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Cheney v. United States Life Insurance Co.

United States District Court, D. Arizona

January 30, 2019

Cynthia Cheney, Plaintiff,
v.
United States Life Insurance Company in the City of New York, a foreign insurance company; American General Life Insurance Company, d/b/a AIG Benefit Solutions Connecticut Claim Center, a foreign business entity; Does 1-10; Roes 1-10, Defendants.

          ORDER

          David G. Campbell, Senior United States District Judge

         Plaintiff Cynthia Cheney filed a complaint against Defendants United States Life Insurance Company (“U.S. Life”) and American General Life Insurance Company (“American General), d/b/a AIG Benefit Solutions, alleging breach of contract and insurance bad faith. Doc. 1. Defendants move for summary judgment. Doc. 92. The motion is fully briefed, and the Court finds that oral argument will not aid in its decision. See Fed. R. Civ. P. 78(b); LRCiv 7.2(f). For the following reasons, the Court will grant the motion.

         I. Background.

         The following facts are undisputed unless otherwise noted. U.S. Life issued a disability insurance policy (“the Policy”) to an association, the American Bar Endowment (“ABE”). Doc. 93-1 at 2-3.[1] As an ABE member, Plaintiff was covered by the Policy. Id. at 35. The Policy provides for the payment of benefits “[i]f an insured person becomes totally disabled and continues to be so disabled past the waiting period.” Id. at 9. The Policy defines “total disability” as:

. during the waiting period and next 60 months, the complete inability of the member to perform the material duties of [her] regular job to include [her] specialty in the practice of law; “specialty in the practice of law” means the specialty in the practice of law which the member was performing on the day before total disability began.
. after such 60 months, the complete inability of the member to perform the material duties of any gainful job for which [she] is reasonably fit by training, education or experience.

Id. An insured's “regular job” is “that which [she] was performing on the day before total disability began.” Id.

         Plaintiff worked generally as an attorney from 1985 to 1990, and then began medical malpractice trial work. Doc. 93-1 at 38-39. As a trial lawyer, Plaintiffs “material duties” included managing complex litigation through trial and appeals, travel, conducting written discovery and depositions, researching, drafting motions and other documents, attending hearings and oral arguments, and being involved in all aspects of trial preparation and execution. Doc. 93-2 at 132-40, 143. Plaintiff tried seven cases between 1997 and 2005, and tried her last case in November 2005 with a colleague's help. Doc. 93-2 at 119-24; 93-1 at 44, 66.

         On January 17, 2014, Plaintiff submitted a claim for total disability to ABE. Doc. 93-1 at 38. Plaintiff asserted that her disability began in December 2006 and that she had been unable to continue working as a trial lawyer due to uncontrolled diabetes and other health conditions. Id. at 38-39. Plaintiff s claim included an Attending Physician's Statement from a treating nurse practitioner which indicated that Plaintiff had a moderate limitation of functional capacity due to her arthritis. Id. at 49. The statement opined that Plaintiff was unable to work due to disability as of July 1, 2012. Id.

         In a February 2014 letter to Plaintiff, U.S. Life verified that “Benefit Solutions Connecticut Claim Center” had received her claim. Doc. 93-1 at 98. The letter requested additional information from Plaintiff, including a specific disability date, monthly billable hours, medical documentation, tax returns, an explanation for her delay in filing, and other documentation. Id. at 98-99. U.S. Life again requested this information from Plaintiff in a March 2014 letter. Id. at 120; Doc. 106 at 3. Plaintiff attended an in-person interview about her claim (Doc. 93-1 at 56), but U.S. Life closed her claim in July 2014 after several more unsuccessful requests for additional information (Doc. 93-1 at 148-50).

         Plaintiff eventually provided the requested information, and U.S. Life reopened her claim. Doc. 93-1 at 113-14. In a March 2015 letter, Plaintiff updated her date of disability to no later than January 1, 2007 and stated that she had wound down her litigation activities by January 2008. Doc. 93-1 at 154-57. Plaintiff also provided a spreadsheet of her hours billed from July 2006 to June 2007. Docs. 93-2 at 3-4; 93-1 at 160-63. Plaintiff's hours billed, Claimant Statement, and Social Security Administration disability application reflect that she began litigating part-time in 2005. Id.; Docs. 93-2 at 9; 93-1 at 87. Plaintiff attended a court hearing as counsel of record in 2007 and was identified as counsel of record in another case that year. Docs. 94-2 at 77; 93 at 9 ¶ 51; 106 at 7 ¶ 51.

         U.S. Life obtained an opinion from a board-certified endocrinologist, Dr. Soodini, that medical records did not support Plaintiff's claimed severe limitations as of 2007. Doc. 93-2 at 21-27. U.S. Life denied Plaintiff's claim on July 22, 2015, finding “insufficient information to support that [Plaintiff] was Totally Disabled through and beyond her policy's 90-day Waiting Period.” Doc. 93-2 at 37-41.

         II. Summary Judgment Standard.

         A party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, shows “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Summary judgment is also appropriate against a party who “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322. Only disputes over facts that might affect the outcome of the suit will preclude summary judgment, and the disputed evidence must be “such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         III. Discussion.

         Counts 1 and 2 assert claims for breach of contract and bad faith, respectively. Doc. 1. Defendants move for summary judgment on both claims. Doc. 92.

         A. American General.

         1. Breach of Contract.

         To succeed on her breach of contract claim, Plaintiff has the burden of proving the existence of a contract, breach of the contract, and resulting damages. Thomas v. Montelucia Villas, LLC, 302 P.3d 617, 621 (Ariz. 2013). American General argues that summary judgment is proper because American General had no contract with Plaintiff. Docs. 92 at 12, 14; 105 at 17-18. The parties agree that American General and U.S. Life are subsidiaries of American International Group, Inc. and are distinct legal entities. Docs. 93 at 9; 106 at 8-9.[2]

         Plaintiff argues that American General may be liable based on its alleged involvement in denying Plaintiff's claim or based on a joint venture theory. She also seems to treat American General, a subsidiary of American International Group, as synonymous with American International Group. Docs. 106 at 8-9, ¶56; 108 at 10-11; 105 at 17-18.[3]Defendants assert that American General played no role in issuing, underwriting, or administering the Policy, or in denying Plaintiff's claim. Doc. 108 at 10.

         Plaintiff makes no coherent argument explaining how American General, a non-party to the Policy between Plaintiff and U.S. Life, can face breach of contract liability. Plaintiff fails to develop or support her “direct involvement” or “joint venture” theories. And her unexplained citations to and quotations from bad faith cases are unavailing on this breach of contract claim. See Gatecliff v. Great Rep. Life Ins., 821 P.2d 725, 730 (Ariz. 1991) (discussing bad faith cases); Ceimo v. Gen. Am. Life Ins. Co., 137 Fed. App'x 968, 969 (9th Cir. 2005) (memorandum decision citing Gatecliff without analysis); Ingram v. Great Am. Ins., 112 F.Supp.3d 934, 940-41 (D. Ariz. 2015) (bad faith claim); Sparks v. Rep. Nat'l Life Ins., 647 P.2d 1127, 1136-37 (Ariz. 1982) (same); Farr v. Transamerica Occidental Life Ins., 699 P.2d 376, 385-86 (Ariz.Ct.App. 1984) (citing Sparks for support that an insurer and its agent are joint venturers and can be jointly liable for bad faith).

         More importantly, Plaintiff cites no evidence in the record showing that American General was party to a contract with Plaintiff, was involved in writing or administering the Policy, or was involved in denying Plaintiff benefits. In fact, the portion of Plaintiff's brief addressing this issue contains only a single citation to the record - a 3-page excerpt from a deposition in a different case. See Doc. 105 at 17-18 (citing Doc. 106-4 at 3-5). This evidence does not establish the elements of Plaintiff's claim in this case, and her conclusory assertions ...


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