Nat'l Prod. Workers Union Ins. Trust v. CIGNA Corp.

• Decision Date: 30 December 2011
• Docket Number: No. 10–2948.,10–2948.
• Citation: 665 F.3d 897
• Parties: NATIONAL PRODUCTION WORKERS UNION INSURANCE TRUST, Plaintiff–Appellant, v. CIGNA CORPORATION (d/b/a Cigna Group Insurance) and Life Insurance Company of North America, Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

665 F.3d 897

NATIONAL PRODUCTION WORKERS UNION INSURANCE TRUST, Plaintiff–Appellant,

v.CIGNA CORPORATION (d/b/a Cigna Group Insurance) and Life Insurance Company of North America, Defendants–Appellees.

No. 10–2948.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 22, 2011.Decided Dec. 30, 2011.

Donald E. Cameron (argued), Attorney, New York, NY, for Plaintiff–Appellant.

Daniel K. Ryan (argued), Stephen R. Swofford, Peter E. Pederson, Jr. (briefed), Attorneys, Hinshaw & Culbertson, LLP, Chicago, IL, for Defendants–Appellees.

Before BAUER, MANION, and KANNE, Circuit Judges.

KANNE, Circuit Judge.

The old adage “don't sign it until you've read it” applies to unions just as it does to individuals. In this case, National Production Workers Union Insurance Trust (the “Trust” or “N.P.W.U.”) and Life Insurance Company of North America (“LINA”) executed group accident and group life insurance policies that omitted what the Trust considered to be a critical beneficiary provision. Nonetheless, the Trust's chairman signed the policy and the Trust paid the policy premiums. This dispute arose after LINA refused to pay the Trust a death benefit to which the Trust assumed it was entitled but for which the actual terms of the policy prohibited. In response, the Trust brought suit against LINA and its parent company, Cigna Corporation. LINA countersued for two months' unpaid premiums. The district court dismissed Cigna as a party for lack of personal jurisdiction and granted LINA's motion for summary judgment on all counts. We affirm.

I. Background

In 2003, the Trust sought to implement group accident and group life insurance policies as a benefit for its union members.¹ The Trust desired a life insurance policy that included a beneficiary provision that paid $50,000 to the Trust as a beneficiary and $50,000 to the decedent's beneficiaries, for a total death benefit of $100,000. To find such a policy, the Trust turned to Robert Mondo, the Trust's insurance broker of record from 2001–2005. Based on instructions from Trust officers, Mondo prepared a request for proposal (“RFP”), which he then distributed to various insurance companies, including LINA. Consistent with the Trust's desired beneficiary provision, Mondo's RFP specifically sought a life insurance policy where the “Trust is the owner of the policy and also [a] beneficiary.”

Two weeks after receiving the RFP, a LINA employee sent Mondo a proposal for both policies. LINA's proposal contained only a summary of the proposed policy's terms, but it expressly cautioned that “[t]his is not a contract,” and “the controlling provisions will be in the group insurance policy.” The proposal omitted any reference to the Trust's desired beneficiary provision. Evidently impressed, the Trust instructed Mondo to place its group accident and group life insurance coverage with LINA. To finalize the agreement, LINA sent Mondo drafts of the two policies, an application for group insurance, a subscription agreement, and a subscription and joinder agreement. LINA instructed Mondo to obtain Trust approval and signatures on the appropriate documents.

The group policy drafts sent to the Trust contained two provisions relevant to the instant dispute. First, LINA's group life policy draft did not contain the beneficiary provision the Trust deemed to be critical. Instead, the policy provided:

Death Benefits will be paid to the Insured's named beneficiary, if any, on file at the time of payment. If there is no named beneficiary or surviving beneficiary, Death Benefits will be paid to the first surviving class of the following living relatives: spouse; child or children; mother or father....”

Second, the group insurance application stated, “Payment of the required premium after delivery of the policy(ies) acts as acceptance of the terms and conditions of the policy(ies).” Apparently content with these terms, Louis M. Pissios, the Trust's chairman, signed the group insurance application and subscription agreements signaling his full acceptance of LINA's offer. In September 2003, the Trust paid the first policy premium, and shortly thereafter, LINA sent Mondo a copy of the final policies. The beneficiary provision in both the draft and final policies was identical, but still different than the Trust's desired beneficiary provision.

As time passed, the Trust made timely premium payments. On May 21, 2004, the Trust made its first claim on the group life policy. Mondo emailed LINA notice that union member Charles Knight had passed away. Six days later, Mondo demanded LINA pay 50% of the death benefit to the Trust. On June 8, 2004, LINA responded to Mondo by highlighting the express terms of the life insurance policy that required LINA to pay the full death benefit to the decedent's beneficiaries. LINA further asserted that unless the decedent named the Trust as a beneficiary, LINA was contractually prohibited from paying any portion of the $100,000 death benefit to the Trust. Pursuant to the terms of the policy, on August 4, 2004, LINA paid Knight's sons a total death benefit of $100,974.60 (the death benefit plus accrued interest). Despite the payment to Knight's sons, Mondo continued to demand that LINA pay the Trust 50% of the death benefit.

The disagreement over the beneficiary provision came to a head in August 2004. At the direction of LINA, Walter Heindl, senior counsel at Cigna, sent a letter to the Trust providing formal notice that LINA was exercising its contractual right to terminate the group life insurance policy, effective September 30, 2004. In the letter, Heindl also suggested that there had been no “meeting of the minds regarding the design of the group life insurance plan....” Even if the contract permitted payment to the Trust as a beneficiary, Heindl concluded that Illinois state law requires insurers to pay only those beneficiaries designated by the decedent.² Upon receiving Heindl's letter, the Trust discontinued paying the monthly premium.

In August 2005, the Trust filed suit in Illinois state court against LINA and Cigna seeking a declaratory judgment and rescission of the contract. In the alternative and relying principally on Heindl's suggestion that there had been “no meeting of the minds,” the Trust sought damages based on theories of breach of contract, unjust enrichment, and negligence. LINA removed the action to federal court premised on either federal question or diversity of citizenship subject matter jurisdiction.³ In January 2006, Judge Hibbler dismissed the negligence claim, but reserved judgment on Cigna's Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction. Following extensive discovery on personal jurisdiction, Magistrate Judge Schenkier dismissed the complaint against Cigna. The case was reassigned to Judge Dow in December 2007.

LINA filed a counterclaim against the Trust for unpaid policy premiums for the months of August and September 2004, and then moved for summary judgment. Judge Dow found an enforceable contract existed as a matter of law, and thus granted LINA's motion for summary judgment on all counts. He then entered judgment in favor of LINA on its counterclaim for $95,059.99. The Trust filed this timely appeal.

II. Analysis

On appeal, the Trust presents two arguments for our review. First, it contends that there are at least four genuine issues of material fact that should have prevented the district court from entering summary judgment in favor of LINA. Second, the Trust claims that Magistrate Judge Schenkier erred by finding that Cigna was not subject to the district court's personal jurisdiction.

A. Summary Judgment

The plaintiff principally argues that the district court erred in granting LINA's motion for summary judgment. Namely, the Trust identifies what it considers to be four genuine issues of material fact. First, the Trust highlights Heindl's admission in his August 2004 letter that there had been no “meeting of the minds regarding the design of the group life insurance plan.” This statement, the Trust argues, should be given to the factfinder as objective evidence that the two parties never mutually assented to the policy. Second, the Trust questions the district court's conclusion as a matter of law that Mondo's actions as agent bound the Trust to the group policies. In questioning the propriety of Mondo's agency, the Trust asserts that Mondo stopped acting as the Trust's agent following the purported purchase of the group policies, but before he delivered them to the Trust. Alternatively, the Trust claims that LINA knew or should have known that Mondo did not have the authority to bind the Trust to policies that materially deviated from its stated intention. Third, the Trust contends that the factual questions surrounding the legitimacy of the contract should have precluded the district court from granting summary judgment on its unjust enrichment claim. Finally, the Trust argues that the district court erred in granting summary judgment on LINA's breach of contract counterclaim, because there is an open question as to whether LINA actually performed according to the contract's terms.

We review grants of summary judgment de novo, Berry v. Chicago Transit Auth., 618 F.3d 688, 690 (7th Cir.2010), viewing the record in the light most favorable to the Trust and drawing all reasonable inferences in its favor, McCann v. Iroquois Mem'l Hosp., 622 F.3d 745, 752 (7th Cir.2010). Although we have previously cautioned against weighing evidence at summary judgment, Kodish v. Oakbrook Terrace Fire Prot. Dist., 604 F.3d 490, 507 (7th Cir.2010), we have also said that “a factual dispute is ‘genuine’ only if a reasonable jury could find for either party,” SMS Demag Aktiengesellschaft v. Material Scis. Corp., 565 F.3d 365, 368 (7th Cir.2009). With that, we turn to the four issues purportedly in dispute.

1. Heindl's Letter

The Trust's first two issues of material fact implicate the district court's finding that...