Luther W. Royal & Royal Commercial Refrigeration, Inc. v. N.Y. Life Ins. Co.
| Decision Date | 26 January 2015 |
| Docket Number | 6:10-cv-104 |
| Parties | LUTHER W. ROYAL and ROYAL COMMERCIAL REFRIGERATION, INC., Plaintiffs, v. NEW YORK LIFE INSURANCE COMPANY, THE PAUL REVERE LIFE INSURANCE COMPANY, and UNUM GROUP, Defendants. |
| Court | U.S. District Court — Southern District of Georgia |
Before the Court are New York Life Insurance Company's, The Paul Revere Life Insurance Company's ("Paul Revere"), and Unum Group's (collectively "Defendants") Motion for Summary Judgment, ECF No. 35, and Luther W. Royal's ("Royal") and Royal Commercial Refrigeration, Inc.'s ("RCR") (collectively "Plaintiffs") Motion for Summary Judgment, ECF No. 37.
Royal originally filed this suit in state court seeking the full amount of benefit payments he alleges Defendants owe him under his disability insurance policy. ECF No. 1-1. Defendants removed the case to this Court on the basis of diversity jurisdiction. ECF No. 1. Then, in their Answer, Defendants advanced a counterclaim alleging that Royal fraudulently obtained payments under the disability insurance policy. ECF No. 4 at 22-23. RCR was later joined as a party. ECF No. 21.
Defendants now move for summary judgment, arguing that Royal cannot establish that he is owed any benefits under the terms of the policy. See ECF No. 35-17 at 2-3. Royal, on the other hand, has moved for summary judgment as to Defendants' counterclaim, arguing that the statute of limitations bars the claim. See ECF No. 37 at 1.
For the reasons set forth below the Court GRANTS Defendants' motion for summary judgment, ECF No. 35, and GRANTS IN PART and DENIES IN PART Plaintiffs' motion for summary judgment, ECF No. 37.
Royal applied for a disability income insurance policy through New York Life Insurance Company in 1988. ECF Nos. 35-16 at 1; 43-3 at 1. RCR was to be the policy's owner and Royal was to be the insured. ECF Nos. 35-16 at 1; 43-3 at 1. New York Life issued Policy No. H3 075 810 ("the Policy") which, after amendment, had an effective date of March 8, 1988. See ECF Nos. 35-16 at 2; 43-3 at 2. In the event of total disability, the Policy provided for a monthly benefit of $6,000. ECF Nos. 35-16 at 3; 43-3 at 2. In the event of residual disability, on the other hand, the Policy provided for a proportional benefit constituting a percentage of the total disability benefit. ECF Nos. 35-16 at 3; 43-3 at 2. In November 1999, New York Life sold a block of insurance policies, which included the Policy, to Paul Revere. ECF Nos. 35-16 at 8; 43-3 at 8. After this sale, Paul Revere assumed responsibility foradministering claims under the Policy. ECF Nos. 35-16 at 8; 43-3 at 8.
On February 9, 2004, Royal submitted a claim to Paul Revere for total disability benefits under the Policy. ECF No. 35-16 at 8; 43-3 at 9. His claim alleged that he injured his knee and back in June of 2002 and that he had only been able to return to part-time work of ten to fifteen hours per week on January 30, 2003. ECF Nos. 35-16 at 9; 43-3 at 9. After filing this initial claim, from March 2004 through September 2006, Royal regularly submitted further proof of loss in support of his claim for benefits. ECF Nos. 35-16 at 9; 43-3 at 10. The proof of loss submitted included Claimant's Supplemental Statements provided by the insurer, medical information, and occupational information. ECF Nos. 35-16 at 9; 43-3 at 11.
Pursuant to this claim and proof of loss, Paul Revere paid out total disability benefits of $6,000 per month from June 1, 2002, through January 31, 2003. ECF Nos. 35-16 at 11; 43-3 at 12. After this period of total disability, Paul Revere continued to pay residual disability benefits, totaling $142,615.22, from February 1, 2003, to April 1, 2006. ECF Nos. 35-16 at 11; 43-3 at 13.
In May of 2006, however, Paul Revere received a tip on its fraud hotline from Betty Whitehead, a long-time office manager of RCR. ECF Nos. 35-16 at 11; 43-3 at 14. Pursuant to this tip, Paul Revere instituted an in-depth investigation into Royal's benefits claims, which included surveillance and an audit of RCR's business records. ECF Nos. 35-16 at 12; 43-3 at 15. Based on this investigation, Paul Revere submitted a Suspected Fraud Referral Form to the Office of Commissioner of Insurance. ECF Nos. 35-7; 35-16 at 18; 43-3 at 23. Paul Revere also determined that Royal was not, and had not, been eligible for benefits under the Policy and, on October 31, 2006, notified Royal that it was closing his claim. ECF No. 35-16 at 18; 43-3 at 24.
On November 3, 2010, Royal filed this claim in Georgia state court seeking recovery of benefits allegedly due under the Policy. ECF No. 1-1. Defendants removed the case to this Court on December 8, 2010. ECF No. 1. On December 15, 2010, Defendants filed their Answer to Royal's Complaint as well as a counterclaim seeking damages for Royal's allegedly fraudulent benefits claims. ECF No. 4. Then, on January 21, 2011, the Court administratively closed the case pending the conclusion of a Royal's related criminal proceeding. ECF No. 11. On August 29, 2013, after a jury acquitted Royal, the Court re-opened the case. ECF No. 13.
On September 3, 2014, both parties moved for summary judgment—Defendants as to all of Royal's claims and Royal as to Defendants' Counterclaim. ECF Nos. 35; 37. After some delay, the motions are now ripe for adjudication.
"The court shall grant summary judgment 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." Fed. R. Civ. P. 56(a). In ruling on summary judgment, the Court views the facts and inferences from therecord in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Reese v. Herbert, 527 F.3d 1253, 1271 (11th Cir. 2008). Courts, moreover, may consider all materials in the record, not just those cited by the parties. Fed. R. Civ. P. 56(c)(3).
The moving party "bears the initial responsibility of informing the district 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." Reese, 527 F.3d at 1268 (internal quotation marks omitted) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). "Where the nonmoving party bears the burden of proof at trial, the moving party may discharge this 'initial responsibility' by showing that there is an absence of evidence to support the nonmoving party's case or by showing that the nonmoving party will be unable to prove its case at trial." Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1260 (11th Cir. 2004). "Alternatively, the moving party may support its motion for summary judgment with affirmative evidence demonstrating that the nonmoving party will be unable to prove its case at trial." United States v. Four Parcels of Real Property in Green and Tuscaloosa Cntys. in the State of Ala., 941 F.2d 1428, 1438 (11th Cir. 1991).
Once the moving party has satisfied its initial responsibility, the burden shifts to the nonmovant to demonstrate the existence of a genuine issue of material fact. Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1116 (11th Cir. 1993). The nonmoving party, however, "may not rest upon the mere allegations or denials of [its] pleading[s], but . . . must set forth specific facts showing that there is a genuine issue for trial." Young v. City of Palm Bay, Fla., 358 F.3d 859, 860 (11th Cir. 2004). "A genuine issue of material fact exists if 'the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Owen v. I.C. Sys., Inc., 629 F.3d 1263, 1270 (11th Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A fact is material only if it might affect the outcome of the suit under governing law. See Anderson, 477 U.S. at 248.
Further, "[f]or issues on which the non-movant would bear the burden of proof at trial," the means of rebuttal available to the non-movant differs depending upon how the movant satisfied its "initial responsibility." See Fitzpatrick, 2 F.3d at 1116. If the movant has offered evidence affirmatively negating an issue, "the non-movant must respond with evidence sufficient to withstand a directed verdict motion at trial on the [issue] sought to be negated." Id. On the other hand, where the movant has "instead demonstrated an absence of evidence on the issue," the nonmovant may either "show that the record in fact contains supporting evidence, sufficient to withstand a directed verdict," or "come forward with additional evidence sufficient to withstand a directed verdict motion at trial based on the alleged evidentiary deficiency." Id. at 1116-17.
The Court will now take the parties' motions up in turn, starting with Defendants' motion for summary judgment before turning to Royal's motion for summary judgment on Defendants' counterclaim.
Before turning to the merits of the parties' motions, the Court first determines whether it has jurisdiction over this case. Defendants removed this case from state court on the basis of the Court's diversity jurisdiction, 28 U.S.C. § 1332. ECF No. 1 at 4. In the Notice of Removal, Defendants allege that Royal is a citizen of Georgia, that New York Life is a New York mutual insurance company with its principal place of business in New York, that Paul Revere is a Massachusetts corporation with its principal place of business in Massachusetts, and that Unum Group is a Delaware corporation with its principal place of business in Tennessee. Id. at 2.2
On initial review, it is unclear whether this Notice of Removal sufficiently alleges diversity of citizenship for purposes of jurisdiction under 28 U.S.C. § 1332. Two of the three defendants possibly are limited liability companies that...
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