United States District Court, D. New Hampshire
Jeanette Partridge, individually and as executrix of the estate of Timothy Partridge,
USAA Life Insurance Company.
MEMORANDUM ORDER Opinion No. 2015 DNH 057.
JOSEPH N. LAPLANTE, District Judge.
This case arises from tragic circumstances: the suicide of the plaintiff's husband, Dr. Timothy Partridge, just before the two-year suicide exclusion in his life insurance policy with the defendant, USAA Life Insurance Company, expired. Based on this exclusion, USAA Life refused to pay the $1 million death benefit to the named beneficiary, plaintiff Jeanette Partridge.
Mrs. Partridge responded by bringing this action against USAA Life in Rockingham County Superior Court, claiming that USAA Life breached the policy by refusing to pay the death benefit. Specifically, she claims that the policy's suicide exclusion is void because its scope exceeds that permitted by the New Hampshire Department of Insurance. See N.H. Code R. Ins. 401.04(m)(3)(a). Mrs. Partridge further claims that USAA Life was negligent in failing to process Dr. Partridge's life insurance application "diligently and within a reasonable period of time, " causing "loss of the value of the life insurance policy" and other damages. USAA Life removed the action to this court, which has jurisdiction under 28 U.S.C. § 1332(a)(1) (diversity), since Mrs. Partridge is a citizen of New Hampshire while USAA Life is a Texas corporation with its principal place of business there,  and the amount in controversy exceeds $75, 000.
The parties have filed cross-motions for summary judgment, see Fed.R.Civ.P. 56, with Mrs. Partridge moving for judgment in her favor on her claim that the policy's suicide exclusion is void, and USAA moving for judgment in its favor on both of Mrs. Partridge's claims. As Mrs. Partridge points out, while the New Hampshire insurance regulations limit the suicide exclusion in a life insurance policy to "[d]eath resulting from suicide within 2 years of the issue date of the policy, " N.H. Code R. Ins. 401.04(m)(3)(a), her husband's policy excluded the full death benefit "[i]f the insured dies by suicide, while sane or insane, within 2 years from the Effective Date of the policy, " which, here, was the date USAA Life received payment of its first premium. Mrs. Partridge argues that these differences-the inclusion of the "while sane or insane clause" and the substitution of "effective date" for "date of issue"-serve to void the exclusion in its entirety under the insurance regulations, which provide that "any policies that contain any exclusions violating this part shall be operative as if such prohibited exclusions were not included." Id . 401.04(m)(1).
USAA Life, however, responds that (A) policy exclusions need only "[c]ontain language substantially similar to the language" set forth in the regulations, id. 401.04(m)(2)(a), and "effective date" as used in its policy is, in substance, the same as "date of issue" as used in the regulations, and (B) even if the other offending phrase identified by Mrs. Partridge, "while sane or insane, " is stricken from the policy as required by Rule 401.04(m)(1), the exclusion still operates to disqualify her from receiving the full death benefit, since there is no evidence (or even any allegation) that Dr. Partridge was insane at the time of his suicide. USAA Life further argues that Mrs. Partridge's negligence claim fails for lack of any duty it owed Dr. Partridge to process his application "diligently" or, for that matter, any evidence that it breached that duty, even if it was owed, or that any such breached proximately caused the damages that Mrs. Partridge seeks to recover. As fully set forth below, the court agrees with USAA Life and, following oral argument, grants its motion for summary judgment in its entirety (and denies Mrs. Partridge's cross-motion).
I. Applicable legal standard
Summary judgment is appropriate where "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 dispute is "genuine" if it could reasonably be resolved in either party's favor at trial, and "material" if it could sway the outcome under applicable law. See Estrada v. Rhode Island, 594 F.3d 56, 62 (1st Cir. 2010). In analyzing a summary judgment motion, the court "views all facts and draws all reasonable inferences in the light most favorable to the non-moving" parties. Id . On cross-motions for summary judgment, "the court must consider each motion separately, drawing inferences against each movant in turn." Merchants Ins. Co. of N.H., Inc. v. U.S. Fid. & Guar. Co., 143 F.3d 5, 7 (1st Cir. 1998) (quotation marks omitted). These inference-shifting rules are largely academic here, however, since, as discussed infra, the material underlying facts are almost all undisputed.
Dr. Partridge submitted an application for a life insurance policy with USAA Life on March 30, 2011. (He had previously applied for and received a different life insurance policy from USAA Life, issued in 2004.) The application notified Dr. Partridge that "no insurance coverage will take effect prior to delivery of the policy" to him "and then only if, " in addition, "the health and insurability of each person is as stated in this application" and "the company has received the first full premium payment while each person is alive." In completing the application, Dr. Partridge indicated that premium payments would be made on the 26th day of each month, by way of an automatic withdrawal from a specified account. He also designated Mrs. Partridge as the primary beneficiary.
Less than two months later, on May 27, 2011, USAA Life notified Dr. Partridge via letter that his application for the life insurance policy had been approved. This letter recited an "[e]ffective date" for the policy of June 26, 2011, and advised Dr. Partridge that USAA Life would "deliver [his] policy shortly after the effective date." USAA Life later explained to Dr. Partridge, in a telephone conversation of June 2, 2011, that the company had determined the effective date of the policy based on the day of the month he had chosen to make the premium payment in his application, as just discussed. Dr. Partridge made no objection, nor did he ask to remit his first premium payment any earlier. USAA Life subsequently delivered a copy of Dr. Partridge's life insurance policy to him.
Like the letter confirming that USAA had accepted Dr. Partridge's application, the policy listed its "effective date" as June 26, 2011, defining that term as "the date on which coverage starts. Premium due dates, policy months, years and anniversaries are measured from that date." In a section marked "Suicide Exclusion, " the policy stated in relevant part that
[i]f the [i]nsured dies by suicide, while sane or insane, within two years from the Effective Date of the policy or from the effective date of the last reinstatement, if any, we will pay a reduced death benefit equal to... [t]he premiums paid for benefits on the [i]nsured's life[.]
(formatting altered). The policy identified Mrs. Partridge as its primary beneficiary.
Dr. Partridge died by suicide on June 25, 2013-just two days shy of the expiration of two-year period during which the suicide exclusion remained in effect. Invoking the exclusion, USAA Life refused to pay the entire death benefit to Mrs. Partridge, though it tendered an amount equal to the premiums remitted as of that time, which Mrs. Partridge declined to accept. She promptly commenced this action.
Mrs. Partridge does not dispute that, under the terms of Dr. Partridge's policy, the suicide exclusion applies, disentitling her to the full death benefit. Instead, as noted at the outset, she claims that the policy's suicide exclusion differs from the suicide exclusion permitted by the New Hampshire insurance regulations, voiding it. She further claims that USAA Life owed Dr. Partridge a duty in negligence to "[p]rocess the entire application diligently and within a reasonable period of time, " and that it breached this duty, resulting in "loss of the value of the life ...