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

Beginning in 1965, Honeywell and the labor union negotiated a series of collective bargaining agreements (CBAs). Honeywell agreed to pay “the full [healthcare benefit] premium or subscription charge applicable to the coverages of [its] pensioner[s]” and their surviving spouses. Each CBA contained a general durational clause stating that the agreement would expire on a specified date, after which the parties would negotiate a new CBA. In 2003, the parties negotiated a CBA obligating Honeywell to pay “not . . . less than” a specified amount beginning in 2008. The retirees filed suit, arguing that the pre-2003 CBAs vested lifetime, full-premium benefits for all pre-2003 retirees and that the CBAs of 2003, 2007, and 2011 vested, at a minimum, lifetime, floor-level benefits for the remaining retirees.The Sixth Circuit agreed with the district court that none of the CBAs vested lifetime benefits. Without an unambiguous vesting clause, the general durational clause controls. Reversing in part, the court held that the “not . . . less than” language unambiguously limited Honeywell’s obligation to pay only the floor-level contributions during the life of the 2011 CBA. The court rejected a claim that Honeywell acquired a "windfall" at the retirees' expense. View "International Union, United Automobile, Aerospace and Agricultural Implement Workers of America v. Honeywell International, Inc." on Justia Law

Perry’s home suffered water damage and required extensive repairs. She filed a claim with her insurer, Allstate, which did not dispute that Perry’s home was seriously damaged, or that it was required to pay for repairs or replacement. The parties agreed that the total estimated cost to repair or replace Perry’s home is $32,965.09. After making deductions for “depreciation,” Allstate provided Perry with a net payment of $28,394.74. Perry’s Allstate policy provides, “If you do not repair or replace the damaged, destroyed or stolen property, payment will be on an actual cash value basis. This means there may be a deduction for depreciation.” The policy does not define “depreciation.” Allstate contends that “depreciation” must account for the cost of both materials and labor. Perry claims that “depreciation” is ambiguous with respect to labor costs. The district court reversed the dismissal of Perry’s lawsuit. Under Ohio law, when an insurance policy is ambiguous, courts must interpret the policy strictly against the insurer, so long as the insured’s interpretation is reasonable. Perry’s reading of the term “depreciation” is a reasonable interpretation of an ambiguous policy, so Allstate may not include the cost of labor in calculating depreciation. View "Perry v. Allstate Indemnity Co." on Justia Law

The Office of Personnel Management (OPM), manages the Federal Employees’ Group Life Insurance Act (FEGLIA), 5 U.S.C. 8705(a). Absent a valid beneficiary selection, FEGLIA provides an order of precedence for the proceeds, starting with the policyholder's surviving spouse, followed by the policyholder's descendants. FEGLIA will not follow that order if a “court decree of divorce, annulment, or legal separation, or . . . any court order or court-approved property settlement agreement” “expressly provides” for payment to someone else. The decree, order, or agreement must be “received” by the policyholder’s “employing agency” or OPM before the policyholder’s death. At the time of his death, Miller worked at Tinker Air Force Base and maintained a MetLife policy. Coleman's 27-year marriage to Donna ended in divorce in 2011. Their property settlement agreement states that “[Donna] shall remain the beneficiary of the life insurance policy.” The court ordered Coleman to assign his FEGLI benefits to Donna.Upon Coleman’s death, his only child, Courtenay, was appointed administratrix of his estate. The Air Force informed Courtenay that the court order had not been filed with Coleman’s employing office. Courtenay was paid $172,000 in proceeds and sought a declaration that she is the rightful owner. Citing lack of subject-matter jurisdiction, the district court dismissed the suit. The Sixth Circuit affirmed, noting the lack of a substantial federal question. FEGLIA does not contain an express cause of action for Donna. There is no federal agency involved. View "Miller v. Bruenger" on Justia Law

One summer night in 2015, at a Louisville nightclub, someone discharged a firearm, shooting eight people. Six of those people sued the nightclub’s owner, Cole’s Place, in state court, arguing that Cole’s Place failed to protect them from foreseeable harm. United Specialty Insurance (USIC) obtained a federal declaratory judgment that it is not obligated to defend or indemnify Cole’s Place in the state court litigation. The Sixth Circuit affirmed. The district court did not abuse its discretion in exercising Declaratory Judgment Act jurisdiction over USIC’s lawsuit and did not err in finding that an assault-and-battery exclusion in Cole’s Place’s insurance policy with USIC applies to the state court litigation. There are no factual issues remaining in the state-court litigation or complex state-law issues that are “important to an informed resolution” of this case. View "United Specialty Ins. Co. v. Cole's Place, Inc." on Justia Law

Due to an unsafe condition on the premises, Osborne suffered a broken arm at the Center, which is owned and operated by Metro Nashville. Osborne obtained a state court judgment against Metro under the Tennessee Governmental Tort Liability Act; the damages included specific medical expenses related to the incident and found Osborne’s comparative fault to be 20 percent. Before the state court suit, Osborne incurred medical expenses for which Metro did not pay at the time. Medicare made conditional payments to Osborne totaling at least $9,453.09. Osborne claims he incurred—in addition to the costs of his state court litigation—the cost of his co-pays, deductibles, and co-insurance for treatments not covered through Medicare. Osborne alleged Metro is a primary payer who failed to pay under the Medicare Secondary Payer Act (MSPA), 42 U.S.C. 1395y(b), and was therefore liable for reimbursement of Medicare’s conditional payments and a double damages penalty under section 1395y(b)(3)(A). Metro claimed it paid the judgment in full, including discretionary costs. The Sixth Circuit affirmed that Osborne lacked statutory standing to sue for his individual losses and the conditional payments made by Medicare because the MSPA does not permit a private cause of action against tortfeasors. Because the MSPA is not a qui tam statute and financial injury suffered by Medicare is not attributed to Osborne, he also lacked Article III standing to sue for Medicare’s conditional payments. View "Osborne v. Metropolitan Government of Nashville and Davidson County" on Justia Law

Doe is HIV-positive and takes Genvoya to control his condition. Doe's BlueCross health insurance covers Genvoya. After February 2017, BlueCross required Doe to fill the HIV prescription through mail order or by picking it up at certain brick-and-mortar pharmacies. If Doe used BlueCross's specialty pharmacy network, his co-pay for each monthly batch of Genvoya would be $120. If Doe continued to get the medicine at his local pharmacy, he would have to pay the full cost, thousands of dollars per batch. Doe preferred interacting with his regular pharmacists, who knew his medical history and could spot the effects of harmful drug interactions. He also worried that deliveries to his house might compromise his privacy or risk heat damage to the medicine. Doe filed a putative class action, alleging that BlueCross discriminated against HIV-positive beneficiaries in violation of the Affordable Care Act and the Americans with Disabilities Act (ADA), which breached their insurance contract. The district court dismissed. The Sixth Circuit affirmed. The Affordable Care Act prohibits discrimination against the disabled in the provision of federally supported health programs under section 504 of the Rehabilitation Act. BlueCross did not violate the Rehabilitation Act; it did not exclude Doe from participating in the plan or deny him benefits covered by it. Section 504 does not prohibit disparate-impact discrimination. The ADA claim failed because Doe targets BlueCross’s operation of his health care plan, not its control over his pharmacy (a public accommodation). View "Doe v. BlueCross BlueShield of Tennessee, Inc." on Justia Law

Defendant issued a life insurance policy to the Decedent. Plaintiff, Decedent’s former wife, is the primary beneficiary; the contingent beneficiaries are Decedent’s “surviving children equally.” Plaintiff and Decedent divorced. Their Dissolution Agreement required that Plaintiff pay the premium of the Defendant’s policy and required “Husband at his expense [to] maintain" insurance on his life with the parties’ children as irrevocable primary beneficiaries. The couple had minor children at the time of Decedent’s death. When Plaintiff requested payment, Defendant requested that Plaintiff obtain waivers from "other potential parties” and court-appointed guardians for the children or that Plaintiff waive her rights so that Defendant could disburse the proceeds to the minor children. The court dismissed Defendant’s subsequent interpleader complaint and ordered Defendant to disburse to Plaintiff. A jury found that Defendant breached its contract, resulting in actual damages of $350,000; Defendant’s refusal to pay was in bad faith, resulting in additional damages of $87,500; and Defendant’s refusal to pay was either intentional, reckless, malicious, or fraudulent. The jury awarded punitive damages of $3,000,000. A Tennessee statute capped punitive damages at two times the compensatory damages awarded or $500,000, whichever is greater. Plaintiff challenged the cap under the Tennessee Constitution. The Tennessee Supreme Court declined to provide an opinion on certified questions. The district court then rejected Plaintiff’s challenge, reducing Defendant’s punitive damages liability to $700,000. The Sixth Circuit vacated in part, finding that the statutory cap on punitive damages, T.C.A. 29-39-104, violates the individual right to a trial by jury. View "Lindenberg v. Jackson National Life Insurance Co." on Justia Law

Plaintiff Mead Vest contended defendant Resolute FP US Inc. breached its fiduciary-duty obligations set forth in the Employee Retiree Income Security Act when it failed to notify her late husband of his right to convert a group life insurance policy to an individual life insurance policy after he ceased employment and began drawing long-term disability benefits. The district court ruled plaintiff did not adequately plead a breach-of-fiduciary-duty cause of action. After review, the Sixth Circuit agreed and affirmed. View "Vest v. Resolute FP US Inc." on Justia Law

Some of KVG’s commercial tenants got caught growing marijuana in their rental units and caused substantial damage to the premises before the police caught them. KVG speedily evicted the tenants and sought coverage from its insurers for nearly $500,000 in related losses. Westfield denied the claims. The Sixth Circuit affirmed summary judgment for Westfield, reasoning that the damage was excluded by the policy, which is the Building and Personal Property Coverage Form. Under this Form, Westfield agreed to pay for “direct physical loss of or damage to Covered Property . . . caused by or resulting from any Covered Cause of Loss.” A “Covered Cause of Loss” is any “Risk[] Of Direct Physical Loss,” with several exclusions, including that Westfield “will not pay for loss or damage caused by or resulting from” any “[d]ishonest or criminal act by you, any of your partners, members, officers, managers, employees (including leased employees), directors, trustees, authorized representatives or anyone to whom you entrust the property for any purpose.” While cultivating marijuana is a crime under federal law, it is protected by Michigan law under certain conditions but no reasonable jury could find that KVG’s tenants complied with Michigan law. View "K.V.G. Properties, Inc. v. Westfield Insurance Co." on Justia Law

In 2010, the defendants formed PremierTox, a urinalysis testing company: Doctors Peavler and Wood owned a substance abuse treatment company, SelfRefind; Doctor Bertram previously worked for SelfRefind. Bottom and Walters owned a drug testing service and laboratory. Physicians at clinics ordered urinalysis tests to check if their patients used illicit drugs and to monitor their medications. PremierTox was to receive those urine samples, perform the testing, and report back. In October 2010, SelfRefind began to send frozen urine samples to PremierTox for testing, but PremierTox did not have the correct equipment. In 2011, after PremierTox bought the necessary, expensive machines, they broke down. Urine samples from SelfRefind piled up. PremierTox started testing them between February and April 2011 and finished testing them in October. Over the same period, it tested and billed for fresh samples as they came in, aiming for a 48-hour turnaround. PremierTox billed insurers, saying nothing about the delays. The defendants were charged with 99 counts of health care fraud and with conspiracy. A jury acquitted them of conspiracy and 82 of the health care fraud charges and convicted them of 17 health care fraud charges. The trial judge imposed sentences of 13-21 months in prison. The Sixth Circuit affirmed the convictions. A reasonable jury could find that the defendants violated 18 U.S.C. 1347 by requesting reimbursement for tests that were not medically necessary. View "United States v. Walters" on Justia Law