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DeCoursey v. American General Life Insurance Co.

United States District Court, W.D. Missouri, Western Division

January 27, 2015

SUSAN P. DECOURSEY, Plaintiff,
v.
AMERICAN GENERAL LIFE INSURANCE COMPANY, Defendant

For Susan P. Decoursey, Plaintiff: Antwaun L. Smith, Kansas City, MO USA; Kesia Smith, Smith Law Office LLC, Kansas City, MO USA.

For American General Life Insurance Company, Defendant: Edward M. Holt, LEAD ATTORNEY; PRO HAC VICE, Jeffrey M. Grantham, Maynard Cooper & Gale PC, Birmingham, AL USA; Gardiner B. Davis, LEAD ATTORNEY, Spencer Fane Britt & Browne LLP, Kansas City, MO USA; Janine McKinnon McAdory, LEAD ATTORNEY; PRO HAC VICE, Birmingham, AL USA.

For American General Life Insurance Company, Counter Claimant: Edward M. Holt, LEAD ATTORNEY; PRO HAC VICE, Jeffrey M. Grantham, Maynard Cooper & Gale PC, Birmingham, AL USA; Gardiner B. Davis, LEAD ATTORNEY, Spencer Fane Britt & Browne LLP, Kansas City, MO USA; Janine McKinnon McAdory, LEAD ATTORNEY; PRO HAC VICE, Birmingham, AL USA.

For Susan P. Decoursey, Counter Defendant: Antwaun L. Smith, Kansas City, MO USA; Kesia Smith, Smith Law Office LLC, Kansas City, MO USA.

ORDER

GARY A. FENNER, UNITED STATES DISTRICT JUDGE.

Presently before the Court is Defendant American General Life Insurance Company's (" Defendant") Motion for Summary Judgment. (Doc. # 33). Plaintiff Susan P. DeCoursey (" Plaintiff") opposes. (Doc. # 42). For the reasons stated below, Defendant's Motion for Summary Judgment is GRANTED in part and DENIED in part.

DISCUSSION

I. FACTS

Defendant's predecessor, Franklin Life Insurance Company (" Franklin"), sold Plaintiff's husband a life insurance policy (the " Policy"). (April 29, 2013, Letter from American General Life Insurance Company to DeCoursey (" April 29 Letter"), 1). Plaintiff was the beneficiary under the Policy, and the Policy was issued for a face value of $250, 000. (Id.) . Plaintiff's husband made several monthly premium payments pursuant to the Policy. (Id. at 2). He made one premium payment on February 6, 1986, two premium payments on February 24, 1986, one premium payment on March 4, 1986, one premium payment on April 2, 1986, one premium payment on May 1, 1986, and a final premium payment on June 2, 1986. (Id.) . At this time, Plaintiff and her husband resided in Missouri. (Deposition of Susan DeCoursey (" DeCoursey Depo.") 8:3-5).

On August 9, 1986, Plaintiff's husband and son were killed in a car accident. (Id. at 6:20-21; 13:3-5). Plaintiff hired an attorney and filed a claim on the Policy shortly after her husband's death. (Id. at 9:5-14). Franklin denied her claim, alleging the Policy had lapsed. (Id. at 9:15-21). Plaintiff was informed of Franklin's denial shortly thereafter. (Id. at 9:22-10:5). Plaintiff did not file a lawsuit against Franklin or make any further inquiries at that point. (Id. at 10:22-11:13).

In June of 2011, Defendant began a review effort to determine if there were deceased insureds whose policies had not been paid out. (April 29 Letter, 2). The Policy was reviewed. (Deposition of Ann Henderson (" Henderson Depo.") 15:14-16:11). During the review, Defendant reviewed the DMF sheet which is a printout containing information on old unsettled claims. (Deposition of Louise Stith 18:21-19:2). The DMF sheet indicated that the Policy did not lapse until November 7, 1986. (Id. at 25:24-26:14). As a result, Defendant sent Plaintiff a letter on December 22, 2012, informing her that she may be entitled to benefits under the policy. (December 22, 2012, Letter from American General Life Insurance Company to DeCoursey (" December 22 Letter")). On January 24, 2013, Defendant paid Plaintiff $250, 000, the face value of the Policy. (January 24, 2013, Letter from American General Life Insurance Company to DeCoursey (" January 24 Letter")).

Plaintiff then asked Defendant to pay interest on the Policy proceeds at the statutory rate from the date she originally filed a claim until the date the Policy was paid. (DeCoursey Depo. 38:2-11). Defendant refused to pay interest, so on January 29, 2013, Plaintiff filed a complaint with the Department of Insurance. (Id. at 44:10-19). After learning of the complaint, Defendant began investigating the Policy further and reviewed many records. (Henderson Depo. 16:22-17:8, 14:13-23). One of the records Defendant discovered was a termination log that indicated that the Policy was only paid through July 1, 1986, after which the policy lapsed and was terminated. (Id. at 22:12-22). Another record was the purged money file, which also indicated that the policy was only paid through July 1, 1986, and thus terminated on August 1, 1986, after the grace period expired. (Deposition of Christina Wools 43:2-18). As a result, Defendant determined that the Policy was not actually payable and had been paid out in error. (Henderson Depo. 16:6-11). However, Defendant offered to allow Plaintiff to keep the $250, 000 and give her an additional $25, 000 to settle the claim. (April 29 Letter, 3).

On October 25, 2013, Plaintiff filed a Petition in the Circuit Court for Jackson County, Missouri. (Petition). Defendant thereafter removed Plaintiff's Petition to this Court. (Notice of Removal). Plaintiff raised seven counts against Defendant: vexatious refusal to pay, unpaid statutory interest, breach of contract, fraudulent representation, negligent misrepresentation, breach of the covenant of good faith and fair dealing, and unjust enrichment. ( See generally Petition). Defendant filed a two count counterclaim against Plaintiff for monies had and received and unjust enrichment. ( See generally Answer). On April 15, 2014, this Court granted Defendant's Motion to Dismiss in part leaving four claims against Defendant: breach of contract, vexatious refusal to pay, unpaid statutory interest, and unjust enrichment. (Doc. # 23, p. 15).

II. LEGAL STANDARD

Summary judgment should be granted " if 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). " Summary judgment is appropriate if the evidence, viewed in the light most favorable to the [nonmovant] and giving [the nonmovant] the benefit of all reasonable inferences, shows there are no genuine issues of material fact and [the movant] is entitled to judgment as a matter of law." Price v. N. States Power Co., 664 F.3d 1186, 1191 (8th Cir. 2011). " Once the moving party has made and supported their motion, the nonmoving party must proffer admissible evidence demonstrating a genuine dispute as to a material fact." Holden v. Hirner, 663 F.3d 336, 340 (8th Cir. 2011). Summary judgment should not be granted if a reasonable jury could find for the nonmoving party. Woodsmith Publ'g Co. v. Meredith Corp., 904 F.2d 1244, 1247 (8th Cir. 1990) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

III. ANALYSIS

A. Statute of Limitations

The present case is before this Court pursuant to diversity jurisdiction. (Doc. # 23, p. 6). " 'A federal court exercising diversity jurisdiction is required to apply the law of the forum when ruling on statutes of limitations.'" Pinnacle Pizza Co. v. Little Caesar Enterprises, Inc., 598 F.3d 970, 975 (8th Cir. 2010) (quoting Nettles v. Am. Tel. & Tel. Co., 55 F.3d 1358, 1362 (8th Cir. 1995)). " 'Missouri, the forum, considers statutes of limitations issues procedural, and, therefore, governed by Missouri law.'" Nettles, 55 F.3d at 1362 (quoting Renfroe v. Eli Lilly & Co., 686 F.2d 642, 646 (8th Cir. 1982)). Under Missouri law, a claim accrues " [not] when the wrong is done or the technical breach of contract or duty occurs, but when the damage resulting therefrom is sustained and is capable of ascertainment." Mo. Rev. Stat. § 516.100. " [T]he phrase 'capable of ascertainment' refers to the fact of damage, not the precise amount of damage. Nuspl v. Mo. Med. Ins. Co., 842 S.W.2d 920, 922 (Mo.Ct.App. 1992). " Damage is capable of ascertainment when it can be discovered or made known." Branstad v. Kinstler, 166 S.W.3d 134, 136 (Mo.Ct.App. 2005)

Missouri courts have repeatedly held that in the insurance context damages are capable of ascertainment when the insurer denies the insured's claim. See McClain ex rel. Rutledge v. Carpio, 338 S.W.3d 361, 373 (Mo.Ct.App. 2011) (" [Defendants] cite to Branstad . . . and Nuspl . . . for the proposition that [w]hen the claim is based on a failure to provide insurance coverage, it is the denial of coverage that triggers the running of the statute of limitations. . . . [W]e have no quarrel with this proposition." (first alteration in original) (internal quotation marks omitted)); Branstad, 166 S.W.3d at 137 (" [L]ike Nuspl, [Plaintiff's] cause of action accrued when he received notice that the carrier denied coverage for the loss and injury to his cattle."); Polytech, Inc. v. Sedgwick James of Mo., Inc., 937 S.W.2d 309, 311-12 (Mo.Ct.App. 1996) (" [T]he critical date is December 13, 1988, when [the insurance company] denied [Plaintiff's] claim . . . . It was at this point that the damage was ascertainable."); Nuspl, 842 S.W.2d at 923 (" We are persuaded by appellants' contention that the cause [of action] accrued when coverage was denied."). Thus, Plaintiff's damages were capable of ascertainment when Franklin denied her claim.

Summary judgment is appropriate on the issue of the statute of limitations when there is undisputed evidence regarding when a plaintiff received notice that her insurer denied her claim. See Syndicated Office Sys., Inc. v. Guardian Life Ins. Co. of Am., No. 4:05CV00640 ERW, 2006 WL 1520635, at *7 (E.D. Mo. May 31, 2006) (finding the defendant was entitled to summary judgment pursuant to the statute of limitations because of " undisputed evidence that the Hospital received notice that [the insurer] would not pay [the insured's] medical bill at least as early as September 26, 2000"). It is undisputed that Plaintiff received notice that her life insurance claim was denied in August or September of 1986. (DeCoursey Depo. 9:7-10:5). At that time, Plaintiff was living in Missouri. (Id. at 12:14-19).[1] Thus, Plaintiff's claim accrued no later than September of 1986.

A cause of action " upon any writing, whether sealed or unsealed, for the payment of money or property" must be brought within ten years from the date upon which it accrued. Mo. Rev. Stat. § 516.110(1). " [A]n insurance policy typically contains a written promise to pay money upon the occurrence of a specified future condition, such as death. The Missouri courts have consistently applied the ten-year statute of limitations to suits upon insurance policies." Johnson v. State Mut. Life Assurance Co. of Am., 942 F.2d 1260, 1263-64 (8th Cir. 1991). Accordingly, Plaintiff had until September of 1996 to bring her claims against Defendant. Plaintiff's claim was not filed until October 25, 2013. (Petition).

Plaintiff argues that even if the statute of limitations expired in 1996, it was restarted when Defendant voluntarily paid her on January 24, 2013. (Doc. # 42, p. 11). " 'Generally, part payment on a debt tolls the statute of limitations.'" Heidbreder v. Tambke, 284 S.W.3d 740, 746 (Mo.Ct.App. 2009) (quoting Anderson v. Stanley, 753 S.W.2d 98, 100 (Mo.Ct.App. 1988)). " [I]n order to toll the statute of limitations, the part payment must be made under circumstances that recognize the remaining debt as existing and are consistent with an intent to pay the balance." Anderson, 753 S.W.2d at 100. " [T]he burden of proof to show such intent is upon the creditor." Green v. Boothe, 239 Mo.App. 73, 188 S.W.2d 84, 89 (Mo.Ct.App. 1945). Plaintiff presents no evidence to indicate that Defendant's payment of the face value of the policy was a manifestation of its intent to pay interest. In fact, Plaintiff herself conceded that she was informed that she was not entitled to interest prior to receiving the face value payment. (DeCoursey Depo. 26: 2-3, 36:25-37:4).

Additionally, " [t]olling based on partial payment is not statutorily mandated but is, instead, a judicially recognized basis for tolling. Heidbreder, 284 S.W.3d at 746-47. The doctrine of partial payment is intended to protect " those who are inclined to rely upon the debtor's implied or express promise to keep paying. If a debtor's promise, express or implied, effectively causes a creditor to postpone litigation, the debtor should not thereby be able to entrap a creditor into a statute of limitations bar." Id. at 748. Tolling the statute of limitations in this case would not operate to serve the purposes of the partial payment doctrine. There is no indication that Defendant's payment caused Plaintiff to postpone litigation and thus miss filing her cause of action within the statutory period.

Plaintiff also argues that the statute of limitations should have been tolled pursuant to Mo. Rev. Stat. § 516.320. Section 516.320 tolls the state of limitations when a party acknowledges its debt in a writing. Plaintiff points to an internal letter that states Defendant paid Plaintiff the face value of the policy and " is in agreement to pay interest" as such a writing. (Doc. # 42, p. 11). However, to toll the statute of limitations, the writing must be one that is communicated to the party or her agent. See Millington v. Masters, 96 S.W.3d 822, 831 (Mo.Ct.App. 2002); Williamson v. Williamson, 50 Mo.App. 194, 200 (Mo.Ct.App. 1892). In this case, the writing was one between Defendant's employees and was not communicated to Plaintiff. Accordingly, § 516.320 does not apply.

Finally, Plaintiff argues that her vexatious refusal to pay claim is not barred by the statute of limitations because " she had a new vexatious refusal claim, accruing in 2013." (Doc. # 42, p. 12). Like with her other claims, a claim for vexatious refusal to pay accrues when a suit could have been maintained and the fact of damage is capable of ascertainment. Hopmeier v. First Am. Title Ins. Co. of Mid-West, 856 S.W.2d 387, 389 (Mo.Ct.App. 1993). To establish a claim for vexatious refusal to pay, Plaintiff must establish " (1) she had an insurance policy with [the defendant]; (2) [the defendant] refused to pay; and, (3) [the defendant's] refusal was without reasonable cause or excuse." See Dhyne v. State Farm Fire & Cas. Co., 188 S.W.3d 454, 457 (Mo. 2006). Thus, Plaintiff's cause of action for Defendant's 1986 refusal to pay would have accrued when Plaintiff was informed of Franklin's denial of her claim. Defendant's 1986 refusal to pay is the only refusal pled in Plaintiff's Petition. (Petition ¶ ¶ 35-36). Therefore, Plaintiff's claims are barred by the statute of limitations.

B. Monies Had and Received Claim

Defendant argues that it is entitled to summary judgment on its counterclaim for monies had and received. (Doc. # 34, p. 18). " 'The appropriate action when one party has been unjustly enriched through the mistaken payment of money by the other party is an action at law for money had and received.'" Investors Title Co. v. Hammonds, 217 S.W.3d 288, 293 (Mo. 2007) (quoting Blue Cross Health Servs., Inc. v. Sauer, 800 S.W.2d 72, 75-76 (Mo.Ct.App. 1990)). The action is appropriate where " 'the defendant has received or obtained possession of the money of the plaintiff, which, in equity and good conscience, he ought to pay over to the plaintiff.'" Id. at 293-94 (quoting Webster v. Sterling Finance Co., 351 Mo. 754, 173 S.W.2d 928, 931 (Mo. 1943)).

However, it is an affirmative defense to such a claim when " 'money has been voluntarily paid with full knowledge of the facts.'" Sentry Ins. v. Knox, 360 S.W.3d 846, 849 (Mo.Ct.App. 2011) (quoting Am. Motorists Ins. Co., v. Shrock, 447 S.W.2d 809, 811 (Mo.Ct.App. 1969)). Defendant claims this defense does not apply in this case because it did not have full knowledge of the facts when it paid Plaintiff. (Doc. # 43, p. 9). However, " [t]his 'voluntary payment doctrine' applies to having full knowledge of the facts or having an unlimited opportunity to become informed of the facts." Id. (quoting Am. Motorists, 447 S.W.2d at 811) (emphasis in original). Looking at the evidence in the light most favorable to the nonmoving party, a reasonable jury could find that Defendant had an unlimited opportunity to become informed of the facts. The necessary records were within its control and it had twenty-six years to review the records before it paid Plaintiff. Thus, Defendant's Motion for Summary Judgment on its counterclaim is DENIED.

CONCLUSION

A cause of action accrues for statute of limitations purposes when the fact of damages is capable of ascertainment. In insurance claims, a claim is capable of ascertainment when the insurer denies the insured's claim. Franklin denied Plaintiff's claim in 1986. Thus, Plaintiff's causes of action accrued against Defendant in 1986 and the statute of limitations expired in 1996. None of Defendant's subsequent actions were sufficient to toll the statute of limitations. Accordingly, for these reasons and the reasons set forth above, Defendant's Motion for Summary Judgment against Plaintiff's claims is GRANTED.

A plaintiff may not recover for monies had and received if the plaintiff paid the defendant the money with full knowledge of the facts or had an unlimited opportunity to become informed of the facts. A reasonable jury could find that Defendant had an unlimited opportunity to become informed of the facts before it paid Plaintiff. Accordingly, for these reasons and the reasons set forth above, Defendant's Motion for Summary Judgment on its counterclaim is DENIED.

IT IS SO ORDERED.


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