Nancy Wactor v. Jackson National Life Insurance Company

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 13-2367

NANCY K. WACTOR,

Plaintiff – Appellant,

v.

JACKSON NATIONAL LIFE INSURANCE COMPANY,

Defendant – Appellee.

Appeal from the United States District Court for the District of
South Carolina, at Anderson. Timothy M. Cain, District Judge.
(8:11-cv-03167-TMC)

Argued: December 9, 2014 Decided: March 10, 2015

Before MOTZ and KING, Circuit Judges, and Arenda Wright ALLEN,
United States District Judge for the Eastern District of
Virginia, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Gary Walter Poliakoff, POLIAKOFF & ASSOCIATES, P.A.,
Spartanburg, South Carolina, for Appellant. Charles Franklin
Turner, Jr., WILLSON JONES CARTER & BAXLEY, P.A., Greenville,
South Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

William Wactor (the “Decedent”) maintained a life insurance

policy (the “policy”) with Jackson National Life Insurance

Company (“Jackson National”) from 1991 until 2010. The policy

was cancelled in February 2010 due to a missed premium payment,

and the Decedent passed away on June 12, 2010. Plaintiff Nancy

Wactor (“Wactor”), the Decedent’s wife, is the personal

representative of the Decedent’s estate and was the sole

beneficiary under the policy. In November 2011, Wactor

commenced this diversity action in the District of South

Carolina, asserting five state law claims through which she

sought to enforce the policy and recover benefits. Jackson

National moved for summary judgment on each of Wactor’s claims,

which the district court awarded. See Wactor v. Jackson Nat’l

Life Ins. Co., No. 8:11-cv-03167 (D.S.C. July 10, 2013), ECF No.

49 (the “Opinion”). Thereafter, the court denied Wactor’s

motion for reconsideration of the Opinion. See Wactor v.

Jackson Nat’l Life Ins. Co., No. 8:11-cv-03167 (D.S.C. Oct. 8,

2013), ECF No. 55 (the “Reconsideration Order”). 1 On appeal,

Wactor contests both the Opinion and the Reconsideration Order.

1
The Opinion is found at J.A. 478-88, and the
Reconsideration Order is found at J.A. 520-22. (Citations
herein to “J.A. ___” refer to the contents of the Joint Appendix
filed by the parties in this appeal.)

2
As explained below, we are satisfied to affirm on the reasoning

of the district court.

I.

A.

1.

The Decedent maintained life insurance with Jackson

National from 1991 until 2010. 2 As of 2010, the policy benefit

was $200,000, and premium payments were due quarterly, on

January 25, April 25, July 25, and October 25 of each year. 3 As

term life insurance, the policy covered the Decedent for the

three-month period following his premium payment, meaning that

if he died during that period, Jackson National would pay the

face value of the policy to Wactor, the named beneficiary.

The policy set forth a series of procedures applicable in

the event of a missed premium payment. If a premium was not

timely paid, the policy became “in default,” commencing a

2
The facts spelled out herein are drawn from the record and
presented in the light most favorable to Wactor, as the
nonmoving party in the summary judgment proceedings. See
Greater Balt. Ctr. for Pregnancy Concerns, Inc. v. Mayor of
Balt., 721 F.3d 264, 283 (4th Cir. 2013) (en banc).
3
During the period in which the policy was in effect,
several terms were modified: (1) the schedule of payment
changed from semiannual to quarterly; and (2) the face value was
decreased from $400,00 to $200,000.

3
thirty-one day grace period. See J.A. 87. During the grace

period, the Decedent remained covered and could reinstate the

policy by simply paying the overdue premium. If the premium

remained unpaid after the grace period, the policy would be

cancelled, meaning the Decedent’s coverage would lapse. At that

point, the policy could be reinstated, within five years of the

date the unpaid premium was due, only upon (1) “receipt of

evidence of insurability of [the Decedent] satisfactory to

[Jackson National],” and (2) “payment of all past due premiums

with interest [at a rate of 6 percent, compounded annually] from

the due date of each premium.” Id. The policy did not contain

a notice provision requiring Jackson National to mail or furnish

notice prior to cancelling coverage for an unpaid premium.

Meanwhile, Jackson National abides by a privacy policy. In

pertinent part, Jackson National collects “nonpublic personal

information (financial and health)” about its insureds, and has

implemented security practices to protect the confidentiality of

that data. See J.A. 143. That information may be disclosed,

however, “[t]o the extent permitted by law, . . . to either

affiliated or nonaffiliated third parties.” Id. The policy

specified that, generally, any disclosures to third-parties

would be for the purpose of servicing or administering the

policy — for example, providing an insured’s name and address to

4
a company that would mail newsletters on Jackson National’s

behalf.

2.

The Decedent was covered by the policy for approximately

nineteen years, beginning in March 1991. The Decedent made most

of the payments for policy premiums from his own bank account,

as he and Wactor generally maintained separate finances. Wactor

sometimes paid the policy premiums for the Decedent, however,

including ten premium payments since 2006. During his nineteen

years under the policy, the Decedent failed to timely pay his

premiums on twenty-two occasions. In each instance, Jackson

National mailed a grace-period notice to the Decedent, and the

Decedent thereafter paid the premium within the grace period.

The Decedent last paid the policy premium that was due

October 25, 2009. After the Decedent failed to pay the January

25, 2010 premium, Jackson National’s records indicate that it

sent two notices via regular mail to the Decedent — a grace-

period notice, followed by a lapse notice — although the

Decedent did not actually receive either notice. The grace-

period notice, sent by letter dated February 4, 2010, stated

that Jackson National had not received the January 25, 2010

premium payment; that, as of that date, the policy had entered a

grace period; and that the policy “will lapse and all coverage

5
. . . will end on February 25, 2010,” absent Jackson National’s

receipt of the premium payment by that date. See J.A. 80.

The Decedent did not submit the overdue premium payment

during the grace period, and Jackson National mailed the lapse

notice to the Decedent by letter dated February 25, 2010,

cancelling the policy. Therein, Jackson National explained that

“your policy has now lapsed and . . . all coverage under this

policy has ended.” J.A. 82. The lapse notice advised that, if

the Decedent submitted the January 25, 2010 premium payment by

March 26, 2010, then “the policy will be automatically

reinstated and we will waive additional requirements.” Id. The

notice clarified that “[t]his offer to reinstate automatically

is not a waiver of the terms of the policy in the event of any

future default of payment of premiums.” Id. The notice also

specified that, unless payment was received by March 26, 2010,

the policy could only be reinstated if all unpaid premiums were

paid along with accrued interest, the Decedent completed an

enclosed application for policy reinstatement, and Jackson

National approved that reinstatement application.

By January 2010, the Decedent was experiencing several

health problems, including Parkinson’s disease and mild

dementia. His cognitive state vacillated between confusion and

lucidity, though the Decedent continued to handle his personal

affairs, including his finances. The Decedent was hospitalized

6
in May 2010 for a broken foot, and Wactor subsequently became

aware that the Decedent had neglected to timely pay several of

his bills.

Wactor called Jackson National’s service center on June 11,

2010, inquiring as to the status of the policy. The Jackson

National representative informed Wactor that the policy was no

longer in force, and that the last premium payment had been

received on October 25, 2009. The representative refused to

provide Wactor with information on paying missed premiums or

reinstating the policy. Rather, the representative told Wactor

that the Decedent would need to contact Jackson National for

instructions on reinstatement. Wactor explained that the

Decedent might not be able to call the company because he was

then hospitalized. The Jackson National representative

ascertained that Wactor did not have the Decedent’s financial

power of attorney, and then suggested that the Decedent could

call Jackson National and authorize Wactor to receive

information. The next day — before any further action was taken

with respect to the policy and the unpaid premiums — the

Decedent passed away.

Wactor and her daughter Lisa Gunter worked on sorting out

the Decedent’s affairs. They searched through the Decedent’s

records for paperwork from Jackson National, but found no

correspondence from 2010. A few days after the Decedent’s

7
death, Gunter telephoned Jackson National to make a claim on the

policy on Wactor’s behalf. The Jackson National representative

informed Gunter that the policy had lapsed. Following that

phone call, Gunter wrote Jackson National a letter, dated June

15, 2010, in which Gunter described her father’s health problems

and enclosed three letters from his health care providers, which

gave information about the cognitive problems that the Decedent

was experiencing in 2010.

Before Gunter’s letter was received, Jackson National

formally denied Wactor’s claim, by letter to Wactor dated June

16, 2010. Therein, Jackson National informed Wactor that the

policy had “lapsed with no value on February 25, 2010 and there

are no benefits payable to the beneficiary.” J.A. 288. The

decision to deny Wactor’s claim was premised solely on Jackson

National’s record that the policy had been cancelled prior to

the Decedent’s death. The June 16, 2010 letter was generated by

Jackson National’s computer system and electronically signed by

Jackson National Vice President Charles F. Field. Field was not

actually involved in writing the letter, but his signature was

affixed pursuant to company procedures for systems-generated

claims correspondence.

Once Jackson National received Gunter’s letter — and after

Wactor’s claim for benefits under the policy had been denied —

Jackson National’s customer relations department became

8
involved. Representative Kevin Schweda was assigned to the

case. He was aware of the information provided by Gunter

indicating that the Decedent had cognitive problems during the

last five to six months of his life, but Schweda did not

consider that information in reviewing Jackson National’s denial

of Wactor’s claim. Rather, Schweda reviewed “the computer

system that administers the policy, confirming that it had

lapsed for nonpayment and the date that that occurred, confirmed

that that occurred prior to the date of [the Decedent]’s death,

confirmed that premium notices were mailed appropriately and

that there was no coverage at the time of death.” J.A. 245.

From that review, Schweda determined that Wactor’s claim had

properly been denied.

B.

Wactor initiated this civil action in November 2011,

alleging five causes of action — breach of contract, equitable

estoppel, unjust enrichment, bad faith refusal to pay insurance

benefits, and breach of the implied covenant of good faith and

fair dealing predicated on Jackson National’s handling of the

claim. 4 Under each of those theories of relief, Wactor sought

4
South Carolina law governs our assessment of Wactor’s
claims. First, “[t]he elements for a breach of contract are the
existence of the contract, its breach, and the damages caused by
such breach.” S. Glass & Plastics Co. v. Kemper, 732 S.E.2d
205, 209 (S.C. Ct. App. 2012). Second, a party claiming
(Continued)
9
enforcement of the policy, including payment of the policy

benefits to her as the sole beneficiary. Additionally, on her

bad faith and implied covenant of good faith claims, Wactor

asserted that Jackson National acted with reckless disregard,

entitling her to recover consequential and punitive damages,

along with attorney’s fees and costs.

Following the close of discovery proceedings, Jackson

National moved for summary judgment as to each of Wactor’s

claims, contending that no material fact was in dispute, and

estoppel must demonstrate that she lacked knowledge or the means
of knowledge as to the truth of relevant facts, that she
reasonably relied on the other party’s conduct, and that she
suffered prejudicial detriment. See Provident Life & Accident
Ins. Co. v. Driver, 451 S.E.2d 924, 928 (S.C. Ct. App. 1994).
Third, unjust enrichment is an available remedy where a party
conferred a benefit on the defendant, the defendant realized
that benefit, and it would be unjust for the defendant to retain
that benefit without paying its value. See Pitts v. Jackson
Nat’l Life Ins. Co., 574 S.E.2d 502, 512 (S.C. Ct. App. 2002).
Fourth, to demonstrate that an insurance company denied a claim
in bad faith, an insured must show the existence of a mutually
binding insurance contract; that the insurer refused to pay
benefits due under that contract; that the denial of benefits
resulted from the insurer’s bad faith or unreasonable action,
breaching its implied duty of good faith and fair dealing; and
that the insured suffered damages. See Cock-N-Bull Steak House,
Inc. v. Generali Ins. Co., 466 S.E.2d 727, 730 (S.C. 1996).
Finally, an insured may recover in tort based on an insurer’s
violation of the implied covenant of good faith and fair dealing
with respect to the insurer’s processing of a claim by
“demonstrate[ing] bad faith or unreasonable action by the
insurer in processing a claim under their mutually binding
insurance contract.” Nichols v. State Farm Mut. Auto. Ins. Co.,
306 S.E.2d 616, 619 (S.C. 1983).

10
that it was entitled to judgment as a matter of law. In

opposing that motion, Wactor maintained that four material facts

remained at issue, precluding summary judgment: (1) whether the

grace-period and lapse notices (collectively, the “cancellation

notices”) effectively cancelled the policy; (2) whether Jackson

National acted in bad faith in refusing to pay benefits;

(3) whether Jackson National was estopped from asserting that

the policy was cancelled; and (4) whether Jackson National acted

in good faith in processing the claim under the policy. 5

1.

By it July 10, 2013 Opinion, the district court awarded

summary judgment to Jackson National on all claims. The court

addressed each of Wactor’s contentions in turn.

a.

First, the district court addressed Wactor’s arguments

relating to the cancellation notices. Wactor contended that

Jackson National — through its course of dealing in providing

written grace-period notices to the Decedent on twenty-two

occasions — waived its right to cancel the policy without

5
In their briefings on Jackson National’s summary judgment
motion in the district court, the parties ordered their
arguments in a slightly different manner than Wactor presented
her claims in the Complaint. We, like the district court,
review the parties’ arguments in the manner presented in the
summary judgment proceedings.

11
furnishing notice. Wactor relied on the Supreme Court of South

Carolina’s decision in Edens v. South Carolina Farm Bureau

Mutual Insurance Co., 308 S.E.2d 670, 671 (S.C. 1983), as

establishing that Jackson National could cancel the policy only

if the Decedent actually received the cancellation notices;

simply sending the notices was ineffective. Wactor submitted

evidence from an expert witness, Gerald M. Finkel, opining that

Edens applies. Because genuine disputes exist as to whether the

Decedent actually received the cancellation notices, Wactor

maintained that summary judgment could not be granted.

The district court found no merit to Wactor’s arguments.

The court determined that the expert opinions submitted by

Wactor regarding Edens constituted legal conclusions and should

be disregarded. The court then recognized that neither South

Carolina law nor the terms of the policy require any notice

prior to cancelling the policy. See Opinion 3-6. Given the

policy’s silence, the court reasoned that the policy contains no

ambiguity as to notice, rendering Edens inapplicable. See id.

at 4-5; Edens, 308 S.E.2d at 671 (finding life insurance

policy’s provision stating cancellation could be effected by

“giving written notice” to be ambiguous, and that, as a matter

of law, contract must be interpreted to require “actual receipt

[as] a condition precedent to cancellation”). Further, the

court rejected Wactor’s contention that Jackson National waived

12
its right to cancel the policy based on its prior course of

dealings with the Decedent. Although Jackson National had

accepted late payments from the Decedent on twenty-two occasions

before 2010, each of those payments was made during the grace

period. Jackson National had never accepted payments from the

Decedent after the grace period, and thus “did nothing that

would have created a reasonable expectation of insurance

coverage past the expiration of the grace periods.” See Opinion

6. Accordingly, Jackson National’s prior conduct “cannot in any

way be construed as a waiver or forfeiture [of] cancelling the

policy for non-payment of premiums after a subsequent grace

period has lapsed.” Id. The court concluded that, because the

undisputed evidence was that Jackson National mailed the

cancellation notices, and because Jackson National was not

obliged to provide notice before cancelling the policy, no

genuine issue of material fact existed regarding the

cancellation notices.

b.

Second, the district court assessed Wactor’s contentions

regarding bad faith. Wactor’s bad-faith argument hinged on her

position that the policy was not effectively cancelled because

the Decedent had not received the cancellation notices. From

that premise, Wactor asserted that Jackson National unreasonably

refused to pay benefits due, again relying on the expert

13
opinions of Gerald Finkel. She further maintained that Jackson

National acted in bad faith by denying her claim for benefits

under the policy without investigating the Decedent’s cognitive

abilities or its prior course of dealings with the Decedent,

because Jackson National knew that the Decedent had not received

the cancellation notices.

The district court disagreed. The court noted that to

succeed on a claim of bad faith refusal to pay benefits, Wactor

must establish, inter alia, that Jackson National’s refusal to

pay benefits resulted from its bad faith or unreasonable

actions. See Opinion 7 (citing Crossley v. State Farm Mut.

Auto. Ins. Co., 415 S.E.2d 393, 396-97 (S.C. 1992)). The “bad

faith or unreasonable action” requirement turns on whether

Jackson National had a reasonable ground to contest Wactor’s

claim. Id. (citing Helena Chem. Co. v. Allianz Underwriters

Ins. Co., 594 S.E.2d 455, 462 (S.C. 2004); Hansen ex rel. Hansen

v. United Servs. Auto. Ass’n, 565 S.E.2d 114, 119 (S.C. Ct. App.

2002)). The court disregarded Wactor’s expert evidence because

it amounted to legal conclusions. The parties agreed that the

Decedent had not paid his premiums after 2009, and the court

determined that, “[b]ased upon the non-payment of the premiums

and the lapse of the policy, Jackson National had reasonable

grounds for denying this claim.” Id. at 8. Accordingly, no

genuine dispute of material fact existed as to bad faith.

14
 c.

Third, the district court addressed Wactor’s estoppel-based

arguments. Wactor contended that Jackson National should be

estopped from relying on the policy’s cancellation based on

Wactor’s June 11, 2010 phone call to Jackson National. By

making that call, Wactor had sought information so that she

might “cure any breach that may have occurred,” but “Jackson

National refused to communicate with [Wactor], concealing all

meaningful information.” J.A. 190. Had Jackson National

informed Wactor of the outstanding balance on the policy and how

it could be reinstated, she might have secured the policy’s

reinstatement before the Decedent passed away. Wactor thus

maintained that factual disputes remained “regarding the

inequitable and self-serving application of [Jackson National’s]

privacy policy,” precluding summary judgment. Id.

The district court determined that Jackson National was

entitled to judgment as a matter of law on Wactor’s estoppel

claim. The undisputed evidence was that, during the June 11,

2010 phone call, Jackson National notified Wactor of several

ways she could obtain authority to act for the Decedent.

Although Wactor hypothesized that she could have cured the

Decedent’s breach had Jackson National provided her with more

information, the court concluded that “there is simply no

15
evidence of any material misrepresentation by Jackson National

or detrimental reliance by Wactor.” See Opinion 10.

d.

Fourth, the district court examined Wactor’s argument that

disputes of material fact existed as to whether Jackson National

breached the implied duty of good faith and fair dealing.

Specifically, Wactor maintained that factual disputes remained

regarding the cancellation notices, Jackson National’s

investigation of her claim, and the procedures and policies

utilized by Jackson National in its handling of the claim.

The district court rejected Wactor’s arguments, observing

that whether Jackson National breached its duty to act in good

faith depended on whether a reasonable ground supported its

decision. See Opinion 11 (citing Crossley, 415 S.E.2d at 397;

Helena, 594 S.E.2d at 462). The court determined that “nothing

in the record [would] suggest that Jackson National acted in an

unreasonable manner in denying coverage or its handling of this

claim,” given that the premiums had not been paid and coverage

had lapsed. Id. Therefore, “no rational trier of fact could

find that Jackson National acted unreasonably in its handling of

this claim.” Id. (citing Monahan v. Cnty. of Chesterfield, Va.,

95 F.3d 1263, 1265 (4th Cir. 1996)).

16
 In light of those conclusions, the district court granted

Jackson National’s motion for summary judgment. On July 10,

2013, judgment was entered in Jackson National’s favor.

2.

On July 19, 2013, Wactor moved, pursuant to Federal Rule of

Civil Procedure 59(e), that the district court reconsider the

Opinion. Wactor asserted that the court had misunderstood or

misconstrued her waiver argument. She clarified her position

that, through its course of dealing with the Decedent, Jackson

National undertook a duty “of not only sending, but actually

furnishing” the cancellation notices. See J.A. 494. According

to Wactor, that course of dealing modified the terms of the

policy. See id. (citing Carolina Aviation, Inc. v. Glens Falls

Ins. Co., 51 S.E.2d 757, 761 (S.C. 1949); Keith v. River

Consulting, Inc., 618 S.E.2d 302, 305 (S.C. Ct. App. 2005)).

And, because the policy thereby contained a notice provision,

the Edens decision applied, meaning that Jackson National could

only cancel the policy if it first verified that the Decedent

had actually received the cancellation notices.

By its Reconsideration Order of October 8, 2013, the

district court denied Wactor’s Rule 59(e) motion. The court

observed that a judgment should only be amended pursuant to Rule

59(e) in extraordinary situations involving an intervening

change in law, previously unavailable evidence, or a need to

17
“correct a clear error of law or prevent manifest injustice.”

See Reconsideration Order 1 (internal quotation marks omitted).

The court determined, however, that Wactor had not demonstrated

that she was entitled to relief based on waiver, which is “‘a

voluntary and intentional abandonment or relinquishment of a

known right.’” Id. at 2 (quoting Janasik v. Fairway Oaks Villas

Horizontal Prop. Regime, 415 S.E.2d 384, 387 (S.C. 1992)).

Additionally, the court recognized that “‘the party claiming

waiver must show that the party against whom waiver is asserted

possessed, at the time, actual or constructive knowledge of

[its] rights or of all the material facts upon which they

depended.’” Id. (quoting Janasik, 415 S.E.2d at 387-88)). The

court observed that the record contained no evidence that

Jackson National took measures to ensure that the Decedent

received any of the twenty-two grace-period notices sent before

2010. Nor did the record show that any of those twenty-two

notices were actually received by the Decedent; Wactor asserted

only that “[the] Decedent ‘apparently’ received” those notices.

Id. The court thus concluded that, although “Jackson National

may have established a course of dealing and waived its right to

cancel during the grace period by mailing the lapse notices, the

intent to waive its right to cancel based upon receipt cannot be

established through Jackson National’s prior conduct.” Id. at

2-3. Accordingly, the court denied Wactor’s Rule 59(e) motion.

18
This appeal ensued, and we possess jurisdiction pursuant to 28

U.S.C. § 1291.

II.

In this appeal, Wactor reiterates several contentions that

she had advanced in the district court in opposition to Jackson

National’s summary judgment motion and in support of her own

motion for reconsideration. 6 We review de novo the district

court’s summary judgment award, crediting Wactor’s evidence and

drawing all justifiable inferences in her favor. See Anderson

v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Summary

judgment may be awarded only if “there is no genuine issue as to

any material fact and . . . the movant is entitled to judgment

as a matter of law.” Fed. R. Civ. P. 56(c). We review the

court’s denial of Wactor’s reconsideration motion for abuse of

discretion. See Bogart v. Chapell, 396 F.3d 548, 555 (4th Cir.

6
On appeal, Wactor asserts that a factual dispute exists
regarding whether Jackson National mailed the cancellation
notices because computer-system records upon which Jackson
National relies are unreliable. Wactor failed to raise that
contention, however, in the summary judgment proceedings in the
district court. See J.A. 171-92. Wactor did raise that
contention in support of her reconsideration motion, but the
district court declined to address it. See Reconsideration
Order 3 n.3. Because Wactor failed to timely assert her
argument about Jackson National’s computer system, she has not
preserved that contention for appeal. See In re Under Seal, 749
F.3d 276, 287 (4th Cir. 2014); Holland v. Big River Minerals
Corp., 181 F.3d 597, 605 (4th Cir. 1999).

19
2005). Relief from a judgment is available under Rule 59(e)

only “(1) to accommodate an intervening change in controlling

law; (2) to account for new evidence not available at trial; or

(3) to correct a clear error of law or prevent manifest

injustice.” Id. (internal quotation marks omitted).

Having carefully examined the record and assessed the

parties’ written submissions, together with the argument of

counsel, we are satisfied that summary judgment was properly

awarded and reconsideration properly denied in the district

court. We are therefore content to affirm the judgment on the

sound reasoning of the district court’s Opinion and subsequent

Reconsideration Order.

AFFIRMED

20