Dinerstein v. Paul Revere Life Ins. Co., 97-5874

• Decision Date: 23 April 1999
• Docket Number: No. 97-5874,97-5874
• Citation: 173 F.3d 826
• Parties: 12 Fla. L. Weekly Fed. C 766 Stephen M. DINERSTEIN, Plaintiff-Appellee, v. PAUL REVERE LIFE INSURANCE COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 826

173 F.3d 826

12 Fla. L. Weekly Fed. C 766

Stephen M. DINERSTEIN, Plaintiff-Appellee, v. PAUL REVERE LIFE INSURANCE COMPANY, Defendant-Appellant.

No. 97-5874.

United States Court of Appeals, Eleventh Circuit.

April 23, 1999.

Mark D. Greenberg, Leonor Lagomasino, Lopez, Greenberg & Best, Miami, FL, for Defendant-Appellant.

Nancy Hoffman, Ft. Lauderdale, FL, Mark Francis Booth, Rogers, Morris &amp Ziegler, Ft. Lauderdale, FL, for Plaintiff-Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before HATCHETT, Chief Judge, BARKETT, Circuit Judge, and RONEY, Senior Circuit Judge.

BARKETT, Circuit Judge:

Paul Revere Life Insurance Company ("Paul Revere") appeals the final judgment entered pursuant to a jury verdict in favor of Stephen Dinerstein on Dinerstein's action for benefits under his disability insurance policy. Dinerstein sued Paul Revere for breach of contract claiming that he was paid monthly disability benefits in an amount less than that to which he was entitled. The disagreement between the parties involves the question of whether Dinerstein's original policy contained a rider which provided for a reduction in benefits once he qualified for Social Security payments.

On appeal, Paul Revere asserts that the judgment must be reversed because: 1) Dinerstein's claim is barred by res judicata and by the statute of limitations; 2) the district court erroneously excluded relevant and material evidence in support of its defense; 3) the jury verdict was against the manifest weight of the evidence; and 4) the district court erred by reserving jurisdiction to award attorney fees and awarding pre-judgment interest. We find that the statute of limitations bars Dinerstein's claim and therefore reverse the final judgment of the district court. ¹

Background

In 1983, Stephen Dinerstein purchased from Paul Revere various insurance policies, both business and personal, to insure against loss if he became disabled. These policies included a personal disability policy, which is the only policy at issue here. In 1986, Dinerstein became disabled and, under this personal disability policy, received benefits for the next twelve months in the amount of $2,000 per month until December 1987, at which time he qualified for Social Security benefits. Thereafter, Dinerstein's disability benefits under the policy were reduced by Paul Revere to $1,400 per month. When Dinerstein inquired about the reduction in his payments, Paul Revere explained that the rider attached to his original policy provided for the reduction as soon as he qualified for Social Security payments. Dinerstein responded that such a rider had not been included in the policy he had received and that he was entitled to $2,000 per month. Paul Revere disputed this assertion and continued to pay only the $1,400 per month, which Dinerstein continued to accept.

In November 1994, Dinerstein filed this suit against Paul Revere in state court claiming that he was entitled to $2,000 per month under his disability policy and not the $1,400 he had been receiving after his Social Security benefits began. The case was removed to federal district court and tried before a jury. At trial, the jury found in Dinerstein's favor and the district court entered judgment awarding Dinerstein $102,572.75: $66,000 in past due disability payments calculated at $600 per month from July 1988 to August 1997, as well as $35,784 in prejudgment interest and $788.75 in costs. The court also found that Dinerstein was entitled to future disability payments of $2,000 per month to the age of 65, and reserved jurisdiction to award attorney fees. Paul Revere appeals from this judgment.

Discussion

Under Florida law, a "legal or equitable action on a contract, obligation, or liability founded on a written instrument" must be commenced within five years. Fla. Stat. Ann. § 95.11(2)(b) (West 1999). The Florida Supreme Court has held that, under § 95.11(2)(b), a breach of contract action on an insurance contract accrues on the date the contract is breached. See State Farm Mut. Auto. Ins. Co. v. Lee, 678 So.2d 818, 821 (Fla.1996).

Paul Revere argues that Dinerstein's cause of action accrued in July 1988, when Paul Revere reduced the payments under Dinerstein's personal disability policy from $2,000 to $1,400 per month following the commencement of his Social Security benefits. Thus, Paul Revere claims, the statute of limitations expired in 1993, before this lawsuit was filed. Dinerstein, on the other hand, argues that he is suing on a debt payable by installments and that the statute of limitations for installment contracts runs against each installment from the day it becomes due. Based on this reasoning, Dinerstein maintains that each underpayment under the policy constitutes a continuing breach and that he should therefore be permitted to bring suit for the installments due within the limitations period. To support his position, Dinerstein relies on Bishop v. State of Florida, Div. of Retirement, 413 So.2d 776 (Fla.Dist.Ct.App.1982).

In Bishop, the plaintiffs were retired teachers entitled to pension benefits based upon a plan that they claimed was intended to pay retirees approximately half of their final salaries after twenty-five years of service. In fact, however, none of the mathematical formulations for payments under the statute formalizing the pension plan guaranteed such an amount, see Fla. Stat. Ann. § 238.07 (West 1998), and a shortfall in the annuity fund from which these benefits were paid led to the retirees receiving approximately $1,000 less than the retirees expected. See id. at 777-78.

Plaintiffs filed suit in 1980. Because more than five years had...