Berkshire Life Ins. Co. of Am. v. Rampersad

557 F.Supp.3d 690

BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA, Plaintiff,

v.Amrika RAMPERSAD, Defendant.

No. 5:19-CV-316-D

United States District Court, E.D. North Carolina, Western Division.

Signed August 27, 2021

Gemma L. Saluta, Ryan Hunter Niland, James A. Dean, Womble Bond Dickinson (US) LLP, Winston-Salem, NC, for Plaintiff.

Melissa Leila Louzri, Nathaniel W. Bax, Foster Law Firm, LLC, Greenville, SC, for Defendant.

ORDER

JAMES C. DEVER III, United States District Judge

On July 25, 2019, Berkshire Life Insurance Company of America ("Berkshire" or "plaintiff") filed a complaint against Dr. Amrika Rampersad ("Rampersad" or "defendant") seeking a declaratory judgment that Rampersad's disability insurance policy was rescinded and void ab initio [D.E. 1]. After discovery closed, both parties moved for summary judgment and filed related materials. As explained below, the court grants Berkshire's motion for summary judgment and denies Rampersad's motion for summary judgment.

I.

In January 2017, Rampersad lived in Fort Myers, Florida, and worked as a general dentist at Riverdale Dental Associates ("Riverdale Dental"). See Rampersad Dep. [D.E. 38-1] 5. Although Rampersad purchased a disability income insurance policy from Berkshire in 2014, she sought additional disability income coverage due to increased income. See id. at 17–18. Rampersad hired Matthew Fine ("Fine") of insurance agency Robert Fine & Associates to help her. See id. at 18–19. Robert Fine & Associates is an agent of Berkshire and licensed to solicit applications for insurance policies with Berkshire. See Rampersad Dep. [D.E. 34-1]. Fine and his agency conducted all communications with Berkshire. See [D.E. 38-1] 18–19.

On February 7, 2017, Rampersad applied for disability insurance. See [D.E. 34-2, 38-2, 41-1]. The application stated:

1. This Application for Disability Insurance: Part I, Application for Insurance:

Part II – Health and Medical History, any required Representations to the Medical Examiner, and any other supplements or amendments to this Application for Disability Insurance: Part I will form the basis for, and become part of and attached to any policy or coverage issued and is herein referred to as the "Application."

2. All of the statements that are part of this Application are correctly recorded, and are complete and true to the best of the knowledge and belief of those persons who made them.

3. No agent, broker or medical examiner has any right to accept risks, make or change contracts, or to waive or modify any of the Company's rights or requirements.

4. Information provided by the applicant are representations and not warranties. Any misrepresentation or omission, if found to be material, may adversely affect acceptance of the risk, claims payment, or may lead to rescission of any policy that is issued based on this Application.

...

6. The policy date is the date from which premiums are calculated and become due ... [N]o Insurance shall take effect unless and until the policy is delivered, the first premium is paid, and there has been no change in the health, the income level, status of employment or occupation of the proposed insured.

[D.E. 34-2] 10; [D.E. 38-2] 10; [D.E. 41-1] 10.

Rampersad completed the Occupational Information section. See [D.E. 34-2] 4–5; [D.E. 38-2] 4–5; [D.E. 41-1] 4–5. It asked, "How many hours per week are you at work in this occupation?" Rampersad answered "40+." [D.E. 34-2] 4; [D.E. 38-2] 4; [D.E. 41-1] 4. The Occupational Information section also asked, "Do you plan to change your occupation, job, or employment within the next six months?" Rampersad answered "No." [D.E. 34-2] 5; [D.E. 38-2] 5; [D.E. 41-1] 5. Rampersad read and signed part one of the disability income insurance application, which contained the Occupational Information section. See Rampersad Dep. [D.E. 38-1] 19.

On February 14, 2017, Rampersad also submitted the Application for Insurance: Part II – Health and Medical History ("Medical History"). See [D.E. 34-2] 16–19; [D.E. 38-3]; [D.E. 41-1] 16–19. The Medical History asked, "Are you currently receiving any medical advice, counseling, or treatment from a licensed physician for any medical ... condition?" Rampersad answered "No." [D.E. 34-2] 17; [D.E. 38-3] 3; [D.E. 41-1] 17. The Medical History asked, "In the past ten years, have you been diagnosed or treated for ... any disease or disorder of the joints, limbs, or muscles," and "[o]ther than previously stated in this [Medical History], have you ... within the past 12 months had any diagnostic test(s) performed (except for HIV or AIDS)?" Rampersad answered "No." [D.E. 34-2] 17–18; [D.E. 38-3] 3–4; [D.E. 41-1] 17–18. The Medical History asked, "Other than previously stated in this [Medical History], have you ... within the past 5 years had a physical exam or check-up of any kind," and "[o]ther than previously stated ... have you within the past 5 years ... been a patient in a hospital, clinic, or other medical or mental health facility?" Rampersad answered "Yes" to both and disclosed that she "had annual physicals & routine check ups." [D.E. 34-2] 18–19; [D.E. 38-3] 4–5; [D.E. 41-1] 18–19. The Medical History stated: "I understand and agree that the statements and answers in this [Medical History] are written as made by me; to the best of my knowledge and belief are full, complete and true; and that they shall be a part of the contract of insurance, if issued." [D.E. 34-2] 19; [D.E. 38-3] 5; [D.E. 41-1] 19.

Rampersad read and signed the Medical History. See Rampersad Dep. [D.E. 38-1] 19.

On April 19, 2017, Berkshire approved Rampersad's coverage and issued Rampersad a disability insurance income policy with the policy number Z3585720 (the "5720 Policy") with a Policy Date of May 3, 2017. See [D.E. 34-3, 38-4, 41-2]. The 5720 Policy stated: "We have issued the Policy in consideration of the representations in the application and payment of the first premium.... The Policy with any applications(s), Schedule Pages, and any attached riders, amendments, and endorsements make up the entire contract. No change in the Policy will be valid unless it has been endorsed on, or attached to, the Policy in writing by the president, a vice president, or the secretary of Berkshire Life." [D.E. 38-4] 23–24. The 5720 Policy did not take effect because Rampersad had not yet signed the delivery requirements or paid any premiums. See [D.E. 38-2] 10; [D.E. 41-1] 10.

On June 1, 2017, Rampersad read and signed the Policy Delivery Receipt, Declaration of Insurability, and Amendment to Application for the 5720 Policy (collectively, the "Delivery Requirements") and returned them to Berkshire on June 12, 2017. See [D.E. 34-4]; Rampersad Dep. [D.E. 38-1] 20; [D.E. 41-3]; [D.E. 41-4]. The 5720 Policy took effect on June 13, 2017, when Berkshire received Rampersad's first monthly premium payment of $125.23. See [D.E. 34-5]; [D.E. 38-6] 6–7; [D.E. 41-4].

In June 2017, Rampersad's husband accepted a job as a physician in Raleigh, North Carolina. See Rampersad Dep. [D.E. 38-1] 6–7; [D.E. 56] 5–7. On June 16, 2017, the North Carolina Board of Dental Examiners issued Rampersad a North Carolina dental license. See [D.E. 38-5]. Rampersad ended her employment at Riverdale Dental before she relocated to North Carolina in July 2017. See Rampersad Dep. [D.E. 38-1] 7.

Before June 13, 2017, a dental assistant at Riverdale Dental sprayed too much air into a patient's mouth, causing blood and saliva to splash onto Rampersad's face, under her goggles, and into her eyes. See id. at 14–15. Rampersad reported the incident to her physician at a wellness exam and asked her physician to test for blood-borne pathogens. See id. Rampersad asserts that she regularly asked for such tests due to her exposure to blood and saliva as a dentist. See [D.E. 56] 8.

While preparing to move to North Carolina, Rampersad tore a ligament and a tendon in her right ankle. See Rampersad Dep. [D.E. 38-1] 13, 15, 17. On June 26, 2017, Rampersad sought medical treatment for the ankle injury. Her doctor recommended surgery to repair the damage, and her ankle remained swollen for months. Although Rampersad is not sure on what date she suffered the ankle injury, Rampersad believes it occurred no more than a few days before June 26, 2017. See id. at 12; [D.E. 56] 8–9.

On July 15, 2017, Berkshire began automatically drafting premiums due for the 5720 Policy. See [D.E. 38-6] 6–7. Berkshire's first automatic draft charged $250.46, corresponding to the months of June and July. See id.; [D.E. 38-7]. Rampersad believed the charge to be a double charge. See Rampersad Dep. [D.E. 38-1] 21. After Rampersad discussed the possible double charge with Fine, see id., on July 24, 2017, Fine's agency asked Berkshire if Berkshire could change the Policy Date from May to June in order for Rampersad to skip the next month's payment. See [D.E. 34-6] 2; [D.E. 38-8] 12; [D.E. 41-5] 2. Berkshire does not change policy dates after a policy takes effect, but it will sometimes issue a new policy under a new policy number. See Cowdrey Decl. [D.E. 38-13] ¶¶ 13–14.

On July 25, 2017, Berkshire told Fine that the 5720 Policy's effective date was June 13, 2017. Berkshire also told Fine that in order for Rampersad to skip the next month's payment, "the client will need to resign deliveries as we'll have to reissue to a new policy number." [D.E. 38-8] 1–4. Fine replied, "Yes. Please go ahead. Client will sign new delivers [sic]." Id. at 2.

On July 25, 2017, Berkshire issued a new policy with a policy number Z3724950 (the "4950 Policy"). See [D.E. 34-15]; Cowdrey Decl. [D.E. 38-13] ¶ 22. On July 25, 2017, in North Carolina, Rampersad read and signed an Amendment concerning the 4950 Policy, which stated: "It is further represented that the statements and answers in said [Occupational Information and Medical History] were complete and true when made and that no changes have occurred which would make said statements and answers incorrect or incomplete as of the present...