Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Arizpe v. Principal Life Insurance Co.

United States District Court, N.D. Texas, Dallas Division

July 9, 2019

DR. NICHOLAS ARIZPE, ET AL., Plaintiffs,
v.
PRINCIPAL LIFE INSURANCE COMPANY Defendant.

          MEMORANDUM OPINION AND ORDER

          A. JOE FISH, SENIOR UNITED STATES DISTRICT JUDGE.

         Before the court are the motions of the defendant Principal Life Insurance Company (“Principal”) to strike the plaintiffs' summary judgment evidence, see Motion to Strike (docket entry 38), and for summary judgment pursuant to Federal Rule of Civil Procedure 56 (docket entry 26). For the reasons stated below, Principal's motion to strike is granted in part and denied in part, and its motion for summary judgment is granted.

         I. BACKGROUND

         A. Factual Background

         The plaintiffs in this case, Doctor Nicholas Arizpe and his wife Rebekah Arizpe (collectively “the Arizpes”), reside in Tarrant County, Texas. See Second Amended Complaint (docket entry 25) at 1. Principal, the defendant, is an Iowa insurance company licensed by the Texas Department of Insurance with its principal place of business located in Des Moines, Iowa. Id. at 2; Answer to Second Amended Complaint (docket entry 31) at 1.

         In or around May 2011, Doctor Arizpe finished his medical residency in San Antonio, Texas. Response to Defendant's Motion for Summary Judgment (“Response”) (docket entry 33) at 2; Defendant's Appendix in Support of Summary Judgment (“Appendix in Support”) (docket entry 28) at 33. At around the same time, the Arizpes contacted Erik Wyse (“Wyse”) for financial planning services based on the recommendation of Rebekah's brother. Appendix in Support at 33-34. Soon thereafter, Wyse and the Arizpes entered into a financial planning agreement, in which Wyse agreed to provide financial planning and investment advisory services in exchange for the Arizpes' payment of a $750.00 annual fee. Appendix in Support at 34, 77-87, 242; Plaintiffs' Appendix in Support of Response to Motion for Summary Judgment (“Appendix in Support of Response”) (docket entry 34) at 1. Importantly, at the time the Arizpes retained Wyse as their financial advisor, the Arizpes knew that he was affiliated with multiple insurance companies.[1] Motion for Summary Judgment at 3; Appendix in Support at 245, 272.

         In July 2011, Doctor Arizpe joined an anesthesia team in Dallas and began working as a full-time anesthesiologist. Appendix in Support of Response at 1. Shortly after this, Doctor Arizpe decided to look into purchasing a disability income insurance policy. Id. Because Wyse had previously provided the Arizpes with financial planning services, Doctor Arizpe sought Wyse's assistance in finding such a policy. Appendix in Support of Response at 1. To best inform Wyse as to the type of policy Doctor Arizpe was searching for, Doctor Arizpe asked Wyse to obtain disability income insurance quotes “with all the bells and whistles.” Appendix in Support at 35, 39. Wyse then presented the Arizpes with several disability income insurance policy illustrations, including one illustration from MetLife and one illustration from Principal. Appendix in Support of Response at 1-2, Appendix in Support at 36, 88-99 (MetLife Illustration), 100-113 (Principal Illustration).

         In pertinent part, Principal's illustration provided on multiple pages that it was “Prepared for Nicholas Arizpe” and that “th[e] illustration is valid for presentation in Texas.” See Appendix in Support at 104-113. Moreover, the seventh page of the Principal illustration contained descriptions of the Capital Sum benefit rider and Presumptive Disability benefit rider that would automatically be added to Doctor Arizpe's policy. Id. at 106. With respect to the Capital Sum rider, the seventh page of the illustration stated that the Capital Sum rider (HH 751):

Provides a one time lump-sum benefit of $153, 000 to help you adjust financially if you have a total loss of use without any possibility of recovery, of the sight in one eye or the use of a hand or foot. This benefit is payable in addition to any other benefit of the policy you qualify to receive.

Id. at 106. With respect to the Presumptive Disability rider (HH 755), the seventh page of Principal's illustration provided that:

You will receive $12, 750 a month if you permanently lose the power of speech, hearing in both ears, sight in both eyes, or use of both hands, both feet, or one hand and one foot. Benefits will start to accrue when the presumptive disability occurs and will continue to be paid, as long as the loss continues regardless of your ability to work or earn an income.

Id. at 106.

         Furthermore, the ninth page of Principal's illustration included a description of the Catastrophic Disability benefits rider (HH 752) that would become part of Doctor Arizpe's policy. Id. at 108. This description provided:

This rider provides a monthly benefit of $8, 000 in addition to your monthly disability benefit (and social insurance substitute benefit if on the policy) in the event you become catastrophically disabled solely due to an Injury or Sickness and have a total loss of use for any and every purpose or activity without any possibility of recovery of the power of speech, hearing in both ears, sight in both eyes or the use of both hands, both feet or one hand and one foot. CBD presumptive disability is paid from the date of disability and does not require an elimination period.

Id. at 108. Also on the same page, just below this description, was a paragraph stating:

This illustration is a general description, but it is not the policy, and does not modify the provisions of any policy or rider. Policy definitions and provisions may vary in some states. Please read your policy carefully for exact definitions in your state. This policy contains certain terms, exclusions and limitations. Contact your Principal Life representative for complete details.

Id. at 108.

         What's more, the tenth page of Principal's illustration included a table that is reproduced below:

         (Image Omitted)

         Id. at 109. Unlike the previous description of the Catastrophic Disability rider on page seven, which stated that this benefit would be paid "in the event you . . . have a total loss of use for any and every purpose without any possibility of recovery of the power of speech, hearing in both ears, sight in both eyes or the use of both hands, both feet or one hand and one foot[, ]" see id. at 106, the table on page ten explained that the Catastrophic Disability Benefit could be paid if the client became Activities of Daily Living (“ADL”) disabled, cognitively impaired, or presumptively disabled. Id. at 109. This table also included a statement that:

Policy and rider definitions and provisions may vary in some states. Please read your policy carefully for exact definitions in your state. Contact your Principal Life financial representative for complete details.

Id. The twelfth page of Principal's illustration also included a similar admonition that:

This illustration is a general description, it is not the policy, and does not modify or change the provisions of any policy or rider. Policy definitions and provisions may vary by state, read your policy carefully for the exact definitions and provisions.

Id. at 111.

         After receiving both the MetLife and Principal illustrations, the Arizpes started reviewing the illustrations with Wyse. Id. at 37, 248. At no point during their review process did the Arizpes express concerns to Wyse about the multiple admonitions in Principal's illustration that specifically stated that the illustration was not the policy and that the policy's terms would control. Id. at 37, 71, 246, 248, 273. Regardless, after his review, Doctor Arizpe decided to apply to Principal for a disability income policy in part because he believed it would offer the most benefits. Appendix in Support of Response at 2. Accordingly, Doctor Arizpe worked with Wyse to fill out an application for a Principal policy. Id.

         While filling out the application, it was the intention of both Wyse and Doctor Arizpe to include Principal's illustration as part of Doctor Arizpe's application. Appendix in Support of Response at 2, 113. In fact, in the Optional Benefit Riders section of Doctor Arizpe's application, Wyse wrote in “see illustration attached.” Appendix in Support at 114 (containing first page of the application); Appendix in Support of Response at 113 (explaining that the handwriting on the first page belonged to Wyse). Moreover, on the third page of the application, there was an additional handwritten instruction to “See Attached Contract.” Appendix in Support at 116. As part of the application, Doctor Arizpe acknowledged that “no agent, broker, licensed representative, telephone interviewer, or medical examiner has any authority to determine insurability, or to make, change, or discharge any contract, or to waive any of [Principal's] rights.” Id. at 121. Ultimately, on June 29, 2011, Doctor Arizpe completed and signed the disability insurance application for Principal's disability income insurance policy. Appendix in Support at 40, 114-122.

         A few months later, on September 1, 2011, Doctor Arizpe's disability income insurance policy became effective. Id. at 127. Shortly thereafter, on October 31, 2011, Doctor Arizpe signed Part D of his application for disability income insurance through Principal, entitled “Agreement/Acknowledgment of Delivery.” Id. at 123. By signing this page, Doctor Arizpe acknowledged that his Principal disability insurance policy was delivered to him by October 31, 2011 and that it is based on his life. Id.

         On the first page of Doctor Arizpe's policy, Principal encouraged Doctor Arizpe to “PLEASE READ THE POLICY CAREFULLY” because the policy's terms provided that if Doctor Arizpe was not satisfied with the policy for any reason, he could return it within thirty days for a full refund of any premiums paid. Id. at 124 (bold and all caps in original). Since Doctor Arizpe believed that his policy contained the terms as Principal's illustration, Doctor Arizpe did not comply with Principal's admonition, nor did Doctor Arizpe exercise his right to return the policy within thirty days of its receipt. Appendix in Support at 43-44 (“We did not do - read every 7- 57 pages of that, as it says in bold. . . . I did not return it to you within 30 days.”).

         In addition to this admonition, Doctor Arizpe's policy also included a paragraph explaining that:

Only [Principal's] corporate officers may modify or waive anything in, or approve changes to, the policy. The change must be attached to the policy. No. one else, including the agent or broker, has the authority to change the policy or waive any provision.

Id. at 145. More importantly, however, Doctor Arizpe's policy also included the Capital Sum, Presumptive Disability, and Catastrophic Disability benefit riders. See Appendix in Support at 148-149, 154.

         With respect to the Capital Sum rider (HH 751), which calls for a payment of a one-time benefit of $179, 520.00, Doctor Arizpe's policy provided:

[Principal] will pay the Capital Sum Benefit shown on the Data Page if an Injury or Sickness results in Your total loss of use for any and every purpose or activity without any possibility of recovery of:
1. The use of a hand or foot; or
2. The sight of an eye.

Id. at 148. Furthermore, with respect to the Presumptive Disability rider (HH 755), Doctor Arizpe's policy stated, in relevant part:

PRESUMPTIVE DISABILITY occurs while the policy and this rider are in force and prior to the Age 65 Policy Anniversary or five years after the Policy Date, whichever is later; and is an Injury or Sickness resulting in Your total loss of use for any and every purpose or activity without any possibility of recovery of:
a) Power of speech; or
b) Hearing in both ears; or
c) Sight of both eyes; or
c) The use of both hands, both feet, or one hand and one foot.

Id. at 154. As for the Catastrophic Disability rider (HH 752 TX), which calls for a monthly benefit of $8, 000.00, Doctor Arizpe's policy provided:

CATASTROPHIC DISABILITY/CATASTROPHICALLY DISABLED - means, solely due to an Injury or Sickness, You have a total loss for any and every purpose or activity without any possibility of recovery of:
1. Power of speech; or
2. Hearing in both ears; or
3. Sight of both eyes; or
4. The use of both hands, both feet, or one hand and one foot.

Id. at 149.

         Doctor Arizpe's policy also included as an attachment the application submitted by Wyse and Doctor Arizpe. Id. at 168-180. Interestingly, the illustration Doctor Arizpe and Wyse intended to attach to Doctor Arizpe's application was not included in the application as it appeared as part of Doctor Arizpe's policy. Id. at 45, 70, 168-180, 250, 272, 319. Despite the missing illustration, Doctor Arizpe did not exercise his right to return the policy within 30 days. Id. at 43-44.

         Years later, on September 18, 2016, Doctor Arizpe suffered a grand mal seizure at home and was subsequently transported to Baylor Grapevine Hospital. Appendix in Support of Response at 11-12. Doctor Arizpe was then transferred to Baylor Scott and White Medical Center where he was diagnosed with anaplastic astrocytoma brain tumor of his left temporal lobe, stroke, and vision impairment. Appendix in Support of Response at 12-13; Appendix in Support at 338. The next morning Doctor Arizpe had surgery to remove his brain tumor. Appendix in Support at 185. On the same day, Rebekah Arizpe contacted Wyse with questions concerning the details of Doctor Arizpe's disability insurance policy with Principal. Appendix in Support of Response at 14-15. Wyse responded by email on September 21, 2017, with a quick summary of the policy information. Appendix in Support at 252, 277. Wyse's email specifically stated that “The ACTUAL policy has the facts and all benefits.” Id. at 277 (underlining and capitalization in original).

         A few days later, on September 27, 2016, Doctor Arizpe was admitted to the Baylor Institute for Rehabilitation, where he stayed until his discharge on October 22, 2016. Appendix in Support at 185. Two days later, on October 24, 2016, Doctor Arizpe began receiving outpatient brain injury rehabilitation services from the Centre for Neuro Skills until his discharge on August 31, 2017. Id. at 222. While Dr. Arizpe was in recovery, Rebekah Arizpe received assistance from Wyse with making a claim under Doctor Arizpe's disability insurance policy and on November 3, 2016, Wyse sent Principal copies of the disability claim notice for Doctor Arizpe. Appendix in Support at 185-202, 253. Two weeks later, on November 17, 2016, Travis Griffith (“Griffith”), an employee of Principal, conducted his initial interview with Rebekah, in which he inquired as to Doctor Arizpe's ability to conduct activities of daily living. Appendix in Support of Response at 16; Motion for Summary Judgment at 9. The same day Griffith sent a letter to Doctor Arizpe acknowledging receipt of his claim and outlining the provisions in Doctor Arizpe's policy. Appendix in Support at 4-8. This letter included an explanation of the Catastrophic Disability rider, which specifically stated:

To be eligible to benefits under the Rider, you must be Catastrophically Disabled. Catastrophic Disability means solely due to an Injury or Sickness, You are unable to perform two or more Activities of Daily Living without Assistance; or You ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.