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

Waskiewicsz suffers from type-1 diabetes, major depression, and gender identity disorder She worked as a product design engineer for Ford from 1990 until October, 2010, when she suffered “a debilitating emotional breakdown.” In December, after her father found her barricaded in her house, she sought long-term disability benefits under Ford’s Plan, governed by the Employment Retirement Income Security Act, 29 U.S.C. 1001. Under the plan: An Active Employee whose employment is terminated . . . shall cease to be eligible for Benefits as of the earlier of: (a) the date the Employee has been notified; or (b) the day prior to the date of such termination (in the case of retroactive terminations) . .... An employee is required to notify the Claim Processor ... if the employee is absent for more than five (5) consecutive Workdays.” She did not give notice within the five-day period and was, apparently, terminated in the interim. UniCare concluded that she did not qualify for benefits. The Sixth Circuit reversed. On remand, Waskiewicz must be given the opportunity to show that her alleged failure to comply with the requirements of the Plan was due to the very disability for which she seeks benefits. View "Waskiewicz v. UniCare Life & Health Ins. Co." on Justia Law

Max Trucking transports freight throughout the United States, maintaining a staff of six dispatchers at its Michigan headquarters. The dispatchers find jobs on websites and contact one of 76 truck drivers, including about 20 drivers based in Michigan, to offer the load to that driver. The Michigan Worker’s Disability Compensation Act (WDCA) requires employers to maintain worker’s compensation insurance coverage for their employees. Liberty Mutual issued Max a policy, which it renewed annually for several years. In 2011, Liberty audited Max and determined that 16–18 Michigan-based drivers, who leased trucks from Max through a lease-to-buy program, were employees, not independent contractors, and increased Max’s policy premium. Max has not paid the premium increase and sought a declaratory judgment that drivers operating under the lease-to-buy program are not employees but are independent contractors under the WDCA. Liberty filed a counterclaim, seeking unpaid premiums totaling $101,592. The Sixth Circuit affirmed judgment in favor of Liberty Mutual, agreeing that the truckers are employees, despite evidence that that they may decline to work, can incur a financial loss, made a significant financial investment in the vehicle purchase, and receive all tax deductions and depreciation of the vehicles on their personal tax returns. View "Max Trucking, LLC v. Liberty Mut. Ins. Corp." on Justia Law

The NEI Board administers a self-funded, multi-employer health plan covered by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001. A Trust Agreement, executed by the participating companies and the Board, does not specify Plan details, but provides that “[t]he detailed basis on which payment of benefits is to be made … shall be set forth in the Plan of Welfare Benefits … subject to amendment by the Trustees.” The National Elevator Industry Health Benefit Plan Summary Plan Description, (SPD) provides the details and includes a subrogation provision: The Plan has the right to recover benefits advanced to a covered person for expenses or losses caused by another party. The Plan is only obligated to provide covered benefits resulting from that illness or injury that exceed amounts recovered from another party (regardless of whether designated to cover medical expenses). The Plan sought reimbursement for medical expenses paid on Moore’s behalf, following Moore’s settlement of a negligence action against entities responsible for injuries he suffered in an accident. Moore counterclaimed, alleging that the Board had violated its fiduciary duty by misrepresenting the Plan terms. The Sixth Circuit found that the SPD containing the subrogation provision set out the binding terms of the Plan and that the plain language of the provision required reimbursement. View "Bd. of Trustees v. Moore" on Justia Law

When the plant closed, plaintiffs retired under a collective bargaining agreement (CBA) that provided that the employer would continue health insurance and that coverage an employee had at the time of retirement or termination at age 65 or older (other than discharge for cause) “shall be continued thereafter provided that suitable arrangements for such continuation[] can be made… In the event… benefits … [are] not practicable … the Company in agreement with the Union will provide new benefits and/or coverages as closely related as possible and of equivalent value." In 2011 TRW (employer’s successor) stated that it would discontinue group health care coverage beginning in 2012, but would be providing “Health Reimbursement Accounts” (HRAs) and would make a one-time contribution of $15,000 for each eligible retiree and eligible spouse in 2012 and, in 2013, would provide a $4,800 credit to the HRAs for each eligible party. TRW did not commit to funding beyond 2013. Plaintiffs sued, claiming that the change violated the Labor-Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act, 29 U.S.C. 1001. The court entered summary judgment, ruling that the CBAs established a commitment to lifetime health care benefits. The Sixth Circuit affirmed, but subsequently vacated and remanded for reconsideration in light of the Supreme Court’s 2015 decision in M & G Polymers. View "United Steel v. Kelsey-Hayes Co." on Justia Law

The Cleveland Indians hired National to produce Kids Day events at baseball games, with attractions, including an inflatable bouncy castle and inflatable slide. The contract required National to secure a five-million-dollar comprehensive liability policy. National submitted an Application to Doodson Insurance Brokerage, stating on the application that the Kids Day events would include inflatable attractions. Doodson arranged for National to obtain a policy, but it excluded from coverage injuries caused by inflatable slides. Johnson admiring a display at a 2010 Indians game, was crushed by an inflatable slide that collapsed onto him. He died of his injuries. Johnson’s estate won a $3.5 million state court default judgment against National. The Sixth Circuit held that the insurance policy did not cover Johnson’s injuries. National and the Indians sued Doodson and obtained settlements. Johnson’s estate, which has not collected on the default judgment against National, sued Doodson, alleging negligence and breach of contract. The Sixth Circuit affirmed dismissal. Under Michigan law, the broker’s contractual duty to its client to protect the client from negligence suits, without more, does not create a tort duty to an injured party who brings such suits and Johnson was neither a party to nor an intended third-party beneficiary of the contract between the broker and National. View "Johnson v. Doodson Ins. Brokerage" on Justia Law

Leonor, a Michigan dentist, suffered an injury that prevented him from performing dental procedures. At the time of his injury, he spent about two-thirds of his time performing dental procedures and approximately one third managing his dental practices and other businesses that he owned. After initially granting coverage, his insurers denied total disability benefits after they discovered the extent of his managerial duties. Leonor sued, alleging contract and fraud claims. The district court granted summary judgment to Leonor on his contract claim, holding that “the important duties” could plausibly be read to mean “most of the important duties” and resolving the ambiguity in favor of Leonor under Michigan law. The Seventh Circuit affirmed, stating that the context of the policy language in this case permits a reading of “the important duties” that is not necessarily “all the important duties.” View "Leonor v. Provident Life & Accident Co." on Justia Law

Ramsey applied for $2 million in life insurance from Penn. His application indicated that he was a Cleveland firefighter and had last seen his physician for a checkup in 2006. During a medical examination by a nurse, Ramsey disclosed that he suffered from chronic ulcerative colitis; in 1984 a colorectal surgeon had surgically removed Ramsey’s colon to alleviate his symptoms. After reviewing his medical records, in mid-April, Penn offered him a policy with one of the lowest ratings Penn offers and an above-average premium. On April 28, Ramsey was examined at the Cleveland Clinic. Having had no treatment for 10-12 years, his visit was precipitated by “frequent bloody [bowel movements] and feel[ing] bad.” On June 1, Penn drafted and Ramsey signed amendments, changing the policy value to $500,000. Ramsey stated: I have not had a colon[o]scopy since 2004 and have had no gastrointestinal problems since that time. Ramsey was soon diagnosed with stage IV metastatic rectal cancer and died in September 2011. Penn denied an application for benefits, rescinded the policy, and returned $14,761.45 in premiums. The district court granted Penn summary judgment, finding Ramsey had failed to inform Penn of a change in the status of his health before the delivery of his policy, breaching a representation in the contract. The Sixth Circuit reversed, finding a genuine dispute as to whether Ramsey misrepresented the state of his health by failing to disclose his rectal bleeding and doctor visits. View "Ramsey v. Penn Mut. Life Ins.Co." on Justia Law

Hargis’s Henderson home was insured by State under a standard homeowner’s policy when it burned to the ground in 2007. No one was home during the fire, but investigations determined that the fire was intentionally set. Hargis filed a claim for $866,000. State paid more than $425,000, including a mortgage payoff of $386,720.34, before alleging that Hargis caused or conspired to cause the fire and falsely inflated the loss in breach of “intentional loss” and “concealment or fraud” policy provisions. Hargis claimed breach of contract and bad faith. State’s investigation eventually led to Hargis’s admission that she had solicited a friend to burn down her house to collect the insurance proceeds. Hargis pleaded guilty to conspiracy to use fire to commit wire fraud and was sentenced to 60 months in prison and ordered to pay restitution totaling $672,497.80, which included $195,116.70 for investigation costs and attorney fees. The district court dismissed a “reverse bad faith” claim, finding certification of the issue unnecessary. The Sixth Circuit affirmed. State did not offer a convincing basis to conclude that the Kentucky Supreme Court would adopt a common law cause of action in tort by an insurer against its insured for breach of the implied duty of good faith and fair dealing. View "State Auto Prop. & Cas. Ins. Co. v. Hargis" on Justia Law

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