MetLife Inv'rs U.S. Ins. Co. v. Estate of Lindsey

• Decision Date: 02 November 2021
• Docket Number: 2:16-CV-97-TLS
• Parties: METLIFE INVESTORS USA INSURANCE COMPANY, Plaintiff, v. ESTATE OF MELINDA LINDSEY and JULIE KIRBY, in her capacity as Personal Representative of the Probate Estate of Melinda Lindsey, Defendants. ESTATE OF MELINDA LINDSEY and JULIE KIRBY, in her capacity as Personal Representative of the Probate Estate of Melinda Lindsey, Counter-Plaintiffs, v. METLIFE INVESTORS USA INSURANCE COMPANY, Counter-Defendant.
• Court: U.S. District Court — Northern District of Indiana

METLIFE INVESTORS USA INSURANCE COMPANY, Plaintiff, v. ESTATE OF MELINDA LINDSEY and JULIE KIRBY, in her capacity as Personal Representative of the Probate Estate of Melinda Lindsey, Defendants.

ESTATE OF MELINDA LINDSEY and JULIE KIRBY, in her capacity as Personal Representative of the Probate Estate of Melinda Lindsey, Counter-Plaintiffs, v. METLIFE INVESTORS USA INSURANCE COMPANY, Counter-Defendant.

No. 2:16-CV-97-TLS

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

November 2, 2021

OPINION AND ORDER

THERESA L. SPRINGMANN, JUDGE UNITED STATES DISTRICT COURT

This matter is before the Court on a Motion for Summary Judgment [ECF No. 87], filed by Plaintiff/Counter-Defendant MetLife Investors USA Insurance Company (“MetLife”), a Motion to Strike the Affidavit of John F. Fitzgerald [ECF No 100] filed by MetLife, and a Motion to Strike MetLife's Supplemental Designation of Evidence and Corresponding Portions of Reply Brief [ECF No. 103], filed by Defendants/Counter-Plaintiffs Estate of Melinda Lindsey and Julie Kirby in her capacity as Personal Representative of the Probate Estate of Melinda Lindsey (collectively, the “Estate”). The motions are fully briefed and ripe for ruling. For the reasons detailed below, the Court denies MetLife's motion for summary judgment and denies as moot the motions to strike. All claims remain pending for trial.

SUMMARY JUDGMENT STANDARD

Summary judgment is warranted when “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). When the movant seeks summary judgment on a claim on which it bears the burden of proof at trial, the movant “must lay out the elements of the claim, cite the facts which it believes satisfies these elements, and demonstrate why the record is so one-sided as to rule out the prospect of a finding in favor of the non-movant on the claim.” Hotel 71 Mezz Lender LLC v. Nat'l Ret. Fund, 778 F.3d 593, 601 (7th Cir. 2015); see also Reserve Supply Corp. v. Owens-Corning Fiberglas Corp., 971 F.2d 37, 42 (7th Cir. 1992) (“[B]ecause Owens-Corning and CertainTeed . . . have the burden at trial of establishing good faith, they must establish affirmatively the lack of ‘sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.'” (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986))). “If the movant has failed to make this initial showing, the court is obligated to deny the motion.” Hotel 71 Mezz Lender LLC, 778 F.3d at 601.

When the movant seeks summary judgment on a claim for which the non-movant bears the burden of proof at trial, the movant may demonstrate that it is entitled to judgment as a matter of law by “either: (1) showing that there is an absence of evidence supporting an essential element of the non-moving party's claim; or (2) presenting affirmative evidence that negates an essential element of the non-moving party's claim.” Hummel v. St. Joseph Cnty. Bd. of Comm'rs, 817 F.3d 1010, 1015-16 (7th Cir. 2016) (citation omitted). In response, the non-movant “must make a sufficient showing on every element of his case on which he bears the burden of proof; if he fails to do so, there is no issue for trial.” Yeatts v. Zimmer Biomet Holdings, Inc., 940 F.3d 354, 358 (7th Cir. 2019) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).

In ruling on a motion for summary judgment, a court must construe all facts and draw all reasonable inferences in the light most favorable to the nonmoving party. Id. (citation omitted). A court's role “is not to sift through the evidence, pondering the nuances and inconsistencies, and decide whom to believe. The court has one task and one task only: to decide, based on the evidence of record, whether there is any material dispute of fact that requires a trial.” Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994) (citations omitted). Facts that are outcome determinative under the applicable law are material for summary judgment purposes. Anderson, 477 U.S. at 248.

FACTUAL BACKGROUND

On October 17, 2013, Steven Lindsey spoke by telephone with David Ambler, a licensed insurance agent with MetLife. Estate Ex. D, pp. 2-3, ECF No. 97-2. Steven explained:

I'm looking to get my life insurance policy renewed. I had one with you guys there for a long time and then I got divorced. And then my ex-wife got the balance of the term life today and the other one just got canceled and I'd like to at least get the short-term one going again until I can get my mind wrapped around so I can start the term life insurance policy. And also I had questions about getting my current fiancée on life insurance. We have a child together and I think it would be a better idea to help her (inaudible).

Id. at 4:10-21. Steven stated that he believed he previously had a million-dollar policy for himself, and Mr Ambler quoted Steven the premium for a million-dollar, 10-year term policy for himself as well as for his fiancée, Melinda. Id. at 5:13, 14:7-12, 18:5-7.

On January 2, 2014, Melinda, then Steve's wife, completed an application over the telephone with Mr. Ambler for a term life insurance policy and an accidental death benefit rider with MetLife (“Application”). MetLife Ex. 1 ¶ 5 (Fluharty Aff.), ECF No. 88-1; MetLife Ex. 1-B, ECF No. 88-3; Estate Ex. I, ECF No. 97-3. During the call, Melinda confirmed that she was financially dependent on Steven. Estate Ex. I 12:21, 30:7-9. Mr. Ambler asked, “And do you know how much life insurance Steven has now?” Id. at 30:10-11. Melinda responded, “[T]wo million.” Id. at 30:12. The written Application contained the answers that Melinda is a “homemaker” and “mother, ” that she was financially dependent on her spouse, Steven, that Steven's earned annual income was $180, 000, and that Steven had insurance in the amount of $2, 000, 000. MetLife Ex. 1-B at 1, 3. Steven is listed as the primary beneficiary on the Application. Id. at 2. Melinda also answered questions about her medical history in the Medical Supplement portion of the Application. Id. at 9-13. Melinda electronically signed the Application, agreeing that, among other things, she “read this application for life insurance including any amendments and supplements” and “to the best of my knowledge and belief, all statements are true and complete.” Id. at 6, 7.

On January 31, 2014, Steven contacted MetLife by telephone and spoke with MetLife representative Ashley. Estate Ex. F, ECF No. 97-2. Ashley confirmed that, although Steven had previously spoken with Mr. Ambler, her office was now handling the Application while it was in underwriting. Id. 4:8-15. Steven asked,

[D]o you know what - - is there like an estimated ETA on when I'll know? Because I was gonna do mine as well, get my policy going, but I'm actually in the middle of changing jobs and so I wanted to wait until I got into my new position because they offer life insurance too and I wanted to see what it is that they offer.

Id. at 5:2-8. Ashley indicated that the average review time is four to eight weeks. Id. at 5:19-21.

On March 26, 2014, MetLife issued policy number MLT140D065 to Melinda with a benefit amount of $1, 000, 000 (“Policy”). MetLife Ex. 1-A, p. 3, ECF No. 88-2. In the General Provisions section, the Policy contains an “Incontestability” clause that provides: “We cannot contest the coverage after the Policy has been in force during the lifetime of the Insured for two years from its Issue Date. This provision will not apply to any rider that contains its own incontestability clause.” Id. at 9. An Accidental Death Benefit Rider in the amount of $100, 000 was also issued on March 26, 2014, with an incontestability clause that provides: “This Rider will not be contestable after it has been in force during the lifetime of the Insured for two years from the Issue Date of this Rider.” Id. at 3, 19.

On January 16, 2015, within the contestability period, Melinda was shot and killed. See MetLife Ex. 1, ¶ 13; MetLife Ex. 1-C (Death Certificate), ECF No. 88-4. On February 12, 2015, Steven was arrested and charged with Melinda's murder. Estate SJ Ex. E, ECF No. 42-2.

MetLife conducted a contestability period investigation to verify the information provided in the Application, including, as relevant here, the statement that Steven had an insurance policy. See MetLife Ex. 1, ¶ 13; MetLife Ex. 2, ¶¶ 4, 7 (Mirabelli Aff.), ECF No. 88-7. The investigator, Gregory Mirabelli, states in his affidavit, “My normal course of investigation would be to interview Steven Lindsey, who was named as the beneficiary on the policy, in order to verify that information, but when I began my investigation I learned that Steven Lindsey was incarcerated and was not available to be interviewed.” MetLife Ex. 2, ¶ 9. Mr. Mirabelli did not make an effort to speak with Steven. Estate Ex. C 11:16-12:13 (Mirabelli Dep.), ECF No. 97-2. Mr. Mirabelli interviewed Melinda's parents, but they were unable to provide information about any insurance for Steven. MetLife Ex. 2, ¶ 10.

As part of the investigation, Mr. Mirabelli checked MetLife's records and did not find any life insurance policy for Steven with MetLife that was in effect at the time of Melinda's Application. Id. at ¶ 11.

Mr Mirabelli also made inquiries with fifteen life insurers or reinsurers. Id. at ¶ 12; Estate Ex. C-3, ECF No. 97-2. The inquiries were made of industry contacts that Mr. Mirabelli had developed over the years through his investigative work. Estate Ex. C 16:21-17:9. Those fifteen contacts do not reflect all life insurance carriers or reinsurance carriers that provide life insurance. Id. at 17:10-15. For example, Mr. Mirabelli did not contact Allstate Insurance Company, American Family...