Opinion
No. 1:01-cv-231.
February 15, 2002
ORDER
In accordance with the accompanying memorandum, it is hereby ORDERED that Life Investors Insurance Company of America's motion [Court File No. 11] is DENIED. It is further ORDERED that Amoco Life Insurance Company's motion for summary judgment [Court File No. 18] is GRANTED. The plaintiff's claims against defendant Amoco Life Insurance Company Inc. are DISMISSED WITH PREJUDICE.
MEMORANDUM
Plaintiff Peggy J. Pemberton ("Pemberton") filed this action against the above-named defendants for wrongfully denying insurance benefits to the plaintiff and misrepresentation concerning the terms of coverage of her deceased husband's insurance policies, both actions being unfair and deceptive business practices in violation of the Tennessee Consumer Protection Act, T.C.A. § 47-18-104. Pemberton also asserts that the denial of benefits was done in bad faith entitling her to damages under T.C.A. § 56-7-105. Defendant Life Investors Insurance Company of America ("Life Investors") moves for dismissal [Court File No. 11] pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim for which relief can be granted. Defendant Amoco Life Insurance Company ("Amoco") moves for partial summary judgment [Court File No. 18]. Pemberton opposes both motions. For the reasons set forth herein, the Life Investors motion will be DENIED and Amoco's motion for summary judgment will be GRANTED.
I. STANDARD OF REVIEW
The FEDERAL RULES OF CIVIL PROCEDURE provide that a complaint may be dismissed if it fails to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). If matters outside the pleading are presented to and not excluded by the Court, the 12(b)(6) motion shall be treated as one for summary judgment and disposed of as provided in Rule 56. FED. R. CIV. P. 12(b); Fugarino v. Hartford Life and Acc. Ins. Co., 969 F.2d 178, 182 (6th Cir. 1992).
Summary judgment is appropriate where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). In ruling on a motion for summary judgment, the Court must view the facts contained in the record and all inferences that can be drawn from those facts in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); National Satellite Sports, Inc. v. Eliadis Inc., 253 F.3d 900, 907 (6th Cir. 2001). The Court cannot weigh the evidence or determine the truth of any matter in dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
The moving party bears the initial burden of demonstrating that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To refute such a showing, the non-moving party must present some significant, probative evidence indicating the necessity of a trial for resolving a material, factual dispute. Celotex Corp., 477 U.S. at 322. A mere scintilla of evidence is not enough. Anderson, 477 U.S. at 252; McLean v. Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). The Court's role is limited to determining whether the case contains sufficient evidence from which a jury could reasonably find for the non-moving party. Anderson, 477 U.S. at 248, 249; National Satellite Sports, 253 F.3d at 907.
II. FACTS
After carefully reviewing the record before it, the Court makes the following findings of fact. All findings are made for the purpose of ruling on the motion for summary judgment. Therefore, all facts are viewed in the light most favorable to Pemberton, the non-moving party.
Pemberton is a resident of Cleveland, Tennessee. Life Investors and Amoco are foreign insurance company doing business in the state of Tennessee. There is complete diversity among the parties and the amount in controversy is asserted to be in excess of the statutory amount.
Pemberton is the widow of James Pemberton who died as a result of complications incurred from a fractured hip and shoulder due to falling on the street after getting tangled in a dog leash while walking his dog near his home. His death occurred on November 19, 1999.
Pemberton attaches the death certificate to the complaint. The directions to the "Cause of Death" section of the certificate state: "Enter the diseases, injuries, or complications that caused the death. Do not enter the mode of dying, such as cardiac or respiratory arrest, shock, or heart failure." The "IMMEDIATE CAUSE (final disease or condition resulting in death)" is listed as "Hip Fracture (Fall)." The death certificate provides spaces to "list conditions, if any, leading to immediate cause" and "enter the UNDERLYING CAUSE (Disease or injury that initiated events resulting in death) LAST." The word "osteoporosis" is written in the first space provided. On the same line, words have been scratched out with what appears to be initials. "RA" is listed on the next line along with scratches and initials. The third line also contains scratches and initials. Under the heading of "other significant conditions contributing to death but not resulting in the underlying cause," "__CVD, Renal Failure (Dialysis)" is listed and "COPD" is listed on the next line.
Pemberton also attaches to the complaint a letter from James Pemberton's treating physician in which the doctor stated, "It is my opinion, and I have expressed this to the patient's wife, that Mr. Pemberton's death was the result of complications incurred following fracture of the hip and shoulder." The doctor also stated that Mr. Pemberton "had known osteoporosis with documented vertebral fractures at T8, T11, T12, L1 and L2, chronic obstructive pulmonary disease, chronic dialysis for atherosclerotic renal vascular disease, and a history of an abdominal aneurysm stable at 4.4 centimeters in diameter." The doctor did not opine that any of these conditions contributed to the cause of Mr. Pemberton's death.
Prior to his death, James Pemberton executed a contract with Life Investors to provide accidental death and hospital benefits to Pemberton, the beneficiary under the contract. Under the contract, Life Investors pays the benefit if death is a result of injury. The policy, submitted by the Life Investors, defines injury:
"Injury" means bodily injury of a Covered Person which:
1. is caused by an accident which occurs while the Covered Person's insurance is in force under the Policy; and
2. results in loss insured by the Policy; and
3. is due, directly and independently of all other causes, to such accidental bodily injury.
Pemberton notified Life Investors of her husband's death and sought the benefits under the policy. Life Investors denied coverage because it asserted that James Pemberton's death was not attributable to accidental causes.
Prior to his death, James Pemberton also executed a contract with Amoco to provide accidental death and injury benefits to Pemberton, the beneficiary under the contract. Under the contract, Amoco pays for any loss suffered resulting from injury. The policy (entitled the "Traffic and Travel Accident Policy"), submitted by Amoco, defines injury:
"Injury" in this policy means bodily injury to you only if the injury: 1. is caused by an accident which occurs while this policy is in force, and
2. is a direct result of an accident, and
3. occurs as described below in parts A, B, or C.
A. Private Passenger Automobile — while you are riding in, operating, or getting into or out of any private passenger automobile (defined below).
B. Pedestrian — if you are struck by a vehicle while a pedestrian (defined below).
C. Common Carrier — while you are a passenger on or while you are getting into or out of any air, land or water common carrier (defined below). You are not insured if you are acting as an operator or staff member of a common carrier at the time of the accident.
The policy provides further definitions:
DEFINITIONS: Private Passenger Automobile: a four wheel vehicle of the private passenger, station wagon, self-propelled motor home, or jeep type; including a truck with a load capacity of 2,000 pounds or less (a truck with a camper body added is included in this definition). A motorcycle or any vehicle not designed mainly for use on public roads is not within this definition.
Pedestrian: a person traveling on foot.
Common Carrier: any air, land or water vehicle owned and operated as a common carrier by a business licensed to carry passengers for hire.
Pemberton notified Amoco of her husband's death and sought the benefits under the policy. Amoco denied coverage because, although James Pemberton was a pedestrian at the time of his injury, he was not struck by a vehicle as required to trigger coverage under the policy.
Prior to James Pemberton's death, Pemberton alleges that defendants made misleading misrepresentations concerning benefits, advantages, and terms of the policies to plaintiff and her husband. Pemberton provides an undated letter received from Amoco shortly after purchasing the accidental death and injury policy in which it is stated:
From now on, whenever you step out your front door, your policy will be protecting you — as a driver, as a passenger, as a pedestrian — 24 hours a day, 365 days a year — whether you're off on a vacation, going to or coming from work, taking the family to church or just walking around the block to stretch your legs a bit.
Pemberton alleges that this letter led her and her husband to believe that the policy provided coverage whenever they stepped out the front door as drivers, passengers, and pedestrians.
Plaintiff filed this cause of action in Circuit Court of Bradley County, Tennessee, on June 27, 2001. The defendants removed this cause to the Eastern District of Tennessee on July 31, 2001.
III. ANALYSIS
A. Claims Against Life Investors
1. Cause of Death
Life Investors asserts that the insurance contract it had with James Pemberton precluded recovery if death is not caused "directly and independently of all other causes." Life Investors further asserts that the death certificate lists several underlying causes of death other than hip fracture. Life Investors argues that Pemberton cannot recover, as a matter of law, because the decedent's death was not a result of an "injury" as defined in the insurance contract and was not a covered loss. Conversely, Pemberton argues that the decedent's death was accidental as it was a direct result of decedent's hip fracture following a fall. The existence of other diseases or conditions did not contribute to the cause of death.
Life Investors cites three Tennessee cases to support its argument. See Britton v. Prudential Ins. Co., 330 S.W.2d 326 (Tenn. 1959); Reserve Life Ins. Co. v. Whittemore, 442 S.W.2d 266 (Tenn.Ct.App. 1969); Wheelock v. Provident Life Accident Ins. Co., 10 Tenn. App. 184 (1929). Likewise, Pemberton relies on case law to support her argument. See Riddlebarger v. Prudential Ins. Co. of America, 622 S.W.2d 524 (Tenn. 1981); North American Ins. Co. v. Ellison, 267 S.W.2d 115 (Tenn.Ct.App. 1954). At issue in each of these cases is whether the decedent's cause of death was accidental and, thus, covered under the terms of the insurance contract. In each of these cases, the relevant contract language was similar to that in the case at bar. Both parties attempt to distinguish the facts of Pemberton's case from those cases cited by the other party. The cases relied upon are good law and, because Tennessee law controls this case, are mandatory authority on this Court.
In an action for benefits under a policy covering death resulting solely from accidental injury, the burden is on the plaintiff to prove that the death of the insured resulted solely from accidental injury. Whittemore, 442 S.W.2d at 271 (Tenn.Ct.App. 1969). In Britton, the Tennessee Supreme Court stated the general rule in these contract disputes:
It is the general rule that if the insured, at the time of the alleged accidental injury, was also suffering from a disease, and the accident aggravated the disease or the disease aggravated the effects of the accident, and actively contributed to the disability or death occasioned thereby, there can be no recovery upon the policy.
Britton, 330 S.W.2d at 330. Notwithstanding this rule, the court has made it clear that "there may be cases of this sort in which the evidence does not justify a recovery and there may be cases of this sort in which the evidence may justify a verdict." Whittemore, 442 S.W.2d at 274 (showing that the Britton court acknowledged that these cases may be distinguished on the facts as the Ellison court had done).
The Court notes that the Britton court stated, "We have concluded after reading many cases on the subject, including numerous ones from this State, that in most of these cases, if not all, the result of them depends upon the particular facts developed in each case." The Court agrees. The result of this Pemberton's case will depend upon the facts developed herein.
All of the cases cited by the parties were on appeal after full trial; they were not decided on summary judgment. Those courts had the benefit of receiving the testimony of several witness, including that of treating physicians, family doctors, and medical examiners who issued opinions on the cause or causes of death. The facts presented in this case, however, are limited. So limited, in fact, that any analysis in light of the relevant case law would be meaningless.
Life Investors does not meet its burden of demonstrating that no genuine issue of material fact exists. Life Investors only offers its speculation on the meaning of scratched out words on the death certificate and its interpretation of secondary and contributing causes of death. Pemberton, on the other hand, has produced the death certificate that clearly states "Hip Fracture (Fall)" is the immediate cause of James Pemberton's death. Pemberton also produced a letter in which the doctor opined that "death was the result of complications incurred following fracture of the hip and shoulder." Should the evidence at trial show that one or more of James Pemberton's pre-existing conditions contributed to his death, in contravention of the policy terms, then Life Investors will be entitled to judgment as a matter of law. On summary judgment, however, this Court will not engage in speculation or weigh the evidence in this matter. The plaintiff has met her burden in establishing a genuine issue of material fact regarding decedent's cause of death. Accordingly, the motion for summary judgment on this ground will be DENIED.
2. Bad Faith
Life Investors also argues that Pemberton has not offered any proof that its refusal to pay insurance benefits was in bad faith and therefore she cannot recover under § 56-7-105 of the Tennessee Code. The statute provides that:
The insurance companies of this state, and foreign insurance companies and other persons or corporations doing an insurance or fidelity bonding business in this state, in all cases when a loss occurs and they refuse to pay the loss within sixty (60) days after a demand has been made by the holder of the policy or fidelity bond on which the loss occurred, shall be liable to pay the holder of the policy or fidelity bond, in addition to the loss and interest thereon, a sum not exceeding twenty-five percent (25%) on the liability for the loss; provided, that it is made to appear to the court or jury trying the case that the refusal to pay the loss was not in good faith, and that such failure to pay inflicted additional expense, loss, or injury including attorney fees upon the holder of the policy or fidelity bond; and provided further, that such additional liability, within the limit prescribed, shall, in the discretion of the court or jury trying the case, be measured by the additional expense, loss, and injury including attorney fees thus entailed.
TENN. CODE ANN. § 56-7-105(a) (2002) (emphasis added).
Whether a refusal to pay benefits was done in bad faith cannot be determined as a matter of law on a motion for summary judgment. The law is clear that the bad faith determination is a question of fact for the jury. Doochin v. U.S. Fidelity Guaranty Co., 854 S.W.2d 109, 112 (Tenn.Ct.App. 1993). Therefore, the motion for summary judgment on this ground will be DENIED. Pemberton will bear the burden of proving bad faith at trial.
3. Tennessee Consumer Protection Act
Pemberton contends that the defendant's refusal to pay benefits is an "unfair or deceptive act or practice" in violation of the Tennessee Consumer Protection Act, TENN. CODE ANN. §§ 47-18-101 et seq. ("TCPA"), particularly where the insurance company had medical proof of the accidental nature of the insured's death. Life Investors challenges this claim, asserting that a denial of benefits is neither unfair nor deceptive where the denial of the plaintiff's claim is based upon the insured's death not coming within the provisions of a covered loss.
The TCPA applies to acts and practices of insurance companies, including the handling of claims. See Myint v. Allstate Ins. Co., 970 S.W.2d 920, 925 (Tenn. 1998); Sparks v. Allstate Ins. Co., 98 F. Supp.2d 933, 937-38 (W.D.Tenn. 2000).
Life Investors does not provide this Court with any proof regarding its reasons for denying coverage — only bare assertions. Life Investors may or may not have acted unfairly or deceptively in denying Pemberton's claim on the basis that James Pemberton's death did not result directly and independently of accidental causes. A weighing of all the facts is necessary to make this determination. Pemberton, with the death certificate and the doctor's letter explaining the cause of death, has established that an issue of material fact exists. As such, summary judgment is not appropriate and will be DENIED.
As a final matter, the Court notes that Pemberton has not pursued the claim of misrepresentation against Life Investors as asserted in paragraph 24 of the Complaint. The Court will thus treat this claim as abandoned.
B. Claims Against Amoco
1. Cause of Death
Pemberton does not oppose Amoco's factual assertions or legal conclusion that James Pemberton's injury and death was not caused by one of the policy's specified causes. There is no dispute that James Pemberton was not struck by a vehicle while he was a pedestrian. As such, Amoco is not contractually obligated to pay benefits under the policy to Pemberton. Amoco's motion for summary judgment will be GRANTED and this claim against Amoco will be DISMISSED.
2. Tennessee Insurance Trade Practices Act
Pemberton asserts that one of her claims against Amoco is based on Tenn. Code Ann. § 56-8-104(1)(a) which defines certain false information and advertising activities as unfair or deceptive acts or practices in the business of insurance. Pemberton further asserts that Amoco mailed a letter to the Pembertons that misrepresented the terms of policy's coverage. Amoco challenges this claim on the grounds that § 56-8-104 does not provide for a private cause of action and, even if a private cause of action existed, the claim should be dismissed because the letter does not contain any false statements and the Pembertons were under an obligation to review the policy and are consequently charged with the knowledge of the policy's contents.
The Court need not address Amoco's latter challenges because "no private right of action may be maintained under the [Tennessee Insurance Trade Practices Act, Tenn. Code Ann. §§ 56-8-101 et seq.]." Myint v. Allstate Ins. Co., 970 S.W.2d 920, 924 (Tenn. 1998). Accordingly, Pemberton's claim under the Act will be DISMISSED.
3. Tennessee Consumer Protection Act
Pemberton contends that Amoco's misrepresentation of benefits is an "unfair or deceptive act or practice" in violation of the TCPA. Amoco contends that a letter, that contains no false statements and was received after the plaintiff purchased the policy, cannot be, as a matter of law, an unfair or deceptive act affecting trade or commerce where the plaintiff did not suffer any resulting harm. The Court agrees.
Section 47-18-109 of the TCPA creates a private cause of action for those who suffer a monetary or property loss as the result of any unfair or deceptive act prohibited by its provisions. TENN. CODE ANN. § 47-18-109(a)(1). Assuming, arguendo, that Amoco's mailing of the letter to the Pembertons after they purchased the "Traffic and Travel Accident" policy is an unfair or deceptive act or practice, Pemberton cannot establish any loss as a result of the letter. There are no factual disputes here: the parties agree that the letter was mailed after the Pembertons purchased and received the policy; the plaintiff does not assert that the letter or any other statement by Amoco induced the purchase of the policy; and the exclusionary language is unambiguously stated in the policy. The letter has not caused Pemberton to suffer any loss. Accordingly, the plaintiff's TCPA claim against Amoco will be DISMISSED.
IV. CONCLUSION
For the foregoing reasons, the Life Investors's motion [Court File No. 11] will be DENIED and Amoco's motion [Court File No. 18] will be GRANTED. An order will enter.