Buzzanga v. Life Insurance Company of North America

Filing 141

MEMORANDUM AND ORDER; IT IS HEREBY ORDERED that defendant's motion to alter or amend judgment [Doc. # 127 ] is granted. An amended judgment consistent with this Memorandum and Order will be entered. Signed by District Judge Carol E. Jackson on 03/01/2013; (DJO)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
DEBORAH BUZZANGA,
Plaintiff,
vs.
LIFE INSURANCE COMPANY OF
NORTH AMERICA,
Defendant.

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Case No. 4:09-CV-1353 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on defendant’s motion pursuant to Fed.R.Civ.P.
59(e) to alter or amend judgment. Plaintiff has filed a response in opposition and the
issues are fully briefed.
Plaintiff Deborah Buzzanga brought this action pursuant to the Employee
Retirement Income Security Act (ERISA), 29 U.S.C. § 1132(a)(1), to recover accidental
death benefits following her husband’s death under a group accident policy issued by
defendant Life Insurance Company of North America to her employer. On January 4,
2013, the Court denied defendant’s renewed motion for summary judgment and
entered judgment in plaintiff’s favor in the amount of $250,000.

Defendant now

argues that, under the terms of the policy, plaintiff’s recovery is limited to $220,000.
Plaintiff contends, first, that defendant should have asserted this argument before
judgment was entered and, second, that defendant’s interpretation of the policy is
unreasonable.
I.

Legal Standard

Federal Rule of Civil Procedure 59(e) was adopted to clarify a district court’s
power to correct its own mistakes in the time period immediately following entry of
judgment. Norman v. Arkansas Dep’t of Educ., 79 F.3d 748, 750 (8th Cir. 1996)

(citing White v. New Hampshire Dep’t of Employment Sec., 455 U.S. 445 (1982)).
Rule 59(e) motions serve a limited function of correcting “manifest errors of law or fact
or to present newly discovered evidence.” Innovative Home Health Care, Inc. v.
P.T.O.T. Associates of the Black Hills, 141 F.3d 1284, 1286 (8th Cir. 1998) (internal
quotation and citations omitted). Such motions cannot be used to introduce new
evidence, tender new legal theories, or raise arguments which could have been offered
or raised prior to entry of judgment. Id.
II.

Discussion

Plaintiff’s husband Garry Robinett died in a car accident on December 22, 2007.
Plaintiff submitted a claim for accidental death benefits which defendant denied on
initial review and appeal. Plaintiff filed this suit, alleging that defendant’s denial of her
claim constituted an abuse of discretion and was arbitrary and capricious. The parties
submitted cross-motions for summary judgment on the administrative record. In its
motion, defendant argued that the Court should apply the definition of accident found
in Wickman v. Northwestern Nat’l Ins. Co., 908 F.2d 1077 (1st Cir. 1990). This was
not the definition of accident that defendant had applied in its review of the claim and
so the Court remanded the matter for reevaluation. See Memorandum and Order
(Dec. 28, 2010) [Doc. #64]. Defendant completed its review on remand and again
denied the claim. Plaintiff filed an amended complaint and defendant again moved for
summary judgment.
Defendant did not address the calculation of damages in its two motions for
summary judgment, choosing instead to assert that plaintiff was not entitled to any
benefit at all. The Court disagreed with defendant and determined that plaintiff was
entitled to judgment on her amended complaint. Finding no argument to the contrary
in defendant’s memorandum in support of its motion for summary judgment, the Court
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awarded plaintiff the amount she sought in her amended complaint, or $250,000.00.
[Doc. #66, ¶¶15-17, ¶¶28-29].
Plaintiff argues that defendant should have raised its argument regarding the
proper calculation of the seatbelt rider before judgment was entered. Plaintiff asserted
that she was entitled to $50,000 under the seatbelt rider in her statement of
uncontroverted facts in support of summary judgment. [Doc. #50-1, ¶¶10-12]. In
response, defendant asserted the benefit was $20,000. [Doc. #57, ¶¶ 11-12]. The
parties’ statements of fact are not the proper vehicle for arguing dispositive points of
law. Nonetheless, under this circumstance, the Court concludes that defendant did not
forfeit its right to challenge the calculation of the benefit due under the seatbelt rider.
Thus, the Court turns to consideration of the relevant policy provisions.
If the language in an insurance contract is clear and unambiguous, the court
must construe the contract as written. Wasson v. Shelter Mut. Ins. Co., 358 S.W.3d
113, 120 (Mo. Ct. App. 2011) (quotation marks and citation omitted). The words of
a policy are given their ordinary meaning unless it is obvious that a technical meaning
was intended. Gateway Hotel Holdings, Inc. v. Lexington Ins. Co., 275 S.W.3d 268,
275-76 (Mo. Ct. App. 2008) (citation omitted).

The policy “must be given effect

according to the plain terms of the agreement, consonant with the reasonable
expectations, objectives and the intent of the parties.” Id. (citation omitted).
Under the policy, plaintiff was an insured and her husband was an eligible
dependent. The policy provided different levels of benefit, defined as the “Principal
Sum.” See Deft. Ex. A at 10 [Doc. #128-1]. The parties agree that plaintiff selected
the maximum benefit, or $500,000. Plaintiff also selected family coverage under the
policy. The “Family Plan Rider” states: “Benefits: Benefits for all covered persons are
based upon the Insured’s Principal Sum amount as follows: . . . Insured[:] 100% of
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the Principal Sum[;] Spouse[:] 40% of the Principal Sum.” The parties agree that,
given a principal sum of $500,000, the death benefit to which plaintiff is eligible is
$200,000. Id. at 14.
The parties also agree that plaintiff is entitled to an additional benefit under the
policy’s seatbelt rider, which states: “We will pay a benefit under this rider when the
Covered Person dies as the result of a covered accident . . . while the Covered Person
is . . . wearing a properly fastened . . . seatbelt. The amount payable under this rider
is 10% of the Principal Sum to $50,000.” Id. at 21. Plaintiff asserts that “10% of the
Principal Sum” means “10% of $500,000,” or $50,000. Defendant contends that the
disputed phrase means “10% of the [Eligible Dependent’s] Principal Sum,” or “10% of
$200,000.”
Because plaintiff’s claim involves benefits for a spouse, the seatbelt coverage
must be read in conjunction with the family coverage, which provides that the benefit
level for a spouse is 20% of that for the insured. Thus, the benefit level for the insured
under the seatbelt rider is 10% of $500,000, or $50,000; and the benefit level for the
spouse of the insured is 40% of $50,000, or $20,000. Thus, the total benefit to which
plaintiff is entitled is $220,000 and the judgment will be amended accordingly.
Defendant additionally argues that it is entitled to offset any damages it owes
to plaintiff by the award of sanctions granted for the breach of the protective order by
plaintiff’s counsel. The Court will address defendant’s sanction award by separate
order.
Accordingly,
IT IS HEREBY ORDERED that defendant’s motion to alter or amend judgment
[Doc. #127] is granted.

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An amended judgment consistent with this Memorandum and Order will be
entered.

___________________________
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 1st day of March, 2013.

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