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Tate v. U.S. Financial Life Insurance Co.

September 1, 2006

GREER W. TATE, PLAINTIFF,
v.
U.S. FINANCIAL LIFE INSURANCE COMPANY, A CORPORATION, AND WILLIAMS INSURANCE SERVICES, INC., A CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: McVerry, J.

MEMORANDUM OPINION AND ORDER OF COURT

Presently before the Court are the following:

1) MOTION FOR SUMMARY JUDGMENT, with brief in support, filed by Defendant U.S. FINANCIAL LIFE INSURANCE COMPANY ("USFL") (Document Nos. 18 and 19);

2) MOTION FOR SUMMARY JUDGMENT, with brief in support, filed by Defendant Williams Insurance Services, Inc. ("Williams Insurance") (Document Nos. 23 and 24);

3)CONSOLIDATED MEMORANDUM IN OPPOSITION TO DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT filed by Plaintiff, Greer W. Tate (Document No. 33); and

4) REPLY BRIEF IN SUPPORT OF USFL'S MOTION FOR SUMMARY JUDGMENT (Document No. 37).

After careful consideration of Defendants' Motions, the filings in support and opposition thereto, the memoranda of the parties, the relevant case law, and the record as a whole, the Court finds that there is not sufficient record evidence upon which a reasonable jury could return a verdict for Plaintiff, Greer W. Tate, on her claims of breach of contract, bad faith, and negligence. Therefore, the Court will grant the motion for summary judgment of Defendant, U.S. Financial Life Insurance Company, and will grant the motion for summary judgment of Defendant Williams Insurance Services, Inc.

PROCEDURAL BACKGROUND

Plaintiff, Greer W. Tate ("Plaintiff") filed this action on June 2, 2004, in which she claims that she is entitled to life insurance policy benefits under a USFL policy for which her husband, Chapman Douglas Tate, Jr. ("Decedent") applied. Plaintiff's Complaint sets forth three counts. In Count I, she alleges that USFL breached the policy at issue by denying that the policy was in force and by failing to pay her death benefits in the amount of $300,000. In Count II, Plaintiff alleges that this same conduct constitutes bad faith within the meaning of Pennsylvania's bad faith statute, 42 Pa. Cons. Stat. Ann. § 8371. In Count III, Plaintiff, in the alternative, alleges a claim against Williams Insurance for negligence in failing to timely deliver the policy and in failing to take all steps necessary to place the policy in force.*fn1

Defendants have each filed a motion for summary judgment. USFL contends that it is entitled to summary judgment because the undisputed material facts show that the policy was not in force at the time of Decedent's death. Williams Insurance contends that it is entitled to summary judgment because the undisputed facts of record fail to establish that Williams Insurance was negligent. Plaintiff has filed a consolidated memorandum in opposition in which she argues that defendants' motions for summary judgment should be denied.

BACKGROUND

The facts relevant to this discussion, and viewed in the light most favorable to Plaintiff, are as follows. In or around August 2002, Decedent, a 59 year old Pennsylvania resident, was researching and obtaining life insurance quotes via the internet. On August 12, 2002, Jeffrey Kinser ("Kinser"), a general agent for Williams Insurance, provided Decedent with several preliminary life insurance policy quotes, contingent upon the results of a physical examination.

Decedent submitted to a physical examination in September 2002 for the purpose of obtaining a life insurance policy. After the physical examination, Williams Insurance learned for the first time that Decedent had a history of heart problems, which made him an "impaired risk." Williams Insurance would typically submit risk cases to insurance broker Calkins & Kramer, which in turn would seek impaired risk insurance rates with insurers willing to insure impaired risk individuals. USFL is known as an insurer that is willing to insure impaired risk cases.

On September 6, 2002, Kinser forwarded the subject USFL life insurance application to Decedent. Several "Declarations" were listed above the signature line on the USFL application, which contained specific conditions precedent to life insurance coverage. Specifically, the Declarations stated, in bold-face type, as follows:

(3a) Any prepayment made with this application will be subject to the provisions of the Temporary Life Insurance Agreement; (3b) If there is no payment made with this application, the policy will not take effect until both:

(I) the first payment is paid during the lifetime of the proposed insured and while his/her health and the facts and other conditions affecting his/her insurability are as described in Part I and Part II of this application;

(II) and until the policy is delivered to the proposed owner.

(Appendix, Exhibit F) (emphasis in original).

As of November 7, 2002, Decedent had failed to return a completed application, so Kinser sent a reminder email to him. In the email, Kinser wrote "Please me know if you have any questions or have already mailed [the application] and for some reason I have not received it." (Appendix, Exhibit D, TATE 00066-67.)

On December 2, 2002, Decedent completed, signed, and returned the application without payment of the premium to Kinser. On December 11, 2002, Kinser acknowledged receipt of the application and notified Decedent that several questions on the application remained unanswered, e.g., how long Decedent had resided at his current address, his business address, and how long Defendant had been employed at that business. (Appendix, Exhibit D, TATE 00066-65.)

On January 7, 2003, Kinser wrote Decedent and asked him to contact USFL directly to complete a personal interview via phone. Two days later, on January 9, 2003, Decedent informed Kinser that he had completed the personal interview and also noted that USFL would follow up with his personal care physician. Decedent also asked Kinser, "What are we talking about - payment and coverage?" (Appendix, Exhibit D, TATE 00066-63.)

Kinser responded the next day with the following email: The only thing I can tell as of yet is the coverage amount and the length of term. I can only approximate the premium. As soon as I have a firm offer, I will let you know. In the ...


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