Claire Kay v. United of Omaha Life Ins. Co. , 709 F. App'x 320 ( 2017 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 17a0520n.06
No. 16-1576 FILED
Sep 08, 2017
UNITED STATES COURT OF APPEALS DEBORAH S. HUNT, Clerk
FOR THE SIXTH CIRCUIT
CLAIRE J. KAY, an individual, and CLAYMORE )
CONSTRUCTION COMPANY, a Michigan )
Corporation, )
)
Plaintiffs-Appellees, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
UNITED OF OMAHA LIFE INSURANCE ) DISTRICT OF MICHIGAN
COMPANY, a Nebraska Corporation, )
)
Defendant-Appellant.
BEFORE: MERRITT, KETHLEDGE, and WHITE, Circuit Judges.
HELENE N. WHITE, Circuit Judge. Claire Kay (“Mrs. Kay”) and Claymore
Construction Company (Claymore, collectively, Plaintiffs) were the beneficiaries of a $2 million
life-insurance policy that Claire’s husband Dr. Sherman Kay purchased from United of Omaha
Life Insurance Company (United) in 2001. After Dr. Kay died in January 2009, United denied
coverage, asserting that the policy had lapsed because the December 2008 and January 2009
premiums had not been paid before Dr. Kay’s death. Plaintiffs sued, alleging breach of contract.
A jury found in Plaintiffs’ favor, but this court reversed due to flawed jury instructions. After
remand, a second jury again found in Plaintiffs’ favor. United now argues that the district court
erred by denying its post-remand request to submit a second summary judgment motion, by
incorrectly instructing the jury, and by denying United’s motions for post-trial relief. We
AFFIRM.
No. 16-1576
Kay, et al. v. United of Omaha Life Insurance Co.
I. BACKGROUND1
A. Facts
As this court previously explained:
In 2001, Sherman Kay bought a $2 million life-insurance policy from
United. At the time of his death, the plaintiffs . . . were the policy’s joint owners
and beneficiaries.
The policy’s premium was due by the 12th day of each month. If Kay
failed to pay by that date, the policy remained in force during a 31-day grace
period. If Kay did not pay by the end of the grace period, the policy would
terminate. In that event, the policy’s terms required Kay to do three things to
reinstate it: first, submit a written application signed by the owner and the
insured; second, submit evidence of insurability satisfactory to United; and third,
pay any past-due premiums with interest.
In practice, however, United also allowed Kay to reinstate the policy
another way—through a so-called “special offer” that was not part of the policy’s
terms. Specifically, once the grace period expired, United would send Kay a
notice in which it offered to reinstate the policy if Kay simply paid the
outstanding premium by the date stated in the notice, so long as the payment was
made “during the lifetime of all persons insured under the policy.” Kay—who
routinely paid premiums late—reinstated the policy in this manner at least seven
times.
Kay v. United of Omaha Life Ins. Co. (Kay I), 562 F. App’x 380, 383 (6th Cir. 2014). Further,
United did not send out premium notices on a regular schedule; rather, it only sent the notice that
a given month’s premium was due after it received the premium for the prior month. See id.
Dr. Kay apparently suffered a serious stroke in early 2008. In February, Mrs. Kay began
paying the monthly life-insurance premiums. In May, she telephoned United, told a
representative that she did not want the policy to terminate, requested a payment history, and
asked United to contact her if any payments were late. Up to that point, United had been sending
premium notices to Claymore at its corporate office. Claymore ceased operations in the summer
1
This suit has been pending for more than eight years, with several rounds of dispositive
motion briefing, two jury trials, and now two appeals to this court. We discuss only the facts and
procedural history relevant to our disposition of this appeal.
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of 2008. This caused some confusion, but eventually Mrs. Kay directed United to send premium
notices to Dr. Kay at the family home, and it is undisputed that all premium payments through
October 2008 were made. It is also undisputed that the November 2008 premium (due
November 12) was not paid until December 11, almost a month late, but two days before the
expiration of the policy’s 31-day grace period.
The December 2008 premium was due on December 12. United’s files contain three
notices regarding the December premium, dated December 19, 2008, December 26, 2008, and
January 13, 2009. Each is addressed to Dr. Kay at the Kay family home. On the back side of the
December 19 notice is the following text: “Unless each premium billed on this Notice is paid on
or before the due date or within the grace period, each policy on which the premium is not paid
will lapse and all payments thereon will become forfeit [sic] except as otherwise stated in the
contract.” (Appellant’s App. at 175.) The parties dispute whether these notices were actually
sent, and whether Mrs. Kay received them.
Dr. Kay passed away on January 23, 2009. The parties agree that the December 2008
and January 2009 premiums were both unpaid and past-due at that point, and that United advised
the Kays’ independent insurance agent on January 26 that it would reject any claim for benefits.
The parties disagree, though, on whether the policy was still in effect at that point. Believing it
was, Mrs. Kay attempted to make the outstanding payments on January 30, but United returned
her check. She filed a claim for benefits in February, but United denied it.
B. Procedural History
Plaintiffs brought this action in state court in May 2009, and United removed it to federal
court. As relevant here, Plaintiffs pleaded two distinct claims. First, Plaintiffs alleged that
United committed a breach of contract by, among other things, refusing to accept late payments
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when it had done so in the past (an equitable estoppel theory), failing to act in good faith, and
failing to pay benefits upon Dr. Kay’s death when the policy was still in effect because United
had not terminated it in accordance with Michigan law.2 Second, Plaintiffs sought a declaratory
judgment that because United had not complied with the same Michigan law, the policy
remained in effect when Dr. Kay died. Prior to the first trial, Plaintiffs agreed, in their pleadings
and the joint pretrial order, that United had sent the notices regarding the December 2008
premium to Dr. Kay at the family home.
The case eventually proceeded to trial, and a jury found in Plaintiffs’ favor on the breach-
of-contract claim. Because the jury was not instructed on any of the specific theories of liability,
and returned a general verdict for Plaintiffs on their breach-of-contract claim, we do not know
which theory or theories of liability the jury accepted. The district court did not rule on
Plaintiffs’ declaratory judgment claim, and Plaintiffs did not ask the court to do so.
United appealed, arguing, as relevant here, that the district court should have granted its
summary judgment motion or its Rule 50(a) motion, and had erred by not instructing the jury
that Michigan law provides a rebuttable presumption that a mailed letter (e.g., the premium
notice dated December 19, 2008) has been delivered and received. Kay I, 562 F. App’x at 384–
86; see Goodyear Tire & Rubber Co. v. City of Roseville, 664 N.W.2d 751 (Mich. 2003).
Plaintiffs cross-appealed, arguing that they were entitled to summary judgment on their breach-
2
Michigan law applies in this diversity case. Erie R.R. Co. v. Tompkins, 304 U.S. 64,
78–80 (1938). Under Michigan law, a life-insurance policy must provide “[t]hat written notice
shall be sent by the insurer to the policyowner’s last known address at least 30 days prior to
termination of coverage.” Mich. Comp. Laws Ann. § 500.4012(b); Kay I, 562 F. App’x at 385.
The policy at issue here does not contain that provision, but the parties agree that it must be read
into the policy. See Rohlman v. Hawkeye-Sec. Ins. Co., 502 N.W.2d 310, 313 n.3 (1993). Thus,
United does not dispute that the policy remained in effect until 30 days after notice of
termination was given. It asserts, however, that the language regarding lapse and forfeiture in
the December 19, 2008 premium notice satisfies the requirements of § 500.4012(b).
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of-contract claim because United had not sent the termination notice required by Michigan law,
and that the district court should have decided their declaratory-judgment claim in their favor for
the same reason.
In April 2014, this court held that it was without jurisdiction to consider either side’s
request for judgment as a matter of law, because neither party renewed its request after trial. Kay
I, 562 F. App’x at 384, 387 (citing Ortiz v. Jordan, 562 U.S. 180 (2011)). The court also found
that Plaintiffs had waived their declaratory-judgment claim because they failed to raise it at or
after trial. Id. at 387. The court found merit, however, in United’s jury-instruction argument,
and remanded for a new trial on that basis. Id. at 385 (citing Goodyear Tire, 664 N.W.2d 751).
The court explained that the failure to give an instruction on the Goodyear Tire presumption
likely confused the jury, in part, because of Plaintiffs’ theory that United had breached its
contractual obligation—imposed by Mich. Comp. Laws Ann. § 500.4012(b)—to provide 30
days’ notice prior to the termination of the policy. See id. at 385–86. Despite concluding it
lacked jurisdiction to entertain the parties’ claims for judgment as a matter of law, the court
suggested that United would have been entitled to judgment on Plaintiffs’ equitable estoppel
theory, had it properly preserved the argument. Id. at 384.
After remand, the case sat dormant for several months. At an August status conference,
United apparently informed the district court’s case manager that it wished to renew its summary
judgment motion, but it is not clear whether United gave notice of the arguments it intended to
make. Plaintiffs objected. On August 25, the district court issued a scheduling order that did not
provide for renewed dispositive motions and that set the case for a trial in March 2015. (R. 153,
PID 3368 (setting trial for 3/3/15); see also R. 158, PID 3653 (issued Jan. 5, 2015, postponing
trial to 3/23/15 and still not providing for dispositive motions).) In December 2014, however,
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United filed a motion seeking leave to submit a renewed motion for summary judgment,
focusing largely on this court’s dicta regarding Plaintiff’s equitable estoppel theory. The district
court rejected that request early in March 2015, concluding that: (1) allowing a renewed
summary judgment motion would exceed the scope of this court’s mandate; (2) the issues raised
in United’s proposed summary judgment motion were controlled by the law-of-the-case doctrine;
(3) United had not identified any new facts or expanded the factual record; and (4) United had
unreasonably delayed in making its request, and allowing a renewed summary judgment motion
would delay the trial scheduled for later that month.
Prior to the second trial, United filed a one-page motion in limine “to preclude plaintiffs
. . . from making any reference to or any other use of plaintiffs’ declaratory-judgment claim
where the Court of Appeals has held that plaintiffs waived this claim.” (R. 164, PID 3675); see
Kay I, 562 F. App’x at 387. On the first day of trial, the district court granted the motion in part,
forbidding any “reference to a declaratory judgment by the Plaintiff[s] in any way in opening
statements.” (R. 215, PID 5181.) The district court did not address the possibility of references
to the declaratory-judgment claim at other stages of the trial, or references to § 500.4012(b)’s
termination-notice requirement more generally, especially as related to the breach-of-contract
claim. United did not ask for clarification or a broader ruling.
For the second trial, Plaintiffs refused to stipulate that the notices regarding the December
2008 premium had been sent. At trial, Mrs. Kay testified about her efforts to keep the policy
current, as discussed above. She also testified that she did not receive any notices regarding the
December 2008 premium; nor did she ever receive a termination notice. Plaintiffs then
presented testimony from the first trial from Morris Silverman, the independent insurance agent
who had sold Dr. Kay the United policy. Silverman testified that, although United had typically
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notified him if payments were late, he received no such notices in November or December 2008,
or in January 2009. Nor did Silverman receive a termination notice during that time period.
Plaintiffs also presented deposition testimony from United employees Sheila Dean and
Frank Thiesen. Dean acknowledged that the notices regarding the December 2008 premium
were addressed to Dr. Kay, even though he was not the policyowner, and that no notice had been
addressed to Mrs. Kay. Thiesen testified that the policy file did not include “any cancellation,
lapse and/or termination notices . . . prior to February 6, 2009.” (Appellant’s App. at 383.)
United made an oral Rule 50(a) motion for judgment as a matter of law at the close of
Plaintiffs’ case-in-chief, and submitted a written motion explaining its position after the district
court declined to hear oral arguments. United focused exclusively on estoppel, arguing that in
light of this court’s dicta in Kay I, that theory of liability failed. In support of that argument,
United asserted that Plaintiffs must have received the notices regarding the December 2008
premium—which stated that the “special offer” to reinstate a lapsed policy was only available
during the life of the insured—because Plaintiffs alleged in their second amended complaint that
United had mailed the notices, and items mailed are presumed received. The district court
denied United’s motion.
United began its case by presenting deposition testimony from Patricia Amburn of
Flagstar Bank. Claymore had assigned its share of the policy proceeds to Flagstar as security for
various loans. For that reason, Flagstar was receiving copies of premium notices, and Amburn
testified that Flagstar did receive notices regarding the December 2008 premium. Stanley
Bershead, Dr. Kay’s attorney, testified that Amburn forwarded a copy of one of those notices to
him. He did not, however, discuss the matter with Mrs. Kay. Dena Austin, another United
employee, testified that, in cases such as this, where a policy has multiple owners, United’s
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practice is that “[w]hoever is listed on our system as just being the first owner, that’s where the
policy or the premium notices will go to.” (R. 213, PID 5073.) Austin further testified that the
notices related to the December 2008 premium were sent, and were addressed to Dr. Kay at the
family home because Mrs. Kay had instructed United to use that address. On cross-examination,
Amburn acknowledged that, under Michigan law, life-insurance companies are required to send
written termination notices to policyowners, and that, during the period at issue, Dr. Kay was not
the policyowner, and had no rights under the policy. Finally, United successfully placed in
evidence Plaintiffs’ first and second amended complaints, in which Plaintiffs alleged that the
notices regarding the December 2008 premium had been sent to Dr. Kay at the family home. At
the close of United’s case, it orally renewed its Rule 50(a) motion. United did not assert any new
basis for judgment as a matter of law, either orally or in writing. The district court denied the
motion.
In their closing argument, Plaintiffs initially focused on the requirement that 30 days’
notice be given before a life-insurance policy is terminated, and argued that United had not
actually sent any notices regarding the December 2008 premium, or if they were sent, it was to
Dr. Kay, not the policyowners. United objected, arguing that this was an attempt to resurrect the
waived declaratory-judgment claim, in violation of the district court’s previous order. Plaintiffs
responded that the issue was also part of their breach-of-contract claim. The district court stated
that it would address the matter outside the hearing of the jury and issue a curative instruction, if
necessary. Plaintiffs then also argued that United was estopped from denying coverage and had
waived the right to do so, and that United had sought to ensure the policy would lapse by
withholding notice of past-due premiums. As relevant here, United argued that the notices
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regarding the December 2008 premium had been sent, and to the address Mrs. Kay requested be
used.
The case was then submitted to the jury. Over United’s objection, no curative instruction
regarding Plaintiffs’ reference to the termination-notice requirement was given. The jury was
instructed on the rebuttable presumption that a mailed communication is received. As with the
first trial, the jury was instructed only on the basic elements of a breach-of-contract claim, not on
specific theories of liability. And, as with the first trial, the jury returned a general verdict in
favor of Plaintiffs on their breach-of-contract claim. In April 2015, the district court entered
judgment in the policy amount of $2,000,000, plus interest and costs.
In May 2015, United filed a renewed motion for judgment as a matter of law pursuant to
Rule 50(b), or, alternatively for a new trial pursuant to Rule 59. United focused primarily on the
estoppel issue, arguing that in light of this court’s dicta in Kay I, that theory of liability failed.
United also asserted that Plaintiffs were bound by the allegation in their pleadings that United
had mailed the notices regarding the December 2008 premiums to Dr. Kay at the family home.
Thus, according to United, because a mailed letter is presumed received, reasonable minds could
only conclude that Plaintiffs received all the premium notices. United did not link this point to
any particular theory of liability, however. Finally, United asserted that Plaintiffs “offered
absolutely nothing” to support their theory that United had breached the contract by failing to
provide the termination notice required by Michigan law. (R. 198, PID 4649–50.) The district
court denied both United’s request for judgment as a matter of law and its request for a new trial,
concluding that “reasonable minds can differ on the questions of material fact that were
presented to the jury.” (R. 206, PID 4922.)
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II. DISCUSSION
United makes three arguments on appeal: (1) the district court should have allowed it to
file a second summary judgment motion after remand; (2) it was entitled to judgment as a matter
of law under Rule 50, or to a new trial under Rule 59; and (3) a curative instruction should have
been given to the jury after Plaintiffs’ closing argument.
A. Second Summary Judgment Motion
United contends that the district court erred by denying its post-remand request to file a
second summary judgment motion. The district court concluded that: (1) our mandate limited
remand proceedings to a new trial; (2) the law-of-the-case doctrine applied; (3) United failed to
identify any new material facts; and (4) allowing another round of dispositive motion briefing
would unreasonably delay the second trial.
We will assume that the remand was general and that the district court erred in ruling
otherwise. Nevertheless, it was within the district court’s discretion to deny United leave to file
its summary judgment motion. See Kovacevich v. Kent State Univ., 224 F.3d 806, 835 (6th Cir.
2000). The case returned to the district court in May 2014, and a status conference was held in
August. United reportedly expressed its intent to seek permission to file a second summary
judgment motion during that conference, (see R. 156, PID 3552), but it did not object when the
district court issued a scheduling order that did not provide for dispositive motions, (see R. 153,
PID 3368). Instead, United waited until December 5 to submit its Motion for Leave to File
Renewed Motion for Summary Judgment (the Motion for Leave), and the rest of that month was
taken up with briefing that motion. The district court denied the Motion for Leave on March 3,
2015, less than three weeks prior to the scheduled start of trial.
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A district court has wide discretion to manage its docket and “insur[e] an expeditious
processing of the litigation.” Kennedy v. City of Cleveland, 797 F.2d 297, 305 (6th Cir. 1986).
The obvious time for United to have sought permission to file a motion for summary judgment
was, if at all, shortly, if not immediately, after remand. But United waited three months to even
raise the prospect of a renewed summary judgment motion and another four months to actually
request leave to file one. United asserts that there would have been plenty of time to resolve a
summary judgment motion before trial if only the district court had granted the Motion for Leave
on December 5, 2014, the same day it was filed. But it is unreasonable to suggest that a busy
federal district court should have ruled on a motion the same day it was filed. Further, the
district court quite properly allowed Plaintiffs to respond to United’s motion. And United did
not request an accelerated briefing schedule or expedited consideration of its motion; instead, it
delayed the matter further by filing an optional reply to Plaintiffs’ response on the last possible
day to do so. United was of course entitled to take its time. But it cannot now blame the court
for not acting quickly enough.3 And summary judgment motions are typically resolved in
months, not weeks. Allowing another round of summary judgment briefing would almost
certainly have required delaying the trial. Under the circumstances, we cannot say that the
district court’s finding of undue delay was an abuse of discretion.
3
United also asserts that Plaintiffs seek to “play upon the Court’s sympathies as to Claire
Kay’s ‘dire’ financial straits, and how she is in desperate need of the life insurance proceeds to
support her and her special needs son[,]” while “fail[ing] to apprise the Court that, despite Claire
Kay’s alleged dire financial straits, Plaintiffs did nothing from the time this Court’s opinion
issued” until the August 2014 status conference. (Reply Br. at 25.) Thus, says United, “if
‘delay’ is to be found, Plaintiffs – as the party filing this lawsuit – are the responsible party.”
(Id.) This argument is meritless. Whether or not it would have been in Mrs. Kay’s interest to
expedite the proceedings, United—and only United—bears responsibility for not raising its
renewed summary judgment motion sooner.
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Having concluded that the district court did not abuse its discretion in denying United’s
motion because it would have unduly delayed the trial, we need not address the other bases for
the district court’s ruling.
B. Request for Judgment as a Matter of Law or a New Trial
The heart of United’s appeal is its argument that it was entitled to judgment as a matter of
law pursuant to Rule 50(b), or to a new trial pursuant to Rule 59, because the verdict was not
supported by the evidence presented at trial. United’s post-trial motion focused primarily on
Plaintiffs’ equitable estoppel theory of liability. United also asserted that Plaintiffs “offered
absolutely nothing” to support their theory that United had breached the contract by failing to
provide the termination notice required by Michigan law.
We review the district court’s denial of judgment as a matter of law de novo. Mike’s
Train House, Inc. v. Lionel, L.L.C., 472 F.3d 398, 405 (6th Cir. 2006). In this diversity case, we
apply Michigan’s “substantive standard for determining when judgment as a matter of law is
appropriate.” Id. (citation omitted). Thus, “judgment as a matter of law is appropriate when
‘viewing the evidence in the light most favorable to the non-moving party, there is no genuine
issue of material fact for the jury, and reasonable minds could come to but one conclusion, in
favor of the moving party.’” Id. (citation omitted). We review the decision to deny a Rule 59
motion for a new trial for abuse of discretion. Id. As relevant here, “[w]e have interpreted [Rule
59] to require a new trial only when a jury has reached a seriously erroneous result as evidenced
by . . . the verdict being against the weight of the evidence[.]” Id. (citation, quotation marks, and
brackets omitted).
As it did below, United argues at length that Plaintiffs’ equitable estoppel theory was not
supported by the evidence. We need not address that issue, however. There were multiple
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theories of liability on Plaintiffs’ breach-of-contract claim. In particular, United has consistently
admitted that it had an implied contractual obligation to provide 30 days’ notice before
terminating the policy, as required by § 500.4012(b). See discussion supra note 2. And
Plaintiffs have maintained throughout this litigation that United breached that contractual
obligation. United’s Rule 50(a) motion did not address this theory, and therefore United was not
entitled to judgment as a matter of law even if it is correct as to estoppel.
United’s renewed motion pursuant to Rule 50(b) did address Plaintiffs’ § 500.4012(b)
theory, but that was too late. A Rule 50(b) motion “is only a renewal of the preverdict motion,”
and “it can be granted only on grounds advanced in the preverdict motion.” Ford v. Cty. of
Grand Traverse, 535 F.3d 483, 491 (6th Cir. 2008) (quoting Fed. R. Civ. P. 50(b) advisory
committee’s note to 2006 amendment). This requirement protects “the plaintiff’s Seventh
Amendment right to a jury trial” by “requiring that parties raise important issues before the case
is submitted to the jury.” Id. at 492 (emphasis in original) (quoting Am. & Foreign Ins. Co. v.
Bolt, 106 F.3d 155, 160 (6th Cir. 1997)). Courts “usually take a liberal view of what constitutes
a pre-verdict motion sufficient to support a post-verdict motion,” but the Rule 50(a) motion must
have “provid[ed] notice to the court and opposing counsel of any deficiencies in the opposing
party’s case” raised in the Rule 50(b) motion. Id. at 492-93 (quoting Kusens v. Pascal Co., 448
F.3d 349, 361 (6th Cir. 2006)).
United cannot satisfy even this liberal standard. In Ford, this court held that a defendant
may not base a Rule 50(b) motion on a legal theory not previously raised in a Rule 50(a) motion.
535 F.3d at 491–94.4 Similarly, United may not attack in a Rule 50(b) motion a theory of
4
In Ford, an Eighth Amendment deliberate-indifference case, the jury found for all of the
individual defendants, but against the county. 535 F.3d at 488. The county’s Rule 50(b) motion
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liability it did not previously address in a Rule 50(a) motion. United’s Rule 50(a) motion
contains no mention of § 500.4012(b) or United’s obligation to provide advance notice of
termination to the policyowners, much less any discussion of that aspect of Plaintiffs’ breach-of-
contract claim that would have put the court or the Plaintiffs on notice that United was
challenging the termination-notice-based theory of liability. (See R. 179, PID 4135–49.) Indeed,
United’s 50(b) motion does not even attempt to argue that the termination-notice issue had been
raised previously. (See R. 198, PID 4636–37.)
United attempts to explain its failure to comply with the requirements of Rule 50 by
stating that it “was under the impression that Plaintiff[s’] theory of breach relating to the
Michigan statute was no longer an issue in the case.” (Appellant’s Br. at 49.) True, this court
held that Plaintiffs waived the declaratory-judgment claim based on § 500.4012(b), Kay I, F.
App’x at 387, and the district court barred Plaintiffs from making “reference to a declaratory
judgment . . . in any way in opening statements,” (R. 215, PID 5181 (emphasis added)). But
neither this court nor the district court has ever held that Plaintiffs could not continue to pursue
their § 500.4012(b) theory as part of their breach-of-contract claim. Indeed, Plaintiffs referenced
§ 500.4012(b) during their opening statement in the context of their breach-of-contract claim and
repeatedly questioned witnesses and presented deposition testimony about whether Plaintiffs, as
policyowners, received a termination notice, generally without objection from United, and all
prior to United’s Rule 50(a) motion.5 (See, e.g., R. 210, PID 4938 (opening statement); id. at
argued, for the first time, that it could not be held liable if none of the individual defendants had
committed a constitutional violation.
5
United did object once, when Plaintiffs questioned Amburn about the requirements of
Michigan law. The district court overruled the objection and allowed Amburn to answer.
United has not challenged that decision on appeal. Further, that United made this objection
indicates that it was aware of Plaintiffs’ § 500.4012(b) theory, and therefore could and should
have addressed it in their Rule 50(a) motion.
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4951–52, 4968, 4971–73 (Claire Kay Test.); Appellant’s App. at 282 (Silverman Test.); id. at
367–68 (Dean Test.); id. at 383 (Thiesen Test.).)
For those reasons, United waived the argument that it is entitled to judgment because, as
a matter of law, it complied with § 500.4012(b)’s notice requirement. Ford, 535 F.3d at 494.
Once again, United must live with its failure to properly raise and preserve its legal arguments
throughout this litigation. See Kay I, 562 F. App’x at 384–85.
Further, United’s argument that it is entitled to judgment on the merits fails.
Section500.4012(b) requires that notice be sent to the policyowners “at least 30 days prior to
termination of coverage.” United contends that the notice dated December 19, 2008—with its
language warning that coverage will lapse and previous payments will be forfeited if the overdue
December premium is not paid within the grace period—satisfies that requirement. But the jury
could have reasonably concluded that United did not actually send the December 19 notice.
True, United’s employees testified that they did so, and there is a presumption that mailed letters
are delivered and received. Kay I, 562 F. App’x at 385 (citing Goodyear Tire, 664 N.W.2d 751).
But “this presumption can be rebutted with evidence that the letter was not received.” Goodyear
Tire, 664 N.W.2d 751 (citing Barstow v. Fed. Life Ins. Co., 242 N.W. 862, 863 (Mich. 1932)).
Here, Mrs. Kay testified that she never received the December 19 notice, or the other notices
regarding the December 2008 premium United claims it sent around the same time. To be sure,
this testimony was self-serving, but it was supported by Silverman’s testimony. Silverman
testified that it was United's practice to notify him if the Kays' premiums were overdue, that he
had received notices regarding overdue premiums in the past, and that upon receipt of a notice
from United, he would call the Kays to tell them that “[i]t's imperative that [they] pay [their]
premium to keep [their] policy in force[.]” (Appellant’s App. at 278.) He did not, however,
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receive any such notices in November or December 2008, or January 2009. (Id. at 282.) The
jury was entitled to credit this testimony and conclude that the December 19 notice was not
received because United did not actually send it.6 Further, the statute requires notice to the
policyowners, and Mrs. Kay and Claymore were both policyowners. Austin, a United employee,
testified that United’s practice was to send only one premium notice, even when a policy had
multiple owners. The December 19 notice at issue was addressed to Dr. Kay, not Mrs. Kay or
Claymore. Dr. Kay was the majority owner of Claymore, but it would not have been
unreasonable for the jury to conclude that United breached the contract by failing to send a
notice to Mrs. Kay.
Because a reasonable jury could have found that United breached its implied contractual
obligation to send notice of termination to the policyowners at least 30 days before terminating
the policy, the verdict was not against the weight of the evidence, and the district court did not
abuse its discretion in declining to grant a new trial. See Mike’s Train House, 472 F.3d at 405.
6
Plaintiffs did allege in their second amended complaint that the December 19 notice had
been sent to Dr. Kay at the family home, and “[f]actual assertions in pleadings” are generally
“binding on the party who made them,” Barnes v. Owens-Corning Fiberglas Corp., 201 F.3d
815, 829 (6th Cir. 2000) (quoting Am. Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224, 226 (9th
Cir. 1988)), including on appeal, Ferguson v. Neighborhood Hous. Servs. of Cleveland, Inc., 780
F.2d 549, 551 (6th Cir. 1986). But in its Rule 50(b) motion, United cited Plaintiffs’ judicial
admissions only in defense of the estoppel theory of liability; it did not link them to Plaintiffs’
§ 500.4012(b) theory. (See R. 198, PID 4646–50.) The same is true in both United’s principal
and reply briefs on appeal. (See Appellant’s Br. at 41–48; Reply Br. at 4–16.) Again, we will
not consider arguments United did not properly present below. Further, at trial, United did not
seek to enforce Plaintiffs’ judicial admissions by requesting that the district court instruct the
jury that they must accept that the December 19 notice was sent. Instead, United introduced
Plaintiffs’ pleadings as evidence, and argued the issue to the jury. A district court has the
discretionary authority to reopen the subject matter of a judicial admission. Ferguson, 780 F.2d
at 551. In light of United’s trial strategy, the district court’s decision to deny United’s Rule
50(b) motion on the basis that factual disputes existed can be understood as a determination that
Plaintiffs should be relieved from their judicial admissions, because even United considered the
question whether the December 19 notice was sent to be a disputed factual question.
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No. 16-1576
Kay, et al. v. United of Omaha Life Insurance Co.
C. Curative Instruction
United’s final argument is that the district court erred by not issuing a curative instruction
after Plaintiffs raised the issue of termination letters in their closing argument. (Appellant’s Br.
at 52.) Specifically, United sought to have the jury instructed that “[a]ny issue with respect to a
failure to send a termination letter is not an issue in this case.” (R. 213, PID 5165.) We review
the refusal to issue a curative instruction only for abuse of discretion. See Cummins v. BIC USA,
Inc., 727 F.3d 506, 516 (6th Cir. 2013). United’s argument is based on its understanding that
“[t]he trial court had previously ruled, based on this Court’s opinion in Kay I, that Plaintiffs’
request for [a] declaratory judgment that United allegedly violated Michigan statutory law [by]
not sending a so-called ‘termination letter’ had been waived and that there should be no mention
of it.” (Appellant’s Br. at 52.) But, as explained above, that understanding was wrong. The
district court did not order that “there should be no mention” of the termination-notice issue.
(See id.) Rather, the district court “forbid reference to a declaratory judgment by the Plaintiff in
any way in opening statements.” (R. 215, PID 5181.) Neither this court nor the district court
held that Plaintiffs could not pursue their breach-of-contract claim based on the implied
contractual obligation to provide termination notice in accordance with § 500.4012(b), and there
was unobjected-to testimony on the issue. In light of the limited scope of both this court’s prior
ruling and the relevant order from the district court, Plaintiffs’ reference to the termination-notice
requirement during closing arguments did not unfairly prejudice United, and the district court did
not abuse its discretion in refusing to give the requested instruction.
III. CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the district court.
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