United States District Court, E.D. Arkansas, Jonesboro Division
MARCIE P. SCRIBER, Trustee of the Ladd J. Scriber Life Insurance Trust PLAINTIFF
CONSECO LIFE INSURANCE COMPANY DEFENDANT
Marshall Jr. United States District Judge
Conseco insured Dr. Ladd Scriber's life for $500, 000 for
his trust. This was a whole life policy, with cash value
available to pay premiums. The policy was in place for
twenty-six years. During the last few of those years, the
Scribers also paid premiums by automatic bank draft. The cash
value had been depleted by the summer of 2014; and the bank
drafts didn't cover the monthly premiums. The policy
lapsed because of nonpayment. In those circumstances, the
trust had a two-month grace period to bring things current.
No 2 at 14. Conseco also promised: "We will
send a written notice to you at least thirty (30) days before
the day the policy would end.'' Ibid.
says, and has offered evidence, that it sent this grace
notice to the Scribers, their former agent, and their former
lienholder. It is undisputed that none of these notices came
back undeliverable. The Scribers say they didn't get the
notice. Their former agent's widow-who maintains his
business post office box -didn't get the notice. And
their former lienholder didn't get the notice, either.
Monthly premium payments, though insufficient to cover the
total due, continued to be drafted from the Scribers'
the sixty-day grace period ended, using the same mailing
protocol, Conseco sent letters to the Scribers, their former
agent, and the former lienholder canceling the policy. All
three letters were received or returned as undeliverable. The
Scribers sought reinstatement, which Conseco denied based on
Dr. Scriber's health. The trust has sued for damages or
reinstatement. Conseco seeks summary judgment, while the
trust wants a trial. Is there a genuine issue of material
fact about whether Conseco sent the grace notice? Bedford
v. Doe, 2018 WL 547455 at *2 (8th Cir. 2018).
Conseco argues that the Scribers have shown (at most) lack of
receipt, not lack of sending. Conseco stands on its mailing
protocol, an automated letter-processing system. It generates
and prints notices. No. 35-1 at 30 [*] The notices are
tagged with a bar code -which is scanned throughout the
process as a safeguard - and moved to the mail room. No
35-1 at 72-75. There, they are placed into an inserter
that packages them, applies postage, and assembles them for
pickup. No. 35-1 at 31. A vendor picks the notices
up, presorts them, and mails them. In all, Conseco spends
about $15 million a year on its mailing system. Conseco's
records show that the July grace notice was generated,
printed, and put into the inserter. No. 35-1 at
55-56. And the same mailing protocol was used in
September, when everyone agrees that the lapse notice was
sent. There is some scuffling about the four-digit extension
on the Scribers' zip code in the mailings. But, as
Conseco says, the Scribers' basic address and zip
haven't changed. The extension is also correct.
Scribers cast doubt, though, on the July mailing. They
highlight that Conseco can't prove the notice was mailed,
just that it was generated and inserted. After the notice
goes through the inserter, it must be held, and then picked
up and mailed by a third party. No. 35-1 at 29.
These steps involve people who, like all of us, make
mistakes. The Scribers argue that through human error Conseco
never sent the grace notice. They rest this conclusion on
this record evidence: they never got the notice; their former
agent's widow, new agent, and former lienholder never got
the notice; all the copies of the September lapse notice
(unlike the July grace notices) were either received or
returned as undeliverable; and, though he would backtrack a
step or two later in the deposition, Conseco's Rule
30(b)(6) witness acknowledged that the company couldn't
prove it had mailed the grace notice. Here's the initial
Q: [I]s there any evidence that . . . this July 2nd grace
notice was actually physically delivered to the post office?
A: No, sir.
No 35-1 at 29; see also No. 35-1 at 55-56.
Proof that the Scribers didn't get the July letter,
standing alone, doesn't prove that it wasn't sent.
Phillips v. Riverside, Inc., 796 F.Supp. 403, 408
(E.D. Ark. 1992). As Conseco argues, there must be more than
a metaphysical doubt to create a genuine factual dispute.
Matsushita Electric Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). Non-receipt by their
current and former agents, as well as their former
lienholder, adds some evidentiary weight for the Scribers.
there are the disparate outcomes. In July, no copy of the
notice was received or returned as undeliverable; in
September, all of them were. These circumstances allow
competing reasonable inferences. Success in September could
mean that Conseco's system also worked in July. Or it
could mean that some human error crept in, leading to an
unsent July notice.
relies on Swinney and Shoffey. They are car
insurance cases, as the Scribers insist, but they are
illuminating. In both cases, witnesses testified under oath
that notice had been mailed. Atlanta Cas. Co. V.
Swinney, 315 Ark. 565, 566, 868 S.W.2d 501, 502 (1994);
Shoffey v. Progressive Nw. Ins. Co., 70 Ark.App.
458, 460-61, 20 S.W.3d 424, 425 (2000). No such testimony is
offered here. Instead, Conseco's Rule 30(b)(6) witness
first testified that he could not say for sure that this
grace notice made it to the post office and into the mail.
No. 35-1 at 29 & No. 35-1 at 55-56. Conseco's
sophisticated automated letter-processing system doesn't
close the case as a matter of law because space for human
Court must take the record in the light most favorable to the
Scribers, drawing all reasonable inferences in their favor.
Chivers v. Wal-Mart Stores, Inc.,641 F.3d 927, 932
(8th Cir. 2011). Looking at the whole mixed bag, a reasonable
person could conclude that Conseco didn't send the July
notice. So the motion for summary judgment, No. 35,
is denied. ...