This matter comes before the Court on cross-motions for summary judgment by plaintiff The Guardian Life Insurance Company of America ("Guardian-Life"), defendant Donna M. Goduti-Moore ("Goduti-Moore"), and third-party defendants Robert Beckett and National Pension Consultants ("NPC"). For the reasons stated, plaintiff's motion for summary judgment is granted, defendant's motion for summary judgment is denied as moot, and third-party defendants' motion for summary judgment is granted.
On October 4, 1994, Guardian Life, a New York company, issued a life insurance policy ("the Policy") in the amount of $500,000 to decedent Kevin Moore ("Moore"), a New Jersey resident. (See Certif. of Janemary S. Belsole, Esq. dated 5-29-98 ("Belsole Certif."), Ex. 6: the Policy.) Third-party defendant and insurance broker Robert Beckett ("Beckett") procured the Policy which named Moore's wife, defendant Goduti-Moore, as the primary beneficiary. (Id. at I.) *fn1
Moore initially applied to pay the insurance premium on an annual basis. (Id. at J.) The Policy allowed a change in payment frequency but required that the change "result in a premium falling due on each policy anniversary." (Id. at O.) The Policy stated that any premium not paid on its due date would be in default. (Id.) However, the Policy also contained a 31-day grace period and stated that the Policy would not lapse if payments were made within that time. (Id.) The Policy identified the policy date as October 4, 1994 and stated that "[p]olicy years, policy months, and policy anniversaries are measured from the policy date." (Id. at C, T.)
On October 25, 1994, Moore executed a "Request for Guard-O-Matic Premium Arrangement Form" by which Moore enabled Guardian Life to draw checks against Moore's checking account on a monthly basis to pay the Policy premium. (Id., Ex. 10.) Moore signed a form stating: "If the Guard-O-Matic premium arrangement is terminated, premiums falling due thereafter shall be payable directly to the Company monthly at the monthly premium rate which would have been applicable to the policy if it had not been placed under the Guard-O-Matic premium arrangement." (Id. at A.)
Moore also issued a check to Guardian Life on October 31, 1994 in the amount of $366 as an initial premium payment. (Id., Ex. 33.) On November 4, 1994, Guardian Life sent Moore a policy statement which divided the $366 payment into payments of $122.31 for the periods from October 4, 1994 to November 4, 1994, November 4, 1994 to December 4, 1994, and December 4, 1994 to January 4, 1995. (Id., Ex. 11.) The policy statement also noted: "Starting January 1995, on or about the 15th of each month, a withdrawal of $122.31 will be made automatically for this policy." (Id.) Guardian Life withdrew $122.31 on the 15th of each month unless the 15th fell on a Saturday, Sunday, or legal holiday in which case the money was withdrawn on the following business day. (See Aff. of Robert Ryan dated 5-22-98 ("Ryan Aff.") ¶ 10.) On September 15, 1995, Guardian sent Moore a policy statement announcing that Guardian Life would collect $129.61 as the monthly premium beginning in October 1995. (Belsole Certif., Ex. 12.)
It is undisputed that Guardian Life was unable to withdraw the amount of $129.61 from Moore's bank account on August 15, 1996. (See Pl.'s Br. in Supp. at 24; Def.'s Br. in Supp. at 9.) On August 20, 1996, Guardian Life received notification from its collecting bank that the electronic transfer debit had been returned because Moore's account had been closed. (Ryan Aff. ¶ 12.) Guardian Life consequently issued a policy statement on August 21, 1996 to Moore that read:
THE DETAILS OF A TRANSACTION ON YOUR POLICY ARE SHOWN BELOW
REMOVAL FROM GUARD-O-MATIC
YOUR AUGUST GUARD-O-MATIC PREMIUM WAS RETURNED FOR ACCOUNT CLOSED.
METHOD OF PAYMENT CHANGED TO ...