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Kucera v. Metropolitan Life Insurance Co.

decided: October 25, 1983.



Seitz, Chief Judge, Gibbons and Rosenn, Circuit Judges. Rosenn, Circuit Judge, dissenting.

Author: Gibbons


GIBBONS, Circuit Judge:

In this removed diversity case Regina Kucera, a named beneficiary in a life insurance policy, appeals from a summary judgment in favor of Metropolitan Life Insurance Company. Summary judgment was granted on the sole ground that suit on the policy was time barred by the Pennsylvania six year statute of limitations applicable to contract actions. 42 Pa. Cons. Stat. Ann. ยง 5527(2) (Purdon 1981). The trial court held that the action was time barred in September, 1980, while Mrs. Kucera's complaint was filed on December 29, 1981. Because Mrs. Kucera's cause of action as a beneficiary did not arise until the death of the named insured on July 2, 1979, we reverse, and remand for further proceedings.

Glenn Kucera, an employee of Metropolitan Life Insurance Company, applied for a $50,000 term life insurance policy on March 14, 1974. Following an examination of Mr. Kucera by a physician, Metropolitan's home office issued a policy on May 1, 1974. It was mailed the following day to Metropolitan's McKeesport office, where Mr. Kucera was employed. He received it on May 6, 1974 and kept it in his desk. Kucera intended to pay the premium through a payroll deduction. The first payroll deduction was made on June 7, 1974. Meanwhile, however, on May 15, 1974 Kucera was hospitalized. Upon his release from the hospital, on June 19, 1974, Kucera completed Metropolitan Form 074 notifying Metropolitan of his hospitalization, and paid $26.50, the amount of the initial premium. He returned to work in August, but was hospitalized again in September and October. Meanwhile payroll deductions continued, aggregating, by October, $109.98.

In September of 1974 Metropolitan, based on the information in the Form 074 which Kucera had furnished in June, declined to "place" the policy and requested the McKeesport office to return it. Metropolitan also sent Kucera a check for $26.50 which was cashed. While Kucera was in the hospital the policy was removed from his desk and returned to the home office. Metropolitan asserts defenses of nonpayment of premium, and of noncompliance with the term of the application providing that "the Company will incur no liability by reason of this application until a policy has been delivered and the full first premium specified therein has actually been paid to and accepted by the Company." App. at 10. Both parties concede, however, that there are issues of material fact which would prevent summary judgment on these grounds.*fn1

It is undisputed that both Mr. Kucera and Mrs. Kucera knew, in the fall of 1974, that the Manager of Metropolitan's McKeesport office had returned the policy to the home office. Indeed Mrs. Kucera was aware that in her husband's view the removal of the policy from his desk while he was in the intensive care unit of a hospital following a heart attack was an injustice, which upset him.

Upon Mr. Kucera's death in July of 1979 Mrs. Kucera submitted proof of death and requested payment as the named beneficiary. There was correspondence between her and representatives of Metropolitan about the claim. Finally in late April of 1981 she received a letter in which Metropolitan denied liability. On May 13, 1981 she requested additional information. On December 29, 1981 she filed her complaint in the Court of Common Pleas of Allegheny County, and it was removed to the district court.

It is undisputed that if a policy issued (as to which there is a material factual dispute) Mr. Kucera was its owner. The ownership clause provides:

Ownership -- The Owner may exercise all rights under this policy during the lifetime of the Insured.

The Owner may designate a new Owner and designate or change a Contingent Owner. The Contingent Owner will, if living, become the Owner in the event that the Owner does not survive the Insured.

If a new Owner or Contingent Owner is designated, then, unless otherwise specified, any prior designation of a Contingent Owner, Beneficiary, or Contingent Beneficiary will automatically be voided. Unless otherwise specified, all rights under this policy are vested in the Owner, or in the Owner's estate, successors, or assigns.

Beneficiary -- The Owner may designate or change the Beneficiary or Contingent Beneficiary during ...

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