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Robertson v. Cincinnati Life Insurance Co.

United States District Court, S.D. West Virginia, Huntington Division

February 4, 2019

HEATHER ROBERTSON, individually and as the personal representative of Jon Robertson, deceased, Plaintiff,
v.
THE CINCINNATI LIFE INSURANCE COMPANY, a foreign corporation, Defendant.

          MEMORANDUM OPINION AND ORDER

          ROBERT C. CHAMBERS UNITED STATES DISTRICT JUDGE

         Pending before the Court are the Motions for Summary Judgment submitted by Plaintiff Heather Robertson and Defendant Cincinnati Life Insurance Company. ECF Nos. 119, 120. In her complaint, Plaintiff alleges claims against Defendant under four causes of action: (1) breach of contract; (2) violation of the West Virginia Unfair Trade Practices Act (“UTPA”); (3) common law bad faith; and (4) reasonable expectations. See Compl., ECF No. 1-1, at 10-21.

         Plaintiff moves for summary judgment on her breach of contract claim and violation of the UTPA claim-counts one and two of her complaint, respectively. Pl.'s Mot. for Summ. J., at 2. Plaintiff claims she is entitled to summary judgment on these two counts because Defendant failed to pay her benefits upon the death of her husband, Jon Robertson, and failed to conduct a reasonable investigation into whether Mr. Robertson made material misrepresentations on his application for life insurance. See Mem. In Supp. of Pl.'s Mot. for Summ. J., ECF No. 122, at 4, 18. Plaintiff also moves for summary judgment on her allegation that Defendant violated section 114-14-8 of the West Virginia Insurance Regulations, arguing that Defendant failed to adopt written standards for the investigation of claims. Id. at 23.

         Defendant moves for summary judgment on all counts Plaintiff asserts against it in the complaint. Def.'s Mot. for Summ. J., at 1. Defendant claims it is entitled to summary judgment on all counts because Mr. Robertson made material misrepresentations on his application for life insurance, and Defendant reached this conclusion after conducting a reasonable investigation. See Mem. In Supp. of Def.'s Mot. for Summ. J., ECF No. 121, at 9-14.

         The parties have fully briefed the issues and the motions are now ripe for adjudication. As explained below, the Court GRANTS, IN PART, AND DENIES, IN PART, both Plaintiff's and Defendant's Motions for Summary Judgment.

         I. BACKGROUND

         On January 3, 2013, Plaintiff's decedent, Jon Robertson, applied for life insurance with Defendant. Application, ECF No. 122-3, at 1, 3. Question 30 of the application asked if the “Proposed Insured had or had been told by a medical professional he/she had any of the following” twenty-two listed medical conditions. Id. at 2. The only checked box related to “High Blood Pressure, ” and the remaining 21 boxes, which included one listing chest pain, were unchecked. Id. Question 31(a) of the application asked whether the proposed insured had, in the last five years, “been hospitalized or consulted, been examined or treated by any physician, psychiatrist or other medical professional not disclosed in response to the prior questions.” Id. Mr. Robertson answered no. Id. Question 34 of the application asked if “the Proposed Insured ever used tobacco or nicotine Products.” Id. The checked box was in the “No” column. Id. On January 30, 2013, Defendant issued a policy of life insurance to Plaintiff's decedent, naming Mr. Robertson as an insured thereunder. Compl., at 8; Dep. of Singer, ECF No. 122-21, at 2. Less than two years later, on January 13, 2015, Mr. Robertson died from esophageal cancer. Death Certificate, ECF No. 122-1.

         On January 23, 2015, Plaintiff made a claim for benefits provided by Defendant. Claim, ECF No. 122-9. However, this claim was denied, and Defendant voided the policy via a letter dated April 8, 2015, after Defendant determined that Mr. Robertson provided inaccurate information in response to Questions 30, 31(a), and 34 of the application. Denial Letter, ECF No. 122-2.

         On April 4, 2016, Plaintiff filed this action against Defendant in the Circuit Court of Cabell County, West Virginia. Notice of Removal, ECF No. 1, at 1. A Notice of Removal to this Court was then filed by Defendant on May 6, 2016, pursuant to 28 U.S.C. § 1441. Id. Both parties filed their motion for summary judgment on October 30, 2018. ECF Nos. 119, 120. Both parties then filed their response and reply on November 13, 2018, and November 20, 2018, respectively. ECF Nos. 127, 129, 132, 133.

         II. STANDARD OF REVIEW

         To obtain summary judgment, the moving party must show that no genuine issue as to any material fact remains and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). In considering a motion for summary judgment, a court will not “weigh the evidence and determine the truth of the matter[.]” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Instead, a court will draw any permissible inference from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986). Any inference, however, “must fall within the range of reasonable probability and not be so tenuous as to amount to speculation or conjecture.” JKC Holding Co. v. Wash. Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001) (citation omitted). Therefore, summary judgment will not be granted if a reasonable jury could return a verdict for the non-moving party on the evidence presented. See Anderson, 477 U.S. at 247-48.

         III. DISCUSSION

         A. Count One: Breach of Contract

          Both Plaintiff and Defendant argue that they are entitled to summary judgment on Plaintiff's claim that Defendant breached the terms of the life insurance policy issued to Mr. Robertson by failing to pay the benefits due under the policy. See Mem. In Supp. of Pl.'s Mot. for Summ. J., at 4; Mem. In Supp. of Def.'s Mot. for Summ. J., at 7. Defendant contends it is entitled to summary judgment because the evidence demonstrates that Mr. Robertson had a history of chest pain and smoking, he omitted these facts in his application for an insurance policy, and Defendant would not have issued the policy had this history been disclosed. See Mem. In Supp. of Def.'s Mot. for Summ. J., at 9-10. However, Plaintiff asserts that there is no “legally sufficient evidence” to support the conclusion that Mr. Robertson had a history of chest pain or smoking, and thus no evidence that he withheld information on his application. See Mem. In Supp. of Pl.'s Mot. for Summ. J., at 5. The Court must deny each parties' request for summary judgment as to count one because Mr. Robertson's history of chest pain and smoking is a material fact reasonably disputed by both parties.

         West Virginia Code Section 33-6-7 provides that “[m]isrepresentations, omissions, concealments of facts, and incorrect statements” in an application for an insurance policy may prevent recovery under the policy if those acts are:

(a) Fraudulent; or
(b) Material either to the acceptance of the risk, or to the hazard assumed by the insurer; or
(c) The insurer in good faith would either not have issued the policy, or would not have issued a policy in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or otherwise.

         The West Virginia Supreme Court has stated that materiality under this statue is determined by:

[W]hether the insurer in good faith would either not have issued the policy, or would not have issued a policy in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or otherwise.[1]

Powell v. Time Ins. Co., 382 S.E.2d 342, 250 ( W.Va. 1989).

         As a result of this holding, “neither West Virginia Code § 33-6-7(b) nor (c) requires that an insurer prove the subjective element that an insured specifically intended to place misrepresentations, omissions, concealments of fact, or incorrect statements on an application in order for the insurer to avoid the policy.” Thompson, 460 S.E.2d at 724 (emphasis added).

         Avoidance of a policy because of an alleged misrepresentation is an affirmative defense which the insurer bears the burden of proving by a preponderance of the evidence. Powell, 382 S.E.2d at 350. Additionally, “an insured may defeat this [affirmative] defense by setting forth evidence that the misrepresentation, omission, concealment of fact, or incorrect statement related to a minor ailment suffered by the insured which was so unrelated and disconnected from the disabling condition suffered by the insured that it could not have possibly been material with respect to the issuance of the policy.” Thompson, 460 S.E.2d at 727 (emphasis added).

         Because Defendant attempts to avoid the policy as a result of a misrepresentation, it bears the burden of proving this affirmative defense. Thus, the Court will first list Defendant's evidence which supports its right to void the policy, then examine Plaintiff's counterevidence to determine whether summary judgment should be granted to either party.

         1. Chest Pain

         Defendant first argues that it is entitled to summary judgment because Mr. Robertson had a history of chest pain that he failed to disclose, and Defendant would not have issued the policy had this history been presented in Mr. Robertson's application. See Mem. In Supp. of Def.'s Mot. for Summ. J., at 9-10. In support of its position that Defendant had a history of chest pain, Defendant submits the following evidence: (1) a Valley Health medical record from December 26, 2012, which states Mr. Robertson complained that his “chest feels like it has razor blades in it”;[2](2) a medical record from a visit to nurse practitioner Mary Adams, also of Valley Health, on January 25, 2013, which states Mr. Robertson complained that he had “chest pain that radiates up neck x 6 months. Happens once a week”;[3] (3) a medical record by Dr. Eric Bronstein, cardiologist at King's Daughters Medical Center, from February 6, 2013, which states Mr. Robertson had “a history of chest pain in left chest over the last 5-6 months. Pain would radiate, at times, to the neck”;[4] and (4) a medical record by Dr. ...


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