Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

Schorsch enrolled in a long-term disability plan in 1991, but apparently never received a summary plan description or explanation of the Employee Retirement Income Security Act, 29 U.S.C.1132. In 1992 she was in an automobile accident; in 1993 Schorsch began receiving disability benefits. In 2006, at the plan’s request, Schorsch underwent a medical exam, which resulted in a report finding her capable of performing a medium duty job. The plan notified Schorsch that it would terminate her benefits, but did not mention a surveillance report, which was part of the determination. , Schorsch’s counsel sent a letter, but neither Schorsch nor her attorney submitted a request for review. The plan notified Schorsch that the appeals period had passed. Schorsch’s claimed breach of contract and unreasonable denial of benefits under Illinois law and ERISA violations. The plan had lost the administrative record relating to Schorsch’s claim. The district court granted summary judgment on the ground of failure to exhaust administrative remedies. The Seventh Circuit affirmed. There are exceptions that may excuse a failure to exhaust, but Schorsch offered no evidence of reasonable reliance on information missing from the notice or that alleged deficiencies were material. View "Schorsch v. Reliance Standard Life Ins. Co." on Justia Law

Miller, a Fund beneficiary, fell from a ladder and was injured. He hired attorney Darr on a contingent fee basis to sue the person who was supposed to hold the ladder. The Fund advanced $86,709.73 in medical and disability benefits on the condition that Miller repay from any recovery, without deducting attorneys’ fees. Miller and Darr, signed a subrogation agreement. The lawsuit settled for $500,000. Calculating his fee based on $413,290.27, Darr submitted $57,806.48 to the Fund, stating that he was withholding $28,903.25 as a fee. To avoid jeopardizing Miller’s benefits Darr later submitted the $28,903.25. The Fund indicated that if Darr pursued his claim, it would consider Darr and Miller in breach of Plan terms and in repudiation of the subrogation agreement and would consider terminating coverage and seeking relief under ERISA. Darr sued the Fund in Illinois state court under the common fund doctrine, which permits a party who creates a fund in which others have an interest to obtain reimbursement for litigation expenses incurred in creating that fund. The district court enjoined Darr’s lawsuit. The Seventh Circuit vacated. A federal court may not enjoin “proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments,” 28 U.S.C. 2283.View "Trs. of the Carptenters' Health & Welfare Trust v. Darr" on Justia Law

Jeranek, a beneficiary of the Humana Plan, was hospitalized in 2006. Three days later, she was admitted at Nu-Roc Nursing Home. She was 88 years old and suffered from a variety of maladies that required her to use 14 prescription medications. A physician estimated at the time of her admission that Jeranek had a life expectancy of about one year. Jeranek was a resident at Nu-Roc for 702 days. On several occasions she declined medical treatment and her physician understood that she was to receive comfort care only. From November 15 until November 19, 2006, Jeranek’s stay at Nu-Roc was paid for by Medicare. Humana paid $50,097.67 to Nu-Roc for services provided from November 20, 2006, to September 30, 2007, but later determined that its disbursement had been a mistake, reasoning that “custodial” care was not covered by the Plan. Humana sought reimbursement for its previous payments and denied coverage for October 1, 2007 through October 22, 2008, when costs for Jeranek’s care totaled $64,669.74. The district court determined that Humana’s denial of coverage was not arbitrary and granted summary judgment for the Plan. The Seventh Circuit affirmed. View "Becker v. Chrysler LLC Health Care Benefits Plan" on Justia Law

Swanson hired ISF for steel fabrication work on an Indiana construction project. ISF hired Central to perform steel erection work. ISF and Central signed a subcontract in which Central agreed to procure insurance and to “defend, indemnify and hold harmless.” Central purchased insurance from Scottsdale: a $1 million commercial general liability policy and a $2 million umbrella insurance policy. ISF also carried $1 million in commercial general liability coverage from Amerisure and $7 million in umbrella coverage from National. Colip, a Central employee, was injured at work when he fell 30 feet through a hole in a building roof. Colip settled with ISF for $2.9 million, and the insurers paid according to an agreement that provided that Scottsdale would pay $1 million out of the CGL policy and $950,000 out of the Umbrella policy, while Amerisure would pay the remaining $950,000. Initially, National had no obligation to contribute. The agreement reserved the rights of the parties to seek reimbursement or contribution from each other. Amerisure sued Scottsdale and Central; Scottsdale filed counter- and cross-claims against Amerisure and National. The district court dismissed Central from the litigation and awarded Scottsdale $50,000 from Amerisure and the remaining $900,000 from National. The Seventh Circuit affirmed. View "Scottsdale Ins. Co. v. Nat'l Sur. Corp." on Justia Law

ProLink and GPS compete, manufacturing and selling GPS-based golf course distance measurement and course management products. GPS owns the 518 patent for a player positioning and distance finding system and sued ProLink for patent infringement. GPS also claimed slander of title and unfair competition, alleging that ProLink falsely represented that it owned an exclusive license under the patent as part of a security agreement with Comerica Bank. This agreement was recorded and allegedly encumbered GPS’s title. ProLink entered into a second agreement, this time representing that it owned outright the 518 security agreement. ProLink was insured under Federal’s commercial general liability insurance policy and requested defense. Federal informed ProLink that it would not defend or indemnify because GPS’s allegations did not satisfy the policy definition of “personal injury;” if they did, the Intellectual Property Laws or Rights Exclusion or Expected or Intended Injury Exclusion would apply. ProLink sought declaratory judgment that Federal breached its duty to defend. The district court found in favor of Federal , holding that the first alleged “personal injury” for which GPS sought damages (2006) occurred outside of the policy period (2007-2008). The Seventh Circuit affirmed. The underlying allegations concern only disparagement of property, which is not covered. View "ProLink Holdings Corp. v. Federal Ins. Co." on Justia Law

Aschermann suffers from degenerating discs and spondylolisthesis and had lumbar fusion operations in 2002 and 2004. Until 2003 she worked as a sales representative. Back pain left her unable to perform its duties. Between 2003 and 2009 she received disability payments under the employer’s disability plan, a welfare-benefit plan governed by the Employee Retirement Income Security Act. The policy provides that after the first two years of benefits, the question becomes whether the recipient can perform any job in the economy as a whole. Lumbermens stopped paying disability benefits to Aschermann in fall 2009, concluding that she could do sedentary work. The district court held that the decision to end her disability benefits was not arbitrary. The Seventh Circuit affirmed. Aschermann does not deny that her education B.S. in psychology and master’s degree in social work and experience suit her for many desk-bound positions, but claimed inability to work more than four hours a day. The insurer gave notice complying with ERISA, (29 U.S.C. §1133(1), that it wanted new diagnostic test results and other recent information; she was given a “reasonable opportunity” to supplement the file and receive a “full and fair review.” View "Aschermann v. Aetna Life Ins. Co." on Justia Law

Travelers sought a declaratory judgment that they had no duty to defend their insured, Rogan Shoes, in an Illinois state court class action for violations of the federal Fair and Accurate Credit Transactions Act, 15 U.S.C. 1681c(g), which prohibits businesses from including on sales receipts the expiration date or more than the last five digits of the purchaser’s credit or debit card and authorizes damages of up to $1,000 per unlawful receipt. The suit sought statutory damages of $387 million. Rogan settled for $16 million; the settlement specified that the judgment would be satisfied only through proceeds from Travelers’ policies, with the exception of $50,000 to cover legal costs. Rogan assigned its claims and rights to payments under the policies. The state court approved the settlement. A state court citation to discover assets was served on Travelers’ agent. The district court dismissed the declaratory judgment action on the ground that parallel state proceedings were pending. The Seventh Circuit affirmed, finding that the case did not satisfy the amount-in-controversy requirement for diversity jurisdiction, 28 U.S.C. 1332(a), because Rogan had assigned its interests in its policies to class members, none of whom individually claim a share of more than $75,000. View "Travelers Prop. Cas. & Travelers Indem. Co. v. Good" on Justia Law

Budrik sued Wegman for injuries sustained in an accident on a construction site managed by Wegman and was demanding almost presented a realistic possibility of a potential loss above the policy limit, $1 million), but failed to warn Wegman of this possibility. Wegman sued Admiral for failure to act in good faith, alleging that it would promptly have sought indemnity from its excess insurer, AIG (policy limit $10 million). Budrik filed suit four years before Wegman notified AIG, which denied coverage for failure to timely notify. Budrik obtained a judgment of slightly more than $2 million. The district court dismissed Wegman’s suit against Admiral, and, on remand, granted a stay, pending state court resolution of Wegman’s suit against AIG. The Seventh Circuit dismissed appeal of the stay. Although Wegman’s suit against Admiral in federal court and against AIG in state court, are related, they do not satisfy the conditions for abstention.; the district court is not finished with the case. The stay really is a stay, and not a dismissal. View "R.C. Wegman Constr. Co. v. Admiral Ins. Co." on Justia Law

Marantz practiced pulmonary and critical care medicine. In 1997 she underwent surgery for a herniated disc and degenerative disc disease. The surgery did not eliminate her pain. In 1999, she stopped working full time. Through her employment with she received disability coverage from LINA. LINA approved her claim. Additional surgery did not resolve the problem. MRIs revealed degenerative disc disease and spinal stenosis. In 2000 LINA provided funding for Marantz to enroll in an online Masters of Public Health program, for retraining for less-demanding work. In 2001, Marantz began working approximately 20 hours per week for the Illinois Department of Public Health. LINA offset disability benefits and reduced its monthly payment from $7,616 to $5,000 per month. LINA paid benefits for 60 months. In 2004, LINA investigated whether Marantz satisfied the policy’s more stringent definition of disability relevant after the first 60 months: “unable to perform all the material duties of any occupation for which [that worker] may reasonably become qualified based on education, training or experience.” In 2005 LINA terminated benefits, based on a functional capacity evaluation, doctors’ assessments, and surveillance. Marantz sued under the ERISA, 29 U.S.C. 113. The district court entered judgment in the defendants’ favor. The Seventh Circuit affirmed. View "Marantz v. Permanente Med. Grp., Inc." on Justia Law

TAMS, a medical device manufacturer, hired Comtrans to coordinate shipment of equipment to a trade show in Chicago. Comtrans is not a carrier. It used its affiliate, ACS, which retained Atlas to perform the actual shipment. The Atlas truck was involved in a serious accident, leaving TAMS with more than $1 million in losses. TAMS’s insurance company sued on behalf of TAMS. Atlas is an interstate motor carrier authorized by the Federal Motor Carrier Safety Administration to transport goods in interstate commerce. Claims are subject to the Carmack Amendment, 49 U.S.C. 14706, which provides that a carrier of property in interstate commerce is liable for the actual loss or injury to the property caused b” the carrier, which may be limited “to a value established by written or electronic declaration of the shipper or by written agreement between the carrier and shipper if that value would be reasonable under the circumstances.” Atlas relied on the contract it had in place with ACS and the bill of lading delivered signed by a Comtrans warehouse manager when Atlas picked up TAMS’s shipment, as limiting liability to $0.60 per pound. The district court entered summary judgment for Atlas. The Seventh Circuit remanded for further development of the facts. View "Nipponkoa Ins. Co., L v. Atlas Van Lines, Inc." on Justia Law