Walker v. Maccabees Mut. Life Ins. Co., s. 83-2535

• Citation: 753 F.2d 599
• Decision Date: 24 January 1985
• Docket Number: 83-3234,Nos. 83-2535,s. 83-2535
• Parties: Esther WALKER, Plaintiff-Appellee, Cross-Appellant, v. MACCABEES MUTUAL LIFE INSURANCE COMPANY, Defendant, Cross-Appellee, and Continental Casualty Company, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 599

753 F.2d 599

40 Fed.R.Serv.2d 1366

Esther WALKER, Plaintiff-Appellee, Cross-Appellant, v. MACCABEES MUTUAL LIFE INSURANCE COMPANY, Defendant, Cross-Appellee, and Continental Casualty Company, Defendant-Appellant.

Nos. 83-2535, 83-3234.

United States Court of Appeals, Seventh Circuit.

Argued Oct. 29, 1984.

Decided Jan. 24, 1985.

Robert A. DuPuy, Foley & Lardner, Milwaukee, Wis., for plaintiff-appellee, cross-appellant.

Michael A. McGrath, Southfield, Mich., for defendant-appellee/cross-plaintiff-appellee.

Linda E.B. Hansen, Prosser, Wiedebach & Quale, S.C., Milwaukee, Wis., for defendant-appellant/cross-defendant-appellant.

Before BAUER and POSNER, Circuit Judges, and HAYNSWORTH, Senior Circuit Judge. ^*

POSNER, Circuit Judge.

This diversity suit requires us to interpret an insurance regulation of Wisconsin dealing with the continuation of insurance coverage after the termination of a group insurance policy. Walker, a full-time employee, went on sick leave on January 23, 1979, suffering from heart problems; retired on April 27 because of total permanent disability due to his heart disease, without having returned to work; and was electrocuted in an accident in his home on July 8. His employer had two group insurance policies for its employees--a life insurance policy and an accidental death and dismemberment policy. The life insurance policy was with Sun Life Assurance Company of Canada and the accidental death and dismemberment policy with Continental Casualty Company (CNA). Each was for roughly $44,000 for an employee with Walker's salary. The effect of the two policies was to give an employee accidentally killed the familiar "double indemnity," which is more commonly provided in a single policy that entitles the insured to double benefits for accidental death.

Effective March 1, 1979, after Walker took sick leave but before he retired and died, the two policies that had been issued by Sun Life and CNA respectively were replaced by two similar policies issued by Maccabees Mutual Life Insurance Company. As none of the insurance companies would pay Mrs. Walker's claim under either policy, she brought this suit against all three companies. Maccabees paid off Mrs. Walker's claim under the group life policy and then filed a cross-claim against Sun, alleging that Sun and not Maccabees was really liable to her on the policy. This claim is still pending in the district court. Regarding Mrs. Walker's claim on the group accidental death and dismemberment policy, the district court granted summary judgment for Mrs. Walker against CNA and for Maccabees, holding that CNA and not Maccabees was liable under the policy. CNA has appealed, and Mrs. Walker has filed a conditional cross-appeal to challenge the finding that Maccabees was not liable, should we reverse the finding that CNA was liable.

Although the entire litigation was not ended by the district judge's order resolving the dispute on the accidental death and dismemberment policy, he has certified his order for an immediate appeal under Rule 54(b) of the Federal Rules of Civil Procedure. This was proper if the claim retained in the district court, relating to the group life policy, was either a separate claim from the one appealed, or a single claim but one involving separate parties from the parties to the appeal--and it was both.

Although the issuance of life insurance and accidental death and dismemberment insurance policies is an unusual method of providing for double indemnity for accidental death, the policies are separate contracts that could have been sued on separately in different courts, and claims under separate contracts are separate claims for purposes of Rule 54(b)--as held, with specific reference to insurance policies, in Bertschinger v. National Surety Corp., 449 F.2d 746 (9th Cir.1971) (per curiam), and Great American Ins. Co. v. Harleysville Mutual Casualty Co., 285 F.2d 262, 263 (4th Cir.1961). It is also the case that the claims involve separate parties. The claim retained in the district court involves Maccabees and Sun, while the claim that is the subject of the appeals before us involves Maccabees, CNA, and Mrs. Walker. The fact that the two claims have one party in common is not enough to defeat the application of the separate-parties ground of Rule 54(b). See 10 Wright, Miller & Kane, Federal Practice and Procedure Sec. 2656, at pp. 47-48 (1983). Two claims with completely separate parties will be separate claims, so that if complete separateness of parties were required the separate-parties ground for a Rule 54(b) appeal would have no independent force--as it was intended to have in order to correct a shortcoming of the original rule. See Note of Advisory Comm. on 1961 Amendment to Rule 54(b). There is no reason why CNA and Mrs. Walker should have to wait for the outcome of the battle between Maccabees and Sun in order to get a definitive resolution of their rights.

The group accidental death and dismemberment policy that CNA had issued to Mr. Walker's employer (and the replacement policy issued by Maccabees) contained no provision for an extension of benefits in the event that an insured employee became totally disabled. However, Wis.Admin.Code, Rules of Comm'r of Ins., ch. 6, Sec. 6.51(6)(a), read...