17 F.4th 1339
11th Cir.2021Background:
- Vanessa Anderson bought a universal life policy (2001) that combined an accumulation (investment) account with life insurance and monthly charges.
- Policy created a guaranteed maximum monthly cost-of-insurance rate ("guaranteed monthly rate") calculated "based on" insured’s sex, attained age, and premium class, and a separate current monthly cost-of-insurance rate ("current monthly rate") that "will be determined by the Company" but "will not be greater than" the guaranteed rate.
- From 2011–2016 Wilco increased Anderson’s current monthly rates substantially; Anderson’s accumulation value was depleted and her policy lapsed when she did not pay out-of-pocket.
- Anderson sued for breach of contract alleging Wilco was required to calculate the current monthly rate based on the policy cost factors (sex, age, premium class) rather than by company discretion.
- The district court dismissed; on appeal the Eleventh Circuit (applying Georgia law) affirmed, holding the policy unambiguously gave Wilco discretion to set the current monthly rate so long as it did not exceed the guaranteed maximum.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the policy required the insurer to calculate the current monthly COI rate based on specified "policy cost factors" (sex, attained age, premium class) | Anderson: the Policy Data Page caption saying rates are determined "based on the policy cost factors described in your policy" requires the current rate to be based solely on those factors. | Wilco: the Cost of Insurance Rates provision explicitly states the current monthly rate "will be determined by the Company," giving insurer discretion subject only to the guaranteed maximum. | The Court held the policy unambiguously gives Wilco discretion to set the current monthly rate, constrained only by the guaranteed maximum. |
| Whether any ambiguity requires construing the policy against the insurer | Anderson: "based on" is reasonably susceptible to an exclusivity reading; ambiguity should be resolved against Wilco. | Wilco: the explicit language "will be determined by the Company" and the dual-rate structure are plain; no ambiguity exists. | The Court applied contract-construction rules, found no ambiguity (avoiding surplusage and preserving the guaranteed/current distinction), and refused to construe the policy against Wilco. |
Key Cases Cited
- Anderson v. Wilco Life Ins. Co., 943 F.3d 917 (11th Cir. 2019) (earlier Eleventh Circuit opinion describing the universal-life policy and resolving CAFA jurisdiction)
- Hickman v. GEM Ins. Co., 299 F.3d 1208 (10th Cir. 2002) (phrase "as determined by the Company" confers insurer discretion)
- Ace Am. Ins. Co. v. Wattles Co., 930 F.3d 1240 (11th Cir. 2019) (apply ordinary contract-construction rules; enforce unambiguous terms)
- Murphy v. Ticor Title Ins. Co., 729 S.E.2d 21 (Ga. Ct. App. 2012) (court must first decide as a matter of law whether policy language is ambiguous)
- State Farm Mut. Auto. Ins. Co. v. Staton, 685 S.E.2d 263 (Ga. 2009) (policy ambiguous only if subject to more than one reasonable interpretation)
- Nat'l Cas. Co. v. Ga. Sch. Bds. Ass'n, 818 S.E.2d 250 (Ga. 2018) (harmonize provisions and avoid rendering policy language surplusage)
- RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. 639 (2012) (discussion of general v. specific canon of construction)
- Auto-Owners Ins. Co. v. Barnes, 373 S.E.2d 217 (Ga. Ct. App. 1988) (specific policy provisions control over general/declaration language)