Smith v. Cont'l Cas. Co.

425 F.Supp.3d 908

Maybelle Z. SMITH et al., Plaintiffs,

v.CONTINENTAL CASUALTY COMPANY, Defendant.

Case No.: 1:16-cv-00616

United States District Court, S.D. Ohio, Western Division.

Filed November 25, 2019

Jeffrey Scott Goldenberg, Goldenberg Schneider, LPA, Paul M. De Marco, Eric Kmetz, Markovits, Stock & DeMarco, LLC, Louise Malbin Roselle, Biller & Kimble, LLC, Cincinnati, Oh, for Plaintiffs.

Jerry Sylvester Sallee, Jeremie W. Imbus, Dinsmore & Shohl, LLP, Cincinnati, OH, Ben E. Waldin, Pro Hac Vice, Brent Robert Austin, Pro Hac Vice, Eimer Stahl LLP, Chicago, IL, for Defendants.

OPINION AND ORDER

Michael R. Barrett, Judge This matter is before the Court on Defendant Continental Casualty Company's Motion for Summary Judgment. (Doc. 27). Plaintiff Mary A. Fleming¹ filed a Response (Doc. 33) and Defendant filed a Reply (Doc. 34).

I. BACKGROUND

On May 1, 1989, Plaintiff applied for and purchased long-term care insurance policy number 076296971 ("the Policy") from Defendant. (Doc. 12-2 at PageID 173-74). Plaintiff's application included a box titled "Prior Hospitalization" and an "X" mark in the corresponding "Yes" box. (Id. at PageID 174).

The Policy's first page states that that it is "guaranteed renewable for life," informs "premiums subject to change," and explains that

We guarantee to renew Your policy as long as the premium is paid within the allowable time.

We can make no change to Your policy without Your consent.

We can change the premium rate for the policy, but only if We give You 31 days prior written notice and We change the premium rate for everyone who has this policy form in Your policy rating group in Your state.

Id. at PageID 162. The Policy Schedule lists: a long-term care benefit of $80 per day; a lifetime maximum benefit of seven years; an effective date of May 1, 1989; and a policy term of annual. Id. at PageID 164.

Part 2 of the Policy is titled "BENEFITS" and includes:

LONG TERM CARE BENEFIT

We will pay You the Long Term Care Benefit for each day You require Long Term Care in a Long Term Care Facility ... In order for benefits to be payable, Your confinement must meet the conditions listed below:

1. within thirty days following discharge from a Hospital confinement of at least three consecutive days, You are admitted to, or placed on a waiting list for, a long Term Care Facility as a result of the same Injury or Sickness which caused Your Hospital confinement.

2. Your Injury or Sickness requires and must continue to require Long Term Care.

Id. at PageID 167. Part 6 of the Policy is titled "THE CONTRACT" and states

ENTIRE CONTRACT AND CHANGES TO IT

This policy is legal contract between You and Us. The policy, the application and any attached papers make up the entire contract. No one has the right to change any part of this policy or to waive any of its provisions unless the change is approved in writing on the policy by one of Our officers.

Id. at PageID 169. Part 6 also states

CONFORMITY WITH STATE STATUTES

If any provision of this policy is in conflict with the statutes of the state in which You reside on the policy Effective Date, the provision is automatically amended to meet the minimum requirements of the statute.

Id.

Plaintiff paid her annual premium each year. (Doc. 1). In December 2012, she could no longer live independently and moved into an assisted living unit named Stratford Court in Palm Harbor, Florida. (Id. , ¶ 14). Plaintiff admits she was not discharged from a hospital confinement of at least three consecutive days before she entered Stratford Court. (Doc. 1). Defendant admits that a February 20, 2013 letter to Plaintiff from Defendant stated, "[a]ccording to the information we received, you (sic) provider, Stratford Court of Palm Harbor, meets the policy requirements," "[u]nfortunately, we have received no information of a Hospital confinement of at least three consecutive days within 30 prior to your admission to the facility" and, "[b]ased upon this information, no benefits are payable for the rendered services by Stratford Court of Palm, Harbor." (Doc. 26 at PageID 264).

Plaintiffs Maybelle Smith and Fleming filed this action on behalf of themselves and others similarly situated and brought claims for breach of contract, declaratory judgment, bad faith, violations of the Unfair Claims Settlement Practices Act, unjust enrichment, and punitive damages related to their long-term care insurance policies issued by Defendant. (Doc. 1). Defendant filed a Motion to Dismiss all of Plaintiffs' claims. (Doc. 11). With respect to Plaintiff Smith, applying Ohio law, the Court dismissed all of her claims with prejudice. (Doc. 21). With respect to Plaintiff Fleming, applying Florida law, the Court dismissed her claims for bad faith, unjust enrichment and punitive damages with prejudice; dismissed her claim under the Unfair Claims Settlement Practices Act without prejudice to refiling; and held that her claims for breach of contract, declaratory judgment, and injunctive relief remained at that stage in the proceedings. Id. Defendant now moves for summary judgment of Plaintiff Fleming's remaining claims. (Doc. 27).

II. STANDARD

Federal Rule of Civil Procedure 56(a) provides that summary judgment is proper "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." The moving party has the burden of showing an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett , 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has met its burden of production, the non-moving party cannot rest on his pleadings, but must present significant probative evidence in support of his complaint to defeat the motion for summary judgment. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

III. ANALYSIS

An insurance policy is a contract and interpretation of the language in such a policy constitutes a ruling on a question of law that is an appropriate issue for summary judgment. EmbroidMe.com, Inc. v. Travelers Prop. Cas. Co. of Am. , 845 F.3d 1099, 1105 (11th Cir. 2017). See Univ. Housing by Dayco Corp. v. Foch , 221 So. 3d 701, 704 (Fla. Dist. Ct. App. 2017) ("Where the resolution of the issues in the lawsuit depends on the construction and legal effect of a contract, the question at issue is essentially one of law only and determinable by entry of summary judgment."). Under Florida² law, "[i]t is generally accepted that the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract." Hassen v. State Farm Mut. Auto. Ins. Co. , 674 So. 2d 106, 108 (Fla. 1996). "The general rule is that in the absence of clear legislative intent to the contrary, a law affecting substantive rights, liabilities and duties is presumed to apply prospectively." Metro. Dade Cty. v. Chase Fed. Hous. Corp. , 737 So. 2d 494, 499 (Fla. 1999). "Thus, if a statute attaches new legal consequences to events completed before its enactment, the courts will not apply the statute to pending cases, absent clear legislative intent favoring retroactive application." Id.

Chapter 627 of the Florida Insurance Code governs Insurance Rates and Contracts and Part XVIII that Chapter covers Long-Term Care Insurance Policies. Fla. Stat. §§ 627.9401, et seq. In 1988, the Florida Legislature created the Long-Term Care Insurance Act.³ 1988 Fla. Sess. Law Serv. 88-57 (West). At that time, Section 627.9403, entitled "Scope," provided that "the provisions of this part shall apply to long-term care insurance policies delivered or issued for delivery in this state." Fla. Stat. § 627.9403 (1988). Section 627.9407, entitled "Disclosure, advertising, and performance standards for long-term care insurance," provided the following:

(5) PRIOR INSTITUTIONALIZATION.

(a) No long-term care insurance policy which provides benefits only following institutionalization shall condition such benefits upon a length of stay in a facility for a period of time longer than 3 days.

(b) No long-term care insurance policy which provides benefits only following institutionalization shall condition such benefits upon admission to a facility for the same or related conditions within a period of less than 30 days after discharge from the institution.

(c) An entity that advertises, markets, or solicits a long-term care insurance policy in this state which provides benefits only following institutionalization shall also offer to each policyholder, as part of the application, a policy which does not condition benefits upon following institutionalization, subject to an appropriate additional premium, if any.

Fla. Stat. § 627.9407(5) (1988). The Florida Legislature stated that the Act "shall take effect October 1, 1988, and shall apply to policies issued or renewed on or after such date." 1988 Fla. Sess. Law Serv. 88-57 (West).

In 1989, the Florida Legislature amended⁴ Section 627.9403, to read that "the provisions of this part shall apply to long-term care insurance policies delivered or issue for delivery in this state" and "[t]he provisions of this part ... shall not apply to guaranteed renewable policies issued prior to October 1, 1988." Fla. Stat. § 627.9403 (1989).

In 1992, the Florida Legislature amended Section 627.9407 to state that "[a] long-term care insurance policy may not be delivered or issued for delivery in this state if the policy: [ ] Conditions eligibility for any benefits on a prior hospitalization requirement." Fla. Stat. § 627.9407(5)(a) (1992). The 1992 Amendment became "[e]ffective October 1, 1992." 1992 Fla. Sess. Law Serv. Ch. 92-33 (West).

a. Effect of the 1989 and 1992 amendments

The Court finds that neither the 1989 amendments to section 627.9403 nor the 1992 amendments to Section 627.9407 alter the prior hospitalization requirement found in Plaintiff's Policy issued on May 1, 1989. The 1992 statutory amendments to Section 627.9407...