Wallin v. Metropolitan Life Insurance , 66 F. App'x 414 ( 2003 )

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
6-4-2003
Wallin v. Metro Life Ins Co
Precedential or Non-Precedential: Non-Precedential
Docket No. 02-4297
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 02-4297
DONNA R. WALLIN,
Appellant
v.
METROPOLITAN LIFE INSURANCE COMPANY,
JACK E. DUCKWORTH,
Appellees
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 97-CV-1173)
District Judge: The Honorable Donetta W. Ambrose
Submitted under Third Circuit LAR 34.1(a)
Friday, May 16, 2003
Before: RENDELL, SMITH and ALDISERT, Circuit Judges.
(Filed: June 4, 2003 )
OPINION OF THE COURT
ALDISERT, Circuit Judge.
Donna R. Wallin, the insured under an insurance policy issued by Metropolitan
Life Insurance Company, appeals from the district court’s decision to grant summary
judgment in favor of the company and agent Jack Duckworth on the grounds that the
Appellant’s fraudulent representation claims were barred by state statutes of limitations.
The law of North Carolina applies in this diversity action. Because we agree with the
district court’s decision, we will affirm without reaching the merits of Appellant’s
substantive claims that Duckworth had made fraudulent oral misrepresentations in
inducing Appellant to purchase a number of insurance policies.
I.
As we write only for the parties who are familiar with the facts and contentions
raised, we will limit our discussion to the controlling legal issues.
Because Appellant did not raise the issue of the proper length of the statute of
limitations for an alleged breach of a fiduciary duty in the district court, we will not notice
this argument. Gass v. Virgin Islands Tel. Corp., 311 F.3d 237, 245 (3d Cir. 2002)
(noting that the “failure to raise an issue in the district court constitutes a waiver of that
argument”). We shall instead confine ourselves to the statutes of limitations for
fraudulent representation.
North Carolina General Statute § 1-52(9) states that a claim “[f]or relief on the
grounds of fraud or mistake” must be filed within three years of the aggrieved party’s
“discovery . . . of the facts constituting the fraud or mistake.” Under this provision,
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“discovery” means actual discovery or when the fraud should have been discovered in the
exercise of reasonable diligence. Grubb Props. Inc. v. Simms Inv. Co., 400 S.E.2d 85, 88
(N.C. App. 1990) (concluding that plaintiff failed to exercise reasonable diligence as a
matter of law where it neglected to discover for nearly four years that a tract of land was
not included in a deed). Almost 70 years ago, the North Carolina Supreme Court
remarked that:
[a] man should not be allowed to close his eyes to facts observable by
ordinary attention and maintain for his own advantage the position of
ignorance. Such principle would enable a careless man, and by reason of
his carelessness, to extend his right to recover for an indefinite length of
time, and thus defeat the very purpose the statute was designed and framed
to accomplish.
Moore v. Fidelity and Casualty Co., 177 S.E. 406, 408 (N.C. 1934).
II.
It is against these statutes and case law precepts that we examine the adjudicative
facts present here.
Appellant contends that Duckworth, Metropolitan Life’s agent, told her that she
was buying a retirement policy issued on November 24, 1989 – Policy Number 895 193
861 A, the “Life 95 Policy.” Joint Appendix at 320. The policy explicitly stated that the
insurance proceeds would be payable when the insured dies, that premiums were payable
for a stated period and that annual dividends would be paid. Id. at 324-327. The original
annual premium was $34.50 a year for a policy in the amount of $35,000.00. Id. at 349,
351. In February 1993, she decided to purchase “paid-up” additional insurance on the
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same policy with an annual premium of $381.05. Id. at 368-369. By paying this premium
for the policy years four through seven, she would receive additional coverage ranging
from $9,000.00 to $16,000.00. Id. Thereafter, she was not required to pay the additional
premium, but the total insurance would then decrease year by year, except for the year
that she died. Upon her death, there would be an additional insurance payment of
$26,060.34. From an actuarial standpoint, although she would stop paying premiums
after the seventh year, the annual dividend of the company would be used to cover the
additional insurance.
By the time the original policy was issued in 1989, Appellant had held a number of
positions that required financial acumen. From 1984 through 1989, she served as
assistant manager and later manager of Variety Wholesalers. She was responsible for
bookkeeping, handling the payroll, ordering merchandise, balancing registers and
merchandising. She was no novice to financial transactions.
Each policy contained the following general provisions:
The Contract. This policy includes any riders and, with the application
attached when the policy is issued, makes up the entire contract. All
statements in the application will be representations and not warranty. No
statement will be used to contest the policy unless it appears in the
application.
***
Limitation on Sales Representative’s Authority. No sales representative or
other person except our President, Secretary, or a Vice-President may a)
make or change any contract of insurance; or b) change or waive any of the
terms of the policy. Any change must be in writing and signed by our
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President, Secretary or Vice-President.
Id. at 328 (emphasis added). The life insurance policies issued by Metropolitan Life
through Duckworth contained clear language explaining their terms, the premium
payment obligations and the inability of sales representatives to modify the terms of the
contract.
In her complaint, Wallin charged that Duckworth had told her that under the terms
of the policy she could retire at age 65 with a monthly income of $481.37. Id. at 373.
The policy, however, contained no provision stating that it was a retirement policy
entitling her a monthly sum upon reaching the age of 65.
Wallin was provided ample opportunity – and indeed had the legal obligation – to
read the language in the policy and return it if she were not satisfied. She simply chose
not to do so. Id. at 349. Had she read the policy, she would have seen immediately that
she had a long-term, ongoing obligation to pay premiums and that she purchased a life
insurance policy payable only upon death. Her failure to exercise the right to return the
policies constituted acceptance.
The limitations period for their fraudulent representation claim is three years. She
purchased her policy in November 1989 but did not bring suit until M arch 1997 – nearly
eight years later. When she received her policies, she was put on actual notice of the
discrepancies between the express written terms of the policies and the alleged oral
representations made to her. Nevertheless, she did not begin the action until long after
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the expiration of the longest limitations period for her claim.
Under North Carolina law, policyholders are under a duty to read their insurance
policies. Elam v. Smithdeal Realty & Ins. Co., 109 S.E. 632, 634 (N.C. 1921). Where a
party has reasonable opportunity to read the instrument in question and the language of
the instrument is clear, unambiguous, and easily understood, failure to read the instrument
bars that party from asserting his belief that the policy contained provisions which it does
not. Baggett v. Summerlin Ins. & Realty Co., 554 S.E.2d 336 (N.C. 2001) (citing Baggett
v. Summerlin Ins. & Realty Co., 545 S.E.2d 462, 468-469 (N.C. App. 2001) (Tyson, J.,
dissenting). Appellant testified that she did not thoroughly review her policy, and that she
did not recall seeing the word “retirement” in her policy documents. Joint Appendix at
149-150.
In light of the foregoing, we agree with the district court that Appellant’s claim
was barred by the statute of limitations.
*****
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We have considered all contentions raised by the parties and conclude that no
further discussion is necessary.
The judgment of the district court will be affirmed.
TO THE CLERK:
Please file the foregoing opinion.
/s/ Ruggero J. Aldisert
Circuit Judge
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