The opinion of the court was delivered by: Thomas J. McAVOY Senior United States District Judge
Plaintiffs Chester and Ella Shultz commenced the instant action against Defendants seeking to recover benefits under a life insurance policy. Presently before the Court is Defendants Sunlife Assurance Company of Canada and Sunlife Financial Group's (collectively "Defendants") motion for summary judgment pursuant to Fed. R. Civ. P. 56 seeking dismissal of the Complaint in its entirety.
Plaintiffs were long time employees of Robert Wehle ("Wehle"). On October 10, 1989, Wehle purchased a life insurance policy on his own life. Wehle was listed as the owner of the policy. On March 5, 1990, Wehle had the policy retitled with Plaintiff Chester Shultz as the owner and Chester and Ella Schultz as the primary beneficiaries. On May 3, 1990, the policy was again changed such that ownership of the policy was transferred from Chester Shultz alone to Chester and Ella Shultz jointly and severally. Premiums for the subject policy were paid for deposit into a fund that creates an "account value." The account value of the policy is used to fund and support the policy's coverage. Wehle paid premiums on January 26, 1990 and May 8, 1990.
In September 1990, Defendants sent a bill for the policy to Plaintiffs at their address. According to Ella Shultz, she wrote a letter to Defendants' former agent, Thomas Mock, complaining that the policy was supposed to be paid up. On September 27, 1990, Defendants' employee, Thomas Mock, wrote to Plaintiffs as follows:
I am very sorry for the bill you received from our company. There are no premiums due on your policy as it is paid up. Please disregard the bill and any others you might receive. I'm in the process of getting all correspondence mailed to Mr. Wehle's address.
As a result, Defendants sent annual statements for the period 1989 through and including 2001 to Plaintiffs as follows:
C/o R Wehle Box 766 Rr 01 Henderson, NY 13650 Thus, although the statements were addressed to Chester and Ella Shultz, they were mailed to Wehle's address.*fn1
The account value was sufficient to support the policy for numerous years. In April 2002, however, the account value was insufficient to keep the policy in force. Accordingly, on April 10, 2002, Defendants sent a letter addressed to Plaintiffs c/o of Wehle and mailed to Wehle's address advising that the policy "will cancel unless we receive a payment of $408.02 by June 09, 2002." Due to an apparent error by the postal service, the April 10, 2002 was actually delivered to Plaintiffs' mailbox; not that of Wehle. According to Plaintiffs, they gave the notice to Wehle's bookkeeper, James Signor, who advised that Wehle would take care of it. In an affidavit, Signor recalled having a conversation with Ella Shultz regarding the letter, but could not recall ever seeing the letter. Signor further stated that he believed his conversation with Ella Shultz occurred well after Wehle died on July 12, 2002.*fn2
Defendants did not receive any further payments on the policy. Defendants did not receive any communications from Plaintiffs or anyone else in response to the cancellation notice. On July 10, 2002, Defendants sent a letter to Plaintiffs (again, addressed to them, but sent in care of Wehle and mailed to Wehle's address) stating that the insurance policy was no longer in effect, but that the policy could be reinstated with payment and proof of insurability. According to Plaintiffs, they never actually received this letter.
Wehle died in July 2002. Plaintiffs made a claim to SunLife for life insurance benefits. The claim was denied on the ground that the policy had lapsed. Plaintiffs then commenced the instant action seeking benefits under the insurance policy. Plaintiffs allege that Defendants breached the contract and that their agent, Mock, negligently misrepresented to Plaintiffs that the policy premiums were paid in full and that they could disregard any future bills.
Defendants now move for summary judgment pursuant to Fed. R. Civ. P. 56 seeking dismissal of the ...