs. Wilmer collected the mail in an accordion folder and brought it to Mr. Wilmer at the hospice facility. (Id. at 33, 49). According to Kirby, Mr. and Mrs. Wilmer were both very methodical about their mail. (Id. at 49). In February of 2013, Kirby visited Mr. Wilmer at the hospice facility and went through the mail in the accordion folder to make sure that nothing needed attention. (Id. at 50-51).
On April 11, 2013, Mr. Wilmer passed away. AXA claims that it sent a Notice of Policy Termination on April 1, 2013. (Long Aff., ¶ 19).
On April 15, 2013, Kirby contacted AXA to collect the death benefit payable on the Policy, but she was informed that the Policy had terminated as of April 1, 2013 due to nonpayment of premiums. (Kirby Dep. at 49). Kirby searched both the accordion file and the Wilmer home for a Notice of Policy Lapse or a Notice of Policy Termination. (Id.) Kirby did not locate the notices. (Id.)
AXA has not paid benefits to Plaintiffs under the Policy. AXA takes the position that because the Policy was terminated as of April 1, 2013, no amounts are due to Plaintiffs. Plaintiffs have brought claims for (1) breach of contract; (2) detrimental reliance and estoppel; and (3) misrepresentation.
Federal Rule of Civil Procedure 56(a) provides that summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." The moving party has the burden of showing an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the moving party has met its burden of production, the non-moving party cannot rest on his pleadings, but must present significant probative evidence in support of his complaint to defeat the motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986).
"The standard of review is the same when reviewing cross-motions for summary judgment, but the court must be careful to 'evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.'" Langston v. Charter Twp. of Redford, No. 14-1664, 2015 WL 4645851, at *4 (6th Cir. Aug. 6, 2015) (quoting Taft Broad. Co. v. United States, 929 F.2d 240, 248 (6th Cir. 1991)).
"It is well-settled in Ohio that in cases involving a contract, the law of the state where the contract is made governs interpretation of the contract." Nationwide Mut. Ins. Co. v. Ferrin, 21 Ohio St. 3d 43, 44, 487 N.E.2d 568, 569 (Ohio 1986) (citing Garlick v. McFarland, 159 Ohio St. 539, 545, 113 N.E.2d 92 (Ohio 1953)). While some of the briefing relies upon Ohio contract law, there appears to be no dispute between the parties that the contact was made in Illinois and Illinois law applies to the interpretation of thePolicy.
Under Illinois law, the insurance carrier bears the burden of proving that a notice of policy lapse was addressed and mailed to the policyholder. Hotaling v. Chubb Sovereign Life Ins. Co., 241 F.3d 572, 579 (7th Cir. 2001) (citing Cullen v. North American Co., 176 Ill.App.3d 643, 126 Ill.Dec. 95, 531 N.E.2d 390 (1988)).
In support of its contention that notice was mailed to Mr. Wilmer, AXA has submitted the Affidavit of Valerie Long. Long states that the physical mailing of the notices to Mr. Wilmer was performed by a third-party vendor, Broadridge Financial Solutions, Inc. (Long Aff., ¶ 21).
Plaintiffs argue that Long's affidavit should be stricken because the affidavit conflicts with Long's previous deposition testimony. Long testified as follows:
To the extent that Long was not able to recall the name of the third-party vendor during her deposition, the Court finds that her affidavit merely "fills a gap left open" in her deposition, and this is not a basis to strike her affidavit. See Aerel, S.R.L. v. PCC Airfoils, L.L.C., 448 F.3d 899, 907 (6th Cir. 2006).
Plaintiffs also argue that to the extent Long states in her affidavit that Broadridge mailed the Notices to the Wilmers, the facts contained in Long's affidavit are foundedupon inadmissible hearsay evidence. Plaintiffs explain that in her deposition, Long testified that she had no knowledge regarding the physical mailing of the notices, so that the only way that Long could have gotten that information is if someone at Broadridge told her that information.
The Court notes that while Long did not have detailed information regarding the process by which AXA sent notices, she did testify generally about the process:
"[W]hen deciding the admissibility of a post-deposition affidavit at the summary-judgment stage, the district court must first determine whether the affidavit 'directly contradicts' prior sworn testimony." O'Brien v. Ed Donnelly Enters., Inc., 575...
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