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Smith v. Life Investors Insurance Company of America

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA


October 31, 2007

WILLIAM E. SMITH, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
LIFE INVESTORS INSURANCE COMPANY OF AMERICA, DEFENDANT.

The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM ORDER

Pending before the Court is DEFENDANT LIFE INVESTORS' MOTION TO DISMISS THE AMENDED CLASS ACTION COMPLAINT (Document No. 10). The matter has been thoroughly briefed (Document Nos. 11, 19, 21) and in addition, Plaintiff's counsel has submitted a letter to chambers dated October 23, 2007, to inform the Court of the recent decision in Ward v. Dixie National Life Ins. Co., 2007 WL 2914954 (4th Cir. Oct. 5, 2007).

The key issue in this case is the meaning of the term "actual charges" in the supplemental cancer insurance policy provided by Defendant. Defendant contends, in essence, that the term is unambiguous as a matter of law, that its interpretation is correct, and therefore, that all of Plaintiff's claims should be dismissed. Plaintiff contends that, at a minimum, the term is ambiguous and should be construed against the insurer.

The opinion of the Court of Appeals for the Fourth Circuit in Ward constitutes only persuasive authority. However, the Court notes that Defendant repeatedly cited the opinion by the District Court for the District of South Carolina in Ward, and that the Fourth Circuit vacated the district court's grant of summary judgment in favor of the insurance company.

It is clear that the matter in dispute is a close call, with legal support for each position. This Court does not, in this opinion, determine whether or not the term "actual charges" is ambiguous. However, the Court concludes that the issue merits the more fully-developed record that will be available after discovery and summary judgment briefing (if appropriate). Accordingly, DEFENDANT LIFE INVESTORS' MOTION TO DISMISS THE AMENDED CLASS ACTION COMPLAINT (Document No. 10) is DENIED. Defendant shall file an Answer on or before November 12, 2007.

SO ORDERED this 31st day of October, 2007.

20071031

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