Ministeri v. Reliance Standard Life Ins. Co.
| Decision Date | 25 July 2022 |
| Docket Number | 21-1651, No. 21-1652 |
| Citation | 42 F.4th 14 |
| Parties | Renee MINISTERI, Personal Representative of the Estate of Anthony Ministeri, Plaintiff, Appellee, v. RELIANCE STANDARD LIFE INSURANCE COMPANY, Defendant, Appellant. Renee Ministeri, Personal Representative of the Estate of Anthony Ministeri, Plaintiff, Appellant, v. Reliance Standard Life Insurance Company, Defendant, Appellee. |
| Court | U.S. Court of Appeals — First Circuit |
Joshua Bachrach, with whom Kara Thorvaldsen and Wilson, Elser, Moskowitz, Edelman & Dicker LLP were on brief, for defendant.
Teresa A. Monroe, with whom Monroe Law LLP, Eugene F. Sullivan, Jr., Richard J. Sullivan, and Sullivan & Sullivan, LLP were on brief, for plaintiff.
Before Barron, Chief Judge, Selya and Howard, Circuit Judges.
It is common ground that ambiguities in an insurance policy — particularly ambiguities in an insurance policy issued as part of an employee benefit plan and, thus, within the protective carapace of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 - 1461 — must ordinarily be construed against the issuing insurer. The case at hand is a poster child for this familiar proposition.
The backdrop is easily painted. In these consolidated appeals, we are tasked — among other things — with deciding whether an employee lost life insurance coverage under his employer's group policy after he developed a brain tumor that disrupted his usual work. The insurance company denied coverage on the ground that the employee had lost coverage before his death. We conclude that the policy language invoked by the insurance company is less than clear, bringing into play the rule that ambiguous terms in an insurance policy should be read, within reason, in favor of coverage. Applying that rule, we hold that the employee was covered at the time of his demise.
The court below granted a motion for summary judgment filed by the employee's widow as to both the basic life insurance amount of $624,000 and the supplemental life insurance amount of $468,000. See Ministeri v. Reliance Standard Life Ins. Co., 523 F. Supp. 3d 157, 181 (D. Mass. 2021). The court also awarded her attorneys' fees, costs, and prejudgment interest. The insurer has appealed, and the widow has cross-appealed to challenge the rate set by the district court for prejudgment interest. Discerning neither any reversible error nor any abuse of discretion, we reject both appeals and leave the parties where we found them.
We briefly rehearse the relevant facts and travel of the case. On April 1, 2014, Anthony Ministeri (Ministeri) began working at AECOM Technology Corporation (AECOM) in Chelmsford, Massachusetts, as a construction services executive. He was to work twenty-four hours per week for an annual salary of $156,000. His ordinary duties required frequent travel.
Through AECOM's group plan, Ministeri selected life insurance coverage underwritten by Reliance Standard Life Insurance Company (Reliance). He opted for coverage in the amount of $624,000 (four times his salary) in basic life insurance and $468,000 (three times his salary) in supplemental life insurance.
On May 2 — barely a month after beginning his new job — Ministeri became discombobulated (to the point of getting lost in an office building, struggling to drink from cups, and typing gibberish) while on a business trip in New York City. Upon his return to Massachusetts, an MRI revealed a brain lesion. After two brain biopsies, Ministeri was diagnosed with glioblastoma (an especially aggressive type of brain tumor ). He was treated with radiation and chemotherapy through July.
Ministeri retained his job at AECOM and did at least some work from home during the period from May until early August 2014 (although the parties wrangle over how much work he did and when he did it). He continued to receive his customary salary and submitted timesheets claiming his normal twenty-four hours of work each week (always Monday, Tuesday, Wednesday), and AECOM invariably approved those timesheets.
On July 31, Ministeri met with Dr. Elizabeth Collins for an outpatient consultation. Ministeri's measured optimism (at least for the short term) is reflected in Dr. Collins's note of that meeting. He said that he felt "much better" and that he was "completely comfortable walking independently." Moreover, he "explained that he would like to return back to work," including significant air travel. He acknowledged, however, that his brain tumor would eventually "come back" and estimated that he was at eighty percent of his prior functioning, noting that he felt "a little bit slow in the uptake in his brain."
On August 10, Ministeri suffered a massive pulmonary embolism. He received extensive hospital care and eventually was transferred to a rehabilitation facility. Unable to work at all, Ministeri took a formal leave effective August 8, 2014. He applied for and received long-term disability benefits under a separate policy issued by Reliance (also a part of AECOM's benefits package). For purposes of that policy, Reliance determined that Ministeri's last day of work at AECOM was August 6. Ministeri continued to pay his premiums on his life insurance policy until his death the following year.
During the fall and early winter of 2014, Ministeri's condition showed signs of improvement. A series of neuro-oncology clinic notes signed by Dr. Erik Uhlmann — after monthly meetings with Ministeri from September through January — recount that Ministeri's "[m]ental status [wa]s satisfactory in areas of alertness, orientation, concentration[,] memory and language"; that he had "[n]o trouble walking, good balance," and "no fatigue"; and that he had "[n]o visual problems, no weakness," and "no difficulty ... speaking." On September 19, 2014, Dr. Uhlmann wrote that Ministeri was "presently not fit to return to work" but would be "able to return to work" on January 5, 2015. In January, though, Dr. Uhlmann pushed back the projected date of Ministeri's return to work to March 31, 2015. Despite Dr. Uhlmann's optimism, Ministeri was never able to resume work and succumbed to his illness on October 2, 2015.
On March 24, 2016, Ministeri's widow, plaintiff Renee Ministeri, submitted a proof-of-loss statement to Reliance, through AECOM. In it, she claimed a total of $1,092,000 under her late husband's life insurance policy. On July 8, 2016, Reliance denied the claim. In a letter to the plaintiff, it stated that Ministeri lost eligibility under the policy once he stopped working "Part-time," which the policy defined as "working for [AECOM] for a minimum of 20 hours during [his] regularly scheduled work week." Reliance explained that, following Ministeri's disorientation in New York in May of 2014, he was no longer performing his usual duties (especially travel) for a minimum of twenty hours per week and, thus, his coverage under the policy had lapsed. The plaintiff appealed this denial, but Reliance held firm.
In March of 2018, the plaintiff sued Reliance in the United States District Court for the District of Massachusetts alleging wrongful denial of benefits under section 502(a) of ERISA, 29 U.S.C. § 1132(a)(1)(B), (a)(3).1 Reliance answered the complaint, and the plaintiff's request to expand the administrative record through discovery was denied. Ministeri, 523 F. Supp. 3d at 165. In due course, the parties cross-moved for summary judgment on the administrative record. After briefing and oral argument, the district court granted the plaintiff's motion for summary judgment, denied Reliance's cross-motion, and awarded the plaintiff the sum of $1,092,000. See id. at 161-62. In a subsequent order, the court awarded the plaintiff attorneys' fees ($102,018.75), costs ($426.83), and prejudgment interest (to be computed at a rate of 7.5%). See Ministeri v. Reliance Standard Life Ins. Co., No. 18-10611, 2021 WL 3815929, at *1 (D. Mass. Aug. 18, 2021).
These cross-appeals followed. In them, Reliance seeks to reverse the entry of summary judgment in favor of the plaintiff as well as the denial of its cross-motion for summary judgment, and the plaintiff seeks to augment the award of prejudgment interest by elevating the prejudgment interest rate.
In the ERISA context, motions for summary judgment "are nothing more than vehicles for teeing up ERISA cases for decision on the administrative record." Stephanie C. v. Blue Cross Blue Shield of Mass. HMO Blue, Inc. (Stephanie C. I ), 813 F.3d 420, 425 n.2 (1st Cir. 2016). This posture sweeps aside "[t]he burdens and presumptions normally attendant to summary judgment practice." Id. A district court must review de novo an ERISA claim challenging a denial of benefits where, as here, the benefit plan does not give the plan administrator discretionary authority to determine eligibility for benefits. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). Under this de novo standard, the court "may weigh the facts, resolve conflicts in the evidence, and draw reasonable inferences." Stephanie C. v. Blue Cross Blue Shield of Mass. HMO Blue, Inc. (Stephanie C. II ), 852 F.3d 105, 111 (1st Cir. 2017). The district court appropriately recognized that the de novo standard of review applied in this case. See Ministeri, 523 F. Supp. 3d at 166.
Our review of a district court's entry of summary judgment is de novo. See Martinez v. Sun Life Assur. Co. of Can., 948 F.3d 62, 67 (1st Cir. 2020). In the context of these ERISA appeals, that standard governs our review of the district court's legal conclusions. See Tsoulas v. Liberty Life Assurance Co. of Bos., 454 F.3d 69, 76 (1st Cir. 2006) ; Muller v. First Unum Life Ins. Co., 341 F.3d 119, 125 (2d Cir. 2003) ; see also DiGregorio v. Hartford Comprehensive Emp. Benefit Serv. Co., 423 F.3d 6, 13 (1st Cir. 2005). Even so, we assay the district court's embedded factual findings only for clear error. See Doe v. Harvard Pilgrim Health Care, Inc., 904 F.3d 1, 10 (1st Cir. 2018)...
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