Kaminsky et al v. Pruco Life Insurance Company et al
MEMORANDUM OPINION re 26 Motion for Summary Judgment. Pruco's 36 and 39 MOTIONs to Strike are DENIED; Kaminsky's 43 MOTION for Extension of Time to Reply to Pruco's Motion for Summary Judgment is GRANTED. Signed by Judge Abdul K Kallon on 5/12/2015. (YMB)
2015 May-12 PM 12:07
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
JULIE KAMINSKY AND
PRUCO LIFE INSURANCE
COMPANY, et al.,
Civil Action Number
Plaintiffs Julie Kaminsky and Nannette Schutta Lennitt commenced this
action seeking to enforce an insurance policy that Defendant Pruco Life Insurance
Company1 issued to David Schutta in April 2009 (to which Plaintiffs were
beneficiaries). This dispute stems from certain representations that David
Schutta—Ms. Kaminsky’s ex-husband and Ms. Lennitt’s then-fiancé—made when
he applied for the policy. In particular, although Mr. Schutta’s physician diagnosed
him with skin cancer in March 2008, Mr. Schutta omitted this diagnosis from his
application with Pruco. Subsequently, after Mr. Schutta died in August 2010,
Pruco learned about Mr. Schutta’s history of skin cancer, denied Plaintiffs’ claim
Plaintiffs also named various other defendants but have not served any of those defendants. See doc. 18.
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for death benefits, and rescinded the policy. This led to Plaintiffs bringing this
action against Pruco seeking a “declaration of ambiguity in policy language” and
alleging breach of contract, bad faith and unfair practices in investigating the claim
for death benefits, and intentional infliction of emotional distress in failing to
promptly process the claim. See doc. 18.2 Ms. Kaminsky and Pruco have both
moved for summary judgment on the breach of contract claim, and Pruco also
moved for summary judgment on the bad faith, unfair practices, and intentional
infliction of emotional distress claims. Docs. 27, 31, 33. For the reasons below, the
court will grant Pruco’s motion for summary judgment and deny Ms. Kaminsky’s
Plaintiffs also seek a declaration that Pruco “waived the right to assert” any foundation for rescinding the
policy other than the alleged misrepresentation and “is therefore estopped from asserting any other grounds in these
proceedings.” Doc. 18 at 19. The court need not make any such declaration because this is indeed the only grounds
that Pruco asserts for rescinding the policy. See doc. 27.
Pruco’s motions to strike, docs. 36, 39, are DENIED because the evidence Pruco seeks to strike
ultimately has no impact on the court’s rulings in this case. Ms. Kaminsky’s motion for extension of time to file her
reply to Pruco’s motion for summary judgment, doc. 43, is GRANTED. The court however is troubled by Ms.
Kaminsky’s assertion in her motion that “on May 6[th] she was informed by the Clerk’s office that pro se parties are
no longer allowed to utilize the CM/ECF system and her filing had been removed.” Doc. 43 at 1. This statement is
simply false because the clerk’s office has repeatedly informed Ms. Kaminsky that she could not use the CM/ECF
system. In fact, as a result of her many conversations with the clerk’s office, Ms. Kaminsky reached out to the
undersigned’s law clerk assigned to this case with the following message on April 22, 2015:
I’m not sure if I explained my predicament very well when we last spoke. I have been suspended
by the Alabama Bar, and technically am not supposed to use cm-ecf system to file my documents
in this case . . . . However, tomorrow is my deadline for filing a response to Pruco's Motion for
Summary Judgment. I really need every minute to finish writing. If Judge requires that I refrain
from using the system it, in effect, shorts me a full day of writing time, as I would have to leave
Auburn before noon tomorrow in order to avoid a repeat of my previous disaster. Is it possible for
Judge Kallon to give me permission to use the cm-ecf system in this case? Do you think that he
would consider it?
The court denied Ms. Kaminsky’s request by email and directed her to “mail [her] response to the clerk’s office
rather than using the CM/ECF system.” Put simply, Ms. Kaminsky knew well prior to the May 5, 2015 deadline that
she was precluded from using the CM/ECF system, and yet decided to ignore this court’s directives and then
decided to misrepresent facts in a motion. The court has no idea why the Alabama State Bar suspended Ms.
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I. STANDARD OF REVIEW FOR SUMMARY JUDGMENT
Under Rule 56(a) of the Federal Rules of Civil Procedure, summary
judgment is proper “if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” To support
a summary judgment motion, the parties must cite to “particular parts of materials
in the record, including depositions, documents, electronically stored information,
affidavits or declarations, stipulations, admissions, interrogatory answers, or other
materials.” FED. R. CIV. P. 56(c). Moreover, “Rule 56(c) mandates the entry of
summary judgment, after adequate time for discovery and upon motion, against a
party who fails to make a showing sufficient to establish the existence of an
element essential to that party’s case, and on which that party will bear the burden
of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving
party bears the initial burden of proving the absence of a genuine issue of material
fact. Id. at 323. The burden then shifts to the nonmoving party, who is required to
“go beyond the pleadings” to establish that there is a “genuine issue for trial.” Id. at
324 (citation and internal quotation marks omitted). A dispute about a material fact
is genuine “if the evidence is such that a reasonable jury could return a verdict for
the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The court must construe the evidence and all reasonable inferences arising from it
Kaminsky, and frankly based on her conduct, has reservations about Ms. Kaminsky’s reinstatement. In the event,
however, that Ms. Kaminsky is reinstated, the court hopes that Ms. Kaminsky will take seriously her obligations
under Alabama Rule of Professional Conduct 3.3 (candor toward the tribunal).
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in the light most favorable to the non-moving party. Adickes v. S. H. Kress & Co.,
398 U.S. 144, 157 (1970); see also Anderson, 477 U.S. at 255 (all justifiable
inferences must be drawn in the non-moving party’s favor). However, “mere
conclusions and unsupported factual allegations are legally insufficient to defeat a
summary judgment motion.” Ellis v. England, 432 F.3d 1321, 1326 (11th Cir.
2005) (per curiam) (citing Bald Mountain Park, Ltd. v. Oliver, 863 F.2d 1560,
1563 (11th Cir. 1989)). Furthermore, “[a] mere ‘scintilla’ of evidence supporting
the opposing party’s position will not suffice; there must be enough of a showing
that the jury could reasonably find for that party.” Walker v. Darby, 911 F.2d 1573,
1577 (11th Cir. 1990) (citing Anderson, 477 U.S. at 252).
II. FACTUAL BACKGROUND
The parties agree that Mr. Schutta never disclosed his March 2008 diagnosis
of malignant melanoma in his application for life insurance with Pruco. In fact,
Plaintiffs do not dispute that Mr. Schutta on three occasions answered “no” to
questions asking if he had ever been diagnosed with “cancer, tumor leukemia,
melanoma, or lymphoma.” See docs. 33 at 10; 33-1 at 3; (Pruco Underwriting
Telephone Interview at 9:00). Nonetheless, Plaintiffs challenge Pruco’s denial of
their claim and rescission of the policy based on their contention that Mr. Schutta’s
low “intelligence level” prevented him from fully comprehending Pruco’s
questions. See doc. 31 at 4. According to Plaintiffs, Mr. Schutta was “not a wellPage 4 of 18
educated man,” and his “conversational vocabulary was quite limited unless the
conversation concerned NASCAR, hunting, cooking, or heavy highway
construction.” Doc. 31-1 at 54. Because of his allegedly limited vocabulary, Mr.
Schutta frequently “used a word that did not mean what he was trying to convey,”
and often “did not understand what the other participant in [a] conversation was
trying to convey to him.” Id. As such, Plaintiffs’ position is that Mr. Schutta—in
answering “no” to three separate questions asking him about any prior diagnosis of
cancer—answered “to the best of his knowledge and belief.” See docs. 31 at 46; 33
at 10; 33-1 at 46.
Plaintiffs also point out that, during the application process, Mr. Schutta
disclosed to Pruco the identity of the physician who diagnosed and treated his skin
cancer. See doc. 33-1 at 3. A review of Mr. Schutta’s application shows that he in
fact listed a Dr. Marder as his treating physician, provided Dr. Marder’s contact
information, and stated that the reason for his last visit was a “check-up.” Id.
However, the record contains no evidence that Mr. Schutta mentioned that Dr.
Mader treated him for skin cancer. Nonetheless, Plaintiffs presumably believe Mr.
Schutta’s mention of getting a check-up from Dr. Marder is sufficient to place
Pruco on notice of Mr. Schutta’s skin cancer. See id. at 8 n. 10. In light of this,
Plaintiffs believe that Pruco “had the opportunity to request Dr. Marder’s records
before approving Mr. Schutta’s application.” Id. In any event, Pruco did not
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request Mr. Schutta’s medical records (and therefore did not learn of Mr. Schutta’s
history of skin cancer) prior to issuing him a life insurance policy on April 13,
2009. See doc. 28-1 at 4. Instead, Pruco sought medical records after Mr. Schutta’s
death in August 20104 as part of Pruco’s “contestable death claim investigation,”
which is a “routine procedure whenever an insured dies within the first two years
of coverage.” Docs. 28-1 at 4; 28-2 at 3; 33-2 at 16. Ultimately, based on Pruco’s
findings during its investigation of the prior cancer diagnosis, Pruco denied
Plaintiffs’ claim for death benefits, rescinded the policy, and refunded past
premium payments to Plaintiffs. Doc. 33-2.
At the heart of this dispute is whether Mr. Schutta’s failure to disclose his
history of cancer justified Pruco’s rescission of the policy and denial of death
benefits. Pruco seeks summary judgment on the breach of contract, “declaration of
ambiguity in policy language,” bad faith, unfair practices, and intentional infliction
of emotional distress claims, contending that Mr. Schutta’s failure to disclose his
history of cancer justified Pruco’s actions. See doc. 26. Ms. Kaminsky seeks partial
summary judgment with respect to the breach of contract claim contending that
Mr. Schutta did not make any material misrepresentation on the application. See
While there is no record evidence establishing the cause of Mr. Schutta’s death, Ms. Kaminsky maintains Mr.
Schutta died of “causes undeniably unrelated to his medical history with Dr. Marder’s office. From Mr. Schutta’s
last visit with Dr. Marder in January 2009 through his death, he never sought treatment for another suspicious skin
lesion.” Doc. 31 at 9.
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doc. 31. In responding to Pruco’s motion, Ms. Kaminsky concedes that “[t]here is
no dispute as to the material facts in this case” and that the court may resolve this
case on summary judgment.5 Doc. 35 at 1. The court will address the breach of
contract and ambiguity claims first and then turn to the bad faith, unfair practices,
and intentional infliction of emotional distress claims.
A. Breach of contract and ambiguity claims
Plaintiffs claim that Pruco breached the insurance policy in denying death
benefits, and that the application questions regarding Mr. Schutta’s history of
cancer were ambiguous (presumably justifying Mr. Schutta’s failure to disclose his
history of cancer). See doc. 18 at 15-16. As an initial matter, the parties agree that
Florida law applies to the contract claims because the “policy was executed in
Florida.” See docs. 27 at 10; 31 at 46-48; 33 at 1; 33-1 at 17. Indeed, under
Alabama law, “the law of the state wherein the contract was executed governs
questions regarding validity and interpretation of the contract.” Am. Nonwovens,
Inc. v. Non Wovens Eng’g, S.R.L., 648 So. 2d 565, 567 (Ala. 1994); see also
Allison v. Vintage Sports Plaques, 136 F.3d 1443, 1446 n. 6 (11th Cir. 1998) (“A
district court must apply the choice-of-law rules of the state in which it sits.”).
Relevant here, Florida law provides that misrepresentations in a policy application
Although Ms. Lennitt failed to respond to Pruco’s motion for summary judgment, the court has carefully reviewed
all record evidence, resolved all inferences in favor of Plaintiffs, and considered the merits of the motion in reaching
its decision. See United States v. One Piece of Real Prop. Located at 5800 SW 74th Ave., Miami, Fla., 363 F.3d
1099, 1101 (11th Cir. 2004) (“[T]he district court cannot base the entry of summary judgment on the mere fact that
the motion was unopposed, but, rather, must consider the merits of the motion.”).
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“may prevent recovery under [a] contract or policy” if (a) the misrepresentation is
“material to the acceptance of the risk or to the hazard assumed by the insurer,” or
(b) had the insurer known the true facts, “the insurer in good faith would not have
issued the policy or . . . would not have issued it at the same premium rate.” FLA.
STAT. § 627.409(1)(a)-(b); see also Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v.
Sahlen, 999 F.2d 1532, 1536 (11th Cir. 1993) (“Misrepresentations and
incorrect statements in a policy application bar recovery under the policy
where, inter alia, they are material to the risk assumed by the insurer or the insurer
would not have offered the same terms had it known the truth.”) (citing FLA. STAT.
§ 627.409(1)(a)-(b)). The points of contention here are whether Mr. Schutta’s
statements were “misrepresentations,” and if yes, whether they were “material”
under Section 627.409(1)(a). For the reasons below, the court agrees with Pruco
that Mr. Schutta’s statements were material misrepresentations justifying denial of
benefits and rescission of the insurance policy. Before reaching the Section
627.409 analysis, however, the court will first address Plaintiffs’ contention about
the purported ambiguity of the application questions.
1. Alleged ambiguity of application question
Under Florida law, “interpretation of an insurance contract is a matter of law
to be decided by the court,” and an “insurance contract is deemed ambiguous if it
is susceptible to two or more reasonable interpretations that can fairly be made.”
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Gas Kwick, Inc. v. United Pac. Ins. Co., 58 F.3d 1536, 1539 (11th Cir. 1995).
Furthermore, “[a] provision is not ambiguous simply because it is complex or
requires analysis.” Garcia v. Fed. Ins. Co., 969 So. 2d 288, 291 (Fla. 2007). Here,
Mr. Schutta filled out two written application forms that asked whether he had
“been diagnosed with or treated by a member of the medical profession for . . .
cancer, tumor, leukemia, melanoma, or lymphoma.” Doc. 33 at 10; 33-1 at 3. The
written application offered Mr. Schutta two answer choices: yes, or no. Doc. 33 at
10; 33-1 at 3. In addition to the written application, Pruco interviewed Mr. Schutta
over the phone and asked the exact same question orally. (Telephone Interview at
9:00). The court finds the questions susceptible to only one interpretation—
whether the applicant has a history of cancer. As such, the court rejects Plaintiffs’
claim that the application was ambiguous.
2. Whether Mr. Schutta’s statements constitute “misrepresentations”
Turning to the Section 627.409 analysis, Plaintiffs contend that Pruco’s
application—which required Mr. Schutta to certify that he answered the
application questions “to the best of his knowledge and belief,” see doc. 33 at 12—
“incorporated the ‘knowledge and belief’ standard,” doc. 31 at 36. According to
Plaintiffs, under this “lowered analytical” standard, “[i]t will be impossible for
Pruco to prove any material misrepresentation by Mr. Schutta” because this
“knowledge and belief standard” requires only a showing that the applicant “knew
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and believed at the time he answered the questions in the application” that his
answers were truthful. Doc. 33 at 1. Moreover, Plaintiffs assert, “Mr. Schutta did
not know the meaning of the word melanoma when he answered the application
questions” and therefore could not have made any misrepresentation about his
history of skin cancer. Id.
Plaintiffs are generally correct that the “knowledge and belief” language in
Pruco’s application forms “imposed a different requirement of accuracy than that
provided in [S]ection 627.409.” William Penn Life Ins. Co. of New York v. Sands,
912 F.2d 1359, 1364 (11th Cir. 1990); see also Green v. Life & Health of Am., 704
So. 2d 1386, 1391 (Fla. 1998) (explaining that insurer “chose to draft and
incorporate a different ‘knowledge and belief’ standard in its application, thereby
bypassing the rigid statutory standard” of Section 627.409). Under the “knowledge
and belief” standard, “[w]hat the applicant in fact believed to be true is the
determining factor in judging the truth or falsity of his answer, but only so far as
that belief is not clearly contradicted by the factual knowledge on which it is
based.” Id. (emphasis added) (citations, alterations, and internal quotation marks
omitted). In other words, whereas Section 627.409 applies even to unintentional
misrepresentations, see Cont’l Assur. Co. v. Carroll, 485 So. 2d 406, 408 (Fla.
1986), the less rigid “knowledge and belief standard” requires an intentional
misrepresentation, see Green, 704 So. 2d at 1391 (explaining that “unknowing
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misstatements” do no justify rescission of an insurance policy under the
“knowledge and belief” standard); Mims v. Old Line Life Ins. Co. of Am., 46 F.
Supp. 2d 1251, 1255 (M.D. Fla. 1999) (“knowledge and belief” language in
insurance application requires showing that insured “intentionally made the
misrepresentations that [insurer] claims as grounds for rescission”). In that regard,
Plaintiffs’ reliance on the “knowledge and belief” language overlooks that Mr.
Schutta’s answers were indeed “intentional” misrepresentations because they
undeniably contradicted his factual knowledge of his skin cancer diagnosis. More
specifically, even accepting that Mr. Schutta did not know the meaning of the word
“melanoma,” by Plaintiffs’ own contentions, Mr. Schutta “knew that he had been
treated by Dr. Marder for ‘skin cancer’” and frequently referred to his diagnosis as
“skin cancer.” Docs. 31 at 3; 33 at 1 (emphasis added); see also doc. 45 at 3 (“In
our frequent phone conversations . . . he always used the words “skin cancer[.]”).6
Yet, despite this knowledge, and as Plaintiffs agree, in responding to application
questions asking whether Mr. Schutta had been diagnosed with “cancer, tumor
leukemia, melanoma, or lymphoma,” Mr. Schutta answered “no” on three
occasions. Based on this undisputed evidence, the court rejects Plaintiffs’
contention that Mr. Schutta answered to “the best of his knowledge and belief.”
Along the same lines, Plaintiffs’ position that Mr. Schuuta “knew he had skin cancer . . . [but] believed he was
cured,” doc. 44 at 1; see also doc. 45 at 3, misses the mark because Pruco’s application asked if Mr. Schutta “had
ever been diagnosed” with cancer—which is an entirely different question than one asking whether he had
previously been diagnosed with skin cancer that is now cured. For the same reason, Plaintiffs’ reliance on Green, id.
at 3, is misplaced because the court in that case ruled in favor of the insured in part because the insured “did not
know the medical diagnosis for his problems,” 704 So. 2d at 1391.
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See Joseph v. Zurich Life Ins. Co. of Am., 159 F. App’x 114, 117 n. 3 (11th Cir.
2005) (under the knowledge and belief standard, “the insurer may make [a]
showing [of misrepresentation] on summary judgment by establishing that there
were underlying facts known to the applicant that clearly contradicted the
information on the application”) (citing Mimms, 46 F. Supp. 2d at 1256 (“[E]ven if
[the insured] were alive and able to testify regarding [his] beliefs as to the veracity
of information [he] gave . . . , if the underlying facts known to [him] were in clear
contradiction of [his] testimony, [his] stated beliefs would not be credited and [he]
would be deemed to ‘know’ of the misrepresentations.”)). Therefore, the court
rejects Plaintiffs’ argument that Mr. Schutta did not knowingly make a false
statement on his application.
3. Whether the misrepresentations were material
To establish materiality under Section 627.409(1)(a), the insurer must show
that “a truthful statement would put a careful insurer on notice that further inquiry
is warranted to adequately gauge the risk of issuing a policy.” Mimms, 46 F. Supp.
2d at 1256. Plaintiffs contend that Mr. Schutta’s misrepresentations are not
material because Pruco “routinely accepted such risks.” Doc. 31 at 48. Even if true,
the relevant inquiry is whether the information “might reasonably have influenced
[Pruco] in deciding whether to accept the risk.” Carter v. United of Omaha Life
Ins., 685 So. 2d 2, 6 (Fla. Dist. Ct. App. 1996). Significantly, in general,
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“[m]isrepresentations related to an insured’s medical history or condition
obviously affect an insurer’s risk in issuing a life insurance policy.” Mimms, 46 F.
Supp. 2d at 1256; see also Fernandez v. Bankers Nat. Life Ins. Co., 906 F.2d 559,
565 (11th Cir. 1990) (under Florida law, “[m]isrepresentations on an insurance
application are material for preventing recovery when the misstatement obviously
affects the risk of insurance”). In fact, even according to Plaintiffs’ own
evidentiary submissions consisting of general underwriting practices, insurance
applicants with a history of skin cancer “must be underwritten quite carefully.”
Doc. 31 at 13. Specifically, the underwriting process requires review of an
applicant’s medical records to determine “the thickness of the melanoma” and to
properly “prognosticat[e] the mortality risk.” Id. Consistent with these standard
industry practices, where an applicant has a history of skin cancer, Pruco’s
underwriting procedures require retrieving additional documentation, including a
pathology report, which Pruco relies on to determine the classification of
malignant melanomas based on the tumor’s characteristics—i.e., thickness, level of
invasion, growth pattern, etc. Id. at 27, 30, 32. Based on a tumor’s classification,
Pruco then determines whether to issue a policy and at what premium rate. See id.
at 28. In light of this process, it is clear to the court that knowledge of whether an
applicant has a history of skin cancer is indeed “material to the acceptance of the
risk” under Section 627.409(1)(a) since the information would place a “careful
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insurer on notice that further inquiry is warranted to adequately gauge the risk of
issuing a policy.”7 Mimms, 46 F. Supp. 2d at 1256; Fernandez, 906 F.2d at 565.
Accordingly, based on Mr. Schutta’s material misrepresentation, the court
concludes that Pruco’s decision to deny benefits and rescind the policy was
justified pursuant to Section 627.409. See Joseph, 159 F. App’x at 117 n. 3, 118
(11th Cir. 2005) (affirming grant of summary judgment on breach of contract claim
where insured’s application misrepresented facts that “clearly contradicted” the
insured’s “knowledge and belief” and that were material to the insurer’s
“assessment of the risk”).8 For these reasons, the court will grant summary
The court rejects Plaintiffs’ argument that Mr. Schutta placed Pruco on notice that it should retrieve his medical
records by listing on his application that he had visited Dr. Marder for a check-up because, under Florida law, “[a]n
insurer is entitled to rely on the truthfulness of an applicant’s statement of medical history and has no duty to make
further inquiries.” de Guerrero v. John Hancock Mut. Life Ins. Co., 522 So. 2d 1032, 1033 (Fla. Dist. Ct. App.
As further support for this conclusion, the court notes that, according to Pruco’s underwriting manager, Dorothy
Diehl, “if Mr. Schutta had disclosed his treatment for [skin cancer], Pruco would have obtained and reviewed Mr.
Schutta’s medical records prior to issuing the policy.” Id. at 5. Based on the medical records—which in addition to
the March 2008 malignant melanoma also revealed multiple dysplastic nevi—Pruco “would have issued the policy
with a Special Class A rating” and a higher premium pursuant to its underwriting manual. Id; doc. 28-2 at 2-4. This
also justifies Pruco’s decision to deny benefits and rescind the policy under Section 627.409(1)(b). See Nat’l Union
Fire Ins. Co. of Pittsburgh v. Sahlen, 807 F. Supp. 743, 747 (S.D. Fla. 1992) aff’d and remanded sub nom. Nat’l
Union Fire Ins. Co. of Pittsburgh, Pa. v. Sahlen, 999 F.2d 1532 (11th Cir. 1993) (misrepresentations justifies denial
of benefits where insurer “has presented undisputed evidence that the [policy] would not have been issued at the
same premium rate”); de Guerrero v. John Hancock Mut. Life Ins. Co., 522 So. 2d 1032, 1033 (Fla. Dist. Ct. App.
1988) (misrepresentation justifies denial of benefits where “[t]he undisputed affidavits filed by the insurer state that
had the deceased given the true facts the insurance policy . . . would not have been issued on the same terms”).
While Plaintiffs contend that Pruco “would have written the policy exactly as it actually did” rather than at a higher
premium, doc. 35 at 8, Plaintiffs do not support their position with any evidence based on Pruco’s policies or
evidence from underwriting experts. Instead, Plaintiffs rely on opinions from dermatologists and oncologists as to
how insurance companies generally should underwrite a policy given Mr. Schutta’s history—not how Pruco actually
would underwrite the policy. See docs. 33-2 at 17-18; 35 at 22-25. Facts, rather than speculation or conjecture, are
required to defeat a motion for summary judgment. Cordoba v. Dillard’s, Inc., 419 F.3d 1169, 1181 (11th Cir.
2005) (“Speculation does not create a genuine issue of fact; instead, it creates a false issue, the demolition of which
is a primary goal of summary judgment.”) (citation and internal quotation marks omitted).
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judgment in Pruco’s favor with respect to the breach of contract and the
“declaration of ambiguity” claims.
B. Bad faith, unfair practices, and intentional infliction of emotional
Under Alabama law, a court decides “the substantive rights of an injured
party according to the law of the state where the injury occurred.” Fitts v.
Minnesota Min. & Mfg. Co., 581 So. 2d 819, 820 (Ala. 1991). In this case, Ms.
Kaminsky was a resident of Alabama when Pruco denied death benefits, see doc.
33-2 at 16, and Ms. Lennitt was a resident of Florida at the time, see doc. 33-2 at
11. Therefore, the court concludes Ms. Kaminsky’s injuries occurred in Alabama
and will apply Alabama law to her tort claims and Florida law to Ms. Lennitt’s tort
1. Bad faith and unfair practices
Plaintiffs claim that Pruco acted in bad faith and violated the Florida Unfair
Trade Practices Act in investigating the claim. However, because, as the court
explained above, Pruco’s denial of death benefits was justified, the bad faith claims
fail under Alabama law and Florida law. See State Farm Fire & Cas. Co. v.
Brechbill, 144 So. 3d 248, 260 (Ala. 2013), reh’g denied (Jan. 17, 2014) (“A badfaith-refusal-to-investigate claim cannot survive where the trial court has expressly
found as a matter of law that the insurer had a reasonably legitimate or arguable
reason for refusing to pay the claim at the time the claim was denied.”); Blanchard
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v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289, 1291 (Fla. 1991) (“[A]n
insured’s underlying first-party action for insurance benefits against the insurer
necessarily must be resolved favorably to the insured before the cause of action for
bad faith in settlement negotiations can accrue.”). Likewise, Plaintiffs’ claims
under the Florida Uniform Trade Practices Act fail because “a party cannot pursue
[such] a cause of action for unfair settlement practices until the party has
determined that it is entitled to recover under the insurance contract at issue.”
Progressive Am. Ins. Co. v. Rural/Metro Corp. of Florida, 994 So. 2d 1202, 1208
(Fla. Dist. Ct. App. 2008). For these reasons, the court will grant summary
judgment in favor of Pruco on these claims.
2. Intentional infliction of emotional distress
The intentional infliction of emotional distress claims (more commonly
known as “outrage” claims in Alabama) also fail because both Florida and
Alabama law require a showing that Pruco subjected Plaintiffs to “extreme” and
“outrageous” conduct that goes “beyond all possible bounds of decency” and is
“utterly intolerable in a civilized society.” Little v. Robinson, 72 So. 3d 1168, 1172
(Ala. 2011); Aguilera v. Inservices, Inc., 905 So. 2d 84, 92 (Fla. 2005). In the
insurance claim context, the Alabama Supreme Court has only recognized an
outrage claim where the insurer’s conduct in coercing settlement of a claim for
benefits was “so horrible, so atrocious, [and] so barbaric . . . that no civilized
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person could be expected to endure the acts committed without suffering mental
distress.” Nat’l Sec. Fire & Cas. Co. v. Bowen, 447 So. 2d 133, 141 (Ala. 1983)
(finding outrage where investigators for the insurer threatened bodily injury to
insured and his children and held him at gunpoint to coerce settlement of his
insurance claim). While Plaintiffs believe that Pruco’s employees acted
“recklessly” in failing to promptly process the claim for death benefits, under
Alabama law, insurers “ha[ve] the right to investigate . . . major claim[s] . . . and to
question those persons who ha[ve] knowledge of [the insured’s] prior medical
history.” Kizziah v. Golden Rule Ins. Co., 536 So. 2d 943, 949 (Ala. 1988)
(granting summary judgment on outrage claim where insurer investigated the claim
and denied benefits based on misrepresentation in application). Along the same
lines, under Florida law, a party is “never liable [for intentional infliction of
emotional distress] . . . where [it] has done no more than to insist upon [its] legal
rights in a permissible way.” Metro. Life Ins. Co. v. McCarson, 467 So. 2d 277,
279 (Fla. 1985). This is precisely what Pruco did. After Plaintiffs filed a claim for
death benefits in early October 2010, Pruco sought Mr. Schutta’s medical records
and interviewed Plaintiffs within one month, and lawfully denied benefits on
December 9, 2010. See docs. 18 at 9; 33-2 at 3-11. The court finds no evidence that
Pruco engaged in “extreme” or “outrageous” conduct at any point during this
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process. For these reasons, the court will grant summary judgment on Plaintiffs’
claims for intentional infliction of emotional distress.
For the reasons above, the court concludes that summary judgment in
Pruco’s favor is appropriate.
DONE the 12th day of May, 2015.
ABDUL K. KALLON
UNITED STATES DISTRICT JUDGE
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