Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

After defendant denied plaintiff's claim for long-term disability benefits (LTD benefits), where plaintiff suffered from fibromyalgia, plaintiff filed a complaint against defendant pursuant to ERISA, 29 U.S.C. 1000 et seq. At issue was whether the district court properly granted summary judgment in plaintiff's favor finding that defendant had abused its discretion in denying benefits to plaintiff. The court held that the district court improperly determined that defendant abused its discretion when it ultimately denied the LTD benefits claim. Based on the record, there was more than a scintilla of evidence supporting defendant's conclusion that plaintiff's condition did not render him "disabled" under the policy's any occupation definition and defendant's decision was supported by substantial evidence, where a reasonable person could have reached a similar decision. The court also held that the fact that defendant operated under a structural conflict of interest, as both plan administrator and insurer, did not warrant a finding that defendant abused its discretion in denying plaintiff's claim. Accordingly, the court reversed summary judgment and remanded for further proceedings.

Appellant, the named beneficiary of an accident benefits plan that her husband obtained through his employer, brought suit under ERISA, 29 U.S.C. 1001 et seq., alleging that the plan administrator, Metropolitan Life Insurance (Metlife), abused its discretion in determining that her husband was intoxicated at the time of the accident and denying coverage. At issue was whether the district court properly granted summary judgment to Metlife because Metlife's interpretation of the relevant policies was arbitrary and capricious and not supported by substantial evidence. The court held that Metlife did not abuse its discretion as plan administrator when it denied benefits based on the general exclusion for intoxication that appeared in the certificate of insurance. The court also held that the toxicology report, which concluded that the husband's blood alcohol level was above the state limit, constituted evidence that a reasonable mind might accept as adequate to support a conclusion and therefore, satisfied the substantial evidence standard. The court also held that because it agreed with the district court's conclusion that the denial of benefits was justified in light of the intoxication conclusion, it need not address Metlife's assertion that the husband's death was not accidental because it was reasonably foreseeable or, alternatively, the result of intentional self-inflicted injury. Accordingly, summary judgment was affirmed.

This case involved a type of insurance fraud known as "Stranger Originated Life Insurance" (STOLI), "whereby," as plaintiff described, "high face amount insurance polices insuring senior citizens are obtained for the benefit of investors with no insurable interest in the life of the insured." At issue was whether the district court erred in applying the procured-by-fraud exception to the general rule that "rescission required the return of unearned premiums." The court held that, based on Minnesota Supreme Court precedents, the court affirmed the district court's decision recognizing plaintiff's right under the Minnesota law to retain the premiums paid on a fraudulently procured insurance policy. Accordingly, the judgment of the district court was affirmed.

Appellees brought this declaratory judgment action seeking a determination that there was no coverage for an accident involving a company car driven by Daniel Brandt and injuring Donald Bunch. At issue was whether liability coverage extended to Brandt and whether Donald Bunch was entitled to uninsured and underinsured motorist coverage because the policy at issue was ambiguous. The court concluded that the Bunches conceded that Brandt did not have express or implied permission from his employer to drive the car and that Patricia Bunch lacked the authority to give Brandt permission to use the vehicle as either a named insured or as a second permitee. Therefore, the district court did not err in concluding that liability coverage did not extend to Brandt. The court also concluded that there was no indication that the term "vehicle" was ambiguous or that a person reading the policy would not understand that the vehicle referred to in the exclusion would have included the car involved in the accident. Therefore, the district court did not err in determining that Donald Bunch did not qualify for uninsured or underinsured motorist coverage.

This lawsuit arose from the dispute between the parties about how much appellant was obligated to pay appellee for auto-glass goods and services rendered on behalf of appellant's insureds. Appellants appealed from the district court's orders dismissing its counterclaim that appellee violated Minnesota's anti-incentive statute, Minn. Stat. 325F.783, granting summary judgment in favor of appellee on appellant's counterclaim for breach of contract, and denying appellant's motion to vacate the arbitration award. The court held that, given the plain language of the statute and the ordinary meaning of the terms of rebate and credit, appellee's practice did not violate the anti-incentive statute. The court also held that even if the blast faxes at issue constituted offers to enter into unilateral contracts, appellee rejected the offers when its actions failed to conform to the terms of the offer. The court further held that the arbitration award did not require reversal or new proceedings because the award was based on the finding that appellant failed to pay the competitive price standard set forth in the applicable endorsement and Minnesota law.

Appellant, who had been on a medical leave of absence from appellee for nearly four months, sued appellee alleging violations of the Family and Medical Leave Act ("FMLA"), 29 U.S.C. 2612(a)(1), and the benefits-termination notice provisions of the Consolidated Omnibus Budget Reconciliation Act ("COBRA"), 29 U.S.C. 1166(a)(4)(A), when appellee fired him for job abandonment. Appellant appealed the district court's grant of summary judgment in favor of appellee on each of his claims. The court held that the district court properly granted summary judgment to appellee on appellant's interference claim under the FMLA where appellant failed to demonstrate any prejudice as a result of his firing on May 1, 2007. The court also held that the district court properly granted summary judgment to appellee on appellant's claim that appellee failed to provide him with notice of the termination of his benefits as required by COBRA where appellant failed to show that a genuine factual dispute existed regarding the means used by appellee to send the notice and where the undisputed facts showed that appellee used a notice method "reasonably calculated to reach" appellant.

Defendant appealed from the district court's grant of summary judgment in favor of plaintiff, compelling arbitration of a dispute related to healthcare benefits under an expired collective bargaining agreement. At issue was whether the district court erred in granting plaintiff's motion for summary judgment and issuing an order compelling the arbitration. The court reversed and held that the district court erred in granting summary judgment and compelling arbitration where both parties vigorously disputed issues of both law and fact, including whether the 1994 agreement was ambiguous and whether the summary plan descriptions constituted an intrinsic or extrinsic evidence of the parties' intent. The parties also point to various other extrinsic evidence and vehemently disagree as to whether the bargained for fully-paid health insurance premiums for life or just for the term of the agreement. Under these circumstances, the court held that the question of whether the right to fully-paid premiums vested under the 1994 agreement was best decided in the first instance by the district court and therefore, remanded for further proceedings.

Owatonna Clinic-Mayo Health System ("Clinic") sued its insurer, Medical Protective Company ("Medical Protective"), claiming that the company had breached its obligation to defend and indemnify the Clinic in a medical malpractice suit that had resulted in a judgment against it. At issue was whether the district court erred in ruling as a matter of law that the Clinic's notice to Medical Protective, of a potential claim against it, conformed to the insurance policy requirements and whether the Clinic's belief that it was at risk was objectively reasonable. Also at issue was whether the Clinic was entitled to pre-judgment interest. The court affirmed the judgment and held that the Clinic was deemed to have filed a timely notice with Medical Protective where the information that Medical Protective received would obviously alert a reasonable insurer to the likelihood of possible allegations of liability on the Clinic's part. The court also held that Medical Protective's challenge to the district court's finding, that the Clinic's belief that it was at risk was objectively reasonable, was meritless where the quoted policy language set an exceedingly low bar. The court further held that the district court did not err in awarding pre-judgment interest under Minn. Stat. 60A.0811, subd. 2(a) where the statute was unambiguous; and, in the alternative, if the statute was ambiguous, the court construed it against the insurer.

Plaintiff sought disability insurance benefits under the Social Security Act, alleging that migraine headaches, affective mood disorder, and mayofascial back pain left her unable to work. At issue was whether the administrative law judge's ("ALJ") decision was supported by substantial evidence and whether the ALJ properly weighed physicians' opinions in determining plaintiff's residual functional capacity. The court concluded that substantial evidence supported the ALJ's decision to discredit plaintiff's subjective complaints where none of her doctors reported functional or work related limitations due to her headaches and where there was no basis for her creditability. The court also held that the ALJ properly weighed the physicians' opinions in determining plaintiff's residual functional capacity.

Plaintiff filed a petition for equitable garnishment against State Farm Mutual Automobile Insurance Company ("State Farm") after she was injured at a crosswalk from a truck driver, the insured under State Farm's policies, who negligently struck and injured her. At issue was whether plaintiff could recover additional amounts from State Farm where State Farm's policy contained an "anti-stacking" clause and an "excess coverage" clause. The court reversed the district court's ruling that plaintiff could stack State Farm's liability limits in each of its four policies where Paragraph 3 of the policy did not create an ambiguity that permitted a court to ignore the unambiguous anti-stacking clause in Paragraph I. The court also remanded to the district court to decide whether a single insurer, having issued four policies to the owner of four vehicles who then negligently caused an accident while driving a non-owned vehicle, may enforce its anti-stacking clause after it satisfied the minimum Missouri's Motor Vehicle Financial Responsibility Law's, State. 303.010 et seq., coverage requirement.