United States District Court, E.D. North Carolina, Western Division
C. DEVER, Chief United States District Judge
24, 2016, Banner Life Insurance Company ("Banner"
or "defendant") moved for summaryjudgment [D.E. 60]
and filed a supporting memorandum [D.E. 61], a statement of
material facts [D.E. 62], and an appendix [D.E. 63]. On June
27, 2016, the Clerk of Court notified plaintiff John
Laschkewitsch ("Laschkewitsch" or
"plaintiff') of Banner's motion for
summaryjudgment, informed him that any response in opposition
was due by July 18, 2016, and stated that failure to respond
could result in the court granting Banner's motion. See
[D.E. 66]. Notwithstanding this deadline and his knowledge of
it, Laschkewitsch did not file his response in opposition to
Banner's motion until July 26, 2016, at which time he
also responded in opposition to Banner's statement of
material facts. See [D.E. 82, 83]. On August 8, 2016, Banner
replied [D.E. 87]. As explained below, the court grants
Banner's motion for summary judgment.
John B. Laschkewitsch is a former insurance agent who
fraudulently attempted to profit, via numerous life-insurance
policies, from the illness and death of his brother, Ben,
from amyotrophic lateral sclerosis ("ALS").
See, e.g.. Laschkewitsch v. Am. Nat'l Life Ins.
Co., No. 5:15-CV-21-D, 2016 WL 4184422, at *1 (E.D. N.C.
Aug. 5, 2016) (unpublished); appeal dismissed. No.
16-2003, 2016 WL 7378888 (4th Cir. Dec. 20, 2016) (per
curiam) (unpublished); Laschkewitsch v. Lincoln Life and
Annuity Distribs, Inc., 47 F.Supp.3d 327, 333-39 (E.D.
N.C. 2014), appeal dismissed, 616 F.App'x 102 (4th Cir.
2015) (per curiam) (unpublished); Reliastar Life Ins. Co.
v. Laschkewitsch, No. 5:13-CV-210-BO, 2014 WL 2211033,
at *4-12 (E.D. N.C. May 28, 2014) (unpublished),
affd, 597 F.App'x 159 (4th Cir.) (per curiam)
(unpublished), cert, denied. 136 S.Ct. 593 (2015).
This case also involves Laschkewitsch's attempts to
recover under one of those policies.
August 2009, Laschkewitsch's brother Ben was diagnosed
with ALS. Banner's Stmt. Material Facts [D.E. 62] ¶
1; Banner App. Ex. 4 [D.E. 63-13]. Following this diagnosis,
Laschkewitsch, an independent insurance agent, applied for or
assisted his brother in applying for numerous life-insurance
policies. Banner's Stmt. Material Facts ¶ 13. On
September 22, 2009, Laschkewitsch submitted one such
application to Banner. Id. ¶ 14; Banner App.
Exs. 1-A [D.E. 63-1] 6-11 & 1-B [D.E. 63-1] 12-14. That
application omitted Ben's diagnosis for ALS and the fact
that Ben had applied for or was covered by other insurance
policies. See Banner's Stmt. Material Facts ¶¶
15-20. Although the application did not initially list
Laschkewitsch as the beneficiary, Laschkewitsch later
submitted a Beneficiary Change Form listing himself as the
policy's beneficiary. Banner App. Ex. 1-L [D.E. 63-1]
113-14. Laschkewitsch submitted an Agent's Report as part
of the application. Banner's Stmt. Material Facts ¶
22; Banner App. Ex. 1-C [D.E. 63-1] 16-17. One of the
questions asked whether Laschkewitsch was "aware of any
information that would adversely affect any Proposed
Insured's eligibility, acceptability, or insurability,
" to which Laschkewitsch responded "No."
Banner's Stmt. Material Facts ¶ 24; Banner App. Ex.
January 14, 2010, Banner sent Ben the policy. Banner's
Stmt. Material Facts ¶ 29; Banner App Ex. 1-E [D.E.
63-1] 20-62. Although the policy's issue date was January
14, 2010, it had a backdated effective date of September 22,
2009. Banner's Stmt. Material Facts ¶ 30; Banner
App. Ex. 1-E. Due to the backdated effective date, Banner
required Ben to pay premiums from the policy's effective
date through its issue date. Banner's Stmt. Material
Facts ¶ 31; Banner App. Exs. 1-E& 14 [D.E. 63-14]
¶3 (Cheryl Milor declaration). Rather than pay the
premiums and accept the policy, Ben requested on January 25,
2010, that Banner reissue the policy "current
dated." Banner's Stmt. Material Facts ¶ 33;
Banner App. Ex. 14 ¶ 4. Banner issued Ben a new policy
with policy and issue dates of January 26, 2010. Banner's
Stmt. Material Facts ¶ 35; Banner App. Ex. ¶ 4. Ben
executed a written acknowledgment of the policy's
delivery. Banner's Stmt. Material Facts ¶ 36; Banner
App. Exs. 1-G [D.E. 63-1] 71-72 & 14 ¶ 5.
January 15, 2012, Ben died. Id. ¶ 43. Over
three months later, and after trying to get Banner to change
the policy's issue date, Laschkewitsch submitted a claim
under the policy. Id. ¶ 46; Banner App. Ex. 1-M
[D.E. 63-1] 116. After months of requesting that
Laschkewitsch provide the necessary documents, Banner denied
the claim. Banner's Stmt. Material Facts ¶¶ 47,
64. It did so after an investigation revealed the
application's misrepresentations regarding Ben's
health and existing policies or applications for life
insurance policies. Id. ¶ 47. In a letter
denying Laschkewitsch's claim, Banner stated that
"had [Ben] health been truthful on his application for
insurance and disclosed his medical history, financial
information, work history and other insurance, [Banner] would
not have approved the issuance of this policy."
Id.; Banner App. Ex. 1-N [D.E. 63-1] 118-129.
alleges that Banner committed various torts and statutory
violations in refusing the pay the proceeds to him and seeks
declaratory judgment awarding him the full policy proceeds
and declaring the policy incontestable. See Am. Compl. [D.E.
27] ¶¶ 1-172. In response, Banner counterclaims for
fraud, breach of contract, breach of the duty of good faith
and fair dealing, unjust enrichment, and violations of North
Carolina's Unfair and Deceptive Trade Practices Act, N.C.
Gen. Stat. § 75-1 et seq.. and seeks declaratory
judgment declaring the policy null, void, and rescinded due
to Laschkewitsch's fraud. See Ans. to Pl.'s Am.
Compl. [D.E. 30] ¶¶ 1-62.
court has subject-matter jurisdiction based on diversity
jurisdiction. Thus, the court applies state substantive
principles and federal procedural rules. See Erie R.R. v.
Tompkins, 304 U.S. 64, 78-80 (1938); Dixon v.
Edwards. 290 F.3d 699, 710 (4th Cir. 2002). Summary
judgment is appropriate if the moving party demonstrates
"that there is no genuine dispute as to any material
fact" and the moving party "is entitled to judgment
as a matter of law." Fed.R.Civ.P. 56(a). The party
seeking summary judgment must initially show an absence of a
genuine dispute of material fact or the absence of evidence
to support the nonmoving party's case. Celotex Corp.
v. Catrett. 477 U.S. 317, 325 (1986). If a moving party
meets its burden, the nonmoving party must "come forward
with specific facts showing that there is a genuine issue for
trial." Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986) (quotation and emphasis
omitted). A genuine issue for trial exists if there is
sufficient evidence favoring the nonmoving party for a jury
to return a verdict for that party. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242.249 (1986V "The mere
existence of a scintilla of evidence in support of the
plaintiffs position [is] insufficient" Id. at
252; see Beale v. Hardy. 769 F.2d 213, 214
(4th Cir. 1985) ("The nonmoving party, however, cannot
create a genuine issue of material fact through mere
speculation or the building of one inference upon
another."). Only factual disputes that might affect the
outcome under substantive law preclude summary judgment.
Anderson. 477 U.S. at 248. In reviewing the factual
record, the court views the facts in the light most favorable
to the nonmoving party and draws reasonable inferences in
that party's favor. Matsushita. 475 U.S. at
court first considers whether Banner is entitled to summary
judgment on Laschkewitsch's claims. The court then
considers whether Banner is entitled to summary judgment on
seeks a declaration that his brother Ben died outside the
policy's constestability period. See Am. Compl.
¶¶ 73-80. The policy's contestability clause
states: "We will not contest this policy after it has
been in force during the Insured's lifetime for two years
from the Issue Date, except for failure to pay
premiums." Banner App. Ex. 1-1 [D.E. 63-1] 83.
Laschkewitsch claims that the January 14, 2010 policy is the
original policy, meaning Ben died one day after the
contestability period for the January 14, 2016, policy ended.
The evidence shows, however, that Ben rejected that policy
and that Banner issued the operative policy on January 26,
2010. See Banner App. Ex. 14 (Cheryl Milor declaration). Ben
died on January 15, 2012, within the two-year contestability
period. Contrary to Laschkewitsch's contention, nothing
required Banner to file suit within the two-year
contestability period. See Reliastar Life Ins. Co..
2014 WL 2211033, at*7. Thus, Banner can contest the policy.
See Laschkewitsch. 47 F.Supp.3d at 338;
Reliastar Life Ins. Co.. 2014 WL 2211033, at *7.
alleges that Banner breached the life-insurance contract by
failing to pay him the policy proceeds upon
Ben's death. See Am. Compl. ¶ 85. He also alleges
that Banner breached a duty of good faith and fair dealing by
insisting on a January 26, 2010 issue date. See Id.
fraudulent misrepresentations foreclose these claims.
"[M]aterial misrepresentations in an application for an
insurance policy may prevent recovery on the policy."
Luther v. Seawell, 191 N.C.App. 139, 144, 662 S.E.2d
1, 4 (2008). "[I]n an application for a life insurance
policy, written questions and answers relating to health are
deemed material as a matter of law." Ward v. Durham
Life Ins. Co., 325 N.C. 202, 210, 381 S.E.2d 698, 702
(1989). As for misrepresentations unrelated to the
applicant's health, "a representation in an
application for an insurance policy is deemed material if the
knowledge or ignorance of it would naturally influence the
judgment of the insurer in making the contract."
Goodwin v. Invests. Life Ins. Co. of N. Am., 332
N.C. 326, 331, 419 S.E.2d 766, 769 (1992) (quotation
omitted). Regardless of the type of misrepresentation,
material misrepresentations will void an insurance policy
even if made unintentionally. See Tharrington v.
Sturdivant Life Ins. Co., 115 N.C.App. 123, 128, 443
S.E.2d 797, 801 (1994) (citation omitted).
application submitted to Banner contained numerous
misrepresentations and omissions concerning Ben's health.
See Banner App. Ex. 1-B [D.E. 63-1] (responses to questions
19, 23(a), and 29); Banner's Stmt. Material Facts ¶
16. These representations are material as a matter of law,
entitling Banner to void the policy. See
Laschkewitsch, 47 F.Supp.3d at 336. The application
also failed to disclose that Ben had applied for other
insurance policies. See Banner App. Ex. 1 -A [D.E. 63-1]
(responses to questions 30(a), 30(c), and 31); Id.
Ex. 7-A [D.E. 63-7] 27-59, Ex. 7-B [D.E. 63-7] 60-90, Ex. 9
[D.E. 64-16], Ex. 10 [D.E. 64-17] (policies Laschkewitsch
helped bis brother obtain before applying for an insurance
policy from Banner); Banner's Stmt. Material Facts
¶¶ 13, 17-20. These misrepresentations are material
because Banner would not have issued the policy had the
application truthfully disclosed this information.
Banner's Stmt. Material Facts ¶ 21; Banner App. Ex.
12 [D.E. 63-12] ¶ 8 (Sharon Jenkins Decl.). Because
these misrepresentations prevent Laschkewitsch from
recovering under the policy, the court grants summary
judgment to Banner on Laschkewitsch's breach of contract
claims. See Laschkewitsch, 47 F.Supp.3d at 336.
claims constructive fraud. See Am. Compl. ¶¶
97-113. A claim for constructive fraud requires "(1) a
relationship of trust and confidence, (2) that the defendant
took advantage of that position of trust in order to benefit
himself, and (3) that plaintiff was, as a result,
injured." White v. Consol-Planning
Tnc.166 N.C.App. 283, 294, 603 ...