Court Opinion

ID: 8409436
Source: CourtListenerOpinion
Date Created: 2022-11-02 16:58:53.140086+00
Date Added: 2024-06-11T16:47:40.708633
License: Public Domain

EDITH H. JONES, Circuit Judge,
specially concurring in part and dissenting in part:
Because no one anticipates the tragedy of unexpected death, the commencement date of a mortgage life insurance policy is ordinarily of little importance. Here, Mr. and Mrs. Jenkins each signed a statement in their insurance application that they understood no insurance was effective until the application was approved and the first premium was paid. The majority repeatedly refer to this statement as “fine print,” but it is no less a part of the contract, and it appeared just above the applicants’ signature lines. The district court applied the literal terms of the application, the cover letter and the insurance policy itself, all of which were consistent on this point.
Notwithstanding these facts, other language in the policies’ promotional materials, and contract documents, and NovaS-tar’s payment handling procedures muddy the picture concerning the policy’s effective date. In occasionally caustic terms, the majority overturns the district court’s grant of summary judgment and reverses for trial on multiple causes of action. Unlike the majority, I do not find in the circumstances of this case an occasion for condemning the defendants’ practices so much as for sorting out the confusion that existed between the defendants’ handling of mortgage life insurance applications and the provisions specifying when and how the necessary first premium payments would be made.
Because of the confusion, I agree that a fact issue exists as to whether Monumental waived its requirement that the first premium must be paid before the thirty-day risk-free effective period of the insurance commenced. There is also a valid question whether NovaStar, having transmitted the *322insurance offer to mortgagors and agreed to be the servicing agent for collection of premiums, owed the Jenkinses a contractual obligation in regard to the payment of the first premium and prompt commencement of the policy.
The facts before us do not, however, support causes of action for estoppel under Texas law, or for violations of the Texas Insurance Code or the DTPA. Texas law defines estoppel as “conduct which causes the other party to materially alter his position in reliance on that conduct.” Braugh v. Phillips, 557 S.W.2d 155, 158 (Tex.Civ.App.1977). The evidence does not show that the Jenkinses relied on these defendants’ alleged misconduct to their detriment. They knew after receiving the March 14 acceptance letter that “the certificate of mortgage life insurance should arrive shortly.” They also knew, from the application they signed, that coverage would not be in effect until the first premium was paid and that they would not receive their next NovaStar billing statement until on or about April 10. They did not know that the effective date of the policy would be April 1, 2001. They could have elected to make the first insurance payment any time after they received notice of approval, or they could have (and did) risk waiting for NovaStar’s April 10 invoice. In neither event did they rely at all on the policy’s becoming effective prior to payment of the first premium. The majority cites no Texas caselaw to support its conclusion.
As for the Texas statutory causes of action, I would hold that even if there was undue confusion about the effective date of the policy and mechanism for paying the first premium, the Jenkinses were not misled or injured under the terms of those statutes. The majority complains that No-vaStar’s actual billing practices may have meant that Ms. Jenkins might have “only a fraction of the promised thirty days” risk-free trial period available to her, a period “too short to be meaningful.” The majority misunderstands the thirty-day risk-free feature of the policy. Risk-free does not mean cost-free. Taken in context of all the documents, this means only that a policyholder, having complied with the requirement to pay the first premium as a condition of policy coverage, could receive a refund of the premium for the first thirty days. (The documents accordingly said that if the coverage was then dropped, “your account will be credited. ... ”). The overall operation of the program was confusing, but the defendants neither misled nor concealed its provisions.
Finally, it should be emphasized that although the majority casts its interpretation of the facts in the light most favorable to Ms. Jenkins, as it should at this juncture, formal factfinding is still necessary.
With due respect, I concur only in the judgment authorizing remand to proceed with Ms. Jenkins’s waiver claim against MLIC and breach of contract claim against NovaStar.