United of Omaha Life Insurance Company v. Seay et al

Filing 32

ORDER denying 26 Motion for Summary Judgment. The issue of United's reasonableness in its delay in bringing this interpleader action, as well as issues of unpaid interest, bad faith penalties, and attorney's fees, shall be determined by a trier of fact. This case shall proceed in trial in due course. Signed by Judge Dudley H. Bowen on 11/09/2018. (jlh)

FILED
U.S. DISTRICT COURT
AUC*.'3m D:V.

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA

q pu o. i n
2018 NOV-9 rfl <:• UU

DUBLIN DIVISION

CLERK
UNITED OF OMAHA LIFE

*

INSURANCE COMPANY,

*
5

Plaintiff,

*
*

V.

*

CV 318-010

•k

JONATHAN SEAY, Individually and

*

As Administrator of the Estate

*

Of Lewis E. Seay, Jr., DAVID

*

A. SEAY, SARAH LOU SEAY, and

*

JAEL M. CONNOR,

*
5

Defendants.

*

ORDER

Pending before the Court in this interpleader action is a
motion for discharge brought by Plaintiff United of Omaha Life

Insurance Company ("United").

United also seeks summary judgment

against Defendant Jonathan Seay's counterclaims for

breach of

contract, statutory interest, bad faith penalty, and attorney's
fees.
the

The facts relevant to the motion are not in dispute.

legal

import

of

these

facts,

i.e.,

the

Rather,

reasonableness

United's conduct vis-a-vis the undisputed facts, is disputed.

of
For

this reason. United's motion for discharge and for summary judgment
must be denied as more fully explained below.

I.

BACKGROUND

United issued an accidental death insurance policy covering

the life of Lewis E. Seay, Jr. in the amount of $200,000.

St. of Undisputed Material Facts, Doc. No. 26-3, f 1.)
Jonathan

Seay,

Lewis

Seay's

beneficiary of the Policy.
2016.

(Id. H 4.)

brother,

(Id. H 2.)

was

(Pl.'s

Defendant

designated

as

the

Lewis Seay died on June 1,

The death certificate indicated the manner of

death as homicide, specifically Lewis Seay died because of gunshot

wounds. (Id. HH 5, 8.)

It is undisputed that as a result of Lewis

Seay's death. United was obligated to pay the beneficiary, Jonathan

Seay, $200,000.

(Id. H 7.)

In fact. United received a claim form

for the proceeds, dated October 26, 2016, from Jonathan Seay.^
(Id. H 6.)

Because
conducted

the

death

a routine

of

Lewis

Seay

investigation into

was
the

a

homicide.

claim

United

through

the

services of a third-party investigative firm. Worldwide Resources,

Inc.

(Id. Us.) On November 13, 2016, Special Agent Eugene Howard

of the Georgia Bureau of Investigation reported to Worldwide that
Jonathan Seay was considered a suspect in the death of Lewis Seay

^
Jonathan Seay's cover letter accompanying the claim form
indicates that he had filed a claim on September 1, 2016. (Ans.,
Doc. No. 20, Ex. A.) There is no evidence of this filing other
than Jonathan Seay's hearsay statement in this letter.
For
purposes of the instant motion, the Court will consider October
26, 2016 to be the date upon which United was notified of his
claim.

and that no benefits should be paid on the claim.

(Id. H 9; see

also Doc. No. 26-1, Aff. Of Christine Levine, Ex. B.)
On

December

6,

2016,

Jonathan

Seay

sent

another

letter

demanding the payment of the insurance benefits, which suggested

that United had 60 days to pay to avoid bad faith penalties. (Ans.,
Doc. No. 20, Ex. A.)

Attached to this letter is a purported

Release of Liability, allegedly signed by Lewis and Jonathan Seay's

siblings (David A. Seay, Sarah Lou White, and Jael M. Connor), the
other named defendants in this case.2

On March 23, 2017, a representative of Worldwide again spoke

with Special Agent Howard who stated that Jonathan Seay had not
been cleared and had not been completely cooperative.^
Aff., Ex. C.)

(Levine

Special Agent Howard added that Jonathan Seay

appears to be the last person to see Lewis Seay alive and the first
to find him deceased.

(Id.)

On June 20, 2017, Special Agent Howard advised Worldwide that
the circumstances had not changed.

(Levine Aff., Ex. E.)

On July

27, 2017, Special Agent Howard again advised Worldwide that there

2 United has served the other named defendants in the case but none

of them has filed an answer or otherwise appeared.

3 Defendant Jonathan Seay "disputes" the fact that he had not been
cooperative with law enforcement. (Def.'s Resp. to Pl.'s St. of

Undisputed Material Facts, Doc. No. 30-1, H 10.) Yet he does not
provide any testimony or other evidence to support his contention
as required by the Local Rules of this district.

(See L.R. 56.1,

S.D. Ga. ("Each statement of material fact shall be supported by
a citation to the record.")

were no changes on the case.

(Levine Aff., Ex. F.)

He relayed

that the District Attorney had sent out subpoenas to life insurance
companies to gather information about additional life insurance
policies.

(Id.)

Finally, on October 2, 2017, Special Agent Howard

reported to Worldwide that Jonathan Seay is the main person of
interest and there were numerous policies on Lewis Seay naming

Jonathan Seay as the only beneficiary.

(Levine Aff., Ex. G.)

Special Agent Howard also reported that Jonathan Seay had refused

to take a polygraph test and was not being cooperative.

(Id.)

Upon issuing its progress reports regarding the information
it obtained from Worldwide, United would put Jonathan Seay's claim

"on hold," usually for thirty days at a time.
B, C, E, F & G.)

(Levine Aff., Exs.

United sent periodic letters to Jonathan Seay

indicating that it was waiting on additional information before it
could process his claim.

(Ans., Ex. B.)

On October 24, 2017, Jonathan Seay's attorney wrote a letter

to United renewing his demand for payment of the policy benefits
and indicating that United could not "lawfully continue to refuse

payment on this claim."

(Levine Aff., Ex. H.)

suggested that United file an interpleader action.

The letter
(Id.)

On February 6, 2018, United filed the instant interpleader
action.

Pursuant to this Court's Order, United paid $200,000 in

to the Registry of the Court on March 12, 2018, over 16 months
from the initial demand letter of October 26, 2016.

Following

discovery. United filed the instant motion seeking to be discharged
from the case and seeking summary judgment on Defendant Jonathan

Seay's

counterclaims.

The

Clerk

gave

the

nonmoving

party.

Defendant Jonathan Seay, notice of the summary judgment motion and
the summary judgment rules, of the right to file affidavits or
other materials in opposition, and of the consequences of default.
(Doc. No. 27.)

Therefore, the notice requirements of Griffith v.

Wainwright, 772 F.2d 822, 825 (11th Cir. 1985) (per curiam), are
satisfied.

The

time

for

filing

materials

in

opposition

has

expired, and the motion is ripe for consideration.

II.

SUMMARY JUDGMENT STANDARD

The Court should grant summary judgment only if "there is no

genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law."

Fed. R. Civ. P. 56(a).

The

purpose of the summary judgment rule is to dispose of unsupported
claims or defenses which, as a matter of law, raise no genuine
issues

of

material

fact

suitable

for

trial.

Celotex

Corp.

v.

Catrett, 477 U.S. 317, 322-23 (1986).

In considering a motion for summary judgment, all facts and
reasonable inferences are to be construed in favor of the nonmoving

party.

Hogan v. Allstate Ins. Co., 361 F.3d 621, 625 (11th Cir.

2004).

Moreover,

[t]he mere existence of some factual dispute will not
defeat summary judgment unless the factual dispute is
material to an issue affecting the outcome of the case.
The

relevant

rules

of

substantive

materiality of a disputed fact.

law

dictate

the

A genuine issue of

material fact does not exist unless there is sufficient

evidence favoring the nonmoving party for a reasonable
jury to return a verdict in its favor.
Chapman v. AI Transp., 229 F.3d 1012, 1023 {ll^h cir. 2000) {en

banc)

{quoted source omitted) (emphasis supplied).

The party

opposing the summary judgment motion, however, "may not rest upon

the mere allegations or denials in its pleadings.

Rather, its

responses . . . must set forth specific facts showing that there
is a genuine issue to be tried."

Walker v. Darby, 911 F.2d 1573,

1576-77 (ll^h Cir. 1990).

III.

LEGAL ANALYSIS

In its motion, United claims it should be discharged from

this case and granted summary judgment on Defendant Jonathan Seay's
counterclaim for breach of contract because it has satisfied its

obligation under the contract by paying the proceeds into the
Registry of the Court. Defendant counters that paying the proceeds
is not enough; rather. United's contractual duty was to "pay the
beneficiary the proceeds of the policy upon the happening of a
covered incident."

(Ans. (Countercl. Breach of Contract, ^ 3).)

United's breach was "retaining possession and control over the

proceeds" for an unreasonable amount of time.

(Id.; see also id.

(Countercl. Statutory Interest and Fees, f 3 ("United failed to
pay Mr. Seay the proceeds due to him under the policy after formal
demand and every demand thereafter . . . .")•)

Thus, Defendant

challenges the timing of United's interpleader action.^

Defendant

adds a claim of bad faith under O.C.G.A. § 33-4-6 and attorney's
fees to his claim as well.

The insurance contract at issue - "Accidental Death Insurance

Policy" - states the following under its provision "Time of Payment
of Claims":

"Benefits for a covered loss will be paid as soon as

we receive proper written proof of loss."

(Compl., Ex. A, at 5.)

United does not contend that it did not receive written notice of

Lewis Seay's death from Jonathan Seay.

Rather, it argues that it

was justified to delay payment of his claim based upon the possible
application of the Georgia Slayer Statute.^ That is, should it be
determined that Jonathan Seay killed Lewis Seay after it paid the
death benefit. United could be open to additional liability to

4

Defendant

claims

proceeds amount.

that

United

owes

interest

on

the

$200,000

Accordingly, Defendant claims that United is

also in breach for failing to tender statutorily required interest
into the Registry of the Court.

5 O.C.G.A. § 33-25-13 provides that "[n]o person who commits murder
or voluntary manslaughter . . . shall receive the benefits from
any insurance policy on the life of the deceased, even though the
person so killing . . . be named beneficiary in the insurance
policy. . . . All right, interest, estate, and proceeds in such an
insurance policy shall go to the other heirs of the deceased who
may be entitled thereto by the laws of descent and distribution of
this state . . . ."

Lewis Seay's heirs.
liability,

United

Rather than risk the possibility of double
waited.

In

Defendant

Jonathan

Seay's

estimation, the waiting was a breach of contract, pointing out
that United had the option to pay the proceeds to Jonathan Seay or

interplead the funds into the Registry of the Court.

to

do nothing for

an

unreasonable

amount of

time.

By failing

Defendant

Jonathan Seay argues that United breached the insurance contract.
Under

the

circumstances

of

this

case,

this

Court

cannot

conclude that United's delay was reasonable as a matter of law.
Indeed, reasonableness is generally a question of fact. See, e.g.,
Order of United Commercial Travelers of Am. v. Moore, 134 F.2d

558, 560 (5*^^ Cir. 1943) (finding an issue of fact as to whether

insurance company's request to perform an autopsy was made within
a reasonable time); Hudson v. Omaha Indem. Co., 360 S.E.2d 406

(Ga. Ct. App. 1987) (finding an issue of fact as to whether an
insurer's request for an independent medical examination was
reasonable, therefore justifying the delay in payment); cf. Trief
V. Am. General Life Ins. Co., 444 F. Supp. 2d 1266, 1268 (S.D.

Fla. 2006) (applying Florida law, stating that whether the length
of time that has elapsed while insurance company evaluates a claim
is reasonable is a question of fact)

Moreover, the question of

® Concomitantly, Georgia courts have found a fact question with
respect to the reasonableness of an insured's delay in perfonnance.
E.g., Progressive Mountain Ins. Co. v. Bishop, 338 790 S.E.2d 91,

95 (Ga. Ct. App. 2016) (whether the delay of an insured in

whether an insurer acted in bad faith ordinarily is a question of
fact."

Supp.

E.g., Mitchell v. Globe Life & Accident Ins. Co., 548 F.

2d

1385,

1397

(N.D.

Ga.

2007)

(cited

cases

omitted).

Accordingly, the Court will not grant summary judgment; rather,
the issue of United's reasonableness in its delay in bringing this

interpleader action, as well as issues of unpaid interest,'' bad

faith penalties, and attorney's fees, shall be determined by a
trier of fact.

IV.

CONCLUSION

Upon the foregoing. Plaintiff United's motion for discharge
and for summary judgment (doc. no. 26) is hereby DENIED.

This

case shall proceed to trial in due course.

ORDER ENTERED at Augusta, Georgia, this /

day of November,

2018.

UNITED STATES DISTRICT JUDGE

providing notice of an accident is reasonable is generally a
question of fact); Equitable Life Assurance Soc'y of U.S. v.
Studenic,

77 F.3d 412, 416

(11*^^ Cir.

1996),

and cases listed

therein.

The parties dispute whether Jonathan Seay is entitled to the
statutory interest provided for in O.C.G.A. § 33-25-10. The Court
defers resolution of this issue.