Opinion
CIVIL ACTION FILE NO. 1:19-CV-892-TWT
2020-04-17
Sandra CRUMBLISS, Plaintiff, v. NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, Defendant.
Brent J. Savage, Savage, Turner, Durham Pinckney & Savage, Savannah, GA, Carl Foster Lindberg, Mark D. Johnson, Gilbert, Harrell, Sumerford & Martin, P.C., Brunswick, GA, for Plaintiff. Andrea K. Cataland, Kenton Jones Coppage, H. Sanders Carter, Jr., Fox Rothschild, LLP, Atlanta, GA, for Defendant.
Brent J. Savage, Savage, Turner, Durham Pinckney & Savage, Savannah, GA, Carl Foster Lindberg, Mark D. Johnson, Gilbert, Harrell, Sumerford & Martin, P.C., Brunswick, GA, for Plaintiff.
Andrea K. Cataland, Kenton Jones Coppage, H. Sanders Carter, Jr., Fox Rothschild, LLP, Atlanta, GA, for Defendant.
OPINION AND ORDER
THOMAS W. THRASH, JR., United States District Judge
This is an action to recover benefits. It is before the Court on Defendant Northwestern Mutual Life Insurance Company's Motion for Summary Judgment [Doc. 18]. For the reasons that follow, Defendant Northwestern Mutual Life Insurance Company's Motion for Summary Judgment [Doc. 18] is GRANTED.
I. Background
Plaintiff Sandra Crumbliss filed this lawsuit to recover benefits under two term life insurance policies issued to the Plaintiff's deceased husband, Thomas Crumbliss, by Defendant Northwestern Mutual in 2005. Mr. Crumbliss paid the annual premiums for the policies at issue without incident for several years. Def.'s Statement of Material Facts ¶ 9 [Doc. 18-1]. The policies lapsed, however, when Mr. Crumbliss failed to pay the premiums in 2016. Id. ¶¶ 10-11. Mr. Crumbliss passed away on October 11, 2017. Id. ¶ 12. On November 4, 2017, the Plaintiff requested that the Defendant waive the unpaid premiums on the grounds that Mr. Crumbliss was totally disabled due to alcoholism from April of 2016 until his death. Id. ¶ 30. The Defendant denied the Plaintiff's waiver request, and the Plaintiff sued for breach of contract and attorneys' fees. The Defendant now moves for summary judgment.
A. The Policies
Mr. Crumbliss was insured under two term life insurance policies numbered 17008814 and 17086138. Id. ¶ 1. Both policies provide for death benefits of $500,000 to the Plaintiff as the direct beneficiary. Id. The annual premium for Policy No. 17008814 was due each year on July 11 or within a thirty-one-day grace period. Id. ¶ 10. The annual premium for Policy No. 17086138 was due each year on December 11 or within a thirty-one-day grace period. Id. ¶ 11. Both policies stipulate that failure to pay premiums results in termination of coverage. Id. ¶ 4.
Both policies allow the insured party to request waiver of the annual premiums due to total disability. The waiver provisions define "total disability" as:
one which prevents the Insured from engaging in an occupation. For the first 24 months of total disability, an occupation is the one that the Insured had at the time he became disabled. After 24 months, an occupation is one for which the Insured is qualified by education, training or experience. Due regard will be given to his vocation and earnings before he became disabled.
Id. ¶ 6. The insured is entitled to a waiver of his premiums "only if":
• the Insured becomes disabled while this Benefit is in force;
• the disability results from an accident or sickness;
• the disability lasts for at least six months.
Id. The insured must provide "proof" of total disability within one year of the start of the disability or, in the alternative, "as soon as reasonably possible." Id. ¶ 7.
B. The Parties' Dispute
The Plaintiff requested that the Defendant waive the unpaid premiums on the grounds that Mr. Crumbliss's debilitating alcoholism prevented him from adequately performing his job as a sales representative for American Family Life Assurance Company of Columbus ("Aflac") from April 2016 until his death. Id. ¶ 30. Medical records that the Plaintiff submitted as part of the waiver request establish that Mr. Crumbliss was admitted to a substance abuse facility called the "The Treehouse" on April 20, 2016. Id. ¶ 32. Mr. Crumbliss's treating physician at the facility, Dr. Sullivan Bryant, identified Mr. Crumbliss's "presenting problem" as "[ethyl alcohol] dependence/withdrawal." Id. ¶ 33. At intake, counselors at the facility described Mr. Crumbliss as having a "serious" and "cooperative" manner; "appropriate" thought processes, speech, and affect; proper orientation to "time, person, place, [and] situation;" and no hallucinations or delusions. Id. ¶ 34. Dr. Bryant indicated that he expected Mr. Crumbliss to return to pre-morbid functioning following discharge. Id. ¶ 32. He did not identify any work-related restrictions. Id.
Mr. Crumbliss was discharged from The Treehouse on May 26, 2016. Id. ¶ 32. Mr. Crumbliss's former supervisor, Lara Carlson, submitted a letter in support of the Plaintiff's waiver request documenting a decline in Mr. Crumbliss's productivity after he returned to work following discharge. Id. ¶ 37. According to Ms. Carlson, Mr. Crumbliss's duties had primarily consisted of field work, but after returning from treatment Mr. Crumbliss mostly made phone calls and generated very little new business for the company. Id. Ms. Carlson wrote that Mr. Crumbliss stopped coming into the office at all in June of 2017 after Ms. Carlson issued him a warning letter for drinking on the job. Id.
The Defendant denied the Plaintiff's waiver request by letter on November 27, 2017 but conducted a second round of review after receiving a demand letter from Plaintiff's counsel. Id. ¶¶ 38-39. The Plaintiff forwarded an undated letter from John L. Lokey, a physician's assistant with the Southeast Georgia Health System, stating in its entirety that "Mr. Crumbliss's Health [sic] had rapidly declined over the last year and when I saw him last was barely ambulatory and somewhat confused. Due to his declining Health Mr. Crumbliss would not have been able to properly manage his personal finances." Id. ¶ 41. The Plaintiff also attached additional email correspondence from Ms. Carlson and a copy of the warning letter that precipitated Mr. Crumbliss's departure from his job in June of 2017. Id. ¶ 40.
During its second round of review, the Defendant asked for and received the following information regarding Mr. Crumbliss's taxable earnings from 2010 to 2017:
| 2010 | $20,037 |
|---|---|
| 2011 | $62,385 |
| 2012 | $60,343 |
| 2013 | $50,779 |
| 2014 | $34,068 |
| 2015 | $26,629 |
| 2016 | $32,296 |
| 2017 | $18,781 |
Id. ¶¶ 43-44. The Defendant also reviewed information regarding the value of "new sales" that Mr. Crumbliss generated in each month of 2016 and 2017:
| 2016 | 2017 | |
|---|---|---|
| January | $20,295.96 | $8,546.64 |
| February | $2,555.52 | $14,590.32 |
| March | $3,187.08 | $11,176.08 |
| April | $1,282.20 | $10,031.52 |
| May | $1,802.40 | $6,454.08 |
| June | $6,201.12 | $15,915.00 |
| July | $2,850.84 | $0.00 |
| August | $8,950.68 | $1,619.28 |
| September | $14,727.48 | $1,135.68 |
| October | $8,188.44 | 0.00 |
| November | $7,807.32 | 0.00 |
| December | $25,934.64 | 0.00 |
| Total: | $103,783.68 | $69,468.60 |
Id. ¶ 47. Finally, the Defendant reviewed online records for Mr. Crumbliss on the Georgia Department of Insurance's website indicating that Mr. Crumbliss completed thirty hours of continuing education in January of 2017. Id. ¶ 48.
Based on the foregoing information, the Defendant again denied the Plaintiff's request to waive the unpaid premiums on the grounds that Mr. Crumbliss was not totally disabled for six consecutive months during the relevant time period. Id. ¶ 49. This lawsuit followed. The Plaintiff testified in her deposition that Mr. Crumbliss paid the annual premiums from his individual bank account and that she was unaware that the premiums had not been paid until after his death. Id. ¶¶ 9, 15. She recalled seeing mail from the Defendant but did not review the contents because it was "[Mr. Crumbliss's] responsibility to take care of Northwestern Mutual." Id. ¶ 26.
II. Legal Standard
Summary judgment is appropriate only when the pleadings, depositions, and affidavits submitted by the parties show no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. FED. R. CIV. P . 56(a). The court should view the evidence and any inferences that may be drawn in the light most favorable to the nonmovant. Adickes v. S.H. Kress & Co. , 398 U.S. 144, 158-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The party seeking summary judgment must first identify grounds to show the absence of a genuine issue of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the nonmovant, who must go beyond the pleadings and present affirmative evidence to show that a genuine issue of material fact does exist. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 257, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "A mere ‘scintilla’ of evidence supporting the opposing party's position will not suffice; there must be a sufficient showing that the jury could reasonably find for that party." Walker v. Darby , 911 F.2d 1573, 1577 (11th Cir. 1990).
III. Discussion
The Defendant argues that summary judgment is warranted because the Plaintiff has failed to adduce evidence tending to show that (1) proof of disability was timely provided to the Defendant and (2) that Mr. Crumbliss was totally disabled within the meaning of the waiver provisions.
A. Whether Proof of Disability Was Timely Provided
The waiver provisions of the policies at issue stipulate that "before any premium is waived" the insured must provide proof of total disability within one year of onset or "as soon as reasonably possible." Def.'s Statement of Material Facts ¶ 7. This requirement constitutes a valid condition precedent to waiver of premiums under the policies. See DeBord v. Peoples Ben. Life Ins. Co. , 565 F. Supp. 2d 1350, 1354 (N.D. Ga. 2008) ("Under Georgia law, insurance policy provisions that require notice of death and written proof of loss be submitted within a certain specified time before a beneficiary may recover are valid condition precedents to the enforcement of the policy.") (citing Equitable Life Assurance Soc'y of U.S. v. Hollingsworth , 103 Ga. App. 505, 119 S.E.2d 725 (1961) ; Metro. Life Ins. Co. v. Jackson , 79 Ga. App. 263, 265–66, 53 S.E.2d 378 (1949) ; Richmond v. Farm Bureau Mut. Ins. Co. , 140 Ga. App. 215, 221, 231 S.E.2d 245 (1976) ). In order to recover, the Plaintiff must show either that the condition precedent was performed or that nonperformance was justified under the circumstances. Id. (citing Wolverine Ins. Co. v. Sorrough , 122 Ga. App. 556, 560, 177 S.E.2d 819, 822 (1970) ). As a general rule, "limitations in an insurance policy requiring notice ‘as soon as possible’ are generally ‘subject to a factual determination.’ " DeBord , 565 F. Supp. 2d at 1354 (quoting Norfolk & Dedham Mut. Fire Ins. Co. v. Cumbaa , 128 Ga. App. 196, 198–99, 196 S.E.2d 167 (1973) ). Before the question can be put to the jury, however, the Plaintiff must articulate some excuse or explanation for the delay that a reasonable jury could accept based on the record evidence. Id.
The Plaintiff alleges that Mr. Crumbliss's disability began on or before April 20, 2016, the date he was admitted to The Treehouse. The Defendant did not receive a waiver request or proof of disability until November 4, 2017, over a year and a half after the purported onset of the disability. Beyond reciting the general rule that the matter is best left to the jury, the Plaintiff does not attempt to explain why proof of disability could not have been provided to the Defendant within one year of onset. The Plaintiff presumably means to rely on her testimony that she was personally unaware that the policies had lapsed and thus could not have submitted a waiver request sooner than she did. Even assuming that the Plaintiff was unaware that the policies had lapsed, the Plaintiff's own lack of knowledge cannot constitute a legally sufficient excuse because it neither explains nor justifies Mr. Crumbliss's failure to submit a waiver request or to furnish proof of disability from April of 2016 until his death in October of 2017.
While Georgia courts have recognized that an insured party's mental or physical incapacity can constitute a valid excuse, the insured's mental state must make satisfaction of the condition impossible rather than merely difficult. North Am. Ins. Co. v. Watson , 6 Ga. App. 193, 64 S.E. 693 (1909) ("Where the insured is suddenly stricken with some disease of the brain which renders him unconscious, and makes it impossible for him to give to the company within the time stipulated written notice of his sickness, this fact is legally sufficient to excuse him from a compliance with this condition of the policy during the existence of such disability."); cf. Clarke v. Unum Life Ins. Co. of Am. , 14 F. Supp. 2d 1351, 1356 (S.D. Ga. 1998) (finding that question of fact existed as to whether the insured's mania justified a temporary delay in giving notice where doctor testified that the insured was "not competent to recognize that she had been disabled" or what her options were under the policy at issue).
The record evidence simply does not permit the reasonable inference that Mr. Crumbliss was unable to provide notice or proof of disability while he was alive. Counselors at The Treehouse determined that his mental processes were appropriate at intake, and Dr. Bryant indicated that he expected Mr. Crumbliss to resume pre-morbid functioning following discharge. Def.'s Statement of Material Facts ¶¶ 32-34. Mr. Crumbliss's employment records further establish that Mr. Crumbliss was, at the very least, capable of engaging in the minimum amount of telephonic and written correspondence necessary to retain his job as an Aflac sales representative in the year following his discharge. The only record evidence tending to support the proposition that Mr. Crumbliss was mentally incapacitated is the undated letter from Mr. Lokey asserting that "[d]ue to his declining Health Mr. Crumbliss would not have been able to properly manage his personal finances." Id. ¶ 41. The nature and extent of Mr. Lokey's treatment of Mr. Crumbliss is unclear. The letter is not accompanied by any medical records tending to support Mr. Lokey's sweeping assertion that Mr. Crumbliss could not have "properly manage[d] his personal finances." The letter does not specify the start and end dates of the "year" to which Mr. Lokey refers, nor does it identify the dates of service on which the author bases his analysis. No reasonable jury could conclude based on this or any other evidence in the record that Mr. Crumbliss was incapable of giving notice or proof of disability at any point prior to his death in October of 2017. Therefore, the Plaintiff's breach of contract claim fails as a matter of law and summary judgment should be entered in favor of the Defendant.
Because the Plaintiff's substantive breach of contract claim will be dismissed, the Plaintiff's derivative state law claim for attorneys' fees must also be dismissed. See United Companies Lending Corp. v. Peacock , 267 Ga. 145, 146, 475 S.E.2d 601, 602 (1996) ("A prerequisite to any award of attorney fees under O.C.G.A. § 13–6–11 is the award of damages or other relief on the underlying claim.").
B. Whether the Insured Was Totally Disabled
Because the Plaintiff cannot show that she or Mr. Crumbliss satisfied a valid condition precedent to the waiver of premium benefit, the Court need not reach the question of whether Mr. Crumbliss was totally disabled within the meaning of the waiver provisions. Nevertheless, the Court agrees with the Defendant that the evidence fails to create a material question of fact as to whether Mr. Crumbliss's condition satisfied the waiver provisions' definition of total disability.
The waiver provisions define "total disability" as "one which prevents the Insured from engaging in an occupation." Def.'s Statement of Material Facts ¶ 6. The parties' dispute turns on the proper interpretation of the phrase "prevents the Insured from engaging in an occupation." The Defendant contends that evidence of Mr. Crumbliss's continued employment and revenue generation at Aflac, even at a reduced capacity, conclusively establishes that he was capable of "engaging in an occupation" and so could not have been totally disabled within the meaning of the waiver provisions. The Plaintiff concedes that Mr. Crumbliss remained employed until shortly before his death but insists that his substandard work output during this time raises the question of whether he was capable of "engaging" with his job in any meaningful sense. In interpreting the language of the policies at issue, the Court is bound to apply Georgia rules of contract construction. Provau v. State Farm Mut. Auto. Ins. Co. , 772 F.2d 817, 819 (11th Cir. 1985) ("The construction of insurance contracts is governed by substantive state law.") (citing Dempsey v. Auto Owners Insurance Co. , 717 F.2d 556, 559 (11th Cir. 1983) ). Under Georgia law, "[t]he proper construction of a contract is a question of law for the court to decide." Pomerance v. Berkshire Life Ins. Co. of Am. , 288 Ga. App. 491, 493, 654 S.E.2d 638 (2007) (citing Collier v. State Farm Mut. Auto. Ins. Co. , 249 Ga. App. 865, 866(2), 549 S.E.2d 810 (2001) ). "When the terms of an insurance contract are clear and unambiguous, the policy terms alone determine the intent of the contracting parties." Id. , 288 Ga. App. at 493, 654 S.E.2d 638 (citing North Metro Directories Publishing v. Cotton States Mut. Ins. Co. , 279 Ga. App. 492, 494(1), 631 S.E.2d 726 (2006) ). If, however, the contractual language is susceptible to two or more reasonable constructions, Georgia's statutory rules of contract construction must be applied to resolve the ambiguity. Id. (citing Hurst v. Grange Mut. Cas. Co. , 266 Ga. 712, 716(, 4)70 S.E.2d 659 (1996) ).
The language at issue is plain and unambiguous. In order to qualify as totally disabled, the insured must be unable to "engage" in his occupation. In this context, the word "engage" means "to begin and carry on an enterprise or activity" or "to do or take part in something." See Merriam-Webster's Online Dictionary, http://www.merriam-webster.com/dictionary/engage; see also Pomerance , 288 Ga. App. at 494, 654 S.E.2d 638 (using Merriam-Webster's Online Dictionary to determine the commonly accepted meanings of undefined terms in an insurance contract); Wade v. Allstate Fire & Cas. Co. , 324 Ga. App. 491, 493, 751 S.E.2d 153 (2013) (same). It follows that an insured who is capable of carrying on in his former occupation after the onset of the alleged disability cannot be "totally disabled" within the meaning of the policy. Undisputed evidence on the record establishes that Mr. Crumbliss remained employed by Aflac until at least June of 2017 and generated thousands of dollars in new sales for the company during that time. Even if, as the Plaintiff contends, Mr. Crumbliss was materially limited from performing some of his job duties, an inability to return to pre-morbid job functioning does not qualify as a total disability under the plain language of the waiver provisions. If the Defendant had intended for the waiver provisions to apply when the insured is unable to engage "fully" or "normally" with his former occupation, then the Defendant could have included such modifiers in the definition of "total disability." It did not do so. The Court cannot alter the plain language of the contract to introduce ambiguity where none exists. Summary judgment should be entered in the Defendant's favor because undisputed evidence on the record conclusively demonstrates that Mr. Crumbliss was not disabled for six consecutive months within the meaning of the waiver provisions.
IV. Conclusion
For the foregoing reasons, Defendant Northwestern Mutual Life Insurance Company's Motion for Summary Judgment [Doc. 18] is GRANTED.
SO ORDERED, this 17 day of April, 2020.