PATRICIA K. LANDRUM, Plaintiff,
CONSECO LIFE INSURANCE COMPANY, Defendant.
MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT; GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT; GRANTING DEFENDANT'S DAUBERT MOTION TO EXCLUDE TESTIMONY OF G. RICHARD THOMPSON; DENYING PLAINTIFF'S MOTION FOR SANCTIONS AND TO STRIKE/OBJECTION TO AFFIDAVIT, EXPERT OPINIONS, OTHER EXHIBITS, AND ARGUMENTS SUBMITTED IN SUPPORT OF CONSECO'S MOTION FOR SUMMARY JUDGMENT; AND DENYING PLAINTIFF'S MOTION FOR LEAVE TO FILE ADDITIONAL PAGES OF MEMORANDUM BRIEFS IN SUPPORT OF PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT
HALIL SULEYMAN OZERDEN, District Judge.
BEFORE THE COURT are five Motions: (1) Plaintiff Patricia K. Landrum's Motion  for Partial Summary Judgment; (2) Defendant Conseco Life Insurance Company's Motion  for Summary Judgment; (3) Conseco's Daubert Motion  to Exclude Testimony of G. Richard Thompson; (4) Ms. Landrum's Motion  for Sanctions and to Strike/Objection to Affidavit, Expert Opinions, Other Exhibits, and Arguments Submitted in Support of Conseco's Motion for Summary Judgment; and (5) Ms. Landrum's Motion  for Leave to File Additional Pages of Memorandum Briefs in Support of her Motion  for Partial Summary Judgment. The Motions  have been fully briefed.
After consideration of the pleadings, the record, and relevant legal authorities, and for the reasons discussed below, the Court finds that Ms. Landrum's Motion  for Partial Summary Judgment and Conseco's Motion  for Summary Judgment should each be granted in part and denied in part, Conseco's Daubert Motion  should be granted, Ms. Landrum's Motion  for Sanctions and to Strike should be denied, and Ms. Landrum's Motion  for Leave to File Additional Pages should be denied.
Conseco correctly calculated the death benefit and interest owed to Ms. Landrum as the primary beneficiary of her ex-husband's life insurance policy. Conseco is entitled to summary judgment in part on these issues. However, Ms. Landrum is entitled to summary judgment in part in that Conseco did breach the terms of the life insurance policy by delaying payment. Ms. Landrum's claim for extra-contractual compensatory damages will proceed to trial. Ms. Landrum's claims for fraudulent misrepresentation, negligent misrepresentation, conversion, unjust enrichment, breach of the duty of good faith and fair dealing, and breach of fiduciary duty will be dismissed. Ms. Landrum's claim for punitive damages is not ripe, and Conseco's request to dismiss Ms. Landrum's punitive damages claim will be denied without prejudice at this time.
Lamar Life Insurance Company issued a flexible premium adjustable life insurance policy ("the Policy) to John L. Landrum in 1993. Policy [100-1]. Mr. Landrum named his then-wife Plaintiff Patricia K. Landrum as the Policy's primary beneficiary. Id. at pp. 25-28. Lamar Life Insurance Company merged into Conseco Life Insurance Company effective December 31, 1998, and Conseco assumed "all liability" for the Policy "as if it had been issued originally by Conseco Life Insurance Company." Policy Endorsement [100-1]; Letter [100-14]. Ms. Landrum abandoned the Landrums' marriage in 1996. In 1999, Mr. Landrum was granted a divorce from her on grounds of desertion. Final Decree of Divorce [100-8]; Dep. of Patricia Landrum [102-13] at p. 3. Despite the divorce, Ms. Landrum remained the primary beneficiary of the Policy.
On May 25, 2011, Mr. Landrum died from multiple gunshot wounds. Death Certificate [100-6]. On May 27, 2011, Conseco became aware that Mr. Landrum may have died. Def.'s Resps. to Interrogs.[100-26] at p. 2; AWD History [100-2]. Ms. Landrum's grandson, who is Mr. Landrum's former step-grandson, has been charged with murdering Mr. Landrum and is currently awaiting trial. Press Articles [102-15]; Dep. of Patricia Landrum [102-13] at p. 11. Ms. Landrum was not aware that she remained the primary beneficiary of the Policy until she received a letter from Conseco on or around October 5, 2011, requesting that she complete an enclosed claim form and provide a certified copy of Mr. Landrum's death certificate. Letter [100-4]. Ms. Landrum completed the claim form and submitted it to Conseco, along with the certified death certificate, on October 14, 2011.
Because Ms. Landrum identified herself as Mr. Landrum's ex-wife and informed Conseco that Mr. Landrum died due to "gun shots to the head, " Conseco "began an investigation for due proof as to the proper recipient of the funds." Def.'s Resps. to Interrogs. [102-6] at p. 13. Ms. Landrum eventually filed suit against Conseco on January 9, 2012, to recover the proceeds, and Conseco filed an Answer and Complaint for Interpleader on January 19, 2012. Conseco tendered $50, 507.53 to Ms. Landrum on October 1, 2012. Def.'s Resps. to Interrogs. [100-26] at p. 2; Def.'s Resp.  at p. 4.
Ms. Landrum maintains that Conseco has not tendered the full amount owed to her under the Policy and that it has withheld payment in bad faith. Conseco maintains that it has tendered to Ms. Landrum the full amount that she is owed, namely the Policy's "specified amount" of $50, 000.00, plus interest at the rate of 0.75% for a total of $50, 507.53. Correspondence [100-20]. Ms. Landrum contends that she is owed the accumulation value of the Policy, which the parties agree is $6, 786.88, multiplied times 122 for a total of $827, 999.36, plus interest at a rate of four percent compounded annually. Pl.'s Mot.  at pp. 4-5. Ms. Landrum's Complaint advances claims for breach of contract, bad faith breach of contract, negligent misrepresentation, conversion, breach of the duty of good faith and fair dealing, breach of the duty to conduct a timely and through investigation, unjust enrichment, negligence and/or gross negligence, breach of fiduciary duty, and fraud. Pl.'s Am. Compl.  at p. 8, ¶ 23.
A. Ms. Landrum's Motion  for Partial Summary Judgment and Conseco's Motion  for Summary Judgment
1. Standard of Review
Federal Rule of Civil Procedure 56(a) provides that summary judgment is appropriate "[i]f the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). "A fact is material' if its resolution in favor of one party might affect the outcome of the lawsuit under governing law. An issue is genuine' if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party." Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th Cir. 2000)(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). The purpose of summary judgment is to isolate and dispose of factually unsupported claims or defenses. Melton v. Teachers Ins. & Annuity Ass'n of Am., 114 F.3d 557, 560 (5th Cir. 1997)(citing Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)).
In reviewing the evidence, factual controversies are to be resolved in favor of the nonmovant, "but only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)(en banc). The Court does not "in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts." Id. To rebut a properly supported motion for summary judgment, the opposing party must show, with "significant probative evidence, " that there exists a genuine issue of material fact. Hamilton, 232 F.3d at 477. If the evidence is merely colorable, or is not significantly probative, summary judgment is appropriate. Cutting Underwater Techs. USA, Inc. v. ENI U.S. Operating Co, 671 F.3d 512, 516 (5th Cir. 2012)(citing Anderson, 477 U.S. at 249). "[M]ere conclusory allegations are not competent summary judgment evidence, and such allegations are insufficient, therefore, to defeat a motion for summary judgment." Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). "The court has no duty to search the record for material fact issues." RSR Corp. v. Int'l Ins. Co., 612 F.3d 851, 858 (5th Cir. 2010). "Rather, the party opposing summary judgment is required to identify specific evidence in the record and to articulate precisely how this evidence supports his claim." Id.
2. Mississippi Substantive Law Applies
Because jurisdiction of this case is based upon diversity of citizenship, Mississippi substantive law applies. Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). "The law pertaining to interpretation and enforcement of insurance policies is well-established." S. Healthcare Servs., Inc. v. Lloyd's of London, 110 So.3d 735, 743 (Miss. 2013). "When the words of an insurance policy are plain and unambiguous, the court will afford them their plain, ordinary meaning and will apply them as written." Id. (internal citation omitted). "Mere disagreement as to the meaning of a policy provision does not render the policy ambiguous." Id. at 744. "A policy, or provision therein, is ambiguous if it can be logically interpreted in two or more ways." Id. (internal citation omitted). "The policy must be considered as a whole, considering all relevant portions together." Id. (internal citation omitted).
3. Contract-Based Claims
a. The Death Benefit Due Ms. Landrum Pursuant to the Policy
The Policy permits the beneficiary to receive the greater of two amounts: the Policy's "specified amount" of $50, 000 or the Policy's "accumulation value on the date of death times the Death Benefit Multiple shown on the Schedule." Policy [102-2] at pp. 7-8. Conseco submits that the amount owed to Ms. Landrum under the Policy is the greater "specified amount" of $50, 000, since there is no dispute that the accumulation value is $6, 786.88. Def.'s Tender Letter [100-20]. Ms. Landrum contends that she is entitled to $827, 999.36, which is the Policy's accumulation value at the time of Mr. Landrum's death, $6, 786.88, multiplied by 122. Pl.'s Mot.  for Partial Summ. J. at pp. 4-5.
Conseco contends that Ms. Landrum's interpretation of the amount owed is grounded in an absurd reading of the Policy on the basis of a missing decimal point contained in a poor reproduction duplicate copy of a Policy issued in 1993, which Conseco retrieved from microfilm and produced during this litigation. Def.'s Mem.  at p. 9. The original Policy issued to Mr. Landrum is not available and is believed by Ms. Landrum to have been destroyed during Hurricane Katrina, along with Mr. Landrum's other household belongings. Dep. of Patricia Landrum [102-13] at pp. 4-5.
Mr. Landrum was 64 years old at the time of his death. Conseco asserts that it is obvious that the original Policy identified a multiplier of "1.22" for an attained age of 64, because the duplicate copy shows a space between the "1" and "22." Id. Def.'s Mem.  at pp. 2-3. Conseco maintains, however, that the missing decimal point is irrelevant because Mr. Landrum's attained age at death was 63, as opposed to his calendar age of 64, and the Policy is clear that the multiplier for an attained age of 63 is "1.24." Id. Because $6, 786.88 multiplied times either 1.22 or 1.24 is less than $50, 000, Conseco submits that, regardless of Mr. Landrum's attained age, Ms. Landrum is owed the greater amount of the specified amount of the Policy, which is $50, 000. Def.'s Resp.  at p. 7.
The Policy's "Death Benefit Multiples" are contained in a Schedule, which appears in the duplicate copy of the Policy as follows:
Attained Attained Attained Attained Age/Factor Age/Factor Age/Factor Age/Factor 0-40 2.50 54 1.57 68 1.17 82 1.05 41 2.43 55 1.50 69 1.16 83 1 05 42 2.36 56 1.46 70 1.15 84 1.05 43 2.29 57 1 42 711.13 85 1.05 44 2.22 58 1.38 72 1.11 86 1 05 45 2.15 59 1.34 73 1.09 87 1.05 46 2.09 60 1.30 74 1.07 88 1 05 47 2.03 611.28 75 1.05 89 1.05
48 1.97 62 1.26 76 1.05 90 1.05 49 1.91 63 1.24 77 1.05 911.04 50 1.85 64 1 22 78 1 05 92 1 03 511.76 65 1.20 79 1 05 93 1 02 52 1.71 66 119 80 1.05 94 1.01 53 1.64 67 118 811 05
Schedule [100-1] (emphasis added).
Of the 55 multipliers listed in the Schedule, all contain a decimal point between the first and second number with the exception of eleven, and those eleven all contain a space between the first and second numbers, where decimal points existed in the original Policy. It is Ms. Landrum's position that the Schedule intentionally omits decimal points for these eleven multipliers and apparently that the blank spaces in these eleven multipliers were also intended and have no meaning. Pl.'s Mem.  at pp. 4-5. Ms. Landrum's theory would require the Court to interpret the Policy in such a way as to allow a person who dies at an attained age of 63 to receive 124% of the accumulation value of the Policy, while a person who dies at an attained age of 64 receives 12, 200% of the accumulation value of the Policy. Id. at pp. 4-9. Ms. Landrum makes this argument despite having been provided a copy of the Specimen Policy during discovery. The Specimen Policy is the form from which Mr. Landrum's Policy was created and clearly shows a decimal between the first and second number of every multiplier. Specimen Policy [102-4].
Ms. Landrum's contention that she is entitled to $827, 999.36 is a patently unreasonable reading of the Policy and would transform a life insurance policy into a lottery ticket. The accumulation value of the Policy, $6, 786.88, whether multiplied by either 1.22 or 1.24, is less than the $50, 000 "specified amount" of the Policy. Ms. Landrum is therefore entitled to a death benefit of $50, 000, and Conseco has tendered this amount. The Policy is not ambiguous and cannot logically be interpreted in any other way. A plain and reasonable reading of the Policy and Schedule as a whole can only lead to the conclusion that Conseco has properly calculated the death benefit and that Conseco is entitled to summary judgment on this point.
b. The Interest Due Ms. Landrum Pursuant to the Policy
The Policy provides that "[i]f no settlement option is in effect at the Insured's death, the beneficiary may choose a settlement option." Policy [100-1] at p. 16:
The guaranteed interest rate for all options is 4%. We may allow excess interest at our discretion.
(a) Option 1. FIXED AMOUNT OR PERIOD - We will pay an income of a fixed amount or an income for a fixed period not exceeding 30 years. Refer to Option 1 Table to determine the number of fixed amount payments or the amount of each fixed period payment. On ...