1 15-3337-cv Stein v. American General Life Insurance Company

UNITED STATES COURT OF APPEALS

FOR THE SECO ND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A

SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED

BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY

MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DA TABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY

OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Cour t of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courth ouse, 40 Foley Square, in the City of New York, on the 5 th day of December, two thousand sixteen.

PRESENT: J ON O. N EWMAN

, G ERARD E. L YNCH

, C HRISTOPHER F. D RONEY

, Circuit Judges

.

---------------------------- ---------------------------- -------------- A LLEN S TEIN

, AS T RUSTEE OF THE R ACHEL M EISELS
I RREVOCABLE T RUST 2006B, Plaintiff-Appellant

,

v. No. 15-3337-cv

A MERICAN G ENERAL L IFE I NSURANCE C OMPANY

, Defendant-Appellee.

---------------------------- ---------------------------- --------------

FOR PLAINTIFF-APPELLANT: I RA S. L IPSIUS

, Lipsius-BenHaim Law LLP, Kew Gardens, NY.

FOR DEFENDANT-APPELLEE: D AVID T. M C D OWELL

, Edison, McDowell & Hetherington LLP,
Houston, TX.

Appeal from a judgment of the United States District Court for the Eastern District of New York (Irizarry, J. ).2 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the district court is AFFIRMED

.

Plaintiff-Appellant Allen Stei n, Trustee of the Rachel Meisels Irrevocable Trust 2006B (the “Trust”), filed a notice of app eal from the July 22, 2014, order and the September 28, 2015, order of the district c ourt. The first order de nied both parties’ motions for summary judgment; the second or der granted summary judgment in favor of Defendant-Appellee American General Life Insurance Company (“American General”)

and ordered the case dismissed. We will treat the notice of app eal as seeking to appeal the judgment, entered September 29, 2015, im plementing the order entered September 28. 1

In 2009, an insura nce policy issued by American General insuring the life of Rachel Meisels lapsed due to nonpayment of premiums. In 2011 , Stein brought suit seeking a declaration that the in surance policy wa s still in force. 2 The district court concluded that there were no ge nuine disputes of material f act that the policy had lapsed. This appeal followed. We assu me the parties’ familiarity w ith the underlying facts, the procedural history of the ca se, and the issues on appeal, which we reference only as necessary to explain our decision to affirm.

This Court reviews de novo a district court’s grant of summary judgment. Matthews v. City of New York , 779 F.3d 167, 171 (2d Cir. 2015). Summary judgment is proper only if “‘the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to ju dgment as a matter of law.’” Id. (quoting Fed. R. Civ. P. 56(a)). This Court “also review[s] de novo the district court’s interpretation and application of state law.” Phansalkar v. Andersen Weinroth & Co. , 344 F.3d 184, 199 (2d Cir. 2003) (per curiam).

On appeal, Stein argues that: (1) Amer ican General failed to mail the Trust a “Grace Period Notice,” as requi red by New York law; (2) even if such Notice was mailed, it was legally deficient; and (3) Amer ican General was compelled to accept a replacement check and keep th e policy in force. These arguments are meritless.

1 To the extent that the notice of appeal sought to appeal the order entered July 22, 2014, it was improper, as that was an unappealable pretrial order, and unnecessary, as an appeal from the final judgment would have brought up for review all prior orders of the dist rict court that pr oduced the judgment. See SongByrd, Inc. v. Estate of

Grossman , 206 F.3d 172, 178 (2d Cir. 2000).

2 This action was originally filed in New York state court. It was removed to the United States District Court for the Eastern District of New York on the basis of diversity jurisdiction.3 1. Proof of Mailing

Under New York law, an insurer may no t terminate a life insurance policy for failure to pay premiums without first notif ying the policyholder by mail of the impending lapse. N.Y. Ins. Law § 3211 (McKinney 2008). A presumption of receipt of such notice arises when “the record establishes office pr ocedures, followed in the regular course of business, pursuant to which [the] notic e[] ha[s] been addressed and mailed.” Ma v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 597 F.3d 84, 92 (2d Cir. 2010) (citing Nassau Ins. Co. v. Murray , 386 N.E.2d 1085, 1086 (N.Y. 1978)). “To rebut this presumption, a litigant must s how that ‘routine office practic e was not followed or was so

careless that it would be unreasonable to assume that no tice was mailed.’” Id. (quoting

Nassau , 386 N.E.2d at 1086). “Mere denial of receipt is insufficient to rebut the presumption.” Id.

At summary judgment, American General o ffered extensive evidence regarding its office procedures as proof that a Grace Pe riod Notice was mailed to the Trust in May 2009, including: (1) the declaration of James Daniel, Director of Information Technology; (2) the declaratio n of Frank Vallis, Director of Records Management; and (3) the deposition testimony of Jeremy Ciszew ski, General Manager for Pitney Bowes, American General’s mail processor. Stein cont ends that this evid ence is insufficient because Ciszewski lacked pers onal knowledge of the mailing. Specifically, Stein asserts

that the Grace Period Notice was mailed from P itney Bowes’s Staffo rd, Texas facility and that, as an employee of th e Houston facility, Ciszewski coul d not have testified as to how the Notice was mailed or to the mailing proc edures in effect at the Stafford facility during the time period when the Notice was mailed.

Under New York law, “personal knowledge is required only to establish regular office procedure, not the particular mailing.” Meckel v. Cont’l Res. Co. , 758 F.2d 811, 817 (2d Cir. 1985); Bossuk v. Steinberg , 447 N.E.2d 56, 58 (N.Y. 1983). Here, Ciszewski’s deposition testimony clearly demonstrates that he had personal knowledge of Pitney Bowes’s regular office procedure as of May 2009. Ciszewski testified that he worked at Pitney Bowes, in both mail sorting and huma n resources capacities, since 2002. He testified that, during that time, he worked at three different facilities, and that all three “follow[ed] a very similar approach.” App’x at 50. Ciszewski then described Pitney Bowes’s mailing procedures in detail. Ciszewski further testified that office procedures at that facility had not change d between May 2009, wh en the Grace Period Notice was sent, and November 2009, when Ciszewski began working at the Stafford facility. We agree with the district court that this testimony, along with the other evidence offered by American General, is sufficient to create a pres umption of receipt. Because Stein offers no evidence to rebut this pres umption, apart from denying that the Notice4 was ever received, we conclude that there is no genuine dispute th at American General has satisfied its mailing oblig ations under New York law.

2. The Grace Period Notice

Pursuant to New York Insurance Law § 3211, a Grace Period Notice must state: (1) the amount of payment owed; (2) the date when payment is due; (3) the place where and the person to whom payment can be made ; and (4) that, withou t such payment, the policy will terminate or lapse. N.Y. Ins. Law § 3211(b)(2) (McK inney 2008). Although “forfeiture of life insurance coverage for late payment of premiums is ‘not favored in the law,’” Speziale v. Nat’l Life Ins. Co. , 159 F. App’x 253, 255 (2d Cir. 2005) (summary order) (quoting N.Y. Life Ins. Co. v. Eggleston , 96 U.S. 572, 577 (1877)), these notice requirements should not be cons trued as creating a “trap” for either the insurer or the insured, McCormack v. Sec. Mut. Life Ins. Co. , 116 N.E. 74, 77 (N.Y. 1917). Thus, minor variations from the statutory notice requirements of § 3211 will not automatically render a grace period notice noncompliant. See McCormack , 116 N.E. at 77 (interpreting § 3211 and asserting that, while everyt hing of substance must be stat ed, “there is no requirement of literal adherence to one invariable form”); see also Zeligfeld v. Phx. Life Ins. Co. , 975 N.Y.S.2d 370 (Table), 2013 WL 1688902, at *4 (N.Y. Sup. Ct. 2013) (concluding that notice containing minor error or obvious typ ographical error in premium amount due may still provide essential inform ation required by § 3211, an d therefore be found in compliance).

Stein maintains that, even if American General mailed the Trust a Grace Period Notice, the Notice failed to clearly and accura tely convey the amoun t owed, the date due, and the payee. The district c ourt concluded otherwise, and we agree. As to amount owed, there can be no genuine questio n that the Notice clearly indicated that, unless a payment of $22,361.91 was received, the policy would la pse. Indeed, the paym ent stub also read, “Pay This Amount: $22,361.91.” App’x at 157. That the Notice also indicated the minimum quarterly premium required is irrele vant. As to date due, even if the Notice erroneously indicated that payment was due prior to July 20, 2009, instead of on or before that date, such error was de minimis . Stein had approximately two months’ notice of the deadline, and was advised that prompt action was required to keep the policy in

force. See McCormack , 116 N.E. at 77 (noting that “the purpose of the [grace period] notice is to spur the assured to diligence”). Fi nally, as to the appropr iate payee, American General submitted evidence showing that: (1 ) the Trust had made checks for premium payments out to “American Ge neral,” “American General Life Insurance,” and “AIG” in the past, all of which had been accepted; and (2) the Trust had receiv ed a nearly identical

Grace Period Notice in June 20 08, and subsequently maile d payment to the correct address. Thus, despite the fact that the No tice listed three different corporate entities and included two different addresses, any resulti ng ambiguity could not have confused or5 prejudiced Stein. In sum, we conclude that no genuine issue of material fact exists, and that the Grace Period Notice adeq uately conveyed all the in formation required by law.

3. The Replacement Check

On June 3, 2009, American General ma iled the Trust a Qu arterly Notice of Payment Due, indicating that a premium pa yment of $15,000 was due by July 17, 2009. On July 16, 2009, Ameri can General received a $15, 000 check from the Trust, erroneously made out to “R. Meisels” (the na me of the insured). As a result, American General returned the check to the Trust, along with a form letter that stated, in relevant part: “Please correct and return to us. We w ill process promptly upon receipt.” App’x at 216. The Trust subsequently submitted a correct ed check, but American General declined to accept it because, by the time of its receipt, the grace pe riod had e xpired and the policy had lapsed.

Stein maintains that the fo rm letter constituted a promis e by American General to accept the replacement check, regardless of the grace period deadline, and keep the policy in force. That argument fails for two r easons. First, we find no genuine dispute that the form letter, which did not reference the policy’s impending lapse and simply requested a replacement check made out to the correct pa rty, did not extend the applicable grace period deadlin e. Second, even if such an extension were made, the $15,000 replacement check was well below the amount required to keep the policy in force. Accordingly, we reject Stein’s argument.

* * *

We have considered Stein’s remaining arguments and conclude that they are

without merit. We therefore AFFIRM th e judgment of the district court.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court