Am. Gen. Life Ins. Co. v. Palmer

1

AMERICAN GENERAL LIFE INSURANCE COMPANY, Plaintiff, v. DESHANNA PALMER et al., Defendant.

No. C23-00162-KKE

United States District Court, W.D. Washington, Seattle

September 3, 2024

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

Kymberly K. Evanson United States District Judge

On July 23, 2020, Joshua Bova (“Bova”) applied in writing to American General Life Insurance Company (“American General”) for a life insurance policy. In completing the application, Bova represented that he had truthfully answered questions regarding his medical and criminal history. After Bova passed away within the policy's contestability period, American General conducted a contestable claim review and discovered that Bova had made numerous material misrepresentations about his health and background. American General now seeks to rescind the policy and has filed this action against its sole beneficiary Deshanna Palmer. Because American General has demonstrated that Bova knowingly made false statements that materially affected American General's assumption of risk in issuing the policy, and that Bova did so with intent to deceive, the Court grants the motion and declares the policy void.

I. FACTS^[1]

A. Bova Obtained a Life Insurance Policy from American General.

On July 23, 2020, Bova applied in writing to American General for a life insurance policy (“Application”). Dkt. No. 28-3 at 19.^[2] On Part A of the Application, Bova reported he had never used tobacco products and that he had never been convicted of a felony or misdemeanor. Id. at 10, 12. Bova signed Part A of the Application, certifying “that the information supplied has been truthfully and accurately recorded.” Id. at 13. On Part B of the Application, Bova asserted he had never “used cocaine, heroin, methamphetamine, hallucinogens, stimulants or any other habit-forming drug except as prescribed by a medical professional.” Id. at 17. Bova also asserted he had never used cannabis or “a controlled substance or prescription drug in a manner other than prescribed by a physician.” Id. In addition, Bova asserted that, in the past five years, he had not been “hospitalized, consulted a member of the medical profession or had any illness, injury or surgery.” Id. Finally, the page where Bova signed part B of the Application contained the following agreement and acknowledgment: “I understand that any misrepresentation contained in this application and relied on by the Company may be used to reduce or deny a claim or void the policy if: (1) such misrepresentation materially affects the acceptance of the risk; and (2) the policy is within its contestable period.” Id. at 19.

Based on Bova's Application, including the answers and representations detailed above, American General issued a term life insurance policy to Bova with a face amount of $750,000 (“Policy”). Dkt. No. 28-3 ¶¶ 12-13; Dkt. No. 28-2 at 9. On November 2, 2020, Bova executed a Policy Acceptance and Amendment of Application (“Policy Acceptance”) that contained the following representation:

I represent, on behalf of myself and any person who may have been proposed for insurance, that to the best of my knowledge and belief:

(1) There have been no changes to my occupation, nor have I become unemployed since the date of the application; or

(2) Neither I nor any other proposed insured has, since the date of the application:

a. Consulted a licensed health care provider or received medical or surgical advice or treatment; or

b. Acquired any knowledge or belief that any representation in the application, including information provided or an answer to a question, is now inaccurate, incomplete, or untrue.

Id. at 21. Bova also indicated that he understood and agreed that the Policy was “Standard Plus Non Tobacco premium class.” Id. The Policy contained a two-year contestability period.^[3] Id. ¶ 14; Dkt. No. 28-2 at 9.

Bova passed away on November 14, 2021, within the contestability period.^[4] Dkt. No. 283 ¶ 14; Dkt. No. 28-2 at 9.

B. American General Conducted a Contestable Claim Review.

American General initiated a contestable claim review and obtained Bova's medical records, the police report relating to his death, and his criminal history. Dkt. No. 28-3 ¶ 15. These documents revealed previously undisclosed tobacco use, drug use, emergency room visits, and criminal history. Dkt. No. 28-3, ¶ 16.

Though Bova had denied ever using tobacco in his July 23, 2020 Application, notes in medical records from the Highline Medical Center Emergency Department dated March 2, 2019 (Dkt. No. 28-3 at 30), June 9, 2019 (Id. at 38), April 27, 2020 (Id. at 58), June 19, 2020 (Id. at 68), October 2, 2020 (Id. at 190), and October 13, 2020 (Id. at 200) show Bova's self-reported tobacco use status as an “every day smoker” of cigarettes. See also id. at 96 (2017 medical record noting tobacco use). Several of these records also note “nicotine dependence.” See, e.g., Id. at 43, 53, 74.

Similarly, with respect to drug use, which Bova denied on his Application, medical records from June 2019 reflect that Bova reported using cannabis daily, including smoking marijuana that may have been laced with PCP on at least one occasion. Dkt. No. 28-3 at 158-159, see also id. at 189 (October 2, 2020 medical record). During an emergency room visit on October 13, 2020, Bova again indicated that he used cannabis and PCP, and that he had last used PCP on October 1, 2020. Id. at 200.

In his Application, Bova had also denied ever having been convicted of a felony or misdemeanor. However, his criminal history records revealed convictions for numerous misdemeanors and felonies during the years 1999-2019, including criminal trespass, burglary, theft, assault, and drug possession.^[5] See Dkt. No. 28-3 at 229 (Washington State Patrol summary of convictions); 210-225 (Accurint criminal history records). Bova had also denied consulting a member of the medical profession within the five years predating his Application, but his medical records document numerous emergency room visits for various illnesses and injuries in the period of 2017-2020. Id. at 27-208.

As a component of the contestable claim review, on July 22, 2022, American General underwriting specialist Joan Kline prepared an “Underwriting Opinion Memo” summarizing the information obtained from the medical and criminal records. Dkt. 28-3 at 23. Kline noted that “[h]ad the tobacco use history been divulged on these documents, the application would have been approved no better than Standard Tobacco, rather than Standard Plus Non-tobacco.” Id. Ms. Kline further concluded that had American General “known this information on either the criminal offense convictions or the illegal drug use, we would have declined this application.” Id. at 25.

On February 2, 2023, American General filed this action seeking declaratory relief and recission of the Policy. Dkt. No. 1 at 9-10. Defendant Palmer, proceeding pro se, filed what she asked the Court to consider an answer to the complaint. See Dkt. Nos. 4, 5, 6. During the course of discovery, on August 30, 2023, American General served a set of requests for admission to Palmer. Dkt. No. 28-2 ¶ 2, at 3. Palmer acknowledged receipt of the requests but did not otherwise respond to them. Id. ¶¶ 3-4. The requests sought admissions regarding Bova's completion of the life insurance Application, including that he knowingly provided answers that were not accurate, complete, or truthful (Id. at 8-9). They also sought admissions regarding the details of the Policy, including that it contained a two-year contestability period (Id. at 8), and admissions that American General is entitled to the relief it now seeks. Id. at 10.

On November 30, 2023, American General filed a motion for summary judgment. Dkt. No. 18. This Court denied the motion without prejudice because it was not sufficiently supported by documentary evidence reflecting the conclusions in the contested claim review. Dkt. No. 27. Consistent with the Court's order, American General filed a renewed motion for summary judgment on June 7, 2024, supported by a declaration including Bova's medical records and criminal history. Dkt. Nos. 28, 28-3. Palmer did not respond to the renewed motion. See Dkt. No. 29.

II. LEGAL STANDARDS

“The court shall grant summary judgment if 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). There is no genuine issue of fact for trial where the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (nonmoving party must present specific, significant probative evidence, not simply “some metaphysical doubt.”); Fed.R.Civ.P. 56(e). In determining whether an issue of fact exists, the Court reviews all evidence in the light most favorable to the nonmoving party and draws all reasonable inferences in that party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986).

The moving party, here, American General, bears the initial burden of showing that there is no evidence supporting an essential element of the nonmovant's case. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Once the movant has met this burden, the nonmoving party then must show that there is a genuine issue for trial. Anderson, 477 U.S. at 250. If the nonmoving party fails to establish the existence of a genuine issue of material fact, “the moving party is entitled to judgment as a matter of law.” Celotex, 477 U.S. at 323 (cleaned up). “Before summary judgment may be entered, the district court must ensure that each statement of material fact is supported by record evidence sufficient to satisfy the...