Appellate Law & Practice

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. 

CA1: it wasn't mail fraud, and stop asking for more discovery

Sanchez v. Triple-S Management, No. 06-1925 affirms a grant of summary judgment to the defendants in a civil RICO case.  The plaintiffs lost a number of initial procedural skirmishes, and finally were faced with an Order to Show Cause why summary judgment should not be granted against them.  The plaintiffs essentially responded that they needed experts to analyze the documents (related to the insurance industry) they had, but in doing so they deviated from their prior RICO theory and into a theory which required pleading with particularity under FRCP 9(b).  While the First acknowledges that summary judgment on the court’s own motion is not a road to be traveled lightly, it concludes that the First didn’t err because: 1) there was enough discovery that the parties probably could understand the material facts; and 2) there was an opportunity to be heard on whether there were triable issues of material facts.  In this case, the District court looked right at the testimony of the plaintiffs in their own depositions.  Substantively, look at “Mail or wire fraud [they require] proof of (1) a scheme to defraud based on false pretenses; (2) the defendant's knowing and willing participation in the scheme with the specific intent to defraud; and (3) the use of interstate mail or wire communications in furtherance of the scheme.”  But, substantively, the best the defendants can muster is a “failure to disclose” and in the First that isn’t enough for mail fraud. 

CA1: no qualified immunity for political abuse of an insurance license

Guillemard-Ginorio v. Contreras-Gomez, Nos. 06-1436, 06-1819 (6/12/07).  This case holds that the insurance commissioner of Puerto Rico was not entitled to qualified immunity for revoking the insurance license of the plaintiffs, finding them, and barring them, for political reasons.  Obviously, he didn’t hold a hearing.  The defendants appeal the denial of summary judgment.  The First holds that the issue of qualified immunity on the First amendment claim was waived (by the defendant), and on the due process claim, the First notes that one of the defendants “relied” on a statute that wasn’t in effect (that was “patently” unconstitutional) to deny him a hearing.  (I am probably not getting a few of the details right, if 1983 or insurance law is your bag, read this.)

CA1: R. 11 and fiduciary duties

EIU Group, Inc. v. Gulf Insurance, Nos. 06-1932, 06-1933, 06-1934, 06-1935.  To an average person, this case would seem fairly straight forward: when you take out a loan, the bank isn’t your best friend.  If you can’t pay the loan, a defense isn’t “the bank-come-shareholder-of-a-floundering compnay didn’t help me.”  Nor is it a breach of a fiduciary duty.  Of course, if there was evidence submitted that the defendant (a bank’s nominee as a director) actually had actually been shown to have hurt the plaintiff’s interests (or even not helped them), it would be different.  There seems to have been a lot of vague words like “lobbied” or “influenced” used.  Strangely, a jury ruled in the debtor’s favor.
But, more interesting is a description of conduct that merits Rule 11 Sactions.  Told to negotiate a docket entry, one lawyer sent the other an email that read:

Giving you guys the benefit of the doubt, you still haven't figured out my concerns. Rather than continue this game of 20 questions, why don't you go ahead and file your motion -- consider the exchange of e-mail to have satisfied the . . . obligation to confer -- and I'll review it and respond as appropriate.

This sounds like a comment on a blog, and gets the sender Rule 11 Sanctions.  (The underlying subject matter is insurance, but that doesn't matter.)