### *THE HONORABLE RICHARD W. GOLD BERG, Judge, United States

Court of International Trade, sitting by designation. THE HONORABLE CHARLES A. SHAW, United States District Judge 1 

### for the Eastern District of Missouri. ____________ No. 95-3867

____________ Kathryn Marren, * *

Appellant, * * v. * Appeal from the United States * District Court for the Eastern Mutual Life Insurance * District of Missouri. Company of New York, * *

Appellee. *

____________ Submitted: April 12, 1996 Filed: May 30, 1996

____________ Before MAGILL and LOKEN, Circuit Judges, and GOLDBERG, Judge. *

____________ GOLDBERG, Judge.

Ka thryn Marren filed an action seeking the proceeds from her ex

husba nd's life insurance policy. The district court found that Ms
. 1 Marren's ex-husband had cancelled his life insurance policy before he died , and it entered summary judgment against her. Be cause we find that genuine issue s of material fact exist, we reverse the judgment of the distric t court and remand for further proceedings.

### -2- I. BACKGROUND
On May 24, 1989, Michael Marren took out a life insurance polic y from Mutual Life Insurance Company of New York ("Mutual Life"). He named his wife, Kathryn Marren, as the primary beneficiary and their children a s alternate beneficiari es. In December of 1992, Michael and Kathryn Marren divorced.

Section 10 of Mr. Marren's life insurance policy provided, "Thi s policy may be surrendered at any time for its cash value less any debt." On April 19, 1993, Mr. Marren telephoned Mutual Life and indicated that he wished to surrender h is policy. Mutual Life did not, however, cancel the policy immediately. Instead, Mutual Life sent Mr. Marren a "Full or Part Surrender Request" form ("surrender request form").

The s urrender request form demanded, "The policy or a Lost Polic y Statement (Form #3551) ("lost policy form") must accompany any (surrender) request." This deman d was arguably made in accordance with Section 17 of Mr. Marren's policy, which provided, "In any set tlement of this Policy, by reason of death, surrender, or otherwise, we may require the return of the Policy."
Mr. Marren filled out certain portions of the surrender request form, indicating that he wished to surrender his insurance policy for its cash value, less indebtedness. Mr. Marren did not, h owever, return his policy,
or a lo st policy form, to Mutual Life. Instead, he wrote, "CANNOT FIN D POLICY" on the surrender request form. Mutual L ife received the surrender request form on May 3, 1993. It did not immediately send Mr. Marren the cash value of his policy.

Mutual Li fe has internal policies that prohibit the processing of a surrender, or the disbursement of the cash value of an insurance policy, until Mutual Life receives a policy document, or

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a lost policy form, f rom the insured. More specifically, one Mutual Life document instructs employees:

If the p olicyowner [sic] indicates the policy is lost, a Statemen t of Loss (Form #3551) must be obtained. . . . If Lost Policy Form is okay, p rocess surrender and attach 3551 to surrender source.
Another Mutual Life document further instructs employees:

If the Policy Contract or Lost Policy Form is not received whe n surrender ing a Life Policy below 7[,]500[,]000 . . . the surrender proceeds must be held without interest pending receipt of the p olicy.

On May 9, 1993, six days after Mutual Life received Mr. Marren' s surrender request for m, Mr. Marren died as a result of a gunshot wound to the chest. At that time, Mutual Life's computer records showed that Mr. Marren's insurance policy was in effect

On or about May 17, 1993, Kathryn Marren met with a Mutual Lif e insurance agent to see if she would receive the proceeds from Mr. Marren's life insurance policy. The agent told Ms. Marre n that she would. On June 22, 1993, however, Mutual Life sent Ms. Marren a letter informing her that Mr. Marren had surren dered his life insurance prior to his death and that she would not receive any proceeds.

On March 11, 1994, Ms. Marren filed a civil action in the Circui t Court of the City of St. Louis, claiming that she should receive th e proceeds from Mr. Marren's life insurance policy. On April 5, 1994, Mutua l Life removed the case to the United States District Court for the Eastern District of Missouri on the basis of diversity o f citizenship. On October 18, 199 5, the district court granted Mutual Life's motion for summar y judgment, finding that Mr.

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Marren had definitely and unconditionally requested cancellation of hi s policy before he died.

II. DISCUSSION

Ms. Marren asserts that the district court erred in entering summary judgment against her because issues of fact exist concerning the meaning of ambiguous terms used in the surrender provisions of Mr. Marren's life insurance policy. Ms. Marren also claims that because Mr. Marren failed to return either his policy or a lost policy form to Mutual Life, a s required by the surrender provisions of the policy, he failed to cancel th e policy. Mutual Life, on the other hand, argues that Mr. Marren complied wit h the provision of the policy that allowed him to surrender hi s insurance at any time . Therefore, according to Mutual Life, the district court properly entered summary judgment in its favor.
We review a district court's ruling on a motion for summary judgment de novo . B.B. v. Continental Ins. Co. , 8 F.3d 1 288, 1291 (8th Cir. 1993). We will affirm if the evidence, viewed in the light most favorable to the non-moving party, sho ws that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Id.
The parties agree that Missouri law applies to this diversity a ction. Missouri law provides that in the absence of other insurance polic y requirements, "the sole requirement to effect cancellation by an insured is a definite and unconditional request for cancellation actuall y communicated to the Company ." Dupeck v. Union Ins. Co. of Am. , 329 F.2d 548, 557 (8th Cir. 1964) (citation omitted) (emphasis in original).
If, however, an insurance policy has specific cancellatio n requirements, Missouri law provides that "strict and literal complianc e with the contractual requirements must be met." S & P

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Oyster C o. v. U.S. Fidelity & Guar. Co. , 865 S.W.2d 379, 382 (Mo. App
. 1993). For example, if a policy requires the in sured to return the policy by registered letter in order to effect cancellation, then the insure d cannot cancel by writ ten notice alone. Farmers Mut. Hail Ins. Co. of Mo.
v. Minton , 279 S.W.2d 523 (Mo. App. 1955). Similarly, if a policy require s that the insurer address all notices of cancellation to the insure d business , then the insurer cannot cancel by addressing a notice o f cancellation solely to the president of that insured business. Safeco Ins
. Co. of Am. v. Stone & Sons, Inc. , 822 S.W.2d 565 (Mo. App. 1992).

It is usually the court's job to interpret the cancellatio n provisions of an insurance policy, as the meaning of terms in a contract ordina rily presents a question of law. Auto Owners Mut. Ins. Co. v
. Wieners , 791 S.W.2d 751, 758 (Mo. App. 1990). If, however, the court find s that the terms of the policy are ambiguous, then it may admit extrinsi c evid ence "to show the real intent of the parties." Prestigiacamo v

. American Equitable Assur. Co. of N.Y. , 221 S.W.2d 217, 221 (Mo. App. 1949)
. If "the surrounding c ircumstances or other extrinsic evidence admitted on the ambig uity question raise issues of fact," then a jury will help th e court to decide the meaning of the ambiguous ter ms. Auto Owners Mut. Ins. Co. , 791 S.W.2d at 758.

We fin d that the terms of Mr. Marren's life insurance policy ar e amb iguous. Section 10 of the policy provides that the policy "may b e surrendered at any time." This language does not impose specific surrende r requirements on the insured. Section 17, on the other hand, provides, "In any settlement of this Policy by reason of death , surrender, or otherwise, we may require the return of the Policy." This language indicates that if Mutual Life exercises its prerogative to do so, it may require the insured to return the policy, or a lost policy statement , in order to complete his election to surrender the policy. See generally Farmers Mut. Hail Ins. Co

. of Mo. , 279 S.W.2d at 527 (discussing return of a lost

### -6-

policy statement instead of the policy itself). It is therefore unclear whether the cancellation provisions of the policy required Mr. Marren to return the policy, or a lost policy form, along with his surrender request form when Mutual Life demanded that he do so.

In add ition, we find that extrinsic evidence that bears on th e interpretation of the ambiguous terms in Mr. Marren's policy raises genuin e issues of material fact for the jury to resolve. The deposition testimony of Mutual Life's Mana ger of Policy Service, Kathleen Ward, indicates that Mutual Life did not intend to require Mr. Marren to return his policy in order to effect cancellation. According to Ms. Ward, Mutual Life merely seeks to recover policy documents from people who have cancelled thei r coverage in order to prevent future misunderstandings. If, however, Mutua l Life did not intend to require Mr. Marren to return his policy document, or a lost policy form, it could have cancelled M r. Marren's policy when he indicated by telephone that he wished to surrend er the policy. Similarly,
as soon as Mutual Life received Mr. Marren's surrender request form, i t could have recorded the surrender and informed M r. Marren, by disbursement of m oney or other means, that he was entitled to the cash value of hi s policy. As Mutual Life did not take these actions, it may have intended to require Mr. Marren to return either his polic y, or a form that provided specific i nformation about the loss of the policy, in order to effec t cancellation. Indeed, both the demand on the surrender request form and Mutual Life's internal policies indicate that Mutual Life did not intend to process Mr. Marren's surrender request, or disburse the value of th e policy, until it received either his policy or a lost policy form.

III. CONCLUSION

A j ury must examine issues of fact presented by the extrinsi c evidence in order to determine the intended mean ing of the ambiguous terms in Mr. Marren's life insurance policy.

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Consequently, we reverse the decision of the district court and remand thi s case for further proceedings.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.