Opinion ID: 1931103
Heading Depth: 2
Heading Rank: 1

Heading: AmSouth's and Protective's Motions for a Summary Judgment

Text: By the time AmSouth and Protective filed their separate motions for a summary judgment in August 2000, it was clear that the Singletons' claims were without merit and were not supported by any evidence before the trial court. The applicable State Banking Department regulation in force at the time of the loans to the Singletons [2] provided as follows: (c) Credit Life Insurance. 1. The maximum rate for single premium decreasing term credit life insurance shall not exceed eighty cents ($0.80) per hundred ($100) per annum. 2. Level term life coverage may be written on single repayment contracts at a rate not in excess of one dollar and sixty cents ($1.60) per hundred ($100) per annum. 3. Dual credit life insurance coverage may be written on both the principal debtor and one co-signer to an obligation. The maximum rate for such coverage shall not exceed an amount equal to 150% of the premium rates shown above. 4. Rates for premiums payable on other than single premium basis shall not exceed the actuarial equivalent of the rates specified above. (Emphasis added.) AmSouth and Protective presented the loan agreementsone signed by the Singletons and two signed by Mr. Singleton alone. It is undisputed that the premiums were payable on an other than single premium basis. The agreements disclosed how the credit-life insurance premiums were calculated and refuted key allegations of the Singletons' complaint. Each agreement provided as follows:  Optional Credit Insurance. Unless this agreement is payable on demand, if you want and if you qualify, we will obtain credit life insurance on you. Credit life insurance is not required to obtain credit and will not be provided unless you sign and agree to pay the additional cost. By signing for credit insurance, you certify that each person to be insured is in good health and that Borrower's age (if insured) is [ ] and Co-Borrower's age (if insured) is [ ]. We will not get credit life insurance for you unless you sign here. Each agreement also set forth an estimated total premium for credit-life insurance. The estimated premium for each note was $289.81 (loan no. 9000198411), $34.47 (loan no. 9000280520), and $15.47 (loan no. 9000509338). As explained in the agreement, those premium figures were estimates; they were not necessarily the premiums the Singletons would actually be charged. Each loan agreement executed by the Singletons or by Mr. Singleton contained the following explanations and disclosures regarding credit-life insurance:  Credit Life Insurance. If you have elected to purchase credit life insurance by signing the credit life insurance election on the other side of this agreement, and the premiums for the credit life insurance are not included in the amount financed, you agree to the following: Only the life of each Borrower and Co-Borrower who signed the Credit Life Insurance Election is insured. The estimated credit life insurance premium for the scheduled term of this note is shown in the credit life insurance block on the other side of the note: However, the actual credit life insurance premium is calculated on the actual unpaid balance of principal and accrued interest due under this note from time to time, and may vary depending on whether you make your payments early or late. If paragraph (a) under the section entitled `How You Will Repay Us' on the other side of this agreement applies to your loan, if the principal of your loan is payable in a single payment, and if you did not pay the credit life premium in cash when you signed this agreement, then the credit life insurance premium is included in the Amount Financed in both principal and interest to maturity are covered by the credit life insurance, if paragraph (b) of that section applies to your loan then the credit life insurance premium is not financed and is not a part of the Amount Financed, and you agree to pay a premium for credit life coverage, payable whenever interest is due, computed at the rate of $.0043836 per day for one insured or $.0065753 for two insureds (or any lesser sum for either number of insured that we may charge from time to time instead) for each $100 of the unpaid balance of principal and accrued interest due under this note from day to day. The credit life insurance covers both principal and interest on the loan. [3] (Emphasis added.) It is undisputed that for each loan, paragraph (b) of the section of the loan agreement entitled How You Will Repay Us was applicable. Under this repayment option the loans were to be repaid in installments, and the credit-life insurance premiums were not financed and were not a part of the Amount Financed. According to the agreements, the coverage and premiums were to be based on the unpaid balance of principal and accrued interest. Mrs. Singleton's deposition testimony acknowledged that she understood that the premiums charged on the loan she had jointly with Mr. Singleton were not charged on the total face amount of the loan plus precomputed interest (or total of payment), but were charged, instead, on the balance of principal and accrued interest: Q. Well, let's see what it says about credit-life insurance. Would you look atWe're looking at Defendant's Exhibit 2 which is the only one of these agreements that you signed, right? A. Of these particular Q. Of these three that we're sued on in this case. A. Correct. Q. Why don't you just take a minute and read what it says about credit-life insurance. A. Okay. Q. Have you read it? A. I have. Q. And you're a person who can read and understand a contract, are you not? A. I just read it. Q. Can you understand a contract like this? A. To the best of my knowledge, it's saying that credit life is calculated in this way and will be paid either up front or in the loan. Q. Right. In fact, this tells you exactly how the premiums for this credit-life insurance were calculated, doesn't it? A. It would seem as though. Q. And it tells you that the premiums were not calculated on the total of payments, doesn't it? A. It says, `balance of principal and accrued interest.' Additionally, AmSouth and Protective submitted detailed loan histories recording the Singletons' loan payments and the amount of the credit-life premiums that were periodically charged. AmSouth and Protective submitted the affidavit of John Eubank, a vice president in AmSouth's lending division, which stated the rates charged for credit-life premiums at the time the loans were made to the Singletons. Furthermore, AmSouth and Protective submitted the affidavit of Michael Presley, a vice president and actuary with Protective. After reviewing the loan histories, which evidenced all payments made on the policies as well as all interest, principal, and insurance charges, Mr. Presley stated in his affidavit: With regard to Loan No. 9000198411, dated July 25, 1995, which contained insurance on the lives of Steven Singleton and Cyndi Singleton, I have reviewed the loan history and confirmed that the credit life insurance premiums charged were charged on an unpaid principal balance using a daily rate of.0059178 dollars for each $100.00 of unpaid balance of principal. Furthermore, the credit insurance premiums on the remaining two notes, # XXXXXXXXXX and # XXXXXXXXXX, which contained insurance on the life of Steven Singleton, appear to have been calculated using a daily rate of .0039452 for each $100.00 of unpaid principal balance. As stated above, the premiums for the three loans in question were all calculated on the unpaid balance of the loans. None of the premiums were calculated on the gross amount of the loan plus interest. At no time did the credit life insurance for either of these loans provide any more coverage than was required to pay off the balance of the loan. The credit life insurance premium rates charged on each of the loans attached hereto were in full compliance with the Alabama Banking Department Regulations in the rates applied to each of these loans, specifically .0059178 for two insured and .0039452 for one insured, per $100.00 of outstanding principal per day, are the equivalent of $1.20 per thousand per month and $1.80 per thousand per month as evidenced below. 1.80/1000 = .18/100 .18 × 12 months ÷ 365 = .0059178 1.20/1000 = .12/100 .12 × 12 months ÷ 365 = .0039452 Finally, AmSouth and Protective presented the Singletons' own deposition testimony to refute the allegations that AmSouth's agent, Kathy Cook, made fraudulent misrepresentations that the Singletons relied on. In fact, the Singletons admit Kathy Cook made no misrepresentations. Cyndi Singleton testified: Q. I want to ask the question this way one time and then I'll get into more detail. What statement, if any, did Kathy Cook ever make to you that wasn't true? A. None, to the best of my knowledge. Steven Singleton testified as follows: Q. Do you know of any time that Kathy Cook has ever told you anything that wasn't true? A. No. If taken as true, AmSouth's and Protective's factual submissions showed that they were entitled to a summary judgment on the claims set forth in the Singletons' complaint, because they established that the Singletons, unlike McCullar, were not sold excessive insurance and that there was no evidence that any misrepresentations had been made to them in regard to the insurance. The Singletons did not dispute any of the evidence submitted by AmSouth and Protective.