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Campbell v. Household Life Ins. Co.

Florida Court of Appeal, Fifth District

December 16, 2011

Karen CAMPBELL, Appellant,

Rehearing Denied Jan. 20, 2012.

Page 773

Grossman Attorneys at Law, Boca Raton, and Michael J. Ferrin, West Palm Beach, for Appellant.

Traci H. Rollins and Jason Daniel Joffe, of Squire, Sanders & Dempsey (US) LLP, West Palm Beach, for Appellee.


The appellant, Karen Campbell, appeals the final summary judgment rendered in favor of the appellee, Household Life Insurance Company (" HLIC" ), determining that an application for credit life insurance completed by Mrs. Campbell and her now deceased husband, Danny R. Campbell, was not ambiguous and had never been accepted by HLIC. Because we agree with the trial court that the insurance documentation was not ambiguous and that no insurance contract was created prior to Mr. Campbell's death, we affirm.

The facts are not in dispute. Mr. and Mrs. Campbell refinanced the mortgage on their home through Beneficial Florida, Inc. Simultaneously, the couple applied for optional credit life insurance through HLIC as offered to them by the lender. In order to do so Mr. and Mrs. Campbell executed and submitted an application for credit life insurance and a disclosure form.

The Credit Insurance Disclosure provided to the Campbells for execution contained disclosures required by Florida law, and stated that " you understand that credit insurance coverage may be deferred if, at the time of application you are unable to perform normal activities of a person(s) of like age or sex, if the proposed credit insurance policy contains this restriction." It further provided that " [a]ny credit insurance

Page 774

you buy will be effective on your Loan Date shown above, unless coverage is added after the date of your Loan." The couple also executed an authorization to debit account which allowed Fort Knox National Bank to deduct premium payments directly from the Campbells' checking account. The fixed monthly insurance premium payment was not financed, but was to be included in the Campbells' monthly loan payments.

The Credit Insurance Disclosure also contained the following language on the signature page:

You acknowledge that: (1) your purchase of credit insurance is completely voluntary, (2) there will be no insurance until the insurer has approved your application (if one is required), (3) if the amount of your regular monthly loan payment changes and is less than the amount of your disability benefit, you direct the excess of the disability benefit to be paid to us to reduce your indebtedness, (4) you have reviewed and met the above eligibility requirements for the coverage(s) elected, and (5) you have read and received a copy of this Optional Credit Insurance Disclosure.

(Emphasis added).

In seeking to obtain the subject insurance Mr. and Mrs. Campbell were required, as well, to complete and submit a document entitled an " Application For Credit Life Insurance." The application asked for the couple's height, weight, age, occupation and health diagnoses, and other basic information. Additionally, the application authorized the couple's medical providers to release medical records to HLIC or its reinsurers " so that [HLIC] can determine [the couple's] eligibility for insurance." Mr. Campbell indicated that he was 46 years of age, was a very large man, and suffered from high blood pressure and diabetes. Mrs. Campbell indicated that she was 42 years of age, was also a large person, and likewise suffered from diabetes.

Unfortunately, Mr. Campbell passed away a few days after the application was submitted and before a certificate of insurance was issued. When Mrs. Campbell made a claim with HLIC for the life insurance benefits on the life of her husband, she was informed that the couple's application for coverage had been rejected. In a letter dated subsequent to the death of Mr. Campbell but addressed to him, HLIC stated that it declined Mr. Campbell's application for Credit Life Insurance based on the information both borrowers supplied on the application form, as well as any additional medical information received during its underwriting review of the couple. The letter indicated that the Campbells would be refunded the full amount of the premium collected for the declined coverage. Mrs. Campbell received another letter further explaining that the Campbells' application for credit life insurance had been ...

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