Estle v. Country Mut. Ins. Co.

• Decision Date: 22 July 1992
• Docket Number: No. 91-3522,91-3522
• Parties: Sondra J. ESTLE, Appellant, v. COUNTRY MUTUAL INSURANCE COMPANY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 476

970 F.2d 476

23 Fed.R.Serv.3d 591

Sondra J. ESTLE, Appellant, v. COUNTRY MUTUAL INSURANCE COMPANY, Appellee.

No. 91-3522.

United States Court of Appeals Eighth Circuit.

Submitted April 14, 1992.

Decided July 22, 1992.

George S. Miller, Kansas City, Mo., argued (Scott Mach and William Hubbard on the brief), for appellant.

Paul P. Hasty, Jr., Kansas City, Mo., argued, for appellee.

Before RICHARD S. ARNOLD, Chief Judge, ROSS, Senior Circuit Judge, and LOKEN, Circuit Judge.

DONALD R. ROSS, Senior Circuit Judge.

Plaintiff Sondra J. Estle (plaintiff) appeals the district court's grant of defendant Country Mutual Insurance Company's (defendant) Motion for Judgment on the Pleadings and the court's subsequent denial of plaintiff's Motion to Reconsider, both involving plaintiff's efforts to collect insurance benefits from policies held with defendant insurance company. After a careful review of the record, briefs and arguments of the parties, we reverse and remand.

On May 18, 1990, plaintiff was in an automobile accident with an unidentified vehicle. At the time of the accident, plaintiff was insured under two policies of insurance issued by defendant Country Mutual Insurance Company. Each policy provided uninsured motorist benefits in the amount of $50,000.00 per person.

On August 23, 1990, defendant sent a letter to plaintiff referring to a "settlement draft for $37,500.00," along with a check in that same amount and a Release of All Claims form. Plaintiff cashed the check but neither signed, nor returned the release. When defendant failed to issue further benefits under the uninsured motorist insurance policies, on February 27, 1991, plaintiff filed a petition in state court for breach of contract, which asserted that plaintiff was entitled to the full $100,000.00 available under the coverage limits of both policies.

Subsequently, the case was removed to federal court and defendant filed its Answer, raising the defenses of accord and satisfaction and release. Defendant also filed a Motion for Judgment on the Pleadings, arguing that an accord and satisfaction had been reached and that under Missouri law plaintiff was required to return the settlement consideration before filing suit. See Nelson v. Browning, 391 S.W.2d 873 (Mo.1965). Plaintiff's response to this motion stated that she had never signed the release, and that if a settlement had been reached, it had been procured by fraud. She included with her response a motion to amend her complaint to include the fraud claim.

The district court granted defendant's Motion for Judgment on the Pleadings, concluding that even assuming a fact issue as to the fraud, plaintiff was still obligated to return her settlement consideration before filing suit. The court stated,

While plaintiff may have a cause of action for fraud in the inducement, she has no present right to bring the action in light of Nelson. Plaintiff received and accepted settlement in the sum of $37,500.00. To date, she retains this sum of money. Until such time plaintiff tenders this sum of money back to defendant, she has no actionable claim.

One month later, on July 30, 1991, plaintiff filed a Motion for Reconsideration or Relief from Judgment, stating that she had returned the $37,500.00 to the defendant following the July 1, 1991 judgment, and requesting to proceed with her lawsuit. Plaintiff also filed a Second Motion to Amend to include a fraudulent misrepresentation claim. On October 10, 1991, the district court denied both of plaintiff's motions, finding that relief was not warranted under Rule 60(b)(6) of the Federal Rules of Civil Procedure. This appeal followed.

We first address defendant's argument that this court is without subject matter jurisdiction to consider this appeal because plaintiff filed her notice of appeal outside the time limitation provided in Rule 4(a)(5) of the Federal Rules of Appellate Procedure. Under Rule 4(a)(1), a notice of appeal must be filed within thirty days after the judgment is entered. Rule 4(a)(5) ¹ provides that the district court may allow an extension of time to file an appeal with a showing of excusable neglect or good cause when the motion for such extension is filed within thirty days of judgment as prescribed under Rule 4(a)(1). Rule 4(a)(5) further provides that the extension shall not exceed thirty days beyond the date the original appeal was to have been filed.

Here, the judgment was entered on July 1, 1991. Plaintiff filed her Motion to Extend on July 31, 1991, in which she requested an extension of time which would allow her thirty days after the ruling on the Motion for Reconsideration to file her appeal. The motion to extend was granted on August 1, 1991. The order denying plaintiff's Motion to Reconsider was entered on October 10, 1991, and plaintiff's appeal was filed on November 5, 1991.

Defendant now contends that the district court was without authority under Rule 4(a)(5) to extend the time for filing an appeal beyond sixty days after its July 1, 1991 entry of judgment, and that this court is now without subject matter jurisdiction to hear the appeal. While Rule 4(a)(5) provides that an extension of time to file an appeal shall not exceed thirty days beyond the time the original appeal was to have been filed, that rule has been somewhat tempered by a line of cases beginning with Harris Truck Lines, Inc. v. Cherry Meat Packers, Inc., 371 U.S. 215, 217, 83 S.Ct. 283, 285, 9 L.Ed.2d 261 (1962) (per curiam), where the Supreme Court allowed an appeal outside the federal rules under certain "unique circumstances." Id. at 217, 83 S.Ct. at 285. Two years later, the Supreme Court applied its ruling in Harris, and allowed an appeal outside the deadline provided for in the federal rules, where the petitioner relied on a statement of the district court and filed the appeal within the assumedly new deadline. The Court found that these "unique circumstances" fit "squarely within the letter and spirit of Harris." Thompson v. INS, 375 U.S. 384, 387, 84 S.Ct. 397, 398, 11 L.Ed.2d 404 (1964) (per curiam).

Similarly, in Needham v. White Lab., Inc., 639 F.2d 394 (7th Cir.), cert. denied, 454 U.S. 927, 102 S.Ct. 427, 70 L.Ed.2d 237 (1981), the Seventh Circuit applied Thompson in holding that the respondent "should not be penalized for relying on the district court assurance that notice of appeal filed within thirty days of its disposition of the motion to reconsider would be timely." Id. at 398. Our Circuit has held that "[t]he unique circumstances exception to rule 4(a) protects a party who reasonably relied on erroneous district court action that caused the party to file an untimely notice of appeal." Hable v. Pairolero, 915 F.2d 394, 395 (8th Cir.1990).

Here, the district court granted plaintiff's motion to extend the time to file her appeal until thirty days following the district court's ruling on her Motion for Reconsideration. The order allowing the extension was entered when time remained to file a timely notice of appeal under Rule 4(a)(1), but instead, the plaintiff was "lulled into inactivity" by the district court's representations that a timely notice of appeal could be filed after the ruling on the Motion for Reconsideration. See Willis v. Newsome, 747 F.2d 605, 606 (11th Cir.1984). Under these unique circumstances, we conclude that the notice of appeal was timely and that this court has jurisdiction over the appeal.

Having thus concluded this case is properly before us, we now turn to the substance of the parties' arguments. There is no dispute that plaintiff was covered under two policies of insurance and that under Missouri law these two policies "stack" to allow for $100,000.00 worth of uninsured motorist coverage. See Husch v. Nationwide Mut. Fire Ins. Co., 772 S.W.2d 692, 695 (Mo.Ct.App.1989). Just three months after the accident, and before plaintiff was represented by counsel, defendant's insurance adjuster, Patti Day, sent plaintiff a memorandum of August 23, 1990, and a check for $37,500.00, along with a Release of All Claims form. Ms. Day's August 23 memorandum provided in part: "I have enclosed the settlement draft for $37,500.00. I have also enclosed a Release of All Claims Form which I need you to sign and have notarized.... I'll call on Monday regarding the car and the rest of the Medical Payment Benefits." Plaintiff signed the draft, but refused to sign the Release.

Plaintiff now claims that defendant misrepresented policy limits and conditions in obtaining the alleged settlement agreement. Specifically, plaintiff charges that the defendant told her that she was covered by only one uninsured motorist policy when she was actually covered by two, and that the defendant misled her into believing that she would be able to recover compensation for any future medical expenses from her private health insurer, when in fact such compensation was not available. The district court denied each of plaintiff's two motions to amend her complaint in order to allege a cause of action for fraud.

The district court did not expressly consider whether the pleadings sufficiently evidenced an accord and satisfaction or contract of release which would...