Fred Smith v. Medical Life Insurance Company
| Docket Number: | 2003-CA-00862-COA | |
| Oral Argument: | 09-30-2004 | |
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| Court of Appeals: |
Opinion Date: 01-11-2005 Opinion Author: LEE, P.J., Holding: AFFIRMED |
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| Additional Case Information: |
Topic: Insurance - Breach of contract - Application for insurance - Retention of premiums Judge(s) Concurring: KING, C.J., BRIDGES, P.J., MYERS, CHANDLER, GRIFFIS, BARNES AND ISHEE, JJ., Dissenting Author : IRVING, J., Procedural History: Summary Judgment Nature of the Case: CIVIL - INSURANCE |
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| Trial Court: |
Date of Trial Judgment: 03-28-2003 Appealed from: WASHINGTON COUNTY CIRCUIT COURT Judge: Richard Smith Disposition: SUMMARY JUDGMENT GRANTED TO ALL DEFENDANTS. |
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| Party Name: | Attorney Name: | |||
| Appellant: | FRED SMITH |
ELLIS TURNAGE |
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| Appellee: | MEDICAL LIFE INSURANCE COMPANY, RUTH GRAYS-WASHINGTON, TANJA GRAINGER AND LYNN KLIMEK | EDWIN W. TINDALL JAMES M. NORRIS JANE L. MAPP |
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| Topic: | Insurance - Breach of contract - Application for insurance - Retention of premiums |
| Summary of the Facts: | Fred Smith filed suit against Medical Life Insurance Company, Lynn Klimek, Ruth Grays-Washington, and Tanja Grainger, alleging gross negligence, fraudulent inducement, misrepresentation, breach of contract, fraud, bad faith post-claim underwriting, bad faith refusal to promptly and adequately investigate a claim, and bad faith denial of a life insurance claim. MLIC and Klimek filed a motion for summary judgment. Smith filed his response to the motion for summary judgment, as well as a cross-motion for partial summary judgment as to liability on the contract claims and a motion to strike certain exhibits attached to MLIC and Klimek's summary judgment motion. Washington and Grainger filed a motion to dismiss or, in the alternative, for summary judgment. The court granted MLIC and Klimek's motion for summary judgment and granted Washington and Grainger's motion to dismiss. Smith's motion to strike certain exhibits was denied. Smith appeals. |
| Summary of Opinion Analysis: | Smith argues that genuine issues of fact exist as to whether the MDOC application for insurance was a contract for insurance, whether MLIC waived its authority to rescind and deny coverage to his wife, and whether MLIC properly investigated Smith's claim. An application for insurance is simply an offer to contract. Smith's arguments that MDOC made an offer to MLIC to accept an insurance policy and MLIC accepted the offer when it executed the application are without merit. The application made by Smith’s wife was not a contract and MLIC was under no duty to accept the application unless it met certain prerequisites set forth by MLIC, namely that she pass general underwriting requirements to which the entire group was subject. Although Smith's application was accepted, he was notified that his wife's application was still pending. Since her offer was never accepted, a contract did not exist. Smith also argues that the retention of premiums by MLIC constituted waiver of its denial of coverage. However, MDOC, not MLIC, collected the premiums while the application for coverage was pending. Once his wife was denied coverage, MDOC refunded to Smith the payment of those premiums. Smith also argues that MDOC, Washington, and Grainger were acting as statutory agents of MLIC. Because Washington and Grainger were both employees acting within the course and scope of their employment at the time, sovereign immunity applies and they cannot be held liable. |
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