Sprague v. Bankers Life & Cas. Co.

• Decision Date: 23 December 2021
• Docket Number: Docket: Yor-21-74
• Citation: 264 A.3d 1243,2021 ME 64
• Parties: ESTATE OF Marion SPRAGUE v. BANKERS LIFE AND CASUALTY COMPANY
• Court: Maine Supreme Court

264 A.3d 1243

2021 ME 64

ESTATE OF Marion SPRAGUE

v.BANKERS LIFE AND CASUALTY COMPANY

Docket: Yor-21-74

Supreme Judicial Court of Maine.

Argued: October 5, 2021

Decided: December 23, 2021

John F. Driscoll, Esq. (orally), Driscoll Law Office, Portsmouth, New Hampshire, for appellant Estate of Marion Sprague

Robert Edmond Mittel, Esq., and Scott D. Dolan, Esq., Mittelasen, LLC, Portland, and Steven K. Huffer, Esq. (orally), S.K. Huffer & Associates, P.C., Carmel, Indiana, for appellee Bankers Life and Casualty Company

Panel: STANFILL, C.J., and MEAD, GORMAN, JABAR, HUMPHREY, HORTON, and CONNORS, JJ.

JABAR, J.

[¶1] The Estate of Marion Sprague (Estate) appeals from a summary judgment in which the court (York County, Fritzsche, A.R.J. ) concluded that the Estate's complaint against Bankers Life and Casualty Company (Bankers Life) for breach of a home health insurance contract was barred by virtue of the expiration of the applicable limitations period. Because we agree with the Estate that the undisputed facts establish that the limitations period had not expired before the Estate filed suit, we vacate the judgment.

I. BACKGROUND

[¶2] The following facts are drawn from the parties' supported statements of material facts, viewed in the light most favorable to the Estate as the nonprevailing party. See Bibeau v. Concord Gen. Mut. Ins. Co. , 2021 ME 4, ¶ 2, 244 A.3d 712.

[¶3] In October 2009, Marion Sprague purchased a home health care insurance policy from Bankers Life. The policy includes an "Amendment Rider" that describes the company's internal review procedures available to a policyholder who wishes to appeal a claim denial and also contains a provision that requires the policyholder to exhaust those procedures before filing a lawsuit. On November 7, 2011, Ruth Bowen was granted power of attorney to act on Sprague's behalf in connection with the policy. On June 4, 2014, Bowen submitted a claim for benefits on Sprague's behalf for care provided to Sprague by her granddaughter, a licensed nursing assistant.

[¶4] Bankers Life denied the claim in a letter dated July 10, 2014. In the denial letter, Bankers Life told Sprague that she was entitled to submit additional facts or request a "management review" of the claim if she believed that the claim was incorrectly denied and notified Sprague that she could file a complaint with the Maine Bureau of Insurance. These review procedures differ from those outlined in the Amendment Rider. On August 7, 2014, following the instructions in Bankers Life's claim denial letter, Bowen requested a management review. On September 25, 2014, Bankers Life issued a written decision after management review, upholding its original decision to deny the claim, and again notified Sprague that she could submit additional facts or request an external review from the Maine Bureau of Insurance.

[¶5] Sprague died on December 20, 2015, and the York County Probate Court appointed Bowen as personal representative of her estate on February 17, 2016. In January 2020, the Estate, through its attorney, made a demand for arbitration pursuant to a provision of the Amendment Rider. In February 2020, Bankers Life responded by advising that the arbitration procedure mandated by the Amendment Rider was no longer available.

[¶6] The Estate filed a complaint on September 4, 2020, in the Superior Court (York County) alleging breach of contract (Count 1), detrimental reliance (Count 2), impossibility of performance (Count 4), quantum meruit (Count 5), and violation of 24-A M.R.S.A. § 2155 (2021) ("Twisting" prohibited¹ ) (Count 6).² On January 28, 2021, Bankers Life filed its motion for summary judgment and argued that the Estate's action is time-barred under Maine's six-year statute of limitations for civil actions, 14 M.R.S. § 752 (2021). The Estate filed an opposing memorandum on February 5, 2021, and Bankers Life replied on February 17, 2021. On February 19, 2021, the court issued a brief order granting Bankers Life's motion for summary judgment.³ The Estate timely appealed. See 14 M.R.S. § 851 (2021) ; M.R. App. P. 2B(c)(1).

II. DISCUSSION

[¶7] A party is entitled to summary judgment when the statements of material fact and referenced evidence establish that there is no genuine issue of material fact and that a party is entitled to a judgment as a matter of law. M.R. Civ. P. 56(c). "We review a grant of summary judgment de novo, viewing the summary judgment record in the light most favorable to the nonprevailing party to determine whether it demonstrates that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Estate of Galipeau v. State Farm Mut. Auto. Ins. Co. , 2016 ME 28, ¶ 9, 132 A.3d 1190 (quotation marks omitted).

[¶8] Bankers Life contends that the Estate filed its complaint after the expiration of the six-year limitations period, which, according to Bankers Life, commenced running on July 10, 2014, when the company sent Sprague a letter denying her claim for benefits. The Estate contends that the limitations period commenced running no earlier than September 25, 2014, when the Estate exhausted Bankers Life's contractually required internal review procedures.

[¶9] In Maine, unless another statute of limitations applies to a particular action, civil actions must commence within six years "after the cause of action accrues." 14 M.R.S. § 752. "When the relevant facts are not in dispute, determining when a cause of action accrued and whether a claim is time-barred are legal questions subject to de novo review." In re George Parsons 1907 Trust , 2017 ME 188, ¶ 15, 170 A.3d 215. Generally, a cause of action for breach of contract accrues at the time of breach. Palmero v. Aetna Cas. & Sur. Co. , 606 A.2d 797, 798 (Me. 1992) ; Kasu Corp. v. Blake, Hall & Sprague, Inc. , 582 A.2d 978, 980 (Me. 1990). "If a condition precedent to a right of action exists ... the cause of action does not accrue ... until the condition is performed." 51 Am. Jur. 2d Limitation of Actions § 132 (2021) ; see also Windham Land Trust v. Jeffords , 2009 ME 29, ¶¶ 20-21, 21 n.4, 967 A.2d 690 ; Dunton v. Westchester Fire Ins. Co. , 104 Me. 372, 376, 71 A. 1037, 1039 (1908) ; Berkshire Mut. Ins. Co. v. Burbank , 422 Mass. 659, 664 N.E.2d 1188, 1189-90 (1996).

[¶10] We stress that when a limitations period commences depends on when a cause of action accrues. But parties are free to contract for conditions precedent to action and even, in certain circumstances, for a limitations period to commence before a cause of action accrues. See Heimeshoff v. Hartford Life & Accident Ins. Co. , 571 U.S. 99, 105-06, 134 S.Ct. 604, 187 L.Ed.2d 529 (2013) ("Absent a controlling statute to the contrary, [parties] may agree by contract to a particular limitations period, even one that starts to run before the cause of action accrues, as long as the period is reasonable."); Burke v. PricewaterhouseCoopers LLP Long Term Disability Plan , 572 F.3d 76, 81 (2d Cir. 2009) (holding the same).

[¶11] We therefore examine the terms of the contract and the facts taken in the light most favorable to the Estate to determine when a cause of action for breach of the contract accrued. The relevant language is found in the policy's Amendment Rider:

Any controversy arising out of or relating in any manner to the policy is subject to certain administrative procedures that must be exhausted by the party claiming rights under the policy ... prior to the Policyholder pursuing any other remedy that may be available in law or equity. These administrative remedies are (i) Appeal of Decision; and (ii) Arbitration.

This language contains a condition precedent with which the insured must comply before bringing a lawsuit. Specifically, the insured must request an internal appeal of the initial claim denial "within sixty (60) days of the date of [Bankers Life's] written notice of its decision." According to the Amendment Rider, Bankers Life then has forty-five days to reverse, modify, or reaffirm its decision or to request more information from the policyholder.

[¶12] Reading 14 M.R.S. § 752 together with the Administrative Rider, the limitations period commenced when the cause of action accrued, and the action accrued when "the party claiming rights under the policy" exhausted the mandatory internal review procedures. The undisputed facts establish that following Bankers Life's denial of Sprague's claim on July 10, 2014, the Estate followed the instructions on Bankers Life's claim-denial letter and requested a management review on August 7, 2014. On September 25, 2014, Bankers Life completed its internal review by affirming its decision to deny the...