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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : VALLEY FORGE LIFE INSURANCE COMPANY v. : : Civil Action No. DKC 2003-1809 : SHELLY LIEBOWITZ : MEMORANDUM OPINION Presently pending and ready for resolution in this insurance dispute are (1) the motion of Defendant Shelly Liebowitz for partial summary judgment, and (2) the cross-motion of Plaintiff Valley Forge Life Insurance Company ("Valley Forge") for summary judgment. The issues are fully briefed and the court now rules

pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, the court denies Valley Forge's motion and grants Ms. Liebowitz's motion. I. Background The following facts are undisputed. On July 16, 2000, Ms.

Liebowitz's husband, Bruce Liebowitz, now deceased, signed an application for a $2,000,000 life insurance policy to be issued by Valley Forge. The application was filled out by the

decedent's father, Howard Liebowitz, an insurance agent who sold policies on behalf of several insurance companies including Valley Forge.

In response to question 9b of the application, which asked whether the applicant "[i]n the last two years traveled or resided or intends to travel or reside outside the USA," Howard Liebowitz checked "No." The decedent signed the application.

In October 2000, Valley Forge issued the policy, which became effective on November 1, 2000. On October 16, 2000, the

decedent paid his first premium. Contrary to the answer provided to question 9b on his policy application, the decedent had traveled extensively outside the United States in the prior two years, and in fact lived in Spain until January of 2000, when he moved to Maryland. The decedent

married Ms. Liebowitz, then a resident of Israel, in February of 1999, and the two had a child in November of 1999. Ms.

Liebowitz asserts, and Valley Forge does not contest, that they then decided together to move to Maryland; Ms. Liebowitz, The

however, never actually moved from Israel to Maryland.

decedent also continued to travel extensively after applying for his insurance policy. On September 5, 2002, Bruce Liebowitz died of esophageal cancer. Soon thereafter Ms. Liebowitz submitted a claim for Valley Forge denied the claim

death benefits under the policy.

on the basis of the misrepresentation in question 9b of the policy application.

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On June 18, 2003, Valley Forge filed a preemptive complaint with this court requesting that the court (1) issue a

declaratory judgment that the policy was never in effect, (2) restrain Valley Ms. Liebowitz for from instituting the any action and against grant deems

Forge

recovery and other

under

policy, as

(3)

attorney's

fees

restitution

the

court

appropriate.

Paper no. 1.

On September 30, 2003, Ms. Liebowitz

filed both an answer and a counterclaim, in which she (1) requested the converse declaratory judgment; (2) asserted breach of contract, negligence, and bad faith; and (3) requested full payment of the policy, plus interest, and damages for

foreseeable

emotional

distress,

extracontractual Paper no. 9.

damages,

punitive damages, fees and costs. II. Standard of Review

It is well established that a motion for summary judgment will be granted only if there exists no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 250 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In other words, if there clearly

exist factual issues "that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party," then summary 3 judgment is inappropriate.

Anderson, 477 U.S. at 250; see also Pulliam Inv. Co. v. Cameo Properties, 810 F.2d 1282, 1286 (4th Cir. 1987); Morrison v. Nissan Motor Co., 601 F.2d 139, 141 (4th Cir. 1987). The moving

party bears the burden of showing that there is no genuine issue as to any material fact and that he is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Catawba Indian Tribe

of South Carolina v. State of S.C., 978 F.2d 1334, 1339 (4th Cir. 1992), cert. denied, 507 U.S. 972 (1993). When ruling on a motion for summary judgment, the court must construe the facts alleged in the light most favorable to the party opposing the motion. See U.S. v. Diebold, 369 U.S. 654,

655 (1962); Gill v. Rollins Protective Servs. Co., 773 F.2d 592, 595 (4th Cir. 1985). A party who bears the burden of proof on a

particular claim must factually support each element of his or her claim. "[A] complete failure of proof concerning an

essential element . . . necessarily renders all other facts immaterial." Celotex Corp. , 477 U.S. at 323. Thus, on those

issues on which the nonmoving party will have the burden of proof, it is that party's responsibility to confront the motion for summary judgment with an affidavit or other similar evidence in order to show the existence of a genuine issue for trial. See Anderson, 477 U.S. at 256; Celotex Corp., 477 U.S. at 324.

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However, "[a] mere scintilla of evidence in support of the nonmovant's judgment." Cir.), position will not defeat a motion for summary

Detrick v. Panalpina, Inc. , 108 F.3d 529, 536 (4th denied, 522 U.S. 810 (1997). There must be

cert.

"sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations

omitted). When faced with cross-motions for summary judgment, as in this case, the court must consider "each motion separately on its own merits to determine whether either of the parties

deserves judgment as a matter of law."

Rossignol v. Voorhaar,

316 F.3d 516, 523 (4th Cir. 2003) (internal quotation omitted). See also havePower, LLC v. Gen. Electric Co., 256 F.Supp.2d 402, 406 (D.Md. 2003) (citing 10A Charles A. Wright and Arthur R. Miller, Federal Practice & Procedure

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