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Oehlmann v. Metropolitan Life Insurance Co.

December 21, 2007

JOANNE OEHLMANN, PLAINTIFF,
v.
METROPOLITAN LIFE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Judge Kosik

MEMORANDUM

This case concerns a dispute over Defendant Metropolitan Life Insurance Company's ("Defendant" or "MetLife") handling of a life-insurance policy claim, to which Plaintiff JoAnne Oehlmann ("Plaintiff" or "Oehlmann") is a primary beneficiary. Oehlmann's ex-husband purchased the policy for their minor daughter, who tragically died in a house fire on April 26, 2005. Plaintiff pleaded the following causes of action:

(1) bad faith; (2) breach of contract; (3) breach of the covenant of good faith and fair dealing; (4) breach of fiduciary duty; (5) negligence; and (6) negligent infliction of emotional distress. We have subject-matter jurisdiction of this case under 28 U.S.C. § 1332(a) (2000), as the diversity and amount-in-controversy requirements are met.*fn1

Factual Background

On February 3, 1994, MetLife issued a life-insurance policy to Todd H. Smirman ("Smirman"), on the life of his minor daughter (the "Insured"). (Doc. 32-3 at 5--6.) Smirman, purchaser of the policy, listed as primary beneficiaries both himself and the Plaintiff (the Insured's mother), to whom he was married at the time. (Doc. 32-2 at 18.)

Each beneficiary was to share fifty percent of the policy proceeds; the face value of the policy was $100,000.00. (Id. at 5, 18.) The policy was issued in the Commonwealth of Pennsylvania.*fn2 (Id. at 5.)

On January 8, 1999, the Court of Common Pleas of Pike County issued a divorce decree dissolving the marriage of Plaintiff and Smirman. (Doc. 39-13 at 7.) Paragraph VI.E. of the Property Settlement Agreement of November 4, 1998, executed by the parties and incorporated into the divorce decree, provides: "The life insurance policies currently insuring the lives of the children are to remain in full force and effect with both Husband and Wife being named as beneficiaries." (Id. at 14.) On December 19, 2001, Plaintiff remarried. (Id. at 6.)

The Insured died in a house fire, while she was living with her mother, on April 26, 2005. (Doc. 39-5 at 3.) Plaintiff retained counsel on or about June, 2005, and counsel requested the requisite claims forms from MetLife. (Doc. 39-8 at 1.) Both Smirman and Plaintiff individually submitted claims forms to MetLife, on July 1, and July 5, 2005, respectively. (Docs. 32-2 at 25, 39-13 at 2.) After processing, MetLife settled the claim on July 20, 2005, and established money-market accounts for both Smirman and Plaintiff. (Docs. 32-2 at 2, 39-14 at 1, 39-15 at 1--2.) Each account contained 50% of the proceeds, $55,630.37.

Five days later, by letter dated July 25, 2005, counsel for Smirman notified MetLife that (1) Smirman disputed Plaintiff's right to the proceeds, and (2) an investigation of the circumstances surrounding the fire was ongoing-insinuating that the fire may not have been an accident.*fn3 (Doc. 32-3 at 1.) In response to the claims of the policyholder, MetLife issued a letter to Plaintiff's attorney on August 4, 2005, which advised of Smirman's allegations and designated a time period during which Smirman's counsel could investigate the allegations.*fn4 (Docs. 32-4 at 1, 39-16 at 1--2.) MetLife requested the fire marshal's report from Plaintiff, and MetLife received the report, dated August 4, 2005, from Plaintiff's attorney on September 13, 2005. (Doc. 32-6 at 1.)

Also on August 4, and without knowledge of MetLife's aforementioned correspondence of that date, Plaintiff instituted litigation against MetLife by filing a Praecipe for Writ of Summons in the Pennsylvania Court of Common Pleas of Pike County. (Doc. 32-2 at 3.)

By letter dated September 27, 2005, MetLife ruled the fire not suspicious, and notified Plaintiff and Smirman regarding same, but explained that Plaintiff and Smirman were still considered rival claimants given Smirman's belief that he was the sole beneficiary of the proceeds. (Docs. 32-2 at 3--4, 32-7 at 1--2.) Additionally, Plaintiff's litigation against MetLife was still pending. (Doc. 32-7 at 2.) As the proceeds had already been disbursed to the money-market accounts, MetLife told the parties that it would distribute the accounts once each side had executed a settlement agreement and release. (Docs. 32-7 at 2, 32-8 at 1.) The relevant portions of the release sent to Oehlmann are as follows:

[I]n consideration of the sum of Fifty Thousand Dollars ($50,000.00), . . . Releasors, their successors and assigns, and anyone claiming under them, hereby releases, discharges and acquits Metropolitan Life Insurance Company and its representatives, . . . from any and all claims, including, without limitation, claims for breach of contract, denial of benefits, bad faith, unfair claims practices and/or statutory violations, breach of the implied covenant of good faith and fair dealing, exemplary or punitive damages, consequential damages for financial loss, emotional distress, breach of fiduciary duty, negligence and attorney's fees, as well as all other claims, demands, sums of money, actions, rights, causes of action, obligations and abilities of any kind of nature whatsoever which Releasors may have had or claimed to have had, or now has or claims to have, or hereafter may have or assert to have [relating to Policy No. 945 000 604A or Pike County C.C.P. No.: 921-2005], and that "Releasors hereby acknowledge that payment of the amount referred to . . . above constitutes full satisfaction and discharge of all the claims, demands, sums of money, actions, rights, causes of action, debts, obligations and liabilities they have against Releasees . . . and that the sole consideration . . . for releasing said claims, demands, sums of money, actions, rights, causes of action, debts, obligations and liabilities is the payment of said sum. (Doc. 32-7 at 1--2.)

Throughout the next months, Plaintiff's attorney continued with the litigation because MetLife would not distribute the accounts without a release, (see Docs. 32-10 at 1--2, 39-22 at 1, 39-24 at 1), and MetLife refused to disburse the proceeds absent a release, (see Docs. 32-9 at 1, 32-11 at 1--2, 32-12 at 1, 32-13 at 1--2, 3, 32-15 at 1, 39-28 at 3, 39-37 at 6.) MetLife and Plaintiff's communications make clear that MetLife insisted on the releases because it considered Plaintiff and Smirman to be rival claimants, (Docs. 39-21 at 2, 39-28 at 3, 39-32 at 2--3), and that Plaintiff refused to execute such a release because the release would waive any claim against MetLife, (Docs. 32-16 at 1, 39-30 at 1, 39-34 at 1). Although Plaintiff's attorney notified MetLife that Smirman no longer disputed the beneficiary arrangement, MetLife received no direct communication from Smirman stating such, nor did it receive an executed settlement agreement and release from Smirman. (Docs. 39-28 at 3, 39-32 at 2). It appears that Smirman's counsel was non-responsive during this period, further frustrating efforts to settle this matter. (Doc. 39-28 at 3).

By letters dated February 16, 2006 and March 14, 2006, the attorneys for Plaintiff and Smirman notified MetLife that they had agreed to split the proceeds, however the parties failed to execute the releases provided by MetLife. (Docs. 39-34 at 1, 39-35 at 2). At this point, Plaintiff's Pike County litigation was still pending. In March, 2006, after talking with counsel, MetLife sent revised releases to Plaintiff and Smirman, (Doc. 39-37 at 2, 7), however each again failed to execute them (Doc. 39-38 at 1). Plaintiff's attorney informed MetLife that the release could not be executed as written, and that he was referring the matter to new counsel. (Doc. 32-16 at 1). On May 8, 2006, Plaintiff's new counsel filed a new complaint in the Court of Common Pleas of Lackawanna County. MetLife removed the matter to this court.*fn5 On June 7, 2006, in addition to its answer, MetLife filed a counterclaim and third-party complaint of interpleader against Plaintiff and Smirman.*fn6 (Doc. 3 at 9). While this matter was pending during fall, 2006, Smirman orally agreed to waive any dispute to the payment of the proceeds, and executed the release for MetLife, on November 4, 2006.*fn7 (Doc. 32-18). Despite Plaintiff not executing the release, MetLife sent Plaintiff her account checkbook for the proceeds on November 14, 2006. (Docs. 39-17 at 1, 39-23 at 9).

Summary Judgment Standard

Summary judgment should be granted when the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c). "The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247--48 (1986). A disputed fact is material when it could affect the outcome of the suit under the governing substantive law. Id.at 248. A dispute is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id. at 250. The court should draw all inferences in the light most favorable to the non-moving party.Wicker v. Consol. Rail Corp., 142 F.3d 690, 696 (3d Cir. 1998).

Initially, the moving party must show the absence of a genuine issue concerning any material fact. SeeCelotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has satisfied its burden, the nonmoving party, "must present affirmative evidence in order to defeat a properly supported motion for summary judgment." Anderson, 477 U.S. at 257. Mere conclusory allegations or denials taken from the pleadings cannot withstand summary judgment once the moving party has presented evidentiary materials. SeeSchoch v. First Fid. Bancorp., 912 F.2d 654, 657 (3d Cir. 1990). Additionally, "[t]he mere presence of an expert opinion supporting the ...


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