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Gail Reina Sawyer, An Individual v. Hartford Life Insurance Company

February 2, 2012


The opinion of the court was delivered by: Hon. Michael M. Anello United States District Judge



Plaintiff Gail Reina Sawyer filed the above-captioned action against Defendants Sears Life Insurance Company's ("SLIC") and Hartford Life Insurance Company ("Hartford") in San Diego Superior Court for breach of insurance contract and breach of the implied covenant of good faith and fair dealing. Sawyer alleges that Defendants wrongfully denied coverage of her insurance claim arising out of her father Charles Potter's death. On June 17, 2010, Defendants removed the action to this Court. Sawyer subsequently settled her claim with Hartford, so Hartford is no longer a party to this action. Currently before the Court is SLIC's Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56. The Court found the motion suitable for decision on the papers and took the motion under submission pursuant to Civil Local Rule 7.1.d.1. For the reasons set forth below, the Motion is GRANTED IN PART and DENIED IN PART.


The following facts are not reasonably in dispute.*fn1 In 2003, after responding to a solicitation letter in the mail, Charles Potter purchased an accidental death insurance certificate (the "Certificate") from SLIC and thereafter he paid SLIC a premium of $9.96 per month for the Certificate. The Certificate provided $100,000 in coverage if Potter died: "(1) while occupying a private passenger automobile; (2) through being struck by a land motor vehicle; or (3) while driving for hire a land motor vehicle." [Doc. No. 20-4, Ex. 1, p. 4.] For all other accidents, the Certificate provided $50,000 in coverage. The Certificate defines "Accidental Death" as "[d]eath resulting directly from bodily injury effected solely through external, violent and accidental means." [Id. at p. 3.] The Certificate defines "Loss" as "An Accidental Death. The accident must occur while your insurance is in force. The Loss must occur within 365 days of the accident. The Loss must result directly from the accident and be independent of all other causes." [Id.] The policy also excludes losses "directly caused . . . by disease, or bodily or mental infirmity."

On June 23, 2009, Potter drove from San Diego headed for his vacation home in La Ribera, Mexico, located approximately 1,025 miles south of San Diego. Somewhere between Cuidad Constitucion and La Paz, Mexico, Potter lost control of his vehicle, crossed over the road, and went down the embankment. [Fritz Dec., Doc. No. 21, ex. 2, ¶¶ 6, 8.] Potter's vehicle ended up about 50 yards into the desert, landed on a tree, and was later declared a total loss. [Id.] He was trapped in his car for approximately eight hours in 100 degree heat before a tow truck came and drove him to his home in La Ribera. [Id. at ¶¶ 8-11.] The day after the accident Potter did not feel well, but insisted that he did not need to see a doctor. However, the following day, two days after the accident, Potter had trouble breathing and was rushed to a hospital in San Jose de Cabo, Mexico. [Fritz. Dec., Doc. No. 21-2, ¶ 15]

When Potter was admitted to the hospital he was cyanotic, and suffering from dehydration and edema in his lower limbs. [Pltf.'s Oppo., Doc No. 21, p. 8.] He was treated with supplemental oxygen and heparin. [Id.] Three hours after being admitted, Potter slipped into a coma and never recovered. [Id.] Potter died at 12:20 a.m. on June 26, 2009. [Id.] The final diagnosis of the treating cardiologist in the hospital, Dr. Alejandro Velderrain Zazueta, was "chronic obstructive pulmonary disease, auricular fibrillation, cerebrovascular event, possibly cardiac-induced, core pulmonale, and congestive heart failure." [Pltf.'s Notice of Lodgment ("NOL"), Doc. No. 21-1, Exh. 15.*fn2 ] Dr. Velderrain also noted that Potter suffered "an accident that made him remain seated for a long time in his vehicle, which possibly increased the risk of thrombosis." [Id.] After Potter's death, the U.S. Consulate issued a Report of Death of American Citizen Abroad, and based upon Dr. Velderrain's diagnosis, the report listed the cause of death as "cerebral thrombosis [stroke], chronic ventricular fibrillation, [and] cardiac insufficiency." [20-4, Exh. 4.]

Potter died at the age of 71. When he died, Potter was six feet three inches tall, and weighed over 300 pounds. Potter suffered from various health issues including chronic obstructive pulmonary disease ("COPD") and Cor Pulmonale (a failure of the right side of the heart). [Doc. No. 20, p. 3.] In May and June of 2009, Potter treated with a cardiologist who diagnosed him with an arterial flutter. [Doc. No. 24-4, Exh. 8.] Potter was also hospitalized in 2006 with a pulmonary embolism. [Doc. No. 21-5, ¶ 36.]

After Potter's death, his daughter Gail Reina Sawyer submitted a claim to SLIC as the beneficiary under the Certificate. Sawyer stated on SLIC's accidental death claim form that Potter "[l]ost control on soft shoulder. In desert heat for 16 hours after trauma of accident. This contributed to the stress of his condition and caused a stroke leading to death on 6/26/09." [Doc. No. 20-4, Exh. 3, p. 1.] Sawyer also submitted the U.S. Consulate's Report of Death, a letter from Dr. Velderrain (in Spanish), a hospital bill, and a copy of Potter's Will. [Doc. No. 20-4, Exh. 5.] SLIC requested Potter's medical records from Potter's primary care physician, Dr. Mohedin. [Doc. No. 20, p. 4.] Dr. Mohedin did not provide Potter's medical records and instead responded with a statement that he had seen Potter on April 20, 2009 for an exacerbation of his COPD, and on May 18, 2009, Dr. Mohedin diagnosed Potter with right sided heart failure (Cor Pulmonale) and referred him to a cardiologist. [Doc. No. 20-4, Exh. 8.] On February 8, 2010, SLIC denied the claim on the basis that Potter's death was not the direct result of an injury resulting from a covered accident. [Doc. No. 20-4,Exh. 9.]

On April 5, 2010, Sawyer filed this action in the San Diego Superior Court against SLIC for breach of insurance contract and breach of the covenant of good faith and fair dealing ("bad faith" claim). Sawyer also seeks attorneys fees and punitive damages. On June 17, 2010, SLIC timely removed the action based on diversity of citizenship under 28 U.S.C. §§ 1332(a) and 1441(a).

SLIC now moves for summary judgment on Sawyer's breach of contract claim because Potter's death was not covered by the Certificate as a matter of Law. SLIC argues in the alternative that even if there is coverage, the most Sawyer is entitled to under the Certificate is $50,000. SLIC also moves for summary judgment on the bad faith claim arguing that SLIC did not act in bad faith because there was a genuine dispute over coverage. Finally, SLIC moves for summary judgment on the punitive damages claim because Sawyer cannot prove, by clear and convincing evidence, that SLIC's denial of coverage involved fraud, oppression or malice.

In opposition to the motion, Sawyer argues that SLIC is not entitled to summary judgment on her breach of contract claim because the claim is covered by the Certificate. Sawyer argues that Potter's death resulted from his car accident, and that she does not have to establish that Potter's death resulted solely from the accident. Sawyer also argues that SLIC is bound by the coverage stated in the solicitation letter sent to Potter, and that the $100,000 coverage limit applies based on the terms of the solicitation letter. Additionally, Sawyer argues that SLIC is not entitled to summary judgment on the bad faith claim because SLIC acted unreasonably in investigating and denying coverage. Finally, Sawyer argues that she is entitled to punitive damages because SLIC acted in conscious disregard of her rights in denying coverage of the claim.*fn3


Pursuant to Federal Rule of Civil Procedure 56, a party is entitled to summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Hubbard v. 7-Eleven, 433 F. Supp. 2d 1134, 1139 (S.D. Cal. 2006) (citing former Fed. R. Civ. P. 56(c)(2)). "The moving party bears the initial burden to demonstrate the absence of any genuine issue of material fact." Horphag Research Ltd. v. Garcia, 475 F.3d 1029, 1035 (9th Cir. 2007) (citation omitted). "Once the moving party meets its initial burden, . . . the burden shifts to the nonmoving party to set forth, by affidavit or as otherwise provided in Rule 56, specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (internal quotation marks and citations omitted).

A mere scintilla of evidence is not sufficient "to defeat a properly supported motion for summary judgment; instead, the nonmoving party must introduce some 'significant probative evidence tending to support the complaint.'" Fazio v. City & County of San Francisco, 125 F.3d 1328, 1331 (9th Cir. 1997) (quoting Anderson, 477 U.S. at 249, 252). Thus, in opposing a summary judgment motion, it is not enough to simply show that there is some metaphysical doubt as to the material facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (citations omitted). However, when assessing the record to determine whether there is a "genuine issue for trial," the court must "view the evidence in the light most favorable to the nonmoving party, drawing all reasonable inferences in his favor." Horphag, 475 F.3d at 1035 (citation omitted). On summary judgment, the Court may not make credibility determinations; nor may it weigh conflicting evidence. See Anderson, 477 U.S. at 255. Thus, as framed by the Supreme Court, the ultimate question on a summary judgment motion is whether the evidence "presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52.


A. Breach of Insurance ...

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