Michael Pitt Missed One Premium and His $2 Million Policy Ended. California’s Supreme Court Took the Question, Then Dismissed It.

Metropolitan Tower Life Insurance Company called the letter a Special Courtesy Offer. It went out on February 8, 2016. Pay the overdue premium by February 27 and the $2,000,000 policy stayed in force.

Michael Pitt never answered it.

He had bought the term policy in Illinois in 2003 and paid the premiums for years. When he and his wife Susan moved to California in 2014, he told the company about the move and kept paying. In December 2015 Tower reminded him that his quarterly premium was due January 6, 2016. He missed that payment. After the courtesy offer expired, Tower wrote again in March 2016 to say the policy had lapsed, and included instructions for applying to get it back.

He followed them. In September 2016 he tendered the full annual premium. In October he filed the formal reinstatement application. In February 2017 Tower rejected it.

Michael Pitt died from amyotrophic lateral sclerosis in May 2018. Susan Pitt, his named beneficiary, filed a death benefit claim in August 2018. Tower denied it. Every fact in the last four paragraphs is drawn from the Ninth Circuit’s own statement of the case in No. 23-55566, filed February 20, 2025.

California had already written a law for this

In 2012 the Legislature passed two sections of the Insurance Code, and they took effect on January 1, 2013. Section 10113.71(a) runs one sentence: “Each life insurance policy issued or delivered in this state shall contain a provision for a grace period of not less than 60 days from the premium due date.”

The rest is just as plain. A notice of pending lapse is not effective unless the insurer mails it at least 30 days before termination. A notice of the unpaid premium goes out within 30 days after the due date. Every owner gets the right to name at least one other person to receive those warnings, and the insurer has to ask, once a year, whether the owner wants to change that name. The California Supreme Court has called it a single, unified pretermination notice scheme with three components, built so that nobody loses a policy by forgetting.

It applies to every policy “issued or delivered in this state.” Michael Pitt’s was sold to him in Illinois. Five words decided whether a widow’s $2,000,000 claim was worth anything, and the Legislature never said which way they cut.

Tower argued that a policy can be issued or delivered only once, and that this one was issued and delivered in Illinois. Susan Pitt argued that every renewal she and her husband paid for in California pulled the California rules into the contract. Judge Robert Steven Huie, in the Southern District of California, case No. 3:20-cv-00694, sided with Tower. He granted it summary judgment on her claims for breach of contract, unfair competition, bad faith, elder abuse and declaratory relief.

The panel stopped and asked

Susan Pitt appealed. Judges Jay Bybee, Sandra Ikuta and Bridget Bade heard argument on December 5, 2024. On February 20, 2025 they withdrew the case from submission and sent one question to the Supreme Court of California: do sections 10113.71 and 10113.72 apply to life insurance policies originally issued or delivered in another state but maintained by a policy owner in California? The order records that neither the California Supreme Court nor any California Court of Appeal had ever answered it, that district courts had split, and that the answer could decide the case outright. If the statutes did not reach the policy, the order says, Susan Pitt’s breach of contract claim would fail, as would her other claims.

On April 16, 2025 the California Supreme Court took it. The court’s published results from that day’s petition conference carry one line for the case: Question of California Law (Request for Certification), Granted. It got a number, S289376. Susan Pitt filed her opening brief.

Then, on July 11, 2025, the parties filed a joint notice telling the Ninth Circuit they had reached a settlement and release agreement, and asking the court to take the question back. On July 29 they filed a joint stipulated request to dismiss the entire action with prejudice. On August 13, 2025 the panel granted both motions, ordered each side to bear its own costs and fees, and directed the clerk to serve the order on the California Supreme Court. What Susan Pitt received is not in the public record.

On September 3, 2025 the California Supreme Court’s conference results listed S289376 one last time. The result column reads: Dismissed.

A nonprofit asked to argue the case nobody was left to argue

The day before the parties asked for dismissal, on July 28, 2025, the Life Insurance Consumer Advocacy Center filed a letter with Chief Justice Patricia Guerrero and the associate justices asking the court to keep the case anyway. The letter, signed by executive director Brian P. Brosnahan and by Gordon W. Renneisen of Cornerstone Law Group, argued the question was one of continuing public interest and likely to recur, and offered to serve as petitioner if the court needed someone to argue that side.

it will be impossible to obtain definitive answers regarding the application of the Statutes which can only be provided by this Court if insurance companies can buy their way out of appellate review by settling with any plaintiff whose case is accepted for review by this Court

The letter put numbers on who is standing in the gap. Using Census state-to-state migration counts, which ran from 422,075 new California residents in 2023 to 523,131 in 2017, and a LIMRA finding that 38 percent of adults own individual life insurance, the group estimated that close to 200,000 policyholders move into California each year carrying policies bought somewhere else. That estimate is the advocacy center’s arithmetic, not a court finding.

The court’s own list of issues pending in civil cases, dated July 25, 2025, still printed the Pitt question in full, two weeks after the parties had filed their settlement notice.

Proving the violation stopped being enough

The certified question was never the only wall. On December 10, 2024 the Ninth Circuit decided a case brought by LaWanda Small, whose husband bought a $75,000 universal life policy in 1990 from LifeUSA Insurance Company, later part of Allianz Life Insurance Company of North America. The Smalls paid for 26 years. They missed a payment in August 2016 and the policy was terminated. In November 2018 she applied to reinstate it and was refused. In December 2018 her husband died. In January 2019 she filed a death claim and Allianz denied it because coverage had lapsed. The opinion records as undisputed that Allianz never told the Smalls they had the right to name a third party to receive the notices.

She won certification of a class of roughly 1,800 owners and beneficiaries. Judge Richard Tallman’s panel reversed it. A plaintiff has to prove more than a violation of the statutes, the court held. She has to prove the violation caused the harm. Causation is personal, and some people let policies lapse on purpose, so the common questions stopped predominating and the class came apart. The summary judgment orders were vacated with it.

Pamela Siino learned what that costs. She bought a twenty-year level term policy from Foresters Life Insurance and Annuity Company in 2010, $100,000 in face value, premium due every January 26. She moved in 2014 and submitted a change-of-address request. It was rejected because she had not signed it. Foresters kept mailing the old address. She missed the premium due January 26, 2018, never saw the February 26 letter saying the policy had lapsed, and let the March 28 reinstatement deadline pass. Her husband’s change of address on his own policy had been valid. He kept getting his notices, including the one telling him he could name a designee.

On April 1, 2025 the Ninth Circuit affirmed the ruling that Foresters violated both the pretermination notice requirement and the designee notice requirement, then reversed the part that would have kept her policy alive. She could not show the violations caused the lapse, because the notices would have gone to an address where she no longer lived. In April 2020 the couple’s Foresters agent, Austin Batista, had told her that all she needed to do was send in three years of missed premiums.

On August 29, 2025 the same court reversed another class. Deana Farley alleged that Lincoln Benefit Life Company gave her neither the 30-day notice nor the offer to name a designee before terminating the policy she had bought on her then-minor son. She missed a payment in 2016, got the policy reinstated, missed another in 2018, and lost it. Judge Jed Rakoff, sitting by designation, wrote that Small controlled and that her claims were not typical of class members who had let their policies lapse deliberately. Those allegations against Lincoln Benefit have never been tried.

The jury that found a breach and no harm

All of it traces back to one file. In March 2005 Chase Life Insurance Company, predecessor to Protective Life Insurance Company, issued a $1,000,000 term policy to William McHugh and named his daughter Blakely the beneficiary. The annual premium was $310 for the first ten years. The policy carried a 31-day grace period, not 60. McHugh missed the payment due January 9, 2013, nine days after the new statutes took effect. Protective Life sent a reminder that December, a warning on January 29, and a final letter on February 18 offering reinstatement if the money arrived by March 12. Around the time that last letter went out, McHugh suffered a serious fall that left him disabled, in continuing pain, and needing surgery. He died in June 2013.

The jury found that Protective Life did something the contract prohibited and that the plaintiffs were not harmed by it. On August 30, 2021 the California Supreme Court held that both statutes apply to every life insurance policy in force when they took effect, regardless of when the policy was originally issued. Justice Mariano-Florentino Cuellar wrote that the reading protects policy owners including “elderly, hospitalized, or incapacitated ones who may be particularly vulnerable to missing a premium payment.”

What the statute still hands a policy owner

The 60-day grace period runs from the premium due date on any policy issued or delivered in California. A lapse notice does not count unless the insurer mailed it at least 30 days before termination, and notice of the unpaid premium is due within 30 days of the missed payment. The designee costs nothing: one name, one address, and that person gets the same warnings the owner gets. Section 10113.72(b) makes the insurer ask every year whether the owner wants to change it. Pamela Siino’s file is the record of what the address on file is worth.

The question the Ninth Circuit asked on February 20, 2025 has never been answered. On July 25, 2025 the California Supreme Court’s list of pending civil issues still printed it word for word. On September 3 the entry read Dismissed.