Pruco Life Ins. Co. v. Villarreal
| Decision Date | 13 September 2021 |
| Docket Number | Civil Action H-17-2795,H-17-2796 |
| Parties | PRUCO LIFE INSURANCE COMPANY, Plaintiff, v. BLANCA MONICA VILLARREAL, Defendant. TRANSAMERICA LIFE INSURANCE COMPANY, Plaintiff, v. BLANCA MONICA VILLARREAL, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
MEMORANDUM AND OPINION ON MOTIONS SEEKING PARTIAL SUMMARY JUDGMENT AS TO INCONTESTABILITY, SUMMARY JUDGMENT AS TO RESCISSION, AND PARTIAL SUMMARY JUDGMENT AS TO THE COUNTERCLAIMS
This litigation over life insurance proceeds has occupied the insurers, the beneficiary, and the lawyers and investigators on both sides for years. The court has devoted considerable time and effort to working through the parties' numerous disputes on facts, law, discovery, and case management.
The facts present an almost hackneyed theme. An insured dies suddenly, a little over two years after large-dollar life insurance policies issue, leaving a young widow who is not the original beneficiary, but no body. Few cases, however present similar facts or offer guidance on the law.
The policies issued on June 25 and August 26, 2014. The insured was reported to have died on December 29, 2016, in Mexico where he and the beneficiary resided. The premiums were fully and timely paid. Since then, the insurers have been investigating, pointing to factors they claim indicate fraud by the insured in obtaining the policies and by his beneficiary in claiming the benefits.[1]
In 2017, the insurers sued, seeking a declaratory judgment that they did not owe the death benefits sought. The beneficiary, Blanca Monica Villarreal, answered and counterclaimed for breach of contract and violations of the Texas Insurance Code. Discovery is done, at last. (Docket Entry No. 182). The parties have asked the court to decide three sets of motions seeking partial summary judgment or summary judgment.
One set of motions presents a threshold question of incontestability. Villarreal has moved for partial summary judgment that the policies, which are substantively identical, are incontestable under Texas law, including against a challenge that the insured obtained them through material, intentional misrepresentations in the policy applications. (Docket Entry No. 192, 17-2795; Docket Entry No. 190, 17-2796). The insurers have responded. (Docket Entry No. 202, 17-2795; Docket Entry No. 198, 17-2796). The insurers also objected to and moved to strike evidence used in support of Villarreal's motion for partial summary judgment as to incontestability. (Docket Entry No. 200, 17-2795; Docket Entry No. 196, 17-2796). In response, Villarreal moved for leave to file summary judgment evidence. (Docket Entry No. 205, 17-2795; Docket Entry No. 199, 17-2796). The insurers have responded. (Docket Entry No. 215, 17-2795; Docket Entry No. 208, 17-2796).
A related set of motions asks the court to decide whether there are material, intentional misrepresentations in the insured's applications that, assuming the policies are contestable on this basis, would provide a basis for rescission. The insurers moved for summary judgment on rescission. They point to what they assert is undisputed evidence showing that the insured deliberately lied on his policy applications about his financial situation, his relationship to the original policy beneficiary, and his citizenship. (Docket Entry No. 194, 17-2795; Docket Entry No. 191, 17-2796). Villarreal has responded, arguing that there are at least factual disputes as to whether the representations in the applications were false, much less materially so. (Docket Entry No. 201, 17-2795; Docket Entry No. 197, 17-2796). The insurers replied. (Docket Entry No. 206, 17-2795; Docket Entry No. 200, 17-2796). The insurers also objected to and moved to strike evidence Villarreal filed with her response. (Docket Entry No. 207, 17-2795; Docket Entry No. 201, 17-2796). Villarreal then moved for leave to file summary judgment evidence. (Docket Entry No. 212, 17-2795; Docket Entry No. 205, 17-2796). The insurers have responded. (Docket Entry No. 215, 17-2795; Docket Entry No. 208, 17-2796).
The third set of motions asks the court to decide whether Villarreal's Texas Insurance Code counterclaims for extracontractual damages can proceed. The insurers say no, because the record discloses numerous bona fide disputes that led them to conduct an investigation that reasonably led them not to pay the death benefits. They seek partial summary judgment dismissing the counterclaims. (Docket Entry No. 189, 17-2795; Docket Entry No. 188, 17-2796). Villarreal vigorously disputes that the insurers investigated reasonably or in good faith. Instead, according to Villarreal, the insurers' investigation “was not conceived as an effort to verify Mr. Rosendi's death at all; it was, instead, expressly an effort to find a reason to avoid the claims made by Ms. Villarreal.” (Docket Entry No. 198, 17-2795, at 4; Docket Entry No. 195, 17-2796, at 4). The insurers replied. (Docket Entry No. 208, 17-2795; Docket Entry No. 202, 17-2796). The insurers also objected to and moved to strike evidence filed in support of Villarreal's response to the insurers' motion for partial summary judgment. (Docket Entry No. 209, 17-2795; Docket Entry No. 203, 17-2796). In response, Villarreal moved for leave to file summary judgment evidence. (Docket Entry No. 211, 17-2795; Docket Entry No. 204, 17-2796). The insurers have responded. (Docket Entry No. 215, 17-2795; Docket Entry No. 208, 17-2796).
After wading through the motions and responses, the record, oral argument, and the applicable law, the court concludes that the policies are susceptible to challenge on the basis of material, intentional misrepresentations made in the policy applications. But the rest of the issues presented—were material, intentional misrepresentations made? Did the insurers reasonably and in good faith investigate the insured's death? Is he dead?—are riddled with factual disputes that implicate credibility and that support competing inferences. The result is a trial. Given the age of the claim and litigation, it is a trial that should take place at the earliest practicable time.
The reasons for these rulings are set out in more detail below. Because this case is so familiar to the parties, the background is not described in detail. The parties have done that thoroughly and well.
The court must first address the insurers' objections to the evidence Villarreal presented in her motion for partial summary judgment on incontestability, her response to the insurers' motion for summary judgment on rescission, and her response to the insurers' motion for partial summary judgment on her Chapter 541 counterclaims. Under Fed.R.Civ.P. 56(c)(2), “[a] party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence.” Fed.R.Civ.P. 56(c)(2). “Although the substance or content of the evidence submitted to support or dispute a fact on summary judgment must be admissible . . ., the material may be presented in a form that would not, in itself, be admissible at trial.” Lee v. Offshore Logistical & Transp., L.L.C., 859 F.3d 353, 355 (5th Cir. 2017) (alteration in original) (quoting 11 Moore's Federal Practice-Civil ¶ 56.91 (2017))). When considering evidence in improper form during summary judgment, there is a “precondition . . . that the party submitting the evidence must show that it will be possible to put the information . . . into an admissible form.” Campos v. Steves & Sons, Inc., __F.4th__, 2021 WL 3674036, at *4 (5th Cir. Aug. 19, 2021) (citations and quotation marks omitted); see also Fed. R. Civ. P. 56(c)(2) advisory committee's note to 2010 amendment ( ).
First, in all three sets of motions, the insurers move to strike certain exhibits attached to the affidavit of Francisco Guerra IV, Villarreal's counsel since January 2021, in which he authenticates the exhibits. The insurers argue that Guerra does not have the personal knowledge necessary to properly authenticate certain exhibits. See Fed. R. Evid. 901(a). Villarreal need not authenticate all documents at summary judgment if the documents can be authenticated at trial. See Maurer v. Indep. Town, 870 F.3d 380, 384 (5th Cir. 2017) (). There is no reason to believe at this stage, based on the evidence presented, that other means cannot be provided for authentication at trial. The insurers' motions to strike evidence that Guerra's affidavit authenticates is denied, unless otherwise addressed on separate grounds below.
Second in all three sets of motions, the insurers move to strike the full deposition transcripts that Villarreal attaches to her briefing, other than the specific lines that she cites to, because “[s]ummary judgment assertions must be supported by citation to specific parts of the evidence in the record.” (Docket Entry No. 200 at 4 (citing Fed R. Civ. P. 56(c)(1)(A); Local Rule 26.1)). Villarreal moved for leave to amend the evidence to file only the relevant pages of the deposition testimony. Because the evidence can be provided in admissible form at trial, the court grants Villarreal's motion for leave to amend her deposition exhibits and will consider the portions Villarreal cited. This includes Villarreal's request to add certain pages of witness testimony, which she did not previously cite to, to the extent the...
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