Banner Life Insurance Company v. Jacqueline Noel

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 3:11-cv-00434-JRS. Copies to all parties and the district court/agency. [999026044].. [12-1329, 12-1498]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 12-1329

BANNER LIFE INSURANCE COMPANY,
Plaintiff - Appellee,
v.
JACQUELINE L. NOEL,
Defendant - Appellant.

No. 12-1498

BANNER LIFE INSURANCE COMPANY,
Plaintiff - Appellee,
v.
JACQUELINE L. NOEL,
Defendant - Appellant.

Appeals from the United States District Court for the Eastern
District of Virginia, at Richmond.
James R. Spencer, District
Judge. (3:11-cv-00434-JRS)

Argued:

December 5, 2012

Decided:

January 22, 2013

Before WILKINSON, NIEMEYER and GREGORY, Circuit Judges.

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Affirmed by unpublished per curiam opinion.

ARGUED:
John
Tracy
Walker,
MCGUIREWOODS,
LLP,
Richmond,
Virginia, for Appellant.
Robert Barnes Delano, Jr., SANDS
ANDERSON, PC, Richmond, Virginia, for Appellee.
ON BRIEF:
Joseph E. Blackburn, Jr., BLACKBURN, CONTE, SCHILLING & CLICK,
PC, Richmond, Virginia, for Appellant.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Banner

Life

Insurance

Company

(Banner)

filed

for

a

declaratory judgment in the United States District Court for the
Eastern District of Virginia seeking to limit its obligations
under a binder of temporary insurance entered into with Gary
Noel.

Jacqueline Noel, the beneficiary of the policy, opposed

the action and filed a counter-claim for breach of contract.
Following cross-motions for summary judgment, the district court
granted

Banner

declaratory

judgment

limiting

its

obligations

under the binder to remitting the premium paid by Gary.

For the

following reasons, we affirm.

I.
A.
On November 30, 2010, Gary and Jacqueline met with
Banner Life Insurance agent Christopher Roberts to purchase a $1
million
meeting,

life

insurance

Gary

application

policy

completed

packet.

The

on

Gary’s

life.

During

three

documents

as

first

document,

labeled

part

the

of

the

Part

1,

contained biographical questions; the second document, labeled
Part

2,

examined

medical

history;

and

the

third

document,

entitled “Temporary Insurance Application and Agreement” (TIAA),
allowed for temporary insurance coverage pending approval of the
full policy.
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When
truthfully

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filling

provide

out

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Part

information

2,

Gary

about

his

was

required

medical

to

history.

Despite this, Gary failed to disclose his history of elevated
liver function tests, an abnormal abdominal liver ultrasound,
and

that

his

primary

gastroenterologist.

care

physician

referred

him

to

a

Gary also denied having sleep apnea and did

not disclose that his doctor recommended he consult with a sleep
disorder

specialist.

Jacqueline

acknowledges

that

Gary

was

required to disclose this information.
After filling out Part 1 and Part 2, Gary had the
option

of

filling

out

the

TIAA.

The

approval

of

the

life

insurance policy was not contingent upon completion of the TIAA.
The TIAA contained four yes or no questions, all of which had to
be answered no to be eligible for temporary coverage.

At the

bottom of the TIAA was a provision entitled “Other Limitations,”
which read in pertinent part:

“The Insurer’s liability will be

limited to a return of the Amount Remitted if . . . any part of
the

life

insurance

application

or

this

TIAA

contains

a

misrepresentation material to the Insurer.”

Gary answered all

four

provision

questions

“no,”

presumably

bottom, and signed the TIAA.
in the amount of $913.90.

read

the

at

the

Gary remitted payment for the TIAA

Banner acknowledges that Gary filled

out the TIAA truthfully.

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After Gary completed and signed all three documents,
Roberts

submitted

the

application

packet

to

Banner’s

underwriting department.

A Banner underwriting consultant, Sean

Lucas,

application

reviewed

Gary’s

packet.

Because

Gary

admitted to a history of hypertension when completing Part 2,
Lucas ordered and obtained a copy of Gary’s medical records from
his primary care physician.

Upon review of the records, Lucas

learned of Gary’s undisclosed medical problems, and as a result,
was

unable

to

application.
requested

make

a

Before

that

recommendation

he

could

Roberts

gastroenterologist

of

approve

follow

referral.

up

approval
Gary’s

with

Roberts

for

Gary’s

policy,

Gary

Lucas

regarding

obliged,

and

the

informed

Lucas on January 31, 2011, that Gary did not follow up on the
referral.
On
review
medical

of

Thursday,
Gary’s

director.

February

application
He

3,

2011,

and

recommended

Lucas

forwarded
postponing

it

completed
to

his

Banner’s

approval

of

the

policy pending additional follow-up and definitive diagnosis for
the cause of Gary’s elevated liver tests.
between

Sunday,

February

6,

and

Monday,

Gary died sometime
February

7,

before

Banner was able to notify Gary that it was postponing issuing
the

life

insurance

policy.

On

July

5,

2011,

Banner

sent

Jacqueline a letter denying her claim for benefits under the
TIAA

due

to

the

misrepresentations
5

made

in

Part

2

of

the

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application.

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Enclosed with the letter was a check refunding

Gary’s premium payment.

B.
On July 6, 2011, Banner filed a declaratory judgment
action in the district court seeking to either rescind the TIAA
or have the court declare that its obligations were limited to a
return

of

the

premium

paid

by

Gary.

Jacqueline

answered,

denying that Banner was entitled to rescission, claiming that
Banner

was

breach

of

estopped
contract

from
and

rescission,
attorneys’

and

fees.

counterclaiming
At

the

for

close

of

discovery both parties moved for summary judgment.
On

February

15,

2012,

the

district

court

granted

Banner’s motion for summary judgment, asserting that Part 1,
Part

2,

and

the

TIAA

formed

a

single

contract;

that

the

misrepresentations made in Part 2 were material to Banner; and
as a result, Banner’s obligations were limited to returning the
premium paid by Gary per the terms of the TIAA.

Banner Life

Ins. Co. v. Noel, 861 F. Supp. 2d 701 (E.D. Va. 2012).

In a

corollary matter, on April 5, 2012, the district court awarded
Banner attorneys’ fees for having to defend a motion to compel
discovery.
Jacqueline timely appealed, challenging the district
court’s grant of summary judgment and award of attorneys’ fees.
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II.
Jacqueline first argues that the district court erred
in

granting

Banner’s

motion

for

summary

judgment,

limiting

Banner’s obligations to returning the premium paid by Gary.
review a grant of summary judgment de novo.

We

Henry v. Purnell,

652 F.3d 524, 531 (4th Cir. 2011) (en banc).
The

TIAA

entered

into

by

Banner

and

Gary

was

an

independent binder of insurance. 1 The clause in the TIAA, “Other
Limitations,”

instructs

that

any

material

misrepresentations

contained in the life insurance application packet as a whole
limits

Banner’s

obligations

under

the

agreement.

Jacqueline

does not argue that there were no misrepresentations in Part 2
of the application.

Therefore, the pertinent question before

the Court is whether the misrepresentations were material to
Banner,

limiting

its

obligations

under

the

agreement

to

returning the premium paid by Gary.
1

A “binder” is defined as: “An insurer’s memorandum giving
the insured temporary coverage while the application for an
insurance policy is being processed or while the formal policy
is being prepared.” Black’s Law Dictionary 190 (9th ed. 2009).
Despite the district court’s finding to the contrary, the
TIAA was intended to be an independent contract consistent with
Virginia law.
See Va. Code. Ann. § 38.2-304; First Protection
Life Ins. Co. v. Compton, 335 S.E.2d 262 (Va. 1985). This error
is inconsequential given that the TIAA incorporates by reference
the entire application packet.

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“A fact is material to the risk to be assumed by an
insurance company if the fact would reasonably influence the
company’s decision whether or not to issue a policy.”

Mut. of

Omaha Life Ins. Co. v. Echols, 154 S.E.2d 169, 172 (Va. 1967).
Materiality is assessed from the vantage point of the insurance
company and the effect of a misrepresentation on the company’s
Jefferson Standard Life Ins. Co.

“investigation and decision.”
v.

Clemmer,

79

Misrepresentations
insurer

would

F.2d
have

have

724,
been

733

(4th

considered

issued

the

Cir.

material

policy

on

1935).
when

the

different

terms, see Minn. Lawyers Mut. Ins. Co. v. Hancock, 600 F. Supp.
2d

702,

709

(E.D.

Va.

2009);

or

postponed

issuing

the

policy, see Parkerson v. Fed. Home Life Ins. Co., 797 F. Supp.
1308, 1312, 1314-15 (E.D. Va. 1992).
The

evidence

on

the

record

shows

that

the

misrepresentations made by Gary in Part 2 of the life insurance
application packet caused Banner to postpone issuing Gary’s life
insurance policy.
testified
policy

is

that
risk

an

Both Lucas and Banner’s Chief Underwriter
essential

assessment,

element
which

to

issuing

necessarily

an

insurance

depends

truthful disclosure of an applicant’s medical history.

on

the

Lucas

testified that because of Gary’s undisclosed medical history, he
recommended “postpon[ing] [the] case pending additional work up
and definitive diagnosis for cause of elevated liver function
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tests.”

As

a

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result

of

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Gary’s

omissions,

Banner’s

Medical

Director agreed with Lucas’s assessment and officially decided
to postpone issuing a policy. 2
It is evident that Gary’s undisclosed medical history
prompted

Banner

Therefore,

to

Gary’s

postpone

misrepresentations

(finding

materiality);

the
are

insurance
considered

policy.
material

See Parkerson, 797 F. Supp. at 1312, 1314-

under Virginia Law.
15

issuing

that
Mut.

postponement
of

Omaha

Ins.

of

a

Co.,

154

decision
S.E.2d

shows

at

171-73

the

TIAA,

(same).
Jacqueline

tries

to

limit

the

terms

of

asserting that any misrepresentation must be material to the
issuance

of

the

TIAA

itself.

The

TIAA

materiality in the manner Jacqueline suggests.

does

not

limit

The TIAA “Other

Limitations” provision only requires that a misrepresentation be
material to Banner – a material misrepresentation can be found
in

any

part

of

the

application

packet. 3

Accordingly,

the

2

Jacqueline implicitly concedes that the misrepresentations
were material to Banner issuing the life insurance policy. See
Appellant’s Br. 19 (“This clearly shows that Banner is relying
on statements made in Part 2 to issue an insurance policy, not
[to] temporarily bind coverage under the TIAA.”).
3

Jacqueline also argues that since Banner found out the
information independent of Gary’s misrepresentations, that they
cannot be considered “material.”
This argument is baseless.
What was omitted, no matter how it was discovered, caused Banner
to delay issuing Gary a policy.

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misrepresentations made by Gary in Part 2 of the application
packet were material to Banner issuing Gary’s policy given that
they led to a postponement of Banner’s decision.

Under the

plain terms of the TIAA, Banner’s obligations were limited to
remitting the premium. 4

III.
Jacqueline also argues that the district court erred
in

granting

Banner

attorneys’

motion to compel discovery.

fees

for

having

to

contest

a

Jacqueline does not challenge the

court’s ruling on the motion.

We review an award of attorneys’

fees for abuse of discretion.

Robinson v. Equifax Info. Serv.,

LLC, 560 F.3d 235, 243 (4th Cir. 2009) (citation omitted).
On

November

23,

2011,

Jacqueline

moved

to

compel

discovery as to the meaning of a term used in Banner’s notation
system.

This

was

in

spite

of

the

fact

that

Banner

had

previously answered the same question in an interrogatory and
Jacqueline

had

the

opportunity

to

4

depose

Banner

employees.

The parties seek to embroil the Court in a debate on the
principles of equity, asserting a number of equitable remedies
and defenses.
Because this dispute is easily resolved per the
unambiguous terms of the contract, we will not be baited into an
unnecessary debate.
See Catholic Soc. of Religious Literary
Educ. v. Madison Cnty., 74 F.2d 848, 850 (4th Cir. 1935) (a
“fundamental rule in equity in the federal courts is that a suit
will not lie when there is an adequate remedy at law”).

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Banner opposed the motion, arguing that its initial answer was
sufficient and requesting costs for having to defend the motion.
In an order dated December 15, 2011, the district court denied
Jacqueline’s
interrogatory

motion,
was

finding

that

sufficient.

Banner’s

The

answer

district

court

to

the

further

awarded Banner attorneys’ fees in the amount of $1,311 - the
cost of responding to the motion.
The district court essentially awarded attorneys’ fees
because it found that Jacqueline’s motion to compel discovery
was cumulative.

Furthermore, the court only awarded attorneys’

fees for the single motion.

Because the award of attorneys’

fees was not “clearly wrong,” see Plyer v. Evatt, 902 F.2d 273,
277-78 (4th Cir. 1990), the district court did not abuse its
sound discretion.

IV.
Because

the

clear

terms

of

the

TIAA

limit

Banner’s

obligations to remitting the premium paid by Gary, and the award
of

attorneys’

fees

was

well

within

the

district

court’s

discretion, the district court’s judgment is affirmed.

AFFIRMED.

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