Stein v. American General Life Insurance Company
665 F. App'x 73
| 2d Cir. | 2016Background
- In 2009 American General issued a grace-period notice after a life insurance policy on Rachel Meisels allegedly lapsed for nonpayment; the Trust (plaintiff) sued in 2011 seeking a declaration the policy remained in force.
- The district court denied cross-motions for summary judgment initially, later granted summary judgment to American General and entered judgment dismissing the Trust's claim.
- Key facts: American General produced evidence of regular mailing procedures and a May 2009 grace-period notice; the Trust denied receiving it.
- The Trust sent a $15,000 check on July 16, 2009 made payable to the insured (R. Meisels); American General returned it with a form letter requesting correction and later refused the corrected check because the policy had lapsed.
- The Trust appealed, arguing (1) no proper mailing/proof of notice, (2) the notice was legally deficient, and (3) American General was bound to accept the replacement check and keep the policy in force.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proof of mailing under NY Ins. Law §3211 | Stein: insurer did not mail required grace-period notice or proof is insufficient | American General: produced declarations and mail-processor testimony establishing regular office mailing procedures, creating presumption of receipt | Court: Presumption of mailing arises from regular procedures; plaintiff's denial insufficient to rebut; mailing proven |
| Adequacy of the grace-period notice under §3211(b)(2) | Stein: notice misstated amount, due date, and payee, so failed statutory requirements | American General: notice conveyed amount, deadline and payee sufficiently; minor errors are de minimis and not fatal | Court: Notice met statutory substance — amount, date, and payee sufficiently clear; minor inaccuracies did not invalidate notice |
| Effect of the returned/replacement check and form letter | Stein: form letter amounted to a promise to accept replacement and extend the grace period; thus policy should be reinstated | American General: form letter merely requested corrected payee; it did not extend the grace period and the replacement was insufficient to cover required amount | Court: Form letter did not extend grace period; even if it had, the $15,000 was less than required to prevent lapse; insurer properly declined acceptance |
Key Cases Cited
- Matthews v. City of New York, 779 F.3d 167 (2d Cir. 2015) (standard of review for summary judgment)
- Ma v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 597 F.3d 84 (2d Cir. 2010) (presumption of receipt from regular mailing procedures)
- Meckel v. Cont’l Res. Co., 758 F.2d 811 (2d Cir. 1985) (personal knowledge required to prove office procedure, not particular mailing)
- Phansalkar v. Andersen Weinroth & Co., 344 F.3d 184 (2d Cir. 2003) (de novo review of district court’s interpretation of state law)
- Bossuk v. Steinberg, 447 N.E.2d 56 (N.Y. 1983) (office mailing practice proof principles)
- Nassau Ins. Co. v. Murray, 386 N.E.2d 1085 (N.Y. 1978) (same — presumption of receipt from mailing records)
- McCormack v. Sec. Mut. Life Ins. Co., 116 N.E. 74 (N.Y. 1917) (substantial-compliance approach to grace-period notice; avoid construing notice requirements as traps)
- Speziale v. Nat’l Life Ins. Co., 159 F. App’x 253 (2d Cir. 2005) (noting disfavour of forfeiture for late premium payment)