White v. American General Life Ins. Co.

Decision Date24 August 2009
Docket NumberCivil Action No. 2:08-978.
Citation651 F.Supp.2d 530
PartiesHarold S. WHITE, Executor of the Estate of Andrew R. White and Shirley White, Plaintiffs, v. AMERICAN GENERAL LIFE INSURANCE COMPANY, Defendant.
CourtU.S. District Court — Southern District of West Virginia

James K. Tinney, John K. Cecil, John H. Tinney, Jr., Meredith O. Johnstone, The Tinney Law Firm, Charleston, WV, for Plaintiffs.

Carrie Goodwin Fenwick, Victoria L. Wilson, Goodwin & Goodwin, Charleston, WV, David P. Donahue, Maynard Cooper & Gale, Birmingham, AL, for Defendant.

MEMORANDUM OPINION AND ORDER

JOHN T. COPENHAVER, JR., District Judge.

Pending are the motion for summary judgment of the defendant, American General Life Insurance Company ("American General"), filed on July 10, 2009, and the motion for partial summary judgment of the plaintiffs, Harold and Shirley White, seeking declaratory judgment, filed on July 13, 2009. Harold and Shirley White are the parents of the decedent, Andrew R. White.1

I.

At some point prior to, or on, October 27, 2006, Shirley White called American General insurance agent Cecil Eller and informed him that she was interested in purchasing "additional insurance" and that her son was considering purchasing a life insurance policy. (Shirley White Dep. at 15, Mem. in Supp. Partial Mot. Summ. J., Ex. C). In response to the call, Mr. Eller went to Mrs. White's place of employment where Mrs. White provided him with basic information about her then twenty-one year old son. (Id. at 17-18).

On October 27, 2006, Mr. Eller met with Andrew at a car dealership where Andrew worked as a salesman. (Id. at 16; Eller Dep. at 49-50, Mem. in Supp. Partial Mot. Summ. J., Ex. D). During the meeting, Mr. Eller read Andrew questions from "Part A" of the American General "Life Insurance Application" and recorded Andrew's answers. (Eller Dep. at 49, Mem in Supp. Partial Mot. Summ. J., Ex. D; Application Part A, Mot. Summ. J., Ex. A). Under the heading "Nonmedical Questions," question seventeen of Part A asks in pertinent part:

17. Background information (Complete questions A through F for all proposed insureds who are applying. If yes answer apples to any proposed insured, provide details specified after each question.)

. . . .

E. In the past five years, have any proposed insureds been charged with or convicted of driving under the influence of drugs or had any driving violations? (If yes, list proposed insured's name, date, state, license no. and specific violation.) [] yes [] no

_______________________________________

_______________________________________

(Application Part A, Mot. Summ. J., Ex. A). Andrew answered this question in the negative, and on the application a check is found in the box marked "no." (Id.)

While Mrs. White had told Mr. Eller that Andrew did not use tobacco products, during the meeting Andrew corrected his mother and informed Mr. Eller of his use of smokeless tobacco, which Mr. Eller accordingly noted on Part A of the application. (Shirley White Dep. at 73, Mem. in Supp. Partial Mot. Summ. J, Ex. C; Eller Dep. at 50-51, Mem. in Supp. Partial Mot. Summ. J., Ex. D; Application Part A, Mot. Summ. J., Ex. A). At the conclusion of the meeting, Andrew signed Part A of the application as the "primary proposed insured" and Mr. Eller signed as the "writing agent." (Application Part A, Mot. Summ. J., Ex. A).

As part of the application process, on October 31, 2006 Andrew underwent a medical examination administered by Susan Camp, a "paramedical examiner." (Shirley White Dep. at 21, Mem. in Supp. Partial Mot. Summ. J, Ex. C; Camp Report, Mem. in Supp. Partial Mot. Summ. J., Ex. E; Eller Dep. at 66, Mem. in Supp. Partial Mot. Summ. J., Ex. D). On the same date, Andrew completed "Part B" of the American General "Life Insurance Application." (Application Part B, Mot. Summ. J., Ex. A).2

Question seven of Part B, titled "Personal Health History," provides:

Complete questions A through G for all proposed insureds who are applying. If yes answer applies to any proposed insured, provide details such as: proposed insured's name, date of first diagnosis, name and address of doctor, tests performed, test results, medications(s) or recommended treatment in the area provided.

(Id.) Below this paragraph, questions 7(A)(8), 7(F)(3) and 7(G) ask:

A. Has any proposed insured ever been diagnosed as having, been treated for, or consulted a licensed health care provider for:

. . . .

8) seizures, a disorder of the brain or spinal cord or other nervous system abnormality, including a mental or nervous disorder?

. . . .

F. In the past ten years, has any proposed insured:

. . . .

3) been advised to have any diagnostic test, hospitalization or treatment that was not completed?

G. Does any proposed insured have any symptoms or knowledge of any other condition that is not disclosed above?

(Id.) As with question 17(E) of Part A, to the right of each of these three questions there are two boxes, one marked yes and the other no. If any of the questions are answered in the affirmative, the person filling out the application is directed to provide an explanation in a space provided below the question. Andrew answered questions 7(A)(8), 7(F)(3) and 7(E) in the negative, and next to each of the questions the box marked "no" is checked. (Id.)

At the end of Part B of the application, the following statement is set forth:

I have read the above statements or they have been read to me. They are true and complete to the best of my knowledge and belief. I understand that this application: (1) will consist of Part A, Part B, and if applicable, related forms; and (2) shall be the basis for any policy issued. I understand that any misrepresentation contained in this application and relied on by the Company may be used to reduce or deny a claim or void the policy if: (1) it is within its contestable period; and (2) such misrepresentations materially affects the acceptance of the risk.

(Id.) Andrew signed his name below this statement as the "primary proposed insured." (Id.) Ms. Camp also signed Part B of the application as a "company representative" and as the paramedical examiner who conducted Andrew's medical examination. (Id.)

On November 25, 2006, after receiving Parts A and B of Andrew's application, American General issued Andrew life insurance policy number UM003112L ("the policy") with a "preferred tobacco" rating. (Policy at 1, 3, Mot. Summ. J., Ex. B; Yasso Dep. at 87, Mot. Summ. J., Ex. L).3 The policy provides for an initial premium payment of $30.95 and periodic monthly premium payments in the same amount. (Policy at 3, Mot. Summ. J., Ex. B). Though there are certain exception, the policy states that it cannot be contested "after it has been in force during the Insured's lifetime for 2 years from the Date of Issue." (Id. at 14). In the event of Andrew's death prior to the maturity date of the policy in the year 2084, American General is to remit the sum of $50,000 to the policy beneficiaries, Harold and Shirley White. (Id. at 1, 3; Application Part A, Mot. Summ. J., Ex. A).

On February 12, 2008, approximately one year and two and a half months after American General issued Andrew the policy, Andrew died in his parents' home at the age of 23. (Certificate of Death, Mot Summ. J., Ex. C; Shirley White Dep. at 71, Mem. in Supp. Partial Mot. Summ. J., Ex. C). According to a certificate of death prepared by a West Virginia medical examiner, Andrew's death was accidental and caused by "combined methadone, paroxetine & quetiapine intoxication." (Certificate of Death, Mot Summ. J., Ex. C). During her deposition, Mrs. White explained that Andrew had served in Iraq as a member of the military and at the time of his death was taking medication to treat post-traumatic stress disorder. (Shirley White Dep. at 71, Mem. in Supp. Partial Mot. Summ. J., Ex. C). While plaintiffs make a number of unsupported assertions regarding the cause of Andrew's death, (Mem. in Supp. Partial Mot. Summ. J at 3), it appears as if the medication he was taking to treat his post-traumatic stress disorder was a contributing factor. (Id.; Certificate of Death, Mot Summ. J., Ex. C).

At some point prior to February 15, 2008, the Whites provided American General with a "timely and appropriate notice of Andrew R. White's death." (Req. for Admis. #4, Mem. in Supp. Partial Mot. Summ. J., Ex. H). On that same date, Michael Machac, an American General senior claims examiner, sent the Whites a letter on behalf of American General. (Machac 2/15/08 Letter, Mot. Summ. J., Ex. D; Machac Dep. at 14, Mot. Summ. J, Ex. I). The letter advised them that the policy contains "a two-year contestable claim period, which gives the Company the right to review the information given at the time of the application if a loss occurs within the first two years of the policy from the date of issue or reinstatement." (Id.) The letter explained that because Andrew's death,

occurred during the first two years of the policy, it will be necessary to perform our routine review. In order to accomplish this review, we have engaged Ed Edge with National Claim Resources to gather the required information. Mr. Edge will be in touch with you in the near future.

(Id.; Machac Dep. at 10, Mot. Summ. J, Ex. J).

As part of its investigation into the claim, American General collected records and other information from medical providers who had treated Andrew both before and after he applied for the policy on October 31, 2006. (Nat'l Claims Resources Report, Mem. in Supp. Partial Mot. Summ. J., Ex. K; Machac Dep. at 43, Mot. Summ. J, Ex. J). These records included the notes of Dr. Richard Hayes, a physician who treated Andrew on four occasions in 2001, 2002 and 2003. (Dr. Hayes Notes 10/22/2001, 11/26/2001, 4/23/2002, 2/3/2003, Mot. Summ. J., Ex. G). American General also received an "emergency physician record" from Saint Francis Hospital, where Andrew was treated for an...

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    ...441, (1976). This court has applied the same principle to the interpretation of insurance applications. White v. Am. Gen. Life Ins. Co., 651 F. Supp. 2d 530, 542-43 (S.D. W. Va. 2009). The Supreme Court of Appeals of West Virginia has also explained that "[i]t is only when the document has ......
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