Massachusetts Mutual Life Insurance Company v. Sinkler
Filing
107
MEMORANDUM OPINION. Signed by Judge Peter J. Messitte on 7/23/2012. (c/m by chambers)(nss, Deputy Clerk)
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
Plaintiff,
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v.
EVEL YN R. SINKLER
Defendant
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lODGET)
RE.CEM:U
JUL 24 2012
AT GREF.NBELT
a,ERI( u.s. DISTRICT eootrr
QlSTRlOT OF IIWmJIND
(NY
Civil No. PJM 10-336
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MEMORANDUM
OPINION
Plaintiff Massachusetts Mutual Life Insurance Company ("MassMutual") seeks a
declaratory judgment against Defendant Evelyn R. Sinkler ("Sinkler") with respect to a disability
income insurance policy Sinkler at one time held with MassMutual (the "Policy").
MassMutual
asks that the Court declare (l) that the Policy lapsed for non-payment of premiums, that coverage
under the Policy has terminated, and that no benefits are due and payable; and, in the alternative,
(2) that the Policy gives MassMutual the right to conduct an independent medical examination
("IME") of its insured as it determines may be necessary and that unless Sinkler submitted to an
IME (which she did not) MassMutual would have no obligation to release any benefits to her.
The case is before the Court on the parties' cross-motions for summary judgment.!
For the reasons that follow, MassMutual's Motion for Summary Judgment
[Docket No. 77] will be GRANTED, and Sinkler's Motion for Summary Judgment [Docket No.
70] will be DENIED.
In correspondence to the Court, Sinkler has argued that MassMutual's reply briefs were
untimely filed. The Court, however, will consider all briefs submitted by both parties relating to
the instant motions.
I.
I.
On October 5, 2001, Sinkler applied for MassMutual's Disability Income
Protection Plan, listing her employer as Cherry Engineering Support Services, Inc. MassMutual
issued the Policy to Sinkler on April 11, 2002. The Policy provided for payment of a monthly
benefit in the event of a sickness or injury that precluded Sinkler from performing the main
duties of her occupation. Before it would pay the monthly benefit, the Policy required written
proof of any loss-including
proof of the claimed disability and a statement of income before
and during the disability. The Policy stated that failure to make premium payments within the
prescribed time period would result in termination of the Policy but provided for a waiver of
premium during the pendency of a qualified disability.
In March 2005, Sinkler submitted a claim for Total Disability based on
rheumatoid arthritis. The claim form indicated that her symptoms first appeared in March 2003,
that she was employed as a senior systems analyst at Benton Enterprises, and that her last day of
work prior to disability was in September 2004. MassMutual received an Attending Physician's
Statement from Sinkler's rheumatologist reflecting a diagnosis of rheumatoid arthritis in 2003,
which indicated that restrictions on her ability to work began in September 2004.
In February 2006, Sinkler amended her claim to include claims of mental health
disabilities.
In connection with this amendment, MassMutual received an Attending Physician's
Statement from Sinkler's psychiatrist reflecting a diagnosis of major depression and stating that
Sinkler was unable to perform any work beginning in May 2004,z
This same psychiatrist submitted subsequent Attending Physician's Statements that included
contradictory and unsupported diagnoses. One such Statement stated that her inability to work
began in April 2003.
2
2
Following Sinkler's initial submission, she and MassMutual engaged in a series of
written exchanges and telephone calls regarding her claim. MassMutual requested certain
supporting documentation, including completed authorization forms so that it might access
Sinkler's medical records, tax returns, and social security benefit information, as well as a
description of her occupation, and verification of employment.
incomplete.
Sinkler's response was
She provided limited medical authorizations and only some of the requested
documentation on the grounds that further documentation was not necessary because the claim
was uncontested.
She refused to provide employment information or authorization to contact her
employer.
In early 2006, given the incomplete and contradictory nature of the medical
records Sinkler submitted, MassMutual informed her that it would require an IME. Sinkler
requested that the exam focus on her psychological disabilities, inasmuch as her primary
symptoms were those associated with depression. On April 18, 2006, she submitted to an
independent neuropsychological
examination arranged by the carrier. After administering an
array of tests, the examining physician concluded that Sinkler was embellishing or feigning
deficit during testing and recommended that her case history and self-report be judged against
the objective record, including her complete medical records. Later that year, MassMutual
attempted to arrange for another IME, which Sinkler refused to attend.
As of July 2006, MassMutual had still received incomplete and inconsistent
medical records covering only a portion of the disability period claimed by Sinkler; it had not
received the required authorization to access additional medical records, and it had not received
documentation supporting Sinkler's asserted pre-disability employment or income. On July 19,
2006, MassMutual made a final request for the missing documentation, informing Sinkler that if
3
it did not receive the documentation
information
by August 19,2006,
it would make its decision based on the
it had on file. On August 1, 2006, Sinkler informed MassMutual
be providing
any additional
determination
information
on her claim.
On August 17,2006,
and requested
MassMutual
that MassMutual
that she would not
denied Sinkler's
make a final
claim.
It explained
the denial
in a detailed letter setting forth the salient terms of the Policy, the history of the investigation
her claim, and the various failures of proof regarding
pertinent
occupational,
Policy based on major depression,
she had a similar condition
a second claim for Total Disability
spinal stenosis, and arthritis.
and other
in 2003, that she had no employer
so that her occupational
were "NI A" (but it did indicate that she had worked from December
attached an Attending
major depression
Physician's
her occupational
declined to allow complete
records from Sinkler's
diagnoses
from Sinkler's
her claim, MassMutual
duties and completed
authorization,
2006 through
The claim form
reflecting
a diagnosis
of
indications
that Sinkler provide information
medical authorization
MassMutual
various treating physicians.
found numerous
requested
forms.
that it determined
and physician
ran counter to Sinkler's
lapses in treatment,
notes inconsistent
4
Sinkler
was able to retrieve certain medical
and her claims of a total inability to work for the claimed disability
with her diagnoses,
Although
Based on the record it accumulated,
an absence of doctor visits during key periods, extended
inconsistent
psychiatrist,
duties and
and an inability to work starting in January 2007.
After receiving
MassMutual
Statement
under the
The claim form indicated that
March 2007), and that she was unable to work starting in February 2007.
regarding
financial,
information.
In April 2007, Sinkler submitted
activities
medical,
into
various
period-including
tests results
with the submitted
Attending
Physician's Statements. MassMutual made repeated attempts to speak with Sinkler's physicians
to resolve these apparent discrepancies, but MassMutual was unable to connect with them.
Again, MassMutual informed Sinkler that she would need to submit to an IME to verify her
claimed disability. Again, MassMutual requested updated medical forms in connection with
scheduling the IME, as well as authorization to arrange a functional capacity evaluation ("FCE").
And again Sinkler and her physicians failed to provide the requested information or to schedule
the IME or FCE.
On August 1,2008, after a final warning, MassMutual closed out Sinkler's second
claim.
In February 2009, Sinkler contacted MassMutual, insisting that it was not
warranted in closing her claim and threatening to sue.3 MassMutual thereafter reopened her
second claim and requested additional medical and employment verification documentation,
most of which this time it did receive. Even so, MassMutual again concluded that the medical
records did not support Sinkler's claimed total disability. MassMutual also determined that
Sinkler had provided no evidence to support her pre-disability occupation or income. Moreover,
in MassMutual's view, the evidence received established only that Sinkler had been employed as
a senior systems analyst at Cherry Engineering Support Services, Inc. from May 2001 through
January 2002; there was no evidence that she was employed when the Policy was issued or when
her alleged disabilities began.
In an effort to obtain objective information regarding Sinkler's claimed disability,
MassMutual, through a third party, advised her that it had scheduled an IME for August 25,
During this period, Sinkler filed several complaints against MassMutual with Virginia and
Maryland authorities. All of those investigations closed with no finding of wrongdoing on the
part of MassMutual.
3
5
2009. Sinkler's response was that she had revoked her authorizations and would not attend an
IME. She asserted that the Policy was not contestable, and therefore MassMutual had no right to
obtain her medical records. She also stated that MassMutual would have to make a decision on
her two claims based on the information it had in hand.
Due to the lack of information, MassMutual concluded that it was unable to
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render any further decision on Sinkler's second claim.
During the pendency of her second claim, Sinkler ceased making premium
payments on the Policy. On September 11,2007, MassMutual sent her a notice of a quarterly
premium payment due October 11,2007.
When Sinkler failed to make that payment,
MassMutual sent her several past due and reminder notices. On December 3, 2007, MassMutual
sent Sinkler a final reminder notice of past due premiums and advised her that to retain coverage,
she should remit payment within 10 days. She failed to do so. In consequence, on December 18,
2007, MassMutual sent Sinkler a letter stating that coverage under the Policy had lapsed on
November 11,2007.
Thereafter, Sinkler filed a complaint in the Circuit Court of Prince George's
County alleging breach of contract and a violation of Maryland's Unfair Claim Settlement Act,
MD. CODEANN., INS. 927-303.
The case was removed to this Court as Civ. No. PJM 10-1221
and subsequently consolidated with the declaratory judgment action MassMutual had filed here.
II.
Under Rule 56(a), summary judgment is appropriate 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.
CIY. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A dispute of fact
MassMutual received additional medical records in the course of discovery in this litigation,
but continues to maintain that those records fail to support Sinkler's claimed disabilities.
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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 party
opposing a properly supported motion for summary judgment 'may not rest upon the mere
allegations or denials of [his] pleadings,' but rather must' set forth specific facts showing that
there is a genuine issue for trial.'" Boucha/ v. Baltimore Ravens Faa/ball Club, Inc., 346 F.3d
514,525 (4th Cir. 2003) (alteration in original) (quoting FED.R. CIv. P. 56(e)). In considering a
motion for summary judgment, the Comi must "draw all justifiable inferences in favor of the
nonmoving party." Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 520 (1991) (citing
Anderson, 477 U.S. at 255). The court must, however, also abide by the "affirmative obligation
of the trial judge to prevent factually unsupported claims and defenses from proceeding to trial."
Boucha/, 346 F.3d at 526 (internal quotation marks omitted) (quoting Drewill v. Prall, 999 F.2d
774,778-79 (4th Cir. 1993), and citing Celo/ex Corp, 477 U.S. at 323-24).
Although pro se pleadings are held to "less stringent standards than formal
pleadings drafted by lawyers," Haines v. Kerner, 404 U.S. 519, 520 (1972), they "must still set
forth facts sufficient to withstand summary judgment."
Symeonidis v. Pax/on Capital Grp., Inc.,
220 F. Supp. 2d 478, 480 nA (D. Md. 2002) (citations omitted).
III.
The material facts are not in dispute .. Rather, the parties disagree over whether,
given the terms of the Policy, MassMutual complied with its contractual obligations when it
denied Sinkler's first claim and when it required an IME as a condition of continuing to review
her second claim. All issues flow from a determination of these issues. If MassMutual's denials
were warranted, then Sinkler was not "Disabled" as defined by the Policy when she ceased to
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pay premiums,
and the Policy thereafter
basis for Sinkler's
lapsed.
And if the denials were proper, there can be no
claims in this litigation.5
A.
MassMutual
argues that it properly denied Sinkler's
to provide the documentation
required to substantiate
before and during the alleged disability.
condition
of allowing Sinkler's
documentation
to substantiate
claim was unnecessary
arguing that MassMutual
second claim.
Sinkler responds
was precluded
that she provided
"Under Maryland
She points to the Policy's
with the second
more than two years
under an insurance
is to apply the terms of the insurance
Kendall v. Nationwide Ins. Co., 348 Md. 157, 166,702
clause, sentence,
and provision
on any particular
being given force and effect.
contract
A.2d 767, 771 (1997) (quoting
Bausch & Lomb v. Utica Mut., 330 Md. 758, 779, 625 A.2d 1021, 1031 (1993)).
contract is to be viewed as a whole, without emphasis
clause,
these arguments.
law, when deciding the issue of coverage
of construction
sufficient
incontestability
from denying any claim submitted
The Court considers
and her income
to require an IME as a
her first claim and that an IME in connection
after the issuance of the Policy.
itself."
her claimed disability
It argues that it was permitted
and inappropriate.
policy, the primary principle
first claim because she failed
provision,
An insurance
and with each
See Empire Fire and Marine Ins.,
In addition to allegations of breach of contract and violation of the Unfair Claims Settlement
Act set forth in her pleadings, Sinkler has alleged a host of additional wrongdoings against
MassMutual throughout her filings. For example, she asserts that MassMutual attempted to alter
the date of the Policy by producing in litigation a copy that reflected a "date of issue" of June 2,
2009, and a "policy date" of April 11,2002. Although the "date of issue" is apparently the date
the duplicate copy was generated, Sinkler relies on this document to claim fraudulent
misstatement, perjury, and assorted other civil and criminal liabilities. Sinkler also contends that
MassMutual's
use of consulting physicians to render opinions on her claims constitutes the
unauthorized practice of medicine and corporate practice of medicine. None of these
allegations-raised
for the first time in the summary judgment briefing-is
relevant to the issues
in question, and, in any event, the Court finds none of them persuasive.
5
8
Co. v. Liberty Mut. Ins. Co., 117 Md. App. 72, 96, 699 A.2d 482, 493-94 (1997). Denial of an
insurance claim is proper where the insured person fails to comply with the requirements of the
insurance policy. See, e.g., Gallagher v. Reliance Standard Life Ins., Co., 305 F.3d 264, 276 (4th
Cir. 2002) (finding denial of a disability insurance claim to be proper where the insured "failed
to submit, as required under the Plan, objectively satisfactory proof of a disability that made him
incapable of performing each and every material duty of his occupation"); Phillips v. Allstate
Indemn. Co., 156 Md. App. 729, 743, 848 A.2d 681, 689 (2004) (affirming summary judgment
for the insurer where the insured refused to answer questions during the examination under oath,
which he was required to submit to by the terms of the insurance policy).
Here the Policy provides for a benefit in the event of a "Total Disability," which it
defines as the occurrence of a sickness or injury that precludes the insured from performing the
main duties of her "Occupation" or from working at any other occupation, and for which the
insured is under a doctor's care. (Policy at 2.) The Policy defines "Occupation" as the insured's
profession or business at the start of the Disability. (Jd.) To receive any benefits, the insured
must comply with certain "Proof of Loss Requirements" designed to substantiate the claimed
Disability and the insured's income before and during said Disability, including, in the words of
the Policy, "written proof of Disability" and "satisfactory proof of the Insured's Income before
and during Disability."
(Jd. at 5.) The Policy specifically states that MassMutual may require
the following documents as proof of income: "W-2 forms(s), federal and state income tax forms
and related schedules, business or professional records, and other tax records and financial data."
(Jd.) The Policy also provides that MassMutual can have the insured examined by a doctor as
often as reasonably necessary while a claim is pending. (Jd.) And, to be sure, the Policy also
includes a provision commonly referred to as an incontestability clause, which provides: "After
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two years from the date this Policy becomes Effective, only fraudulent misstatements in the
application may be used to void this Policy or to deny a claim for a Disability that starts after the
two year period.,,6 (ld. at 7.)
The uncontested evidence in the record is crystal clear that, with respect to both of
her submitted claims, Sinkler failed to comply with several of the Proof of Loss Requirements
set forth in the Policy.
She failed to submit "written proof of Disability" in two material
respects. First, she failed to provide sufficient documentation of her "sickness or injury." At the
same time, she declined to authorize MassMutual to speak with her treating physicians or review
her complete medical records, and the forms and records that she did supply were deficient in
numerous respects and inconsistent with her claimed disabilities.
sufficient documentation of her "Occupation."
Second, she failed to provide
Bearing in mind, after all, that a disability
income policy was involved, Sinkler never provided, despite repeated requests from
MassMutual, an objective occupational description, nor did she furnish any evidence of her
employment at the onset of her alleged disability. As "Total Disability" is defined in reference
to inability to perform the "main duties of []her occupation," written proof of Disability
reasonably required documentation of both the main duties of her occupation and the medical
reasons why she was no longer able to perform those duties. See Gallagher, 305 F.3d at 276;
Massachusetts Cas. Ins. Co. v. Riel, 227 Md. 324, 328, 176 A.2d 777, 779 (1962) (interpreting
occupational disability policies to require coverage where the disability renders the insured
6 This clause is consistent with Maryland law. See MD. CODEANN., INS. S 15-208(a)
(requiring health insurance policies to include the following provision: "After two years from
the date of issue of this policy no misstatements, except fraudulent misstatements, made by the
applicant in the application for such policy shall be used to void the policy or to deny a claim for
loss incurred or disability (as defined in the policy) commencing after the expiration of such twoyear period"); Mutual Life Ins. Co. of New York v. Insurance Comm 'rfor State of Maryland, 352
Md. 561, 569, 723 A.2d 891, 895 (1999).
10
unable to perform "the substantial and material acts of his own occupation in the usual or
customary way"). Additionally, Sinkler failed to provide "satisfactory proof of [her] Income
before and during Disability." The Policy is quite clear about the types of documentation
MassMutual might require-including
W-2 forms, federal and state income tax forms and
schedules, and other necessary tax records and financial data-none
of which Sinkler was
willing to provide.
Sinkler, therefore, as a matter of law, has failed to meet her burden to prove that
she substantially complied with the Proof of Loss Requirements, i.e., that she (1) "furnished the
insurer with information reasonably requested ... to the extent that it is reasonably possible" for
her to do so, and (2) "expressly or impliedly promises to submit, when and as it is reasonably
possible for [her] to do so, the balance of the information."
Hartford Fire Ins. Co. v. Himelfarb,
355 Md. 671,690-91, 736 A.2d 295, 306 (1999); see also Aetna Cas. & Sur. Co. v. Harris, 218
Va. 571, 578,239 S.E.2d 84, 88 (1977) ("The burden of proving compliance with the necessary
requirements of an insurance policy as to proof of loss, or the waiver of such compliance on the
part of the company, is on the insured; and, if he fails to establish the same by a preponderance
of the evidence his action must fail."). These failures fairly entitled MassMutual to deny
Sinkler's claims.
In addition to failing to meet the Proof of Loss Requirements, Sinkler refused to
submit to the IMEs that MassMutual was contractually entitled to require "as often as reasonably
necessary."
Although she did submit to a single IME for her claimed psychological disability,
that exam resulted in a finding by the physician that Sinkler was embellishing or feigning her
condition. When MassMutual made numerous attempts to schedule further IMEs for both
Sinkler's first and second claims, she repeatedly refused to comply. This put her at odds with the
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terms of the Policy. Given the various failures of proof with regard to her claimed medical
condition, it was reasonable for MassMutual to require the follow-up IME to obtain objective
verification of Sinkler's claimed Disability. Cf Smart v. State Farm Mut. Auto. Ins. Co., 126
Md. App. 511, 517, 730 A.2d 690, 693 (1999) (finding that an insurer's contractual right to
require a medical examination should be construed by the application of a reasonableness rule).
This, too, provides an independent basis for MassMutual to deny both of Sinkler's claims. See
Huntt v. State Farm Mut. Auto. Ins. Co., 72 Md. App. 189, 198,527 A.2d 1333 (1987) ("State
Farm therefore had a contractual right to deny ... benefits based on her failure to comply with
the condition precedent that she submit to a medical examination by a physician of State Farm's
choice.").
Sinkler's only proffered explanation for failing to comply with the myriad of
contract provisions is that the incontestability clause precluded MassMutual from denying any
claim after the Policy has been in place for two years. Sinkler fundamentally misunderstands
this Policy provision. The incontestability clause provides only that after the Policy has been in
effect for two years, MassMutual cannot void the Policy or deny a claim for a Disability that
began after the two year period unless there were fraudulent misstatements in the application.
The purpose of this clause is to provide the insured with finality as to the existence and terms of
her coverage and to avoid uncertainty regarding future claims. See Mutual Life Ins. Co. of New
York v. Insurance Comm 'rfor State of Maryland, 352 Md. 561, 568-71, 723 A.2d 891, 894-95
(1999) (describing the history and purpose of incontestability clauses in insurance policies).
However, the incontestability clause does not, as Sinkler would have it, obviate the other terms
of the Policy or release her from the obligation to submit a valid, documented claim of Disability
before receiving any benefits. She was at all times bound by the Proof of Loss Requirements to
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establish that she had a Disability as defined by the Policy, notwithstanding the incontestability
clause.
The Court finds that MassMutual acted within its contractual rights when it
denied Sinkler's first claim and when it required that she submit to an IME as a condition of
considering her second claim.
B.
Having determined that MassMutual properly denied Sinkler's claims, the Court
considers whether MassMutual properly terminated the Policy for lapse of premium payments.
In Maryland, "(i]t is well-settled that if an insurance' policy contains a provision
for its forfeiture for nonpayment of premiums, the insurance company may avoid the policy on
the insured's failure to pay a premium." Rubinstein v. Jefferson Nat. Life Ins. Co., 268 Md. 388,
391,302 A.2d 49,52 (1973) (citing Alexander v. Life Ins. Co., 166 Md. 112,170 A. 522 (1934);
Burns v. Prudential Ins. Co., 162 Md. 228, 159 A. 606 (1932)); see also McFarland v. Farm
Bureau Mut. A uta, Ins. Co., 201 Md. 241, 251, 93 A.2d 551, 556 (1953).
Here the Policy provides that premiums are due in advance and "must be paid
within 31 days after the due date" for the Policy to remain in force.7 (Policy at 4.) If premiums
are not paid within the prescribed time period, the Policy will terminate. (ld.) Further, the
Policy provides a waiver of premium benefit "(a]fter the Insured has been Disabled for 90 days
... for as long as the Insured remains Disabled." (ld. at 3.)
It is undisputed that Sinkler failed to make a payment for the premium that
became due on October 11, 2007, despite receiving multiple past due notices from MassMutual.
Because she was not Disabled, as defined by the Policy, at the time she failed to makethis
Maryland law requires a 31 day grace period to make premium payments before an insurer
can terminate a policy. See MD. CODEANN., INS 9 15-209(a).
7
13
payment-and
because she certainly had not been Disabled for 90 days-Sinkler
did not qualify
for the waiver of premium benefit. Accordingly, as a matter of law, MassMutual was entitled to
terminate the Policy once the 31 day grace period expired with no payment having been made,
and the Policy lapsed on November 11,2007. See Rubinstein, 268 Md. at 391,302 A.2d at 52.
C.
Finally, Sinkler's claims for breach of contract and violation of Maryland's Unfair
Claim Settlement Act, MD. CODEANN., INS. S 27-303, also fail as a matter of law.
First, there is no evidence to support a separate claim for breach of contract. As
explained in detail above, MassMutual complied with the terms of the Policy in denying
Sinkler's claims and in terminating the Policy upon her failure to make premium payments.
Second, no action lies under the Unfair Claims Settlement Act, which makes it a
violation for an insurer to "refuse to pay a claim for an arbitrary or capricious reason based on all
available information."
MD. CODEANN., INS. S 27-303(2). "The Unfair Claim Settlement
Practices Act explicitly states that penalties for violations of the Act are limited to the imposition
of administrative penalties on the insurer by the Commissioner; it creates no state cause of action
for the insured." Connecticut Gen. Life Ins. Co. v. Ins. Comm 'rfor the State of Maryland, 371
Md. 455,460, 810 A.2d 425, 427-28 (2002); MD. CODEANN., INS. S 27-301 (b); see also Hartz v.
Liberty Mut. Ins. Co., 269 F.3d 474, 476 (4th Cir. 2001) (noting that, under Maryland law, there
is no private cause of action in tort or statute for failure to settle a claim with an insured);
. Johnson v. Federal Kemper Ins. Co., 74 Md. App. 243, 248, 536 A.2d 1211, 1213 (1988) (same).
14
,
'
IV.
For the foregoing reasons, MassMutual's Motion for Summary Judgment [Docket
No. 77] is GRANTED,
and Sinkler's Motion for Summary Judgment [Docket No, 70] is
DENIED.
A separate Order will ISSUE.
UN
July 23, 2012
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