UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 99-60443
PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY,
Plaintiff-Counter Defendant-Appellee,
VERSUS
DINESH K. GOEL,
Defendant-Counter Claimant-Appellant.
Appeals from the United States District Court
for the Southern District of Mississippi
December 4, 2001
Before HIGGINBOTHAM, WIENER, and DENNIS, Circuit Judges.
DENNIS, Circuit Judge:
After suffering an injury to his hand that prevented him from
performing surgery, Dr. Dinesh K. Goel sought disability benefits
under a policy issued by Provident Life and Accident Insurance
Company (“Provident”). Although it paid on the claim, Provident
reserved its rights and ultimately brought this declaratory
judgment action to rescind the policy, contending that Dr. Goel did
not satisfy a condition precedent to coverage by failing to cancel
1
a disability policy he held with another insurer. The district
court granted summary judgment to Provident and denied Dr. Goel’s
subsequent motion for relief from judgment. Our consideration of
the record, the briefs, and the arguments presented by both parties
convinces us that summary judgment was appropriate. We further
find that the district court did not abuse its discretion in
denying Dr. Goel’s Rule 60(b) motion for relief from judgment.
Accordingly, we affirm.
I. FACTS AND PROCEDURAL HISTORY
This action concerns the validity of a disability insurance
policy issued by Provident to Dr. Dinesh K. Goel. The
circumstances surrounding the issuance of the policy date back to
1992. At that time, Dr. Goel practiced as a surgical specialist in
Jackson, Mississippi, where he continues to reside. Although Dr.
Goel maintained $11,000 a month in disability coverage with The
Paul Revere Life Insurance Company, his financial obligations and
rapidly rising income caused him to seek additional coverage. To
that end, Dr. Goel contacted Anil Sharma, a personal friend and
Provident agent, to discuss increasing his coverage to
approximately $25,000 a month. Through Mr. Sharma, Dr. Goel
submitted three applications for disability coverage with
Provident.
On his first application, dated November 11, 1992, Dr. Goel
stated that he did not have disability coverage. Provident later
2
issued a policy that provided the $15,000 monthly benefit requested
in the application. But after realizing that he did not disclose
his Paul Revere coverage on the Provident application, Dr. Goel
allowed this policy to lapse through non-payment of the first
premium.
On June 21, 1993, Dr. Goel submitted his second application to
Provident. In a letter dated September 27, 1993, a Provident Field
Underwriter informed Mr. Sharma that “[i]n order for Mr. Goel to
qualify for the $25,000 of benefit you requested, his income level
would need to be upwards of $1,000,000.00 annually, to be
considered as an exception to the Maximum Issue Rule.”1 Based on
his $400,000 income in 1992, Provident advised Dr. Goel that it
would issue him $15,000 a month in coverage if he agreed to cancel
his Paul Revere policy.2 Because Dr. Goel was unwilling to cancel
his Paul Revere coverage, he allowed the second application to
expire.
In 1993, Dr. Goel’s income increased to over $719,000. This
significant increase brought about Dr. Goel’s third and final
application to Provident on February 28, 1994. On his application,
Dr. Goel disclosed his $11,000 policy with Paul Revere but answered
“N/A” to the following question:
4.(f) If any coverage is to be replaced by the coverage
applied for, the following coverage(s) will be
1
R. at 504.
2
See id.
3
permanently cancelled within 30 days of the issue date or
effective date, whichever is later, of the insurance
coverage issued pursuant to this application.
Co. Name___________________ Amount $________________
In a “Personal History Interview” conducted in connection with his
application, Dr. Goel again disclosed his Paul Revere policy and
further indicated that he would not terminate his existing
coverage. But Provident also maintained its position concerning
the Paul Revere coverage: it would provide $15,000 a month in
coverage only if Dr. Goel agreed to cancel his Paul Revere policy.
Provident therefore prepared an Amendment to Dr. Goel’s application
that changed his answer to Question 4(f) from “N/A” to “Paul
Revere.”
On June 28, 1994, Provident approved and printed, along with
the Amendment, a disability policy for Dr. Goel that provided a
monthly benefit of $15,000. Instructions accompanying the
Amendment and the policy directed the agent to obtain Dr. Goel’s
signature on the Amendment before releasing the policy to him.3
The Amendment, relating to cancellation of the Paul Revere
coverage, stated:
In consideration of the issuance of the policy to which
this amendment is attached, it is understood and agreed
that my signed application dated February 28, 1994 is
3
Provident actually sent two copies of the Amendment along with
the policy and instructed the agent to have Dr. Goel sign both the
copy that would be returned to Provident’s Home Office and the copy
that would remain with the policy. Although the Home Office
received its original signed copy, Dr. Goel did not sign the copy
attached to his policy.
4
amended as follows:
THE ANSWER TO QUESTION 4F IS CHANGED TO READ: “PAUL
REVERE”
Neither Dr. Goel nor the agent, Mr. Sharma, recalls the Amendment
or when it was signed.4 But Provident did receive the signed
Amendment, and a copy remains in its underwriting file.5 Moreover,
Dr. Goel retained the policy as issued and paid the monthly
premiums.
On October 26, 1996, Dr. Goel suffered a disabling injury to
his hand that prevented him from performing surgery. He later
sought benefits under the Provident policy. During its
investigation of his claim, Provident discovered that Dr. Goel had
not cancelled his Paul Revere coverage. Provident therefore
elected to pay benefits under a reservation of rights.
On April 16, 1997, Provident filed a Complaint for Declaratory
Judgment and Other Relief seeking to rescind and cancel the
4
Although Provident did not print the policy and the Amendment
until June 28, 1994, the signed Amendment bears the date of June
26, 1994–-an impossibility. Dr. Goel argues that this discrepancy
creates a genuine issue of material fact concerning the validity of
the signed Amendment. But see infra Part II.B.(2).
5
Lester Duncan, Provident’s Rule 30(b)(6) underwriting witness,
testified in his deposition that if the signed Amendment had not
been returned in a timely manner, the policy would have
automatically been cancelled as of July 8, 1994, its original
effective date.
Mr. Duncan also testified that during the period of time
relevant to this suit, Provident maintained its records on
microfilm. After a document was microfilmed, the original was
destroyed. As a result, the paper copy of the Amendment in the
underwriting file is a copy made from the microfilm.
5
disability policy and recover all benefits paid to Dr. Goel. In
its Complaint, Provident alleged that it issued the policy to Dr.
Goel “on the condition or promise of Goel that he would cancel his
Paul Revere coverage.” According to Provident, Dr. Goel’s failure
to cancel the Paul Revere policy rendered the Provident policy
“voidable.” Dr. Goel answered the Complaint and filed a
Counterclaim demanding damages from Provident for bad faith breach
of contract. Dr. Goel also invoked the incontestability provision
of the Provident policy6 and raised affirmative defenses of waiver,
estoppel, and fraud. Provident denied Dr. Goel’s allegations in
its Answer to the Counterclaim.
On February 20, 1998, Dr. Goel filed a Motion for Partial
Summary Judgment on his contract claim; Provident responded three
days later with a Motion for Summary Judgment on its complaint. On
September 28, 1998, after hearing oral argument on the parties’
motions, the district court granted Provident’s motion and denied
Dr. Goel’s motion. In reaching its decision, the court relied on
the Amendment to Question 4(f) of Dr. Goel’s application and found
that Dr. Goel breached a condition precedent to coverage by failing
to cancel his Paul Revere policy. The district court reasoned that
the policy–-presented along with the Amendment to the application–-
6
Page 13 of the policy, under the heading “TIME LIMIT ON
CERTAIN DEFENSES,” provides that “[a]fter two years from the
Effective Date of this policy, no misstatements, except fraudulent
misstatements, made by you in the application for this policy will
be used to void the policy or to deny a claim for loss incurred or
disability that starts after the end of such two year period.”
6
constituted a counter-offer by Provident that Dr. Goel accepted by
signing the Amendment, retaining the policy, and paying the
required premiums.
Following the entry of judgment, Provident filed a Motion to
Amend Final Judgement asking the district court to “specify the
amount of the Plaintiff’s recovery and the amount of interest it is
entitled to receive until the judgment is paid.” Dr. Goel later
filed a Rule 60(b)7 Motion for Relief from Judgment, in which he
claimed to have “new evidence indicating that [he] never signed the
application amendment, but that his signature was forged.” This
“new evidence” consisted of a report prepared by Mr. Frank Hicks,
a handwriting expert who concluded that Dr. Goel’s signature on the
Amendment was probably forged. On May 24, 1999, the court entered
an Amended Final Judgment ordering Dr. Goel to pay Provident
$274,413.38, plus post-judgment interest on this amount from
September 28, 1998, until paid, less an offset of $36,401.40 for
premiums paid. Dr. Goel filed a Notice of Appeal on June 22,
1999.
Although he had filed a Notice of Appeal from the Amended
Final Judgment, Dr. Goel’s Rule 60(b) motion was still pending in
the district court. In August 1999, the district court
“terminated” the motion, reasoning that Dr. Goel’s appeal rendered
the motion moot. Dr. Goel submitted a motion for reconsideration
7
FED. R. CIV. P. 60(b).
7
of that ruling, contending that a Rule 60(b) motion should be
addressed on the merits rather than terminated as moot. The
district court agreed with this contention. Therefore, on March
29, 2000, after full review and consideration of the motion, the
district court denied it on the merits. In addition to his appeal
from the Amended Final Judgment of June 22, 1999, Dr. Goel also
appeals from the denial of his Rule 60(b) motion.
II. SUMMARY JUDGMENT
A. Standard of Review
“We review a district court’s award of summary judgment under
the same standards that the district court applied to determine
whether summary judgment was appropriate.”8 “Summary judgment is
appropriate if the record discloses ‘that there is no genuine issue
as to any material fact and that the moving party is entitled to a
judgment as a matter of law.’”9 In making such a determination,
the district court must look to “the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any. . . .”10 It therefore follows that “our
review is confined to an examination of materials before the
8
State Farm Fire & Cas. Ins. Co. v. Keegan, 209 F.3d 767, 768
(5th Cir. 2000) (citing Herrera v. Millsap, 862 F.2d 1157, 1159
(5th Cir. 1989)).
9
Id. (quoting FED. R. CIV. P. 56(c)).
10
FED. R. CIV. P. 56(c).
8
[district] court at the time the ruling was made; subsequent
materials are irrelevant.”11
The party moving for summary judgment must establish that
there are no genuine issues of material fact. “Once the moving
party makes that showing, however, the burden shifts to the
nonmoving party to show that summary judgment is not appropriate.”12
Thus, to defeat a motion for summary judgment, the nonmoving party
must “go beyond the pleadings and by her own affidavits, or by the
‘depositions, answers to interrogatories, and admissions on file,’
designate ‘specific facts showing that there is a genuine issue for
trial.’”13 “Credibility determinations, the weighing of the
evidence, and the drawing of legitimate inferences from the facts
are jury functions, not those of a judge. . . . The evidence of
the non-movant is to be believed, and all justifiable inferences
11
Nissho-Iwai Am. Corp. v. Kline, 845 F.2d 1300, 1307 (5th Cir.
1988) (citing Ingalls Iron Works Co. v. Fruehauf Corp., 518 F.2d
966, 967 (5th Cir. 1975)). See also Little v. Liquid Air Corp.,
37 F.3d 1069, 1071 n.1 (5th Cir. 1994) (en banc) (We are “limited
to the summary judgment record and the plaintiffs may not advance
on appeal new theories or raise new issues not properly before the
district court to obtain reversal of the summary judgment.”); 11
JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE ¶ 56.41[3][c] (3d ed.
1997) (“As a general rule, arguments and evidence not presented in
the district court in connection with a summary judgment motion are
waived on appeal and the appellate court will be unable to consider
these materials in its review of the district court’s decision.”).
12
Fields v. City of S. Houston, 922 F.2d 1183, 1187 (5th Cir.
1991).
13
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (quoting
FED. R. CIV. P. 56).
9
are to be drawn in his favor.”14
B. Analysis
On appeal, Dr. Goel raises four arguments as to why summary
judgment was inappropriate: (1) the Amendment is ambiguous and,
construed against Provident, does not support recission of the
policy; (2) a factual dispute exists as to whether Dr. Goel signed
the Amendment; (3) the district court’s analysis disregarded Dr.
Goel’s claims of waiver, estoppel, fraud, and bad faith; and (4)
the incontestability provision in the policy probibits Provident
from denying coverage.
(1) Ambiguity and Contract Construction
Dr. Goel contends that the language of Question 4(f)15 on the
Provident application is ambiguous because it only asks for the
name of the policy to be cancelled “if” coverage is to be replaced;
it does not address the threshold issue of whether coverage will be
replaced. Thus, in his view, “[t]he particular wording of the
response [to Question 4(f)], even if amended, does not
14
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
15
4.(f) If any coverage is to be replaced by the
coverage applied for, the following coverage(s) will be
permanently cancelled within 30 days of the issue date or
effective date, whichever is later, of the insurance
coverage issued pursuant to this application.
Co. Name___________________ Amount $________________
10
unambiguously require cancellation of the Paul Revere policy.”16
This ambiguity, according to Dr. Goel, required the district court
to construe the language in the insurance contract against
Provident and in favor of coverage.
Mississippi courts strictly construe any ambiguity in an
insurance policy against the insurer.17 A condition tending to
defeat a policy “must be expressed or so clearly implied that it
cannot be misconstrued.”18 The fact remains, however, that
“insurance policies are contracts, and their construction and
interpretation ‘is according to the same rules which govern other
contracts.’”19 In Cherry v. Anthony, Gibbs, Sage,20 the Supreme
Court of Mississippi offered the following explanation of those
rules:
The most basic principle of contract law is that
contracts must be interpreted by objective, not
subjective standards. A court must effect a
determination of the meaning of the language used, not
the ascertainment of some possible but unexpressed intent
of the parties. The mere fact that the parties disagree
16
Appellant’s Opening Brief at 21-22.
17
See Burton v. Choctaw County, 730 So. 2d 1, 8 (Miss. 1997).
18
Home Ins. Co. v. Thunderbird, Inc., 338 So. 2d 391, 394 (Miss.
1976) (quoting 2 GEORGE J. COUCH, COUCH ON INSURANCE § 15:93 (2d ed.
1959)).
19
Keith A. Rowley, Contract Construction and Interpretation:
From the “Four Corners” to Parol Evidence (And Everything in
Between), 69 MISS. L.J. 73, 181 (1999) (quoting Krebs v. Strange,
419 So. 2d 178, 181 (Miss. 1982)).
20
501 So. 2d 416 (Miss. 1987).
11
about the meaning of a provision of a contract does not
make the contract ambiguous as a matter of law. Parole
[sic] evidence as to surrounding circumstances and intent
may be brought in where the contract is ambiguous, but
where . . . the contract . . . [is] unambiguous it has no
place. The parties are bound by the language of the
instrument.21
Thus, “[u]nder Mississippi contract law, if an insurance policy is
unambiguous, its terms must be given their plain meaning and
enforced as written.”22 Furthermore, “[w]hen construing a contract,
. . . [the court must] read the contract as a whole, so as to give
effect to all of its clauses.”23
Mississippi law also provides that an application for
insurance is simply an offer to contract.24 The potential insurer
is free to accept the offer as written or it may issue a policy
different from the one requested in the application.25 In the
latter case, the policy itself is a counter-offer, and “the rule is
that after such a counter-offer, the . . . [applicant] must accept
21
Id. at 419 (internal quotations and citations omitted). See
also Rowley, supra note 19, at 145-46 (“Generally, Mississippi
courts will not consider evidence of surrounding circumstances
unless their ‘four corners’ analysis of the written agreement
suggests that the agreement is ambiguous, incomplete, or both.”).
22
Am. Guar. & Liab. Ins. Co. v. 1906 Co., 129 F.3d 802, 805 (5th
Cir. 1997) (citing Am. States Ins. Co. v. Nethery, 79 F.3d 473,
475 (5th Cir. 1996) & Aero Int’l, Inc. v. United States Fire Ins.
Co., 713 F.2d 1106, 1109 (5th Cir. 1983)).
23
Brown v. Hartford Ins. Co., 606 So. 2d 122, 126 (Miss. 1992).
24
Interstate Life & Accident Ins. Co. v. Flanagan, 284 So. 2d
33, 36 (Miss. 1973).
25
Id.
12
or reject the policy issued according to the terms of the
insurer.”26
The district court applied these principles to the facts of
this case in the following manner:
[T]his court is satisfied that Goel’s application in
which he requested $15,000.00 a month in coverage in
addition to (i.e., without canceling) his existing Paul
Revere coverage was an offer. Provident declined to
accept his offer, as it had in the past. When Provident
issued Goel a policy with an amendment to the application
that required him to cancel his Paul Revere coverage, the
policy constituted a counter-offer. The evidence is
undisputed that Goel signed the amendment, retained the
policy and paid the premiums required by the policy, and,
by doing so, he accepted the policy as written by
Provident. Looking at the “four corners” of the
Provident policy, the court finds that the policy
unambiguously required that Goel cancel his Paul Revere
coverage as an express condition and consideration for
receiving the Provident policy.27
We agree with the district court. “[T]he application attached
to or giving rise to an insurance policy is a part of the insurance
contract, and the policy should be construed together with the
application.”28 Here, the insurance contract includes the policy,
Dr. Goel’s application, and the Amendment to the application.
Reading the contract as a whole, we find that it is unambiguous;
its terms must therefore be given their plain meaning and enforced
as written. Turning, with this obligation in mind, to Question
26
Id.
27
R. at 622 (paragraph break omitted).
28
Rowley, supra note 19, at 184 (citing Flanagan, 284 So. 2d at
35).
13
4(f), it becomes clear that the words “If any coverage is to be
replaced” mean that information is required only from those
applicants who are replacing existing coverage. Regardless, then,
of Dr. Goel’s subjective intent, by responding “Paul Revere” to
Question 4(f), he agreed to permanently cancel his Paul Revere
coverage within 30 days of the effective date of the Provident
policy. Any other construction would render Question 4(f)
meaningless. Thus, we reject Dr. Goel’s contention that the
language of and amended response to Question 4(f) is ambiguous, and
we decline to reverse the district court on this ground.
(2) Validity of Dr. Goel’s Signature on the Amendment
Mississippi law prohibits the alteration of a written
application for insurance without the “written consent” of the
applicant.29 Dr. Goel asserts that he did not sign the Amendment
to his application, and, as a consequence, the Amendment
constitutes an alteration without his written consent in violation
of Mississippi law. In determining whether a genuine issue of
material fact exists with respect to the validity of Dr. Goel’s
signature on the Amendment so as to preclude summary judgment, we
may only consider evidence in the record at the summary judgment
stage.30
29
MISS. CODE ANN. § 83-9-11(2) (1972).
30
Nissho-Iwai, 845 F.2d at 1307.
14
On summary judgment, Dr. Goel stated that while the signature
looked like his, he did not remember signing the Amendment.31 The
district court noted that Dr. Goel “did not deny that he signed the
amendment in his response to plaintiff’s motion for summary
judgment. Defense counsel also admitted at oral argument that Goel
signed the copy of the amendment that was returned to Provident.”32
In Dr. Goel’s deposition, when asked about the Amendment to the
application changing his answer to Question 4(f) to read “Paul
Revere,” he did not allege forgery or fraud:
Q. Okay. Had you ever seen [the Amendments] before?
A. I don’t remember seeing them before.
Q. All right. Is that your signature on there?
A. Yes. It’s a photocopy of my signature.
Q. It’s a what?
A. This is a photocopy of my signature.
Q. Well, this--the document is a photocopy?
A. Yes.
....
Q. Okay. Is that your handwriting [on the Amendment]
where it says “Signed at Jackson, Mississippi this
31
Despite his lack of recall, in response to Provident’s motion
for summary judgment, Dr. Goel stated that in his “best judgment,”
the Amendment was “probably executed in the event Provident decided
to write the entire $25,000.00 coverage.” R. at 573.
32
R. at 619.
15
26th day of June”?
A. Yes, that’s my handwriting.
Q. Okay. Well, as we sit here today, do you have any
question in your mind whether or not you actually
got those documents and signed them at some point?
A. Well, when these documents came unsigned with my
policy, I did not pay attention one way or the
other. I just had a policy. I briefly looked at
it. I put it in my file and forgot about it. I
thought I have [sic] coverage and went my way.33
The only instance where Dr. Goel denied signing the Amendment
was in his Answer to Provident’s Complaint For Declaratory Judgment
and Other Relief. Paragraph 7 of Provident’s Complaint states, in
part: “On or about June 26, 1994, Goel agreed, by a signed
amendment to his application, that he would cancel his Paul Revere
coverage within 30 days of the issue date or effective date of his
Provident policy.” Correspondingly, Paragraph 7 of Dr. Goel’s
Answer states, in full, that “[t]he allegations in Paragraph 7 are
denied.” Not until he submitted his Rule 60(b) motion did Dr. Goel
resurrect this assertion. Indeed, the above general denial is the
only portion of the record cited by Dr. Goel in his appellate brief
to support his current claim that he alleged forgery throughout the
course of this litigation. After an exhaustive search of the
33
R. at 718-20.
16
record, we find that at no time prior to the entry of summary
judgment did Dr. Goel submit evidence demonstrating that he did not
sign the Amendment.
Even if Dr. Goel had alleged forgery and directed the district
court to his Answer in support of this contention, such a general
denial in an original pleading is insufficient to create an issue
of material fact. “Rule 56(e) itself provides that a party
opposing a properly supported motion for summary judgment may not
rest upon mere allegation or denials of his pleading, but must set
forth specific facts showing that there is a genuine issue for
trial.”34 “[T]he apparent existence of a factual dispute based on
a denial in the answer or an allegation in the complaint does not
automatically defeat a Rule 56 motion. If it did, the rule could
be rendered nugatory by clever pleading.”35 In fact, the purpose
of the 1963 revision to Rule 56(e) was to prevent the nonmoving
party from merely relying on his pleadings when the moving party
supported his motion for summary judgment with affidavits and other
evidence.36
In sum, to defeat Provident’s motion for summary judgment, Dr.
Goel was required to “present affirmative evidence” and “set forth
34
Anderson, 477 U.S. at 256.
35
10A CHARLES A. WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 2712, at
211 (3d ed. 1998).
36
Id.
17
specific facts showing that there [wa]s a genuine issue for
trial.”37 Dr. Goel’s unsworn Answer to Provident’s complaint is
insufficient to satisfy this burden.38 We therefore refuse to
disturb the district court’s ruling on this ground.39
(3) “Four Corners,” Waiver, Estoppel, Fraud, and Bad
Faith
Dr. Goel next argues in his brief that the district court’s
“four corners” analysis disregarded substantial evidence of
knowledge, bad faith, and inequitable conduct by Provident
supporting Dr. Goel’s claims of waiver, estoppel, fraud, and bad
37
Anderson, 477 U.S. at 256-57.
38
See Ratner v. Young, 465 F. Supp. 386, 389 n.5 (D.V.I. 1979)
(“A non-movant cannot rely upon his own unverified pleading to
contradict factual matters properly before the court in support of
the motion [for summary judgment].”).
39
Dr. Goel further attempts to create a factual issue regarding
the Amendment by contending that irregularities concerning the date
of the Amendment and Provident’s destruction of the original policy
preclude summary judgment. Because we find no genuine issue of
material fact as to the validity of Dr. Goel’s signature, we also
find that the date discrepancy and Provident’s internal document
management procedures do not render summary judgment inappropriate.
Indeed, Provident concedes that the date on the Amendment, June 26,
1994, is incorrect because the Amendment was not printed until June
28, 1994. But this issue is neither disputed nor material, and
therefore it does not preclude summary judgment. Furthermore, the
fact that Provident’s physical copy of the Amendment was
microfilmed and then destroyed does not constitute a genuine issue
of material fact. Although the facts and legitimate inferences
therefrom are to be viewed in a light most favorable to Dr. Goel,
nefarious intention on the part of Provident is not a legitimate
inference that can be drawn from its document management
procedures.
18
faith. As a preliminary matter, we reject Dr. Goel’s contention
that the district court erred in conducting a “four corners”
analysis of the insurance contract. The prevailing method of
contractual construction and interpretation under Mississippi law
requires courts to make a threshold finding that the “four corners”
of the instrument reveal some ambiguity before resorting to other
interpretational aids.40 Employing this method, the district court
correctly found the insurance contract to be unambiguous and
enforced its terms as written. In view of our earlier
determination of the plain meaning of Dr. Goel’s contract with
Provident, his scattershot allegations of inequitable conduct by
Provident are unpersuasive.
Although Dr. Goel identifies fraud and bad faith as grounds
for his appeal, he does not discuss the elements required to
establish these claims. Moreover, his contention that “Mr.
Sharma’s actions in delivering a policy that differed materially
from the one requested by Goel” constitute substantial evidence of
bad faith that is imputed to Provident through agency principles
further ignores Mississippi law. “In Mississippi, an insurer is
under no duty to insure every applicant and is in fact free to
state the terms upon which insurance may be obtained.”41 Thus,
40
Rowley, supra note 19, at 86. See generally Pursue Energy
Corp. v. Perkins, 558 So. 2d 349 (Miss. 1989).
41
Gladney v. Paul Revere Life Ins. Co., 895 F.2d 238, 241 (5th
Cir. 1990) (citing Flanagan, 284 So. 2d at 36).
19
Provident was free to make a counter-offer to Dr. Goel upon receipt
of his application.42 Finally, to the extent that Dr. Goel invites
us to ignore the summary judgment record and consider his new
suggestion that Provident forged his signature on the Amendment, we
decline the invitation.43 Because Dr. Goel failed to present
affirmative evidence of fraud and bad faith to the district court,
these claims do not preclude summary judgment.
Dr. Goel’s waiver and estoppel arguments also lack merit.
Knowledge of the contents of an insurance policy is imputed to an
insured as a matter of law.44 Moreover, “[a] person cannot avoid
a signed, written contract on the grounds that he did not read
it.”45 Despite the clarity of these bedrock principles, Dr. Goel
asserts that he never intended to cancel his Paul Revere coverage.
He further contends that Provident waived, or is estopped from
asserting, the condition precedent to coverage because Mr. Sharma
possessed knowledge, imputable to Provident, that Dr. Goel would
not cancel his Paul Revere policy.
“It is a long-settled rule of law in Mississippi that the
doctrines of waiver and estoppel may not operate to create coverage
42
See supra Part II.B.(1).
43
See Nissho-Iwai, 845 F.2d at 1307.
44
Cherry, 501 So. 2d at 419.
45
Hicks v. Bridges, 580 So. 2d 743, 746 (Miss. 1991).
20
or expand existing coverage to risks expressly excluded.”46 But Dr.
Goel relies on a “counterpart to the rule just stated: that a
forfeiture provision may be waived.”47 The Supreme Court of
Mississippi has construed conditions precedent as forfeiture
provisions. For example, in Southern United Life Insurance Co. v.
Caves,48 the agent knew that a credit life insurance applicant had
a serious heart condition at the time he completed the application.
The policy provided, as a condition precedent to coverage, that the
insured had to be in insurable health at the time of issuance.
When Mr. Caves died of a heart attack, the insurer discovered that
he did not meet the condition precedent and therefore rejected his
widow’s claim. The court found that the agent “accepted payment of
the premium knowing of the serious pre-existing condition of the
insured which she failed to communicate to the company. As a
matter of law, this knowledge was imputed to the principal,
Southern United. The condition of insurability was effectively
waived and the acts are binding upon the company.”49
A critical distinction exists between Caves and the present
46
Pongetti v. First Continental Life & Accident Co., 688 F.
Supp. 245, 248 (N.D. Miss. 1988) (citing Mississippi Hosp. & Med.
Serv. v. Lumpkin, 229 So. 2d 573, 576 (Miss. 1969)).
47
Id. (citing Morris v. Am. Fid. Fire Ins. Co., 173 So. 2d 618
(Miss. 1965)).
48
481 So. 2d 764 (Miss. 1985).
49
Id. at 767.
21
matter. While the agent in Caves possessed knowledge of existing
facts on which the insurer would have based a refusal to issue
coverage, the record in this case contains no indication of similar
misconduct on the part of Mr. Sharma. Put differently, Mr. Sharma
did not fail to inform Provident of an existing circumstance or
condition concerning Dr. Goel that the company would have taken
into account in deciding whether to issue a policy. It follows,
then, that “an insurance company is not bound by the knowledge of
its soliciting agent as to the future intention of an insured in
regard to violation of any conditions of the policy. . . .”50 A
contrary conclusion would disregard the cardinal principles of
Mississippi contract law. Provident was free to condition coverage
on Dr. Goel’s permanent cancellation of his existing policy.51 Dr.
Goel agreed to this condition in his amended response to Question
4(f) on the Provident application. Even if he never intended to
cancel his Paul Revere coverage within 30 days of the effective
date of the Provident policy, and even if Mr. Sharma knew this,
“our concern is not nearly so much what the parties may have
intended as it is with what they said, for the words employed are
by far the best resource for ascertaining intent and assigning
50
3 LEE R. RUSS & THOMAS F. SEGALLA, COUCH ON INSURANCE 3D § 49:5, at
49-10 (1995).
51
See Gladney, 895 F.2d at 241.
22
meaning with fairness and accuracy.”52 Because Dr. Goel promised
to cancel his Paul Revere coverage after receiving the Provident
policy, the equitable doctrines of waiver and estoppel do not
permit him to “benefit from his own dereliction.”53
(4) The Incontestability Provision
Dr. Goel argues that the two-year incontestability provision
in the Provident policy prohibits the company from rescinding the
policy. The provision states that “[a]fter two years from the
Effective Date of this policy, no misstatements, except fraudulent
misstatements, made by you in the application for this policy will
be used to void the policy or to deny a claim for loss incurred or
disability that starts after the end of such two year period.”54
The district court found this provision inapplicable:
This is not a case of a mere misstatement in the
application which the law deems waived if not asserted
within two years. Provident seeks rescission because
Goel’s failure to cancel his Paul Revere coverage
constitutes a failure of consideration and/or a breach of
an express condition upon which the policy was issued.
It is a breach which goes to the heart of their
agreement. If Goel had not agreed to the amendment,
there would have been no meeting of the minds and,
52
UHS-Qualicare, Inc. v. Gulf Coast Cmty. Hosp., Inc., 525 So.
2d 746, 754 (Miss. 1987).
53
Gladney, 895 F.2d at 242.
54
Mississippi law requires policies issued for delivery in the
state to contain this or a similarly worded provision. See MISS.
CODE ANN. § 83-9-5(1)(b) (1972).
23
therefore, no agreement.55
Dr. Goel contends that the district court erred in failing to
view the Amendment as a misstatement. We find, however, that his
reliance on the incontestability provision is misplaced. Under
Mississippi law, a misstatement or a misrepresentation concerns
past or present facts, not promises of future conduct.56 Only when
a promise of future conduct is made with the present intent not to
perform can such a promise constitute a misrepresentation.57 In his
amended response to Question 4(f) on his application, Dr. Goel
promised to cancel his Paul Revere policy after receiving his new
coverage. Because this is a promise of future conduct, it does not
qualify as a misstatement under Mississippi law unless it was made
with the present intent not to perform. But Dr. Goel asserts that
if he signed the Amendment, he did indeed do so with the present
intent not to perform. We find this assertion incredible for two
reasons. First, it runs headlong into the fraudulent
misrepresentation exception to the incontestability provision.
Second, in his deposition, Dr. Goel testified that he does not
remember signing the Amendment. We therefore cannot take seriously
his self-serving characterization of his own mental state at the
55
R. at 622-23.
56
Cockerham v. Kerr-McGee Chem. Corp., 23 F.3d 101, 104 (5th
Cir. 1994).
57
Bank of Shaw v. Posey, 573 So. 2d 1355, 1360 (Miss. 1990).
24
time he engaged in an act for which he has no recollection.
We conclude that Dr. Goel has failed to demonstrate that
summary judgment was inappropriate.
III. RULE 60(B)
A. Standard of Review
“The decision to grant or deny 60(b) relief lies in the sound
discretion of the district court and will be reversed only for an
abuse of that discretion.”58
B. Analysis
The linchpin of Dr. Goel’s appeal from the denial of his Rule
60(b) motion is his argument that because the district court did
not give reasons for its order,59 this court should remand the case
for further evaluation. Relying on this court’s decision in
Schwarz v. Folloder,60 Dr. Goel contends that the district court
must give reasons for its decision so that the appellate court can
58
New Hampshire Ins. Co. v. Martech USA, Inc., 993 F.2d 1195,
1200 (5th Cir. 1993) (citing Brown v. Petrolite Corp., 965 F.2d 38
(5th Cir. 1992)).
59
Although the district court did not provide a statement of
reasons as to why it denied relief, it did not blithely dismiss Dr.
Goel’s motion without consideration. The district court’s order
denying the motion states that the court “reviewed and fully
considered the briefs of the parties regarding the defendant’s
motion to be relieved from final judgment in this case” and
contains reasons as to why the court considered the motion at all,
as it had originally dismissed the motion as moot because Dr. Goel
had already filed a notice of appeal.
60
767 F.2d 125, 133 (5th Cir. 1985).
25
exercise “meaningful review.” The case on which he relies did not,
however, establish the per se rule that Dr. Goel currently
advocates. Schwarz involved an appeal by a prevailing defendant
who sought costs and attorney’s fees. The district court denied
the defendant’s claims “without holding an evidentiary hearing,
issuing an opinion, or making any written findings of fact or
conclusions of law.”61 Remand was appropriate because it was
unclear whether the district court recognized that its dismissal of
the plaintiff’s suit with prejudice meant that the defendant was a
prevailing party–-a prerequisite to recovering costs.62 This court
noted that “a dismissal with prejudice is tantamount to a judgment
on the merits” and concluded that the defendant, as the clearly
prevailing party, should ordinarily have been entitled to costs.63
This court further noted that in view of the district court’s
silence, “it [wa]s not even possible to infer from the court’s
order whether the court erroneously believed that [the defendant]
was not a prevailing party, or whether it believed that [the
defendant], despite being a prevailing party, was not entitled to
costs for other reasons.”64 Finding that the defendant also “made
a colorable claim for attorney’s fees [by] arguing that the
61
Id. at 129.
62
Id. at 130.
63
Id.
64
Id. at 131.
26
appellees knew or should have known of the falsity of essential
factual allegations in their complaint,” the court concluded that
“[w]here a district court fails to explain its decision to deny
attorney’s fees, we do not know whether the decision was within the
bounds of discretion or was based on an erroneous legal theory.”65
Other circuit courts confronting the failure of a district
court to assign reasons for a ruling have refused to find an abuse
of discretion where the merits of the appellant’s claim can be
easily addressed. Thus, the appellant must establish a colorable
claim before remand is justified. For example, in Barnhill v.
Doiron,66 an appellant argued that the district court’s denial of
his motion for appointment of counsel without assigning reasons
constituted a per se abuse of discretion. The Seventh Circuit
rejected the petitioner’s per se argument as having “no basis in
law” and then evaluated the substance of the petitioner’s motion.67
Because the “legal issues raised by [the petitioner’s] complaint
[we]re straightforward and readily comprehensible” and “[t]he
assistance of counsel would have added little–-if indeed anything–-
to his understanding of the relevant issues,” the court found no
abuse of discretion.68
65
Id. at 133.
66
958 F.2d 200 (7th Cir. 1992).
67
Id. at 202.
68
Id. at 203.
27
Although we agree that district courts should provide
statements of reasons for their decisions, as “[a] statement of
reasons is one of the handmaidens of judging,”69 because the legal
issues raised by Dr. Goel’s appeal of the denial of his Rule 60(b)
motion are straightforward and readily comprehensible, we decline
to hold that the district court’s dismissal of Dr. Goel’s motion
without the articulation of reasons is a per se abuse of discretion
demanding remand, and we undertake a review of the merits of his
motion to determine whether he raises a colorable claim.
“[T]he court may relieve a party . . . from a final judgment
. . . for . . . newly discovered evidence which by due diligence
could not have been discovered in time to move for a new trial
under Rule 59(b).”70 “To succeed on a motion brought under 60(b)(2)
based on newly discovered evidence, the movant must demonstrate (1)
that it exercised due diligence in obtaining the information and
(2) ‘the evidence is material and controlling and clearly would
have produced a different result if presented before the original
judgment.’”71 “The only issues on an appeal of a Rule 60(b) motion
are: the propriety of the denial of relief . . . and whether the
court abused its discretion in denying relief.”72
69
Schwarz, 767 F.2d at 133.
70
FED. R. CIV. P. 60(b)(2).
71
Martech, 993 F.2d at 1200-01 (quoting Brown, 965 F.2d at 50).
72
12 MOORE ET AL., supra note 11, ¶ 60.68[1].
28
Dr. Goel contends that his Rule 60(b) motion presented
substantial new evidence questioning the validity of the signature
on the Amendment to his Provident application. In support of his
motion, Dr. Goel submitted an affidavit claiming that he could not
have signed the Amendment because he was at a conference in San
Francisco from June 24, 1994 to June 30, 1994. Dr. Goel stated
that he did not raise this claim earlier because he did not
remember the San Francisco trip until his daughter reminded him of
it in January of 1999. Dr. Goel also submitted the unsworn report
of a handwriting specialist that, based on a comparison of the
signature on the Amendment with the signatures on several business
checks given to him by Dr. Goel, concludes that the evidence,
although falling short of a “‘virtually certain’ degree of
confidence,” does “point[] rather strongly toward the questioned
and known writings not having been written by the same
individual.”73
Dr. Goel has not shown that the evidence in his affidavit and
in the handwriting report is newly discovered evidence that by due
diligence could not have been discovered in time to move for a new
trial. “Unexcused failure to produce the relevant evidence at the
original trial can be sufficient without more to warrant denial of
73
R. at 743.
29
a rule 60(b) motion.”74 Moreover, the failure to remember or
discover one’s own actions after having forgotten them does not
reflect the exercise of due diligence. After all, “[w]ere the
belated recalling of facts that were once well known and since
forgotten to qualify as ‘newly discovered,’ the teeth of the rule
would be substantially blunted.”75 The key to Dr. Goel’s motion is
his contention that his signature on the Amendment was forged. But
Dr. Goel had access to the copy of the signed Amendment long before
summary judgment was entered against him, and the importance of the
Amendment to the outcome of this case was evident from the
beginning. Thus, Dr. Goel’s failure both to inquire into his own
whereabouts during the last week of June 1994 and to consult with
a handwriting expert prior to summary judgment falls short of the
74
Kentucky Fried Chicken Corp. v. Diversified Packaging Corp.,
549 F.2d 368, 391 (5th Cir. 1977) (citing AG Pro, Inc. v. Sakraida,
512 F.2d 141, 143-44 (5th Cir. 1975), rev’d on other grounds, 425
U.S. 273 (1976)). See also Longden v. Sunderman, 797 F.2d 1095,
1103 (5th Cir. 1992).
75
In re United States, 565 F.2d 173, 176 (1st Cir. 1977).
Although the court in In re United States concluded that the
defendant in a criminal case could not, after a verdict, obtain a
new trial under FED. R. CRIM. P. 33 by introducing a document he had
signed four years earlier, we find the reasoning of the First
Circuit persuasive in this case, a civil challenge to the court’s
judgment under Rule 60(b). See also United States v. Douglas, 874
F.2d 1145, 1163 n.32 (7th Cir. 1989) (noting that the defendant’s
attempt, after trial, to characterize subsequently released
government reports “detailing his role as a[] [police] informant as
‘newly discovered’ is somewhat disingenuous, [as] . . . [a]n
individual is expected to remember his own actions . . .”),
overruled on other grounds, United States v. Durrive, 902 F.2d
1221, 1225 (7th Cir. 1990).
30
requirements of due diligence.
Additionally, commentators have described as “self-evident”
the requirements that newly discovered evidence be “both admissible
and credible,” as “[t]here is no reason to set aside a judgment on
the basis of evidence that could not be admitted at a new trial or,
if admitted, would be unconvincing.”76 The handwriting report
submitted with Dr. Goel’s Rule 60(b) motion would not be properly
considered in evaluating the motion for summary judgment, as the
report concerning the authenticity of Dr. Goel’s signature on the
Amendment is unsworn. “Unsworn expert reports . . . do not qualify
as affidavits or otherwise admissible evidence for [the] purpose of
Rule 56, and may be disregarded by the court when ruling on a
motion for summary judgment.”77 As for Dr. Goel’s affidavit, his
contention that he was out of town on June 26, 1994 is unavailing
as Provident does not dispute that the Amendment bears an incorrect
date. It is hornbook law that “[t]he fact that a written contract
is undated or even misdated does not necessarily affect its
76
12 MOORE ET AL., supra note 11, ¶ 60.42[6].
77
11 MOORE ET AL., supra note 11, ¶ 56.14[2][c]. Cf. Nissho-Iwai,
845 F.2d at 1306 (“It is a settled rule in this circuit that an
unsworn affidavit is incompetent to raise a fact issue precluding
summary judgment.”). See also Duplantis v. Shell Offshore, Inc.,
948 F.2d 187, 191 (5th Cir.1991) (expert letter not considered for
summary judgment purposes where it is unsworn and fails to indicate
expert's qualifications).
31
validity.”78 The following is the only statement in Dr. Goel’s
affidavit that could have possibly precluded summary judgment: “I
now firmly believe that I did not sign the amendment. I know that
I did not back-date the amendment as Provident accuses.” This
assertion, however, is also of questionable admissibility, as “[a]
statement that an affidavit is based on the affiant’s personal
belief does not automatically satisfy the requirement [of Rule
56(e)] that the affidavit be based on personal knowledge.”79 But
given the failure to establish due diligence in discovering this
evidence, further consideration of this question is not required.
Finally, even if we were to conclude that Dr. Goel’s evidence
satisfies the due diligence and admissibility requirements, we
express doubt as to whether the evidence is “material and
controlling and clearly would have produced a different result if
presented before the original judgment.”80 Because Dr. Goel, unlike
the petitioners in Schwarz, has made no “colorable claim” for
78
17 C.J.S. Contracts § 74 (1999). “So, as between the parties,
it is usually immaterial that the contract is not executed on the
day of its date. . . .” Id. (citing Thornton Bros., Inc. v. Gore,
172 So. 2d 425 (Miss. 1965)).
79
11 MOORE ET AL., supra note 11, ¶ 56.14[1][c]. See also Jameson
v. Jameson, 176 F.2d 58, 60 (D.C. Cir. 1949) (“Belief, no matter
how sincere, is not equivalent to knowledge.”); 10B WRIGHT ET AL.,
supra note 35, § 2738, at 346-56 (“[U]ltimate or conclusory facts
and conclusions of law, as well as statements made on belief or ‘on
information and belief,’ cannot be utilized on a summary-judgment
motion.”).
80
Martech, 993 F.2d at 1201.
32
relief under Rule 60(b), we decline to find that the district court
abused its discretion and we affirm the district court’s ruling on
this issue.
III. CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s
grant of summary judgment to Provident and its denial of Dr. Goel’s
Rule 60(b) motion.
AFFIRMED.
33
Provident Life & Accident Insurance v. Goel
Court: Court of Appeals for the Fifth Circuit
Date filed: 2001-12-04
Citations: 274 F.3d 984
Copy CitationsCombined Opinion