Opinion
CIVIL ACTION NO. 1:20-cv-4432-AT
2022-03-31
Olga GLUSHCHAK, Plaintiff, v. TRANSAMERICA LIFE INSURANCE COMPANY, Defendant.
Shaun M. Daugherty, I, Steven Loube, Lowe Law Firm, P.C., Atlanta, GA, for Plaintiff. Covert J. Geary, Pro Hac Vice, Jones Walker LLP, New Orleans, LA, David John Forestner, Christopher Henry, Jones Walker LLP, Atlanta, GA, for Defendant.
Shaun M. Daugherty, I, Steven Loube, Lowe Law Firm, P.C., Atlanta, GA, for Plaintiff.
Covert J. Geary, Pro Hac Vice, Jones Walker LLP, New Orleans, LA, David John Forestner, Christopher Henry, Jones Walker LLP, Atlanta, GA, for Defendant.
ORDER
Amy Totenberg, United States District Judge
This is an action by Plaintiff Olga Glushchak seeking the proceeds of her deceased husband's life insurance policy with Defendant Transamerica Life Insurance Company. This matter is before the Court on Defendant's Motion for Summary Judgment [Doc. 52]. For the following reasons, Defendant's Motion for Summary Judgment is DENIED .
I. Background
Keeping in mind that, when deciding a motion for summary judgment, the Court must view the evidence and all factual inferences in the light most favorable to the party opposing the motion, the Court provides the following statement of facts. See Optimum Techs., Inc. v. Henkel Consumer Adhesives, Inc. , 496 F.3d 1231, 1241 (11th Cir. 2007) (observing that, in connection with summary judgment, the court must review all facts and inferences in the light most favorable to the non-moving party). This statement does not represent actual findings of fact. Priester v. City of Riviera Beach , 208 F.3d 919, 925 n.3 (11th Cir. 2000) ("We ... have repeatedly stressed that the ‘facts,’ as accepted at the summary judgment stage of the proceedings, may not be the ‘actual’ facts of the case."). Instead, the Court has provided the statement simply to place the Court's legal analysis in the context of this particular matter.
On May 27, 2017, Mr. Orest Glushchak submitted Part 1 of his application for a life insurance policy with Transamerica Life Insurance Company ("Transamerica"). (Glushchak Ins. Application – Part 1, Doc. 52-5.) At the time, Mr. Glushchak was 44 years old. (Id. )
Part 1 of his application contained the following key paragraphs, which indicated that the life insurance policy he applied for would not take effect unless certain conditions—related to payment of the first premium, the "good health" of the proposed insured, and the truthfulness of all statements made in the application—were met:
I, the Proposed Insured, and I, the Owner if different, hereby represent that the statements and answers in this application are true, complete and correctly recorded. I/we agree: (1) this application shall consist of Part 1, Part 2, and any required application supplement(s)/amendment(s), and shall be the basis for any contract issued on this application; (2) except as otherwise provided in the conditional receipt, if issued, with the same Proposed Insured as on this application, any contract issued on this application shall not take effect until after all of the following conditions have been met: (a) the full first premium is paid, (b) the Owner has personally received the contract during the lifetime of and while the Proposed Insured is in good health, and
(c) all of the statements and answers given in this application must be true and complete as of the date of Owner's personal receipt of the contract and that the contract will not take effect if the facts have changed ; (3) no waiver or modification shall be binding upon Transamerica Life Insurance Company (the Company) unless in writing and signed by the President or a Vice President and the Secretary or an Assistant Secretary.
I/we understand that omissions or misstatements in this application could cause an otherwise valid claim to be denied under any contract issued from this application.
(Id. at 2 (italicized emphasis added.)) "Good health" is not defined in the application. (See id. ) By signing Part 1 of his application, Mr. Glushchak agreed to be bound by the above paragraphs.
Mr. Glushchak was also asked in Part 1 of his Transamerica life insurance application a series of questions regarding other insurance policies, including (1) whether he had any existing life insurance policies or annuities at the time of his application, (2) whether he "intend[ed]" to replace any existing policy with the Transamerica policy if it were issued, and (3) whether he had any life insurance applications pending with other companies at the time of his application. (Id. at 1–2.) Mr. Glushchak responded that: (1) he had a $1,000,000 policy in force with State Farm, (2) he intended to replace his State Farm policy with the Transamerica policy (if issued), and (3) that he had no life insurance applications pending with other companies at the time of his application. (Id. )
Because Mr. Glushchak represented that he intended to replace his State Farm life insurance policy, he also executed a Transamerica Replacement Notice on May 27, 2017. (Defendant's Statement of Material Facts ("DSOF"), Doc. 52-69 ¶ 4; Pl. Resp. to DSOF, Doc. 64 ¶ 4.) The Replacement Notice began with the following statement: "Are you thinking about buying a new policy and discontinuing or changing an existing policy? If you are, your decision could be a good one – or a mistake. You will not know for sure unless you make a careful comparison of your existing policy and the proposed policy." (Replacement Notice, Doc. 52-7 at 1.) The Notice then provided a checklist of factors that a potential insured should consider when determining whether he or she should replace his or her existing life insurance policy with a new one. (Id. at 1–2.) That list included a caution and a fact to remember:
Caution , you are [ ] urged not to take action to terminate, assign, or alter your existing life insurance coverage until after you have been issued the new policy, examined it and have found it to be acceptable to you.
and
Remember , you have ten (10) days following receipt of any individual life insurance policy to examine its contents. If you are not satisfied with it for any reason, you have the right to return it to the insurer at its home or branch office or to the agent through whom it was purchased, for a full refund of premium.
(Id. at 2.)
Although a potential insured is required to review and sign the Replacement Notice as a part of his or her Transamerica life insurance application, there is no duty on behalf of a Transamerica underwriter to confirm that the potential insured actually replaced his or her existing insurance after the Transamerica policy is issued. (Transamerica 30(b)(6) Rep. Michael Shepard ("Shepard") Deposition, Doc. 61-7 at 72:6–24.) Independent Agent Toni Ly received Part 1 of Mr. Glushchak's life insurance application, and Morgan Tillotson of Transamerica conducted the underwriting review of his application. (DSOF, Doc. 52-69 ¶¶ 3, 5; Pl. Resp. to DSOF, Doc. 64 ¶¶ 3, 5.) On May 29, 2017, Ms. Ly executed and submitted an Agent's Report to Transamerica indicating that the purpose of Mr. Glushchak's life insurance policy was "Employer Provided," although Part 1 of Mr. Glushchak's application does not indicate a policy purpose. (Ly Agent's Report, Doc. 52-8; see Glushchak Ins. Application – Part 1, Doc. 52-5; Shepard Deposition, Doc. 61-7 at 76:3–23.) Transamerica's internal records show that on June 2, 2017, Ms. Tillotson indicated that she needed further explanation regarding why Mr. Glushchak's coverage was "Employer Provided." (Doc. 52-4 at 2.) On June 8, 2017, Ms. Tillotson noted that Mr. Glushchak's desired policy was a "KEY EMPLOYEE policy." (Id. ) On June 9, 2017, Transamerica informed Ms. Ly that additional requirements were added to Mr. Glushchak's application, including two "Other Underwriting Requirement[s]." (Transamerica Additional Requirements June 2017 Letter, Doc. 52-10 at 8.) The two additional requirements were as follows:
Other Underwriting Requirement
• Comments: please advise why a key man policy needed [sic] for maintenance personal?
....
Other Underwriting Requirement
• Comments: as we have been informed that this is key person coverage[,] we will only allow 10x income (480K)[. H]owever please advise why it would take the company 480K to replace a person with the tile [sic] appliance tech/maintenance?
(Id. ) Transamerica's internal records indicate that Ms. Ly responded to Transamerica's notice of "Other Underwriting Requirement[s]" on June 23, 2017 and reported that Mr. Glushchak's desired policy was a personal policy rather than a "key person" policy. (Doc. 52-4 at 7.)
Transamerica's internal records also show that Ms. Ly called Transamerica on June 1, 2017 to report that Mr. Glushchak would not be replacing his State Farm policy with the Transamerica policy if it were issued. (Doc. 52-4 at 8; see Tillotson Affidavit, Doc. 52-3 ¶ 8.) But on June 6, 2017, Ms. Ly reported that she was confused and that Mr. Glushchak would in fact cancel his existing policy if the Transamerica policy was approved. (Id. )
On September 29, 2017, Mr. Glushchak completed and submitted Part 2 of his life insurance application after meeting with a medical examiner selected by Ms. Ly. (Glushchak Ins. Application – Part 2, Doc. 52-15; DSOF, Doc. 52-69 ¶ 9; Pl. Resp. to DSOF, Doc. 64 ¶ 9; Doc. 52-16.) In connection with Part 2 of Mr. Glushchak's application, Transamerica received forms prepared by the medical examiner as well as blood and urine tests completed by Mr. Glushchak. (Id. ; Doc. 52-16; Doc. 52-17; Doc. 52-18.) Ms. Tillotson reviewed the statements made by Mr. Glushchak in Part 2 of his application and the accompanying documents from the medical examiner. (DSOF, Doc. 52-69 ¶ 10; Pl. Resp. to DSOF, Doc. 64 ¶ 10.) Mr. Glushchak had reported a routine visit with a doctor in 2016, which included normal EKG and blood test results. (Glushchak Ins. Application – Part 2, Doc. 52-15.) According to Ms. Tillotson, the medical history reported by Mr. Glushchak was basically "clean." (DSOF, Doc. 52-69 ¶ 10; Pl. Resp. to DSOF, Doc. 64 ¶ 10; Tillotson Affidavit, Doc. 52-3 ¶ 8.) After signing Part 2 of his life insurance application the morning of September 29, 2017, Mr. Glushchak went to see Dr. Galinda Vayner of the Georgia Clinic. (Doc. 52-48 at 3.) Mr. Glushchak reported abdominal pain, loss of appetite, stress, and the loss of ten pounds over the previous two months. (Id. ) Dr. Vayner prescribed omeprazole, a stomach medication, and ordered tests. (Id. ) The test results included a positive fecal occult blood test, a normal complete blood count, a normal abdominal ultrasound, and a positive H. pylori test. (Id. at 7–10.) Given Mr. Glushchak's two positive tests, Dr. Vayner ordered more tests. (DSOF, Doc. 52-69 ¶ 20; Pl. Resp. to DSOF, Doc. 64 ¶ 20.) On October 2, 2017, a follow-up fecal occult blood test was completed and came back negative. (Doc. 52-48 at 6.)
On October 4, 2017, Mr. Glushchak saw Dr. Vayner again. (Id. at 2.) He reported that he was feeling better, which Dr. Vayner "probably attributed ... to the [prescribed] omeprazole." (Vayner Deposition, Doc. 61-9 at 40:9–13.) There was no blood in his stool. (Id. at 40:17–20.) Dr. Vayner also reported to Mr. Glushchak that his abdominal ultrasound found no abnormality. (Id. at 18:21–19:17.) Dr. Vayner explained in her deposition that an ultrasound will not typically show the stomach "until there is something big going on, like big tumors." (Id. at 19:7–12.)
Still, Mr. Glushchak was diagnosed with H. pylori the same day. H. pylori, or helicobacter pylori, is an infection that occurs when H. pylori bacteria infect the stomach. It is a common cause of peptic ulcers. Id. Dr. Vayner deposed that H. pylori is a very common infection worldwide, specifically for people from the former Soviet Union like Mr. Glushchak; Dr. Vayner further deposed that she sees H. pylori much less in the United States. (Doc. 52-48 at 2; Vayner Deposition, Doc. 61-9 at 40:21–41:3.) Mr. Glushchak was prescribed antibiotics for ten days to treat his H. pylori. (Doc. 52-48 at 2.) Dr. Vayner then ordered him to return for a repeat H. pylori breath test after his antibiotics were completed, and because she was alarmed by his weight loss, Dr. Vayner also referred him to a gastroenterologist. (Id. ; Vayner Deposition, Doc. 61-9 at 41:4–11.)
Helicobacter pylori (H. pylori) infection , Mayo Clinic: Diseases and Conditions (May 18, 2021), https://www.mayoclinic.org/diseases-conditions/h-pylori/symptoms-causes/syc-20356171
Mr. Glushchak was born in Ukraine. (Glushchak Ins. Application – Part 1, Doc. 52-5.)
Transamerica's internal records indicate that also on October 4, 2017, Ms. Tillotson made notes regarding Mr. Glushchak's cholesterol level, his urinalysis, his height and weight, and his blood pressure based on the documents provided with Part 2 of his life insurance application. (Doc. 52-4 at 1.) That same day, Ms. Tillotson approved the issuance of coverage to Mr. Glushchak at the "best rates." (Id. ; DSOF, Doc. 52-69 ¶ 10; Pl. Resp. to DSOF, Doc. 64 ¶ 10.)
Transamerica's Underwriting Guide (Doc. 52-9) indicates in its "Determining Coverage Amounts – Individuals" Section that, to determine the coverage amount of an individual between the age of 36 and 45 whose purpose for insurance 1s "Income Continuation," an income factor of 25 should be used. (Transamerica Underwriting Guide, Doc. 52-9 at 5.)
| Purpose | Formula | Requirements | |
|---|---|---|---|
| Income Continuation | Ages | Income Factor | - Income stated must be reasonable for the profession or occupation stated |
| 18-35 | Up to 30 | ||
| 36-45 | 25 | - Income source considered will be that of the proposed insured, not the household income or that of the owner | |
| 46-50 | 20 | ||
| 51-55 | 15 | ||
| 56-65 | 10 | ||
| 66-70 | 5 | - Earned income includes salary, bonuses, commissions, and deferred compensation and excludes income from investments | |
| 71+ | Individual Consideration | - The unemployed spouse may be considered for a percentage of the employed spouse's income |
In the same section, the Underwriting Guide indicates that when the purpose of an individual's policy is "Estate Planning," regardless of the individual's age, his or her coverage amount is calculated by multiplying his or her projected future estate value by fifty percent. (Id. at 7.)
| Purpose | Formula | Requirements |
|---|---|---|
| Estate Planning | Projected future estate value x 50% | A cover letter must be provided that includes: |
| Note: A 7% annual growth rate over the applicant's life expectancy is used for illustration purposes. | - The purpose of the insurance | |
| - A current value of the applicant's estate, which includes a personal balance sheet listing all assets and liabilities, and an estate analysis |
Although Transamerica has guidelines regarding the amount of life insurance it believes is reasonable for an individual, the guidelines can be deviated from as long as the deviation "makes sense" to the underwriter and is "within the underwriter's level of authority." (Tillotson Deposition, Doc. 61-6 at 60:8; Shepard Deposition, Doc. 61-7 at 78:7–12.)
On October 5, 2017, Transamerica issued life insurance Policy No. 6600285365 in the amount of $1,000,000 to Mr. Glushchak. (Glushchak Policy, Doc. 52-38.) Mr. Glushchak's life insurance application was attached to the policy and made a part of the contract between Mr. Glushchak and Transamerica. (Id. at 19.) The "Policy Date" for Mr. Glushchak's policy was October 5, 2017. (Id. at 1.) "Policy Date" is defined as "[t]he date coverage is effective under th[e] policy." (Id. at 9.) The "Expiry Date" for Mr. Glushchak's policy was October 5, 2078. (Id. at 3.) Mr. Glushchak's beneficiary was listed as his wife, Mrs. Glushchak. (Id. at 30.) Mr. Glushchak paid his first premium to Transamerica on October 5, 2017. (Premium Payment Record, Doc. 61-11.) Transamerica mailed Mr. Glushchak's policy on October 6, 2017; however, it is unclear to whom the policy was sent. ("Policy Mailed" Notice, Doc. 52-67.)
Importantly, $1,000,000 was approximately 20.47 times Mr. Glushchak's reported salary ($48,848). And, when deciding Mr. Glushchak's maximum amount of coverage under Transamerica's policies, Ms. Tillotson applied an income factor of approximately 35, determining Mr. Glushchak's maximum amount of coverage to be $1,660,589. (Tillotson Affidavit, Doc. 52-3 ¶ 12.) Ms. Tillotson specifically noted in Transamerica's internal records that: "the face applied for is 1mm and income is 48K -- max coverage is 1,660,589 with all carriers (he is replacing the other coverage IF so we are OK on the face amount)." (Doc. 52-4 at 1.)
On October 7, 2017, three days after Dr. Vayner referred Mr. Glushchak to a gastroenterologist and two days after Transamerica issued Mr. Glushchak's life insurance policy, Mr. Glushchak saw gastroenterologist Dr. Edward Layne. (Doc. 52-31 at 8–12.) Dr. Layne's assessment of Mr. Glushchak concluded that Mr. Glushchak had:
1. Gastrointestinal bleeding uncertain etiology
2. Upper abdominal pain, probably representing gastric ulceration, although I cannot rule out gastrointestinal malignancy
3. Family history gastrointestinal malignancy
4. 10 pound weight loss in the 2-3 months preceding this evaluation, raising the question of a GI malignancy
5. Recent situational stress with multiple deaths in the family
6. Recent onset of treatment for H. pylori gastritis. Patient currently on triple therapy
(Id. at 11.)
As a care plan, Dr. Layne indicated that "[p]atient will need an EGD to map the upper gastrointestinal tract" and that "[b]ecause of this and family history of gastrointestinal malignancy in the recent weight loss, we'll also perform a colonoscopy to screen the colon as the source of the blood loss." (Id. at 12.)
On October 23, 2017, Mr. Glushchak saw Dr. Layne again and underwent an endoscopy. (Id. at 6–7.) That day, Dr. Layne found Mr. Glushchak to have a "large gastric mass in the stomach" and noted that the "gastric mass probably represent[ed] gastric carcinoma." (Id. ) Multiple biopsies of the gastric mass were therefore necessary. (Id. ) Two days later, Dr. Layne's gastric carcinoma concern was confirmed by a pathologist. (Id. at 13.) However, it was not until November 1, 2017 that Mr. Glushchak was formally diagnosed with and informed that he had stomach cancer. (Id. at 14–17.)
After Transamerica issued its life insurance policy to Mr. Glushchak, it sent a Life Policy Invoice to Mr. Glushchak's insurance agent, Ms. Ly. (Life Policy Invoice, Doc. 52-39.) The Invoice contained a section titled "Agent Report of Delivery or Return" that Ms. Ly was required to sign, date, and then return to Transamerica in order to document the date Mr. Glushchak's policy was delivered to him. (Id. ; DSOF, Doc. 52-69 ¶ 12; Pl. Resp. to DSOF, Doc. 64 ¶ 12.) Transamerica's records reflect that it did not receive a signed, dated "Agent Report of Delivery or Return" from Ms. Ly in connection with Mr. Glushchak's policy. (DSOF, Doc. 52-69 ¶ 12; Pl. Resp. to DSOF, Doc. 64 ¶ 12.) However, Mrs. Glushchak produced a Life Policy Invoice in this litigation, which indicated that Ms. Ly delivered Mr. Glushchak's policy to him on October 23, 2017. (Signed Life Policy Invoice, Doc. 52-57.)
Mr. Glushchak died on October 9, 2018. (DSOF, Doc. 52-69 ¶ 18; Pl. Resp. to DSOF, Doc. 64 ¶ 18.) His death was within the two-year "Contestability Period" provided for in his Transamerica life insurance policy. (Id. ) Accordingly, Transamerica wrote to Mrs. Glushchak on December 4, 2018, informing her that the company had begun a routine investigation to gather Mr. Glushchak's medical records. (Doc. 52-44.) Lead Claims Examiner Kathy Zimmerman handled the claim and reported to Senior Claims Manager and Transamerica 30(b)(6) witness Jolynn Barnes. (DSOF, Doc. 52-69 ¶ 18; Pl. Resp. to DSOF, Doc. 64 ¶ 18.)
During Ms. Zimmerman's investigation, she obtained Mr. Glushchak's medical records from the Georgia Clinic, which revealed his diagnosis of H. pylori by Dr. Vayner on October 4, 2017 and the tests leading up to his H. pylori diagnosis. ( Id. ¶ 20.) Ms. Zimmerman then forwarded Mr. Glushchak's medical records, Part 2 of his application, and the form submitted by the medical examiner to Transamerica's underwriting department, seeking an opinion on whether to approve Mrs. Glushchak's claim. (Id. ¶ 21.)
Michael Shepard, a Transamerica Senior Quality Risk Manager for Underwriting and one of two 30(b)(6) witnesses for Transamerica in this case, performed the underwriting review in connection with Mrs. Glushchak's "contestable claim." (Id. ¶ 22.) In connection with his review, Mr. Shepard completed a form titled "Request for Underwriting Review" that contained five questions. (Id. ¶ 23; Request for Underwriting Review, Doc. 52-27.) He answered "Yes" to Question 1, which asked whether Mr. Glushchak's policy would have been issued if his additional medical records had been disclosed on his application. (Request for Underwriting Review, Doc. 52-27.) He answered "No" to Question 3, which asked whether Transamerica would have permitted delivery of Mr. Glushchak's policy if the additional information had been known at the time of the delivery of the Policy. (Id. ) He also answered "No" to Question 4, which asked if Transamerica had any information in its possession before issuance or delivery of Mr. Glushchak's policy that contradicted the answers given in his application and/or that suggested that further inquiry should have been made. (Id. ) Finally, he answered Question 5 by indicating that he believed Questions 5d, 7a, 7b, 7c and 9 of Part 2 of Mr. Glushchak's life insurance application were incorrect as of the date of delivery, and offered the following explanation for why he believed those answers were incorrect:
Seen by Dr. Vayner for abdominal pain on 9/29/17. He was prescribed omeprazole. The doctor ordered tests which were completed the same day including: a positive fecal occult blood test, a normal CBC, a normal abdominal ultrasound, and a positive h pylori breath test. A follow-up negative fecal occult blood test was completed on 10/2/17. He followed up with Dr. Vayner of 10/4/17 with a diagnosis of h pylori. He was prescribed antibiotics for 10 days, was to return for a repeat h pylori breath test after antibiotics were completed, and was given a GI referral.
(Id. at 2.)
Mr. Shepard also made an entry into an information tracking system used by Transamerica, noting that:
[He u]sed the archived Swre ["Swiss Re"] guidelines (in effect at the time of original underwriting) for gastritis. The guidelines say that if gastritis related to h pylori has been treated, resolved, and eradicated, ok +0. In this case, the h pylori infection was not resolved. Without clear manual guidance, the case should then be referred to medical for input. I have attached e-mail conversations with Dr. Greene noting that her advise [sic] would have been to postpone until the follow up was completed.
(this note added to explain how I got from Dr. Greene's remarks in the 2nd e-mail to saying that we would have postpone ... RMD would have been appropriate without clear guidelines)
At the time that Mr. Glushchak applied for life insurance, Transamerica underwriters used Swiss Re guidelines to determine how a health condition or impairment should impact a potential insured's eligibility for insurance. (Tillotson Deposition, Doc. 61-6 at 17:4-8; 29:12–24.) Swiss Re offered guidance on whether a potential insured's application should be accepted or declined or whether a potential insured needed to be seen by Transamerica's medical director before a determination could be made. (Id. )
(Doc. 52-30 (emphasis added.)) The Court notes here that Swiss Re's guidelines actually indicated that a person with gastritis related to H. pylori could be issued a policy if the gastritis had been "treated, resolved, or eradicated." (Doc. 52-28; Shepard Deposition, Doc. 61-7 at 48:24–49:7; DSOF, Doc. 52-69 ¶ 24; Pl. Resp. to DSOF, Doc. 64 ¶ 24; Def. Reply to Pl. Resp. to DSOF, Doc. 65 ¶ 24.)
The Court also finds it beneficial to detail the email conversations between Mr. Shepard and Dr. Virginia Greene of Transamerica. Because Mr. Shepard was unsure how to interpret Swiss Re's guidelines, he emailed Dr. Greene for further clarification. (Shepard Deposition, Doc. 61-7 at 51:11–14.) In his email, he stated:
I'm working on a claim where the applicant was diagnosed with h. pylori after the exam and was being treated with antibiotics and omeprazole. I've put the full details below but my question is--would we postpone someone being treated for h. pylori?
Swre was being used at the time this was underwritten. The only place I find h. pylori is in the gastritis section. It says +0 if resolved but doesn't say what to do if active.
(Shepard-Greene Email Exchange, Doc. 52-29.)
Dr. Greene responded to Mr. Shepard's question by stating:
We should have the f/u H. Pylori testing noting it has cleared for an offer. H. Pylori can lead to cancer. Also Uwer [sic] needs to verify abd [("abdominal")] pain was resolved which it wasn't leading to GI referral and more testing ordered by GI.
(Id. ) After further discussion with Mr. Shepard, Dr. Greene clarified:
OK. I don't know if underwriters have to wait until H. Pylori clears before an offer. I do believe that Swiss used to want a follow up negative breath test in the past. This is exactly the reason why I want a negative breath test and to document that symptoms have resolved. Not sure what "I do" is helpful if you can't document a manual or SP actually notes this at the time of underwriting.
(Id. at 4.)
After reviewing Mr. Shepard's responses to the "Request for Underwriting Review," Ms. Zimmerman sent Transamerica's response to Mrs. Glushchak's claim in a letter dated April 17, 2019. (Transamerica Claim Denial, Doc. 52-52.) The letter denying Mrs. Glushchak's claim stated:
[Mr. Glushchak's] application Part 1 states that "this application shall consist of Part 1, Part 2, and any required application supplement(s)/amendments(s), and shall be the basis for any contract issued on this application." It also states that "any contract issued on the application shall not take effect until ... (b) the Owner has personally received the contract during the lifetime of and while the Proposed Insured is in good health, and (c) all of the statements and answers given in this application must be true and complete as of the date of Owner's personal receipt of the contract and that the contract will not take effect if the facts have changed." Although the application part 2 was completed on September 29, 2017, the policy was not issued for delivery until October 5, 2017. As the medical conditions and tests noted above occurred before the policy was delivered, the Insured did not personally receive the contract while he was in good health and the statements and answers given in the application were not true and complete
as of the date of the insured's personal receipt of the contract.
(Id. (emphasis added.))
Mrs. Glushchak responded to Transamerica's claim denial letter with a letter dated May 20, 2019, in which she stated:
I'm writing this to you to inform you that my husband Orest had no idea he had cancer till November 3rd 2017. My husband Orest was never sick before this and was a very healthy man who only did regular check up with the doctors. In the month of May 2017, he applied for the life insurance policy with you guys. He went through all the tests and even passed YOUR test and we got a letter stating he was accepted into the policy in the month of September of that year. In October, Orest even had a colonoscopy and a cat scan done which both showed that he didn't have cancer and the doctors can prove it (we provided this information already) as they mentioned that he has nothing to worry about that worst case he might have ulcers. He only found out he had cancer on November 3rd by Dr. Layne ... Please take another look over this and Ill be awaiting your reply soon.
(Doc. 52-53.)
Transamerica responded to Mrs. Glushchak's letter on June 25, 2015. In responding, Transamerica further explained why it rescinded Mr. Glushchak's policy:
As the Insured would not have received the contract until on or after October 5, 2017, the application required that as of at least October 5, 2017, the Insured was in good health and all of the statements and answers given in this application were still true and complete. Neither of the above was true as of October 5, 2018.
... As the medical conditions and tests noted above occurred before the policy was delivered, the Insured did not personally receive the contract while he was in good health and the statements and answers given in the application were not true and complete as of the date of the insured's personal receipt of the contract. Therefore, as per the terms of the application, the contract should not have taken effect.
Accordingly, it is necessary for us to maintain our decision to rescind the policy contract.
(Doc. 52-55.)
Later, Transamerica learned that Mr. Glushchak did not replace his $1,000,000 State Farm life insurance policy with the $1,000,000 Transamerica policy. Instead, he kept the State Farm policy in force, and the $1,000,000 death benefit was paid following his death. (DSOF, Doc. 52-69 ¶ 31; Pl. Resp. to DSOF, Doc. 64 ¶ 31.) Mrs. Glushchak does not know why Mr. Glushchak kept the State Farm policy in force. (Id. ) Unbeknownst to Transamerica, Mr. Glushchak also had in force another life insurance policy in the amount of $250,000 with Banner Life Insurance Company ("Banner Life") at the time he applied for his Transamerica policy. The benefits of the Banner Life policy were also paid on his death. (Id. ) Thus, at the time that Mr. Glushchak submitted his life insurance application to Transamerica, he had $1,250,000 in life insurance coverage, which he maintained in force for the remainder of his life. (Id. ) Transamerica now asserts that Mr. Glushchak materially misrepresented the amount of insurance he had in place when he applied for his life insurance policy and argues that these misrepresentations are an additional reason for its decision to rescind Mr. Glushchak's policy.
Mrs. Glushchak filed this lawsuit on October 30, 2020, asserting claims for breach of contract and bad faith failure to pay benefits under O.C.G.A. § 33-4-6. On August 4, 2021, Transamerica moved for summary judgment. (See Doc. 52.) Transamerica argues that Mr. Glushchak's policy never went into effect. Alternatively, Transamerica maintains that Mr. Glushchak made several material misrepresentations on his application, which make his life insurance policy unenforceable.
II. Legal Standard
The Court may grant summary judgment only if the record shows "that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual issue is genuine if there is sufficient evidence for a reasonable jury to return a verdict in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual issue is material if resolving the factual issue might change the suit's outcome under the governing law. Id. The motion should be granted only if no rational factfinder could return a verdict in favor of the non-moving party. Id. at 249, 106 S.Ct. 2505.
When ruling on the motion, the Court must view all evidence in the record in the light most favorable to the non-moving party and resolve all factual disputes in the non-moving party's favor. See Reeves v. Sanderson Plumbing Prods., Inc. , 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). The moving party need not positively disprove the opponent's case; rather, the moving party must establish the lack of evidentiary support for the non-moving party's position. See Celotex Corp. v. Catrett , 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party meets this initial burden, in order to survive summary judgment, the non-moving party must then present competent evidence beyond the pleadings to show that there is a genuine issue for trial. Id. at 324–26, 106 S.Ct. 2548. The essential question is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson , 477 U.S. at 251–52, 106 S.Ct. 2505.
III. Discussion
A. The Existence of a Contract
Transamerica argues that Mr. Glushchak's life insurance policy never took effect. It explains that Mr. Glushchak's policy required that he be "in good health" when he "personally received [his] contract." (Glushchak Ins. Application – Part 1, Doc. 52-5 at 2.) Transamerica then asserts that Mr. Glushchak was not in good health when he received his policy and as a result, his life insurance policy did not take effect.
In Georgia, "insurance is a matter of contract." Flynt v. Life of S. Ins. Co. , 312 Ga.App. 430, 718 S.E.2d 343, 347 (2011). A life insurance contract is created upon the unconditional written acceptance of an application for insurance by the company to which the application is made. Sw. Life Ins. Co. v. Middle Ga. Neurological Specialists , 262 Ga. 273, 416 S.E.2d 496, 497 (1992) ; Middle Ga. Neurological Specialists, P.C. v. Sw. Life Ins. Co. , 967 F.2d 536, 538–39 (11th Cir. 1992) ; N.Y. Life Ins. v. Babcock , 104 Ga. 67, 30 S.E. 273, 273 (1898). Contrary to Transamerica's assertion, where an insurance company includes in its application a condition that must be met before an insurance policy will take effect, the condition is not determinative of whether a contract was formed between the parties. Sw. Life Ins. , 416 S.E.2d at 497 ; Middle Ga. Neurological Specialists , 967 F.2d at 538–39. Rather, the condition listed in the life insurance application acts as a condition precedent to the insurance company's liability. Id. Transamerica's only argument that Mr. Glushchak did not have a valid, enforceable contract with the company is that Mr. Glushchak failed to meet certain conditions set out in his life insurance application. However, as explained, the conditions listed in a life insurance application determine contractual liability – not contract formation. Under the facts presently before the Court, the Court holds that Transamerica unconditionally accepted Mr. Glushchak's offer for an insurance contract. Transamerica received Mr. Glushchak's applications, had Mr. Glushchak submit to a medical examination requested by Ms. Ly, approved Mr. Glushchak's applications, called for Mr. Glushchak's first premium payment, received the first premium payment, and issued a conforming policy that states unconditionally that "[t]his policy is a legal contract between you and the Company." (Glushchak Policy, Doc. 52-38 at 2.) There can be no doubt that a contract was formed between Transamerica and Mr. Glushchak upon the issuance of Mr. Glushchak's life insurance policy. Cf. Sw. Life Ins. , 416 S.E.2d at 498.
Still, an insurance company may validly define conditions precedent to its liability in a life insurance contract, id. , including conditioning its liability on the requirement that an insured be in good or sound health when an insurance policy is issued or received. Fowler v. Liberty Nat. Life Ins. Co. , 73 Ga.App. 765, 38 S.E.2d 60, 62 (1946) (citing Glover v. N.Y. Life Ins. Co. , 109 S.E. 546, 546 (Ga. Ct. App. 1921)) ("That the parties to an insurance contract can make the actual delivery of the policy during the good health of the insured a valid and binding condition precedent to the liability of the company is certain."). "However, where the conditions precedent to liability that are described in the application or policy are contradicted by a specified date on which insurance coverage is to take effect, the date certain controls. " Sw. Life Ins. , 416 S.E.2d at 498 (emphasis added); Brooks v. Nw. Mut. Life Ins. Co. , 193 Ga. 522, 18 S.E.2d 860, 864 (1942) ; Adams v. W. Coast Life Ins. Co. , No. CIV.A. 1:05CV1304GET, 2006 WL 2224006, at *3 (N.D. Ga. Aug. 2, 2006). On that date certain, an insurance company has "the absolute duty to perform under the contract." Sw. Life Ins. , 416 S.E.2d at 498.
Here, Part 1 of Mr. Glushchak's life insurance application included the following provision, which required that Mr. Glushchak be in good health when he personally received his policy as a condition precedent to Transamerica's liability under the policy:
[A]ny contract issued on this application shall not take effect until after all of the following conditions have been met: (a) the full first premium is paid, (b) the Owner has personally received the contract during the lifetime of and while the Proposed Insured is in good health , and (c) all of the statements and answers given in this application must be true and complete as of the date of Owner's personal receipt of the contract and that the contract will not take effect if the facts have changed.
(Glushchak Ins. Application – Part 1, Doc. 52-5 at 2 (emphasis added.)) Transamerica maintains that Mr. Glushchak personally received his life insurance policy on October 23, 2017. Therefore, according to Transamerica, Mr. Glushchak was required to be in good health on October 23, 2017, in order for Transamerica to be liable for his death benefit under the policy.
However, Mr. Glushchak's policy did not include the same provision and "good health on receipt" condition that was included in his life insurance application. Instead, Mr. Glushchak's policy included a specified policy effective date of October 5, 2017. (Glushchak Policy, Doc. 52-38 at 1.) Mr. Glushchak's policy defines "policy date" as "[t]he date coverage is effective under th[e] policy" without any additional conditions. (Id. at 9.) Because the specific policy date in Mr. Glushchak's life insurance policy contradicts the conditional "good health on receipt" date contemplated in his life insurance application, the specific policy date controls. Compare Sw. Life Ins. , 416 S.E.2d 496 with Adams , 2006 WL 2224006. Therefore, Transamerica's liability hinges on whether Mr. Glushchak was in good health on October 5, 2017.
The Court notes here that Transamerica's Motion for Summary Judgment and briefs in support focus primarily on the state of Mr. Glushchak's health on October 23, 2017 (the date that the policy was allegedly delivered to him) and secondarily on the state of Mr. Glushchak's health on October 5, 2017 (the date Mr. Glushchak's policy was issued). Given this, the Court carefully reviewed Transamerica's briefs to parse out Transamerica's arguments concerning Mr. Glushchak's health on October 5, 2017.
Transamerica makes the following statements in its briefs supporting its Motion for Summary Judgment:
• "[T]he requirement in the application that the insured be in good health when the policy is delivered serves to bar coverage, since clearly Mr. Glushchak was not." (Brief in Support of MSJ, Doc. 52-1 at 21.)
• "Had Transamerica known of Mr. Glushchak's condition on October 23, 2017, it would not have issued the Policy." (Id. )
• "There is also no genuine dispute that Mr. Glushchak was, tragically, suffering from cancer on the date that the Policy was delivered. The diagnostic procedure took place that same day, and the doctor wrote that the gastric mass probably represented gastric carcinoma ; this was confirmed in a phone call to him by the pathologist two days later." (Reply Brief, Doc. 65 at 2 (emphasis added.))
• "Mr. Glushchak was not in good health, and the statements and answers in the application were no longer true, as of the date of delivery of the contract." (Id. at 5.)
Although "good health" is not defined in Mr. Glushchak's policy, Transamerica argues that Mr. Glushchak was not in good health on October 5, 2017. In its brief supporting its Motion for Summary Judgment (Doc. 52-1), Transamerica asserts that Mr. Glushchak was not in good health because (1) he reported to Dr. Vayner on September 29, 2017 that he had lost ten pounds over a two-month period and that he was experiencing a loss of appetite and abdominal pain; (2) Dr. Vayner expressed alarm about Mr. Glushchak's weight loss; and (3) Mr. Glushchak was diagnosed with H. pylori on October 4, 2017.
In its reply brief (Doc. 65), Transamerica again lists the above facts in support of its argument that Mr. Glushchak was not in good health at the time Transamerica issued Mr. Glushchak's policy but this time adds that Mr. Glushchak's cancer diagnosis supports a holding that Mr. Glushchak was not in good health as a matter of law on October 5, 2017. Transamerica states:
Transamerica's initial brief references cancer four times — each time in reference to the state of Mr. Glushchak's health on October 23, 2017. (Doc. 52-1 at 12 ("Thus, Dr. Layne's records reflect that Mr. Glushchak was suffering from stomach cancer as of October 23, 2017. See Ex. B, ¶ 10. Mr. Glushchak saw Dr. Layne again on November 1, 2017, where they discussed the cancer diagnosis and a treatment plan. Ex. B-8 & Ex. C-12. Had Transamerica known of Mr. Glushchak's condition on October 23, 2017, it would not have issued the Policy. Ex. B, ¶ 11.") and 17 ("On October 23, Dr. Layne performed a colonoscopy and an endoscopy, and in the latter took biopsies of a gastric mass that he identified as probably representing gastric carcinoma. That belief was confirmed two days later in a call from the pathologist. That has only strengthened the grounds for Transamerica's determination, as Mr. Glushchak was either under suspicion of cancer or had been diagnosed with cancer as of the date that the policy was delivered."))
In this case, Plaintiff contends that Mr. Glushchak's health was generally good as of the date Transamerica approved the application, October 5, 2017, except only for the diagnosis of h. pylori. While Transamerica submits that the diagnosis of h. pylori is sufficient to constitute a "change" [of health] within the meaning of the [ ] language in the Policy, the change in health was much more than that. Mr. Glushchak suffered from a recent loss of weight, a loss of appetite, and stomach pain, all of which alarmed Dr. Vayner. By the time the application was approved on October 5, Dr. Vayner had conducted an h. pylori test based upon the very symptoms that alarmed her, and it was found to be positive, had prescribed antibiotics and ordered a follow-up h. pylori test after the antibiotics were completed, and had given Mr. Glushchak a referral to a gastroenterologist ....
Carrying the facts forward to the date of delivery, there is no genuine issue of fact that Mr. Glushchak suffered from stomach cancer on that date – and likely had it on the date of the application. As a matter of degree, this renders the statements in the application even more untrue and only strengthens the grounds for concluding that the Policy never took effect.
(Doc. 65 at 7.)
Transamerica relies on Davis v. John Hancock Mutual Life Insurance Co. , to support its reply brief's newly asserted argument. 202 Ga.App. 3, 413 S.E.2d 224 (1991) ; (Doc. 65 at 7-8.) The Court need not consider Transamerica's new argument relying on Davis made in its reply brief, as Mrs. Glushchak had no opportunity to respond to the argument. See Riechmann v. Fla. Dep't of Corrs. , 940 F.3d 559, 579 (11th Cir. 2019) (quoting Herring v. Sec'y, Dep't of Corrs. , 397 F.3d 1338, 1342 (11th Cir. 2005) ) ("[A]rguments raised for the first time in a reply brief are not properly before a reviewing court."). Even so, the Court has nevertheless considered Transamerica's Davis argument and finds that the case is not dispositive here. The instant case is in a different evidentiary posture than Davis , and the Court must review all factual disputes bearing on the legal issues here in the light most favorable to Mrs. Glushchak, as discussed further below.
In its opening summary judgment brief, Transamerica primarily relies on four cases to argue that this Court should hold as a matter of law that Mr. Glushchak was not in good health, as defined under Georgia law, on October 5, 2017, due to his H. pylori diagnosis, weight loss, abdominal pain, and loss of appetite.
Transamerica also discusses a fifth case, Cosby v. Transamerica Occidental Life Ins. Co. , in its good health section. 860 F. Supp. 830 (N.D. Ga. 1993), aff'd sub nom. Cosby v. Transamerica Occidental , 16 F.3d 1232 (11th Cir. 1994). However, Cosby does not include a "good health" provision and is therefore discussed in a separate section of this Order.
In Fowler v. Liberty National Life Insurance Co. , the Georgia Court of Appeals reviewed a trial court's directed verdict in favor of an insurance company that refused to pay the death benefit of a deceased man who the company argued was no longer in "sound health" when his insurance policy was issued. 38 S.E.2d at 62. The Court explained the meaning of "sound health" or good health when used in a life insurance policy:
The term ‘sound health’ as used in a life insurance policy means that the insured enjoys such health and strength as to justify the reasonable belief that he is free from derangement of organic functions, or free from symptoms calculated to cause reasonable apprehension of such derangement, and to ordinary observation and to outward appearance his health is reasonably such that [ ]he may with ordinary safety be insured upon ordinary terms and that he has no grave impairment or serious disease and is free from any ailment that seriously affects the general soundness and healthfulness of the system.
Id. at 63. The Court then concluded that the deceased was not in good health when his life insurance policy was issued because two days prior to the policy's issuance, the deceased became delirious and "mentally deranged," was placed in jail at the request of his mother, and then taken to a mental hospital for the insane, where he remained until his death. Id. A physician from the mental hospital also testified that the deceased was suffering from dementia paralytica, a neuropsychiatric disorder, when he was admitted to the mental hospital. Id. at 61.
In Brown v. Interstate Life & Accident Insurance Co. , the Georgia Court of Appeals reviewed a life insurance company's liability under an insurance policy that stated that the insured's policy would not take effect if the insured was not "free from bodily injury" or in good health on the date of issuance. 111 Ga.App. 552, 142 S.E.2d 330, 331 (1965). The Court held that the trial court did not err in sustaining the life insurance company's demurrer because the insured was rendered unconscious due to an automobile accident the day before his policy was issued. Id. at 331–32.
Gulf Life Insurance Co. v. Griffin involved the appellate review of instructions provided to a jury that was tasked with determining whether an insurance company was liable for the death benefit of a 12-year-old girl under a life insurance policy with a "good health on delivery" condition. 80 Ga.App. 730, 57 S.E.2d 296, 298 (1950) (physical precedent only). At trial, the jury returned a verdict for the girl's beneficiary. Id. at 296. The defendant insurance company appealed, arguing that the trial court did not properly instruct the jury about the "good health on delivery" condition. Id. at 298. After considering the facts before it, the Court explained the meaning of a "good health on delivery" condition precedent under Georgia law and provided a definition of sound health similar to the one provided in Fowler :
The condition in the policy of insurance that ‘This Policy shall not take effect unless on the date and delivery hereof the Insured is alive and in sound health,’ refers to a change in the condition of the applicant's health between the time of taking the application for insurance and the date of the issuance and delivery of the policy, and is unavailable as a defense unless it is shown that the insured's disease developed during that period. The term ‘sound health’ used in such a policy has been defined to mean that the applicant is free from any ailment that seriously affects the general soundness and healthfulness of the system, that the insured enjoys such health and strength as to justify the reasonable belief that he is free from derangement of organic functions, and to ordinary observation and to outward appearance his health is reasonably such that he may with ordinary safety be insured upon ordinary terms.
Id. The Court then concluded that the trial judge did not err in its jury instructions, noting that the jury simply found against the insurance company, where the insurance company argued to the jury that the insured was not in good health at the time of her application because she was suffering from a chronic kidney condition (nephritis ) at the time. Id.
Unlike Fowler, Gulf Life , and Brown , the case of Transamerica Occidental Life Insurance Co. v. Miles involved a situation in which it was undisputed that the insured was no longer in good health when his insurance policy was delivered to him. 317 F. Supp. 2d 1373, 1379 (N.D. Ga. 2003), aff'd without opinion , 107 F. App'x 184 (11th Cir. 2004). Because the insured was no longer in good health when his policy was delivered and his policy had a "good health on delivery" condition, the Court granted summary judgment to the defendant. Id. at 1379–80.
Fowler, Brown, Gulf Life , and Miles are each inapposite. Miles did not involve a dispute about whether the insured was in good health on the date of delivery. Instead, unlike here, the parties agreed that the insured was not in good health on that date. Gulf Life in fact cuts against Transamerica's assertion that the Court should decide whether Mr. Glushchak was in good health at the time his policy was issued as a matter of law. In that case, the Court reviewed, and affirmed, a jury's verdict in favor of an insured who died of a kidney disease and had experienced kidney trouble earlier in life. The Court in Fowler reviewed a directed verdict entered by the trial court after hearing testimony from a physician that the insured suffered from a disease thought to be deadly, dementia paralytica or general paresis of the insane, on the day the policy was issued. There is no such testimony by a medical professional before this Court. Finally, Brown involved a "free from bodily injury" condition, which was not a condition listed in Mr. Glushchak's application or policy. Where an insured was rendered unconscious on the day before his life insurance policy issued due to injuries sustained during a car accident, there is little doubt that he was not "free from bodily injury" when his policy issued.
See Life & Cas. Ins. Co. v. Worley , 61 Ga.App. 722, 7 S.E.2d 289, 290 (1940) (finding that where the insured had been diagnosed with dementia paralytica, "[t]he uncontroverted evidence ... showed that the insured had been treated by a physician for a serious and incurable disease only a short time before the policy was issued, and that he died from this same disease within two years from the date of the issuance of the policy. Without elaboration or any extended discussion it is sufficient to say that, under the evidence, the terms of the policy, and the above-mentioned decisions of this court, the plaintiff was not entitled to recover.").
In this case, the Court cannot hold as a matter of law that Mr. Glushchak's H. pylori diagnosis, abdominal pain, loss of appetite, and/or 10-pound weight loss was such a "grave impairment" or "serious disease" affecting the "general soundness and healthfulness of [his] system" to deem him not to be in good health, as defined in Fowler and Gulf Life , for the purpose of qualifying for life insurance. Mrs. Glushchak argues in her response to Transamerica's Motion for Summary Judgment that:
The positive test for H. Pylori is very much like having the common cold and should not disqualify Mr. Glushchak from a good health status ... Positive tests for H. pylori are extremely common, and only indicate a bacterial injection [sic] within the stomach which can lead to an elevated risk of non-fatal peptic ulcers. In rare cases, H. pylori can lead to chronic gastritis and in extremely rare cases can lead to stomach cancer.
The Court takes judicial notice of certain information at the Johns Hopkins University website and the Mayo Clinic website that is "not subject to reasonable dispute" because they are "sources whose accuracy cannot be reasonably questioned." See Fed. R. Evid. 201(b)(2) ; United States v. Blake , No. 15-CR-80018, 2020 WL 4677309 (S.D. Fla. Aug. 12, 2020). According to Johns Hopkins, "H. pylori is common. Many people have it. Most people who have it won't get ulcers or show any symptoms." Helicobacter Pylori , Johns Hopkins Med. : Conditions & Diseases , https://www.hopkinsmedicine.org/health/conditions-and-diseases/helicobacter-pylori (last accessed Mar. 30, 2022). Similarly, according to the Mayo Clinic, "[a] common cause of peptic ulcers, H. pylori infection may be present in more than half the people in the world. Most people don't realize they have H. pylori infection, because they never get sick from it." Helicobacter pylori (H. pylori) infection , Mayo Clinic : Diseases & Conditions (May 18, 2021), https://www.mayoclinic.org/diseases-conditions/h-pylori/symptoms-causes/syc-20356171.
Mr. Glushchak's doctor, Dr. Vayner, made a similar observation during her deposition:
This infection is very common and it may lead to stomach ulcers and also stomach cancer in not very big amount -- not very significant cases of this infection -- but it's still possible; if it's left untreated.
(Doc. 55 at 21:2–6.)
Transamerica does not dispute Mrs. Glushchak's contention. Instead, it argues that the combination of Mr. Glushchak's H. pylori, weight loss, stomach pain, and loss of appetite suggests that Mr. Glushchak was not in good health when his insurance policy was issued. However, weight loss, stomach pain, and loss of appetite are all symptoms of H. pylori. Supra JOHNS HOPKINS MED. , https://www.hopkinsmedicine.org/health/conditions-and-diseases/helicobacter-pylori (last accessed Mar. 30, 2022). And symptoms that can be associated with a more serious illness do not mandate a finding that an individual is in bad health. Interstate Life & Acc. Ins. Co. v. McMahon , 50 Ga.App. 543, 179 S.E. 132, 134 (1935) ("A bad cold may be the forerunner of pneumonia, a headache the first symptom of a deadly malady, and yet a bad cold or a headache is not necessarily a condition of unsound health.") Resolving all factual disputes in Mrs. Glushchak's favor, the Court finds that fact questions remaining regarding whether Mr. Glushchak was in good health on October 5, 2017.
The Court notes though that Mr. Glushchak's doctor's testimony was equivocal. On the one hand, Dr. Vayner testified that Mr. Glushchak had positively responded to the antibiotic treatment for the H. pylori and was a 44-year-old young man who appeared healthy and did not have any prior symptoms of concern. (Vayner Deposition, Doc. 61-9 at 23:3–15; 41:19–21.) And on the other hand, Dr. Vayner stated that she viewed Mr. Glushchak's weight loss with concern and therefore referred him to the gastric specialist. (Id. at 41:19–42:3 (Q: You said otherwise, though, he was pretty healthy, I think that was your phrase? A: Yes. He looked healthy, young man. Q: And before the diagnosis of cancer was made, would you have said that he was in good health overall? A: I wouldn't say it. If somebody comes with the complaint of weight loss then it's – that he is not very healthy. We were looking for the explanation.))
As noted above, although Transamerica belatedly raised its argument that Davis mandates a holding that Mr. Glushchak was not in good health as a matter of law on October 5, 2017, the Court addresses this contention here. In Davis , Mrs. Davis was treated for facial acne on December 7, 1987. See 413 S.E.2d at 225. The same evening, Mrs. Davis and her husband completed an application for military spouse life insurance. Id. By completing the application, the couple certified that Mrs. Davis was in good health on the application date and did not have any major illness, injury, or disease. Id. On December 11, Mrs. Davis’ life insurance policy was issued. Id. Just ten days later, on December 21, Mrs. Davis was preliminarily diagnosed with lymphoma, which is a malignancy of the cells. Mrs. Davis died on July 1, 1989. Id.
In reviewing the trial court's grant of summary judgment for the insurer, the Georgia Court of Appeals concluded that the "uncontradicted evidence established that the incurable leukemia Mrs. Davis suffered from existed on December 7, 1987 when she applied for the insurance, despite the fact that the disease was undiagnosed." Id. at 226. "[I]n light of the incorrect statements Mrs. Davis gave on her application regarding her objective physical condition," the Court concluded that recovery under Mrs. Davis’ policy was barred. Id. at 227.
In this case, Transamerica has not put up any evidence or expert testimony, let alone "uncontradicted evidence," that establishes (or attempts to establish) that Mr. Glushchak was suffering from stomach cancer on October 5, 2017. Instead, it asks this Court to conclude that Mr. Glushchak was obviously not in good health on that day because a mass was found in his stomach 18 days later. However, considering that: (1) all factual disputes must be resolved in the light most favorable to Mrs. Glushchak; (2) Transamerica did not make this argument in its initial briefing but instead focused on the common, typically non-lethal disease of H. pylori; and (3) Transamerica failed to provide any expert medical testimony as to the probability of Mr. Glushchak already having serious cancer as of October 5, 2017, the Court declines to make such a conclusive finding as to the status of Mr. Glushchak's health. The Court concludes that it would be more appropriate to submit the question to a jury. United Fam. Life Ins. Co. v. Shirley , 242 Ga. 235, 248 S.E.2d 635, 637 (1978) ("[W]ith respect to the issue of the materiality of the ‘misrepresentation’ of no illness or diseases, it was proper to submit this to a jury in view of the conflict of evidence as to whether the child's illness or disease was in existence at the time the application was filled out."). Accordingly, Transamerica's Motion for Summary Judgment is DENIED with respect to its conditional contract argument.
The Court notes here that Mrs. Glushchak may face a steep uphill battle moving forward in this litigation. Davis mandates a finding in favor of Transamerica after a presentation of uncontradicted evidence that an insured suffered from cancer on the day that his policy was issued. It does not matter whether Mr. Glushchak was aware of his cancer or if he completed his insurance applications in good faith. Shirley , 248 S.E.2d at 637 ; Davis , 413 S.E.2d at 226. Still, Transamerica has not submitted such evidence and has not secured an expert to present such evidence at this juncture, and summary judgment on this basis is therefore not appropriate.
B. Material Misrepresentation
Transamerica also argues that it is not required to pay the death benefit under Mr. Glushchak's policy because Mr. Glushchak made several material misrepresentations in his life insurance application.
Under Georgia law, "[m]isrepresentations, omissions, concealment of facts, and incorrect statements" made by a potential insured on his life insurance application shall prevent insurance recovery if they are (1) fraudulent; (2) "[m]aterial either to the acceptance of the risk or to the hazard assumed by the insurer;" or (3) "[t]he insurer in good faith would either not have issued the policy ... or would not have issued a policy ... at the premium rate as applied for ... if the true facts had been known to the insurer as required ... by the application for the policy ...." O.C.G.A. § 33-24-7(b). Georgia courts have interpreted material misrepresentations to be ones "that would influence a prudent insurer in determining whether or not to accept the risk, or in fixing a different amount of premium in the event of such acceptance." Am. Gen. Life Ins. Co. v. Schoenthal Fam., LLC , 555 F.3d 1331, 1340 (11th Cir. 2009) (quoting Lively v. S. Heritage Ins. Co. , 256 Ga.App. 195, 568 S.E.2d 98, 100 (2002) ); Jackson Nat. Life Ins. Co. v. Snead , 231 Ga.App. 406, 499 S.E.2d 173, 176 (1998).
It is immaterial whether a potential insured acted in good faith when completing his or her life insurance application or did not know that a representation was untrue. Shirley , 248 S.E.2d at 637 ; Davis , 413 S.E.2d at 224. "In cases where the application for insurance is attached to and becomes a part of the policy, in order to avoid the policy for a misrepresentation of the applicant made in the application, the insurer need only show that the representation was false and that it was material in that it changed the nature, extent, or character of the risk." Davis , 413 S.E.2d at 226 (quoting Haugseth v. Cotton States Mut. Ins. Co. , 192 Ga.App. 853, 386 S.E.2d 725 (1989) ).
Instead of inquiring into what a particular insurer would have done had it known of a potential insured's misrepresentations or concealments, Georgia courts use an objective reasonableness test to determine the effect of a potential insured's false declarations. Am. Gen. Life , 555 F.3d 1331, 1340 (quoting Woods v. Indep. Fire Ins. Co. , 749 F.2d 1493, 1497 (11th Cir. 1985) ). Therefore, the issue of materiality is ordinarily a jury question. United Fam. Life , 248 S.E.2d at 636 ; Lively , 568 S.E.2d at 100. However, where the evidence excludes every reasonable inference except that a representation was material, it is a question of law for the court. Id.
Georgia courts have found that when an insurer presents an uncontradicted statement by its underwriter that the insurer would not have issued an insurance policy had it known the truth about a misrepresentation, the burden shifts to the potential insured's representative to show that the misrepresentation was not material. See Davis , 413 S.E.2d at 226 ; Sanders v. S. Farm Bureau Life Ins. Co. , 174 Ga.App. 888, 332 S.E.2d 33, 34 (1985) ; Worley v. State Farm Mut. Auto. Ins. Co. , 208 Ga.App. 805, 432 S.E.2d 244, 247 (1993) ; Bolin v. Mass. Indem. & Life Ins. Co. , 203 Ga.App. 570, 417 S.E.2d 325, 327 (1992) ; Nappier v. Allstate Ins. Co. , 961 F.2d 168, 170 (11th Cir. 1992) ; Dracz v. Am. Gen. Life Ins. Co. , 427 F. Supp. 2d 1165, 1170 (M.D. Ga. 2006), aff'd , 201 F. App'x 681 (11th Cir. 2006). A plaintiff can demonstrate that the misrepresentation was not material by showing that the underwriter's statement was a blanket statement unsupported by the insurer's policies regarding the specific risk, see Lively , 568 S.E.2d at 100 ; by showing that the insurer did not actually rely on the potential insured's application when it issued the policy, see Case v. RGA Ins. Servs. , 239 Ga.App. 1, 521 S.E.2d 32, 34 (1999) ; or by presenting a qualified expert to testify that a prudent insurer would have issued the policy even if it had known of the misrepresentation, see Jackson Nat. Life Ins. Co. v. Snead , 231 Ga.App. 406, 499 S.E.2d 173, 176 (1998).
In Case v. RGA Ins. Servs. , the Georgia Court of Appeals explained the pitfalls of this rule:
The only evidence [suggesting that the insurer in good faith would not have issued the policy with knowledge of the true facts] ... is Hanover's expert underwriter's affidavit that the company would not have issued Ms. Case an insurance policy "[h]ad Hanover been aware of the previous moving violations and automobile accident of Andrea Joyce Case...." The problem with this statement is that such "opinion testimony is always a question of acceptance or nonacceptance on the part of the jury." [Pa. Life Ins. Co. v. Tanner , 163 Ga.App. 330, 293 S.E.2d 520 (1982) ] ... The "opinion testimony" rule upon which we rely is not only based on this Court's factually indistinguishable decision in Pa. Life , but is grounded upon venerable Supreme Court of Georgia authority providing that "summary judgment can never issue based upon opinion evidence alone." Ginn v. Morgan [225 Ga. 192, 167 S.E.2d 393 (1969) ]. In our view the dissent, without explanation, would ignore this rule and adopt a holding which provides that summary judgment must go to the insurer if the insurer's employee provides his employer with a favorable opinion in the requisite affidavit.
The test for materiality of a representation in an insurance application should not be based upon such procedural gaming, but must be grounded upon a weighing of whether the representation varied from the truth so as to substantially change the nature, extent, or character of the risk. Preston v. Nat. Life &c. Ins. Co. [196 Ga. 217, 26 S.E.2d 439 (1943) ].
239 Ga.App. 1, 521 S.E.2d 32, 34 (1999) ; see Lee v. Mercury Ins. Co. of Ga. , 343 Ga.App. 729, 808 S.E.2d 116 (2017) ("[O]ur holding in Case still applies to the affidavit of an underwriter opining that his employer would not have issued a particular policy if additional facts had been disclosed. Our holding in Case also comports with the plain language of the statute, which places the burden on the insurance company to demonstrate that it "in good faith would either not have issued the policy or contract or would not have issued a policy or contract in as large an amount or at the premium rate as applied for...." [ ] O.C.G.A § 33-24-7 (b)(3). In other contexts, the Supreme Court of Georgia has held that "[t]he question of the insurer's good faith (or lack thereof) is one of fact for the jury...." "Good faith is always a question for the jury. Even though the party may swear he acted in good faith , the jury may decide he acted in bad faith from consideration of facts and circumstances in the case.") (citations omitted).
Here, Transamerica maintains that Mr. Glushchak made two types of misrepresentations in his life insurance application. First, Transamerica argues that Mr. Glushchak made medical history misrepresentations by failing to update answers to particular health questions in his life insurance application after being diagnosed with H. pylori. Second, Transamerica contends that Mr. Glushchak made "other insurance" misrepresentations by concealing or misrepresenting the existence and value of his other insurance policies when he completed his life insurance application. Transamerica maintains that each of Mr. Glushchak's misrepresentations is material.
1. Medical History Representations
The Court begins by analyzing Mr. Glushchak's medical history representations made on September 29, 2017. Transamerica argues that Mr. Glushchak should have updated his answers to Questions 5d, 7a, 7b, 7c, and 9 in Part II of his life insurance application after being diagnosed with H. pylori. Because he did not, Transamerica contends that Mr. Glushchak's answers constitute misrepresentations, as they were no longer true and complete when Transamerica issued his policy. Transamerica then explains that, had it known that the answers to those questions were false or incomplete, it would not have issued Mr. Glushchak's policy.
Question 5d of Part II of Mr. Glushchak's life insurance application asked Mr. Glushchak if he had ever "been told by a member of the medical profession that [he had], or been diagnosed with or treated for: ... [u]lcer, colitis, hepatitis, cirrhosis, or any disease or abnormality of the esophagus, stomach, intestines, rectum, gallbladder or liver?" Mr. Glushchak responded, "No." Questions 7a, 7b, and 7c asked Mr. Glushchak whether he had in the past five years (a) "[c]onsulted, been examined or been treated by any physician or practitioner;" (b) "been advised to have an X-ray, electrocardiogram, laboratory test, or other diagnostic study;" and/or (c) been seen for "observation or treatment at a clinic, hospital or other medical facility." Mr. Glushchak responded "Yes" to 7a and 7b but responded "No" to 7c. Question 9 asked Mr. Glushchak to list all "prescription, vitamin, supplement or over-the-counter medication" he was taking at the time of his application. Mr. Glushchak only listed multivitamins.
In addition to answering the aforementioned questions, Mr. Glushchak was asked to "[g]ive complete details of all yes answers to questions 5 – 8, including but not limited to all dates, diagnoses, duration, outcome, treatments, and medications prescribed." In response to questions 7a and 7b, Mr. Glushchak explained that he had been to the doctor for annual physical examinations, blood work, and EKGs in the past.
Mr. Glushchak signed Part II of his life insurance application, which contained the above-mentioned answers, on September 29, 2017. Mr. Glushchak was diagnosed with H. pylori on October 4, 2017, and his policy was issued on October 5, 2017. Transamerica argues that following his diagnosis, Mr. Glushchak was required by law to update his answers to Questions 5d, 7a, 7b, 7c, and 9 in Part II of his life insurance application. Because he did not, Transamerica contends that Mr. Glushchak made misrepresentations sufficient to allow Transamerica to rescind his life insurance policy. Transamerica relies on Cosby v. Transamerica Occidental Life Ins. Co. , 860 F. Supp. 830 (N.D. Ga. 1993), aff'd sub nom. Cosby v. Transamerica Occidental , 16 F.3d 1232 (11th Cir. 1994), which it argues is "entirely on all fours" with the case before the Court, to support its position.
In Cosby , a plaintiff sued to recover death benefits under her late husband's life insurance policy, which was issued by the defendant, a legal predecessor to Transamerica. Id. at 831. Her husband, Mr. Cosby, had been issued a $350,000 life insurance policy by the defendant in April 1987. Id. In late 1988, Mr. Cosby contacted the defendant to increase his life insurance coverage to $500,000. Id. In connection with his request, on February 28, 1989, Mr. Cosby signed Part II of his life insurance application. Id. Part II of his application contained questions about his health and medical history, including inquiries about "whether [Mr.] Cosby had consulted a doctor, been observed or treated in a hospital, or ever had any disease or abnormality of the brain." Id. at 833. On March 28, 1989, Mr. Cosby was hospitalized after having a period of confusion. Id. at 834. On March 29, 1989, the defendant accepted Mr. Cosby's request to increase his life insurance coverage. Id. At the time that it accepted Mr. Cosby's request, the defendant was not informed that Mr. Cosby had been hospitalized. Id. On April 1, 1989, Mr. Cosby was diagnosed as having a brain tumor. Id.
The Cosby Court found that Mr. Cosby's life insurance application contained incorrect statements about being hospitalized and examined by a physician. Id. It then held those statements to be material because the defendant submitted an undisputed affidavit that it would not have issued Mr. Cosby's policy had it been aware of his hospitalization on March 28, 1989. Id. at 834–35. Given this, the court granted the defendant's motion for summary judgment and allowed it to rescind Mr. Cosby's additional life insurance coverage. Id. at 835.
Contrary to Transamerica's contention, Cosby is not "entirely on all fours" with the case before the Court. Here, the parties dispute whether Transamerica would have issued or approved Mr. Glushchak's insurance policy had it known of his H. pylori diagnosis. Transamerica argues that it would not have issued Mr. Glushchak's policy; however, there is evidence in the record that suggests otherwise. When asked after conducting an underwriting review of Mrs. Glushchak's claim under Mr. Glushchak's policy to specify whether Transamerica would have issued Mr. Glushchak's policy "without any modification as to rate class, flat extra, plan, face amount, or premium rate" if the medical information discovered after Mr. Glushchak's death were disclosed on his application, senior Transamerica underwriter Mr. Shepard responded, "Yes." (Request for Underwriting Review, Doc. 52-27.) This fact alone is sufficient to create a jury question about whether Mr. Glushchak's omission of his H. pylori diagnosis and his related doctor's visit in his application was material.
Moreover, Mr. Shepard's statement is not the only evidence that creates a jury issue about the materiality of Mr. Glushchak's omissions. Transamerica's own guidelines, and Dr. Greene of Transamerica, suggest that Mr. Glushchak's policy could have been issued if his H. pylori were treated. (See Shepard-Greene Email Exchange, Doc. 52-29 at 4 ("OK. I don't know if underwriters have to wait until H. Pylori clears before an offer.".)) The corporate Swiss Re guideline reviewed by Transamerica underwriters for gastritis associated with H. pylori provides that where the gastritis has been "treated, resolved or eradicated," life insurance coverage may be issued at a standard rate. (Doc. 52-28; Shepard Deposition, Doc. 61-7 at 48:24–49:7; DSOF, Doc. 52-69 ¶ 24; Pl. Resp. to DSOF, Doc. 64 ¶ 24; Def. Reply to Pl. Resp. to DSOF, Doc. 65 ¶ 24.)
Transamerica argues that "treated" means that treatment for H. pylori was complete and not ongoing. However, dictionary definitions of "treat" do not support Transamerica's argument. Black's Law Dictionary defines "treat" as: "To care for (a medical patient); to try to cure the illness or injury of (a person) by using medicine, hospital care, surgery, etc.[;] [t]o subject (a disease, debility, etc.) to a regimen of medicine, exercise, etc." Treat , BLACK'S L. DICTIONARY (11th ed. 2019). The Merriam-Webster Dictionary defines "treat" as "to care for or deal with medically or surgically." Treat , MERRIAM-WEBSTER , https://www.merriam-webster.com/dictionary/treat. Additionally, Dr. Vayner suggests in her deposition that she treated Mr. Glushchak's H. pylori when she prescribed his antibiotics. (Vayner Deposition, Doc. 61-9 at 23:10–13 ("So I gave him treatment to treat the infection in the stomach, which is very common infection, and treated with antibiotics; course of antibiotics for two weeks.")) A jury could reasonably find that Mr. Glushchak's H. pylori was indeed treated when he was prescribed antibiotics to try to cure it.
Because jury questions remain regarding whether Mr. Glushchak's omission of his H. pylori diagnosis and his related doctor's visit from his life insurance application were material to Transamerica's acceptance of the risk, the Court DENIES Transamerica's Motion for Summary Judgment with respect to its medical history misrepresentation argument.
2. "Other Insurance" Representations
The Court now turns to Mr. Glushchak's other insurance representations: (1) that he intended to replace his $1,000,000 State Farm life insurance policy with his Transamerica policy if issued and (2) that he did not have any life insurance policies in force at the time of his application other than the pending Transamerica policy and the State Farm policy. Transamerica asserts that had it known that Mr. Glushchak would keep his State Farm policy in force and that he had another $250,000 policy in force with Banner Life, it would have rejected Mr. Glushchak's application and refused to issue his life insurance policy. Mrs. Glushchak opposes Transamerica's assertion by highlighting Transamerica's policies and practices and offering expert testimony from Stephen Burgess, a life and disability insurance analyst and former insurance instructor. (See Burgess Deposition, Doc. 61-10.)
Transamerica relies on a sworn affidavit from Transamerica Senior Quality Risk Manager for Underwriting and 30(b)(6) representative Mr. Shepard to support its argument. In his affidavit, Mr. Shepard explains what Transamerica would have done had it known of Mr. Glushchak's alleged misrepresentations and concealments:
Had Transamerica known that at the time he was applying for life insurance coverage with Transamerica, Mr. Glushchak already had in force $1,250,000 in life insurance with other companies, and that he was going to maintain in force after the issuance of the $1,000,000 policy by Transamerica, Transamerica would have determined that Mr. Glushchak did not qualify for the Transamerica coverage, and the Transamerica policy would not have been issued.
(Shepard Deposition, Doc. 52-23 ¶ 15 (emphasis added.))
However, Mr. Shepard's sworn affidavit is contradicted by the testimony of Transamerica's own Claim Manager and 30(b)(6) witness Jolynn Barnes. When asked whether she has "ever made a decision to rescind a policy because someone had too much insurance," Ms. Barnes responded, "[n]o, not if the information was disclosed properly on the application." (Barnes Deposition, Doc. 61-8 at 23:18-22.) Transamerica's internal practice of not having an underwriter confirm that a potential insured actually replaced his existing insurance after the issuance of a Transamerica policy also suggests that Transamerica does not materially rely on a potential insured's statement that he intends to replace an existing policy when deciding whether to issue a life insurance policy. Additionally, Mrs. Glushchak's expert, Mr. Burgess, highlights in his deposition that Transamerica never informed Mr. Glushchak that his life insurance coverage was contingent on his actually cancelling any of his other insurance policies. (Doc. 61-10 at 40:20–41:1 (stating that "there was no disclosure to Mr. Glushchak that he would need to cancel other insurance in order to obtain a $1 million policy from Transamerica" and suggesting that Transamerica reached out to State Farm prior to issuing Mr. Glushchak's policy, and State farm indicated only that its policy "might" be replaced.)) This too cuts against Mr. Shepard's assertion that Transamerica would not have issued Mr. Glushchak's policy had the company known that Mr. Glushchak intended to keep his other insurance policies in place.
Transamerica also relies on its internal guidelines to support its argument that it would not have issued Mr. Glushchak's life insurance policy had it known that Mr. Glushchak would have $2,250,000 in life insurance benefits in force after the issuance of Transamerica's policy. Transamerica argues that its guidelines would not have allowed for the issuance of more than $1,121,200 in coverage to Mr. Glushchak, and that because he had more coverage than that already in force through his other life insurance policies, it would not have issued its life insurance policy.
Again, Transamerica's position is called into question by the deposition testimony of its own witnesses and its own internal guidelines. Mr. Shepard and Transamerica underwriter Ms. Tillotson deposed that, although Transamerica has guidelines regarding the amount of life insurance it believes is reasonable for an individual, the guidelines can be deviated from as long as the deviation "makes sense" to the underwriter and is "within the underwriter's level of authority." (Tillotson Deposition, Doc. 61-6 at 60:8; Shepard Deposition, Doc. 61-7 at 78:7–12.) Although Mr. Shepard further testified that an underwriter would have to document a very good reason to deviate from Transamerica's guidelines, Mr. Shepard's and Ms. Tillotson's testimony together suggests that Transamerica did not have a fixed rule or policy regarding how much insurance an individual should or could have. (Shepard Deposition, Doc. 61-7 at 33:11–16.) This is further confirmed by Ms. Barnes’ testimony that Transamerica has never rescinded a policy because someone had too much insurance, if the potential insured had properly disclosed his insurance on his application. (Barnes Deposition, Doc. 61-8 at 23:18–22.)
Moreover, Transamerica's Underwriting Guide provides different equations for calculating a potential insured's insurability based on the purpose of the potential insured's life insurance policy. (Transamerica Underwriting Guide, Doc. 52-9 at 5–8.) Transamerica maintains that the maximum amount of insurance for which Mr. Glushchak was eligible was twenty-five times his annual income, or $1,221,2002, based on Transamerica's "Income Continuation" purpose guideline. However, Transamerica's Underwriting Guide indicates that there is a different calculation for a life insurance purpose of "Estate Planning." (Id. at 7.) The "Estate Planning" purpose equation is the projected future value of Mr. Glushchak's estate times fifty percent. (Id. ) While an estate planning purpose calculation was never made for Mr. Glushchak, that Transamerica has different equations for calculating a potential insured's insurability based on the purpose of the potential insured's life insurance policy suggests that there were, at the very least, multiple ways to determine Mr. Glushchak's insurability. (See Glushchak Ins. Application – Part 1, Doc. 52-5; Shepard Deposition, Doc. 61-7 at 76:3–23.) Additionally, Mr. Burgess testified that in his expert opinion, the main purpose of Mr. Glushchak's life insurance policy as perceived by Transamerica was estate planning, which was purportedly indicated in Ms. Tillotson's deposition testimony. (Burgess Deposition, Doc. 61-10 at 50:19–51:17.)
Transamerica argues that "Ms. Tillotson flatly testified that she would decline anything above [$1,121,200], with the possible exception of allowing an additional $50,000 had Mr. Glushchak disclosed and sought approval to keep the Banner Life policy." (Transamerica Reply Brief, Doc. 65 at 11.) However, this position does not comport with Ms. Tillotson's notes at the time that she considered Mr. Glushchak's life insurance application. When Ms. Tillotson reviewed Mr. Glushchak's application, she did not use either the "Income Continuation" or the "Estate Planning" equations to determine Mr. Glushchak's maximum amount of coverage under Transamerica's policies. Instead, Ms. Tillotson used an income factor of approximately 35 and determined Mr. Glushchak's maximum amount of coverage to be $1,660,589. (Tillotson Affidavit, Doc. 52-3 ¶ 12.) Ms. Tillotson specifically noted in Transamerica's internal records that: "the face [Mr. Glushchak] applied for is 1mm and income is 48K -- max coverage is 1,660,589 with all carriers (he is replacing the other coverage[.] IF so we are OK on the face amount)." (Doc. 52-4 at 1) (emphasis added).
Taken together, Mr. Shepard, Ms. Barnes, and Ms. Tillotson's conflicting and murky testimony presents a jury question on the issue of whether the alleged misrepresentations in Mr. Glushchak's life insurance application concerning his other insurance policies would actually be material to a prudent insurer. The Court therefore DENIES Transamerica's Motion for Summary Judgment with respect to its alternate "other" insurance misrepresentation argument.
IV. Conclusion
For the foregoing reasons, Transamerica's Motion for Summary Judgment [Doc. 52] is DENIED . As noted above, Mrs. Glushchak faces a distinct uphill battle in this litigation that should not be minimized. And trial would not necessarily be a slam dunk for Transamerica either. Given the complications in this litigation and the potential costs and risks for both sides of litigating this matter through trial and beyond, the Court ORDERS AND REFERS this case to mediation with the next available magistrate judge on the rotation wheel.
The mediation shall be conducted within 45 days of the date of this Order. The parties are DIRECTED to advise the Court regarding the results of the mediation within 10 days of the conclusion of the mediation. This case is STAYED until the completion of the mediation. If no settlement is reached, the Court will lift the stay. If the stay is lifted, the parties are DIRECTED to file their proposed pretrial order within 30 days of the date the stay is lifted. Any applicable motions in limine shall be filed within 30 days after the filing of the proposed pretrial order.
IT IS SO ORDERED this 31st day of March, 2022.