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Amanatullah v. The United States Life Insurance Co. of City of New York

United States District Court, D. Idaho

February 8, 2017

FAISAL F. AMANATULLAH, M.D., Plaintiff,
v.
THE UNITED STATES LIFE INSURANCE COMPANY OF THE CITY OF NEW YORK, AIG BENEFIT SOLUTIONS, AIG AFFINTITY BENEFIT SOLUTIONS, AMERICANINTERNATIONAL GROUP, INC. AND AMERICAN GENERAL LIFE COMPANIES, LLC, Defendants.

          MEMORANDUM DECISION AND ORDER

          Honorable Edward J. Lodge United States District Judge

         Pending before the Court in the above-entitled matter are Plaintiff Faisal F. Amanatullah, M.D. (Amanatullah)'s Motion for Partial Summary Judgment (Dkt. 18), Defendants The United States Life Insurance Company of the City of New York, AIG Benefit Solutions, AIG Affinity Benefit Solutions, American International Group, Inc. and American General Life Companies, LLC's (collectively referred to as “Defendants”) Motion for Summary Judgment (Dkt. 23) and related motions to strike filed by both parties (Dkts. 27, 28, 36, and 39). Plaintiff also filed motions relating to punitive damages and non-economic damage caps. (Dkts. 50, 51, and 52).

         Having fully reviewed the record, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, this matter shall be decided on the record before this Court without oral argument.

         Additionally, because this matter is set for trial in the near future, the Court finds it would be an efficient use of limited judicial resources to remove the referral to the Magistrate Judge for certain motions that are more properly handled by the presiding judge. Therefore, the Court withdraws the referral on docket numbers 27, 28, 36, 39, 50, 51, and 52.

         FACTUAL BACKGROUND

         Amanatullah purchased a disability insurance policy from Defendants on February 19, 1987, Policy No. G-189, 553, Certificate No. 2328149 (the Policy). Amantullah became totally disabled before his 50th birthday. The Policy provided Plaintiff with a monthly benefit of $5, 000. Plaintiff maintains the Policy provides this $5, 000 monthly benefit for his lifetime. Defendants claim the Policy reduces the disability payment to the greater of $1, 000 or 25% of the monthly benefit on the certificate anniversary following Amanatullah's 65th birthday. In this case, Defendants argue the reduced benefit would be $1, 250.

         The Policy provides:

         (IMAGE OMITTED)

If you are disabled on your 65th birthday your Monthly Benefit will reduce on the earlier of these dates: (a) your certificate anniversary next following your 65th birthday, if such Monthly Benefit payments have been received for 12 or more months, or (b) on the dale you have received 12 Monthly Benefit payments for the then current disability.
Any other decrease in the amount of insurance will take effect on the date of receipt by the authorized agent of the Policyholder of your written request for the decrease.

See Complaint, Exhibit A, G-19001 SCH,, Dkt. 1-1, p.7. The “Monthly Benefit” of $5, 000 comes from Exhibit A, G 19001 SCH, Dkt. 1-1, p.1. The Schedule Page also states the Monthly Benefit Amount is $5, 000. Id.

         In November of 2008, Plaintiff spoke with John Butryman, Senior Case Manager for Defendants to confirm his monthly payment was a lifetime benefit as Plaintiff was obtaining a mortgage and needed to provide proof of his income. Mr. Butryman orally confirmed the monthly benefit was a lifetime benefit and sent a letter to Amanatullah stating:

We are writing to you in response to our phone conversation today. This letter is to confirm you currently receive $5, 000 per month, post tax under the following disability policy. Since your disability began prior to the age of 50, your policy states you are eligible to receive this monthly benefit for as long as you live and as long as you continue to satisfy the provisions of this policy.

         Affidavit of Faisal F. Amanatullah, M.D., Exhibit B, Dkt. 19-2.

         Plaintiff claims he relied on this letter as proof he would be receiving the $5, 000 benefit for the rest of his life and took out a mortgage and made other purchases relying on this stream of income.

         In March of 2014, Plaintiff spoke with Senior Claims Manager Bernadine Luddy as he had not received his monthly benefit check. He was advised the check had been sent to his ex-wife instead of Plaintiff. Plaintiff alleges Ms. Luddy became hostile toward him when he notified Defendants of the error. Ms. Luddy also indicated she would be reviewing the file and that his benefit would be reduced in September 2014. Defendants reduced Plaintiff's benefit to $1, 250 on September 1, 2014.

         Between March and November of 2014, Plaintiff continued to try to explain his position and have Defendants reinstate his $5, 000 monthly payment. Defendants did not change their position. Plaintiff filed his Complaint on February 23, 2015 alleging bad faith, breach of contract, promissory estoppel and negligent adjustment. Plaintiff moves for summary judgment on the breach of contract claims and Defendants move for summary judgment on all claims.

         STANDARD OF REVIEW

         Summary judgment is appropriate where a party can show that, as to any claim or defense, “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). One of the principal purposes of the summary judgment “is to isolate and dispose of factually unsupported claims . . . .” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is “not a disfavored procedural shortcut, ” but is instead the “principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources.” Id. at 327.

         “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Material facts are those that may affect the outcome of the case. See id. at 248.

         The moving party is entitled to summary judgment if that party shows that each issue of material fact is not or cannot be disputed. To show the material facts are not in dispute, a party may cite to particular parts of materials in the record, or show that the materials cited do not establish the presence of a genuine dispute, or that the adverse party is unable to produce admissible evidence to support the fact. Fed.R.Civ.P. 56(c)(1)(A)&(B); see T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987) (citing Celotex, 477 U.S. at 322). The Court must consider “the cited materials, ” but it may also consider “other materials in the record.” Fed.R.Civ.P. 56(c)(3).

         Material used to support or dispute a fact must be “presented in a form that would be admissible in evidence.” Fed.R.Civ.P. 56(c)(2). Affidavits or declarations submitted in support of or opposition to a motion “must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.” Fed.R.Civ.P. 56(c)(4).

         The Court does not determine the credibility of affiants or weigh the evidence set forth by the non-moving party. All inferences which can be drawn from the evidence must be drawn in a light most favorable to the nonmoving party. T.W. Elec. Serv., 809 F.2d at 630-31 (internal citation omitted).

         Rule 56(e)(3) authorizes the Court to grant summary judgment for the moving party “if the motion and supporting materials-including the facts considered undisputed-show that the movant is entitled to it.” The existence of a scintilla of evidence in support of the non-moving party's position is insufficient. Rather, “there must be evidence on which the jury could reasonably find for the [non-moving party].” Anderson v. Liberty Lobby, 477 U.S. at 252.

         ANALYSIS

         Breach of Contract Claim

         There are cross motions for summary judgment on the breach of contract claim, Plaintiffs argues the language of the Policy provides for a lifetime benefit of $5, 000 or in the alternative that the Policy is ambiguous and must be construed in the insured's favor. Defendants argue the Policy is not ambiguous and clearly sets forth there is a reduction in benefits when insured reach a certain age. Additionally, Defendants argue an employee of Defendants cannot modify the terms of a policy so any statements by Mr. Butryman are not binding on Defendants.

         Defendants argue the choice of law provision in the Master Policy governs even if the insured resides outside the designated state. Defendants claim the Master Policy is attached as Ex. A to the Luddy Declaration, Dkt. 23-7. This includes one page identifying the policy is Group Policy No. G-189, ...


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