United States District Court, S.D. Ohio, Eastern Division
SHEELA K. O'DONNELL, Plaintiff,
FINANCIAL AMERICAN LIFE INSURANCE CO., Defendant.
Magistrate Judge, Jolson
OPINION AND ORDER
MICHAEL H. WATSON, UNITED STATES DISTRICT JUDGE
American Life Insurance Co. ("Defendant") moves for
reconsideration of the Court's March 21, 2016, Opinion
and Order ("March 21 Order"), ECF No. 99, and to
certify three issues decided in the Order to the Ohio Supreme
Court, ECF No. 86. The Court DENIES both
facts of this case are set forth in more detail in the March
21 Order. For ease of reference, relevant background facts
from that Order are repeated below.
Financial American Life Insurance Co. offers credit life
insurance policies. Such policies, available to consumers
financing credit transactions, offer payments to the
consumer's lender in the event the consumer dies or
becomes disabled. Defendant offers its policies exclusively
at automobile dealerships, where Defendant trains the
dealership's employees on how to offer the policies to
customers. Tri-County Chrysler Dodge Jeep in Health, Ohio
("Tri-County") was one of these dealerships.
February 10, 2102, Plaintiff Sheela K. O'Donnell and her
late husband, Daniel O'Donnell, Sr., purchased a new
automobile from Tri-County. The O'Donnells financed the
automobile purchase through Wells Fargo Dealer Service
connection with the purchase, a Tri-County agent solicited
the O'Donnells to purchase one of Defendant's
policies. The agent told the O'Donnells that it would
benefit them to purchase credit life insurance since they
were both in their sixties. The agent then presented the
O'Donnells with an application for credit life insurance
(the "Policy"). The agent did not inform the
O'Donnells of any restrictions on their ability to
purchase the insurance or otherwise discuss the
O'Donnells' suitability for the insurance. The agent
similarly did not ask any questions about the
O'Donnells' heath history.
The Policy and its Terms
parties highlight several of the Policy's provisions. The
following provisions relate to the O'Donnells'
eligibility for the Policy:
THE FOLLOWING ARE MY REPRESENTATIONS AND ACKNOWLEDGMENT OF
1. I am not eligible for any insurance if I now have, or
during the past two (2) years have been seen, diagnosed or
treated (including medication) by a doctor or member of the
medical profession for: (a) a disease or disorder of the:
Brain, Heart, Lung, Liver, Kidney, Respiratory System,
Circulatory System, Digestive System, Neurological/Muscular
System; (b) Cancer; High Blood Pressure (prescribed and/or
taking more than one medication); Edema; Stroke; Diabetes;
Alcoholism; Drug Abuse; Morbid Obesity (and/or complications
directly related to); or a Psychological or Psychiatric
Illness; (c) an HIV Positive test result; or (d) weight
reduction surgery (had or recommended to have).
YOUR CERTIFICATE MAY NOT BE IN FORCE WHEN YOU HAVE A CLAIM!
Your certificate is issued based on the information
entered in this Application. If, to the best of your
knowledge and belief, there is any misstatement in this
Application or if any information concerning the medical
history of any insured person has been omitted, you should
advise the Company, otherwise your Certificate may not be a
My signature below acknowledges that I have read and
understand the above Insurability Requirements and
represent that I meet both the Eligibility Requirements and
the Statement of Insurability and am eligible for the
coverage as requested in the Schedule. I further understand
and agree that I am insured only if I have signed below and
I agree to pay the premiums for this insurance... .
ECF No. 37-1, at PAGEID # 386.
that clause, the O'Donnells both signed the Policy:
WARNING; Any person who, with Intent to defraud or knowing
that he is facilitating a fraud against an Insurer, submits
an Application or files a claim containing a false or
deceptive statement is guilty of insurance fraud.
testified that neither she nor Mr. O'Donnell read the
Policy before signing it. The Tri-County agent did not
instruct the O'Donnells not to read the Application or
obstruct the O'Donnells from doing so. Plaintiff
testified that she and Mr. O'Donnell had signed other
applications for credit life insurance in the past without
the Policy's Eligibility section is a section entitled
CERTIFICATE OF INSURANCE. This section states:
We certify that, if we have been paid the premium shown in
the Application, you are insured for the coverage shown in
the Application, subject to the terms of the Group Policy
issued to the Creditor and acceptance by us. Our acceptance
will be in accordance with our procedures and practices.
Under no circumstances will acceptance occur before sixty
(60) days of the receipt of the Application. ... All benefit
payments are made to the Creditor shown in the Application to
pay off or reduce your debt. If benefit payments are more
than the balance of your loan, we will pay the difference to
you or to a named Second Beneficiary....
PAYMENT OF A DEATH BENEFIT section below the CERTIFICATE OF
INSURANCE SECTION states:
If you or the insured Co-Borrower dies while insured, we will
pay the amount of insurance then in force after we receive
proof of death. Only one death benefit is payable under this
Certificate. Payment of a death benefit terminates all
insurance coverage under this Certificate. We will not pay
more than the decreasing insurance balance of the initial
amount of life insurance.
Id. at PAGEID # 387.
undisputed that the O'Donnells paid a premium of $1,
429.56 at the time they signed the Policy. This premium,
according to Plaintiff, purchased $30, 629.93 worth of credit
life insurance over a period of 75 months, payable to Wells
Fargo in the event the O'Donnells died or became
disabled. Defendant accepted the premium payment, meaning
that the O'Donnells became "insured for the coverage
shown in the Application, subject to the terms of the Group
Policy issued to the Creditor." Id. Defendant
therefore became obligated to "pay the amount of
insurance then in force after we receive proof of death"
in the event that either of the O'Donnells died while
Mr. O'Donnell's Death
a year and a half after the O'Donnells purchased the
Policy, on October 16, 2013, Mr. O'Donnell died.
Plaintiff submitted a claim to Defendant for a life benefit
payment pursuant to the Policy. The balance owed on the loan
at that time was approximately $21, 000.
included a certified copy of Mr. O'Donnell's death
certificate with her claim. The death certificate lists Mr.
O'Donnell's cause of death as myocardial infarction
due to coronary artery disease and hypercholesterolemia. The
death certificate also lists conditions contributing to Mr.
O'Donnell's death as hypertension, ...