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SPEZIALE v. NATIONAL LIFE INSURANCE COMPANY

July 1, 2004.

CAROL B. SPEZIALE, AS ADMINISTRATRIX OF THE ESTATE OF THOMAS A. SPEZIALE AND CAROL B. SPEZIALE, INDIVIDUALLY AND AS BENEFICIARY, Plaintiff,
v.
NATIONAL LIFE INSURANCE COMPANY, Defendant.



The opinion of the court was delivered by: LAWRENCE KAHN, District Judge

MEMORANDUM — DECISION and ORDER

I. INTRODUCTION

  Plaintiff Carol B. Speziale commenced the instant action against Defendant National Life Insurance Company asserting claims of breach of contract, unjust enrichment, equitable estoppel, and a violation of N.Y. Gen. Bus. Law § 349 arising out of Defendant's denial of Plaintiff's claim under a life insurance policy issued to her deceased husband, Thomas Speziale. By Decision & Order dated March 19, 2003, Plaintiff's claims under N.Y. Gen. Bus. Law § 349 and for punitive damages were dismissed. Presently before the Court is: (1) Defendant's motion for summary judgment pursuant to Fed.R.Civ.P. 56 seeking dismissal of the Complaint in its entirety; and (2) Plaintiffs' cross-motion for summary judgment seeking a determination of liability as a matter of law.

  II. FACTS

  Thomas Speziale purchased a term life insurance policy from Defendant with an inception date of March 22, 1999. Def.'s Ex. D. Plaintiff was the named beneficiary. The policy had the following provisions pertinent to the instant dispute:
Entire Contract. This policy and a copy of the application which is attached . . . are the entire contract. . . . Any change of this contract must be written and may be made only by one of our authorized officers. . . .
Payment of Premiums. The First Premium and its interval are shown in the Data Section. It is due on the Policy Date. Each later premium is due at the end of the interval of time for which the preceding premium was paid. . . .
Lapse and Grace Period. If any premium due is not paid on or before the day it is due, this policy shall lapse as of such date. All our liability shall then cease. However, a grace period of thirty-one days from the due date, during which the insurance shall stay in force, shall be allowed for the payment of every premium except the first. . . .
Reinstatement. If this policy has lapsed, upon request it may be reinstated within five years of the date it lapsed. However, it may not be reinstated after the Final Expiration Date. We will require proof to our satisfaction that the insured is insurable. We will also require the payment of:
1. the premium for the period from the date of reinstatement to the next premium due date; plus
2. the lesser of:
a. half of all premiums for the period from the date of lapse to the date of reinstatement; or b. the premiums for the one year period prior to the date of reinstatement.
Death Benefit.. . . . We will pay the Death Benefit to the Beneficiary when we receive at our Home Office due proof that the Insured died while this policy was in force. . . .
Def.'s Ex. D. Thomas Speziale opted to make premium payments on a monthly basis. Id.
  By letter dated June 1, 1999, Defendant wrote Mr. Speziale advising him that the policy lapsed due to non-payment of premiums. Def.'s Ex. G. The letter read, in part, that
since the 31 day grace period has expired, your policy has lapsed. The policy may be reinstated without any interest penalty or evidence of insurability by paying the "amount due" while the Insured is still living and within 62 days of the due date. Therefore, payment of $209.43 for the April premium must be submitted by June 22, 1999 . . . or reinstatement requirements will be necessary.
Id. It appears that Mr. Speziale made the necessary payments to bring his premiums up to date. Def.'s Ex. F.
  By letter dated March 22, 2000, Defendant wrote Mr. Speziale concerning unpaid premiums.*fn1 The letter read, in part, as follows:
THANK YOU FOR YOUR RECENT PAYMENT. ALTHOUGH YOUR REMITTANCE WAS RECEIVED WITH THE MARCH PREMIUM NOTICE, OUR RECORDS SHOW THAT THE FEBRUARY PREMIUM WAS UNPAID. CONSEQUENTLY WE HAVE APPLIED YOUR REMITTANCE TO THE UNPAID PREMIUM. . . . IN ORDER TO BRING YOUR CONTRACT TO A CURRENT STATUS, WE ARE ENCLOSING ANOTHER PREMIUM NOTICE WITH A RETURN ENVELOPE TO FACILITATE PAYMENT. . . .
IF THIS INFORMATION DOES NOT AGREE WITH YOUR RECORDS, PLEASE NOTIFY US AT YOUR EARLIEST CONVENIENCE.
Def.'s Ex. H. Defendant sent Mr. Speziale a similar letter dated April 19, 2000.*fn2 That letter provided, in part, that "[a]lthough your remittance was received with the April premium notice, our records show that the March premium was unpaid." Def.'s Ex. I.

  Mr. Speziale died on February 1, 2002. The next day, February 2, 2002, Mrs. Speziale signed a check payable to Defendant in the amount of $209.43.*fn3 Defendant received the check sometime thereafter. Plaintiff also provided Defendant with notice of the death.

  Defendant established a claim file and assigned the matter to Caroline Buswell. Upon her review of the file, Buswell determined that the policy was paid through December 22, 2001 and that there were $418.86 in unpaid premiums (i.e., two months of unpaid premiums). Buswell also determined that the policy had a thirty-one day grace period and that the final payment on the policy was made after Mr. Speziale's death. Buswell concluded that the policy had lapsed prior to Mr. Speziale's death and, therefore, no payments were due. Plaintiff denies that the premiums were in arrears and that the policy had lapsed.

  By letter dated February 15, 2002, Buswell informed Plaintiff that "the . . . policy was not inforce [sic] on the date of your husband's death. On February 1, 2002 the paid to date on the policy was December 22, 2001. This paid to date was not within the thirty-one day grace period. We received a premium payment on February 5, 2002, . . . the check is dated after your husband's death." Def.'s Ex. M. Defendant also provided Plaintiff's attorney with a summary of all premium payments made by Mr. Speziale. Defendant returned to Plaintiff the February 2, 2002 premium payment.

  Plaintiff then commenced the instant action seeking payment under the terms of the policy. Defendant now moves for summary judgment pursuant to Fed.R.Civ.P. 56 seeking dismissal of the Complaint in its entirety. Plaintiff cross-moves for summary judgment.

  III. STANDARD OF REVIEW

  Federal Rule of Civil Procedure 56 provides that 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 genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In applying this standard, courts must "`resolve all ambiguities, and credit all factual inferences that could rationally be drawn, in favor of the party opposing summary judgment.'" Brown v. Henderson, 257 F.3d 246, 251 (2d Cir. 2001) (quoting Cifra v. General Electric Co., 252 F.3d 205, 216 (2d Cir. 2001)). Once the moving party meets its initial burden by demonstrating that no material fact exists for trial, the nonmovant "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (citations omitted). Rather, the nonmovant "must come forth with evidence sufficient to allow a reasonable jury to find in her favor." Brown, ...


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