709 F. App'x 320
6th Cir.2017Background
- Dr. Sherman Kay purchased a $2 million life-insurance policy from United of Omaha in 2001; after his Jan. 23, 2009 death, United denied benefits saying Dec. 2008 and Jan. 2009 premiums were unpaid and the policy had lapsed.
- Policy required premiums due by the 12th, with a 31-day grace period; policy language required written application, evidence of insurability, and payment of back premiums to reinstate, but United had a recurring informal "special offer" practice allowing reinstatement by paying overdue premiums during the insured’s lifetime.
- Michigan statute (Mich. Comp. Laws § 500.4012(b)) requires insurers to send written notice to the policyowner at least 30 days before termination; parties agree this statutory duty is read into the policy.
- Plaintiffs (Mrs. Kay and Claymore) alleged breach of contract based on (a) equitable estoppel from United’s past practice of accepting late payments and (b) breach of the statutory/contractual notice obligation; first jury verdict for plaintiffs was vacated on appeal for faulty jury instructions; case retried.
- At retrial, disputed facts included whether United actually mailed/served the December 19, 2008 premium/termination notice (United’s files show notices; plaintiffs and the Kays’ agent testified they did not receive them); jury received presumption that mailed letters are received but could find that presumption rebutted by evidence.
- District court denied United leave to file a renewed summary-judgment motion after remand, denied Rule 50(a)/(b) motions and a new-trial motion; the Sixth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court abused discretion by denying United leave to file a renewed summary-judgment motion after remand | United’s delay was not prejudicial; merits warranted disposition without another trial | Denial proper for undue delay, docket control, and to avoid disrupting trial schedule | Affirmed: district court acted within discretion to deny leave because United delayed and summary-judgment briefing would have delayed trial |
| Whether United was entitled to JMOL under Rule 50(b) or a new trial because plaintiffs’ equitable estoppel theory failed | Kay argued sufficient evidence supported estoppel and alternative breach (failure to give 30-day termination notice) | United argued estoppel failed and plaintiffs’ pleadings admitted the December 2008 notice was mailed and thus received, defeating notice-based claim | Affirmed: Court need not reach estoppel; United failed to preserve Rule 50(b) challenge to §500.4012(b) notice theory (not raised in Rule 50(a)); jury reasonably could find notice not sent or not sent to policyowners, so verdict supported |
| Whether plaintiffs were bound by judicial admission that December 19 notice was mailed (precluding rebuttal) | Plaintiffs argued evidence rebutted mailing presumption and that judicial admission could be reopened at trial | United relied on plaintiffs’ pleadings and the presumption that mailed letters are received to claim no factual dispute | Held: United used the pleadings only for estoppel argument and did not enforce a judicial-admission instruction; factual dispute existed and district court permissibly treated receipt as contested |
| Whether district court should have given a curative instruction after plaintiffs referenced termination-letter statutory requirement in closing | Kay argued the termination-notice evidence was part of breach claim and closing was proper | United argued the issue had been waived earlier and closing references unfairly resurrected a waived declaratory-judgment claim; requested instruction to remove termination-letter issue from jury consideration | Held: No abuse of discretion; prior rulings forbade mention of declaratory-judgment in openings only and did not bar pursuing §500.4012(b)-based breach theory at trial, so no unfair prejudice warranting a curative instruction |
Key Cases Cited
- Kay v. United of Omaha Life Ins. Co., [citation="562 F. App'x 380"] (6th Cir. 2014) (prior appeal addressing jurisdictional and jury-instruction issues)
- Goodyear Tire & Rubber Co. v. City of Roseville, 664 N.W.2d 751 (Mich. 2003) (rebuttable presumption that mailed communication is delivered/received)
- Mike’s Train House, Inc. v. Lionel, L.L.C., 472 F.3d 398 (6th Cir. 2006) (standard of review for JMOL and new-trial motions)
- Ford v. County of Grand Traverse, 535 F.3d 483 (6th Cir. 2008) (Rule 50(b) limited to grounds raised in pre-verdict Rule 50(a) motion)
- Kovacevich v. Kent State Univ., 224 F.3d 806 (6th Cir. 2000) (district court docket-management discretion)
- Cummins v. BIC USA, Inc., 727 F.3d 506 (6th Cir. 2013) (review of curative-instruction refusals for abuse of discretion)
- Ortiz v. Jordan, 562 U.S. 180 (2011) (requirement to renew JMOL post-trial to preserve appellate review)