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ALTIMARI v. JOHN HANCOCK VARIABLE LIFE INSURANCE CO.

February 26, 2003

MARY JO ALTIMARI, PLAINTIFF,
v.
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY, ET. AL., DEFENDANT.



The opinion of the court was delivered by: Marvin Katz, Senior District Judge

MEMORANDUM & ORDER

Plaintiff Mary Jo Altimari brings the above-titled action against John Hancock Variable Life Insurance Company (Hancock) and First Union/Wachovia Bank (Wachovia) for failing to pay life insurance benefits following the death of her common law husband. Specifically, Altimari is suing Hancock for breach of contract and breach of an implied-in-fact contract. Altimari also alleges promissory estoppel, bad faith, unfair trade practices, fraud, and negligent misrepresentation against both Hancock and Wachovia. For the reasons set forth below, the defendants' motions for summary judgment are granted.

I. Background

In early May 2001, a Wachovia employee solicited Altimari for life insurance over the telephone. When Altimari indicated some interest, the employee transferred Altimari to another Wachovia employee named Ann Monroe.*fn1 After discussing the available policies, Altimari agreed with Monroe to apply for a $500,000 insurance policy through John Hancock on her common law husband Brian Batchelor. Altimari provided information to Monroe over the phone,*fn2 and Monroe forwarded the application to Batchelor for his review and signature. However, Monroe failed to record answers to the questions on pages three and four of the application in the section titled "Part B Statements to the Company's Agent" and instead wrote "N/A" in the margins. These questions concerned the applicant's health history and inquired as to whether the applicant had been hospitalized in the past five years or suffered from any diseases.

On May 15, 2001, Batchelor signed the application and sent it to Monroe, along with a $49.99 check made out to John Hancock. Batchelor neglected to answer the questions in Part B as well and failed to disclose that he had sought treatment in the emergency room at Frankford Hospital for severe abdominal pain on January 17, 2001, February 4, 2001, and April 13, 2001. Def. Wachovia's Mot. for Summ. J, exhs. E, F, G. On the same day he signed the application, Batchelor met with a portamedic who obtained a saliva sample. Def. Hancock's Mot. for Summ. J, exh. D. As part of the application process, Batchelor authorized an automatic deduction from his checking account for the monthly insurance premiums and indicated that his desired start date was "ASAP." Id. at exh. C. On May 23, 2001, Monroe received the application, witnessed Batchelor's signature, and forwarded the application to Hancock's home offices. On May 29, 2001, Batchelor again visited the emergency room at Frankford Hospital complaining of severe abdominal pain and a 35 pound weight loss over the previous two months. Def Wachovia's Mot. for Summ. J, exh H.

On June 1, 2001, Patricia Duggan, an underwriter at Hancock received Batchelor's application. On the same date, Duggan faxed a "life underwriting sheet" to Monroe noting that three items needed immediate attention before Hancock could process the application. Specifically, Duggan requested that Wachovia submit a Super Preferred Term Checklist,*fn3 that Batchelor undergo a paramedical examination, and that Batchelor answer all questions on pages 3 and 4 of the application which were initially left blank. Def. Hancock's Mot. for Summ. J., exh. F. On June 15, 2001, Wachovia employee Macie Caldwell sent an email to Duggan inquiring about the status of Batchelor's application. Duggan replied to the email by again requesting the three pieces of information that were missing from Batchelor's application. Id. at exh. H. After receiving the Super Preferred Term Checklist on July 6, 2001, Duggan faxed another "life underwriting sheet" to Wachovia and Monroe stating that the "[f]ile will be [incompleted] 7/27/01 if the paramed and the rest of the unanswered questions are not received." Id. at exh. J. During a series of conversations in June and July, 2001, Monroe assured Altimari that Bathelor's life insurance application was approved, and that the only reason for the delay in processing his application was "routine administrative bottleneck." Id. at exh. Q, pg. 11-14, 96. During one conversation in early July 2001, Monroe allegedly told Altimari that "technically, as long as Batchelor doesn't commit suicide or go bungee jumping, he's covered." Id. Despite Monroe's assurances, on July, 27, 2001, Duggan issued a letter to Batchelor which stated:

Thank you for the confidence you have placed in our company by applying to us for insurance. We are not able to continue consideration of your application since we have not received requested Paramed and information from your agent.

Id. at exh. K. On August 2, 2001, Hancock issued a check in the amount of $49.99 and mailed it to Batchelor. Also on August 2, 2001, Batchelor went to the emergency room at Frankford Hospital and reported that he had been coughing for about three weeks and had recently coughed up blood. Def. Wachovia's Mot. for Summ. J, exh. T1. On that date, Batchelor and Altimari learned for the first time that Batchelor had pancreatic cancer.

On August 3, 2001, Wachovia employee Vivian Wallace telephoned Duggan regarding Batchelor's application and then faxed answers to some of the unanswered questions. Def. Hancock's Mot. for Summ. J., exh. N. In response, Duggan faxed a Life Underwriting Sheet to Wallace later that day stating

I [have] been requesting the outstanding paramed [examination] since the first day this app [sic] arrived in underwriting 6/1/01. Basically this is an age/amt requirement but the rep had the option of performing the oral test and if that was the case then the paramed would have been waived and we would have gone with the non-med section on the app [sic] being used, but in this case the rep also did not complete the non-med section. Vivian, this file has been closed and [we] will be happy to reopen when we received the paramed.

Exh. O. This was the last communication between Duggan and Wachovia regarding Batchelor's application.

After this communication, Monroe ordered a paramedical examination. On August 14, 2001, Batchelor underwent this examination. When asked whether he had a history of cancer, Batchelor answered that he did not. Id. at exh. P. Batchelor also failed to inform the paramedic that he had received treatment in the Frankford Hospital Emergency room in early 2001. Wachovia never forwarded the information obtained in the paramedical exam to John Hancock. Batchelor died of pancreatic cancer on September 8, 2001.

II. Terms of Application

The relevant portions of John Hancock's Term Life Insurance Application are as follows:

This application is to: ___ John Hancock Life Insurance Company or (check one) ___ John Hancock Variable Life Insurance Company

1. Please print all answers legibly in black ink.

2. Any change or deletions must be initialed by the Proposed Insured or Applicant.
3. Part B must be completed on the Proposed Insured unless a medical examination is required. . . .
A. Parts A and B of the attached application will form the basis and be part of any new policy or additional benefit issued on the basis of this application.
B. Coverage will take effect as provided in and subject to the terms and conditions of Conditional Temporary Insurance Agreement on pages 5 and 6 bearing the same date and number of Part A of this application if:
(1) an advance payment of at least the Minimum Temporary Insurance Premium is made with Part A of this application which satisfies the requirements of such Conditional Temporary Insurance Agreement; and
(2) the amount applied for in this and all other applications for life insurance on the Proposed Insured now pending with John Hancock Life Insurance Company and John Hancock Variable Life Insurance Company does not exceed $1,000,000.
C. In cases other than those described in B above, any new policy of Benefit will take effect as of the Date of Issue of the policy, but:
(1) only on delivery to and receipt by the Applicant of the policy and payment of the minimum initial premium thereon and
(2) only if at the time of such delivery and payment, the Proposed Insured is living and has not consulted or been examined or treated by a physician or practitioner since the latest Part B pertaining to the Proposed Insured was completed.
D. No agent or medical examiner is authorized to make or discharge contracts or waive or change any of the conditions or visions of any application, policy, or receipt, or to accept risks or pass on insurability. Any such unauthorized action is not notice to or ...

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