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Fields v. Gerber Life Insurance Co.

United States District Court, W.D. Pennsylvania

September 2, 2014



TERRENCE F. MCVERRY, District Judge.

Pending before the Court is a MOTION TO PARTIALLY DISMISS PLAINTIFF'S COMPLAINT FOR FAILURE TO STATE A CLAIM PURSUANT TO F.R.C.P. 12(b)(6) (ECF No. 4) filed by Defendant Gerber Life Insurance Company ("Gerber Life") with brief in support (ECF No. 5). Plaintiff Patricia A. Fields ("Fields") filed a RESPONSE TO MOTION TO DISMISS (ECF No. 6) with brief in support (ECF No. 7); Gerber Life filed a reply brief (ECF No. 8). Accordingly, the motion is ripe for disposition.

I. Background

A. Factual Background

This action arises from the denial of insurance benefits by Gerber Life after the death of King James Benson Davis, the grandson of Plaintiff Patricia Fields. The following background is drawn from the Complaint, and the factual allegations therein are accepted as true for the purpose of this Memorandum Opinion. As the law requires, all disputed facts and inferences are resolved in favor of Plaintiff, the non-moving party.

On June 12, 2012, Davis was born prematurely with multiple abnormalities which required that he be administered oxygen, a feeding tube and blood transfusions. Following a lengthy hospitalization, Davis was discharged home with his parents.

Gerber Life is an out-of-state company licensed to sell endowment life insurance policies, which it markets as a college savings plan. Gerber Life does not employ agents in Pennsylvania; rather, it sells these policies on the internet and through phone solicitation, allegedly by offering sizeable coverage for minimal monthly, quarterly, semi-annual or annual payments to be made until the insured reaches one-hundred-years-of age.

According to Fields, when a prospective customer contacts Gerber Life by telephone, its representative conducts an interview and completes the application without providing the applicant the opportunity to review and physically sign the document(s). Fields also avers that Gerber Life does not provide the required consumer disclosures and documentation necessary for the applicant to provide a documented electronic signature in accordance with the Electronic Signatures in Global and National Commerce At, 15 U.S.C. ยงยง 7001, et seq.

On October 12, 2012, Fields contacted Gerber Life by telephone to apply for an endowment life insurance policy for her grandson. During that phone call, Fields allegedly informed the representative that Davis was born prematurely with several medical conditions. The Gerber Life representative apparently asked few (if any) questions regarding the health insurance underwriting process.

On October 18, 2012, a Gerber Life representative contacted Fields to further inquire into Davis' medical history. Fields claims that she fully disclosed to the representative all information regarding Davis' premature birth, including his need for a feeding tube, supplemental oxygen, and blood transfusions. Gerber Life allegedly never requested that she verify this information in writing or by electronic means, that she sign her name to any application prepared by the representative, or that she produce the medical records of Davis.

On October 22, 2012, Gerber Life issued to Fields a $50, 000 life insurance policy for Davis. Attached to the insurance agreement were unsigned and unverified application forms prepared by and/or on behalf of Gerber Life, purportedly in violation of Pennsylvania and federal law. Moreover, Plaintiff allegedly never agreed in writing to the answers placed on the medical questionnaire which had been completed by the Gerber Life representative after the follow-up telephone call.

On March 7, 2013, Davis died from bilateral acute pneumonia. Following his death, Fields notified Geber Life and completed all forms required by the insurer in order to obtain the payment of death benefits due under the policy. Upon receiving notice, Gerber Life obtained the medical records of Davis and began to investigate whether Fields made a material misrepresentation in the application process. Fields allegeldy cooperated fully with Gerber Life at all times.

On March 3, 2014, Gerber Life denied coverage and canceled the life insurance policy. As Fields contends, Gerber Life denied coverage "based upon information contained on the application forms attached to the policy, knowing that the forms were bogus and should never have been used ...

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