UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 23-1770

CAROLINE B. REYNOLDS; ALISON W. REYNOLDS; PAIGE A. 

REYNOLDS, individually and as Administrator of the Estate of John Paul 

Reynolds,

 Plaintiffs - Appellants,

v.

USAA LIFE INSURANCE COMPANY,

 Defendant - Appellee.

Appeal from the United States District Court for the Eastern District of Virginia, at

Richmond. Henry E. Hudson, Senior District Judge. (3:22-cv-00577-HFH)

Argued: May 7, 2024 Decided: May 31, 2024

Before NIEMEYER and THACKER, Circuit Judges, and MOTZ, Senior Circuit Judge.

Affirmed by unpublished per curiam opinion.

ARGUED: Churchill G. Bowles, BOWLES AFFILIATES, PC, Richmond, Virginia, for 

Appellants. Duncan Robert Becker, COZEN O’CONNOR P.C., Philadelphia, 

Pennsylvania, for Appellee. ON BRIEF: Paul McCourt Curley, SIX EAST LAW 

GROUP, Richmond, Virginia, for Appellants. Laura M. Zulick, Philadelphia, 

Pennsylvania, Chad E. Kurtz, COZEN O’CONNOR P.C., Washington, D.C., for 

Appellee.

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Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

Paige, Caroline, and Alison Reynolds (collectively, “Appellants”) appeal the 

district court’s order granting summary judgment to USAA Life Insurance Company 

(“USAA”) on their breach of contract claim. Because the life insurance contract was 

validly canceled at the time of the insured’s death and the grace period does not apply, 

we affirm.

I.

Appellants’ breach of contract claim arises out of USAA’s life insurance policy 

with John Paul Reynolds (“J.P.”). J.P. was married to Paige, and they had two daughters: 

Caroline and Alison. On November 4, 2010, USAA issued a $1,000,000 twenty-year 

term life insurance policy to J.P. J.P. initially listed Paige as the policy’s beneficiary. 

J.P. opted to pay his policy premium monthly, and for USAA to automatically draft his 

monthly premium from his bank account. Because the policy measured monthly 

premium due dates from the effective date, November 4, 2010, J.P.’s premium was

automatically drafted on the 4th of each month. The policy also contained a 31-day grace 

period provision, which would go into effect if J.P. failed to pay his monthly premium by 

the 4th of the month. J.P. maintained the policy for nearly ten years. The only change 

that J.P. made to the policy was in 2018, when he changed the beneficiary from Paige to 

his daughters after he and Paige divorced.

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On August 3, 2020, J.P. called USAA. The telephone conversation was recorded. 

J.P. began by stating that he wanted “to cancel [his] Term Life Insurance.” J.A. 290.*

 

When the customer service representative, Velma Rodriguez, offered to explore less 

expensive coverage options and transfer his call to an agent who could reduce his policy 

coverage, J.P. said he wanted to “skip that” and “just cancel it.” J.A. 292. Rodriguez 

clarified that J.P. wanted to “just go ahead and cancel[.]” J.A. 292. J.P. responded, 

“Yeah . . . so I just don’t need to pay [my monthly premium].” J.A. 292. Then, the 

following exchange occurred:

[Rodriguez]: Yeah, okay, so, we can go ahead and cancel the 

policy, [J.P.]. It looks like you are currently paid through—

uh—August the 4th, which is tomorrow, so what we can do is 

we can cancel it effective tomorrow. That’ll stop the 

automatic payment, so we won’t be drafting that payment 

tomorrow.

[J.P.]: Perfect.

[Rodriguez]: Okay, looks like it was perfect timing whether 

you were going to reduce it or cancel it, it would have 

happened tomorrow[.] Alright, and so we’ll cancel it.

J.A. 292. Rodriguez then canceled the policy over the phone, effective August 4. USAA 

sent J.P. a letter confirming that the policy had been canceled and that his premium 

payments would no longer be drafted from his bank account. J.P. died two weeks later, 

on August 17, 2020. 

* Citations to the “J.A.” refer to the Joint Appendix filed by the parties in this 

appeal.

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After J.P.’s death, Appellants sought the policy benefits from USAA, but USAA 

explained that because J.P. terminated the policy, no benefits were payable to them. 

Appellants then filed a complaint with the Virginia Bureau of Insurance, who declined to 

direct USAA to pay the policy’s proceeds because the policy was canceled at the time of 

J.P.’s death. Finally, Appellants sued USAA in Virginia state court, alleging breach of 

contract, negligence, constructive fraud and fraudulent inducement, and unjust 

enrichment. USAA removed the case to federal court on diversity grounds. Then, the 

district court granted USAA’s partial motion to dismiss, dismissing Appellants’ 

negligence, constructive fraud and fraudulent inducement, and unjust enrichment claims, 

leaving only Appellants’ breach of contract claim.

Following discovery, the parties filed cross motions for summary judgment. 

Appellants argued that J.P.’s oral cancellation during his phone call with USAA was 

invalid because it was not supported by adequate consideration and because by the time 

J.P. called to cancel, the policy had entered its grace period. USAA countered that J.P.’s 

cancellation was a valid contract, supported by adequate consideration, and J.P.’s policy 

had not entered a grace period when J.P. called. The district court granted summary 

judgment to USAA for the reasons articulated by USAA. 

This timely appeal followed. 

II.

We review a district court’s grant of summary judgment de novo. Bhattacharya v. 

Murray, 93 F.4th 675, 686 (4th Cir. 2024). 

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III.

On appeal, Appellants reiterate the arguments they made before the district court: 

that J.P.’s cancellation was not supported by adequate consideration and that J.P.’s policy 

was in a grace period when he called. And therefore, in Appellants’ view, J.P.’s policy 

was still in effect when he died, entitling Appellants to the policy’s proceeds.

At oral argument, counsel for Appellants highlighted that “precision is crucial.” 

Oral Argument at 32:24–26, Caroline Reynolds v. USAA Life Ins. Co., No. 23-1770 (4th 

Cir. May 7, 2024), https://www.ca4.uscourts.gov/oral-argument/listen-to-oral-arguments. 

We agree. J.P. was precise and quite clear when he called USAA. J.P. made clear that he 

wanted to cancel his life insurance policy. Indeed, in the span of the recorded telephone 

conversation, J.P. indicated no less than four times that he wanted to cancel the policy. 

J.A. 290 (“I would like to cancel my Term Life Insurance.”); id. at 292 (“[L]et’s skip 

[modifying the policy]—let’s just cancel it.”); id. (responding “Yeah” to “You wanna just 

go ahead and cancel?”); id. (responding “[p]erfect” to Rodriguez explaining that USAA 

would cancel the policy effective August 4th, which would “stop the automatic 

payment”). And USAA agreed to cancel the policy. By canceling his policy, J.P. 

received the benefit of no longer paying his monthly premium and USAA received the 

benefit of no longer insuring J.P. This is sufficient consideration. Sfreddo v. Sfreddo, 

720 S.E.2d 145, 153 (Va. Ct. App. 2012) (“Virginia has long followed the ‘peppercorn’ 

theory of consideration under which even a peppercorn suffices as consideration.”); R.K. 

Chevrolet, Inc. v. Hayden, 480 S.E.2d 477, 480 (Va. 1997) (explaining that even a “slight 

advantage” or a “trifling inconvenience” is sufficient consideration). 

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Like the district court, we reject Appellants’ argument that the grace period had 

already begun when J.P. called USAA on August 3 to cancel the policy. J.P.’s policy 

would have entered a grace period only if J.P. missed his August 4th payment. That did 

not happen. Instead, J.P. called and canceled the policy the day before payment was due. 

J.A. 292 (explaining that USAA would “cancel [the policy] effective tomorrow,” August 

4, which would “stop the automatic payment”). 

Thus, J.P.’s oral cancellation was a valid contract, supported by sufficient 

consideration, and the policy’s grace period does not apply. The district court properly 

concluded that Appellants’ breach of contract claim failed as a matter of law.

IV.

Therefore, the district court’s order granting summary judgment to USAA is 

AFFIRMED.

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