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Bgi Life, Inc., A Florida Corporation v. American General Life Insurance Company

August 19, 2011

BGI LIFE, INC., A FLORIDA CORPORATION PLAINTIFF,
v.
AMERICAN GENERAL LIFE INSURANCE COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. Otis D. Wright, II United States District Judge

Order GRANTING Defendant's Motion for Summary Judgment

I. INTRODUCTION

Pending before the Court is Defendant American General Life Insurance Company ("Defendant") Motion for Summary Judgment against Plaintiff BGI, Inc. ("Plaintiff"). The Court deems the matter appropriate for decision without oral argument, and for the reasons discussed below, hereby GRANTS Defendant's Motion for Summary Judgment. FED. R. CIV. P. 78. L.R. 7- 15.

II. FACTUAL BACKGROUND

A. THE LIFE INSURANCE POLICY

Plaintiff in this case is the owner of a $5 million life insurance policy (the "Policy") for Ms. Sameha Rajab ("Insured"). Defendant sold and issued a term life insurance policy to Insured for $5 million through one of its independent agents in California. In March 2007, Insured converted to a Flexible Premium Adjustable Life Insurance Policy. At the time the Policy was issued to Insured she was 70 years old and was diagnosed with Type II diabetes ("DM") and an enlarged left ventricle in her heart. (SUF at 2.) Because of this, Defendant classified her as "Special", rated her health in "Table 3"*fn1 ,and required additional charges when the policy was executed.

B. LAPSE AND TERMINATION OF THE POLICY

Defendant claims it issued a notice of premium payment due on December 8, 2008, informing Plaintiff that "[e]ven though you may have been making regular payments on your policy, the current values are insufficient to cover the monthly charges. . . . This policy is in its grace period and will terminate without value unless a payment of $48,750.00 is received prior to February 8, 2009." (Def.'s Mem. of Points and Authorities at 3.) Plaintiff claims it never received this letter. (Compl. at 5.)

In February 2009, Plaintiff claims it spoke with a phone representative of Defendant regarding the past due premium. (Compl. at 5.) The agent allegedly stated the Policy could be reinstated if a $97,500 payment was received with the reinstatement application. (Compl. at 5.) On February 19, 2009, Plaintiff wired $97,500 to Defendant. (Compl. at 6.) On or about February 19, 2009, Plaintiff mailed in the reinstatement application. (SUF at 4.) On February 20, 2009, Plaintiff claims another phone representative of Defendant's promised Plaintiff that the Policy would be "auto-reinstated", meaning that no additional medical information would be required. (Compl. at6.)

C. THE REINSTATEMENT APPLICATION

On February 24, 2009, Defendant instructed Plaintiff by letter to resubmit an Application for Reinstatement with "Notice-Info","Medical Statements" and $48,750 to "pay the contract". (SUF at 4.) Although Plaintiff notes in the Complaint that the letter was contrary to the discussions with phone representatives, Plaintiff complied with the requests in the letter. (Compl. at 6.) Plaintiff received a second letter dated February 24, 2009, that acknowledged Plaintiff's $97,500 premium payment, but requested Insured's notarized signature for processing, and stated that their Underwriter "may need updated Attending Physician Statements and/or other requirements." (SUF at 4.) On March 3, 2009, Plaintiff faxed a reinstatement application with Insured's notarized signature, and on March 9, 2009 wired the requested $48,750. (Compl. at 7.) On March 13, 2009, Plaintiff faxed Defendant a physician statement from Dr. Wahab who had examined insured on March 14, 2008. (SUF at 6.)

On March 20, 2009, Plaintiff spoke with Mr. Gregory Thornton, AG's Vice President-Underwriting. (SUF at 5.) Mr. Thornton advised Plaintiff that Defendant had received a "trial application"*fn2 for life insurance for Insured in July 2008 through an independent agent. The "trial application" included a report from Dr. Sam Anabi that made him concerned about Insured's blood pressure and chest pain. (SUF at 6.) Mr. Thorton told Plaintiff's representative that more medical information would be needed to approve the reinstatement application. (SUF at 6.) No additional medical information was provided. (SUF at 6.)

On March 24, 2009 Plaintiff received a letter from Defendant denying reinstatement of the Policy. (SUF at 6.) Defendant refunded premium payments not applied to the Policy in March 2009. (SUF at7.)

D. THE INSTANT ACTION

On or about September 18, 2009, Plaintiff filed its Complaint alleging breach of contract and the covenant of good faith and fair dealing as well as a claim seeking Injunctive Relief. (SUF at 7; Compl. at 2.) Defendant contends Plaintiff is e ...


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