USCA11 Case: 20-11756 Date Filed: 08/02/2021 Page: 1 of 15
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 20-11756 Non-Argument Calendar ________________________
D.C. Docket No. 9:18-cv-80558-DMM
GARY H. LEBBIN,
Plaintiff,
THE LEBBIN-SPECTOR FAMILY TRUST BY AND THROUGH ITS TRUSTEES ROGER M. LEBBIN AND CAROLE SUE LEBBIN,
Plaintiff - Appellee,
versus
TRANSAMERICA LIFE INSURANCE COMPANY,
Defendant - Appellant.
________________________
Appeal from the United States District Court for the Southern District of Florida ________________________
(August 2, 2021) USCA11 Case: 20-11756 Date Filed: 08/02/2021 Page: 2 of 15
Before WILSON, MARTIN, and ROSENBAUM, Circuit Judges.
PER CURIAM:
Transamerica Life Insurance Company appeals the district court’s order
granting summary judgment in favor of the Lebbin-Spector Family Trust (the
“Trust”) and awarding the Trust $2.53 million in damages. According to
Transamerica, the life insurance policies at issue terminated in 2017, and it is not
required to pay out any death benefits. According to the Trust and the district
court, the terms of the life insurance policies are ambiguous and must be construed
against Transamerica. After careful review, we reverse the district court’s order
granting summary judgment in favor of the Trust on the breach of contract claim
and remand to the district court for grant of summary judgment in favor of
Transamerica on that claim. Having concluded there was no breach of contract, we
also vacate the court’s order awarding the Trust damages.
I. This case involves two “second-to-die” life insurance policies that jointly
insured Gary Lebbin and his wife, Bernice, and had a combined coverage amount
of $3.2 million. These types of policies insure the lives of two people and pay a
death benefit upon the death of the second insured to die.
In 1990, Gary purchased a $2 million policy (the “1990 Policy”). Gary and
Bernice, the Joint Insureds, both turned 73 that year. The owner and beneficiary
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was the Trust, with Gary’s children, Roger and Carole Sue Lebbin, as trustees.
Gary purchased another policy the following year in the amount of $1.2 million
(the “1991 Policy”). The Trust was again the owner and beneficiary. Both
Policies had identical payout provisions. Transamerica agreed to
pay the death benefit to the Beneficiary if both Joint Insureds die before the policy anniversary nearest Joint Equal Age 100. . . . If both or either Joint Insured is living at the policy anniversary nearest Joint Equal Age 100, we will pay the net cash value, if any, to you.
The Policies defined “Joint Equal Age” as “the adjusted age of the Joint Insureds
which reflects a risk that would be equivalent to two people of the same age, class
of risk and smoking status.” When the 1990 Policy was issued, it listed the Joint
Equal Age as 73, and when the 1991 Policy was issued, it listed the Joint Equal
Age as 74. The Policies also contained identical termination provisions. “The
policy will terminate at the earliest of,” in relevant part, “the policy anniversary
nearest Joint Equal Age 100.”
Over almost three decades, the Trust paid Transamerica more than $1.5
million in Policy premiums. In 2015, Bernice passed away at the age of 97.
At some point, the trustees learned the 1990 Policy and the 1991 Policy
would terminate on July 9, 2017, and December 20, 2017, respectively, unless
Gary passed before then. Transamerica stated that when the Policies terminated on
those dates, it would pay only the accumulated cash value in the Policies to the
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Trust. Because Gary lived past the respective termination dates—he turned 100 on
September 6, 2017 and is now almost 103—the Policies terminated. Transamerica
issued checks to the Trust for $2,574.47 and $55.18, the net cash values of each
Policy. 1
In July 2017, the Trust, through Roger and Carol Sue as trustees (the
“Plaintiffs”), sued Transamerica in the District of Maryland.2 The Plaintiffs
alleged that Transamerica marked the Policies “as permanent coverage that would
insure the Lebbins for life” and guarantee the Trust would receive death benefits.
The complaint alleged, in relevant part, that Transamerica breached the Policies by
terminating them in 2017.
As relevant to this appeal, both sides filed cross-motions for summary
judgment. The Plaintiffs sought summary judgment on their breach of contract
claim, while Transamerica sought summary judgment in its favor on all of the
Plaintiffs’ claims. Transamerica made several arguments, including that the
Plaintiffs’ claims were barred by the applicable statute of limitations and that the
terms of the Policies clearly indicated their termination dates.
The district court granted summary judgment in favor of the Plaintiffs. With
respect to the statute of limitations argument, the court first found (and the parties
1 These amounts were calculated according to the Policies. 2 The case was later transferred to the Southern District of Florida.
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do not dispute on appeal) that the three-year statute of limitations under Maryland
law applies to this case. 3 Md. Code Ann., Cts. & Jud. Proc. § 5-101. The court
also found that Maryland has adopted the discovery rule, which provides that a
cause of action accrues “when a plaintiff in fact knows or reasonably should know
of the wrong.” Hecht v. Resol. Tr. Corp., 635 A.2d 394, 399 (Md. 1994).
The district court rejected what it described as Transamerica’s “principal
theory” concerning notice. Transamerica argued the cause of action accrued when
Gary first received the Policies and the plain language of the Policies “did not
include any reference to the ‘permanent insurance’ he was allegedly promised and
which contradicted any promise that coverage would never terminate.” The court
said that if Gary understood the terms of the Policies to be consistent with the
statements on which he relied when he purchased the Policies, “it would be unjust
and unreasonable to hold the Trust accountable, at this time, for a disjunction that
Gary did not perceive.”
Transamerica’s other theory was based on actual knowledge. It argued the
Plaintiffs had actual knowledge of the Policies’ termination dates based on Roger
Lebbin’s realization that the Policies would terminate when his parents reached age
100. Roger testified that the servicing agent for the Policies told him the Policies
3 Because this case was initiated in Maryland but was transferred to Florida, the parties agree Maryland procedural law and Florida substantive law apply.
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would terminate if Gary reached age 100. He expounded: “I think that was my day
of reckoning. . . . I thought that the policy was a guarantee, an absolute certainty
that it pays when the second to die passes away.” Roger was then shown a June
10, 2014, email confirming his understanding as of that date that if one of his
parents lived past 100, he would receive the cash value of the Policies rather than
the multi-million-dollar death benefit. He went on to say: “This is what I referred
to as my ‘aha’ moment. . . . It was a ‘Houston, we have a problem’ moment”
because this would “defeat the whole purpose of the policy.” Based on these facts,
Transamerica argued the Plaintiffs had actual knowledge of the cause of action on
June 10, 2014.
The district court also rejected this theory. It reasoned that “when the
Policies were breached in this action necessarily depends on whether they were
breached.”
The court then proceeded to analyze the terms of the Policies, finding that
because the term “adjusted” in the definition of Joint Equal Age was not defined,
the definition of Joint Equal Age was ambiguous.4 Based on this ambiguity, the
court adopted the Plaintiffs’ “reasonable” proffered interpretation—that the term
4 The Plaintiffs’ theory was that because the term “adjusted” within the definition of Joint Equal Age was not defined, it was impossible to determine when or how the Joint Equal Age was adjusted or increased, and therefore impossible to know when an insured has reached the Joint Equal Age.
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“adjusted” required Transamerica to independently perform an adjustment to
Gary’s and Bernice’s ages and notify the Plaintiffs of the effect of that adjustment.
And, because Transamerica did not do any such adjusting to Gary and Bernice’s
Joint Equal Age, the district court found Transamerica breached the Policies. 5
The district court then issued an order determining the damages to which
Plaintiffs were entitled. The court rejected the Plaintiffs’ theory of damages.
Instead, it adopted Transamerica’s theory, which proposed awarding the Trust the
amount of the Policies less the amount of premiums—monthly mortality and
expense charges—that would be required to keep the Policies active during Gary’s
remaining life expectancy. It then sua sponte calculated damages by using an
“average yearly increase” methodology that estimated premiums and used Gary’s
estimated remaining lifespan, which assumed a shorter lifespan than Gary actually
came to have. However, because no party had advanced this calculation and
Gary’s actual lifespan exceeded the estimate of his life expectancy, the court
allowed additional briefing on the issue. Ultimately, the district court awarded the
Plaintiffs $2,530,154 in damages.
Transamerica appealed from the final judgment and final order on damages.
It makes several arguments in this appeal, including that the district court erred
(1) by finding that the Plaintiffs’ claims were not barred by the statute of
5 Based on this breach, the district court also found that Plaintiffs’ claim was timely.
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limitations; (2) in interpreting the term Joint Equal Age in the Policies; (3) by
declining to consider extrinsic evidence to resolve any alleged ambiguity in the
Policies; and (4) by awarding the Trust over $2.5 million in breach of contract
damages. We conclude the District Court did not err in finding the claims were not
barred by the statute of limitations, but it erred in finding the term Joint Equal Age
ambiguous.
II. We review de novo the district court’s grant of summary judgment to the
Trust, including its application of the statute of limitations and its interpretation of
a contract. M.H.D. v. Westminster Schools, 172 F.3d 797, 802 n.13 (11th Cir.
1999); Hegel v. First Liberty Ins. Corp., 778 F.3d 1214, 1219 (11th Cir. 2015). We
apply the same legal standards applied by the district court in the first instance.
Yarbrough v. Decatur Hous. Auth., 941 F.3d 1022, 1026 (11th Cir. 2019).
Summary judgment should be granted only if there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(a).
III.
A. PLAINTIFFS’ BREACH OF CONTRACT CLAIM IS NOT TIME-BARRED First we address whether the district court erred by finding the statute of
limitations did not bar the Trust’s claims. Transamerica says the Plaintiffs’ breach
of contract claim “is based on an insurer’s failure to issue the promised coverage,” 8 USCA11 Case: 20-11756 Date Filed: 08/02/2021 Page: 9 of 15
which accrues upon issuance of the non-conforming policy, subject to the
discovery rule. It argues that the termination provisions in the Policies put the
Plaintiffs on notice and, regardless, the trustees had actual knowledge no later than
June 10, 2014, when Roger was told about the termination dates by the Policies’
servicing agent. The Plaintiffs counter this argument and say that Maryland’s
discovery rule cannot work to accelerate the accrual of a cause of action. And,
because their claim is based on Transamerica’s alleged breach of the Policies’
termination provisions, the Plaintiffs say the clock did not start until Transamerica
terminated the Policies.
We find no support for Transamerica’s argument in Maryland law. The
general rule is that a cause of action for breach of contract accrues upon the breach.
Kumar v. Dhanda, 43 A.3d 1029, 1035 (Md. 2012). We find no precedent holding
that in a case alleging a breach of contract based on contract provisions, a
plaintiff’s notice of the offending provision can put the date of the accrual before
the date of the breach. See id. at 1034 (“[T]he law is concerned with accrual in the
sense of testing whether all of the elements of a cause of action have occurred so
that it is complete.” (quotation marks omitted)). 6 This means the statute of
6 Transamerica’s reliance on Thelen v. Massachusetts Mutual Life Insurance Company, 111 F. Supp. 2d 688 (D. Md. 2000), and Ruddy v. Equitable Life Assurance Society of U.S., No. CIV. A. DKC 00-70, 2000 WL 964770 (D. Md. June 20, 2000), is inapposite. Those cases addressed claims based on oral representations that the insured relied on to purchase the policies and which allegedly contradicted the plain terms of the policies. See Thelen, 111 F. Supp. 2d at 690, 693 (relying on agent’s representation that monthly payments above a certain amount would 9 USCA11 Case: 20-11756 Date Filed: 08/02/2021 Page: 10 of 15
limitations could not have begun to run before Transamerica “was called upon to
perform its obligations under the contract.” See Millstone v. St. Paul Travelers,
962 A.2d 432, 437 (Md. Ct. Spec. App. 2008), aff’d, 987 A.2d 116 (Md. 2010).
Because the obligations in this case are alleged to be continued coverage, the
Plaintiffs’ breach of contract claim is tied to the dates of termination, which were
July 9, 2017, and December 20, 2017, respectively. The Plaintiffs filed their
complaint in July 2017, within the statute of limitations.
B. THE DISTRICT COURT ERRED IN FINDING THE POLICIES AMBIGUOUS
Next we turn to the district court’s finding that Transamerica breached the
Policies by terminating them. The court adopted two arguments raised by the
Plaintiffs, first finding that the word “adjusted” in the definition of Joint Equal
Age, was “not sufficient to explain itself on its own,” which rendered the definition
of Joint Equal Age “deficient.” Based on this ambiguity, the court construed the
Policies against Transamerica and in favor of coverage.
On appeal, Transamerica argues the district court’s findings were wrong for
three reasons. First, it says the court erred by finding the definition of Joint Equal
guarantee the premium would vanish and holding the breach occurred, if at all, when the written policy failed to incorporate the alleged promises made); Ruddy, 2000 WL 964770, at *1, *4–5 (holding there was a single, not a continuing, breach based on the written policy’s failure to incorporate oral promises). Here, the Plaintiffs’ breach of contract claim is based solely on their reading of the Policies.
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Age was “incomprehensible.” Second, it argues the Policies need to be construed
as a whole, but the district court erred by focusing on a single term. Finally,
Transamerica says the court’s adoption of the Plaintiffs’ interpretation required
rewriting the Policies, which is unreasonable as a matter of law. We conclude that
the Policies are not ambiguous.
As mentioned, Florida substantive law governs the interpretation of the
Policies. See Hegel, 778 F.3d at 1220. Florida law provides that we begin by
looking at the language of the policy as a whole, endeavoring to give every
provision its full meaning and operative effect. See Auto-Owners Ins. Co. v.
Anderson, 756 So. 2d 29, 34 (Fla. 2000). “Where the language in an insurance
contract is plain and unambiguous, a court must interpret the policy in accordance
with the plain meaning so as to give effect to the policy as written.” Washington
Nat’l Ins. Corp. v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013). In other words, we
must avoid relying on certain provisions to the exclusion of others. Id.
Our Court does, however, consider policy language to be ambiguous under
Florida law “if the language is susceptible to more than one reasonable
interpretation, one providing coverage and the other limiting coverage.” Id.
(quotation marks omitted). But to allow for such a construction, “the provision
must actually be ambiguous.” Garcia v. Fed. Ins. Co., 969 So. 2d 288, 291 (Fla.
2007) (emphasis added). A provision is not ambiguous “simply because it is
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complex or requires analysis.” Id. If we determine a policy is ambiguous, we will
resolve the ambiguity in favor of the insured by adopting the reasonable
interpretation of the policy’s language that provides coverage, as opposed to the
reasonable interpretation that would limit coverage. Travelers Indem. Co. v. PCR
Inc., 889 So. 2d 779, 785–86 (Fla. 2004). Therefore, when one reasonable
interpretation of an ambiguous policy provision would provide coverage, “that is
the construction which must be adopted.” Ruderman, 117 So. 3d at 950.
As referenced above, the Policies say that if either Gary or Bernice (or both)
were living “on the policy anniversary nearest Joint Equal Age 100,” Transamerica
would pay only the net cash value, not death benefits, to the Trust. The
termination dates also coincided with this date, noting that the Policies would
terminate, in relevant part, at “the policy anniversary nearest Joint Equal Age 100.”
Joint Equal Age is defined as “the adjusted age of the Joint Insureds which reflects
a risk that would be equivalent to two people of the same age, class of risk and
smoking status.”
The Policies do not define “adjusted,” so we look to the ordinary, accepted
meaning of the word. See Garcia, 969 So. 2d at 291–92. “Adjusted” is defined as
“accommodated to suit a particular set of circumstances or requirements.”
Adjusted, Merriam-Webster.com, https://www.merriam-
webster.com/dictionary/adjusted (last visited July 28, 2021). In context, then, Joint
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Equal Age means that the age of the Joint Insureds is accommodated to suit a
particular set of circumstances or requirements. Id. The particular set of
circumstances or requirements here “reflect[] a risk that would be equivalent to
two people of the same age, class of risk and smoking status.” Thus, the
reasonable interpretation is that Gary’s and Bernice’s respective ages were
adjusted to reflect a single age to be used when applying the terms of a life
insurance policy covering two separate people.7
Other provisions in the Policies support this interpretation. In a different
section, the terms “Joint Equal Attained Age” or “attained Joint Equal Age” are
used.8 One use of Joint Equal Attained Age is reflected in the “Table of Death
Benefit Factors,” which affects the amount of death benefits paid to the insureds.
That Joint Equal Attained Age is reflected as a single number to reflect one age for
the Joint Insureds. And, when the Policies were issued, they listed the Joint Equal
Age as a single age—73 and 74, respectively. This reflects that the Joint Insureds
reached the next Joint Equal Attained Age as each year passed. Attained,
Merriam-Webster.com.
7 The understanding that a life insurance policy covering two people must equate the insureds’ potentially differing ages into one age is also reflected in the Internal Revenue Code. Cf. 26 C.F.R. § 1.7702-2(c) (stating “the attained age of the insured is determined . . . as if the youngest individual were the only insured under the contract”). 8 “Attained” is defined as “to reach as an end.” Attained, Merriam-Webster.com, https://www.merriam-webster.com/dictionary/attained (last visited July 28, 2021).
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Reading these provisions together, Ruderman, 117 So. 3d at 948, “the
reasonable, logical and rationable interpretation” of the Policies is that they
terminated at “the policy anniversary nearest Joint Equal Age 100.” Triple E Dev.
Co. v. Floridagold Citrus Corp., 51 So. 2d 435, 438–39 (Fla. 1951) (en banc). The
termination dates were thus July 9, 2017, and December 20, 2017—the policy
anniversaries in the year the Joint Insureds turned 100 years old. And, because
Transamerica did not terminate the Policies prematurely, it therefore did not breach
the contract.
Because our de novo review concludes that the Policies were not ambiguous,
and thus terminated in 2017 before Gary’s death, we grant summary judgment to
Transamerica on the Plaintiffs’ breach of contract claim.
* * *
In sum, the district court erred in finding that the Policies were ambiguous
with respect to the term “Joint Equal Age.” 9 We therefore VACATE the court’s
order awarding the Plaintiffs damages; we REVERSE the district court’s order
granting summary judgment in favor of the Plaintiffs on their breach of contract
9 We therefore need not address Transamerica’s arguments about the district court’s failure to consider extrinsic evidence to resolve any alleged ambiguity in the Policies and improper calculation of the amount of damages.
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claim; and we REMAND to the district court with instruction to enter summary
judgment in favor of Transamerica on the breach of contract claim. 10
10 The Plaintiffs’ motion to supplement the record is DENIED as moot.