McCord v. Horace Mann Ins. Co.
| Decision Date | 01 December 2004 |
| Docket Number | No. 04-1743.,04-1743. |
| Citation | 390 F.3d 138 |
| Parties | Darlene M. McCORD, Plaintiff, Appellant, v. HORACE MANN INSURANCE COMPANY, Defendant, Appellee. |
| Court | U.S. Court of Appeals — First Circuit |
R. Mark Petersen with whom Michelle M. Hansen was on brief for appellant.
Michael L. Snyder with whom McGovern & Ganem, P.C. was on brief for appellee.
Before LYNCH, Circuit Judge, CAMPBELL and STAHL, Senior Circuit Judges.
Plaintiff-Appellant, Darlene M. McCord, brought an action in the district court against Defendant-Appellee, Horace Mann Insurance Company ("Horace Mann"), for breach of its insurance policy insuring her home (the "Policy") and for violation of Mass. Gen. Laws ch. 93A. Horace Mann moved for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) on the grounds that McCord failed to comply with a condition precedent in the Policy, inserted under Massachusetts law, that required the amount of loss to be submitted to a panel of referees prior to the bringing of an action to recover for the loss. See Mass. Gen. Laws ch. 175, § 99. The district court entered judgment in Horace Mann's favor and dismissed the case without prejudice. The district court subsequently denied McCord's motion to alter or amend the judgment pursuant to Fed.R.Civ.P. 59(e). We affirm.
On February 5, 2002, McCord's home in Holden, Massachusetts was destroyed by a fire. McCord sought to recover insurance under the Policy issued by Horace Mann. McCord's public adjuster, Sadick Public Insurance Adjusters ("Sadick"), submitted a statement to Horace Mann, estimating that the damages caused by the fire were $162,553.22. On November 15, 2002, Horace Mann sent a letter to McCord, formally denying all coverage or liability under the Policy, on the grounds that she, or persons acting at her direction, intentionally set the fire at her home. The letter quoted excerpts from the Policy, including the requirement that "a disagreement as to the dollar amount of loss" be "referred to a three member board of referees" in accordance with Massachusetts law. The letter also referred to a provision of the Policy stating that "no suit may be brought against [Horace Mann] unless all the terms of [the Policy] have been complied with." The letter further stated:
Horace Mann specifically reserves all of its rights and defenses with regard to the resolution of amount of loss.... Horace Mann specifically rejects [Sadick's] calculation as being an accurate determination of the amount of loss. Accordingly, Horace Mann specifically reserves all of its rights and defenses with regard to resolution of any dispute about the amount of loss as a result of the subject fire.
On December 4, 2002, counsel for McCord sent Horace Mann a demand letter in accordance with Mass. Gen. Laws ch. 93A. Horace Mann's response, dated December 19, 2002, denied liability and stated:
Notwithstanding Horace Mann's denial of coverage to [McCord], Horace Mann specifically reserves all of its rights under the [Policy] and M.G.L. c. 175, § 99 with regard to resolution of any dispute about the amount of loss caused by the subject fire. Horace Mann specifically rejects [McCord's] assertion that she sustained $66,205.86 in personal property damage and $162,553.22 in property damage as a result of the subject fire.
McCord brought an action against Horace Mann in the Massachusetts state court, seeking damages for Horace Mann's refusal to pay her claim under the Policy. On February 7, 2003, Horace Mann, a resident of the State of Illinois, removed the case to federal court, pursuant to 28 U.S.C. § 1446, alleging diversity jurisdiction under 28 U.S.C. § 1332(a). In its answer to McCord's complaint, Horace Mann raised McCord's "fail[ure] to comply with the condition precedent of reference pursuant to M.G.L. c. 175, § 99" as one of its affirmative defenses. In its counterclaim against McCord for breach of contract and deceit, Horace Mann also stated that "McCord and Horace Mann have never reached an agreement as to the amount of loss caused by the subject fire." McCord admitted this statement in her answer to the counterclaim.
On June 11, 2003, Horace Mann moved for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c). It asserted that the parties had failed to agree on the amount of loss caused by the fire, and that McCord's failure to submit her claim to a reference proceeding, pursuant to Mass. Gen. Laws ch. 175, § 99, barred her suit. McCord argued in opposition that Mass. Gen. Laws ch. 175, § 99 was inapplicable, because 1) the case was about a complete denial of coverage rather than any disagreement over the amount of loss and 2) Horace Mann had waived its rights to a reference proceeding. In the alternative, McCord requested a stay of the case pending the outcome of a reference proceeding.
On March 16, 2004, the district court dismissed the case without prejudice, citing McCord's failure to have submitted her claim to a reference proceeding prior to commencement of the action. The district court declined to issue a stay, because McCord had not initiated reference proceedings before bringing suit. The court noted it had granted a stay in another case where a reference proceeding had been begun but was not completed by the time the action was filed. See M.A.S. Realty Corp. v. Travelers Cas. & Sur. Co. of Ill., 196 F.Supp.2d 41, 47 (D.Mass.2002). It was not until after the dismissal of her case that McCord requested a reference proceeding with Horace Mann. We were advised by counsel at oral argument that Horace Mann refused to participate, citing as a reason the expiration of the two-year statute of limitations set forth in Mass. Gen. Laws ch. 175, § 99. On March 29, 2004, McCord filed a motion to alter or amend judgment under Fed.R.Civ.P. 59(e), which the district court denied. This appeal followed.
We review de novo both a district court's entry of judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) and the court's allowance of summary judgment pursuant to Fed.R.Civ.P. 56. Rafferty v. Cranston Pub. Sch. Comm., 315 F.3d 21, 25 (1st Cir.2002). However, the standard governing the allowance of a Rule 12(c) motion is generally more generous to the nonmovant. "Judgment on the pleadings under Rule 12(c) may not be entered unless it appears beyond a doubt that the nonmoving party can prove no set of facts in support of her claim which would entitle her to relief." Feliciano v. State of R.I., 160 F.3d 780, 788 (1st Cir.1998) (citations omitted).
On occasion—and this is such a case—the parties' actions during the proceeding will result in converting what begins as a motion under Rule 12(c) to one for summary judgment under Rule 56. See Fed.R.Civ.P. 12(c) (); Gulf Coast Bank & Trust Co. v. Reder, 355 F.3d 35, 38 (1st Cir.2004). When this happens, the governing standard becomes that applicable to summary judgment. See id.
Here, Horace Mann's Rule 12(c) motion relied upon evidentiary submissions outside the pleadings, and McCord filed an opposition that appended additional, outside evidentiary materials. There is no indication the district court excluded these materials from its consideration. The motion accordingly converted to one for summary judgment. While a conversion cannot take place unless the nonmoving party "is given adequate notice of the conversion and a `reasonable opportunity to present material made pertinent to such a motion by Rule 56,'" McCord had constructive notice of the potential conversion and, as noted, responded by attaching outside materials to its opposition. Collier v. City of Chicopee, 158 F.3d 601, 603 (1st Cir.1998).1
Under Rule 56, the nonmovant has a heavier burden than would be posed by Rule 12(c). Once the moving party has served a supported motion asserting entitlement to summary judgment, the party opposing the motion must demonstrate, by competent evidence, a genuine issue of a material fact. Gulf Coast Bank, 355 F.3d at 39; see Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir.1990). In reviewing a motion for summary judgment, we construe the record in the light most favorable to the nonmovant and resolve all reasonable inferences in her favor. Rosenberg v. City of Everett, 328 F.3d 12, 17 (1st Cir.2003).
There are two issues on appeal: 1) whether McCord's failure to submit her claim to a reference proceeding bars her lawsuit pursuant to Mass. Gen. Laws ch. 175, § 99, and 2) whether Horace Mann waived the reference condition precedent.2
Both parties rely upon Mass. Gen. Laws ch. 175, § 99 and Massachusetts state case law. In so doing, they implicitly agree that Massachusetts law governs.3 The Policy itself appears to be drafted in accordance with the standard form for Massachusetts fire insurance policies as required and set forth in Mass. Gen. Laws ch. 175, § 99. Section 99 states in pertinent part:
In case of loss under this policy and a failure of the parties to agree as to the amount of loss, it is mutually agreed that the amount of such loss shall be referred to three disinterested men ... and such reference, unless waived by the parties, shall be a condition precedent to any right of action in law or equity to recover for such loss....
McCord argues that Mass. Gen. Laws ch. 175, § 99 is not applicable, because there was no dispute as to the amount of loss but only a total denial of coverage by Horace Mann. According to McCord, Horace Mann did not state any amount of loss or provide specific criticism of her public adjuster's statement.
But Section 99 is explicit that "[i]n case of ... a failure of the parties to agree as to the amount of loss," reference, unless waived, shall...
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