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Blau v. Allianz Life Insurance Company of North America

United States District Court, E.D. New York

February 15, 2018

DAVED BLAU, Trustee of the Zupnick Family Trust 2008 C, Plaintiff,


          NICHOLAS G. GARAUFIS, United States District Judge.

         Plaintiff David Blau, Trustee of the Zupnick Family Trust 2008 C (the "Trust"), brings this action against Defendant Allianz Life Insurance Company of North America ("Allianz North America"), seeking declaratory relief concerning a life insurance policy issued by Allianz North America of which the Trust is owner and beneficiary. Plaintiff commenced this action in New York Supreme Court, County of Kings, on April 3, 2014. (N.Y. Sup. Ct Compl. (Dkt. 1-1) at ECF p.7.) Defendant removed the case to federal court on May 22, 2014. (Not. of Removal (Dkt. 1).) On September 2, 2014, Defendant moved to dismiss the complaint for failure to state a claim on which relief could be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). (Mot to Dismiss (Dkt. 14).) This court granted Defendant's motion on August 17, 2015, but directed Plaintiff to file an amended complaint addressing certain deficiencies in his original complaint. (Mem. & Order (Dkt. 17).) On September 18, 2015, Plaintiff filed an amended complaint seeking the instant declaratory relief. (Am. Compl. (Dkt. 18).) The parties attempted to mediate their dispute, though the court granted both parties leave to move for summary judgment if they were unable to resolve their dispute through extrajudicial means. (Nov. 11, 2016, Minute Entry.) On January 13, 2017, the parties set a joint briefing schedule while still hoping to resolve their dispute by mediation. (Jan. 13, 2017, Letter (Dkt. 37).) On May 12, 2017, both parties filed their fully briefed cross-motions for summary judgment. (Pl. Mot. for Summ. J. ("Pl. Mot.") (Dkt. 40); Pl. Mem. in Supp. of Pl. Mot. ("Pl. Mem.") (Dkt. 40-2); Def. Mem. in Opp'n to Pl. Mot. ("Def. Opp'n") (Dkt. 41); Pl. Reply to Def. Opp'n ("Pl. Reply") (Dkt. 42); Def. Mot. for Summ. J. ("Def. Mot.") (Dkt. 43); Def. Mem. in Supp. of Def. Mot. ("Def. Mem.") (Dkt. 43-1); Pl. Mem. in Opp'n to Def. Mot. ("Pl. Opp'n") (Dkt. 44); Def. Reply to Pl. Opp'n ("Def. Reply") (Dkt. 46).)

         For the reasons set forth below, Defendant's motion is GRANTED and Plaintiffs motion is DENIED.

         I. BACKGROUND

         A. Facts

         Plaintiff alleges that on or about April 7, 2007, Defendant issued a life insurance policy with a face value of $8, 000, 000 on the life of Dora Zupnick (the "Policy"). (Am. Compl. ¶ 4.) The Trust is both the owner and beneficiary of the Policy. (Id. ¶¶ 5-6.) Plaintiff is the trustee of the Trust. (Id.¶ 1.) Plaintiff became trustee of the Trust on April 10, 2010. (Def. Mem. at 5.) Zupnick was alive as of the filing of the amended complaint, and therefore no demand on the Policy has been made. (Am. Compl. ¶ 61.)

         From time to time, Defendant sent notices to the Trust informing it of premium payments that had come due. (Id. ¶¶ 10-19.) The Trust would then pay the required premium to ensure that the Policy did not lapse. (See Pl. Resp. to Def. Rule 56.1 Statement (Dkt. 44-1) ¶ 20.) The most recent such payment made by the Trust was in February 2011. (Am. Compl. ¶ 20.) On March 10, 2011, Defendant sent a letter to the Trust (the "March Grace Notice") informing it once again that the premium payment was due. (See Def. Mem. at 7; Def. Reply in Supp. of Def. Rule 56.1 Statement ¶ 38.) The March Grace Notice said that the Trust owed $71, 900.74 in premium payments and that the Policy had entered grace. (See Def. Reply in Supp. of Def. Rule 56.1 Statement (Dkt. 46-1) ¶ 38.) Over the next month (the "Grace Period"), neither Plaintiff nor the Trust made any payment in response to the March Grace Notice. (See Def. Rule 56.1 Statement (Dkt. 53-2) ¶ 37.) On April 9, 2011, Defendant sent a lapse notice informing the Trust that the Policy had lapsed. (Am. Compl. ¶ 24.) That same date, Defendant sent another letter (the "April Grace Notice") informing the Trust that it owed $34, 726.67 in premium payments. (Id. ¶ 21.) No other communications were sent in reference to the April Grace Notice.

         Plaintiff alleges that Defendant considers the Policy to have lapsed and seeks a contrary declaration from this court "that the Policy is in full force and effect and has been continuously in full force and effect since the Policy was issued without any lapses in coverage." (Id. ¶¶ 25-26.)

         B. Arguments

         In their cross-motions for summary judgment, the parties present the following arguments:

         Plaintiff moves this court to declare the Policy "in good standing." (Pl. Mem. at 16.) Plaintiff contends that the March Grace Notice should be declared invalid because it demanded a higher dollar amount than what the Trust needed to pay to avoid lapse, featured the incorrect due date for payment, and contained two addresses for where payment should be sent. (Id. at 11-16.)

         Defendant seeks a judgment as a matter of law on the grounds that the Policy lapsed when Plaintiff failed to make timely payments. (Def. Mem. at 9.) Defendant bases its argument on four principal points. First, it argues that the Policy lapsed when Plaintiff failed to make payments before the expiration of the Grace Period. (Id. at 10-15.) Second, it claims that, even if the March Grace Notice was invalid, the Policy lapsed after a year of nonpayment pursuant to New York law. (Id. at 15-18.) Third, Defendant construes Plaintiffs failure to pay premiums as a repudiation or abandonment of the Policy, leading to the conclusion that Plaintiff forfeited his rights in the Policy. (Id. at 19-20.) Finally, Defendant submits that Plaintiffs claims are barred by the statute of limitations and that the Policy could only be reinstated within a three-year period that already ended. (Id. at 21-22.)


         A court must grant summary judgment when "the movant shows that 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). "A 'material' fact is one capable of influencing the case's outcome under governing substantive law, and a 'genuine' dispute is one as to which the evidence would permit a reasonable juror to find for the party opposing the motion." Figueroa v. Mazza, 825 F.3d 89, 98 (2d Cir. 2016) (citing Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986)). "The movant may discharge this burden by showing that the non-moving party has 'fail[ed] to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'" Lantheus Med. Imaging. Inc. v. Zurich Am. Ins. Co., 255 F.Supp.3d 443, 451 (S.D.N.Y. Apr. 28, 2015) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). "'The mere existence of a scintilla of evidence' in support of the non-movant will be insufficient to defeat a summary judgment motion." Transflo Terminal Servs., Inc. v. Brooklyn Res. Recovery. Inc., 248 F.Supp.3d 397, 399 (E.D.N.Y. 2017) (quoting Liberty Lobby, 477 U.S. at 252).

         "In determining whether an issue is genuine, '[t]he inferences to be drawn from the underlying affidavits, exhibits, interrogatory answers, and depositions must be viewed in the light most favorable to the party opposing the motion.'" SCW West LLC v. Westport Ins. Corp.,856 F.Supp.2d 514, 521 (S.D.N.Y. 2012) (quoting Cronin v. Aetna Life Ins. Co.,46 F.3d 196, 202 (2d Cir. 1995)). "[T]he judge's function is not Q to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Redd v. N.Y. Div. of Parole, 678 F.3d 166, 173-74 (2d Cir. 2012) (quoting Liberty Lobby, 477 U.S. at 249). However, "[a] party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment, " and "[m]ere conclusory allegations or denials ... cannot ...

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