Wiener v. AXA Equitable Life Ins. Co.

MALCOLM H. WIENER, Plaintiff, v. AXA EQUITABLE LIFE INS. CO., DAVID HUNGERFORD,AXA ADVISORS, L.L.C., and AXA NETWORK, L.L.C., Defendants.

16 Civ. 4019 (ER)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

March 31, 2021

OPINION AND ORDER

RAMOS, D.J.:

Malcolm H. Wiener initiated this action on May 26, 2015. Doc. 1. In his operative complaint, Wiener asserts thirteen claims collectively against Defendants regarding the termination of three of his life insurance policies. Doc. 79. Pending before the Court are: a motion for summary judgment by AXA Equitable Life Insurance Co. ("AXA Equitable"), AXA Advisors, L.L.C. ("AXA Advisors"), and AXA Network, L.L.C. ("AXA Network") (collectively, "AXA Defendants"); a motion for summary judgment by David Hungerford; and a cross-motion for partial summary judgment by Wiener regarding his claim for breach of contract against AXA Equitable for its alleged failure to send premium reminder notices in November 2013. Docs. 186, 194, and 202.

For the reasons set forth below, AXA Defendants' and Hungerford's motions are GRANTED, and Wiener's cross-motion is DENIED.

I. BACKGROUND

A. Factual Background

Unless noted otherwise, the following facts are undisputed. Wiener was born in 1935 and is the retired founder of Millburn Corporation ("Millburn"), a financial services firm located in New York. Docs. 79 ¶¶ 11, 24 and 217 ¶ 9. Wiener currently resides in Connecticut. Doc. 79 ¶ 1. AXA Equitable is a life insurance company headquartered in New York. Id. ¶ 2. AXA Advisors and AXA Network are financial services and consulting companies located in New York, and are affiliated companies of AXA Equitable. Id. ¶¶ 4-5, 13-14. AXA Equitable assigns employees from AXA Advisors and AXA Network to serve as agents of record for its life insurance policies. Id. ¶ 15. Hungerford, a resident of New York, was a life insurance agent with AXA Equitable at all relevant times. See id. ¶ 3; see also Doc. 214 ¶¶ 8, 10.

Wiener purchased the three universal life insurance policies at issue from AXA Equitable. Doc. 217 ¶ 14. Wiener purchased the first policy (# 36-224-259) on October 14, 1986 in the amount of $9,000,000; that amount was later reduced to $7,200,000. Id. ¶ 14(a). He purchased the other two policies on May 14, 1987: one for $9,000,000 that was later reduced to $7,200,000 (# 37-205-147), and the other for $2,000,000 that was later reduced to $1,600,000 (#37-205-155). Id. ¶ 14(b), (c). In 1990, AXA Equitable assigned Hungerford to serve as the agent of record on these policies, and he remained the agent of record at all relevant times. Doc. 214 ¶¶ 8, 10.

The policies provided that AXA Equitable would send premium reminder notices for the planned payment period selected by the policyholder, unless the policyholder selected otherwise. See, e.g., Doc. 216-1 at 11. However, Wiener's policies did not require fixed premium payments. Doc. 217 ¶ 1. Rather, under the terms of those policies, Wiener could "skip planned premium payments or change their frequency and amount." Id. Under the policies, after expense charges were deducted from the premium payments a policyholder made, those net premiums were then put into a policy account that earned interest each policy month. Id. At the beginning of each policy month, AXA Equitable made a deduction from the policy account for the monthly cost of insurance and benefits. Id. ¶ 2. For the policies to remain in effect, the amount in each policy's respective account, less certain interest and administrative charges, must be sufficient to cover the monthly deductions. Id. ¶ 4. If that amount (the "Net Cash Surrender Value") was less than the deduction for a given month, the policy would lapse and enter a sixty-one-day grace period, and AXA Equitable would send a policy lapse notice to the policyholder. Id. ¶¶ 4-5, 16. If the delinquent amount was not paid by the end of the grace period, the policy would then terminate without value. Id. ¶ 8.

Wiener relied on Millburn to handle all aspects of his financial portfolio—including making the necessary payments to keep his life insurance policies in effect. Id. ¶ 10. Notably, from 1994 to October 2013, Millburn would not pay the monthly premiums until it received a policy lapse notice from AXA Equitable. See Docs. 214 ¶ 6 and 217 ¶ 16. As a result, during that time, the three policies lapsed a total of 209 times. Doc. 217 ¶ 16. After Millburn received the policy lapse notices, Milburn paid only the minimum amount necessary to cover the monthly deductions for three months at a time, in accordance with the policy lapse notices sent to Wiener. See Docs. 214 ¶ 6 and 217 ¶ 16.

Through March 2009, Wiener's premium reminder notices and policy lapse notices were mailed directly to Millburn. See Doc. 217 ¶¶ 17, 21; see also Doc. 231 ¶¶ 29-30. However, by June 2009, Wiener's address of record for these policies was changed, such that all premium reminder notices and policy lapse notices were sent to his Connecticut address instead.¹ See Doc. 217 ¶ 21; see also Doc. 231 ¶¶ 29-30. A copy of the address change confirmation was mailed to both Millburn's address and Wiener's Connecticut address. Doc. 231 ¶ 29.

Since 2009, Wiener had a system in place at his residence to process any mail that he received—including mail that he received from AXA Equitable. See Doc. 217 ¶¶ 17-19, 21. Two of Wiener's household staff retrieved mail from the mailbox on a daily basis, and the mail then would be sorted either in the office of one of the staff or on the kitchen table. Id. ¶¶ 17-18. Wiener's executive assistant was responsible for sending mail from AXA Equitable to Millburn for processing. Id. ¶¶ 13, 19. Wiener's household staff didnot maintain logs of the mail received or processed, nor did they retain copies of mail sent from Wiener's address to Millburn. Id. ¶ 23. From there, Millburn employees would review any policy lapse notices, and draft and mail checks in connection with premium payments. See id. ¶¶ 11, 20.

On October 1, 2013, the Net Cash Surrender Value for each of Wiener's policies was less than the monthly deductions, meaning that the policies lapsed and entered a sixty-one-day grace period. See id. ¶ 25; see also Doc. 214 ¶ 15. During the grace period, AXA Equitable did not send Wiener any premium reminder notices. Although the parties dispute whether AXA Equitable mailed and Wiener received policy lapse notices, it is undisputed that Millburn failed to pay the minimum premiums owed on the policies during the sixty-one-day grace period that followed; as a result, the policies were terminated on December 1, 2013. Docs. 214 ¶¶ 16-17 and 217 ¶¶ 32-33. On December 2, 2013, Wiener received a termination notice at his Connecticut address for each of the policies, along with an application for reinstatement of his policies. Docs. 214 ¶ 17 and 217 ¶¶ 32-33. Hungerford was copied on the termination notices, as he had been with all premium reminder notices and policy lapse notices. Docs. 214 ¶ 18 and 231 ¶ 26.

The applications for reinstatement explicitly stated "[p]lease do not submit a payment with this form." Doc. 214 ¶ 21. Under the terms of the policies, Wiener could apply for one of two types of reinstatement: a technical reinstatement and a regular reinstatement. A technical reinstatement occurs automatically if AXA Equitable made a technical or processing mistake that resulted in a lapsed policy, while a regular reinstatement requires evidence of insurability. Docs. 216-1 at 11, 39, 216-2 at 25, and 216-14 at 99:19-101:16. On December 26, 2013, Wiener submitted a reinstatement application with medical evidence of insurability to AXA Equitable. Docs. 214 ¶ 22 and 217 ¶ 34. That application was forwarded to AXA Equitable's underwriter, Hallie Hawkins. Doc. 217 ¶ 34. As an underwriter, Hawkins's role was to review both medical and financial records to review a reinstatement application and determine whether theperson was insurable under AXA Equitable's guidelines.² Id. ¶ 36. Additionally, in reviewing Wiener's application, Hawkins assessed his medical records against AXA Equitable's applicant medical checklist for seniors and the company's underwriting manual. Id. ¶ 37. Pursuant to this review process, Hawkins requested a physician statement from Wiener's physician, Dr. Barry Boyd. Id. ¶ 35. Although the parties have a number of disputes regarding Wiener's medical records, it is undisputed that those records showed that, at various times, Wiener's serum albumin levels were below 3.8. See Doc. 192-17; see also Doc. 192-10 at 71:9-11, 117:6-23, 123:10-12.

On February 21, 2014, along with a follow-up letter on behalf of Wiener regarding his reinstatement application, Millburn sent a check to AXA Equitable for $96,093 in an effort to cover the missing amount for the lapsed policies, basing that figure on the amount it had paid to address the preceding lapse notice in July 2013. Docs. 214 ¶ 23 and 216-16. AXA Equitable initially cashed the check; however, on March 5, 2014, it provided Wiener with copies of the October 2013 lapse notices and provided him with a check reimbursing him for the checks it had cashed. Doc. 214 ¶ 24. On March 24, 2014, AXA Equitable notified Wiener that it had denied his reinstatement application. Id. ¶ 25; see also Doc. 217 ¶ 45.

B. Procedural History

Wiener filed the instant suit in Connecticut state court on May 26, 2015. Doc. 1 at 1. On June 10, 2015, AXA Equitable removed the action to federal court in the District of Connecticut, asserting that the court had diversity jurisdiction pursuant to 28 U.S.C. § 1332. Id. at 1-2. On May 10, 2016, the parties filed a joint motion and stipulation to transfer venue to this District, and the Connecticut district court granted that request. See Docs. 58 and 58-1.

In his operative complaint, filed August 12, 2016, Wiener asserts thirteen claims. Doc. 79. Against AXA Equitable, Wiener asserts the following claims: declaratory and injunctive relief; equitable...