The opinion of the court was delivered by: Hon. Dennis M. Cavanaugh
DENNIS M. CAVANAUGH, U.S.D.J.:
This matter comes before the Court upon motion for summary judgment by Transamerica Life Insurance Company, successor to Transamerica Occidental Life Insurance Company, ("Transamerica" or "Plaintiff") and a cross motion for summary judgment by Total Systems, Inc. and Totsys Inc. (collectively "Defendants") pursuant to Fed. R. Civ. P. 56. Pursuant to Fed. R. Civ. P. 78, no oral argument was heard. After considering the submissions of the parties, the decision of this Court upon each of these motions is set forth for the reasons herein expressed separately below.
Transamerica seeks to recover $1,978,418.11 that it allegedly overpaid to Defendants as death benefits under an individual life insurance policy (the "Policy") issued on the life of Robert Hendrickson ("Hendrickson").
On or about December 28, 1999, Daniel Devine ("Devine") and Hendrickson, the principals of Total Systems, Inc. (the "Corporation"), applied for life insurance policies on each other's lives with the Corporation named as the beneficiary. The applications sought coverage from Transamerica in the amount of $2,000,000. JB Hanauer submitted applications to Transamerica through the Selario Agency. The stated purpose of the policy was to fund the purchase of any stock in the Corporation still owned by Hendrickson at the time of his death, pursuant to a buy-sell agreement between Hendrickson and one or more of the Defendants.
Transamerica approved Devine's policy for issuance on June 30, 2000. Transamerica approved Policy 41776405 for Hendrickson on July 6, 2000. Both policies had a face amount of $2,000,000 and required annual premium payments of $2,390. Transamerica sent both policies to Selario Agency for delivery to Devine and Hendrickson. Steven Vitale ("Vitale"), an insurance broker at JB Hanauer, delivered Devine's policy on or about August 30, 2000. Vitale returned Policy 41776405, insuring Hendrickson, to Transamerica with instructions to reissue with an aviation exclusion.
The Policy is alleged to have included an Aviation Exclusion Endorsement providing for reduced payout in the event that Hendrickson died "as a result of operating, riding in or descending from any kind of aircraft while . . . a crew member of that aircraft." Defendants deny the Policy contained an Aviation Exclusion Endorsement. Defendants do not have the original Policy. Transamerica has produced the Life Policy Invoice, which was automatically generated and printed at the same time as the policy and is a precise record of each of the forms, amendments, and endorsements contained within the referenced policy. Only the forms, amendments, and endorsements that actually print with the policy are reflected on the Life Invoice Policy. When the policy and Life Invoice Policy are printed, the documents were bound and sent to the appropriate Transamerica agent for delivery to the policy owner. The Life Invoice Policy for Hendrickson contains several references to the Aviation Exclusion Endorsement.
Hendrickson died while piloting a private airplane in Alaska on or about August 6, 2007. On November 5, 2007, a claims examiner for Transamerica paid $2,003,888.36 in death benefits to Defendants. Because Hendrickson died as a result of an airplane crash while piloting the aircraft, however, Transamerica alleges that the Aviation Exclusion Rider required payment of only $25,470.25. On January 2, 2008, a Transamerica claims examiner advised Defendants of the error and requested return of the overpayment. Defendants have refused to return the alleged overpayment.
Summary judgment is granted only if all probative materials of record, viewed with all inferences in favor of the non-moving party, demonstrate that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. See FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). "A party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion." See Celotex Corp., 477 U.S. at 323. "This burden has two distinct components: an initial burden of production, which shifts to the nonmoving party if satisfied by the moving party; and an ultimate burden of persuasion, which always remains on the moving party." Id. at 330.
"In determining whether there are any issues of material fact, the Court must resolve all doubts as to the existence of a material fact against the moving party and draw all reasonable inferences - including issues of credibility - in favor of the nonmoving party." Newsome v. Admin. Office of the Courts of the State of N.J., 103 F. Supp.2d 807, 815 (D.N.J. 2000), aff'd, 51 Fed. Appx. 76 (3d Cir. 2002) (citing Watts v. Univ. of Del., 622 F.2d 47, 50 (D.N.J. 1980)). While a court must draw reasonable inferences, the non-moving party "may not rest upon the mere allegations or denials of his pleading" to satisfy this burden, but must produce sufficient evidence to support a jury verdict in his favor. See FED. R. CIV. P. 56(e); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). "The mere existence of a scintilla of evidence in support of the [non-moving party]'s position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-movant]." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). Additionally, "unsupported allegations in memorandum and pleadings are insufficient to repel summary judgment." Schoch v. First Fid. Bancorporation, 912 F.2d 654, 657 (3d ...