Appellate Law & Practice

CA1: Puerto Rican insurance liquidation fight ends

MRCo, Inc. v. Juarbe-Jimenez , No. 07-1614.  The plaintiff sued Banco Popular and the insurance commissioner of Puerto Rico as “liquidator of the Plan de Salud de la Federación de Maestros de Puerto Rico.”  The plaintiff then settled with Banco Popular. The underlying facts are fairly complicated.  I find them interesting, but they would bore most people. But, what you need to know, is that there were proceedings in Puerto Rico’s “liquidation court” and “P.R. Law Ann. tit. 26, § 4021 precluded actions against the Commissioner during the pendency of the proceeding in the Liquidation Court.”  The District Court denied a motion for summary judgment, but granted a motion to dismiss under Puerto Rican law. 

A translation of the relevant statute reads:

Upon issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in Puerto Rico, no action at law shall be brought against the insurer or the liquidator, whether in Puerto Rico or elsewhere, nor shall an action of that nature be maintained or entered after issuance of such order.

The most important thing is that the plaintiff argues that the Puerto Rican statute attempts to divest a federal court of jurisdiction.  But the First say that the statute only impacts substantive rights and not actual jurisdiction. 

The First also reproduces the statute it in the original Spanish.  The first concludes that this statute bar equitable actions as well as legal ones (it discusses the meaning of “equity” in Spanish).  It also rejects the argument that since the plaintiff claims to be seeking monies from the liquidator (rather than the proceeding), that it claims are its own, this doesn’t apply.

CA1: DOJ employee loses ERISA claim on procedural and ERISA grounds

Serreze Desrosiers v. Hartford Life, No. 06-2609.  Starting at the top with a garden-variety denial-of-long-term disability benefits ERISA case.  What sets this apart is the plaintiff is an attorney that worked at the US Trustees’s Office. She enrolled in the Federal Employee Group Long Term Disability Plan ("the Plan"), which is sponsored by the Department of Justice Recreation Association ("DJRA").  Got it.  The “recreation” is a “Long Term Disability Plan.”    Whatever the case, the First makes it clear: this person is a real person with a real job.  Yet, they still affirm the District Court’s grant of summary judgment.  Anyway, she fell off a swing, was hit by the door of a car, and cut her hand.  This seemingly minor injuries, according to her, caused major neurologic damage. 

CA1: in an ERISA case, a trustee is personally liable (and a note of caution for defendants)

Indianapolis Life v. Herman, No. 07-1797.  This case holds that the trustee of an ERISA plan is personally liable for a default judgment (as well as liable in her trustee capacity) that were the result of cross-claimed filed by defendants, alleging that the defendants had misappropriate a retiree/Doctor’s funds and failed to execute directives to transfer assets in the retirement plans.  The District Court denied a motion under FRCP 60(b) to vacate that judgment.  The underlying lawsuit sought to invalidate an insurance policy, and summary judgment in that was granted in favor of the insurance company.  This case was first reviewed by the First in Indianapolis Life Ins. Co. v. Herman, 204 Fed. Appx. 908, 910 (1st Cir. 2006) (unpublished) (our coverage here).  Whatever the case, in enforcing the judgment, a fight started (and so did discovery) over who was liable for the on the judgment. 

If you don't read on, you are a goose.

CA1: rich doctor’s deferred compensation plan was indeed a top-hat plan

Alexander v. Brigham & Women's Hospital, No. 07-1443.  This is an ERISA issue.  This means that you either 1) care; or 2) really, really, don’t care.  The plaintiff is a surgeon that claims that his plan was *not* a valid “top-hat” plan under 29 U.S.C. § 1051(2).  Top hat plans cater to the kind of people we like – rich people, or “highly compensated employees” they earned, on average, a little less than a half-million each.  Or, in the words of Judge Seyla, “The origins of the top-hat provision lie in Congress's insight that high-echelon employees, unlike their rank-and-file counterparts, are capable of protecting their own pension interests.”  (I should note that surgeons are oppressed by evil “trial lawyers” and many of them suffer from malnutrition.)    In this case, the surgeons felt oppressed by Harvard’s salary caps, and so they devised a way around them in the form of a deferred compensation plan.   These plans were mandatory, but the plaintiff, like all of the surgeons was a voting member of the group that provided them.  Selya explains that “While such corporate structures are not equivalent to direct employee democracy, they are nonetheless meaningful.”

Read the heck on!

 

CA1: no duty to defend against environmental suit as home heating oil is a pollutant

Nascimento v. Preferred Mutual Insurance Company, No. 07-1792 affirms a declaratory judgment action dealing with my favorite subject, insurance coverage.  The plaintiff wants the court to say that the insurance company has to defend him in an environmental lawsuit brought by his neighbors.  Following Massachusetts law, the First finds that the “total pollution exclusion bars coverage.”  The First differ on what part of the exclusion bars coverage, and looks to dictionaries to define words like “occupy.”

CA1: standard of review in joinder and supplemental jurisdiction in an insurance-coverage diversity case

Picciotto v. Continental Casualty, No. 06-2685.  The First starts of 2008 with my favorite kind of case: insurance coverage.  Or at least I say this is my favorite kind of case.  This litigation has been ongoing from some time, and seems to currently involve collateral litigation against an attorney’s malpractice carrier and claims for fees by said attorneys.  There is a state-law case pending against the lawyer.  But, this case is between the original plaintiffs and the insurance carriers, based on diversity jurisdiction – i.e. 28 U.S.C. § 1332 – , and alleging  civil conspiracy to interfere tortiously with the contractual relations between the Picciottos and their attorneys.  The insurers claim that the federal suits is really an attempt to obtain discovery in a state-court suit against the lawyers, and the lawyers are really a “necessary and an indispensable” under FRCP 19.  Of course, joinder wouldn’t be feasible since it would destroy complete diversity.  The District Court concluded that the lawyers were necessary and indispensable, and therefore, the case must be dismissed.

Read on.  I mean it.

CA1: Insurer was noticed too late for products liability policy to benefit plaintiff that prevailed against bankrupt manufacturer

Edwards v. Lexington Insurance, No. 07-1414.  This is one of my favorite areas of law: insurance coverage litigation. So, let’s lay out the facts.  In a first lawsuit, the plaintiff claimed that he was injured by a defective protect.  He serves the insurance company (but out of time), but still obtains a default judgment and the insured party (or so the defendant thinks) goes into bankruptcy.  The he sues the insurer under Maine's reach and apply statute, 24-A M.R.S.A. § 2904 (2000) seeking to collect from them.

If you were really committed to working at a firm such as this you would have read on by now.

CA1: ERISA denials and FRCP 59

Kansky v. Coca-Cola Bottling, No. 06-2042.  Oh boy!  This is an ERISA lawsuit challenging a plan administrator's decision to deny the plaintiff long-term disability benefits due to his chronic fatigue syndrome.  The First does note that it is having some trouble figuring out a theory of what the proper standard of review of ERISA benefit denials might be, and that there is currently a pending petition for rehearing en banc in Denmark v. Liberty Life Assurance Co., 481 F.3d 16, 19 (1st Cir. 2007) (our coverage here).  But, on the merits, the First notes that the record reveals that his CFS is related to his pre-existing condition of schizophrenia. 

But, there are important things in here of general interest to people outside the ERISA world.

1. A FRCP 59(e) motion was properly denied, because there was no “manifest error of law” or newly discovered evidence.  The plaintiff had argued that the District Court had conducted “its own” medical research, relied on things the physicians with less qualifications than he wanted to see said.  But the First simply says that the District Court did nothing of the sort.
2. There was no abuse of discretion in denying a motion for sanctions for the defendant’s failure to produce documents, even though they were late, because the lateness caused no prejudice.

CA1: policy not ambiguous

Prostkoff v. Paul Revere Life Insurance Company,  No. 06-2699 (unpublished).  The plaintiff argued (in a declaratory judgment action) that his insurance policy entitles him to cost of living increases on his disability benefits for the duration of his life.  The parties disputed whether a “lifetime benefit rider” contained ambiguous language that contradicted another part of the policy.  But, the First says it isn’t ambiguous. 

CA1: post-judgment clock begins to run not from time of determination of damages (not liability)

Radford Trust v. First Unum Life Insurance Company of America, No. 06-1992.  This is an ERISA case.  Normally I don’t like reading pure ERISA cases (sorry, Stephan).  But, this one concerns something of more general applicability, “the district court's determination of the date on which postjudgment interest on an award of benefits would begin, and the effect of this determination on the court's discretionary decision to award prejudgment interest.”  While the court acknowledges that setting dates can be a matter of discretion, when the District Court sets them based on a view of the law, the Court of Appeals gets to review that issue de novo.  (Note to all lawyers: remember that.)  The court looks at Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494 U.S. 827, 836 (1990), and finds that “a finding of liability alone without a corresponding determination on damages does not suffice to start the clock on postjudgment interest.”  The court rejects the idea that this matter should be resolved like attorneys fees issues, or like cases where only the calculation of an amount is left to determine.  Therefore, since the court erroneously started the post-judgment clock, it erroneous ended the pre-judgment clock.