Black v. Jackson National Life Insurance Co.

          Present: The Honorable CHRISTINA A. SNYDER JUDGE

          Proceedings: DEFENDANT JACKSON NATIONAL LIFE INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT (Dkt. 18, filed May 20, 2016)

          Honorable CHRISTINA A. SNYDER JUDGE

         I. INTRODUCTION

         On June 11, 2015, plaintiff Priscilla J. Black initiated this action in the Riverside County Superior Court against defendants Jackson National Life Insurance Company (“Jackson National”) and Does 1 through 50 (collectively, “defendants”). Dkt. 1., Notice of Removal. On July 17, 2015, defendants removed this action to this court on the basis of diversity jurisdiction. Id. Plaintiff asserts claims against defendants for: (1) breach of contract; and (2) breach of the implied covenant of good faith and fair dealing. Dkt. 1, Ex. A, Compl. Plaintiff is the beneficiary of a life insurance policy issued by defendant Jackson National. As a result of financial difficulties, plaintiff failed to pay the premiums on this policy resulting in the substantial depletion of the policy benefits. Nonetheless, plaintiff alleges that, throughout this period, Jackson National failed to inform her and actively misrepresented to her that her policy was eligible for a waiver that would have relieved her obligation to pay the premiums on the policy.

         On May 20, 2016, Jackson National filed a motion for summary judgment. Dkt. 18. On May 27, 2016, plaintiff filed an opposition, Dkt. 23, and on June 6, 2016, Jackson National filed a reply, Dkt. 24. Having carefully considered the parties’ arguments, the Court finds and concludes as follows.

         II. BACKGROUND ^[1]

         Except where noted, the following facts are undisputed: On July 10, 1989, Jackson National issued a life insurance policy (“the Policy”) to plaintiff’s husband, Robert Black. Pl.’s Additional Facts and Evidence (“PAFE”) ¶ 1; Def’s Resp. (“DR”) ¶ 2. Plaintiff was the sole beneficiary of the Policy. PAFE ¶ 2; DR ¶ 2. The policy contains a premium disability waiver provision, referred to as the “Supplementary Rider for Waiver of Premium During Total Disability” (“Supplementary Rider”). Def’s Uncontroverted Facts and Evidence (“DUFE”) ¶ 3; Pl.’s Resp. (“PR”) ¶ 3. Pursuant to the Supplementary Rider, Jackson National agreed to waive the Policy’s premiums in the event it received a timely written notice that the insured had become totally disabled. See Jackson National Ex. 9, the Policy, at 41. Plaintiff contends that the Supplementary Rider is not called to the attention of the policy holder; specifically, it does not appear until the very last pages of the Policy, it is not sequentially numbered (i.e., the provision is not identified by a page number), it is not listed in the Policy’s Table of Contents, and, while the Policy’s declarations page refers to a “Waiver of Premium, ” it does not indicate that this waiver is for disability. PAFE ¶ 3.^[2]

         The Supplementary Rider provides, in pertinent part:

BENEFIT Upon receipt of due written proof that the Insured is totally disabled as defined in the Rider, the Company will waive premiums on this Policy which fall due while total disability continues.

NOTICE OF CLAIM AND PROOF OF DISABILITY Before any premium is waived, written notice of claim and proof of total disability must be received at the Home Office. Notice of claim must be received while the insured is living and during the continuance of total disability. It must be received not later than six months after:

1. The policy anniversary on which the attained age of the insured is sixty . . .

2. The due date of a premium in default

3. The Termination of the Policy

Written proof of claim must be submitted within six months after receipt of notice of claim.

This provision will not prevent any premium from being waived if it is shown that notice and proof were given as soon as was reasonably possible. In no event will any premium be waived or refunded if the due date was more than one year ...