Snape v. Lincoln Benefit Life ( 2002 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-40784
Summary Calendar
STEPHANIE SNAPE, Individually,
As Next Friend for Cornelius James
Snape IV and as Representative of
the Estate of Cornelius James Snape
III, on behalf of Cornelius James
Snape,
Plaintiff-Appellant,
versus
LINCOLN BENEFIT LIFE COMPANY; ET AL,
Defendants
LINCOLN BENEFIT LIFE COMPANY; POE &
BROWN INC.; SCOTT HENRY; CIGNA
FINANCIAL ADVISORS INC.; SAGEMARK
CONSULTING INC.,
Defendants-Appellees.
__________________________________________________
Appeal from the United States District Court
for the Eastern District of Texas
(No. 4:99-CV-236)
________________________________________________
April 8, 2002
Before DAVIS, BENAVIDES, and CLEMENT, Circuit Judges.
PER CURIAM:*
*
Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
Cornelius James Snape III (“Neal Snape”) died in an automobile
accident with a drunk driver on September 20, 1997. Prior to his
death, Neal Snape had been in the process of finalizing a life
insurance policy with Lincoln Benefit Life Company (“Lincoln”) to
benefit his wife, with his son named as contingent beneficiary.
The policy was to take effect on September 22, 1997. At the time
of his death Snape had paid no premiums on the policy and had yet
to receive the policy.
After Lincoln denied her claims for benefits, appellant
Stephanie Snape filed negligence and Texas Insurance Code violation
claims in her individual capacity, as well as on behalf of her
minor son, Cornelius James Snape IV, and the estate of her deceased
husband, Neal Snape, involving the application for life insurance
that Neal Snape submitted to Lincoln through Scott Henry (“Henry”).
Henry is employed by defendant Poe & Brown, Inc. as a sales agent
in the employee benefits group. Henry consulted with John Van
Veldhuizen, an employee of defendant Cigna Financial Services
(“Cigna”), which is now known as Sagemark Consulting, Inc.
(“Sagemark”).
Lincoln notified Henry that the life insurance policy was
approved on August 26, 1997. On August 26, 1997, Lincoln also
notified Henry that it was suspending processing of the policy
until Henry fulfilled its internal agent appointment procedures.
The policy was suspended sixteen days while Henry obtained
appointment. On September 11, 1997, the policy went into
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processing. If the policy had not been suspended, the effective
date of the policy would have been September 7, 1997, before Neal
Snape’s death.
On September 15, 1997, Lincoln sent Henry written notice of
the amount of the premium payment he was to collect to put the
policy in effect and notified him that the policy had an effective
date of September 22, 1997. Henry was also notified by Van
Veldhuizen’s office on September 19, 1997, that a premium needed to
be collected. Henry was advised on September 19, 1997, that the
physical policy was in the mail to him.
By memorandum opinion dated March 28, 2001, the district court
partially adopted the magistrate judge’s report; granted motions
for summary judgment by Poe & Brown and Henry, Lincoln, and
Sagemark and Cigna; dismissed appellant’s case with prejudice; and
dismissed Cornelius James Snape IV with prejudice. Appellant
appeals the district court’s grants of summary judgment and
dismissal of appellant’s claims. Snape further claims that the
district court abused its discretion when it denied her leave to
amend her complaint to add claims allegedly developed during the
discovery process.
This court reviews grants of summary judgment de novo. Harken
Exploration Co. v. Sphere Drake Ins. PLC, 261 F.3d 466, 470 (5th
Cir. 2001). Summary judgment is proper if there is no genuine
issue as to any material fact. Fed. R. Civ. P. 56(c); Celotex
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Corp. v. Cartrett, 477 U.S. 317, 322 (1986). A genuine issue of
fact exists only “if the evidence is such that a reasonable jury
could return a verdict for the non-moving party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Defendants owed no duty to Snape that would support the
negligence claims. An insurer and its agent have no duty to give
an insured notice of a premium, to give notice that a policy has
expired, to inform an insured of the status of a policy, or to
ensure that coverage is in effect through payment of a premium.
Shindler v. Mid-Continent Life Ins. Co., 768 S.W.2d 331, 333 (Tex.
App. 1989); Macintire v. Armed Forces Benefit Ass’n, 27 S.W.3d 85(Tex. App. 2000).
Appellant also brought suit against defendants for
misrepresentation pursuant to Article 21.21 § 4(11) of the Texas
Insurance Code, which prohibits unfair or deceptive acts or
practice in the business of insurance. Even where the insurer or
its agent has made statements that could be misleading, “[a]n
insured will be deemed to know the contents of the contract he
makes.” Shindler, 768 S.W.2d at 334 (citing Standard Accident Ins.
Co. v. Employers Cas. Co., 419 S.W.2d 429, 432 (Tex. App. 1967)).
The policy application provides that “no insurance will start by
reason of the application until the policy is delivered and the
first payment is accepted by Lincoln Benefit Life. In this case,
the insurance will start on the date shown in the policy.” The
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policy application further provides that “each person who signs
below acknowledges that he or she read and understands this
Application.” Neal Snape signed the policy application. “A claim
for misrepresentation can not stand when the party asserting the
claim is legally charged with knowledge of the true facts.”
Shindler, 768 S.W.2d at 334 (citing Sutton v. Grogan Supply Co.,
Lumber Division, 477 S.W.2d 930, 935 (Tex. App. 1972)).
Further, Texas follows the rule that where a policy provides
that life insurance shall not be in force until certain
considerations are satisfied, fulfillment of these conditions is
essential for a valid contract. Roberts v. Mass. Indem. & Life
Ins. Co., 713 S.W.2d 159 (Tex. App. 1986). There was no contract
between Lincoln and Neal Snape. Neal Snape had made no payments
and had not even received the policy.
Regarding appellant’s claim that Henry had a duty to inform
Neal Snape that he would need to go through processing to become an
agent of Lincoln, Henry was licensed by the State of Texas to sell
life insurance for any life insurance company. When the time came
for Henry to complete Lincoln’s internal procedures and become
“appointed,” he did so with ease in about two weeks. Lincoln never
withdrew Henry’s authority nor does appellant aver a failure by
Henry to obtain the requisite authority from the state. See
generally Armstrong v. Tidelands Life Ins. Co., 466 S.W.2d 407(Tex. App. 1971); Woods v. William M. Mercer, Inc., 769 S.W.2d 515,
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518-19 (Tex. 1988).
This court reviews denial of a motion for leave to amend for
abuse of discretion. Addington v. Mutual Ins. Co., 650 F.2d 663,
666 (5th Cir. 1981). Leave to amend “shall be freely given when
justice so requires,” Fed. R. Civ. P. 15(a), but “leave to amend is
not automatic.” Avatar Exploration, Inc. v. Chevron, U.S.A., Inc.,
933 F.2d 314, 320 (5th Cir. 1991). Reason for the denial need only
be apparent from the record. Foman v. Davis, 371 U.S. 178, 182
(1962). Reasons for denying the leave to amend here are “ample and
obvious.” Rhodes v. Amarillo Hosp. Dist., 654 F.2d 1148, 1154 (5th
Cir. 1981). The record supports denying leave to amend because the
motion was untimely, presented without full disclosure to the
court, prejudicial to the defendants, or futile. The district
court was within its discretion to deny leave.
The judgment of the district court is AFFIRMED.
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