Opinion ID: 215106
Heading Depth: 2
Heading Rank: 1

Heading: D & H's Acquisition of the Boston Mutual Plan

Text: In 1997, D & H obtained a long-term disability insurance policy from Guarantee Life Insurance Company (Guarantee Life). D & H obtained the policy with the help of an insurance agent, Benefit Services, Inc. (Benefit Services). Havunen led the efforts to obtain this policy. She testified that she explained to a Benefit Services representative that D & H wanted a policy that would protect W-2 earnings such that the principals of the firm would be insulated against loss of the salary form of their income. Havunen understood the Guarantee Life policy to reflect this request. According to Havunen, the policy defined protected earnings for principals as W-2 earnings. In 2000, the Guarantee Life policy was expiring. As D & H considered whether to renew the policy, the same Benefit Services representative who had assisted D & H with the Guarantee Life policy contacted Havunen. The representative, Maureen Baker, informed Havunen that she had received a quote from a different insurance provider at a better rate. Havunen testified that she told Baker that D & H would only consider switching to the new policy if the policy protected W-2 earnings in the same manner as she understood the Guarantee Life policy did. Havunen testified further that when Baker identified the quote in question as belonging to Boston Mutual, Havunen reiterated this requirement. To ensure that the Boston Mutual policy would meet these specifications, Havunen testified, she and Baker met with a Boston Mutual agent, Thomas Liszanckie. Havunen testified that Liszanckie assured her that the Boston Mutual policy would contain the same definitions of earnings and income as the Guarantee Life policy. She testified as well that Liszanckie brought a written Group Insurance Proposal, which he said contained the requested protection for W-2 income. Havunen testified that Liszanckie identified the last page of the proposal as ensuring this protection. That page includes the following statement: Definition of Earnings: Basic Annual Earnings shall mean the Insured Person's earnings for the prior calendar year as reported by the Group Policyholder on form W-2. Havunen testified that, based on Liszanckie's statements and the proposal's definition of earnings, D & H did not renew the Guarantee Life policy and instead purchased the Boston Mutual policy. When Havunen received the final language of the policy, she expressed some concern to Baker about the policy's terms relating to any other income from employment, which might be construed to include income other than W-2 income. Baker, Havunen testified, assured her that this language only referred to other income that may be included in W-2 earnings, like bonuses and commissions. Havunen did not contest the final policy language. She testified that D & H would not have signed on to the policy if not for Liszanckie and Baker's representations. Boston Mutual disputes Havunen's testimony concerning her conversations with Baker, the content of the Guarantee Life policy, and her interactions with Liszanckie. Baker testified that, in her discussions with Havunen about both the Guarantee Life policy and the Boston Mutual policy, Havunen told her that she wanted to protect the K-1 income of D & H's principals, not their W-2 income. Baker also speculated that a portion of the Guarantee Life policy not present in the record defined earnings for principals differently from that of other employees and included non-salary income. [2] Liszanckie testified that while he occasionally dropped off insurance forms to customers before they signed an insurance policy, he rarely met with the customers and he could not recall whether he met with Havunen and Baker.