Stanley v. Lafayette Life Ins. Co.
| Decision Date | 14 September 2015 |
| Docket Number | Case No.: 3:13-cv-05137-MDH |
| Court | U.S. District Court — Western District of Missouri |
| Parties | STEWART M. STANLEY, Plaintiff, v. THE LAFAYETTE LIFE INSURANCE COMPANY, Defendant. |
Before the Court is Defendant's Motion for Summary Judgment (Doc. 54). After full and careful consideration of the issues presented and arguments provided by the parties, the Court hereby DENIES Defendant's motion.1
Plaintiff filed this action in state court alleging Defendant breached the parties' insurance agreement and vexatiously refused to pay benefits without reasonable cause or excuse. The petition alleges that Defendant agreed to provide lifetime benefits to Plaintiff under the Policy ifPlaintiff suffered a total disability commencing before age 50, that Plaintiff was involved in an automobile accident at age 48 wherein he suffered a traumatic brain injury that caused total disability and entitled Plaintiff to lifetime benefits under the Policy, and that Defendant acknowledged and paid benefits for Plaintiff's total disability but wrongfully ceased paying benefits when Plaintiff reached age 65. Defendant removed the case to federal court and filed an answer alleging that Plaintiff did not become totally disabled under the Policy until after age 50 such that he was entitled to benefits only to age 65 rather than life; that Plaintiff's claims are barred by the statute of limitations and/or estoppel; and that Plaintiff failed to provide timely proof of loss to Defendant, which prejudiced Defendant's investigation of Plaintiff's claim.
Defendant now moves for summary judgment arguing there is no genuine issue of material fact and Defendant is entitled to judgment as a matter of law based on the statute of limitations and Plaintiff's failure to plead/provide timely proof of loss. Defendant argues: (1) the statute of limitations began accruing in 1999 such that Plaintiff's claims are now barred by Missouri's 10-year statute of limitations; (2) Plaintiff failed to adequately plead proof of loss under Rule 9(c); and (3) Plaintiff failed to provide proof of loss for the time period prior to July 1998 or, if he did, Plaintiff failed to provide timely proof of loss and Defendant was thereby prejudiced in its ability to investigate Plaintiff's claims. Plaintiff responds that Defendant's motion for summary should be denied because there are genuine issues of material fact and Defendant is not entitled to judgment as a matter of law. After full briefing, the matter is now ripe for review.
Summary judgment is proper where, viewing the evidence in the light most favorable to the non-moving party, there is no genuine issue of material fact and the moving party is entitledto judgment as a matter of law. Fed. R. Civ. P. 56(a); Reich v. ConAgra, Inc., 987 F.2d 1357, 1359 (8th Cir. 1993). Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant meets the initial step, the burden then shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "Where there is no dispute of material fact and reasonable fact finders could not find in favor of the nonmoving party, summary judgment is appropriate." Quinn v. St. Louis County, 653 F.3d 745, 750 (8th Cir. 2011).
The Court finds there are genuine issues of material fact that preclude summary judgment in this case. Defendant's arguments for summary judgment are analyzed separately below.
Plaintiff was born on April 9, 1948. On February 1, 1982, Defendant issued a Total Disability Policy ("Policy") to Plaintiff. The Policy defines "total disability" as follows:
Section 3 of the Policy states:
Total Disability Benefit. We'll pay you a benefit for each total disability that continues through the First Benefit Day shown in the policy schedule. Starting with that day, we'll pay the benefit for as long as your total disability continues. But we won't pay benefits for a period longer that the Maximum Benefit Period that applies. . . . For each month of total disability, we'll pay you the Monthly Benefit for Total Disability. The amount of this benefit is shown in the policy schedule.
Plaintiff's policy schedule defines "First Benefit Day" as the "181st day of total disability"; Plaintiff's "Monthly Benefit for Total Disability" as "$800 per month to the end of the Maximum Benefit Period"; and Plaintiff's "Maximum Benefit Period" for both sickness and injury as "your lifetime if total disability commences before your 50th birthday, otherwise until your 65th birthday but not less than 24 months[.]"
Section 6 of the Policy describes the process for claiming benefits. The introduction paragraph states "[f]or you to receive benefits, we must receive: written notice of your claim to benefits; and proof of your loss." The insured's written notice of claim must be given to the insurer "within 20 days after any covered loss starts or as soon as reasonably possible." Once the insurer receives a notice of claim, the Policy states the insurer will send claim forms to the insured that "ask for facts that prove [the insured's] loss." Proof of loss "must describe how the loss occurred, its nature and its extent" and must be given to the insurer "within 90 days after: each total or partial disability period for which [the insurer is] liable; or the occurrence of any other loss for which [the insured] is covered." If the insured fails to provide proof of loss within 90 days, the insurer will not reduce or deny the insured's claim but the insured must provide proof of loss "as soon as it is reasonable possible to do so" and "within one year after the time limit unless [the insured is] legally unable to do so."
Plaintiff was involved in an automobile accident in May of 1996, at the age of 48. Plaintiff continued to work or continued to try to work at his business, where he was self-employed, until July of 1998, when Plaintiff stopped working completely due to cognitive impairments. In August of 1998, at the age of 50, Plaintiff filed a notice of disability claim with Defendant. Plaintiff's notice stated that his disability resulted from cognitive injuries sustained in an accident that occurred on May 17, 1996, that Plaintiff was hospitalized at the Mayo Clinic in May 1996 and attended visits at the Mayo Clinic the "last 2 ½ years[,]" and that Plaintiff stopped working completely on July 22, 1998. Plaintiff submitted a Disability Claimant's Statement form in October of 1998, wherein Plaintiff stated his disability resulted from an accident on May 17, 1996. In response to questions regarding dates/times he was able to perform work only in a limited capacity and dates/times he was unable to perform any work or business, Plaintiff did not respond with specific dates or time but stated "[d]uring period from 5/17/96 - 7/22/98 was unable to work during several periods from 1 day to approx. 6 wks in Jan/Feb 97." Plaintiff reported that he was hospitalized and treated by "Dr. Boeve et al." at the Mayo Clinic since May 1996 for his condition and that he had other insurance for disability/health benefits through Provident Life. Plaintiff further provided information about his former occupation and, in response to a question asking how Plaintiff's condition interfered with his performance of his occupation, Plaintiff stated "no concentration or memory - need to have no sound lights several times in day - fall asleep w/o warning."
Plaintiff's employer and physician completed forms on behalf of Plaintiff. Elizabeth Parr completed an "Employer or Administrator's Statement" that reported Plaintiff worked 0-12 hours in a normal week, Plaintiff stopped working completely on July 22, 1998, and the job duties associated with Plaintiff's occupation - owner/general manager - require 50-70 hoursspent per week. Dr. Boeve completed an "Attending Physician's Statement" that stated Plaintiff has a primary diagnosis of "cognitive impairment from traumatic brain injury" and reported that Plaintiff's symptoms first appeared/accident happened on May 17, 1996, that Dr. Boeve first treated Plaintiff for his condition on August 6, 1997, and Plaintiff ceased work because of his sickness/injury on July 22, 1998. Dr. Boeve did not answer the question that asked when Plaintiff "limited work because of sickness or injury[.]" The Mayo Clinic submitted a Disability Form in connection with Dr. Boeve's Attending Physician Statement that stated: "On December 1, 1998, Dr. B. F. Boeve stated Mr. Stanley should be considered totally disabled since July 22, 1998, indefinitely." In addition to the above information, Plaintiff's wife sent a letter to Defendants on November 11, 1998 that included the names and addresses of Plaintiff's two local doctors - Dr....
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