Yang v. Farmers New World Life Ins. Co.

• Decision Date: 23 March 2017
• Docket Number: Civil No. 15-1514 ADM/FLN
• Parties: Mary G. Yang, Plaintiff, v. Farmers New World Life Insurance Company, Defendant.
• Court: U.S. District Court — District of Minnesota

Mary G. Yang, Plaintiff, v. Farmers New World Life Insurance Company, Defendant.

Civil No. 15-1514 ADM/FLN

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

March 23, 2017

MEMORANDUM OPINION AND ORDER

Jason W Whitley, Esq., Novitzke, Gust, Sempf, Whitley & Bergmanis, Amery, WI, on behalf of Plaintiff.

Andrew R. Shedlock, Esq., Kutak Rock LLP, Minneapolis, MN, on behalf of Defendant.

I. INTRODUCTION

On January 18, 2017, the undersigned United States District Judge heard oral argument on Plaintiff Mary G. Yang's ("Yang") and Defendant Farmers New World Life Insurance Company's ("Farmers") Motions for Summary Judgment [Docket Nos. 26, 36]. For the reasons set forth below, Yang's Motion is granted and Farmers' Motion is denied.

II. BACKGROUND

On May 9, 2003, Yang's grandmother, May Yang (the "Insured"), signed a $150,000 20 Year Guarantee Level Term 2000 FNWL Life Insurance Policy (the "Policy") issued by Farmers. At issue in this case is the birthdate of the Insured. Yang contends that the Insured's birthdate is July 11, 1943, meaning that she was 59 years old when she purchased the Policy. Farmers, on the other hand, argues that the Insured's birthdate is May 27, 1933, meaning that the Insured was 69 years old at the time the Policy was purchased. If Farmers is correct, then the Insured was ineligible to purchase the Policy because her age exceeded the Policy's maximum age at the time of issue.

A. The Policy

1. Purchase

On May 9, 2003, Farmers' independent agent, Daniel Stocker ("Stocker") met the Insured and several of her relatives at the Insured's residence to apply for the Policy. First Whitley Aff. [Docket No. 44] Ex. A ("Stocker Dep.") 10:11-14. Stocker completed the application, filling in the answers as he asked the questions to the Insured. During this application process, Yang claims that Stocker was told that the Insured had two birthdates: a May 27, 1933 birthdate that Yang contends was arbitrarily assigned by United States immigration officials, and a July 11, 1943 birthdate documented on the Insured's Laotian birth records. Nao Yang Aff. [Docket No. 49] ¶ 8.

Nao Yang ("Nao"), the Insured's son-in-law, testified that Stocker was directly asked which birthdate should be placed on the application and Stocker responded that the July 11, 1943 date of birth should be used. Id.; Vang Aff. [Docket No. 50] ¶ 7.

Stocker does not recall being told that the Insured had two different birthdates. Stocker Dep. at 26:20-25. Stocker also testified that in his fifteen years as a Farmers agent, he could not recall a situation where an insured had two different dates of birth. Id. at 29:23-30:7. Rather, Stocker testified that when he asked for the Insured's birthdate, she stated that her birthdate was July 11, 1943. Id. at 21:12-16. Stocker also recalled receiving supporting documents from Laos that showed a July 11, 1943 date of birth. Id. at 12-16.

2. Terms and Conditions

The Policy has a maximum issue age limit of 60 years old, meaning only individuals under age 60 are eligible to purchase the Policy. Consistent with Minnesota law, the Policy includes a misstatement of age or sex provision and an incontestability provision. The Policy'smisstatement of age or sex provision provides, "[i]f the insured's age or sex was misstated, the amount payable will be that which the premiums paid would have purchased at the correct age or sex." Second Whitley Aff. [Docket No. 54] at 7. The incontestability provision states that Farmers "will not contest this policy after it has been in force for two years from the date of issue during the insured's lifetime except for nonpayment of premiums. This provision does not apply to any additional benefits for disability or accidental death." Id.

B. The Insured Purchases the Unity Policy

In 2007, the Insured applied for a whole life insurance policy with Unity Financial Life Insurance Company ("Unity"). Klosowski Decl. [Docket No. 40] Ex. H. The Unity application reflects the Insured's birthdate as May 27, 1933, the date that Yang claims was arbitrarily assigned by United States immigration officials. Id.

C. The Insured Dies and Beneficiaries Make Claims

The Insured died in Laos on February 11, 2014. Yang then made a claim to Farmers for death benefits under the Policy that had been purchased in 2003. On July 16, 2014, Farmers, in denying Yang's request, wrote:

On the application for insurance dated 5/9/03, May Yang provided her date of birth as 7/11/43. The Certificate of Death shows the date of birth as 7/11/43 however Social Security Number verification indicates the correct date of birth for May Yang is 5/27/33. The policy provision for Misstatement of Age specifies in general that if the age of the insured has been misstated, the amount payable and every benefit accruing under this policy shall be such as the premiums paid would have purchased at the correct age according to the Company's published rates at the date of issue. Since her age was older then [sic] what was allowed by this product we have refunded all the premiums that were paid on the policy.

If the correct date of birth is 7/11/43, we will need appropriate verification of date of birth in order to consider any additional principal sum payable.

Id. Ex. J. Farmers issued Yang a check for $7,404.17, refunding the Policy premiums with interest. Id.

Yang later provided Farmers a Laotian death certificate that showed the Insured was born on July 11, 1943. Tischer Aff. [Docket No. 48] Ex. A. In investigating Yang's claim, Farmers learned of the Unity policy purchased in 2007. Farmers also learned that when the Insured's beneficiary made a claim under the Unity policy, Unity was provided with a Laotian death certificate that showed the Insured's birthdate was May 27, 1933. Klosowski Decl. Ex. I. This birthdate was consistent with the birthdate provided on the Unity policy application, but inconsistent with the birthdate provided to Farmers.

Farmers also discovered that the Insured's passport, Certificate of Naturalization, and Minnesota Identification card each list the Insured's birthdate as May 27, 1933. Id. Exs. A, B, C. All three of those documents were either obtained or used after the Farmers Policy was issued.

D. Two Different Birthdates

As an explanation for the two different birthdates, Yang claims that it was common practice for the United States to assign birthdates to immigrants arriving in the country without official identification papers. To support this claim, Nao, the Insured's son-in-law, testified that he was assigned an arbitrary birthdate when he arrived in the United States. Nao Yang Aff. ¶¶ 3, 4. While Nao stated that he eventually corrected his United States records to reflect his true birthdate and that he encouraged the Insured to do the same, she never followed through and continued to use her identifying documents with inaccurate information. Id. ¶ 6.

E. The Lawsuit

Yang contends that the Insured's birthdate is July 11, 1943, and seeks full payment of the Policy's $150,000 benefit. Farmers asserts that, consistent with the Policy's misstatement of age or sex provision, Yang is only eligible for an amount which the premiums paid would have purchased if her correct birthdate of May 27, 1933 was provided. On February 20, 2015, afterFarmers refused to pay the $150,000 benefit, Yang filed this breach of contract case in Minnesota state court. Compl. [Docket No. 1-1]. Farmers removed the case to federal court under diversity jurisdiction, and both parties move for summary judgment.

III. DISCUSSION

A. Summary Judgment Standard

Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment shall be rendered if there exists no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. On a motion for summary judgment, the court views the evidence in the light most favorable to the nonmoving party. Ludwig v. Anderson, 54 F.3d 465, 470 (8th Cir. 1995). However, the nonmoving party may not "rest on mere allegations or denials but must demonstrate on the record the existence of specific facts which create a genuine issue for trial." Krenik v. Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995).

If evidence sufficient to permit a reasonable jury to return a verdict in favor of the nonmoving party has been presented, summary judgment is inappropriate. Id. However, "the mere existence of some alleged factual dispute between the parties is not sufficient by itself to deny summary judgment. . . . Instead, 'the dispute must be outcome determinative under prevailing law.'" Get Away Club, Inc. v. Coleman, 969 F.2d 664, 666 (8th Cir. 1992) (citation omitted). "[S]ummary judgment need not be denied merely to satisfy a litigant's speculative hope of finding some evidence that might tend to support a complaint." Krenik, 47 F.3d at 959.

There seem to be three possible scenarios here: 1) the Insured's actual birthdate is July 11, 1943, 2) the Insured misstated her birthdate when securing the Policy and her birthdate is not July 11, 1943, or 3) the Insured purposefully misrepresented her birthdate to be eligible to purchase the Policy and her birthdate is not July 11, 1943. As explained below, under anyscenario, Yang is entitled to the full $150,000 benefit.

B. Conflicting Evidence Regarding the Insured's Actual Birthdate

Yang first argues that the evidence establishes that the Insured's true birthdate is July 11, 1943, the date submitted on the Policy application. If Yang is correct, then the Insured is below the Policy's 60 year old issue age limit and Farmers must pay Yang the full $150,000 benefit. Farmers argues in response that the record includes credible evidence showing the Insured's birthdate is not July 11, 1943, and that this conflicting evidence presents a dispute of material fact that makes summary judgment inappropriate.

To support her argument, Yang relies upon three different categories of evidence: 1) the Insured's Laotian birth certificate and affidavit...