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Bear v. Lifemap Assurance

Citation: 2021 UT App 129Docket: 20200183-CA

Court: Court of Appeals of Utah; November 17, 2021; Utah; State Appellate Court

Original Court Document: View Document

Narrative Opinion Summary

In the dispute, a former employee of a school district sought increased life insurance benefits from LifeMap Assurance Company for herself and her husband but failed to submit the required Evidence of Insurability (EOI). Despite premium deductions due to a software glitch, LifeMap denied the claim following the husband's death, citing the absence of an EOI. The employee sued LifeMap and the district for breach of contract and the implied covenant of good faith and fair dealing. The district court granted summary judgment to the defendants, which was upheld on appeal. The court concluded that the insurance contract unambiguously required an EOI for coverage increases, which was not waived by premium acceptance. The appellants failed to establish an enforceable contract for the $300,000 policy, as specific conditions for risk assumption under the Group Policy were unmet. The appellate court confirmed that no material facts were in dispute regarding the district's obligations, affirming the lower court's judgment.

Legal Issues Addressed

Ambiguity in Insurance Contracts

Application: The court found no ambiguity in the contract’s EOI requirement, as headings do not create inconsistencies with the contract’s substantive provisions.

Reasoning: Inconsistencies only create ambiguity if the heading is a substantive part of the contract.

Breach of Contract Elements

Application: Bear's claims failed due to lack of evidence of an enforceable insurance contract for the $300,000 policy.

Reasoning: The burden of production rests on the nonmoving party, and the moving party can meet its burden of persuasion by demonstrating the absence of evidence supporting an essential claim element.

Implied Covenant of Good Faith and Fair Dealing

Application: LifeMap and the District did not breach this covenant as Bear failed to meet the EOI requirement, and there was no contract obligating the District to pay the claimed benefits.

Reasoning: The implied covenant of good faith and fair dealing is inherent in all contracts, prohibiting parties from intentionally harming each other's rights to contract benefits.

Requirement for Evidence of Insurability (EOI)

Application: The court upheld that LifeMap required an EOI for coverage increases exceeding the guaranteed issue amount, which Bear did not submit.

Reasoning: The relevant contract provision clearly states that LifeMap requires an Evidence of Insurability (EOI) for coverage increases exceeding the guaranteed issue amount, a condition precedent that Bear did not meet by failing to submit an EOI for her husband.

Waiver of Contractual Rights

Application: LifeMap did not waive the EOI requirement by accepting premiums, as waiver requires clear intent to relinquish a known right.

Reasoning: Acceptance of premiums does not equate to a knowing waiver of the right to require an EOI.