Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

Naser was the founder, 20 % co-owner, and chief executive of Michigan Orthopedic Services. The other co-owner was MOS, a private equity firm. In 2009, new Medicare regulations required the company to obtain surety bonds. The co-owners applied to Lexon, which responded with an indemnity agreement: “I agree to indemnify Lexon. . . in connection with any bond executed on behalf of the person or entity named as ‘applicant’ below.” There were three signature blocks. The first appeared under the named “applicant”: “Michigan Orthopedic Services.” The last two appeared under: “In consideration of the execution by the Surety of the bond herein applied for, the undersigned owners, jointly and severally, join the foregoing indemnity agreement. MUST BE SIGNED BY A CORPORATE OFFICER.” One was for the “Authorized Corporate Officer” of “MOS.” The other was for Naser. Naser signed the first and third blocks under the “applicant” and “undersigned owners” sections. Higgins signed the other on behalf of MOS. Lexon issued the bonds. Michigan Orthopedic Services filed for bankruptcy. Lexon turned to the “undersigned owners” for indemnification when the Centers for Medicare & Medicaid Services issued claims against its bonds. The district court found Naser liable for breaching the agreement. The Sixth Circuit affirmed, rejecting Naser’s denial of personal liability. View "Lexon Ins. Co. v. Naser" on Justia Law

In 2000, Rochow sold his interest in Universico to Gallagher and became President of Gallagher. As Gallagher employee, Rochow was covered under a LINA disability policy. In 2001, Rochow began to experience short term memory loss, chills, sweating, and stress. Gallagher demoted Rochow and forced Rochow to resign in January, 2002. In February 2002, Rochow experienced amnesia, was hospitalized, and was diagnosed with HSV-Encephalitis, a rare, severely debilitating brain infection. LINA repeatedly denied Rochow benefits stating that Rochow’s employment ended before his disability began. Rochow sued Cigna, LINA’s parent company, alleging breach of fiduciary duty under ERISA, 29 U.S.C. 1104(a). In 2007 the Sixth Circuit affirmed a decision that denial of Rochow’s claims was arbitrary and did not appear to have been made solely in the interest of the participants and beneficiaries or the exclusive purpose of providing benefits to participants and beneficiaries as required by ERISA. Rochow died in 2008. In 2009, the district court ordered an equitable accounting of profits and disgorgement of $3,797,867 under an equitable theory of unjust enrichment. The Sixth Circuit affirmed in 2013. Following rehearing en banc, the Sixth Circuit later vacated the disgorgement award and remanded the case to determine whether Rochow is entitled to prejudgment interest. View "Rochow v. Life Ins. Co. of North Am." on Justia Law

Elvira was driving a car, owned by Mullalli, when she hit ice and collided with a negligently parked vehicle. Elvira, who suffered a traumatic brain injury, acute cervical and lumbar sprains, bulging discs, and other injuries, sued in federal court to recover under Mullalli’s no-fault State Farm automobile insurance policy,. Elvira and Mullalli are citizens of Michigan; State Farm is an Illinois citizen. The district court dismissed for lack of diversity jurisdiction, reasoning that the suit was a “direct action” under 28 U.S.C. 1332(c)(1), requiring Mullalli’s Michigan citizenship to be imputed to State Farm. The Sixth Circuit reversed. Because the direct action proviso does not apply to suits brought against the insurer by insured persons identifiable before the accident occurs, this suit was not a direct action and Mullalli’s citizenship should not have been imputed to State Farm. The court distinguished between the personal protection provisions of Michigan’s no-fault law that require coverage of an identifiable group of individuals: the named insured, a spouse, any relatives living with them, and any occupant of a car they own and the property protection provision of the statute, which states simply that “an insurer is liable to pay benefits for accidental damage.” View "Ljuljdjuraj v. State Farm Mut. Auto. Ins. Co." on Justia Law

Hoey, who owns a farmers’ market that offers hay rides, pony rides, and pumpkin picking, hired Armbruster to run the hay wagon for eight weekends. Armbruster is now a paraplegic because an accident with the wagon crushed her spine. She sued for negligence in Michigan state court. Armbruster and Hoey also sought a declaratory judgment, again in state court, that Armbruster was covered by Hoey’s General Commercial Liability insurance policy. The insurer, Western, sought a federal declaratory judgment that Armbruster was not covered by the insurance policy. The cases were consolidated in federal court. Counsel, provided by Western to Hoey, filed a workers’ compensation claim on the theory that Armbruster was an “employee” eligible for workers’ compensation. The state tort claim has been stayed until the workers’ compensation claim is resolved. The district court accepted jurisdiction and construed the policy to exclude Armbruster’s injury from coverage. The Sixth Circuit affirmed, agreeing that it would be helpful for the parties to know whether Western was liable for Hoey’s legal fees, that Western was not playing procedural games, and that the federal forum could resolve the action without interfering in Armbruster’s tort suit or taking on difficult questions of state law. View "W. World Ins. Co. v. Armbruster" on Justia Law

More than nine years ago, Butler checked into a substance-abuse treatment facility to obtain inpatient rehabilitation for her alcohol addiction. She sought coverage for the treatment through her husbandView "Butler v. United Healthcare of TN" on Justia Law

Hayden worked as an office manager at MMI beginning in 1997 and was covered by its long-term disability plan, insured and administered by Liberty and subject to the Employee Retirement Income Security Act, 29 U.S.C. 1001. Hayden suffers from chronic hepatitis C, pancreatitis, fibrocystic breast disease with breast implants, degenerative arthritis, breast carcinoma, hypothyroidism, hypotension, hypertension, and crepitation and decreased range of motion around her shoulders, cervical spine, hips, and knees. She stopped working in January 2010, and applied for benefits under the plan. She also submitted evidence from four doctors detailing general anxiety disorder, major depression, and insomnia. The district court affirmed the denial of benefits on Hayden’s physical-disability claim but remanded her mental-disability claim because the plan administrator failed to consider medical evidence from three doctors. On remand, the plan again rejected Hayden’s claim, and the district court affirmed. The Sixth Circuit affirmed with respect to Hayden’s physical-disability claim but reversed with respect to her mental-disability claim, instructing the district court to award Hayden mental-health benefits consistent with the terms of the plan.View "Hayden v. Martin Marietta Materials, Inc." on Justia Law

As a Solvay employee Moyer participated in Solvay’s ERISA- governed Long Term Disability Plan. In 2005 MetLife initially approved Moyer’s claim for benefits. MetLife reversed its decision in 2007 after determining that Moyer retained the physical capacity to perform work other than his former job. In an administrative appeal, MetLife affirmed the revocation on June 20, 2008. Moyer’s adverse benefit determination letter included notice of the right to judicial review but failed to include notice that a three-year contractual time limit applied. The Summary Plan Description failed to provide notice of either Moyer’s right to judicial review or the applicable time limit. On February 20, 2012, Moyer sued MetLife, seeking recovery of unpaid plan benefits under 29 U.S.C. 1132(a)(1)(B). The district court held that the plan’s limitations period barred Moyer’s claim, noting that the plan documents—which were not sent to participants unless requested—stated that there was a three-year limitations period for filing suit, so that MetLife provided Moyer with constructive notice of the contractual time limit. The Sixth Circuit reversed. Exclusion of the judicial review time limits from the adverse benefit determination letter was inconsistent with ensuring a fair opportunity for review and rendered the letter not in substantial compliance.View "Moyer v. Metropolitan Life Ins. Co" on Justia Law

In 2011, Michigan passed the Health Insurance Claims Assessment Act, Mich. Comp. Laws 550.1731–1741, to generate revenue needed to fund its obligations under Medicaid. The Act functions by imposing a one-percent tax on all “paid claims” by “carriers” or “third party administrators” to healthcare providers for services rendered in Michigan for Michigan residents. “Carriers” include sponsors of “group health plan[s]” set up under the strictures of the Employee Retirement Income Security Act, 29 U.S.C. 1002–1461. On top of the tax, every carrier and third-party administrator paying the tax must submit quarterly returns with to the Michigan Department of the Treasury and “keep accurate and complete records and pertinent documents as required by the department.” Every carrier and third-party administrator must also “develop and implement a methodology by which it will collect the [tax]” subject to several conditions. SIIA sought a declaratory judgment that ERISA preempted the Act, and an injunction, to prevent implementation and enforcement of the Act against the ERISA-covered entities. The district court dismissed, concluding that the Act did not offend ERISA’s express preemption clause because the Act did not “relate to” an ERISA-governed benefit plan. The Sixth Circuit affirmed, finding that the statute escapes the preemptive reach of ERISA.View "Self-Ins. Inst. of Am., Inc. v. Snyder" on Justia Law

Nationwide, with 32,000 employees in 49 states, has an ERISA employee-benefits plan that provides short-term disability (STD), long-term disability (LTD), and “Your Time” benefits. An employee can receive Your Time benefits for personal reasons, such as vacation or illness. To receive STD benefits, an employee must be “STD Disabled,” which means “a substantial change in medical or physical condition due to a specific illness that prevents an Eligible Associate from working their current position.” Specific rules govern maternity leave. The first five days of paid maternity leave come out of an associate’s Your Time benefits. Thereafter, a new mother is considered STD Disabled and entitled to STD benefits for six weeks following a vaginal delivery, or eight weeks following a cesarean section. Wisconsin’s Family Medical Leave Act requires that employers allow six weeks of unpaid leave following “[t]he birth of an employee’s natural child[.]” The Act’s “substitution provision” requires employers to allow an employee to substitute “paid or unpaid leave of any other type provided by the employer” for the unpaid leave provided by the statute. A Wisconsin Nationwide employee had a baby. She received six weeks of STD benefits under Nationwide’s plan. She then requested an additional period of STD benefits pursuant to the substitution provision. The plan denied the request, finding that she was no longer short-term disabled under the plan. The Wisconsin Supreme Court had held that, ERISA did not preempt the Wisconsin Act. The district court held that, under the Supremacy Clause, the administrator was required to comply with ERISA rather than the Wisconsin Act. The Sixth Circuit affirmed.View "Sherfel v. Newson" on Justia Law

Rose’s Bidwell, Ohio home was insured by State Farm. Rose also had a Personal Articles Policy that covered two Rolex watches. In 2009, a fire destroyed the house. Later that day, Rose made a claim of $696,373.30 for the dwelling, $512,765.57 for damage to personal property, $30,000 for living expenses, and $29,850 for one Rolex watch. State Farm’s investigator took a recorded statement from Rose and his wife and spoke with Rose’s ex-wife; gathered information by searching public records; and retained a fire investigator, who issued a report, finding that the fire originated in the kitchen, that electrical items did not appear to be the source of the fire, and that neither smoking nor cooking was suspected as a cause. The report indicated that non-reported human action could not be eliminated as a cause, but did not specify that the fire was deliberately ignited. State Farm denied Rose’s claims, alleging that Rose violated “Intentional Acts” and “Concealment or Fraud” conditions of his policies. Rose sued, alleging breach of contract and bad faith. The district court declined to grant summary judgment on the “Intentional Acts” clause, but found that some answers Rose gave, failing to identify multiple tax liens and judgments, in statements to State Farm were misleading and material, and granted summary judgment on the other claim. The Sixth Circuit reversed, finding material questions of fact concerning whether Rose misled investigators. View "Rose v. State Farm Fire & Cas. Co." on Justia Law