Allstate Life Insurance v. Fister

JAMES R. EYLER, Judge. This is an appeal by Allstate Life Insurance Company, appellant, from a summary judgment entered by the Circuit Court for Frederick County in favor of Maria Angelique Fister, personal representative of the estate of Mary Gaye Fister (the Estate), and Dorothy Winslow, appellees, beneficiaries of certain life insurance policies insuring the life of the decedent. The policies excluded coverage for death by suicide. The circuit court ruled as a matter of law that the insured’s death was not suicide and entered summary judgment in favor of appellees.

We hold that the insured’s death was suicide, and as a result, we shall reverse the judgment of the circuit court. Because the parties filed cross motions for summary judgment and our ruling is one of law, we direct the entry of judgment in favor of appellant. Factual Background Appellant, between November, 1994 and May, 1995, issued five life insurance policies to Mary Gaye Fister as insured. Each policy contained a provision excluding death by suicide within a two-year contestable period.

The insured died on September 10, 1996, within that two-year period. Appellant denied coverage on the ground that the insured’s death was by suicide. The policies provided an aggregate death benefit of $1,650,000. One of the policies had a face amount of $1,000,000, with the Estate as beneficiary; another had a face amount of $100,000, with Dorothy Winslow, the insured’s mother, as beneficiary; another had a face amount of $200,000, ³⁷² with Lawrence H. Goldman and William Tad Cole as beneficiaries.

The other two policies are not involved in this appeal. The suicide exclusion clause, the same in each policy, provided as follows: Suicide—If the insured dies by suicide while sane or insane within two years from the start date of the contract: 1. We will only pay a refund of the payments made; and 2. The contract will stop.

Appellant points to the following evidence. Ms. Fister, the insured, and Lawrence H. Goldman were extraordinarily close friends. Mr. Goldman was very loyal to Ms. Fister. She controlled him, and he frequently did her bidding.

In September, 1995, Ms. Fister had breast augmentation surgery, and Mr. Goldman took care of her for approximately three months. On several occasions, in 1995 and 1996, Ms. Fister asked several persons to kill her, including Mr. Goldman and William Tad Cole, a former boyfriend. During the three-month period prior to her death, Ms. Fister left home and incurred substantial debts while traveling. During that time period, Ms. Fister left several messages, conveying her intention to commit suicide.

On August 30, 1996, she attempted suicide on two occasions. On September 7,1996, Ms. Fister purchased a 12 gauge shotgun, the gun that ultimately killed her. On September 8, 1996, Ms. Fister met Mr. Goldman in New Jersey. Ms. Fister expressed her desire to die.

On September 10, 1996, Ms. Fister called Mr. Goldman and told him that this was the day she was going to die. Ms. Fister told Mr. Goldman to purchase string so that she could rig the shotgun and pull the trigger. He purchased string and, on September 10, 1996, met Ms. Fister at the Maryland House Restaurant on Interstate 95. The two of them then proceeded to Harper’s Ferry, West Virginia, where Ms. Fister retrieved the shotgun from the car and rigged it for a test firing, which worked.

Ms. Fister directed Mr. Goldman to a location in Monrovia, Maryland, near her mother’s home. Ms. Fister loaded the shotgun and told Mr. Goldman to make the ³⁷³ shotgun disappear after she died. Ms. Fister sat down in the road and directed Mr. Goldman to place the string, which was attached to the shotgun, around his leg. Ms. Fister pulled back the shotgun’s hammer and pulled the string several times, but the gun did not fire.

She began screaming and said, “Larry, for the first time in your life, do the right thing.” While Ms. Fister continued trying to pull on the string to fire the shotgun, Mr. Goldman pulled on the trigger. The gun discharged, and Ms. Fister died from the wound. Appellant points to additional evidence relating to Ms. Fister’s deteriorating financial condition (she owed over one million dollars and had few assets), her fraudulent conduct prior to death (she was the subject of lawsuits and a criminal fraud investigation), and her plans to stage her own death (she expressed a desire for her death to look like murder so that life insurance proceeds could pay debts). We find it unnecessary to detail those facts because appellees agree that Ms. Fister intended to kill herself.

Appellees’ position is that she was unsuccessful, and Mr. Goldman killed her. Appellees filed a complaint against appellant in the Circuit Court for Frederick County, seeking death benefits under the three life insurance policies involved in this appeal. The beneficiaries of the other two policies, Anna P. Bussard and the A.P. Bussard Revocable Trust, were plaintiffs below, but they are not parties on appeal. In the complaint, as amended, Lawrence H. Goldman and William Tad Cole were also named as defendants.

On October 4, 1999, an order of default was entered against Messrs. Goldman and Cole. Mr. Goldman and Mr. Cole were beneficiaries of one of the policies—in the face amount of $200,000— and the Estate was contingent beneficiary. The Estate sought a declaratory judgment that the primary beneficiaries should be disqualified because of involvement in the insured’s death.

Appellant and appellees filed cross motions for summary ³⁷⁴ judgment. 1 The circuit court, on February 17, 2000, entered summary judgment (A) in favor of the Estate, (1) as beneficiary of the policy in the face amount of $1,000,000 plus (2) as contingent beneficiary of the policy in the face amount of $200,000 with Goldman and Cole as primary beneficiaries (a total of $1,446,378.08 including prejudgment interest) and (B) in favor of Dorothy Winslow, beneficiary of the policy in the face amount of $100,000 (a total of $120,531.51 including prejudgment interest). 2 Appellant’s position, below and on appeal, is that the insured’s death was by suicide, if we look at it, as we must, from the insured’s perspective. According to appellant, the death was the result of a voluntary act, and the insured was responsible for the acts of her agent, Mr. Goldman. Additionally, appellant contends that the slayer’s rule precludes recovery. The circuit court held that the term suicide was ambiguous, construed the provision against the insurer, and held that the insured’s death was not suicide as a matter of law. 3 ³⁷⁵ Discussion The suicide exclusion clause in the policies was permitted by Md.Code (1986 Repl.Vol., 1990 Cum.Supp.), Article 48A, § 410, which provided as follows: (a) No policy of life insurance shall be delivered or issued for delivery in this State if it contains a provision which excludes or restricts liability for death caused in a certain specified manner or occurring while the insured has a specified status, except that such a policy may contain provisions excluding or restricting coverage as specified therein in the event of death under any of the following circumstances: (5) Death within 2 years from the date of issue of the policy as a result of suicide, while sane or insane. 4 Appellant argues that the provision in question is not ambiguous.

Relying upon Cole v. State Farm Mut. Ins. Co., 359 Md. 298 , 753 A.2d 533 (2000), appellant asserts that we must look at the issue from the perspective of the insured, employing both a subjective and an objective analysis. Appellant also ³⁷⁶ argues that suicide is death by voluntary act, relying on Supreme Court and Maryland cases.

Appellant concludes that the insured voluntarily employed an agent to act on her behalf. Finally, and alternatively, appellant relies on the slayer’s rule. Appellees concede that the insured intended to kill herself, but posit that she attempted to kill herself and failed. They agree that “suicide” is not ambiguous, arguing that any doubt of ambiguity was removed in 1999, with the implementation of the Assisted Suicide Law.

See Art. 27, § 416 (defining suicide as “the act or instance of intentionally taking one’s own life.”). Appellees argue that the insured did not take her own life; Mr. Goldman did. According to Maryland law, the death of an insured covered by a life insurance policy is presumed to have been caused either by an accident or by natural causes. Baltimore Life Ins.

Co. of Baltimore, Md. Inc. v. Fahrney, 132 Md. 222, 225 , 103 A. 450 (1918). The insurer has the burden of proving that the insured’s death was the result of suicide, and not by accident. See Travelers Ins. Co. v. Connolly, 145 Md. 554, 565 , 125 A. 900 (1924)(stating that the burden is on the defendant insurance company to prove suicide); Travellers’ Ins.

Co. v. Nicklas, 88 Md. 470, 473 , 41 A. 906 (1898)(stating that “[i]t is well settled ... that the presumption of law is against self-destruction, and this presumption will prevail in every case unless the facts disclosed are such as to be inconsistent with it.”). In the context of interpreting an insurance policy, the Court of Appeals has defined “accident” as: “a happening; an event that takes place without one’s foresight or expectation; an event which proceeds from an unknown cause, or is an unusual effect from a known cause, and therefore not expected.” Cole, 359 Md. at 307 , 753 A.2d 533 (quoting Harleysville Mut. Cas. Co. v. Harris & Brooks, Inc., 248 Md. 148, 151 , 235 A.2d 556 (1967)).

In Cole , the Court was faced with the question of whether a death resulting from an intentional tort may be considered an “accident” for purposes of accidental death ³⁷⁷ insurance coverage. Id. at 307 , 753 A.2d 533 (noting that, from the victim’s perspective, “her death may be said to have been the result of an accident if her murder occurred without her foresight or expectation.”). Answering that question in the affirmative, the Court held that the determination of whether a death was accidental is made from the perspective of the insured. Id. at 315 , 753 A.2d 533 .

In reaching its holding, the Court adopted a two-part test from Lincoln Nat’l Life Ins. Co. v. Evans, 943 F.Supp. 564 (D.Md.1996), to determine whether, from the insured’s perspective, the death would have been considered “ ‘unforeseen, unusual and unexpected,’ and therefore an ‘accident.’ ” Id. (citing Sheets v. Brethren Mut. Ins.

Co., 342 Md. 634, 652 , 679 A.2d 540 (1996); Harleysville, 248 Md. at 151-52 , 235 A.2d 556 ). The Court described the analysis to be undertaken as follows: The subjective part of the test entail[s] the court inquiring whether the insured expected an attack similar to the kind which occurred. If insufficient evidence exist[s] to determine that the insured actually expected to be attacked, then the court would advance to the second, objective inquiry. In this prong of the test, the court inquires whether a reasonable person with the same knowledge and experience as the insured would have viewed the injury as highly likely to occur in light of the insured’s past conduct.

If the answer to the objective question of the test [is] also negative, then the insured’s death was the result of an “accident.” Id. at 314, 753 A.2d 533 (internal citations omitted)(citing Lincoln Nat’l Life Ins. Co. v. Evans, 943 F.Supp. 564, 568 (D.Md.1996)). In the case before us, both parties urge that the trial court was incorrect in its finding that the term “suicide,” as used in Art. 48A, § 416 and in the insurance policies, is ambiguous. We agree.

As noted above, the suicide exclusion clause in the policies in question was permitted by § 416. According to principles of statutory construction, “[a] statute should be construed according to the ordinary and natural import of the language used without resorting to subtle or ³⁷⁸ forced interpretations for the purpose of limiting or extending its operation.” State Farm Mut. Auto. Ins.

Co. v. Insurance Comm’r, 283 Md. 663, 670 , 392 A.2d 1114 (1978). Furthermore, “where statutory language is clear and unambiguous, according to its ordinary and commonly understood meaning, a court must so construe the statute, rather than resort to legislative history or other extraneous considerations to arrive at a contrary construction.” Total Audio-Visual Sys. v. DOL, Licensing & Regulation, 360 Md. 387, 395 , 758 A.2d 124 (2000)(internal citations omitted). Likewise, in determining the interpretation of an insurance contract, we must “give words their usual,