NATIONWIDE LIFE INSURANCE COMPANY v. MICHELE JOY THOMPSON
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2251-15T1
NATIONWIDE LIFE INSURANCE
COMPANY,
Plaintiff-Respondent,
v.
MICHELE JOY THOMPSON,
Defendant-Appellant,
and
JEANNE MARIE STURM, Individually
and as Trustee,
Defendant.
________________________________
Argued October 18, 2017 – Decided April 23, 2018
Before Judges Nugent and Geiger.
On appeal from Superior Court of New Jersey,
Law Division, Monmouth County, Docket No.
L-3156-13.
Robert J. Ferb argued the cause for appellant.
Rodman E. Honecker argued the cause for
respondent (Windels Marx Lane & Mittendorf,
LLP, attorneys; Rodman E. Honecker and William
C. Cagney, on the brief).
PER CURIAM
This case involves a life insurance policy issued by plaintiff
Nationwide Insurance Co. to Harold Sturm. The policy lapsed before
Sturm's death. Although Sturm took steps to reinstate the policy,
he had not paid the reinstatement premium and Nationwide had not
reinstated the policy before he died. The policy terms required
that a lapsed policy be reinstated before the insured's death.
On cross-motions for summary judgment, the trial court ruled
for Nationwide. We must decide whether, as defendant Michele Joy
Thompson asserts on her appeal, Nationwide is equitably estopped
from denying coverage, or whether we should compel payment of the
policy proceeds to fulfill the parties' reasonable expectations.
Because the unambiguous policy terms required reinstatement before
Sturm's death, and Thompson did not demonstrate on the summary
judgment motion record a triable issue as to her other theories
that Nationwide should pay her the policy's proceeds, we affirm
the order granting Nationwide summary judgment.
Nationwide filed this action in August 2013, seeking a
declaration Sturm's life insurance policy had lapsed and no
benefits were payable. The parties engaged in discovery and then
filed cross-motions for summary judgment. The trial court granted
summary judgment to Nationwide, denied summary judgment to
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Thompson, and issued a memorializing order from which Thompson has
appealed.
The summary judgment motion record discloses the following
undisputed facts. The policy at issue is a flexible premium
adjustable variable life insurance policy issued to Sturm, the
named insured, by Nationwide in October 1998. The policy's face
amount is $250,000.1 Its terms permitted premiums to be paid from
the policy's cash value. Its terms also permitted the insured to
withdraw the policy's "Net Cash Surrender Value" and to borrow
against the policy "while it ha[d] a loan value."
In December 2012, the insured, Sturm, twice telephoned
Nationwide customer service and asked for information about taking
a loan against the policy. During the first call, the Nationwide
representative said he could withdraw approximately $3500 from a
current value of $4202, which would leave a balance of $702.
During the second call, a Nationwide representative informed Sturm
he could withdraw a maximum amount equal to 90% of the policy's
value. The same day he made the second call, Sturm completed a
"POLICY OWNER REQUEST FOR SERVICE" form in which he check marked
boxes for a "Policy Loan in accordance with the policy provisions"
in the "Maximum Amount," requests consistent with those he had
1
Plaintiff issued another life insurance policy to Harold Sturm
in October 1998. That policy is not at issue on this appeal.
3 A-2251-15T1
made during his telephone conversations with the Nationwide
customer service representatives.
Sturm requested Nationwide post the funds to an account he
specified in the application. Two days later, Nationwide
transferred $4129.46 to the specified account. The amount
deposited in Sturm's account was more than Nationwide's customer
service representatives said he could withdraw. The deposited
amount represented approximately 97% of the value from which the
funds were drawn, rather than the 90% maximum mentioned by the
second Nationwide customer service representative with whom Sturm
spoke. Consequently, the cash value left in the policy, $121.75,
would cover one $110 monthly premium. The policy remained in
effect through January 2013.
On December 28, 2012, Nationwide wrote to Sturm and informed
him his policy was about to lapse. The letter explained the
policy's value was insufficient to cover the monthly charges and
a sixty-one-day grace period had begun. The letter stated, "if
we don't receive your payment of $300.87, your policy will lapse
without value, and you will be notified." The letter provided
Sturm with Nationwide's customer service center's contact
information and advised he could contact the center if he had any
questions. Defendant telephoned Nationwide on January 17, 2013,
4 A-2251-15T1
inquired about the other policy on Sturm's life, and paid a premium
on that policy.
On January 28, 2013, Nationwide again wrote Sturm and informed
him, "[y]ou're flexible premium variable life insurance policy is
about to lapse." According to the letter, the policy "began a
[sixty-one]-day grace period on December 28, 2012." The letter
informed Sturm that he was required to make a $300.87 payment or
the policy would lapse without value. The letter included
Nationwide's customer service center's telephone number.
On February 28, 2013, Nationwide wrote Sturm and informed him
the policy had lapsed. The letter also informed Sturm he could
apply for reinstatement of the policy. Four days after receiving
the February 28 letter, Sturm applied to reinstate the policy.
The policy's terms concerning reinstatement provided:
REINSTATEMENT. If this Policy has lapsed
without value, you may reinstate it while the
Insured is alive if you:
1. apply for reinstatement within
three years after the end of the
Grace Period;
2. provide evidence of the
insured's insurability satisfactory
to us; and
3. make a premium payment of an
amount sufficient to keep the Policy
in force for at least three months
after the date of reinstatement.
The Effective Date of the reinstated Policy
will be the Policy Processing Day which
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coincides with or next follows the date we
approve the reinstatement application.
Surrender charges may apply upon
reinstatement.
Nationwide required Sturm to undergo a physical examination,
which he did. Nationwide also required Sturm to sign an amendment
to the policy acknowledging "the Waiver of Premium Rider attached
to this policy at issue will be removed upon policy reinstatement."
Sturm signed the amendment on April 30, 2013.
On May 3, 2013, Nationwide's underwriter advised Sturm the
policy was approved for reinstatement but did not advise Sturm of
the premium payment due. Sturm died two days later, on May 5,
2013. Nationwide learned of his death the next day, May 6, 2013.
Nonetheless, in a letter addressed to Sturm and written the same
day, Nationwide informed Sturm reinstatement of the policy was
approved. The letter stated: "To move forward with reinstating
this policy, we need a payment of $377.87. Please remit the
payment, by June 8, 2013, using the self-addressed envelope
included with this letter." The letter further stated, "[o]nce
sufficient payment is received in our office, the policy will be
reinstated."
The parties dispute most of the remaining facts concerning
Nationwide's decision to deny Thompson's claim. In opposition to
Nationwide's summary judgment motion and in support of her cross-
6 A-2251-15T1
motion, Thompson averred she contacted Nationwide on May 17 or 18,
2013, once again advised a Nationwide representative of Sturm's
death, and asked whether she could send in the premium payment to
reinstate the policy. According to Thompson, the Nationwide
representative told her she could send the premium. May 18, 2013
was a Saturday.
Nationwide denies this telephone conversation took place.
The transcript of a Friday, May 17, 2013 telephone conversation
between Thompson and a Nationwide representative quotes Thompson
as saying her husband's life insurance policy was just reinstated
and she got a letter in the mail saying that payment was due, but
he just passed away, so she was unsure what to do. During the
conversation, Thompson asked if there was a chance the policy was
not going to "pay out." The Nationwide representative responded,
"[t]hat's why I want to put it to that issue resolution team to
see if since, he had passed and yet no first payment had not come
in for it yet to see what that would [entail] for you. [Because]
. . . honestly, this is the first time I've actually seen this
kind of situation occur."
The Nationwide representative said the matter would be a high
priority and someone would telephone Thompson on Monday morning.
She asked if she should call on Monday and the representative
responded that someone would call her.
7 A-2251-15T1
Thompson mailed a cashier's check to Nationwide the next day,
May 18, 2013. Nationwide received and cashed the check on May 20,
2013. According to James Shockey, Nationwide's Manager of Capture
Operations, East, Nationwide's "Mail Intake/Batch Building Team,"
which handles approximately 1802 checks daily, deposited the check
without any way of knowing or ascertaining whether the policy was
active. On July 11, 2013, Nationwide wrote to Thompson and
informed her it was denying her claim for payment of the policy
proceeds. Nationwide refunded the premium, though Thompson
apparently did not cash the check.
In mid-November 2014, Nationwide filed its reply to
Thompson's opposition as well as its opposition to Thompson's
cross-motion. On January 20, 2015, three days before the return
date of the cross-motions, Thompson submitted a "Supplemental
Expert Report prepared by Patrick Flanagan." In his report dated
five days earlier, Flanagan asserted the actions taken by
Nationwide following Sturm's death, among other things, were not
specifically excluded by the policy and concerned circumstances
not specifically addressed in the contract of insurance. Flanagan
asserted "the almost simultaneous death of . . . Sturm and the
issuance of the policy [made] interpretation of the contract
language necessary." Flanagan suggested the issue that should be
addressed was "the 'binding authority' of Nationwide Supervisors
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in agreeing or not agreeing to accept a premium to bind a policy
after being fully informed of all relevant circumstances."
Flanagan opined:
Though the contract was binding in its
language (as are more standard Life Insurance
contracts), it does not specifically preclude
the insurance company or its representatives
from acting outside the terms of the contract
on a case by case basis where deemed
appropriate by those parties, and did not
preclude Ms. Thompson from reasonably
concluding that those representatives were
acting within their authority in providing
information or instructions to her.
Flanagan further noted:
As per the recordings and per Ms.
Thompson's own records, Ms. Thompson received
a telephone call from Nationwide after receipt
of her payment (speaking with Sheila Fraser
Mosely and Amanda Gladfelter of Nationwide on
two separate occasions), both of whom
acknowledged receipt of the payment. This
directly refutes Mr. Honecker's contention
that Nationwide "had no way of ascertaining
whether the policy was active." Nationwide
discussed the payment and the policy
specifically with Ms. Thompson immediately
after receipt of the payment, wherein Ms.
Thompson was informed that she was not listed
as the Beneficiary. Ms. Thompson was asked
if she still wished to pay the premium based
upon this information, and she indicated that
she did wish to pay the premium anyway.
Nationwide had full knowledge of the payment
they were applying and would have been able
to determine during these conversations if the
policy could have a payment applied to it.
During these conversations as well, (with
Mosley and Gladfelter), Ms. Thompson was led
9 A-2251-15T1
to believe that the payment she submitted was
being held only until they (Nationwide)
informed Ms. Thompson that she was not the
beneficiary, and no reference was made in
these conversations to any other issues
surrounding the policy.
. . . .
Since Nationwide's representatives
specifically discussed the premium payment
with Ms. Thompson and agreed to accept the
payment, this would constitute a Waiver and
would satisfy the third requirement of placing
the policy in force as the representative
agreed verbally to accept the premium (an
implied Waiver) and did not indicate any
requirements in the policy not allowing the
premium to be processed.
. . . .
The series of events which precipitated
and surrounded the payment of the premium by
Ms. Thompson and the subsequent follow up by
Nationwide negates any "mailroom volume"
arguments that may be made. This payment was
personally handled by at least 2 people and
was applied to a policy that is now alleged
to not have existed at the time the premium
was paid.
Nationwide is complicit in the lapse of
the second policy by not informing Ms.
Thompson of the pending lapse when they had
an opportunity to do so (as she called in to
make premium payments), substantiated by using
both the "privacy issue" and the "system
issue" to explain why that was not done; both
of which are unfounded and contradictory.
Mr. Sturm's policy was approved prior to
his death, and the first two of the three
requirements in placing the policy in force
were met. That argument that a Waiver did not
10 A-2251-15T1
exist might be valid if the premium was only
processed through the automated systems. The
intervention of Nationwide's representatives
and the acknowledgment of, discussion of, and
application of the premium to the policy (i.e.
the payment was handled manually), would
constitute Nationwide's representatives using
their Bonding Authority to provide a Waiver.
As such, all three requirements necessary
to place this policy in force and to make it
payable were met.
On appeal, Thompson argues:
STANDARD OF REVIEW
POINT I
EQUITABLE ESTOPPEL
POINT II
INTERPRETATION OF POLICY
First, she argues Nationwide is equitably estopped from denying
it reinstated the policy. Second, she argues the policy should
be interpreted to fulfill the insured's reasonable expectations.
She asserts that in this instance the reasonable expectation of
the insured was that the policy would be reinstated.
Appellate courts "review[] an order granting summary judgment
in accordance with the same standard as the motion judge." Bhagat
v. Bhagat,
217 N.J. 22, 38 (2014) (citations omitted). We "review
the competent evidential materials submitted by the parties to
identify whether there are genuine issues of material fact and,
if not, whether the moving party is entitled to summary judgment
11 A-2251-15T1
as a matter of law." Ibid. (citing Brill v. Guardian Life Ins.
Co. of Am.,
142 N.J. 520, 540 (1995)); accord R. 4:46-2(c). A
trial court's determination that a party is entitled to summary
judgment as a matter of law is not entitled to any "special
deference," and is subject to de novo review. Cypress Point Condo.
Ass'n v. Adria Towers, L.L.C.,
226 N.J. 403, 415 (2016) (citation
omitted).
We review a trial court's denial of a motion for
reconsideration under an abuse of discretion standard. Davis v.
Devereux Found.,
414 N.J. Super. 1, 17 (App. Div. 2010) (citing
Marinelli v. Mitts & Merrill,
303 N.J. Super. 61, 77 (App. Div.
1997)), aff'd in part and rev'd in part on other grounds,
209 N.J.
269, 277 (2012).
Preliminarily, we note appellant's counsel has failed to
present proper legal arguments in support of either of the two
point headings. In both instances, the arguments consist mostly
of a conclusory statement followed by "cut and paste" excerpts
from legal research databases. In some instances these data dumps
are double spaced and in other instances they are single spaced.
The headnote designations and the asterisked page numbers
referring to various reporters have not even been removed. The
"argument" sections of the brief contain virtually no legal
12 A-2251-15T1
analysis discussing application of the cut and pasted material to
the facts.
Parties to an appeal are required to make a proper legal
argument, "[s]upporting [it] with appropriate record reference[s]"
and "provid[ing] the law." State v. Hild,
148 N.J. Super. 294,
296 (App. Div. 1977); see also Sackman v. N.J. Mfrs. Ins. Co.,
445 N.J. Super. 278, 297-98 (App. Div. 2016). Counsel are required
to "present [a] reasonably competent analysis of the law as it
relate[s] to the facts of th[e] case." Sackman,
445 N.J. Super.
at 298-99. An argument based on conclusory statements is
insufficient to warrant appellate review. Nextel of N.Y. v.
Borough of Englewood Cliffs Bd. of Adjustment,
361 N.J. Super. 22,
45 (App. Div. 2003).
We nonetheless consider – and reject – Thompson's arguments.
First, "[t]o establish equitable estoppel, parties must prove that
an opposing party 'engaged in conduct, either intentionally or
under circumstances that induced reliance, and that [they] acted
or changed their position to their detriment.'" Hirsch v. Amper
Fin. Serv., LLC,
215 N.J. 174, 189 (2013) (alteration in original)
(quoting Knorr v. Smeal,
178 N.J. 169, 178 (2003)). The doctrine
"applies when 'conduct, either express or implied, . . . reasonably
misleads another to his prejudice so that a repudiation of such
conduct would be unjust in the eyes of the law.'" D'Agostino v.
13 A-2251-15T1
Maldonado,
216 N.J. 168, 200 (2013) (quoting McDade v. Siazon,
208 N.J. 463, 480 (2011) (citation omitted)).
In the context of insurance policies:
where an insurer or its agent misrepresents,
even though innocently, the coverage of an
insurance contract, or the exclusions
therefrom, to an insured before or at the
inception of the contract, and the insured
reasonably relies thereupon to his ultimate
detriment, the insurer is estopped to deny
coverage after a loss on a risk or from a
peril actually not covered by the terms of the
policy.
[Harr v. Allstate Ins. Co.,
54 N.J. 287, 306-
07 (1969).]
Here, Nationwide's policy is clear as to the three conditions
an insured is required to meet to reinstate a lapsed policy. Sturm
did not meet the third condition, namely, making a premium payment,
while alive, in an amount sufficient to keep the policy in force
for at least three months after reinstatement. Nothing in the
summary judgment record suggests that Nationwide somehow misled
Sturm, inadvertently or deliberately, to not making a timely
premium payment during his lifetime.
Thompson further argues:
The plaintiff's conduct subsequent to Mr.
Sturm's passing away, having full knowledge
of the fact that he had passed away, proceeded
to send a request for payment, had specific
discussions with Michele Thompson Sturm
directing her to make payment in a very
specific way different from the normal payment
14 A-2251-15T1
of premiums, questioned her about paying the
premium and then in fact accepting payment,
all of which [is] more than sufficient support
for granting the defendant's summary judgment
motion under the theory of equitable estoppel.
Nothing in the summary judgment record suggests Thompson
relied to her detriment upon any statement made by Nationwide
representatives. The transcript of the last recorded telephone
conversation between her and a Nationwide representative
demonstrates the representative never told Thompson the policy
would be reinstated. If anything, fairly interpreted, the content
of the conversation suggests the policy would not be reinstated
because Sturm had died before paying the reinstatement premium.
To be sure, Thompson recalls a telephone conversation with a
representative in which the representative said the policy would
be reinstated. But she testified at her deposition the
conversation could have taken place on either May 17 or 18, 2013,
and there was only one conversation. The recording of that
conversation demonstrates her interpretation or memory of what was
said is inaccurate. The evidence to the contrary is so one-sided
that no fact finder could credit her interpretation.
We have considered Thompson's remaining arguments and found
them to be without sufficient merit to warrant further discussion.
R. 2:11-3(e)(1)(E).
Affirmed.
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