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Fleming v. Jackson National Life Insurance Co.

United States District Court, N.D. Mississippi, Aberdeen Division

May 14, 2018



         Plaintiff Kay Fleming sues Defendant Jackson National Life Insurance Company for denying a life insurance claim she made after her husband's death. Jackson National has moved for summary judgment [34]. Having considered the matter, the Court finds the motion should be granted.


         In June 1984, Jackson National issued a life insurance policy to Curtis and Kay Fleming[1], with both of them being insured under the policy. Def.'s Itemization of Facts [37] ¶ l[2]; Jackson National Life Insurance Company Policy #061520920 (the "Policy" or "policy") at p. I[3]. In 1991, the Flemings took out a loan against the loan value of the policy. Id. ¶ 5. From 1994 to 1999, they made no payments on either the principal or the interest of the loan, and took out a second loan against the policy. Id. ¶¶ 7-11.

         In 2000, the accrued interest caused the balance on the loan to exceed the loan value of the policy. Id. ¶ 12. Jackson National sent the Flemings written notice that the total loan balance had exceeded the loan value, and informed them that they could either terminate the policy or make a loan payment to decrease the balance below the loan value of the policy. Id. ¶¶ 13-14. The Flemings made the required payment to reduce the loan balance and keep the policy in effect and continued making premium payments. Id. ¶¶ 16-17.

         This cycle repeated itself for the next decade. The Flemings would pay premiums but would make no or infrequent payments on the loan; interest would accrue and bring the loan balance above the loan value of the policy; Jackson National would send notice that the Flemings needed to pay down the loan; and the Flemings would make a single loan payment to keep the policy in place. Id. ¶¶ 18-35.

         On May 11, 2012, Jackson National again sent notice that the loan balance had exceeded the loan value of the policy. Id. ¶ 38; Peruchietti Aff., Exhibit 6. The notice stated that the loan balance was $3, 248.00 over the loan value of the policy. It further stated that the policy would be automatically terminated if Jackson National did not receive payment within 31 days. Id. ¶ 39. Thus, the Flemings had until June 11, 2012 to make the payment.

         On June 4, Kay called Jackson National to determine the amount the needed to be paid. Id. ¶ 40. During the call, Jackson National extended the due date for the loan payment to July 20, 2012. Id. ¶ 41; Peruchietti Aff., Exhibit 7. On June 19 and June 29, Kay called Jackson National again. During both calls, Jackson National informed her that the policy would remain in force as long as the Flemings made the required loan payment. Id. ¶¶ 43-49; Peruchietti Aff., Exhibits 8, 10.

         The Flemings did not make the loan payment by July 20, 2012, although they did make a premium payment sometime in July. Id. ¶¶ 50-51. Curtis passed away on August 23, 2012. Id. ¶ 53. Kay made a claim for the life insurance proceeds from the policy. Jackson National investigated the claim, determined that the policy terminated on July 21, 2012 after the Flemings failed to make the minimum loan payment, and denied the claim. Id. ¶ 54.

         Kay initiated this action in state court consisting of three claims: (1) bad faith denial of insurance coverage; (2) breach of contract; and (3) breach of fiduciary duty. Jackson National timely removed the matter to this court.

         Jackson National now argues that it is entitled to summary judgment because the Flemings did not pay down the loan balance as required by the policy. Kay has responded. The matter is ripe for review.

         Rule 56 Summary Judgment Standard

         Summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). See Fed. R. Civ. P. 56(a); Johnston & Johnston v. Conseco Life Ins. Co., 732 F.3d 555, 561 (5th Cir. 2013). The rule "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a sufficient showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp., Ml U.S. at 322, 106 S.Ct. 2548.

         The party moving for summary judgment bears the initial responsibility of informing the Court of the basis for its motion and identifying those portions of the record it believes demonstrate the absence of a genuine dispute of material fact. See Id. at 323, 106 S.Ct. 2548. "An issue of fact is material only if its resolution could affect the outcome of the action." DeBlanc v. St. Tammany Par. Sch. Bd, 640 Fed.Appx. 308, 312 (5th Cir. 2016) (per curiam) (quoting Manning v. Chevron Chem. Co., LLC, 332 F.3d 874, 877 (5th Cir. 2003) (quoting Wyatt v. Hunt Plywood Co., 297 F.3d 405, 408 (5th Cir. 2002) (internal quotation marks omitted))).

         Under Rule 56(a), the burden then shifts to the nonmovant to "go beyond the pleadings and by ... affidavits, or by the 'depositions, answers to interrogatories, and admissions on file, ' designate 'specific facts showing that there is a genuine issue for trial.'" Celotex, 477 U.S. at 324, 106 S.Ct. 2548; Littlefleld v. Forney Indep. Sch Dist., 268 F.3d 275, 282 (5th Cir. 2001); Willis v. Roche Biomedical Labs., Inc.,61 F.3d 313, 315 (5th Cir. 1995). The Court "'resolve[s] factual controversies in favor of the nonmoving party, but only where there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts.'" Thomas v. Baldwin, 595 Fed. App'x. 378, 378 (5th Cir. 2014) (per curiam) (quoting Antoine v. First Student, Inc.,713 F.3d 824, 830 (5th Cir. 2013) (internal quotation marks and citation omitted)). "[T]he nonmoving ...

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