Spolnik v. Guardian Life Ins. Co. of America, IP97-1198-C-T/G.

CourtUnited States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
Writing for the CourtTinder
Citation94 F.Supp.2d 998
PartiesEdward J. SPOLNIK, Jr., D.D.S., Plaintiff, v. GUARDIAN LIFE INSURANCE COMPANY OF AMERICA, Defendant.
Docket NumberNo. IP97-1198-C-T/G.,IP97-1198-C-T/G.
Decision Date29 March 2000
94 F.Supp.2d 998
Edward J. SPOLNIK, Jr., D.D.S., Plaintiff,
No. IP97-1198-C-T/G.
United States District Court, S.D. Indiana, Indianapolis Division.
March 29, 2000.

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Robert E. Saint, Emswiller, Williams, Noland & Clarke, Indianapolis, IN, Ronald E Elberger, Bose McKinney & Evans, Indianapolis, IN, for plaintiff.

David M Mattingly, Ice Miller Donadio & Ryan, Indianapolis, IN, for defendant.

Entry Ruling on Motions

TINDER, District Judge.

The following motions come before the court for ruling: (1) Plaintiff's Motion to Dismiss (regarding counter-claims/defenses of fraud and/or mutual mistake of fact seeking recission and/or reformation); (2) Plaintiff's Motion to Dismiss Counter-Claim (regarding counter-claim of overpayment); (3) Guardian's Motion for Summary Judgment; (4) Motion to Amend Plaintiff's Complaint for Damages; and (5) Motion to Amend Plaintiff's Response to Statement of Material Facts and Include Affidavit of Ronald E. Blacklock, Plaintiff's Affidavit and Plaintiff's Amended Complaint As Additional Evidence in Response to Defendant's Motion for Summary Judgment.

I. Background

The following facts are supported by proper citations to admissible evidence and are taken in the light most favorable to the Plaintiff, the non-moving party on the summary judgment motion, with all reasonable inferences based on the facts drawn in his favor. This presentation is limited to those facts which are material to the ruling on Guardian's summary judgment motion. Dr. Edward J. Spolnik, Jr., is a dentist who resides in Zionsville, Indiana. On or about June 15, 1989, he purchased a policy of disability income insurance from Guardian, Policy No. G-616655 ("disability policy"). On April 8, 1992, he purchased a policy for business overhead expense disability insurance from Guardian, Policy No. G-639175 ("business overhead policy"). He claims his insurance agent for these two policies was Marianne Hanson f/k/a Spolnik, his former wife. Dr. Spolnik and Ms. Hanson were married from November 1988 until March 1995. During their marriage, Ms. Hanson was an insurance agent and broker for Guardian and other insurance companies.

In the Fall of 1992, Dr. Spolnik, assisted by Ms. Hanson, applied for benefits under the Guardian disability policy. In September 1992, when he initially submitted his disability claim and again in December 1995, she told him he needed to have a 75% loss to be entitled to total disability benefits under the disability policy. She

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also told him that he was not entitled to any disability benefits under his business overhead policy. He claims he placed special trust and confidence in her specialized knowledge regarding insurance, which he says he lacked. As a result, when he submitted his claim for disability benefits to Guardian, he only requested partial benefits under the disability policy and did not request benefits under the business overhead policy.1

Sometime between January 18, 1995, and June 30, 1995, Dr. Spolnik discovered Ms. Hanson had misled him and misrepresented the terms of his disability policies. In a letter dated June 30, 1995, he notified Guardian of his belief that he was entitled to total disability benefits under his policies since September 1992.

Dr. Spolnik commenced this action on July 27, 1997, by filing his Complaint, alleging fraud against Guardian based upon Ms. Hanson's misrepresentations. He contends he was "totally disabled" from September 1992 through August 1995 for purposes of his Guardian policies due to "myofascial pain syndrome." He claims that he is entitled to the difference between the partial disability benefits he collected from September 1992 through August 1995 and the total disability benefits to which he claims he was entitled. He seeks an additional $24,000 under the business overhead policy.

On June 1, 1999, Dr. Spolnik filed his first motion to dismiss counterclaim. He filed another motion to dismiss counterclaim on June 21, 1999. Also on that date, Guardian filed its Motion for Summary Judgment, seeking summary judgment on the Complaint.

Subsequently, on September 2, 1999, Dr. Spolnik filed a motion to amend his Complaint, seeking to add claims for forgery and scheme to defraud. In his motion, he claims that he first discovered during his deposition on April 15, 1999, potential forgeries when he was asked to identify his signature on certain applications and endorsements submitted to Guardian in connection with his disability insurance policies. Dr. Spolnik requested Guardian to produce the original applications and a handwriting exemplar of Ms. Hanson, but Guardian refused. He subsequently filed motions to compel production of same, and, on August 20, 1999, the court denied his motions to compel. Dr. Spolnik then obtained a handwriting analysis from Ronald E. Blacklock, a purported expert in handwriting comparisons, who has opined that Ms. Spolnik forged a certain endorsement to his disability policy.2

II. Plaintiff's Motion to Dismiss Affirmative Defenses of Fraud and Mistake

Plaintiff moves to dismiss Defendant's counter-claims/defenses of fraud and/or mutual mistake of fact seeking recission and/or reformation of the disability insurance agreements for failure to state a claim. He contends that dismissal is appropriate because the Defendant failed to plead allegations of fraud with particularity as required under the federal rules. Subsequent to the filing of this motion to dismiss, the Defendant sought and was

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granted leave to file an Amended Answer, making allegations of fraud and mistake with particularity. Therefore, Plaintiff's Motion to Dismiss is DENIED AS MOOT.

III. Plaintiff's Motion to Dismiss Counter-Claim of Overpayment

Plaintiff moves, pursuant to FED. R. CIV. P. 12(b)(6) and (c), to dismiss the Defendant's counterclaim of overpayment for failure to state a claim. This motion was filed before the Defendant filed its Amended Answer; but the overpayment counterclaim was not amended. Thus, the court treats this motion as directed to the Amended Answer. In its Second Affirmative Defense/Counterclaim, the Defendant asserts, "To the extent that Defendant's payments to Plaintiff exceed its obligations, for reason of lack of disability or otherwise, Defendant requests a complete accounting and repayment of such sums together with interest and costs." (Am. Answer at 5.) "An accounting is a suit in equity governed by equitable principles and addressed to the sound discretion of the trial court." Hammes v. Frank, 579 N.E.2d 1348, 1355 (Ind.Ct.App. 1991).

A motion to dismiss for failure to state a claim should not be granted "unless it appears beyond a reasonable doubt that the [nonmovant] can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). In considering a motion to dismiss for failure to state a claim, the court accepts as true the well-pleaded factual allegations in the challenged pleading and draws all reasonable inferences in favor of the nonmovant. See, e.g. Massey v. Helman, 196 F.3d 727, 731 (7th Cir.1999).

In support of his motion, the Plaintiff relies on National Mut. Ins. Co. v. Fincher, 428 N.E.2d 1386 (Ind.Ct.App.1981), for the proposition that the doctrines of waiver and estoppel extend to any ground upon which liability can be denied by an insurer. He also relies upon American Central Life Ins. Co. v. Bott, 76 Ind.App. 439, 130 N.E. 432 (1921), for the proposition that an insurer which elects to pay benefits without an investigation cannot retract payment in the absence of fraud on the part of the insured. Neither case dictates that the Defendant's counterclaim be dismissed for failure to state a claim.

Whether the Plaintiff may defend against the accounting counterclaim on the basis of waiver or estoppel is not properly at issue on the Plaintiff's motion to dismiss. Even assuming that these affirmative defenses could be proven by the Plaintiff, these defenses do not convert a well-pleaded counterclaim into a claim upon which relief cannot be granted. The Defendant is not required to anticipate defenses to its counterclaims. Bott is distinguishable. In that case, the defendant insurance company sought to recover money paid under a life insurance policy on the basis that fraud was committed by the insured in securing the policy upon which payment was made. Bott, 130 N.E. at 434. The insurer in Bott did not make a claim for an accounting. Thus, Bott is inapposite. Further, the Plaintiff's claim that fraud is an element of an accounting claim is not supported in the law. The motion to dismiss is DENIED.

IV. Defendant's Motion for Summary Judgment

A. Summary Judgment Standard

Summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The evidence is construed in the light most favorable to the nonmoving party and all reasonable inferences from the evidence are drawn in favor of that party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

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When a summary judgment motion has been filed, "the burden shifts to the non-moving party to show through specific evidence that a triable issue of fact remains on issues on which the non-movant bears the burden of proof at trial." Liu v. T & H Mach., Inc., 191 F.3d 790, 796 (7th Cir.1999) (citing Vector-Springfield Properties, Ltd. v. Central Illinois Light Co., 108 F.3d 806, 809 (7th Cir.1997)). A mere scintilla of evidence in support of the...

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