LaChapelle v. Berkshire Life Ins. Co.

• Citation: 142 F.3d 507
• Decision Date: 07 April 1998
• Docket Number: No. 97-2146,97-2146
• Parties: Ronald R. LaCHAPELLE, Plaintiff, Appellant, v. BERKSHIRE LIFE INSURANCE COMPANY, Defendant, Appellee. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 507

142 F.3d 507

Ronald R. LaCHAPELLE, Plaintiff, Appellant, v. BERKSHIRE LIFE INSURANCE COMPANY, Defendant, Appellee.

No. 97-2146.

United States Court of Appeals,

First Circuit.

Heard April 7, 1998.

Decided April 29, 1998.

Mark L. Randall, with whom Daniel G. Lilley Law Offices, P.A. was on brief, for appellant.

K. Douglas Erdmann, with whom William J. Kayatta, Jr. and Pierce Atwood were on brief, for appellee.

Before SELYA, Circuit Judge, BOWNES, Senior Circuit Judge,and LYNCH, Circuit Judge.

SELYA, Circuit Judge.

Plaintiff-appellant Ronald R. LaChapelle appeals from an order dismissing his civil action for breach of contract and intentional infliction of emotional distress against defendant-appellee Berkshire Life Insurance Company (the Company). For the reasons elucidated below, we affirm.

I

The district court dismissed the appellant's suit on a Rule 12(b)(6) motion. Accordingly, we, like the trial court, must accept as true the well-pleaded factual allegations of the complaint, draw all reasonable inferences therefrom in the plaintiff's favor, and determine whether the complaint, so read, limns facts sufficient to justify recovery on any cognizable theory. See Dartmouth Review v. Dartmouth College, 889 F.2d 13, 16 (1st Cir.1989). In arriving at this determination, we differentiate between well-pleaded facts, on the one hand, and "bald assertions, unsupportable conclusions, periphrastic circumlocution, and the like," on the other hand; the former must be credited, but the latter can safely be ignored. See Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir.1996).

The operative pleading here is the amended complaint. It alleges that the appellant, a stockbroker, obtained a policy of long-term disability insurance from the Company in 1986. The insurance contract contained a standard clause, tracking Me.Rev.Stat. Ann. tit. 24-A, § 2715 (West 1990), which required the insured to file written proof of any insured loss with the Company and to bring any legal action predicated on the policy within three years of the accrual date.

On February 4, 1991, the appellant was found floating in the Androscoggin River and promptly hospitalized. Doctors treated him for frostbite, hypothermia, and amnesia. They also performed a psychiatric evaluation. Following his discharge on February 8, 1991, the appellant admitted himself to another hospital because of his emotional difficulties. He stayed there for less than two weeks. Psychiatrists attributed his depression to severe stress, resulting from career troubles and pending legal proceedings.

The appellant furnished written proof of loss to the Company, backed by medical evaluations declaring him to be totally disabled from performing his usual occupation. The Company honored the claim and began paying benefits. In due season, LaChapelle's legal bedevilment bore bitter fruit and he pled guilty to criminal charges of theft by misapplication of property. The state court imposed an incarcerative sentence and imprisoned the appellant in June 1992. That month, the Company informed him that it would discontinue payments (presumably on the theory that his immurement, not his depression, kept him from functioning as a stockbroker), ¹ but that it might resume payments after his release. The Company also offered to settle all policy-related claims for $15,000. The appellant refused the settlement offer but took no immediate action to contest the discontinuance of benefits.

In 1995, the appellant filed another claim for disability benefits, asserting that he was still unable to work as a result of his original disability. ² The Company denied this claim and the appellant did not pursue it. Two years later, however, he shifted his focus and sued the Company on the ground that it had breached the policy covenants by unilaterally terminating his benefits when he went to prison in 1992. He appended supplemental claims for intentional infliction of emotional distress and violation of Maine's late payment of claims statute, Me.Rev.Stat. Ann. tit. 24-A, § 2436(1) (West 1990), directed to the same event.

The Company moved to dismiss the complaint for failure to state an actionable claim. See Fed.R.Civ.P. 12(b)(6). After the appellant amended the complaint, the district court granted the Company's motion. The court concluded that the breach of contract claim was time-barred by virtue of the insurance policy's internal three-year limitations period and that the facts alleged in the amended complaint were insufficient to ground an equitable estoppel. The court also held that the amended complaint failed to state cognizable claims for either intentional infliction of emotional distress or the untimely payment of an insurance claim.

We review de novo a district court's allowance of a Rule 12(b)(6) motion to dismiss. See Garita Hotel Ltd. Partnership v. Ponce Fed. Bank, 958 F.2d 15, 17 (1st Cir.1992). Inasmuch as the appellant premised federal jurisdiction on diversity of citizenship and the existence of a controversy in the requisite amount, 28 U.S.C. § 1332(a) (1994), we apply the substantive law of Maine. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938); Woods-Leber v. Hyatt Hotels of P.R., Inc., 124 F.3d 47, 50 (1st Cir.1997). Because the appellant has abandoned his claim under Me.Rev.Stat. Ann. tit. 24-A, § 2436(1), we focus exclusively on breach of contract and intentional infliction of emotional distress.

II

We first address the breach of contract claim. Granting a motion to dismiss based on a limitations defense is entirely appropriate when the pleader's allegations leave no doubt that an asserted claim is time-barred. See, e.g., Street v. Vose, 936 F.2d 38, 39 (1st Cir.1991); Kali Seafood, Inc. v. Howe Corp., 887 F.2d 7, 9 (1st Cir.1989). Here, the appellant concedes that the three-year limitations period, if untolled, bars his contract claim. He maintains, however, that the doctrine of equitable estoppel, correctly applied, halts the running of the limitations period and vitiates any temporally oriented defense. The district court did not agree. Nor do we.

In Maine, "the gist of an estoppel barring the defendant from invoking the defense of the statute of limitations is that the defendant has conducted himself in a manner which actually induces the plaintiff not to take timely legal action on a claim." Townsend v. Appel, 446 A.2d 1132, 1134 (Me.1982). Of course, the lack of a timely filing cannot be attributed to the defendant's conduct unless the plaintiff can demonstrate that he intended to file suit during the permitted period, see id., that the defendant's actions led him to refrain from doing so, see Roberts v. Maine Bonding & Casualty Co., 404 A.2d 238, 241 (Me.1979), and that his forbearance was objectively reasonable, see Hanusek v. Southern Me. Med. Ctr., 584 A.2d 634, 636-37 (Me.1990).

The appellant was on clear notice of his burden. His original complaint in this case did not allege an estoppel, but he filed an amended complaint in an effort to correct that shortcoming. Even then, he failed to sketch a factual predicate that would warrant the application of equitable estoppel. For example, the appellant does not allege that he intended to sue during the prescriptive period. More importantly, as evidence of conduct that ostensibly dissuaded him from taking timely legal action, the appellant mentions only the Company's statement to the effect that it might resume payments after his release. As a matter of law, this assertion is insufficient to induce a reasonable person to sit on his rights. See Townsend, 446 A.2d at 1134.

We need not belabor the obvious. The Company did not mislead the appellant, but, rather, told him straightaway that it intended to stop paying benefits. It then acted on that stated intention. This should have been a reveille, not a lullaby. By that we mean it should have galvanized a reasonable person into action, not lulled him into a false sense of security. The Company's additional statement--that it "might" subsequently resume payments--conveyed no assurance and does not alter the relevant calculus. In all events, even if the appellant relied on the Company's statement to his detriment, such reliance fails, as a matter of law, to meet the standard of objective reasonableness imposed under Maine law. See Hanusek, 584 A.2d at 636-37; City of Auburn v. Desgrosseilliers, 578 A.2d 712, 714 (Me.1990).

LaChapelle parries by asserting that, given his fragile mental state, he could not be expected to appreciate and act upon the Company's volte-face. Under certain circumstances, perhaps, the standard of objective reasonableness might yield to accommodate a plaintiff with severe mental disabilities (especially if those disabilities are known to the defendant). But this is not such an instance. Though the appellant suffered from depression, he was competent enough to bring his initial claim in a timely fashion, to mull (and promptly reject) the insurer's settlement proposal, and, three years later, to file another claim with the Company. He does not allege that his condition worsened over time (indeed, at oral argument in this court, his counsel stated that it had not). In short, there is nothing of record here that suggests a lack of capacity or a disability severe enough to warrant an exception to, or a relaxation of, the rule of objective reasonableness.

The appellant has one last arrow in his quiver. In his reply brief in this court, he attempts to repair his ruptured breach of contract claim by arguing that, under the public policy of Maine as expressed in Me.Rev.Stat. Ann. tit. 14, § 853, his imprisonment tolled the limitations period. ³ The attempt fails. For one thing, it seems fairly obvious that this statutory tolling provision does not apply to actions brought on insurance policies. We need not resolve this point definitively, however, because the argument is procedurally defaulted. It is settled...