McKown v. Symetra Life Insurance Company

Filing 65

ORDER denying #59 Motion for Reconsideration. Signed by the Honorable R Bryan Harwell on 12/3/2014. (hcic, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
FLORENCE DIVISION
William M. McKown,
Plaintiff,
v.
Symetra Life Insurance Company,
Defendant.

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Civil Action No.: 4:13-cv-982-RBH

ORDER

INTRODUCTION
This matter is before the Court on Defendant Symetra Life Insurance Company’s
(“Defendant”) motion for reconsideration of the Court’s November 20, 2014 Order granting in part
and denying in part Defendant’s motion for summary judgment. See Mot., ECF No. 59; Order, ECF
No. 51. The Court’s November 20, 2014 Order granted Defendant’s motion as to Plaintiff’s claims
for breach of contract and bad faith refusal to pay life insurance benefits, as well as Plaintiff’s
demands for punitive damages and attorney’s fees. See ECF No. 51 at 8. The Order, however,
denied Defendant’s motion as to Plaintiff’s claim for breach of implied contract. See id. The matter
has been fully briefed and, having reviewed the submission of the parties, the Court denies
Defendant’s motion.
STANDARD OF REVIEW
Motions under Rule 59 of the Federal Rules of Procedure are not to be made lightly;
“reconsideration of a previous order is an extraordinary remedy, to be used sparingly in the interests
of finality and conservation of judicial resources.” 12 James Wm. Moore et al., Moore’s Federal
Practice ¶ 59.30[4] (3d ed.); see also Pac. Ins. Co. v. Am. Nat’l Fire Ins. Co., 148 F.3d 396, 403
(4th Cir. 1998) (“In general, reconsideration of a judgment after its entry is an extraordinary remedy

which should be used sparingly.” (internal quotations and citations omitted)). The Fourth Circuit
has held such a motion should be granted for only three reasons: (1) to accommodate an intervening
change in controlling law; (2) to account for new evidence; or (3) to correct a clear error of law or
prevent manifest injustice. Collison v. Int’l Chem. Workers Union, 34 F.3d 233, 235 (4th Cir. 1994)
(quoting Hutchinson v. Staton, 994 F.2d 1076, 1081 (4th Cir. 1993)). Rule 59 motions “may not be
used to make arguments that could have been made before the judgment was entered.” Hill v.
Braxton, 277 F.3d 701, 708 (4th Cir. 2002). Nor are they opportunities to rehash issues already
ruled upon because a litigant is displeased with the result. See Hutchinson v. Staton, 994 F.2d 1076,
1082 (4th Cir. 1993) (stating that “mere disagreement does not support a Rule 59(e) motion”)
(citation omitted).
DISCUSSION
I.

Arguments of the Parties
In the motion, Defendant asks the Court to reconsider its ruling denying summary judgment

as to Plaintiff’s implied contract claim to “correct a clear error of law.” See ECF No. 59-1 at 1–2.
Defendant asserts that any implied contract cannot contradict the terms of an express contract, and
that no implied contract could have been created in this case because it would contradict the terms
of the policy, which required an executed reinstatement application, a signed medical release, and
the past due premium in order to be reinstated after lapse. See id. at 3–4. Defendant then argues
that no reasonable jury could find the existence of an implied contract because there was no
evidence of any mutual assent. See id. at 4–5. Defendant argues that it never gave Plaintiff any
assurances that the policy could be reinstated without an application and release, and that Plaintiff’s
self-serving affidavit does not create an issue of fact. See id. at 5–6. Defendant asserts that the
evidence supports that it merely retained the premium during the time period in which it expected to

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receive the application and medical release, and it would be unreasonable for a jury to infer that
Defendant intended to enter into a life insurance contract merely because it retained the premium
for a few weeks. See id. at 6–7. Finally, Defendant asserts that allowing Plaintiff’s implied contract
theory to proceed improperly allows Plaintiff to assert a waiver and estoppel claim, as Plaintiff
previously moved to amend the complaint to assert these claims but the Court denied that motion.
See id. at 7–8.
Plaintiff responded, asserting that the Supreme Court of South Carolina has recognized a
valid claim for an implied in fact contract for life insurance on several occasions. In Moore v.
Palmetto State Life Ins. Co., 73 S.E.2d 688 (S.C. 1952), the Supreme Court noted that the “crucial
questions are whether there was an implied acceptance and whether the circumstances are such as to
estop appellant from asserting that there was no contract of insurance.” Id. at 691. Plaintiff argues
that the Moore case also stands for the proposition that Defendant’s verbal or written assent was not
required, and mere retention of the premium payment until after the insured’s death could be
sufficient to create an implied contract. Defendant also cites to Crossley v. State Farm Mutual
Automobile Insurance Company, 415 S.E.2d 393 (S.C. 1992), in which the Supreme Court of South
Carolina stated:
State Farm accepted respondent's payment and processed his check.
Circumstances may imply acceptance of an offer to purchase
insurance. We find that the evidence regarding whether a contract
was created is susceptible of more than one inference, and thus
properly was submitted to the jury.
Id. at 358.
Defendant replied, asserting that the facts of the Moore and Crossley cases are
distinguishable from the present case. Defendant asserts that, in both of those cases, applications
were submitted to the insurance company along with the past due premium, and the insurance

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companies made a representation to the plaintiffs that the policies were accepted. See ECF No. 64
at 1–2. Defendant argues that, here, Plaintiff failed to submit an application and provided no
evidence that Defendant represented that the premium payment alone would reinstate the policy.
See id.
II.

Analysis
The Court notes that there has been no intervening change in controlling law which would

affect the issues addressed in the Order.

Moreover, no new evidence has been presented.

Accordingly, reconsideration is not warranted on either of the first two grounds set forth in
Collison, 34 F.3d at 235. Therefore, the Court need only determine whether Defendant has shown
the need for the Court “to correct a clear error of law or prevent manifest injustice.” Id.
After thorough review of the record, the Court finds that Defendant has failed to show the
need to correct a clear error of law or prevent manifest injustice. Defendant’s motion simply
rehashes the very issue that the Court has already ruled upon: whether there is a genuine issue of
material fact as to whether an implied contract of insurance was created between the parties.
Defendant cites to the Court’s acknowledgement that the weight of the evidence appears to be in its
favor. However, that does not mean that a reasonable jury could not find in Plaintiff’s favor. As
the Court explained in its Order denying summary judgment on the implied contract claim, “[i]t is
for the jury to determine whether there was a contract and whether it was performed according to its
terms.” Johnston v. Brown, 357 S.E.2d 450, 452 (S.C. 1987) (citing Quality Concrete Products,
Inc. v. Thomason, 172 S.E.2d 297 (S.C. 1970)). The language in the Crossley case cited by
Defendant only bolsters this conclusion. See Crossley, 415 S.E.2d at 358 (“We find that the
evidence regarding whether a contract was created is susceptible of more than one inference, and
thus properly was submitted to the jury.”).

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Defendant repeats its argument that it did not manifest assent to entering into a new contract
with Plaintiff, and asserts that mere retention of the premium payment was insufficient to reinstate
the policy. However, a reasonable jury could in fact determine that by accepting the premium
payment and depositing the funds, and only returning the premium after three weeks had passed and
Defendant had been informed of the insured’s death, an implied contract was created. Defendant is
correct that the express contract of insurance was never reinstated, and waiver and estoppel claims
relevant to that express contract were denied on a motion to amend. However, that question is no
longer at issue in this case, as summary judgment was already granted in Defendant’s favor with
regard to the breach of express contract claim. The mere fact that the express contract was not
reinstated does not mean that a subsequent implied contract did not arise. As the Court noted in its
previous Order, it is a question of fact as to whether an implied contract was created. Regardless of
the strength of Defendant’s arguments, there is more than a scintilla of evidence as noted by
Plaintiff:
McKown had already been in a contractual relationship with the
Defendant insurance company since 1989 and had faithfully paid
premiums since that time. When he missed a premium in the Fall of
2009, the insurance company offered a reinstatement. He sent in the
required premium to reinstate the policy and to reinstate a
longstanding relationship with the Defendant insurance company. The
insurance company cashed the check. The insurance company did not
attempt to refund the monies until after the death of the insured.
See ECF No. 62 at 2. The Court cannot say that there is no genuine issue of material fact in light of
the fact that clearly contradictory evidence has been presented in the record. Where there is a
genuine dispute of fact, the issue should be submitted to the jury.
Accordingly, the Court finds no clear error of law or need to prevent manifest injustice, and
denies reconsideration.

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CONCLUSION
IT IS THEREFORE ORDERED that Defendant’s motion for reconsideration is DENIED.
IT IS SO ORDERED.
s/ R. Bryan Harwell
R. Bryan Harwell
United States District Judge
Florence, South Carolina
December 3, 2014

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