Health and Welfare Plan for Employees of REM, Inc. v. Ridler, 96-4031

• Decision Date: 10 September 1997
• Docket Number: No. 96-4031,96-4031
• Parties: NOTICE: Eighth Circuit Rule 28A(k) governs citation of unpublished opinions and provides that they are not precedent and generally should not be cited unless relevant to establishing the doctrines of res judicata, collateral estoppel, the law of the case, or if the opinion has persuasive value on a material issue and no published opinion would serve as well. HEALTH AND WELFARE PLAN FOR EMPLOYEES OF REM, INC.; Douglas Miller, Plan Administrator for the Health and Welfare Plan for Employees of REM, Inc., Plaintiffs-Appellees, v. James B. RIDLER, Defendant-Appellant, Vickie MADSON; Renville County, Defendants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 207

124 F.3d 207

NOTICE: Eighth Circuit Rule 28A(k) governs citation of unpublished opinions and provides that they are not precedent and generally should not be cited unless relevant to establishing the doctrines of res judicata, collateral estoppel, the law of the case, or if the opinion has persuasive value on a material issue and no published opinion would serve as well.

HEALTH AND WELFARE PLAN FOR EMPLOYEES OF REM, INC.; Douglas

Miller, Plan Administrator for the Health and Welfare Plan for Employees of REM, Inc., Plaintiffs-Appellees, v. James B. RIDLER, Defendant-Appellant, Vickie MADSON; Renville County, Defendants.

No. 96-4031.

United States Court of Appeals, Eighth Circuit.

Sept. 10, 1997.

Submitted June 13, 1997.

Filed Sept. 10, 1997.

Before LOKEN, REAVLEY ^* and JOHN R. GIBSON, Circuit Judges.

PER CURIAM.

James Ridler appeals the district court's ¹ grant of summary judgment to appellees, the Health and Welfare Plan for REM, Inc. and the Plan Administrator. While an employee at REM, Ridler was severely injured in a motorcycle accident, and the Plan expended over $400,000 in medical care and wage loss benefits. Ridler sued those allegedly responsible for the accident in state court. Pursuant to a settlement, two of the defendants deposited their combined insurance policy limits ($450,000) into the state court pending resolution of the present action. The Plan filed this suit in federal court seeking the deposited funds under its subrogation agreement. The district court found that the Plan was entitled to reimbursement in the amount of $406,114.50, and granted appellees' motion for summary judgment. We affirm.

Ridler contends that he settled the subrogation claim with the Plan. On March 13, 1996, a representative of Great West Life and Annuity Insurance Co., to whom the Plan Administrator delegated certain non-discretionary Plan functions, offered to compromise the reimbursement claim for $137,443.00, exactly 50% of the $274,886.39 in benefits paid into the state court at that time. In a conversation between the representative, Lavina Reis, and Ridler's attorney, James Lord, on June 3, 1996, Lord stated that $137,443.00 was not enough and suggested that Great West reduce the $1 million cap by the amount paid. The representative informed him that Great West would not consider a set-off in lieu of reimbursement. Lord concluded the conversation by notifying the representative that since the parties could not resolve their differences, Ridler would pursue action in state court.

Lord told Reis, in essence, that the offer was not acceptable and then suggested that Great West forgo reimbursement for a set-off. This was an attempt to materially alter the terms of the offer, and constitutes a counter-offer. The Restatement of Contracts states:

(1) A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer.

(2) An offeree's power of acceptance is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counter-offer manifests a contrary intention of the offeree.

RESTATEMENT (SECOND) OF CONTRACTS § 39 (1979).

Under Minnesota law, an acceptance that seeks to vary, add to or qualify the terms of an offer is not positive and unequivocal, and constitutes a counter-offer and a rejection of the original offer. Travelers Ins. Co. v. Westridge Mall Co., 826 F.Supp. 289, 292 (D.Minn.1992), aff'd. 994 F.2d 460 (8th Cir.1993) (citing Hough v. Harvey, 410 N.W.2d 53, 55 (Minn.Ct.App.1987)). The district court did not err by finding that Lord's uncontroverted statements presented a counter-offer and a rejection, and terminated his power to accept the original offer.

Moreover, Ridler's attempt to accept the offer on June 13th was not within a reasonable time. Great West's offer did not contain a specified deadline for acceptance. Therefore, it lapsed after a "reasonable time." RESTATEMENT (SECOND) OF CONTRACTS § 41 (1979). According to both the Second Restatement and Corbin on Contracts § 2.16, what constitutes reasonable time is a fact question which depends on all the circumstances existing when the offer and attempted acceptance are made. Great West's reimbursement interest was increased by $130,000 between the time the offer was made and Ridler attempted acceptance. Despite the fact that only a short period of time had lapsed, the circumstances surrounding the offer had radically changed. The district court did not err by concluding that even if Ridler had not rejected the offer, the acceptance was not made within a reasonable time.

Ridler challenges the amount of reimbursement to which the Plan is entitled. However, Ridler has presented no evidence to support his contention that a fact issue exists with respect to the proper amount, nor does he even suggest a more appropriate figure. In his opposition to the Plan's motion for summary judgment, Ridler objected to the Plan's calculation of money expended because of double-charging on certain items. The Plan took this into consideration and adjusted the total...