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The Capitol Life Insurance Co. v. Newman

Court of Appeals of Texas, Fifth District, Dallas

June 21, 2018

THE CAPITOL LIFE INSURANCE CO., Appellant
v.
LINDA S. NEWMAN, METLIFE INVESTORS GROUP, INC., METLIFE INSURANCE COMPANY USA, AMERICAN GENERAL LIFE INSURANCE COMPANY, Appellees

          On Appeal from the 192nd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-15-01615

          Before Chief Justice Wright, Justice Fillmore, and Justice Schenck

          MEMORANDUM OPINION

          DAVID J. SCHENCK JUSTICE

         The Capitol Life Insurance Company ("Capitol") appeals the trial court's decisions to grant summary judgments in favor of policyholder Linda S. Newman; third-party administrators MetLife Investors Group, Inc. and MetLife Insurance Company USA[1]; and reinsurer American General Life Insurance Company ("AGL"). Capitol urges the trial court erred in granting summary judgment in favor of Newman and impliedly denying its cross-motion for summary judgment because (1) Newman's claims are barred by limitations, or at least a fact issue exists as to whether they are barred; (2) there is a fact issue as to whether Newman even had a policy in force at the time she demanded payment; and (3) Newman failed to prove her damages. Capitol argues the trial court erred in granting no-evidence summary judgment in favor of AGL and MetLife because Capitol brought sufficient evidence to support its claims. We reverse the trial court's judgment granting summary judgment in favor of Newman and remand the cause to the trial court for further proceedings. We affirm the trial court's orders granting summary judgment in favor of AGL and MetLife. Because all issues are settled in law, we issue this memorandum opinion. Tex.R.App.P. 47.4.

         Background

         Capitol is a life insurance company formed and domiciled under the laws of Colorado. In 1973, Capitol entered into a third-party administrative services agreement (the "TPA") with MetLife's predecessor in interest. Under the TPA, MetLife contracted to administer and keep and maintain all necessary records of all annuity contracts issued before 1985 by Capitol. In 1985, Capitol entered into an assumption reinsurance agreement (the "reinsurance agreement") with AGL's predecessor in interest. Under the reinsurance agreement, AGL contracted to reinsure certain fixed annuity contracts and certificates as of January 31, 1985. Under the reinsurance agreement, AGL agreed to defend and indemnify Capitol against claims regarding the specified policies. Both the TPA and the reinsurance agreements are governed by Colorado law. In 2004, Capitol was re-domesticated to the State of Texas.

         In 2008, Newman began contacting Capitol, MetLife, the New York Insurance Department, the New Jersey Department of Banking and Insurance, and the Texas Department of Insurance, asserting that in 1978 she had invested in a life insurance annuity policy, which she believed had already or would soon mature. MetLife responded that after searching their records, they had not located anything to indicate Newman's annuity was active or had any benefits due. Newman continued making inquiries regarding her annuity policy in 2009 and 2010.

         In May 2010, Newman wrote to MetLife, stating that she had "tried to collect, but have been unable to do so. . . . I am tendering the policy for payment." MetLife responded that "[a]s stated in previous correspondence, MetLife Investors has been unable to locate any record of this annuity contract." In August 2012, counsel for Newman wrote on her behalf to Capitol, stating "Demand is hereby made for the return of Ms. Newman's $50, 000 annuity premium . . . or full and immediate payment of all amounts due under Ms. Newman's annuity . . . ."

         In May 2014, Newman sued Capitol in a New York federal court, asserting a breach of her annuity. On September 16, 2014, the federal court dismissed Newman's case for want of personal jurisdiction. On February 10, 2015, Newman filed suit against Capitol in Texas for breach of contract, conversion, unjust enrichment, bad faith, violations of the deceptive trade practices act, and deceptive insurance practices. Capitol notified AGL of Newman's claims, but AGL refused to defend or indemnify Capitol or pay Newman's claim. In April 29, 2015, Capitol filed third-party claims against AGL and MetLife for breach of contract.

         The parties all filed motions for summary judgment. The trial court (1) granted summary judgment in favor of Newman on her claim for breach of contract and certain of Capitol's affirmative defenses; (2) granted summary judgment against Newman on her tort claims; (3) granted summary judgment in favor of AGL; and (4) granted summary judgment in favor of MetLife. The trial court entered a final judgment in accordance with its summary rulings.

         Discussion

         I. Summary Judgment for Newman

         In its first issue, Capitol urges the trial court erred in granting traditional summary judgment in favor of Newman on her breach of contract claim and in denying its motion for traditional summary judgment because Newman's claim was barred by limitations. According to Capitol, Newman's May 11, 2010 letter to MetLife tendered her annuity for payment, and constituted a surrender, requiring payment to be made within six months of that date. MetLife responded to Newman by May 26, 2010, denying having any record of Newman's annuity. Thus, Capitol argues, limitations on Newman's claim for breach of contract began to run by November 26, 2010, and Newman was required to bring suit against Capitol within four years. Tex. Civ. Prac. & Rem. Code Ann. § 16.051. Although Newman did file suit in federal court before November 26, 2014, that suit was dismissed on September 23, 2014. Texas law suspends the running of the applicable statute of limitations between the date of filing an action in a trial court and the date of a second filing of the same action in a different court, so long as the action is commenced in the second court no later than the 60th day after the date the dismissal becomes final. Tex. Civ. Prac. & Rem. Code Ann. § 16.064. Newman did not file this suit until February 10, 2015, nearly five months after the federal court signed its dismissal order.

         Newman concedes the statute of limitations on her claim is four years. However, she argues the May 10, 2010 letter was not a demand, but even if it were and MetLife's response communicated its anticipatory repudiation of any obligations under Newman's annuity, she had the option to sue at that time ...


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