UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-1178
KAREN MCKINNON, as Personal Representative of
the Estate of Clayton S. McKinnon; FLORENCE
NATIONAL BANK,
Plaintiffs - Appellants,
versus
LINCOLN BENEFIT LIFE COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the District of
South Carolina, at Florence. Terry L. Wooten, District Judge.
(CA-03-3518-4-25)
Argued: December 2, 2005 Decided: January 6, 2006
Before WILKINSON and MICHAEL, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
William Reynolds Williams, WILLCOX, BUYCK & WILLIAMS, P.A.,
Florence, South Carolina, for Appellants. William Clyde Barnes,
Jr., TURNER, PADGETT, GRAHAM & LANEY, P.A., Florence, South
Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Plaintiffs, Karen McKinnon (as personal representative of
the estate of Clayton McKinnon) and the Florence National Bank,
sued Lincoln Benefit Life Company (“Lincoln”) for a declaration
that a suicide exclusion in a Lincoln policy should not be
enforced. The district court granted summary judgment to Lincoln,
and plaintiffs appeal. Plaintiffs also appeal the district court’s
denial of their motion for certification on questions of law to the
South Carolina Supreme Court. Finding no reversible error, we
affirm.
I.
The relevant facts in this case are undisputed. On
October 26, 2000, Clayton McKinnon (“McKinnon”) applied to Lincoln
for a $1.25 million life insurance policy. On March 2, 2001,
Lincoln issued a Preferred Plus life insurance policy to McKinnon
in the face amount of $1.25 million. The South Carolina Department
of Insurance had earlier approved the form and wording of this
policy. On January 18, 2003, roughly one year and ten months after
the policy had been issued, McKinnon committed suicide. The
primary beneficiary under the policy is Florence National Bank and
the secondary beneficiary is McKinnon’s estate.
Plaintiffs made a claim for death benefits in March 2003.
Lincoln denied the claim, invoking the suicide exclusion in
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McKinnon’s policy because he had committed suicide within two years
of his policy being issued. The exclusion in McKinnon’s policy
reads: “If the insured dies by suicide while sane or self-
destruction while insane within two years of the issue date, we
will not pay the death benefit. We will return to you all premiums
paid.” J.A. 35. Lincoln returned the premiums plus interest
($2,873.99) to the primary beneficiary, Florence National Bank.
Plaintiffs filed a declaratory judgment action in South
Carolina state court in October 2003, alleging that the policy’s
suicide exclusion is unenforceable under South Carolina law, S.C.
Code. Ann. § 38-63-225 (“Suicide and Death Exclusions”). The
statute provides:
(A) If an individual life insurance policy contains a
suicide provision, it may not limit payment of benefits
for a period more than two years from the date of issue
of the policy and it must provide for at least the return
of premiums paid on the policy.
(B) An individual life insurance policy or rider to such
a policy delivered or issued for delivery in this State
may exclude or restrict liability in the event of death
occurring while the insured is a resident in a specified
foreign country or countries, but except as provided in
subsection (A) may not contain any provision excluding or
restricting liability in the event of death caused in a
certain specified manner, except as a result of:
(1) death as a result of war, declared or
undeclared, or any act or hazard of such a war;
(2) death as a result of operating, riding, or
descending from an aircraft unless the insured is a
passenger and the aircraft is operated commercially
to transport passengers for hire or by a private
business to transport personnel or guests;
(3) death as a result of hazardous occupations or
hazardous sports specified in the policy or rider.
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If death is caused in a manner excluded in the policy or
rider, the policy must provide for at least the return of
premiums paid on the policy less any indebtedness to the
insurer on the policy.
(C) If an individual life insurance policy or rider
contains any exclusions or restrictions of liability as
allowed in subsection (B), the policy or rider must have
a prominent stamp of notice of these exclusions or
restrictions on the face of it and the insurer is
required to have a separate form acknowledging the
exclusions of liability signed by the owner of the
policy.
§ 38-63-225.
Lincoln removed the case to the U.S. District Court for
the District of South Carolina in November 2003. Lincoln then
moved for summary judgment. Plaintiffs, in turn, moved for two
questions of law to be certified to the South Carolina Supreme
Court: whether the notice requirements of S.C. Code. Ann. § 38-63-
225(C) apply to the suicide exclusions addressed in § 38-63-225(A);
and whether the policy’s exclusion for “suicide while sane or self-
destruction while insane” exceeds the permissible bounds of § 38-
63-225(A).
The district court denied plaintiff’s motion for
certification upon concluding that “[t]he language of the [state
insurance] statute is clear and unambiguous.” J.A. 78-79. The
court then granted Lincoln’s motion for summary judgment. Because
the facts in the record were “virtually uncontested,” the court
found no genuine issues of material fact and proceeded to the legal
question: whether the policy’s suicide exclusion is valid under
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South Carolina law. The court concluded that it is valid,
characterizing the language in the policy as “clear and
unambiguous” and in strict compliance with § 38-63-225(A). The
court thus granted summary judgment in favor of Lincoln.
Plaintiffs now appeal.
II.
Federal courts in diversity cases apply the law of the
forum state. See Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938).
If there is no case law directly on point, the district court
“attempts to do as the state court would do if confronted with the
same fact pattern.” Roe v. Doe, 28 F.3d 404, 407 (4th Cir. 1994).
“Only if the available state law is clearly insufficient should the
court certify the issue to the state court.” Id.; see also S.C.
App. R. 228(a) (state certification rule). We review for abuse of
discretion a district court’s denial of a motion to certify. See
Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974); Boyter v. Comm’r,
668 F.2d 1382, 1385 (4th Cir. 1981).
Finding no reversible error, we affirm the district
court’s denial of plaintiffs’ motion to certify. The district
court fairly concluded that plaintiffs’ claims present
straightforward questions that are covered by the plain language of
the statute. The court thus rejected plaintiffs’ contention that
the case raises two novel questions that should be decided by the
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South Carolina Supreme Court, namely: (1) whether the suicide
exclusion must comply with the notice requirements of § 38-63-
225(C); and (2) whether the policy language, “suicide while sane or
self-destruction while insane,” in fact creates two exclusions and
thereby exceeds the scope of § 38-63-225(A). The court correctly
dismissed this first question as meritless and the second as
immaterial.
In framing the first question, plaintiffs rely on a
circuitous reading of S.C. Code Ann. § 38-63-225: they read
subsection (C) to apply to subsection (A) only through subsection
(B). Even though the notice requirements of subsection (C) do not
on their face apply to subsection (A), but only apply to subsection
(B), plaintiffs argue that (C)’s requirements should nonetheless
apply to (A) because (B) refers to (A). Subsection (B) disallows
exclusions specifying the manner of death “except as provided in
subsection (A),” covering suicide exclusions, and except as listed
in subsections(B)(1)-(3), covering certain external hazards.
Rejecting this strained statutory reading, the district
court reasoned that “[i]f the legislature wanted the notice
requirement set forth in subsection (C) to apply to subsection (A),
they could have easily done so by including relevant language in
(A) or (C).” J.A. 78. The court concluded that, by the plain
terms of the statute, the notice requirements in subsection (C)
apply only to the specified death exclusions in subsection (B) and
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not to the suicide exclusions in subsection (A). We agree with the
district court’s interpretation. See Milligan v. Liberty Life Ins.
Co., 331 S.C. 478, 480-81 & n.1, 443 S.E.2d 381, 382 & n.1 (S.C.
1994) (citing only § 38-63-225(A) in granting summary judgment to
insurance company on application of suicide exclusion).
Accordingly, we conclude that the court did not abuse its
discretion by denying certification on the first allegedly novel
question of law.
Nor did the district court abuse its discretion by
denying certification on the second question. Because the manner
of death in this case was undisputedly suicide, it is immaterial
whether the policy exclusion for “self-destruction while insane” is
valid under § 38-63-225(A). Plaintiffs’ admission of suicide
renders this question irrelevant because the court did not even
have to consider the issue of sanity and could proceed straight to
the legal analysis under § 38-63-225(A). As the district court
noted, subsection (A) specifically contemplates suicide exclusions
and enables insurance companies to insert such exclusions in
policies so long as the insurers comply with two restrictions:
insurers cannot deny benefits if the insured commits suicide more
than two years after the policy issue date, and they must return
all premiums paid on the policy. § 38-63-225(A). In this case,
where it is already established that the policyholder committed
suicide, Lincoln need not establish sanity or insanity; Lincoln
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need only establish that it has complied with the above two
restrictions. The district court thus correctly characterized as
immaterial plaintiffs’ second allegedly novel question of law, and
for this reason properly denied certification.
III.
We review the district court’s grant of summary judgment
in favor of Lincoln de novo, affirming “only if there are no
material facts in dispute and the moving party is entitled to
judgment as a matter of law.” Hitachi Credit Am. Corp. v. Signet
Bank, 166 F.3d 614, 623 (4th Cir. 1999). As the district court
correctly stated, there are no material facts in dispute in this
case. The only remaining question is whether Lincoln is entitled
to judgment as a matter of law on the validity of the policy’s
suicide exclusion. Concluding that the exclusion is valid, we
affirm.
The district court characterized the language in the
policy as “clear and unambiguous”: “If the insured dies by suicide
while sane or self-destruction while insane within two years of the
issue date, we will not pay the death benefits. We will return to
you all premiums paid.” J.A. 35. The policy plainly applied to
McKinnon because he committed suicide within two years of the issue
date of his policy. Lincoln, for its part, complied with the
policy by returning all premiums plus interest ($2,873.99) to the
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primary beneficiary, Florence National Bank. As the district court
explained, “It is well-settled that[] ‘an insurer’s obligation is
defined by the terms of the policy itself, and cannot be enlarged
by judicial construction . . . [and] if the intention of the part
is clear, courts have no authority to torture the meaning of policy
language to extend or defeat coverage that was never intended by
the parties.’” J.A. 81 (quoting Kay v. State Farm Mut. Auto. Ins.
Co., 562 S.E.2d 676 (S.C. 2002), and MGC Mgmt. of Charleston, Inc.
v. Kinghorn Ins. Agency, 520 S.E.2d 820, 823 (S.C. 1999)). By the
clear terms of the policy, Lincoln is under no obligation to pay
plaintiffs a death benefit.
Further, the policy is legally enforceable because it
complies with the statutory language of S.C. Code Ann. § 38-63-
225(A). As discussed above in part II, § 38-63-225(A) is the only
controlling statutory authority on suicide exclusions; the notice
requirements of subsection (C) do not apply. Subsection (A) simply
requires that insurers not limit benefits for policyholders who
commit suicide more than two years after the policy issue date and
that they return all premiums paid on the policy. Because Lincoln
complied with these two requirements, its suicide exclusion is
valid under South Carolina law.
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Because the suicide exclusion is applicable and
enforceable in this case, we affirm the grant of summary judgment
in favor of Lincoln.
AFFIRMED
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