NOT RECOMMENDED F OR PUBL I CATI ON File Na me: 12a1235n.06 No. 11-2254 UNI TED STATES COURT OF A PPEAL S FOR THE SI XTH CI RCUI T

J OHN T. SYRON, Plaintiff-Appellant,

v. REL I ASTAR L I FE I

NSURANCE COMPANY, Def endant- Appellee

.

______________________________________ ) ) ) ) ) ) ) ) ) ) ) ) ON APPEAL FROM THE UNI TED STATES DI STRI CT COURT FOR THE EASTERN DI STRI CT OF MI CHI GAN

OPI NI ON

Before: M OORE, GILMAN, and KETHLEDGE, Circuit Judges. RONALD LEE GILMA N , Circuit Judge. J ohn T. Sy ron purcha sed a $7.2 milli on termlife insurance policy from ReliaStar L ife I nsuranc e Company on the life of Nicholas Anthony I anni, J r. The poli cy , providing what is known as “key -man covera g e,” was i ntended to protec t Sy ron’s interest in a nine- milli on-dollar loan ma de to one or more companies tha t I anni owned. I anni was found murdere d in his Michig an home three months afte r the policy was issued. Be cause ReliaStar had not y et paid Sy

ron the policy ’s dea th benef it four months after

rec eiving a cla im for pay ment, Sy ron filed a

lawsuit ag ainst ReliaStar in state cour t. ReliaStar remove d the case to fede ral court and filed a motion to dismiss for lack of subjectmatter jurisdi ction , ar gu i n g t h at t he case was not ripe for adjudication because ReliaStar was still conducting a contestability revie w and had not y et denied Sy ron’s claim for pay

ment. The district court g rante d ReliaStar’s motion and dismiss ed the case without prejudice

. Sy ron timely filed thisNo. 11-2254

Syron v. Re liaStar L ife Ins. Co. appea l. For the rea sons set forth below, we REVERSE the judgme nt of the district court and REMAND for further procee dings consistent with this opinion. ReliaStar’s request for an aw ard of the c osts of this appeal is conseque ntly DENIED

. I. BACKG ROUND Sy ron owned a company that was owed more than nine milli on dollars b y o n e o r m o re of I anni’s companies. To protec t Sy ron’s interest in the debt due his company , Sy ron soug ht to insure I anni’s life with “key -man” insurance cover ag e. Sy ron first applied for an “I

NG Guar antee d Dea th Be nefit Universa l L i fe ” i n s u ranc e policy throug h Security L ife of Denve r I nsuranc e Company , which, like ReliaStar, is a member of the I NG family of financ ial companies. The same form could be used to apply for a policy throug h both ReliaStar and Security L ife of Denv er . S y ron’s application included financ ial information about both Sy ron and I anni. I t was approve d, and the whole-li fe p o licy issued on J une 15, 2010. The policy provided a 30-day period for Sy ron to examine and re turn the policy for a ref und of all pre miums paid. Wit hin that ex am i n ation period, Sy ron submitt ed a second I NG application (without specify ing a pre fer ence for ReliaStar or Security L ife of D enver ) for

a ten-y ear term life insurance policy on I anni’s li fe, protectin g t h e s am e int ere st in the s ame debt as t he whole-life poli cy . This application did not contain the e x tensive under writing information that Sy ron and I anni submitt ed with the first application. I nstead, ReliaStar used the information submitt ed with both applications to underw rite the term policy

. Sy ron then sent a letter instructing th e I NG Reliastar Processing Depa rtment to canc el the whole-life policy , but only on the condition that his application for a term

-2-No. 11-2254

Syron v. Re liaStar L ife Ins. Co. policy was approve d. ReliaStar issued the term policy on J uly 7, 2010 and proce ssed the whole-life policy as “not take n.” I anni was found dead from g u n s h o t wo u nds in his Michig an home in mid-October 2010. Sy ron submitt ed a letter making a claim for pay ment on the term p o l i cy o n Dec ember 7, 2010, providing a “Proof of Dea th Claimant’s Statement” form, a cer tified death cer

tificate, and copies of authorizations for rele ase of health-r elated information signe d by I anni befor e his death. The letter reque sted pay

ment within seven day s of ReliaStar’s rec eipt of the claim, p u rsuant to the term policy ’s provision tha t “ [R eliaStar] w ill pay the Dea th Proc eeds w ithin 7 day s of when we rec eive due proof of the de ath claim.” ReliaStar responde d two day s later, informing Sy ron that the company was “unable to make pay ment at thi s t i me” beca

use I anni’s death occur

red within the policy ’s two-y ear contestability peri o d

. As such, ReliaStar “nee d[ed] to verify that all of the questions in the application for insurance wer e answe red corr ectly .” The letter asked for medical- rele ase authorizations to be signe d by I anni’s next of kin or estate a dminist rator be cause some healthca re providers would not acc ept rele ases signe d by persons no longe r living. ReliaStar also noted that it had contac t ed t h e police depar tment in Novi, Michig an to verify that Sy ron was not involved in I anni’s death (p u rsuant to Michig an’s “slay er statute,” M i ch

. Comp. L aws § 700.2803), but that the pol ice had not y et ruled out any one in the murder investiga tion. The insurer later reque sted I anni’s t ax re t u rn s for the previous three y ear s to verify that his income and n et wo rt h were corr ectly repr esente d on the application for

insurance

.

-3-No. 11-2254

Syron v. Re liaStar L ife Ins. Co. Sy ron dispu t ed t h at R el iaStar had a contra ctual rig ht to the information it reque sted as a prer equisite to approving or deny ing Sy ron’s claim, but he nonetheless provided the medical- rele ase authorization i n Marc h 2011. He did not, howeve r, provide ReliaStar with copies of I anni’s tax returns. ReliaStar neither approve d nor denied Sy ron’s claim, maintaining its positi o n t hat S y ron had y et to provide “ due proof ” of the claim and that its contestability revie w was ong oing. I n April 2011, Sy

ron filed a lawsuit in state court al l egi ng that ReliaStar had brea ched the insurance policy contra ct and had violated Mich. Comp. L aws § 500.2006 by failing to timely

pay his claim. He also soug ht a decla ratory judgme nt that he was entitled to the full death benef it under the term policy

. ReliaStar remove d the case to the United Stat es Di strict Court for the Easter n District of Michig an and later filed a motion to dismiss the complaint for lack of subject-matter jurisdiction. Sy

ron’s complaint, ReliaStar arg ued, was not ripe for judicial revie w beca use ReliaStar had not y et denied his c laim for pay ment. After a September 2011 hear ing on the motion, the district court conclude d that the term policy allowed for a contestability revie w under the fac ts prese nted and that the “nine to ten months” that ReliaStar had alre ady taken to do that revi ew wa s not unrea sonable. The court found that Sy ron’s claim was p re m at u re and thus dismiss ed the complaint without prejudice

. This timely appea l followed. Two months afte r the dismiss al of Sy ron’s lawsuit, ReliaStar filed a new action in the same fede ral district court seeking a decla ration that the term policy is void beca use of alleg ed fra

udulent and materia l misrepre sentations made by Sy ron and I anni when procur ing t h e p o l i cy . ReliaStar maintained in its complaint that it had “not completed its claim revie w, rec eived due proof that the -4-No. 11-2254

Syron v. Re liaStar L ife Ins. Co. claim is pay able, or denied the claim,” but that i t had lear ned that Sy

ron and I anni provided “untruthful and misleading information during the application proce ss for the subject insurance

c o v e r a g e . ” T h e a ll e g e d mi s r e p r e sentations conce rned the profitability of I anni’s me d ic a l- ma lp r a c ti c e reinsura nce business, I anni’s income and net worth, and the asser tion that a lawsuit involving I anni h ad been resolved. Sy

ron filed a counter claim seeking decla rations that: (1) the term policy is a valid, enfor cea

ble insurance contra ct; (2) ReliaStar’s contestability revie w is limit ed to the scope of the repr esenta tions Sy

ron made in the t er m-policy application, which did not contain financ ial repr esenta tions from I anni; and (3) ReliaStar’s action for decla ratory relief is in eff

ect a denial of Sy ron’s cl ai m fo r the death benef it on the term policy

. ReliaStar’s complaint and Sy ron’s counter claim ar e still pending. II. ANALYSIS A. Standard of

revie w We revie w de novo a district court’s deter mination that claims are not ripe for adjudication and must be dismiss ed for a lack of subject-matter jurisdiction. Kruse v. Vill. of Chagrin Falls , 74 F.3d 694, 697 (6th Cir. 1996) ; see also Bige low v

. Mich. Dep’ t of Natural Res. , 970 F.2d 154, 157 (6th Cir. 1992) (“I f a claim is unripe, fede ral courts lack subject matter jurisdiction and the complaint must be dis missed.”). The present case, however, wa s removed from st ate court and shoul d have been rema

nded instead of dismiss ed when the district court found a lack of subject matter jurisdiction. See 28 U.S.C. § 1447(c)

. But beca use the court dismiss ed the case without pr ejudice instead of rema

nding it to state court, we have jurisdiction to review the court’s decision as a final

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Syron v. Re liaStar L ife Ins. Co.

o rd er . See id. at § 1291; see also Zayed v. United States , 368 F.3d 902, 904-05 (6th Cir. 2004 ) (noting that the dismissal of an ac tion without prejudice is final and a ppeala ble). Our revie w takes into acc ount the parties’ ag ree ment that ReliaStar’s motion to dismiss Sy ron’s complaint under Rule 12(b)( 1) of the Fe dera l Rules of Civil Procedur e was a fac tual, rathe r than fac ial, attack on the complaint. Be cause ReliaStar raised a fac tual challeng e, “no presumptive truthfulness applies to [S y ron’s] fac tual alleg ations,” and the di strict court was “f re e t o weigh the evidenc e and sati sfy itself as to the exis tence of its power to hear the case .” See United States v. Ritchie , 15 F.3d 592, 598 (6th Cir. 1994). A distr i ct co u rt’s fac tual finding s in this situation are revie wed under t he clear- err or standar d. RMI Ti tanium Co. v. W estinghouse El ec. Corp. , 78 F.3d 1125, 1135 (6th Cir. 1996). “[S] ince ripene ss is peculiar ly a question of timing, it is the situation now rathe r than the situation at the time of the District Court’s decision that must g overn.” Reg’l Rail Reorganization Act Cases , 41 9 U. S

. 1 0 2 , 140 (1974); see also Buck ley v. Valeo , 424 U.S. 1, 114-17 (1976) (consider ing fac ts that occur red afte r the decision of the Court of Appea ls in its ripene ss analy sis and citing Regional Rail ); Casden v. Burns , 306 F. App’x 966, 972-73 (6th Cir. 2 0 0 9 ) (applying Regional Rail and considering events occur ring afte r the district court’s dismiss al to find that claims had become ripe). Our inquiry must thus focus on whether Sy ron’s c laim is presently

ripe, ra ther than on whether it was ripe when the district court dismiss ed his complaint. See Reg’l Rail , 419 U.S. at 140.

-6-No. 11-2254

Syron v. Re liaStar L ife Ins. Co. B. Syron’s claim r ipened u pon ReliaS tar’ s fi ling i ts declarat ory act ion When assessing ripen es s , “w e ask two basic questions: (1) is the claim fit for judicial decision in the sense that it arises in a concr ete fac tual context and conce rns a dispute that is likely t o come to pass? and (2) what is the hardship to the parties of wit hholding court cons i d er at i o n ? ” W arshak v. United States , 532 F.3d 521, 525 (6th Cir. 2008) (interna l quotation mark s an d altera tions omitted); see also Dealer Computer Servs., Inc. v. Dub Herring Ford , 547 F.3d 558, 561 (6th Cir. 2008) (bre aking the two parts of W arshak ’s first question int o s ep ar at e factors for consideration, thus recasting the ripene ss analy sis as a three -fa ctor a ssessment). The dist rict court in the present case found t hat t here was li ttle chanc e tha t S y ro n ’s claim would not be paid unless the contestability revie w reve aled g rounds for not pay ing. I t also deter mined that the fac tual rec ord was not sufficie ntly develope d beca use there wer e still “issues that need[ed] to be resolved.” Most notably , ReliaStar had not c ompleted its contestability revie w and thus had not indicated whether it would approve or deny Sy ron’s claim. The court reje cted Sy ron’s arg ument that ReliaStar’s re view had g one on so long that it was effe ctively a denial of hi s claim, holding that “ nine to ten months” of re view wa s not unreasona ble. Although the district court’s analy sis might have been corr ect at the time, a key postdismiss al fac tual development chang es our view—the fac t that Re li a St a r s u b s e q u e n tl y filed an action to decla re the term insurance policy void. Whatever doubt that then exis ted about whether ReliaStar would pay Sy

ron’s claim no longe r rema ins. Acc ording to ReliaStar, the term policy is void beca use of fra udulent misrepre sentations made in the application, and there fore it owes no death benef it to Sy ron. -7-No. 11-2254

Syron v. Re liaStar L ife Ins. Co. Michig an law prov i d es that even an underpa y ment of a claim, as opposed to an outrig ht ref usal to pay any amount, constitutes a denial of liability that can g ive rise to an insured’s cause of action. Jimene

z v. Allstate I

ndem. Co. , 765 F. Supp. 2d 986, 991 (E.D. Mich. 2011) (der iving this rule from Bourke v. N. River Ins. Co. , 324 N.W.2d 52 (Mich. Ct. App. 1982)). I f the underpa y ment of a claim constitutes a den i al, then so too must an insurer’ s action seeking to void a policy and there by absolve itself of a

ny duty to pay whatsoeve r. Moreove r, ReliaStar’s lawsuit meets M i ch i gan ’s test for the formal denial of liability (re levant in some circ umstances to the running of time that an insured has to file a lawsuit) beca use it “unequivoc ally impress[ed] upon the insured that the extraordinary step of pursuing relief in court must be taken.” See Jimene z , 765 F. Supp. 2d at 992 (internal quotation mar ks omitted). Seeking

a judicial decla

ration to void the policy sufficie ntly “impresse d upon” Sy ron that ReliaStar did not intend to pay

his claim. The disput e that had y et t o come to pass at the time of the district court’s order has since occur

red, providing a definitive fac tual context for the case . See W arshak , 532 F.3d at 525 (noting that ripene ss require s a “conc rete fac tual contex t an d

. . . a d ispute that is likely to

come to pass”)

. To be sure, ReliaStar argue s that its contestability revie w continues, but this ong oing revie w does not chang e the fac t that the company has denied Sy ron’s claim. The first part of the W arshak test is therefor e met because the fa ctual pre dicate f or the ha rm Sy ron alleg es—the denial of his cla im for dea th benef its in breach of

the insuranc e contr act—ha s now happe ned. Sy ron also meets the second part of the W arshak tes t. The ty

pical ripene ss challeng e involves

a harm that has not y et come to pass, thus causing this court to ask whether “the hardship

. . . of withholding court considerat i o n o u tweig hs the costs of allowing litigation by hy pothetical.” -8-No. 11-2254

Syron v. Re liaStar L ife Ins. Co. Connection Distrib. Co. v. Holder , 557 F.3d 321, 342 (6th Cir. 2009) (interna l quotation marks omitted). But in this case the alleg ed har m has alre ady

occur red. There are no costs of “litig ation by hy pothetical” ag ainst which to balanc e the hardship of further delay ing judicial revie w of Sy

ron’s claim beca

use ReliaStar’s denial of pay ment is no longe r hy

pothetical. Any further delay would be

an unwa rra nted har dship. ReliaStar’s position is that the litigation it initiated should continue, but tha t Sy ron’s claim is still not ripe for adjudication. But we are unawa re of any prudential or statutory rule that allows

an insurer to deny liability on one g round while prec luding an insured’s lawsuit from proce eding simply beca

use the insurer can point to another g round upon which it might decide to deny liability in the future. N or ar e we inclined to adopt such a rule that could l ead to claim-by -cla im lit igation and a waste of judicial resour ces. Once ReliaStar definitively took the position that the term policy

was void and that it owed Sy ron nothing, Sy

ron’s claim that he is rig htfully owed pay ment beca

me ripe for adjudication. Upon remand, the di s t ri ct court should consider consolidating this action with ReliaStar’s subsequent action in Case No. 2:11-cv-15098. ReliaStar’s reque st for an awa rd of costs under Rule 38 of the F eder al Rules of Appellate Procedur e and 28 U.S.C. §§ 1912 and 1927 is denied in lig ht of our de cision to rever se the district cour t’s dismiss al of Sy

ron’s c omplaint.

-9-No. 11-2254

Syron v. Re liaStar L ife Ins. Co. III. CONCLUSION For all the rea sons set forth above, we REVERSE the judgme nt of t he district court and REMAND the case for further proce eding s consistent with this opinion. ReliaStar’s reque st for an

awa rd of the c osts of this appeal is conseque ntly DENIED

.

-10-