United States District Court, N.D. Texas, Dallas Division
DR. NICHOLAS ARIZPE, ET AL., Plaintiffs,
PRINCIPAL LIFE INSURANCE COMPANY Defendant.
MEMORANDUM OPINION AND ORDER
FISH, SENIOR UNITED STATES DISTRICT JUDGE.
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.
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.
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. Motion for Summary Judgment at 3; Appendix
in Support at 245, 272.
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).
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
Id. at 106.
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.
more, the tenth page of Principal's illustration included
a table that is reproduced below:
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.
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.
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.
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.
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.”).
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.
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
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
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
Id. at 149.
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.
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
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 ...