Casey v. American International Group, Inc.
Filing
90
MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 2/21/2017. Mailed notice. (mgh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
LINDA CASEY,
Plaintiff,
v.
AMERICAN INTERNATIONAL
GROUP, INC., a Delaware
corporation a/k/a AMERICAN
GENERAL LIFE INSURSANCE CO.
f/k/a WESTERN NATIONAL LIFE
INSURSANCE CO. f/k/a AIG
ANNUITY INSURANCE CO.,
Defendant.
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No. 14 C 3541
MEMORANDUM OPINION AND ORDER
Plaintiff Linda Casey (“Casey”) has sued American General
Life Insurance Co. (“American General”) for breach of contract
based on American General’s refusal to acknowledge her as the
sole beneficiary of an annuity. The parties have filed crossmotions for summary judgment. For the reasons discussed below,
American General’s motion is granted and Casey’s is denied.
I.
The relevant facts are largely undisputed.1 On March 12,
2008, Natalie Bailey (“Bailey”) submitted an application (“the
1
The parties present conflicting allegations and evidence in
support of their respective views regarding the manner in which
the decedent would have wanted the annuity to be distributed.
First Application”) to American General for a $97,000 annuity
policy (“the policy”). The application designated Bailey as the
Owner and Casey as the Joint Owner. The document contains a
provision stating: “If you do not want the Joint Owner to be the
Primary Beneficiary, check here and name Beneficiary below.”
Pl.’s Ex. B at 1. The box was checked, indicating that Casey was
not to be the annuity’s primary beneficiary. A list of eighteen
beneficiaries was attached to the form specifying what
percentage of the annuity each beneficiary was entitled to
receive. Bailey’s husband, for example, was entitled to thirty
percent of the annuity; Casey was entitled to eight percent;
others were entitled to two percent.
On March 17, 2008, American General issued the annuity
policy to Bailey. The policy contains a provision stating: “If
you make a beneficiary change, the change will take effect on
the date you sign the change request form. However, we are not
responsible for any payment or other action taken before we have
received and acknowledged in writing your change request.” Pl.’s
Ex. C at 5.
On April 18, 2008, Bailey and Casey submitted a second
application (“the Second Application”) for the same annuity.
Pl.’s Ex. D. Again, Casey was listed as the Joint Owner of the
However, the parties’ disputes on these points are irrelevant
for purposes of resolving their summary judgment motions.
2
annuity. This time, however, the box indicating that the Joint
Owner was not to be the primary beneficiary was not checked. In
addition, several other portions of the form remained
incomplete. For example, no box was checked for the question
asking, “Will this annuity replace or change any existing life
insurance or annuity contract in this or any other company?” or
the question, “Do you have any existing life insurance policies
or annuity contracts?” Also left uncompleted were the sections
of the form requesting the applicant’s phone number, marital
status, age, and gender. It is undisputed that American General
received the Second Application in April 2008. Casey does not
dispute that she did not receive any communication from American
General acknowledging receipt of the Second Application at that
time. Neither is there any record that Bailey was sent any
acknowledgment.
After Bailey passed away in May 2011, Casey was appointed
executor of her estate. Casey contacted American General about
the annuity and was told that it had only the First Application
on file. Casey claims that she informed American General that
this was mistaken. Nevertheless, after making no headway with
the company, she accepted the lesser amount and received a check
from American General in the amount of $7,807.06. She also
assisted other beneficiaries in submitting their claims and
obtaining their shares.
3
According to Casey, she later contacted American General
with a question she had been asked by another beneficiary and
was told that American General in fact had both the First and
Second Applications for the annuity. Casey later obtained copies
of both applications, and in October 2011, she wrote American
General stating that it had made an error in distributing the
annuity funds in accordance with the First Application. Pl.’s
Ex. L.
During October and November 2011, Casey had a number of
phone conversations with American General representatives.
Entries in the company’s internal system for documenting
telephone communications indicate that Casey was told by an
American General representative that the company would contact
the other beneficiaries and request return of the money that had
been distributed to them. See, e.g., Pl.’s Ex. K at AGL 011
(“CONTACT LINDA CASEY AND ADVISE WE WILL BE CONTACTING THE OTHER
BENEFICIARIES REQUESTING THE FUNDS BACK – PER THE APPLICATION
SCANNED 04/08/08 THIS POLICY HAS JOINT RIGHTS OF SURVIVORSHIP –
PLEASE ADVISE LINDA CASEY MIGHT TAKE THRU END OF NEXT WEEK TO
GET RESOLVE STARTED.”).
On November 9, 2011, American General contacted Sheila
Carter (“Carter”), one of the beneficiaries listed on the First
Application, to request return of the funds that had been
disbursed to her. Carter suggested that American General contact
4
Geraldine Simmons (“Simmons”), a personal friend of Bailey’s and
the attorney of the estate. Simmons advised American General
that she believed American General had acted properly in
distributing the funds according to the First Application. She
asked for copies of the documents and advised American General
not to proceed further while she investigated the matter. On
November 10, American General wrote the following to Simmons:
As you requested I have enclosed a copy of the first
application submitted to our company with a list of
the designated beneficiaries for the above-referenced
policy. I have also enclosed a copy of the second
application that we received for Natalie Bailey as
owner and annuitant with Linda Casey listed as joint
owner of the policy. As you can see, this policy is
different than the first application submitted as the
box is no longer checked indicating that they would
like for the surviving joint owner to receive the
death benefits should one joint owner pass away.
Pl.’s Ex. M, Letter from Yvonne Salmon to Geraldine Simmons
(Nov. 10, 2011).
On December 5, 2011, American General sent a letter to
Casey stating, “Please be advised that as we now have competing
claims, we will send this to our legal department and have them
review to decide if an interpleader should be filed with the
court to have them determine who should receive the funds.”
Pl.’s Ex. N, Letter from Angela Furlong to Linda Casey (Dec. 5,
2011). Casey contacted American General several times in the
following months to inquire about the status of the matter. On
5
March 8, 2012, American General sent Casey a letter rejecting
her claim to the entire annuity:
Please be advised that after review with our legal
department, the referenced annuity contract was setup
[sic] based on the March application. We sent out the
annuity welcome packet based on the March application
and the policy owner was aware that the annuity was
already setup [sic] based on the fact that they
received the packet prior to executing the second
application. Therefore, it has been determined that
the death benefit proceeds were paid in accordance
with the designations made on the March application as
there were no subsequent beneficiary changes on
record.
Pl.’s Ex. O, Letter from Angela Furlong, American General
Annuity Claims Department, to Linda Casey (Mar. 8, 2012).
In March 2014, Casey filed suit in Illinois state court
alleging breach of contract.2 American General removed the suit
to this court and later filed a motion to dismiss, which I
denied. See Casey v. Am. Int’l Grp., Inc., No. 14 C 3541, 2014
WL 5073155 (N.D. Ill. Oct. 9, 2014). Both parties have now moved
for summary judgment.
II.
“Summary judgment is proper when the ‘pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
The policy includes a provision stating that it is governed by
the laws of the state in which it was delivered. See Pl.’s Ex. C
at 10. The parties agree that Illinois law applies to the
dispute. See Casey v. Am. Int’l Grp., Inc., No. 14 C 3541, 2014
WL 5073155, at *2 (N.D. Ill. Oct. 9, 2014).
2
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genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.’” Tegtmeier v.
Midwest Operating Engineers Pension Trust Fund, 390 F.3d 1040,
1045 (7th Cir. 2004) (quoting Fed. R. Civ. P. 56(c)). In the
case of cross-motions for summary judgment, I “construe all
facts and inferences therefrom in favor of the party against
whom the motion under consideration is made.” Calumet River
Fleeting, Inc. v. Int’l Union of Operating Engineers, Local 150,
AFL–CIO, 824 F.3d 645, 647–48 (7th Cir. 2016) (quotation marks
omitted).
As discussed in my previous opinion ruling on American
General’s motion to dismiss, under Illinois law, American
General is entitled to strict compliance with the terms of the
annuity policy. Casey, 2014 WL 5073155, at *3. Moreover, the
“burden of proving that there has been strict compliance, and
therefore an effective change of an insurance beneficiary, rests
on the person claiming as the substitute beneficiary.” 44A Am.
Jur. 2d Insurance § 1983. Casey has failed to carry that burden
here.
Pointing to the policy’s change-of-beneficiary provision,
American General contends that annuity beneficiaries can be
changed only by submission of a “change request form,” see Pl.’s
Ex C at 5 (“If you make a beneficiary change, the change will
take effect on the date you sign the change request form.”), not
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by submitting a second annuity application. American General has
submitted the form in question as an exhibit to its Local Rule
56.1(b)(C)(3) Statement of Additional Material Facts. See Def.’s
N.D. Ill. L.R. 56.1(b)(3)(C) Stmt. of Add’l Material Facts, Ex.
A. American General’s Local Rule 56.1(b)(3)(C) Statement asserts
that in 2008, this was the form it used to make beneficiary
changes to annuity policies. Id. ¶ 1 Since Casey has not replied
to American General’s Local Rule 56.1(b)(3)(C) Statement, these
representations are deemed admitted. See N.D. Ill. L.R.
56.1(a)(3) (“All material facts set forth in the statement filed
pursuant to section (b)(3)(C) will be deemed admitted unless
controverted by the statement of the moving party.”). It follows
that submission of the second annuity application form did not
constitute strict compliance with the policy’s requirements for
changing beneficiaries. As a result, American General is
entitled to summary judgment.
I note, however, that even without the change request form,
Casey has failed to present a plausible case in support of her
claim that she strictly complied with the policy. First, Casey
offers no reasonable basis for thinking that the annuity
application form was intended to be used to change
beneficiaries. According to Casey, American General must have
intended the form to serve this purpose because it asks, “Will
this annuity replace or change any existing life insurance or
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annuity contract in this or any other company?” The question
makes no reference to beneficiaries. In any event, neither box
is checked in response to this question on the Second
Application. Thus, even assuming that submitting a second
annuity application could otherwise have been an acceptable
method for changing beneficiaries, the Second Application would
have failed to provide the necessary information and would not
have constituted strict compliance with the policy’s
requirements.3
III.
For the reasons above, American General’s motion for
summary judgment is granted and Casey’s motion is denied.
ENTER ORDER:
Elaine E. Bucklo
United States District Judge
Dated: February 21, 2017
3
American General has asserted a number of additional arguments
in support of its motion for summary judgment. In particular, it
argues that Casey has waived, or is estopped from asserting, any
right to the entire annuity by accepting the eight-percent share
initially distributed to her. American General also argues that
her acceptance of the lesser sum represents an accord and
satisfaction with respect to any contract between the parties.
Having found that Casey’s position fails on other grounds, I do
not address these further contentions.
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