Walker v. Life Ins. Co. of N. Am., Case No. 5:16-cv-00506-HNJ

• Decision Date: 19 May 2020
• Docket Number: Case No. 5:16-cv-00506-HNJ
• Parties: CHERRI WALKER, Plaintiff v. LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant
• Court: U.S. District Court — Northern District of Alabama

CHERRI WALKER, Plaintiff v. LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant

Case No. 5:16-cv-00506-HNJ

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ALABAMA NORTHEASTERN DIVISION

May 19, 2020

MEMORANDUM OPINION AND ORDER

Plaintiff, Cherri Walker, asserts claims for breach of contract and bad faith against Defendant, Life Insurance Company of North America (LINA),¹ arising fromLINA's decision to terminate her disability benefits under a group long-term disability policy and deny her claim for benefits under a group life insurance policy. (Doc. 86). The case proceeds before the court on LINA's Motion for Summary Judgment. (Doc. 125). The court will also consider Walker's request, in her brief, for the court to sua sponte enter summary judgment in her favor on her breach of contract claim. (Doc. 128-1, at 15).

As discussed below, the court finds genuine disputes as to material facts prevent the entry of summary judgment in either party's favor on Walker's breach of contract claim. However, the court will grant summary judgment in LINA's favor on the bad faith claim because Walker cannot prove that LINA's decisions to terminate and deny Walker's benefits lacked an arguable basis.

STANDARD OF REVIEW

Pursuant to the Federal Rules of Civil Procedure, "[t]he 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. Rule 56(a). The party seeking summary judgment 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 agenuine issue of material fact. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11^th Cir. 1991) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).

If the movant sustains its burden, a non-moving party demonstrates a genuine issue of material fact by producing evidence by which a reasonable fact-finder could return a verdict in its favor. Greenberg v. BellSouth Telecomms., Inc., 498 F.3d 1258, 1263 (11^th Cir. 2007) (citation omitted). The non-movant sustains this burden by demonstrating "that the record in fact contains supporting evidence, sufficient to withstand a directed verdict motion." Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1116 (11^th Cir. 1993). In the alternative, the non-movant may "come forward with additional evidence sufficient to withstand a directed verdict motion at trial based on the alleged evidentiary deficiency." Id. at 1116-17; see also Doe v Drummond Co., 782 F.3d 576, 603-04 (11^th Cir. 2015), cert. denied, 136 S. Ct. 1168 (2016).

The "court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000) (citations omitted). "'Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.'" Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). "Thus, although the court should review the record as a whole, it must disregard all evidence favorable to the moving party that thejury is not required to believe." Reeves, 530 U.S. at 151 (citation omitted). "That is, the court should give credence to the evidence favoring the nonmovant as well as that 'evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that that evidence comes from disinterested witnesses.'" Id. (citation omitted).

Rule 56 "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. "In such a situation, there can be 'no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Id. at 322-23. In addition, a movant may prevail on summary judgment by submitting evidence "negating [an] opponent's claim," that is, by producing materials disproving an essential element of a non-movant's claim or defense. Id. at 323 (emphasis in original).

EVIDENTIARY OBJECTIONS

Both parties raise objections to portions of their opponent's evidence. The court overrules Walker's objections to evidence originating after LINA initially decided to terminate and/or deny her benefits, and her objections to LINA's expert reports.The court will not resolve LINA's objections to Walker's expert witness testimony because that testimony does not materially affect the outcome of LINA's motion for summary judgment.

I. The Court Can Consider Evidence Originating After LINA's Initial Denial Decision Because It Relates to LINA's Decision to Deny Walker's Appeals

At summary judgment, the court bears responsibility for determining whether disputes exist as to "material" facts. Fed. R. Civ. P. 56(a). "A fact is material if it is relevant or necessary to the outcome of the suit." Gomez v. Harbor Freight Tools USA, Inc., 383 F. Supp. 3d 1376, 1378 (M.D. Ga. 2019) (emphasis in original) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Evidence satisfies the relevance requirement if: "(a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action." Fed. R. Evid. 401.

Walker raises a relevance objection to any evidence originating after LINA initially decided to terminate and/or deny her benefits under the two policies at issue,²citing as justification the following provision: "[w]hether an insurance company is justified in denying a claim under a policy must be judged by what was before it at the time the decision is made." Nat'l Sav. Life Ins. Co. v. Dutton, 419 So. 2d 1357, 1362 (Ala. 1982). The court disagrees. Walker's Second Amended Complaint challenges LINA's appeals denials as well as LINA's initial denial, and thus, documents originating after LINA's initial denial decision relate to the propriety of LINA's decisions to deny Walker's appeals. (Doc. 86, ¶¶ 103-11).

II. Walker's Authentication and Hearsay Objections Do Not Warrant Exclusion of the Reports of Dr. Stephen G. Jacobson, Dr. Matthew Lundquist, Randy Norris, Colin Loris, Mark Matzek, and Dr. David Knapp

Walker objects that LINA failed to authenticate the following documents, and that those documents constitute inadmissible hearsay: (1) Dr. Stephen G. Jacobson's February 12, 2014, report (Doc. 125-14); (2) Dr. Matthew Lundquist's May 28, 2014, report (Doc. 125-18); (3) Randy Norris's June 3, 2014, Transferable Skills Analysis(TSA) (Doc. 125-20); (4) Colin Loris's June 5, 2014, TSA (Doc. 125-35); (5) Mark Matzek's September 12, 2014, Functional Capacity Evaluation (FCE) (Doc. 125-25); (6) Randy Norris's November 6, 2014, TSA (Doc. 125-26); and (7) Dr. David Knapp's December 8, 2014, report (Doc. 125-24).

LINA does not purport to have properly authenticated any of the contested documents pursuant to Federal Rule of Evidence 901, but as of the 2010 amendments, Rule 56 does not require authentication at the summary judgment stage. See Abbott v. Elwood Staffing Servs., Inc., 44 F. Supp. 3d 1125, 1133 (N.D. Ala. 2014) ("[A]uthentication is not required at the summary judgment stage.") (emphasis in original). Rather, Rule 56's 2010 amendment obligated Walker to object that the reports "cannot be authenticated," and thus, cannot be presented in a form that would be admissible at trial. Abbott, 44 F. Supp. 3d at 1135 (emphasis in original). Walker did not raise that objection, so her evidentiary entreaty on the authentication basis fails.

Moreover, the challenged reports do not constitute inadmissible hearsay. See Fed. R. Evid. 801(c) ("'Hearsay' means a statement that: (1) the declarant does not make while testifying at the current trial or hearing; and (2) a party offers in evidence to prove the truth of the matter asserted in the statement."). First, LINA does not offer the reports solely to disprove Walker's breach-of-insurance-contract claims by demonstrating she was no longer disabled. LINA also offers the reports to disproveWalker's bad-faith claims by demonstrating the effect the reports had on the claims examiners' decisions finding her no longer disabled. In that guise, the reports are non-hearsay because LINA offers them not for their truth vis-à-vis the bad-faith claim; they offer them for the effects upon the listeners, i.e., the claims examiners, regardless of the truth of the reports. See United States v. Rivera, 780 F.3d 1084, 1092 (11^th Cir. 2015) (party's "[o]ut-of-court declarations . . . offered only to show their effect on the listener" did not constitute hearsay); Worsham v. Provident Companies, Inc., 249 F. Supp. 2d 1325, 1344 n.9 (N.D. Ga. 2002) (information in an insurer's claim file did not constitute inadmissible hearsay because the insurer offered it to explain the basis of its decision to terminate the plaintiff's benefits and to show a lack of bad faith, not to establish the plaintiff's non-disability status).

Furthermore, even if the challenged reports are offered for their truth, Rule 56 does not prohibit a court from considering such putative hearsay evidence at summary judgment. As LINA concedes, Walker "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); see also Jones v. UPS Ground Freight, 683 F.3d 1283, 1293-94 (11th Cir. 2012) (quoting Macuba v. Deboer, 193 F.3d 1316, 1322-23 (11th Cir. 1999)) ("'[A] ...