United States District Court, M.D. Georgia, Macon Division
JULIANNA “JILL” BRANNEN, as Trustee of the 1996 C. Bishop Brannen III Irrevocable Trust; CLINTON B. BRANNEN, IV; and SARAH-AVERILL BRANNEN, Plaintiffs,
JACKSON NATIONAL LIFE INSURANCE COMPANY, Defendant.
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY
E. SELF, III, JUDGE
Brannen died three years ago. Prior to his death, Bishop took
out a 20-year term life insurance policy, but he missed his
last payment, causing the policy to lapse. Under operation of
Georgia law and the Eleventh Circuit's interpretation of
that law, Bishop's children will lose $2.3 million
because of that missed payment.
hopes to avoid this loss, Plaintiffs, who are his former
spouse (Julianna) and his children (Clinton and
Sarah-Averill), hired an attorney who sent a demand letter
(along with the missed payment) to Defendant Jackson National
Life Insurance Company demanding it pay the claim. Contending
that the policy had lapsed and could not be reinstated due to
Bishop's death, Jackson National denied the claim. After
months of back and forth, Plaintiffs instituted this action
against Jackson National, asserting claims for breach of
contract (Counts I, II), accord and satisfaction (Count III),
estoppel (Count IV), other equitable relief (Count V), bad
faith damages pursuant to O.C.G.A. § 33-4-6 (Count VI),
and attorney's fees. [Doc. 16 at pp. 12-21].
in the case, Jackson National moved the Court to dismiss
Plaintiffs' estoppel (Count IV) claim. After conferring
with defense counsel and researching relevant Georgia law,
Plaintiffs consented to the dismissal and the Court granted
the motion. [Docs. 18, 27, 29]. Plaintiffs, however, opposed
dismissal of their “other equitable relief” claim
(Count V), taking the position that the Georgia Court of
Appeals incorrectly interpreted O.C.G.A. § 33-24-44(d)
in Guideone Life Insurance Co. v. Ward, 619 S.E.2d
723 (Ga.Ct.App. 2005), and its predecessor Goodley v.
Fireman's Fund American Life Insurance Co., 326
S.E.2d 7 (Ga.Ct.App. 1985). [Doc. 27 at p. 6]; see
also [Doc. 16 at p. 17]. Nevertheless, Plaintiffs
astutely recognized that Count V fails under the current
interpretation and, after preserving their appellate rights
on that claim, consented to its dismissal. [Doc. 27 at p. 6].
Jackson National has now moved for summary judgment
adjudication on the four remaining claims-a claim for bad
faith damages couched on two breach of contract claims and an
accord and satisfaction claim. After a careful review of the
record, the parties' briefs, and with the benefit of oral
argument, the Court GRANTS Jackson National
Insurance Company's Motion for Summary Judgment [Doc.
as trustee of the 1996 C. Bishop Brannen III Irrevocable
Trust (the “Trust”), and the Trust's
beneficiaries, Clinton and Sarah-Averill (collectively
“Plaintiffs”), filed this lawsuit seeking to
recover proceeds of a life insurance policy insuring the life
of the late Clinton Bishop Brannen, III. [Doc. 16 at ¶
4, 1997, Valley Forge Life Insurance Company issued a life
insurance policy (the “Policy”) to Clinton Bishop
Brannen, III (the “Insured” or
“Bishop”) with a fixed annual premium payment of
no more than $2, 547.20 due each subsequent year for 20
years. [Doc. 62-1 at ¶¶ 1, 4-6]. Bishop paid the
annual premium for the first 19 years of the policy term, but
he failed to pay his final payment, which had come due on
June 4, 2016. [Id. at ¶¶ 8, 30].
event that “[a]ny premium, other than the first, . . .
[wa]s not paid by its [due date], ” the Policy provided
a 31-day Grace Period during which the Policy would stay in
force. [Id. at ¶¶ 9-10]; [Doc. 18-1 at p.
17]. At any time during that 31-day period, a missed premium
could be paid if “the Insured [was] living” at
the time of the payment. [Doc. 62-1 at ¶ 11]; [Doc. 18-1
at p. 17]. If, however, an annual premium remained unpaid at
the end of the Grace Period, the Policy could be reinstated
up to five years after it lapsed under certain circumstances,
provided that Bishop was alive at the time of payment. [Doc.
62-1 at ¶¶ 12-13]; [Doc. 18-1 at p. 17].
Trust was the sole beneficiary of the Policy, and
Bishop's now adult children are the sole and equal
beneficiaries of the Trust. [Doc. 16-2 at ¶¶
15-16]. Julianna was the initial trustee under the terms of
the Trust; however, its terms provided that
[i]n the event the [Insured] and [Julianna] become divorced,
she shall cease to be a beneficiary and fiduciary under this
Agreement (and shall be treated for the purposes of this
Agreement as if she had predeceased the [Insured]) . . . and
she shall have no right to exercise any power under this
Agreement granted to her.
[Id. at ¶¶ 17-18]; [Doc. 55-1 at p. 24].
After she and Bishop divorced in May 2007, her role as
trustee ceased in accordance with the Trust's terms, and
Clinton and Sarah-Averill's godparent, Brack Maggard,
became successor trustee in July 2007. [Doc. 62-1 at
¶¶ 19-21]. The terms of the final order for their
divorce required Bishop to maintain a life insurance policy
“with no less than $1, 000, 000.00 of death benefit,
naming the two minor children of the parties as equal
beneficiaries until such time as they reached the age of
majority and are no longer eligible for child support.”
[Id. at ¶ 23]; [Doc. 49-12 at p. 155]. When
Clinton and Sarah-Averill graduated from high school in 2011
and 2016, respectively, Bishop no longer had to pay child
support. [Doc. 49-12 at pp. 153-54]. And, because he no
longer had to pay child support, he no longer had to continue
to pay for the Policy. [Doc. 62-1 at ¶¶ 24-27, 29];
[Doc. 49-12 at pp. 153-54].
Lapse of the Policy in 2016
Bishop didn't pay the June 4, 2016, premium payment, in
accordance with the Policy's provisions, the Policy
nonetheless remained in force for 31-days (the Grace Period),
which ended on July 5, 2016. [Id. at ¶¶
30, 32]. After the Policy officially lapsed, Jackson National
sent a Notice of Lapse dated July 12, 2016, which stated,
“Your [P]olicy provided a Grace Period following your
premium Due Date of June 04, 2016, during which premiums
could be paid without affecting your coverage. Since your
premium payment has not been received your [P]olicy has
terminated without value effective July 05, 2016 . . .
.” [Id. at ¶ 34]; [Doc. 55-1 at p. 30].
Notice of Lapse also outlined the criteria for reinstatement
of the Policy. Any reinstatement, however, was subject to the
requirement that “[t]he Insured [was] living on the
date that all past due premiums are received” by
Jackson National. [Doc. 62-1 at ¶ 35]; [Doc. 55-1 at p.
30]. Relevant to these reinstatement provisions, the Notice
of Lapse also provided that, “[i]f the [p]olicy is not
reinstated under the . . . conditions [listed in the Notice
of Lapse], the [P]olicy [would] remain lapsed.” [Doc.
62-1 at ¶ 36]; [Doc. 55-1 at p. 30]. Almost a month
after Jackson National sent the Notice of Lapse, it sent a
subsequent notice informing the Insured that “the time
ha[d] ended for reinstating” the Policy under the
20-day reinstatement period following the Grace Period. [Doc.
62-1 at ¶ 37]; [Doc. 55-1 at p. 31]; [Doc. 18-1 at p.
The Insured's Death
died on July 24, 2016, and nearly two months later, Maggard
became the executor of the Insured's estate. [Doc. 62-1
at ¶¶ 39-40]. In order to resolve disputes over the
distribution of the estate, Bishop's adult children and
his widow (Tracy Brannen) proceeded to mediation.
[Id. at ¶ 41]. Following the mediation,
Clinton, Sarah-Averill, and Tracy executed a settlement
agreement, and as part of that agreement, released Maggard
from his responsibilities as trustee and executor of the
estate. [Id. at ¶¶ 42-43]. The Trust
provided for two successor appointments. [Id. at
¶ 44]. However, Plaintiffs' prior counsel secured
renunciations from the two trustees named to succeed Maggard.
On October 10, 2017, the Superior Court of Houston County,
Georgia, issued an order appointing Julianna as trustee.
[Id. at ¶¶ 45-46].
Jackson National's Denial of Plaintiffs' Claim
for Policy Proceeds
March 14, 2017-seven months before the trustee appointment
from the Houston County Superior Court-Julianna's prior
counsel sent a letter to Jackson National in Lansing,
Michigan, accompanied by a completed “Life Insurance
Claim Form” seeking the proceeds of the Policy.
[Id. at ¶¶ 60-61]. The two-page letter enclosed
several documents: the required claim form, an affidavit from
Maggard, a copy of the Trust and modification documents,
various correspondence from Jackson National, a death
certificate, and a check for $2, 922.80 drawn on
Plaintiffs' prior counsel's trust
account. [Id. at ¶ 62-63]; see
generally [Doc. 55-1].
National received this letter and its enclosures on March 15,
2017, at its corporate headquarters in Lansing, Michigan.
[Doc. 62-1 at ¶ 64]. Jackson National's mailroom
scanned the letter and its contents and sent those scanned
documents to be indexed and routed to the proper departments.
[Id. at ¶ 65]. This Order focuses on what
happened next. Although it is unknown who reviewed the check
and the enclosures, we do know that it went to some
department for review and was eventually deposited on March
22, 2017. [Id. at ¶ 75]. Five days later, some
unknown person, upon realizing that the Policy had lapsed and
that the Insured had died, decided that Jackson National
would not reinstate the Policy and that Plaintiffs'
outstanding premium payment should be refunded. [Id. at
¶ 76]. These circumstances pit an interesting question
to the Court: whether the five-day period between Jackson
National knowingly depositing the check (after reviewing a
completely forthcoming and undeniably candid letter detailing
the lapse and the Insured's death) and refunding it
constitutes a retention such that Jackson National is on the
hook for $2.3 million. The short, but unfortunate, answer
(for Plaintiffs) is no.
Standard of Review
must grant summary judgment “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). A factual dispute is not genuine unless,
based on the evidence presented, “‘a reasonable
jury could return a verdict for the nonmoving
party.'” Info. Sys. & Networks Corp. v.
City of Atlanta, 281 F.3d 1220, 1224 (11th Cir. 2002)
(quoting United States v. Four Parcels of Real
Prop., 941 F.2d 1428, 1437 (11th Cir. 1991)); see
also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). The movant may support its assertion that a fact is
undisputed by “citing to particular parts of materials
in the record, including depositions, documents,
electronically stored information, affidavits or
declarations, stipulations (including those made for purposes
of the motion only), admissions, interrogatory answers, or
other materials.” Fed.R.Civ.P.
56(c)(1)(A).“When the nonmoving party has the
burden of proof at trial, the moving party is not required to
‘support its motion with affidavits or other similar
material negating the opponent's claim' in order to
discharge this ‘initial responsibility.'”
Four Parcels of Real Prop., 941 F.2d at 1437-38
(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986)). Rather, “the moving party simply may show-that
is, point out to the district court- that there is an absence
of evidence to support the nonmoving party's case.”
Id. (cleaned up). Alternatively, the movant may
provide “affirmative evidence demonstrating that the
nonmoving party will be unable to prove its case at
burden then shifts to the nonmoving party, who must rebut the
movant's showing “by producing . . . relevant and
admissible evidence beyond the pleadings.” Josendis
v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292,
1315 (11th Cir. 2011) (citing Celotex Corp., 477
U.S. at 324). The nonmoving party does not satisfy its burden
“if the rebuttal evidence ‘is merely colorable,
or is not significantly probative' of a disputed
fact.” Id. (quoting Anderson, 477
U.S. at 249-50). Further, where a party fails to address
another party's assertion of fact as required by
Fed.R.Civ.P. 56(c), the Court may consider the fact
undisputed for purposes of the motion. Fed.R.Civ.P. 56(e)(2).
However, “credibility determinations, the weighing of
the evidence, and the drawing of legitimate inferences from
the facts are jury functions, not those of a judge.
Anderson, 477 U.S. at 255. Stated differently,
“the judge's function is not himself to weigh the
evidence and determine the truth of the matter but to
determine whether there is a genuine issue for trial.”
Id. at 249. “The evidence of the [nonmovant]
is to be believed, and all justifiable inferences are to be
drawn in his favor.” Id. at 255.
Plaintiffs' Breach of Contract Claims ...