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Byrd v. Conseco Life Insurance Co.

United States District Court, D. Colorado

April 25, 2014

TRENSON L. BYRD, Plaintiff,
v.
CONSECO LIFE INSURANCE COMPANY, an Indiana corporation transacting business in Colorado, Defendant.

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

WILLIAM J. MARTINEZ, District Judge.

Plaintiff Trenson L. Byrd ("Plaintiff") brings this action against Conseco Life Insurance Company ("Defendant"). Before this Court are Defendant's Motion for Summary Judgment ("Motion").[1] (ECF No. 47.) For the reasons set forth below, the Motion is granted and Plaintiff's Motion to Strike is denied.

I. BACKGROUND

On December 27, 1994, Linda Byrd applied for a $100, 000 life insurance policy (the "Policy") with Massachusetts General Life Insurance Company ("Massachusetts General"). (ECF No. 47-4 at 6.) Massachusetts General's insurance agent wrote Mrs. Byrd's date of birth as "5/27/67" on the application, making Mrs. Byrd's age 27 in 1994, instead of her actual age at the time of 33. (ECF No. 47-4 at 16.) The Byrds reviewed and signed the application. ( Id. at 17.) The application was approved and the Policy was purchased and issued on February 12, 1995. ( Id. at 3.) The Policy was thereafter purchased and taken over by Defendant. (ECF No. 22 ¶ 3.)

The Policy contained a "Error in Age or Sex" provision (the "Misstatement of Age Provision") which read, "[i]f the age or sex of the insured has been misstated, the cash values, accumulation account and death benefit payable will be that which the most recently monthly deduction would have purchased at the correct age and sex." (ECF No. 47-4 at 14.)

Plaintiff claims that he advised Massachusetts General that Mrs. Byrd's date of birth had been incorrectly stated on the policy. (Dep. (ECF Nos. 47-1 & 55-2) pp. 77-78.) Although Plaintiff believed that Massachusetts General had corrected this error ( Id. pp. 37-38), the policyholder statements, which were sent to the Byrds annually, continued to indicate that Mrs. Byrd was 27 years old on the date of issue. (ECF No. 47-11.) Additionally, the premium on the Policy never changed. (Dep. p. 34.)

Mrs. Byrd passed away in July 2010. (ECF No. 47-5 at 1.) Plaintiff, the beneficiary of Mrs. Byrd's Policy, filed a claim with Defendant. ( Id. ) In the course of processing Plaintiff's insurance claim, Defendant learned that Mrs. Byrd's date of birth had been misstated on the application, and that Mrs. Byrd was actually 33 years old when the Policy was issued. (ECF No. 47-2 ¶ 10.) On August 27, 2010, Defendant sent Plaintiff a letter (the "Letter") explaining that Defendant was reducing the death benefit in accordance with the Misstatement of Age Provision. (ECF No. 47-6.)

The Policy's $100, 000 benefit had been based on the cost of insurance to a twenty-seven-year-old female. (ECF No. 47-4 at 4.) Because Mrs. Byrd was in fact six years older, Defendant, relying upon the Policy's Misstatement of Age Provision, reduced the policy's death benefit accordingly. (ECF No. 47-6.) Defendant adjusted the benefit to the amount of insurance it would have issued to a thirty-three-year-old female based on the premiums collected, and paid Plaintiff approximately $57, 000. (ECF No. 47-2 ¶ 11.)

On July 24, 2012, Plaintiff initiated this action against Defendant in the District Court of Denver County, Colorado. (ECF No. 1-1.) On September 14, 2012, the action was removed to this Court. (ECF No. 1.) On April 25, 2013, Plaintiff filed an Amended Complaint, asserting four causes of action: (1) breach of contract; (2) negligence; (3) vicarious liability; and (4) bad faith breach of insurance contract. (ECF No. 22 ¶¶ 11-22.)

On September 6, 2013, Defendant filed a Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56. (ECF No. 47.) On October 11, 2013, Plaintiff filed his Opposition to Defendant's Motion (ECF No. 55), and Defendant filed its Reply Brief on October 25, 2013. (ECF No. 59.)

On October 6, 2013, Plaintiff filed a motion to strike an exhibit to Defendant's Reply Brief. (ECF No. 60.) Defendant responded on November 27, 2013. (ECF No. 61.) These motions are now ripe for resolution.

II. STANDARD OF REVIEW

Summary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or conversely, is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, 477 U.S. 242, 248-49 (1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132 (10th Cir. 2000); Carey v. U.S. Postal Serv., 812 F.2d 621, 623 (10th Cir. 1987).

A fact is "material" if it pertains to an element of a claim or defense; a factual dispute is "genuine" if the evidence is so contradictory that if the matter went to trial, a reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248. The Court must resolve factual ambiguities against the moving party, thus favoring ...


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