Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-03-04001/USCOURTS-ca8-03-04001-0/pdf.json

Parties Involved:
Daniel Miller
Appellant
Northwestern Mutual Life Insurance Company
Appellee

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

Nos. 03-3989 and 03-4001

___________

Timothy Miller and Daniel Miller, *

*

Plaintiffs-Appellants, *

*

v. * Appeals from the United States

* District Court for the

Northwestern Mutual Life Insurance * District of Minnesota.

Company, being sued as The *

Northwestern Mutual Life Insurance *

Company, *

*

Defendant-Appellee. *

___________

Submitted: October 18, 2004

Filed: December 23, 2004

___________

Before COLLOTON, LAY, and BENTON, Circuit Judges.

___________

LAY, Circuit Judge.

Timothy Miller and Daniel Miller are brothers who operated an architectural

and construction company (Miller Architects & Builders, Inc.) as equal owners.

Daniel served as president and Timothy served as chairperson. Timothy’s principal

duties included (1) creating an agenda for, and presiding over, advisory board

meetings; (2) marketing; and (3) acting as development consultant for new client

accounts. 

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On April 27, 1998, Timothy first sought treatment for depression from

Maureen Kelly (Kelly), a psychotherapist. By May 26, 1998, Timothy was

hospitalized at the request of his psychiatrist, Dr. Charles McCafferty (McCafferty).

Timothy was discharged on June 2, 1998. At that time, McCafferty prescribed a

treatment plan for depression. Timothy saw either McCafferty or Kelly eighteen

times in 1998 after being discharged, and he continued treatment in 1999, 2000, 2001,

and 2002. Timothy continues to receive care from McCafferty to this day.

In November 2000, Timothy submitted a claim to his insurer, Northwestern

Mutual Life Insurance Company (“Northwestern”), for benefits under his Disability

Income Policy. He identified May 26, 1998 (the day he was hospitalized), as his

disability onset date. Shortly thereafter, Daniel agreed to buy Timothy’s share of the

business, and Daniel submitted a claim for benefits under a separate insurance policy

with Northwestern – a Buyout Expense Reimbursement Policy, wherein Daniel was

the owner and Timothy was the insured. 

Both Northwestern policies contained a provision requiring that Timothy be

“totally disabled” in order for the policyholder to recover. The Buyout Expense

Reimbursement Policy stated:

The Insured is totally disabled when unable to perform the principal

duties of the regular occupation, and not working in any capacity in the

Business.

Buyout Expense Reimbursement Policy at 5 (Jt. App. at A-49) (emphasis added). In

contrast, the Disability Income Policy stated:

Until the end of the Initial Period [of disability], the Insured is totally

disabled when unable to perform the principal duties of the regular

occupation. . . . If the insured can perform one or more of the principal

duties of the regular occupation, the Insured is not totally disabled;

however, the Insured may qualify as partially disabled.

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1

In addition to “total disability,” both Northwestern contracts required that

Timothy be under the regular care of a licensed physician during disability. The

district court opinion did not discuss this element. Yet, on appeal, the parties dispute

what Dr. McCafferty’s treatment plan for Timothy entailed, whether Timothy

followed this plan, and whether the frequency of his treatment visits rose to the level

of “regular care” required by the contracts. We do not address these arguments since

they were not relevant to the district court’s decision. 

2

Summary judgment should never be used to denigrate the right of trial by jury.

Summary judgment should be utilized only in the case where no material facts are

genuinely disputed. In the present case, Timothy urges that material facts are

disputed. He claims his work performance constitutes under-performance. To some

extent, this is true. However, the Millers largely misread and stretch Minnesota

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Disability Income Policy at 5 (Jt. App. at A-11) (emphasis added). Northwestern

relied on the “total disability” provisions in either contract as grounds to deny

benefits to Timothy (for disability) and Daniel (for buyout expenses).1

 However,

Northwestern did find that Timothy was partially disabled and paid him $15,000

under the Disability Income Policy. Mem. and Order of U.S. District Court Judge

Paul Magnuson at 3.

The Miller brothers brought separate suits against Northwestern for breach of

contract and sought declaratory relief and damages in Minnesota state court.

Northwestern removed the case to federal court. Minnesota state law governs the

dispute. 

The district court granted Northwestern’s motions for summary judgment

against both Plaintiffs. Since the court found Timothy was able to perform at least

one of his principal duties, it held that there was no genuine issue as to whether

Timothy was totally disabled within the meaning of either contract. The district court

emphasized that “[t]his is not a situation where Timothy only performed ‘trivial’ tasks

of the business,” and therefore could still be deemed totally disabled under Minnesota

law. See id. at 8.2

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precedent. See infra at 4-5 (discussing Minnesota law).

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The Millers appealed, claiming the district court erred in granting summary

judgment on the ground that Timothy was not “totally disabled” within the meaning

of either policy. Their primary argument is that the trial court failed to consider what

it means to meaningfully “perform” a job duty. Although the Millers concede that

Timothy returned or attempted to return to work after being hospitalized, they claim

that evidence showed Timothy was unable to function at the pre-disability level.

They further argue that this minimum showing is sufficient to entitle a claimant to

present that evidence to a fact-finder, who then determines whether that postdisability level of functioning in fact constitutes “total disability” within the meaning

of Minnesota law. 

The Millers also claim the phrase “total disability” is inherently ambiguous

under Minnesota law according to Weum v. Mutual Benefit Health & Accident Ass’n,

54 N.W. 2d 20 (Minn. 1952). They urge this court to adopt the definition of “total

disability” used in the Weum decision, to-wit: that a person is totally disabled for

insurance purposes if she or he is “unable to perform the substantial and material

acts necessary to the successful prosecution of his occupation or employment in the

customary and usual way.” Id. at 26 (emphasis added). Had the district court applied

the Weum standard, the Millers argue, a genuine issue would have existed as to

whether Timothy’s reduced capacity to work was equivalent to “total disability.” 

We disagree with these arguments. First, neither the Weum case nor the plain

language of the contract at issue here reveal an ambiguity. The contract in Weum,

which was issued by Mutual Benefit Health & Accident Association (MBHA),

required that the insured be “wholly and continuously” disabled before disability

benefits could be triggered. Id. at 22. Because a literal interpretation of that contract

language was deemed to require “complete helplessness,” id. at 29, the Weum court

reasoned that “[s]ome limitation upon the literal terms is obviously necessary in order

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to give a realistic meaning to the words and give to the insured some measure of the

protection which he bargained and paid for.” Id. Since no realistic limitations

appeared on the face of this contract language, the Weum court declared the contract

“ambiguous,” 54 N.W.2d at 29, and affirmed the district court’s jury instruction. The

jury instruction defined disability as a state where one is “unable to perform the

substantial and material acts necessary to the successful prosecution of [an]

occupation or employment in the customary and usual way.” Id. at 26. 

In light of this summary, it is evident that Weum provides little aid to the

Millers. The original contract language in Weum was materially different from

language used in Northwestern’s contracts. MBHA’s contract required the insured

to be “wholly and continuously disabled” before benefits would issue; here, the

insured need only be unable to perform “the principal duties of the regular

occupation.” It cannot be reasonably argued that these two contract provisions are

equivalent. The language used in the Northwestern contracts is actually more similar

to the limiting construction that the Weum court imposed upon MBHA’s contract than

it is to the plain meaning of MBHA’s contract. Thus, we reject the Millers’

contention that a literal interpretation of the Northwestern contract language requires

utter helplessness, as did MBHA’s original contract language. 

Other Minnesota cases cited by the Millers in support of their proposition that

the Northwestern contracts require “utter helplessness” likewise involved materially

different contract language. See Laidlaw v. Commercial Ins. Co. of Newark, 255

N.W. 2d 807, 811-12 (Minn. 1977) (involving interpretation of the phrase “period for

which the (Company) is liable” and holding that an insured’s income is not relevant

to a finding of total disability); Blazek v. North Am. Life & Cas. Co., 87 N.W. 2d 36,

40 (Minn. 1957) (contract requiring an insured to be “totally and continuously

disable[d]” and unable to perform “every duty pertaining to his occupation” before

disability benefits could issue). Only Dowdle v. Nat’l Life Ins. Co., 2003 U.S. Dist.

LEXIS 15093 (D. Minn. 2003), defined total disability as a condition wherein an

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insured is “unable to perform the material and substantial duties of an occupation.”

However, the original contract language provided that definition. 2003 U.S. Dist.

LEXIS 15093 at *3. 

In light of the fact that the Northwestern contracts do not require utter

helplessness, neither Minnesota law nor the Millers explain why this court should

impose a construction on the contract language. Rather, the plain language of the

contracts supports the district court’s ruling that Timothy must be unable to perform

all principal duties of his regular occupation in order to qualify as “totally disabled.”

See McOsker v. Paul Revere Life Ins. Co., 279 F.3d 586, 588 (8th Cir. 2002). The

Millers reject McOsker on the grounds that it is a federal case that failed to apply

Minnesota law in any substantive manner. This is not determinative. The facts and

contract language at issue in McOsker were very similar to those involved here, and

the court’s analysis and reasoning were sound. As such, McOsker is persuasive

authority. 

Comparing the facts to the plain language of the contract, it appears that

Timothy was not “totally disabled.” He was able to perform at least one of the

principal duties of his regular occupation after the onset of his depression. For

instance, it is undisputed that Timothy was at times able to draft agendas for, and

preside over, board meetings for the company. Additionally, there were times where

Timothy was able to engage in sales efforts by meeting with clients, issuing

marketing letters or special appearances, and making telephone contacts. While it is

indisputable that Timothy’s level of sales productivity dropped substantially and

board meetings were held on an infrequent basis, it still cannot be said that he was

unable to perform at least one of the principal duties of his regular occupation. 

Our opinion today does not stand for the proposition that clinical depression,

as opposed to a physical injury or ailment, is an inappropriate basis upon which to

allege total disability. However, the evidence in this case does not show that Timothy

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has reached such a point. Timothy clearly suffers from depression and experienced

a severe suicidal episode, from which he has not fully recovered. It seems as though

the post-hospitalization period has been characterized by moments of improvement

– during which Timothy attempted to return to work and did in fact perform some of

his principal duties – and moments of reversion, during which he fled from his

responsibilities and avoided any pressures whatsoever, as his brief alleges. We

acknowledge that Timothy’s decision-making may not yet be fully within his control,

that his volatile state makes him an unreliable co-owner and poor employee, and that

the purchase of Timothy’s share in the business was probably necessary to protect the

business. Still, we cannot say on the facts presented that Timothy’s condition during

the post-hospitalization period was so severe as to constitute a state of “total

disability” within the meaning of the Northwestern contract language. 

For these reasons, the judgment of the district court is AFFIRMED.

______________________________

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