Metlife Investors USA Insurance Company v. Steven L Lindsey et al
OPINION AND ORDER: For the reasons set forth in the Opinion and Order, Defendants/Counter-Plaintiffs' motion for summary judgment [41[ is DENIED. Plaintiff's motion to deny or defer Defendants' motion for summary judgment 44 is DENIED. Defendants/Counter-Plaintiffs' request for oral argument 58 is DENIED. Signed by Judge Rudy Lozano on 12/4/2017. (jss)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF INDIANA
METLIFE INVESTORS USA INSURANCE
ESTATE OF MELINDA LINDSEY,
STEVEN L. LINDSEY and JULIE
KIRBY, in her capacity as
Personal Representative of the
Probate Estate of Melinda
ESTATE OF MELINDA LINDSEY and
JULIE KIRBY, in her capacity as
Personal Representative of the
Probate Estate of Melinda
METLIFE INVESTORS USA INSURANCE
OPINION AND ORDER
Plaintiffs Estate of Melinda Lindsey and Julie Kirby in Her
Capacity as Personal Representative of the Probate Estate of
Melinda Lindsey’s Motion to Summary Judgment, filed on June 12,
2017 (DE #41); Plaintiff’s Rule 56(d) Motion to Deny or Defer
Investors USA Insurance Company on June 16, 2017 (DE #44); and
Defendants/Counter-Plaintiffs Estate of Melinda Lindsey and Julie
Kirby in Her Capacity as Personal Representative of the Probate
Estate of Melinda Lindsey’s Request for Oral Argument on Motion
for Summary Judgment, filed on July 24, 2017 (DE #58).
reasons set forth below, Defendants/Counter-Plaintiffs’ motion for
summary judgment (DE #41) is DENIED.
Plaintiff’s motion to deny
or defer Defendants’ motion for summary judgment (DE #44) is
Defendants/Counter-Plaintiffs’ request for oral argument
(DE #58) is DENIED.
Plaintiff MetLife Investors USA Insurance Company (“MetLife”)
seeks rescission of a term life insurance policy (“Policy”) issued
Lindsay and Julie Kirby in her capacity as personal representative
of the probate estate of Lindsey (together, “Estate”) move for
summary judgment on the grounds that MetLife failed to properly
rescind the Policy by retaining the insurance premiums when it
initiated the suit, and by not depositing the premiums with the
Court. MetLife filed a motion to deny or defer the Estate’s motion
for summary judgment based on Federal Rule of Civil Procedure
The Estate also filed a request for oral argument
on its motion for summary judgment.
Request for Oral Argument
At the outset, the Court will address the Estate’s request
for oral argument on its motion for summary judgment.
Pursuant to Local Rule 7-5, the Court may “grant or deny a request
for oral argument or an evidentiary hearing in its discretion.”
N.D. Ind. L.R. 7-5(c)(1).
Here, the parties' memoranda have
sufficiently apprised the Court of the issues at hand, and the
Court does not believe that oral argument is necessary. Therefore,
the Court DENIES the Estate’s request for oral argument (DE #58),
and turns to the merits of the motions.
application for a term life insurance policy with an accidental
application, Lindsey responded to a series of questions regarding
her medical history and her spouse’s life insurance coverage.
MetLife issued the Policy to Lindsey on March 26, 2014.1
On January 16, 2015, Lindsey was shot and killed.
occurred during the contestable period of the Policy.
spouse, Steven Lindsey, made a claim for the Policy benefits as
the named beneficiary.
Steven Lindsey was eventually convicted of
Lindsey’s death and is currently incarcerated.
The Estate made a
claim for the Policy benefits on the basis that it obtained a
wrongful death judgment against Steven Lindsey for the Lindsey’s
death. As part of its review of the claims for the Policy benefits,
MetLife found what it believes to be material misrepresentations
and omissions in Lindsey’s application.
In a letter dated June 25, 2015, MetLife denied Steven
Lindsey’s claim for death benefits, and notified him that MetLife
was exercising its right to void the Policy, and that all premiums
paid as of that date, with interest, would be forwarded to him
under separate cover. MetLife sent a similar letter to the Estate,
indicating that the premium refund was being sent to Steven
The Estate responded on June 29, 2015, requesting that
premium refunds be forwarded to the Estate, rather than Steven,
who at that time was awaiting trial for Lindsey’s murder.
The Court notes that while the parties identify disputes of fact
relating to issuance of the Policy, these disputes are not material
for the purpose of the Estate’s motion for summary judgment.
6, 2015, MetLife sent a check to Steven Lindsey in the amount of
$907.05, representing a premium refund plus interest.
On July 20,
2015, MetLife sent a check to the Estate for the same amount.
January 19, 2016, the Estate returned the premium refund check to
MetLife, and notified MetLife that it intended to contest the
denial of the Policy.
MetLife acknowledged the Estate’s return of
the check in correspondence dated January 25, 2016.
24, 2016, MetLife stopped payment on the checks that it had sent
to Steven Lindsey and the Estate.
On March 16, 2016, MetLife filed the instant lawsuit seeking
misrepresentations and/or omissions in her application for the
representations, and that MetLife would not have issued the Policy
information and made correct and complete representations in the
misrepresentations were fraudulent and/or material, entitling it
to rescind the Policy.
The Complaint also alleges that “[o]n June
25, 2015, MetLife provided timely written notice to the Defendants
that the Policy is considered void and MetLife refunded all
premiums paid as of that date, with interest.”
The Estate answered the Complaint and filed counterclaims
On June 30, 2016, MetLife filed its answer to
the Estate’s counterclaims, asserting as a defense that “MetLife
properly and timely determined the Policy initially issued to the
Decedent was void and/or voidable and should be rescinded based on
misrepresentations and/or omissions in the Decedent’s insurance
(DE #21, at 13.)
In September 2016, Magistrate
Judge Martin held the Rule 16 preliminary pretrial conference, and
set discovery and mediation deadlines.
In May 2017, Magistrate
Judge Martin granted the parties’ motion to extend discovery
deadlines; the close of fact discovery was set for August 15, 2017,
and the close of all discovery was set for February 15, 2018.
deadline was set for the filing of dispositive motions.
On June 12, 2017, the Estate filed the instant motion for
At that time, the parties were still
depositions of certain MetLife employees.
On June 16, 2017,
MetLife filed the instant motion to deny or defer the Estate’s
motion for summary judgment (DE #44), as well as a motion for leave
to deposit funds with the Clerk (DE #43).
On July 27, 2016,
Magistrate Judge Martin granted MetLife’s motion for leave to
deposit funds with the Clerk, noting that “[a]ccepting deposit of
the funds is therefore appropriate but in no way addresses the
timeliness and effectiveness of MetLife’s attempted rescission.”
(DE #60 at 2.)
On September 1, 2017, Magistrate Judge Martin
ordered that all discovery-related deadlines in this matter be
stayed pending the Court’s decision on the instant dispositive
Rule 56(d) Motion
In general, a party may file a motion for summary judgment at
any time after the case is initiated until thirty days after the
close of discovery.
Fed. R. Civ. P. 56(b).
Thus, a party can
move for summary judgment before discovery is completed.
Nurses' Ass'n v. State of Ill., 783 F.2d 716, 729 (7th Cir. 1986).
Here, the Estate filed a motion for summary judgment before the
close of discovery on the issue of whether MetLife failed to
properly rescind the Policy by failing to tender the premiums to
the Court in a timely manner.
MetLife argues that the Court should deny or defer the
Estate’s motion for summary judgment under 56(d) of the Federal
Rules of Civil Procedure. Rule 56(d) states that “[i]f a nonmovant
shows by affidavit or declaration that, for specified reasons, it
cannot present facts essential to justify its opposition [of a
motion for summary judgment], the court may: (1) defer considering
the motion or deny it; (2) allow time to obtain affidavits or
Fed. R. Civ. P. 56(d).
To succeed, the party
seeking the protection of Rule 56(d) must “state the reasons why
the party cannot adequately respond to the summary judgment motion
Sterk v. Redbox Automated Retail, LLC, 770 F.3d 618,
627-28 (7th Cir. 2014) (quoting Deere & Co. v. Ohio Gear, 462 F.3d
701, 706 (7th Cir. 2006)).
The party’s affidavit must demonstrate
“how postponement of a ruling on the motion will enable [it], by
discovery or other means, to rebut the movant’s showing of the
absence of a genuine issue of fact.”
First Specialty Ins. Corp.
v. Supreme Corp., No. 3:12-CV-186-JTM-MGG, 2017 WL 2591384, at *2
(N.D. Ind. June 14, 2017) (quoting Korf v. Ball State Univ., 726
F.2d 1222, 1230 (7th Cir. 1984)).
“A party . . . may not use [Rule
assertions that further discovery would develop genuine issues of
Id. (quoting Grundstad v. Ritt, 166 F.3d 867, 873
(7th Cir. 1999)).
Here, MetLife submits the affidavit of Tina Bengs (“Bengs
Affidavit”) in support of its Rule 56(d) motion.
Bengs Affidavit details the history of the discovery in this matter
and communications between the parties related thereto, including
the parties’ delays in producing discovery responses.
does not argue, and the Bengs Affidavit does not identify, any
need for discovery pertaining to the limited issue addressed in
the Estate’s motion for summary judgment, that is, whether MetLife
waived its rescission claim by not tendering the premiums to the
Court in a timely manner.
Rather, the facts regarding MetLife’s
initial tender of the premiums to the Estate, the Estate’s return
of the premiums, MetLife’s initiation of the lawsuit for rescission
and subsequent assertion of affirmative defenses, and MetLife’s
tender of the premiums to the Court, are undisputed.
not explain what “facts essential to justify its opposition” to
the Estate’s motion for summary judgment that it might be able to
extract from outstanding or additional discovery.
MetLife’s Rule 56(d) motion is denied.
Motion for Summary Judgment
Summary judgment must be granted when “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).
dispute of material fact exists when “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, 106 S. Ct.
2505, 91 L. Ed. 2d 202 (1986).
Not every dispute between the
parties makes summary judgment inappropriate; “[o]nly disputes
over facts that might affect the outcome of the suit under the
judgment.” Id. To determine whether a genuine dispute of material
fact exists, the Court must construe all facts in the light most
favorable to the nonmoving party and draw all reasonable inferences
in that party’s favor.
See Ogden v. Atterholt, 606 F.3d 355, 358
(7th Cir. 2010).
A party opposing a properly supported summary judgment motion
may not rely on allegations in her own pleading but rather must
“marshal and present the court with the evidence she contends will
prove her case.”
Goodman v. Nat'l Sec. Agency, Inc., 621 F.3d
speculation or conjecture will not suffice.” Stephens v. Erickson,
569 F.3d 779, 786 (7th Cir. 2009) (citation omitted).
nonmoving party fails to establish the existence of an essential
element on which he bears the burden of proof at trial, summary
judgment is proper.
See Massey v. Johnson, 457 F.3d 711, 716 (7th
The Estate argues that MetLife waived its rescission claim
because it failed to tender the premiums to the Court in a timely
Under Indiana law, when an insurer seeks to rescind a
policy based on a material misrepresentation in an application,
generally the insurer “must first make a tender of the full amount
of premiums paid under the policy.
This is to restore the parties
to the position they were in prior to the contract by returning
Standard Ins. Co. v. Durham, 403 N.E.2d 879, 881 (Ind. Ct. App.
1980) (citations omitted).
“[A]n insurer must tender back any
consideration paid to the beneficiary named in the policy,” and
if, as here, “the beneficiary refused to accept the consideration,
the money must be brought into court for use of the beneficiary or
the fraud will be waived.”
Gary Nat. Bank v. Crown Life Ins. Co.,
392 N.E.2d 1180, 1181 (Ind. Ct. App. 1979) (citation omitted).
The Indiana Supreme Court reaffirmed this rule in 2013, stating
that “an insurer must first offer to return the premiums it has
collected from the insured within a reasonable time after the
discovery of the alleged breach. . . .
Failure to offer such
constitutes a waiver of the alleged fraud.”
Dodd v. Am. Family
Mut. Ins. Co., 983 N.E.2d 568, 570 (Ind. 2013).
When the facts
are undisputed, “[w]hat constitutes a reasonable time period in
which to tender such premiums becomes a question of law.”
Nat. Bank, 392 N.E.2d at 1182 (citation omitted).
parties do not dispute that MetLife’s initial tender of the
premiums to the Estate was timely.
However, the Estate returned
the un-negotiated check to MetLife before MetLife initiated this
lawsuit for rescission of the Policy, and did not tender the
premiums to the Court until after the Estate filed the instant
motion for summary judgment.
Thus, the issue is whether MetLife’s
second tender of the premiums was timely.
Insurance Company in support of their respective positions.
(“Crown”) after Crown denied a claim for death benefits based on
the decedent’s fraud in procuring the policy.
392 N.E.2d at 1181.
Crown had tendered the premiums to the beneficiary when it denied
After Crown answered the complaint and asserted the
affirmative defense of misrepresentation, the beneficiary returned
the un-negotiated check for the premiums to Crown. The beneficiary
eventually filed a motion for summary judgment, arguing that Crown
because Crown had failed to tender the premiums to the court.
Crown then tendered the premiums to the court, raising the issue
as to whether Crown’s second tender was timely.
denied the beneficiary’s motion.
The lower court
On appeal, the Indiana Court of
Appeals found that Crown’s initial tender of the premiums and
accompanying letter to the beneficiary were adequate to inform the
beneficiary that it elected to void the policy, and that “Crown
was in total compliance with the law for so long as the beneficiary
retained the tender of the premiums.”
Id. Crown’s “duty to tender
Holding that Crown’s second tender of
the premiums to the court was timely, the court explained:
One purpose of tendering premiums into court is to
facilitate at the trial on the merits, a judicial
determination of which party is entitled to the sums.
Because rescission is an equitable remedy, equity
demands that the party obtaining such relief restore the
status quo by returning any consideration paid. See:
Prudential Insurance Co. v. Smith, [108 N.E.2d 61 (Ind.
1952)]. At the time Crown paid the premiums into court,
both parties had disclaimed any rights thereto. While
Crown could have been more diligent in making the second
tender, the funds were placed into court custody prior
to any pretrial or trial on the merits. The evidence
shows that tender was made prerequisite to asserting the
defense of fraud and that Crown was unequivocal in its
election to rescind the insurance policy. Further, it
must be noted that appellant was less than diligent in
refusing acceptance of the initial check and returning
it to Crown.
Id. at 1182.
According to MetLife, Gary National establishes that its
tender of the premiums to the Court was timely.
As in Gary
National, the evidence shows that MetLife elected to rescind the
Policy and tendered the premiums to the Estate.
The Estate kept
the check for the premiums for several months before returning it
As in Gary National, MetLife tendered the premiums to
the court after the Estate filed a motion for summary judgment on
this issue, but prior to any pretrial or trial on the merits.
the time MetLife paid the premiums into court, both parties had
disclaimed any rights thereto.
The Estate maintains that Gary National does not support the
position that MetLife’s tender was timely. The Estate acknowledges
that “there was no delay in selecting [MetLife’s] remedy” of
rescission; rather, the Estate claims that MetLife delayed “in
being unequivocal in properly presenting that request.”
It argues that “[t]he law governing rescission required
MetLife to deposit with this Court the returned premiums prior to
and no later than the time it initiated the suit on March 16,
(Id. at 8 (citing Smith, 108 N.E.2d at 65).)
But the case
law cited by the Estate does not address the issue of whether a
following refusal thereof by a beneficiary, is timely.
the insurer “never paid the premiums into court prior to trial.
There it was decided that payment into court after entry of
judgment was too late.”
Gary Nat. Bank, 392 N.E.2d at 1182
Aside from Gary National, the Estate does
not identify any other Indiana case that addresses whether a second
tender was timely.
See id. (distinguishing Indiana cases because
they did not address the timeliness of a “second tender” to the
Indiana law requires that an insurer first offer to return the
premiums it has collected from the insured within a reasonable
time after the discovery of the alleged breach, and that if
refused, they must pay it into court, or waive the alleged fraud.
See Dodd, 983 N.E.2d at 570.
The parties do not dispute that
MetLife tendered the premiums to the Estate within a reasonable
time after learning of the alleged misrepresentations.
returned those premiums after holding them for several months.
MetLife initiated this lawsuit seeking rescission.
delayed in making its second tender by submitting the premiums to
the Court, it did so before a pretrial or trial on the merits.
Applying Gary National, the Court finds that MetLife’s second
tender of the premiums to the Court was timely.
Plaintiff’s motion to deny or defer Defendants’ motion for summary
request for oral argument (DE #58) is DENIED.
December 4, 2017
/s/ RUDY LOZANO, Judge
United States District Court
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