FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T OCTOB ER 19, 2009 THOMAS K. KAH

N CL ERK [PUBLIS H] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

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__ __ __ __ __ __ __ __ __ __ __ __ D. C. Dock etNo. 0 5- 01 06 0- CV-AR-S MEGA LIFE AND HE ALTH INSURANCE COMPANY, THE, Pl ai nt iff -Co un te r-Defe nd an tApp el la nt , Cro ss -Ap pe ll ee, ve rs us DONALD D. PIENIOZEK, in di vi du al ly andas a dm in is tra to r of th e es ta te of Ke ll ie O. Pien io zek , Deceas ed , Defen da nt -Co un te r-Cl ai m an tApp el le e, Cro ss -Ap pe ll an t, ESTATE O F KELLIE O. PIENIOZEK, Decea se d, Defen da nt .

__ __ __ __ __ __ __ __ __ __ __ __ _ App eal s fr om

th e Uni te d S ta te s Di st ric t Co urt fo r th e North ern Dis tri ctof Al ab am a

__ __ __ __ __ __ __ __ __ __ __ __ __ (Oct ob er 1 9, 2 00 9)Befo re CARNES a ndPRYOR, Ci rcu itJu dg es , andDOWD, Dis tri ctJu dg e. * DOW D, Dist ric t Jud ge : I. Overvi ew Thi s ap pe al is th e se co ndap pe al in th is cas e b efo re the Co urt. In th e fi rs t ap pe al , th e Co urt v acat edth e d is tri ctco urt’s g ran t o f su m m ary jud gm en t i n fa vo r of Mr. Pi en io zek(“ Pi en io zek ”) o n M eg a Life an d Hea lt h In su ran ce Co m pany’ s (“ Meg a”) c la im

forres ci ss io n o f Ms . Pie ni oz ek ’s li fe i ns ur an ce p ol ic y an d Pi en io zek ’s cou nt ercl ai m for bre ach of c on tra ct , andrem an de d t he cas e fo r de te rm in at io n b y

a fact -fi nd er as to Meg a’s ob li ga ti on to pa y th e li fe i ns ur an ce co nt ract . Mega Lif

e & Heal th Ins . Co. v. Pi en io ze k, 51 6 F .3d98 5, 9 91 (11 th Cir . 20 08 ). On remand , th e d is tri ctco urt co nduc te d abe nc h t ria l o ve r Meg a’s ob jecti onth atth e cas e sh ou ldha ve be entri edto a jury. At the co nc lu si on of t he tri al , th e d is tri ctco urt fo un d fo r Pi en io zekan d e nt ereda m on ey jud gm en t i n h is fav or . The pre li m in ary is su e o n app eal is whet he r th e d is tri ctco urt erredin de te rm in in g t ha t n o ju ry

tri al was e ffec ti ve ly dem an de d o n t he si ng le rem ai ni ng is su e reg ard in g the li fe i ns ur an ce p ol ic y be fo re t he di st ric t co urt o n re m an d, i .e.,

Honora ble David D. D owd, J r., United States District Judge f or the Nor

thern District of * Ohio, sitti ngby

designation. 2Meg a’s ob li ga ti on to pa y , or i n d iff eren t t erm s, Pi en io zek ’s ent it le m en t t o pa ym en t. We con cl ud e th atth e d is tri ctco urt p ro pe rly det erm in edth atno ti m el y jury dem an d was fil edan d s erv edby eith er p art y wit h re sp ectto th e o nl y

is su e be fo re i t o n re m an d. Fu rth er, we fi ndno erro r wit h re sp ectto Meg a’s rem ai ni ng is su es on ap pe al , andaffi rm th e jud gm en t o f th e d is tri ctco urt. II. Fact s an d P ro cedur al His to ry The ba si c fac ts are as fol lo ws. In Sep te m be r 20 04 , Kell ie Pie ni oz ek ap pl ie d fo r a l ife in su ran ce p ol ic y wit h M eg a an d a ls o app li edforacci de nt al de ath co ve rag e. The app li cat io n re fle ct edanin co m e o f $7 00 pe r week . Meg a is su eda li fe i ns ur an ce p ol ic y

to Ms . Pie ni oz ekwit h ade ath b en efi t o f $5 00 ,00 0 a ndan acci de nt al de ath b en efi t o f $3 00 ,00 0. Ms . Pie ni oz ekdi edon Decem be r 14 , 20 04 in a si ng le -caracci de ntwhen sh e swe rv edto av oi d s tri ki ng a de er. Defen da ntwas apa ss en ge r in th e carat t he ti m e. Meg a d oe s n otco nt en d s ui ci de or f ou l p lay in co nn ect io n wi th Ms . Pie ni oz ek ’s de ath. Afte r Pi en io zekfil eda cl ai m wit h M eg a o n h is wife ’s li fe i ns ur an ce p ol ic y , Meg a d is co ve redth atMs . Pie ni oz ekwas e arn in g m uc h l es s t ha n $ 70 0 p er week . Meg a cl ai m s t ha t i f itha d kno wn M s. Pi en io zek ’s actua l i nc om e, itwou ldha ve no t 3is su eda po li cy , or i t wo ul d h av e is su eda po li cy wit h l owe r co ve rag e. On M ay 20 , 20 05 , Meg a fi le d atwo co un t co m pl ai ntforde cl arat ory jud gm en t. Co un t 1 of t he co m pl ai ntso ug hta de cl arat io n t ha t M eg a was en ti tl edto res ci ndKell ie Pie ni oz ek ’s li fe i ns ur an ce p ol ic y on th e g ro un ds th atMs . Pie ni oz ek m is rep res en te d h er i nc om e o n t he po li cy ap pl ic at io n. In Co un t 2 , Meg a so ug htan al te rn at iv e d ecl arat io n tha t i f th e d is tri ctco urt d et erm in edth atMeg a was no t en ti tl edto res ci ss io n, t he acci de nt al de ath b en efi t was no t p ay ab le be cau se acci de nt al de ath was no t es tabl is he d b y anau to ps y . No jury was de m an de d. Pi en io zekfil edanan swe r on Octo be r 18 , 20 05 . The an swe r was a ge ne ral de ni al an d n o ju ry

was d em an de d. OnDecem be r 6, 2 00 5 a ndwit ho utlea ve of co urt, Pi en io zekfil edanam en de d a ns wer wh ic h i nc lu de d ajury de m an d. Ex cep t fo r th e jury dem an d, t he am en de d a ns wer was id en ti cal to th e o rig in al an swe r. Afte r Meg a m ov edforsu m m ary jud gm en t an d wi th lea ve of t he di st ric t co urt, Pi en io zekfil edco un te rcl ai m s, wi th jury de m an d, fo r pa y m en t o n t he li fe in su ran ce p ol ic y

(Co un t 1 ) an d b adfai th (Co un t 2 ). Meg a an swe redan d a ls o m ov edforsu m

m ary jud gm en t o n t he co un te rcl ai m s. Pi en io zekop po se d M eg a’s m ot io n a ndm ov edforsu m m ary jud gm en t o n h is co un te rcl ai m for bre ach of co nt ract . 4The di stric t co urt g ran te d M eg a’s m ot io n fo r su m m ary jud gm en t as to Pi en io zek ’s badfai th cla im , bu t g ran te d P ie ni oz ek ’s m ot io n fo r su m m ary jud gm en t as to th e co nt ractcla im an d e nt eredjud gm en t fo r Pi en io zek . Bot h s id es ap pe al ed . This Co urt af

firm edth e d is tri ctco urt i n g ran ti ng su m m ary jud gm en t i n fav orof M eg a o n P ie ni oz ek ’s badfai th cla im , bu t v acat edan d re m an de d fo r res ol ut io n b y

a fact -fi nd er the is su e o f Meg a’s ob li ga ti on an d P ie ni oz ek ’s en ti tl em en t u nd er the li fe i ns ur an ce p ol ic y . Se e Mega L if e &Heal th Ins . Co. , 51 6 F.3 d 9 85 . Upo n re m an d, t he di st ric t co urt re jecte d M eg a’s cl ai m

th atitwas e nt it le d t o a jury andco nduc te d abe nc h t ria l. In anora l o pi ni on set ti ng forth th e fi nd in gs of factto jus ti fy

hi s co nc lu si on s, the di st ric t co urt awa rd edjud gm en t t o P ie ni oz ekin th e to ta l s um

$8 00 ,00 0 o n the li fe i ns ur an ce p ol ic y , pl us in te res t ca lc ul at edat t he rat e o f 6% i n t he su m

of $ 16 0,8 32 .80 , fora to ta l ju dg m en t o f $9 60 ,83 2.8 0. A m ot io n b y

Meg a p ur su an t t o F ed . R. Civ . P. 59 was p art ia ll y gra nt edby the di st ric t co urt, an d t he jud gm en t was reduc edto $9 59 ,91 6.1 6 b ecau se of a n ad jus tm en t i n t he in te res t ca lc ul at io n. Bo th pa rti es ag ai n app eal ed . Meg a’s ap pe al cla im s t ha t t he di st ric t co urt erre d b y rul in g t ha t a ju ry

tri al was n otrequi redon rem an d, b y no t ap pl y in g t he

5“ la w of t he cas e” wi th res pe ctto th e in su red ’s ann ua l i nc om e an d fi nd in g t he term

“ an nu al in co m e” t o b e am bi gu ou s, an d b y

award in g p re-ju dg m en t i nt eres t ata rat e of 6%. Pi en io zekackno wled ge s t ha t h is ap pe al reg ard in g d is m is sa l o f hi s am en de d c ro ss -cl ai m

is m oo t u nl es s t he cas e is rem an de d. III. Law an d An al y si s A. Neit he r Part y

Tim el y Dem an de d aJu ry

Trial The fir stis su e requi rin g re so lu ti on by thi s C ou rt i s wh ethe r th e d is tri ctco urt pr op erl y de ni edMeg a’s co nt en ti on itwas e nt it le d t o atri al by j ury up on rem an d fro m th e fi rs t ap pe al . W e ad dr es s t ha t i ss ue at the ou ts etbe cau se if t he di st ric t co urt erred , a rev ers al an d re m an d wo ul d b e requi red . In te rp ret at io n o f th e Fed eral Ru le s o f Ci vi l Pr oc edur e p res en ts a qu es ti on of la w subjec t t o de no vo rev ie w, andde ni al of ajury tri al is rev ie wedwit h t he m os t

“ ex act in g s cru ti ny.” Ci tyof Mor ga nt ow n v . Roya l In s. Co . , 33 7 U.S. 2 54 , 25 8- 60 , 69 S. Ct. 1 06 7, 1 07 0, 9 3 L. Ed. 1 34 7 (1 94 9) ; Bur ns v. La wthe r , 53 F.3d12 37 , 12 40 (11 th Cir . 19 95 ) (ci ti ng McBri de v. Sh ar pe , 25 F.3d96 2, 9 67 -6 8 (1 1t h C ir. 19 94 )). The rig htto tri al by j ury is fun da m en ta l, an d t hi s C ou rt “ in du lg e[s ] ev ery reas on ab le pre su m

pt io n a ga in stwaiv er.” LaMar ca v. Tu rn er , 99 5 F .2d15 26 , 15 44 (11 th Cir . 19 93 ) (quo ti ng Aetn a In s. Co . v. Ken ne dy , 30 1 U.S. 3 89 , 39 3, 5 7 6S. Ct . 80 9, 8 12 , 81 L. Ed. 11 77 (19 37 )).

Ru le 38 of the Fed eral Ru le s o f Ci vi l Pr oc edur e p res erv es th e ri gh t o f tr ia l by j ury as d ecl aredby the Sev en th Am en dm en t t o the Co ns ti tu ti on , andpro vi de s th at : (b) Dem an d. On an y is su e tr iabl e o f ri gh t b y

a jury, a p art y

m ay de m an d a jury tria l b y : (1 ) se rv in g t he ot he r pa rti es wit h awrit te n d em an d—whi ch m ay be in cl ud edin a pl ead in g—no lat er tha n 1 0 d ay s af te r th e la st pl ead in g d ire ct edto th e is su e is serve d; an d (2 ) fil in g t he de m an d i n a cco rd an ce wi th rul e 5 (d ). Fed . R. Civ . P. 38 (b ). Init s co m pl ai nt , Meg a so ug hta de cl arat io n tha t i t was en ti tl edto res ci nd Kell ie Pie ni oz ek ’s li fe i ns ur an ce p ol ic y be cau se th e an nu al in co m e st at edon he r in su ran ce ap pl ic at io n was a m at eri al m is rep res en ta ti on . This cas e cam e b efo re the di st ric t co urt o n d iv ers it y juri sd ic ti on , andun de r Alaba m a la w, m at eri al it y of a m is rep res en ta ti on on a po li cy ap pl ic at io n i s t riabl e b y

a jury. Ben ne tt

v. Mut ua l o

f Omah a In s. Co . , 97 6 F .2d65 9, 6 61 (11 th Cir . 19 92 ) (ci ti ng Fed er al Kemp er Lif e Ass ur an ce Co . v. Fir

st Na t’l Ban k, 71 2 F .2d45 9, 4 62 (11 th Cir . 19 83 ); Stat e Farm In s. Co . v. W

hi ddon , 51 5 S o. 2 d 1 26 6 (Al a. Ci v. Ap p. 1 98 7) ); Alf a L if e In s. Co rp . v. Lewis , 91 0 S o. 2 d 7 57 , 76 2 (Al a. 20 05 ) (ci ti ng Ben ne tt , 97 6 F .2dat 6 61 ; Clark 7v. Ala . Farm Bur ea u Mu t. Ca s. In s. Co . , 46 5 S o. 2 d 1 13 5 (Al a.Ci v.Ap p. 1 98 4) ).

Meg a co ul d h av e d em an de d ajury tri al in it s co m pl ai ntforres ci ss io n b utfai le d t o do so . Pi en io zekan swe redon Octo be r 18 , 20 05 in th e fo rm of age ne ral de ni al an d di d n otm ak e a jury

de m an d. OnDecem

be r 6, 2 00 5, Pi en io zekfil ed , witho utlea ve of th e d is tri ctco urt, an am en de d a ns wer wh ic h i nc lu de d ajury de m an d. Th e am en de d a ns wer was id en ti cal to th e o rig in al an swe r sa ve forth e jury dem an d. Am en dm en ts no t i nt ro du ci ng ne w is su es do no t re ne w a pa rty’ s ri gh t t o de m an d ajury tri al . Gua

ja rdo v . Est el le , 58 0 F .2d74 8, 7 53 (5t h C ir. 1 97 8) (ci ti ng Co nn . Gene ra l Li

fe Ins . Co. v. Br es li n , 33 2 F .2d92 8, 9 31 (5t h C ir. 1 96 4) (“ The or ig in al an swe r of

th e ap pe ll an t, wh ic h d idno t co nt ai n ade m an d fo r a jury tri al , co nt ai ne d ade ni al of t he all eg at io ns of t he ap pe ll ee’s co m pl ai nt. . . . The am en de d an swe r, whi ch co nt ai ne d ade m an d fo r a jury tri al , . . . di d n otrai se an y is su es whi chwere i n a ny m at eri al way di ffer en t fr om

th os e p res en te d b y

th e o rig in al an swe r. In s uc h acas e th e wai ve r or ig in al ly m ad e rem ai ns effe ct iv e an d t he subs eque ntde m an d i s i ne ffec ti ve .”)), ab ro ga te d o n o th er gr ou nd s b y Th or nb ur

g v . Abb ot t , 49 0 U.S. 4 01 , 42 3- 24 , 10 9 S . Ct. 1 87 4, 1 04 L. Ed. 2d45 9 (1 98 9) . Pi en io zek ’s am en de d ans wer d em an di ng a jury tria l was in effe ct iv e b ecau se itwas

8ou ts id e th e ti m e p aram et ers forde m an di ng a jury tria l es tabl is he d b y Ru le 38 an d di d n otrai se ne w is su es up onwhi ch a pa rty m ay pro pe rly dem an d ajury tri al . Subs eque nt ly, wit h l eav e o f th e d is tri ctco urt, Pi en io zekfil edco un te rcl ai m s fo r br each of c on tra ctan d b adfai th . The co un te rcl ai m s i nc lu de d ajury de m an d. The qu es ti on th atem erg es is whethe r Pi en io zek ’s cou nt ercl ai m for bre ach of co nt ract , acco m

pa ni edby a requ es t fo r a jury, rais eda ne w is su e wit hi n t he m ean in g o f Ru le 38 th atwou ldgi ve ris e to a ren ewedrig htto de m an d ajury.

“ The term

‘ ne w is su es ’ ha s b een in te rp ret edto m ean ne w is su es of f act , no t n ew th eo rie s o f rec ov ery. ” Gua ja rdo , 58 0 F .2dat 7 53 ; se e a ls o L aMa rc a , 99 5 F .2dat 15 45 . Meg a’s ob li ga ti on to pa y th e p ol ic y

an d P ie ni oz ek ’s ent it le m en t t o p aym en t un de r th e p ol ic y

are t wo s id es of t he same coi n. Defe nd an t’s co un te rcl ai m for br each of c on tra ctis no t a n ew is su e fo r th e p ur po se s o f Ru le 38 , bu t s im pl y a di ffer en t v ers io n o f th e d en ia l i n h is an swe r to pl ai nt iff’s cla im forres ci ss io n. Neit he r Meg a n orPie ni oz ekm ad e a t im el y jury de m an d o n t he is su e o f Meg a’s ob li ga ti on /P ie ni oz ek ’s ent it le m en t u nd er t he po li cy . Se e La nz a v . Drex el &Co . , 47 9 F .2d12 77 , 13 10 (2dCir . 19 73 ) ( en ba nc ) (co m pl ai ntpl acedde fen da nton no ti ce o f un de rlyin g fa ct s an d b as ic leg al th eo ry up on whi chrel ie f was so ug htan d 9am en dm en t d idno t ra is e “ ne w is su es ” fo r pu rp os es of R ul e 3 8) . Acco rd in gl y , eve n i ndul gi ng ev ery reas on ab le pre su m pt io n a ga in stwaiv er, we fi ndno erro r in th e d is tri ctco urt’s d et erm in at io n t ha t t he pa rti es were n ot en ti tl edto a jury tria l o n t he is su e o f res ci ss io n- br each of c on tra ctbef or e th e di st ric t co urt upo n re m an d fr om th e fi rs t ap pe al . B. Dis tri ctCo urt Di d No t Vi ol at e “ Law of t he Cas e” A di st ric t co urt’s ru li ng onth e ap pl ic at io n o f th e “ la w of t he cas e” d oc tri ne is subjec t t o de no vo rev ie w. Tr an sa mer ic a L ea si ng , Inc . v. Ins t. o

f Lo ndon Underwr it er

s , 43 0 F .3d13 26 , 13 31 (11 th Cir . 20 05 ). Und er thi s d oc tri ne ,

“ ‘find in gs of f

actan d c on cl us io ns of l aw by an ap pe ll at e co urt ar e g en eral ly bi nd in g i n a ll subs eque ntpro ceed in gs in th e sa m e cas e in th e tr ia l co urt o r on a la te r ap pe al .’ ” Id. (qu ot in g Hea th co at v. Pot ts , 90 5 F .2d36 7, 3 70 (11 th Cir . 19 90 )). Howe ve r, th e la w of t he cas e d oc tri ne do es no t ap pl y to ba r reco ns id erat io n o f anis su e whe n: “ (1 ) a s ub se qu en t t ria l p ro du ces subs ta nt ia ll y di ffer en t ev id en ce; (2) co nt ro ll in g autho rit y ha s s in ce m ad e a co nt rary deci si on of la w app li cab le to th atis su e; or ( 3) th e p rio r de ci si on was c le arl y erro ne ou s an d wou ldworka m an ife stin jus ti ce.” Hea th co at , 90 5 F .2dat 3 71 . On re m an d a ndaft er a b en ch tri al , th e d is tri ctco urt ru le d tha t M eg a was no t 10en ti tl edto res ci ss io n o r refo rm at io n. Am on g o th er fi nd in gs of f actsupp orti ng th at co nc lu si on , th e d is tri ctco urt fo un d t ha t “ I do n’t b el ie ve th atMr. Walia gh a’s te st im on y th at[Ms . Pie ni oz ek ] to ldhi m [he r in co m e was ] $7 00 a week . I fin d i t in cred ib le an d I d o n otbe li ev e it .” Meg a n ow ar gu es on ap pe al th atth e d is tri ctco urt’s fi nd in g o f fac t tha t M s. Kell ie Pie ni oz ek

di d n ottel l h er i ns ur an ce ag en t, Ah m edW al ia gh a, th atsh e earn ed$7 00 pe r weekvi ol at edth e “ la w of t he cas e” b ecau se th atfin di ng is di rect ly con tra ry

to th e fi nd in gs of f

actsetforth in th is Co urt’s o pi ni on inth e fi rs t ap pe al va cat in g the di st ric t co urt’s en try of s umm ary jud gm en t i n fa vo r of de fen da nt . The s ta te m en t t o wh ic h M eg a ref ers in th is Co urt’s ea rli er o pi ni on is

“ Mrs . Pie ni oz ekto ld[Ahm ed ] W al ia gh a[, a Me gaag en t,] th atsh e was earn in g $7 00 pe r week .” Mega L if e & Heal th Ins . Co. v. Pi en io ze k, 51 6 F .3dat 9 87 . Fi rs t, t he Co urt fi nd s t ha t t he ab ov e-re fere nc edst at em en t d oe s n otco ns ti tu te th e “ law of t he cas e.” Thi s C ou rt’s p rio r ru li ng on ap pe al va cat edth e d is tri ct co urt’s g ran t o f su m

m ary jud gm en t i n fa vo r of Pie ni oz ekan d re m an de d t he cas e fo r a fac t-f

in de r to de te rm in e whe th er Me gaha d an u nd erwri ti ng po li cy tying th e am ou ntof l ife in su ran ce co ve rag e to an nu al in co m e, “ an d wh ethe r itwou ldha ve , in go odfai th , dec li ne d t o i ss ue th e p ol ic y or r educ edth e am ou ntof M rs . 11Pi en io zek ’s cov erag e if itha d kno wn h er t ru e in co m e.” Id. at99 0- 91 . If an d h ow Ms . Pie ni oz ekm is rep res en te d h er i nc om e to Meg a’s ag en t, Ah m edW al ia gh a, is on e o f th e rel ev an t que st io ns of f actto be de te rm in edby the fact -fi nd er o n re m an d fro m th is Co urt as to whethe r Meg a wou ldha ve in go odfai th de cl in edto is su e th e po li cy or r educ edth e am ou ntof c ov erag e. Seco nd , th is Cir cu itreco gn iz es anex cep ti on to th e “ law of t he cas e” do ctrin e whe n asubs eque nttri al pro du ces subs ta nt ia ll y di ffer en t ev id en ce. See Hea th co at , 90 5 F .2dat 3 71 . The d is tri ctco urt co nduc te d abe nc h t ria l an d h eard te st im on y reg ard in g the fact s s urro un di ng Ms . Pie ni oz ek ’s li fe i ns ur an ce ap pl ic at io n. Aft er h eari ng all th e te st im on y an d t ak in g i nt o a cco un t al l o f th e ev id en ce, the di st ric t co urt d idno t fi ndth e te st im on y of M eg a’s ag en t cr ed ib le an d fo un d tha t M s. Pi en io zekdi d n ottel l M eg a’s ag en t t ha t h er i nc om e was $7 00 pe r week . There fo re, ev enif t he Co urt’s l an gu ag e co ul d b e co ns tru edas e st ab li sh in g th e “ law of t he cas e,” the subs eque ntbe nc h t ria l an d s ub st an ti al ly diff eren t fi nd in g of factby the di st ric t co urt o n t ha t i ss ue wou ldfal l wi th in th is ex cep ti on to th e do ctrin e. Acco rd in gl y , th e Co urt fi nd s tha t t he di st ric t co urt d idno t err wit h re sp ectto th e “ law of t he cas e” d oc tri ne as t o t he st at em en t o f Ms . Pie ni oz ek ’s in co m e o n t he

12li fe i ns ur an ce ap pl ic at io n.

C. No Erro r InCo nc lu si on That“ Ann ua l In co m e” Was Am bi gu ou s Meg a fu rth er cl ai m s o n app eal th atitwas u nf ai rly preju di cedby the di st ric t co urt’s co ns id erat io n o n re m an d o f whe th er t he term “ an nu al in co m e” i n M s. Pi en io zek ’s li fe i ns ur an ce ap pl ic at io n was am bi gu ou s, an d fu rth er tha t t he di st ric t co urt erredin co nc lu di ng th e te rm “ an nu al in co m e” was am bi gu ou s. Th e Co urt fin ds th atno erro r oc cu rred . Fi rs t, Me gawas n otun fai rly preju di cedby the di st ric t co urt’s co ns id erat io n of whet he r th e te rm

“ an nu al in co m e” i n t he li fe i ns ur an ce ap pl ic at io n was am bi gu ou s. Th is Co urt’s ch arg e to th e d is tri ctco urt o n re m an d t o d et erm in e Meg a’s ob li ga ti on an d P ie ni oz ek ’s ent it le m en t u nd er the po li cy rev ol ve d a ro un d th e is su e o f “ an nu al in co m e.” The di st ric t co urt s ou gh t t o d et erm in e th e m ean in g of th atterm in res ol vi ng th e p art ie s’ rel at iv e o bl ig at io ns an d e nt it le m en ts un de r th e po li cy , andco ns id eri ng th e am bi gu it y of t ha t t erm

as t he fir stst ep in th atan al y si s was no t p reju di ci al to Meg a. Seco nd , th e te rm

“ an nu al in co m e” i s n otde fin edby Megain it s i ns ur an ce ap pl ic at io n. We fin d, l ik e th e d is tri ctco urt, t ha t t he term is su sc ep ti bl e to two or m or e co ns tru ct io ns an d t he re was co nf us io n a s t o i ts m ean in g a ndm etho d o f 13cal cu la ti on in th e co nt ex t o f th e li fe i ns ur an ce p ol ic y . Whe n aterm is su sc ep ti bl e to m ul ti pl e co ns tru ct io ns , or t he re i s re as on ab le do ub t o r co nf us io n a s t o i ts m ean in g, t he term

is am bi gu ou s as a m at te r of

law. Mega L if

e & Heal th Ins . Co. , 51 6 F .3dat 9 92 (“ ‘T he term s o f an in su ran ce p ol ic y are am bi gu ou s o nl y

if t he po li cy ’s pro vi si on s ar e rea so nabl y su sc ep ti bl e to two or m or e co ns tru ct io ns or th ere i s re as on ab le do ub t o r co nf us io n a s t o t he ir m ean in g.’” (quo ti ng St at e Farm Fir e & Ca s. Co . v. Sl ade , 74 7 S o. 2 d 2 93 , 30 8- 09 (Ala . 19 99 ))). We ho ldth atth e di st ric t co urt p ro pe rly det erm in edth atth e te rm “ an nu al in co m e” was am bi gu ou s as a m atte r of

law. Afte r de te rm in in g a n a m

bi gu it y ex is ts , a di st ric t co urt s ho ul d a tt em ptto res ol ve th e am

bi gu it y by app lying th e wel l-s et tl edrul es of c on tra ctco ns tru ct io n. Id. Am bi gu it y in anin su ran ce co nt ractis to be st ric tl y co ns tru edag ai ns t the dr aft er an d l ib eral ly in fa vo r of th e in su red . Id. at99 2- 93 . If ap pl ic at io n o f th e ru le s o f co ns tru ct io n i s i ns uf fic ie ntto res ol ve th e am

bi gu it y , th e res ol ut io n o f th e am bi gu it y be co m es a ta skforth e fac t-f in de r. Id . at99 2. Inth is cas e th e d is tri ctco urt, ac ti ng as b oth ju dg e an d fa ct -fi nd er, en ga ge d in anex te ns iv e an al y si s re ga rd in g t he m ean in g o f th e te rm “ an nu al in co m e.” We fin d n o e rro r in th e d is tri ctco urt’s d et erm in at io n t ha t t he term was a m bi gu ou s o r

14it s re so lu ti on .

D. No Erro r InInt eres t Ra te Meg a al so arg ue s o n app eal th atth e d is tri ctco urt erredin de te rm in in g t ha t th e p re-ju dg m en t i nt eres t o wedon th e jud gm en t en te redby the di st ric t co urt sh ou ldbe award edat arat e o f 6% u nd er Al a. Co de §§ 8-8 -1 an d 8 -8 -8 . Meg a cl ai m s t ha t t he po li cy

li m it edth e in te res t ra te to 3.5 %. Bas edon th e Alaba m a Co de , th e Supr em e Co urt o f Alaba m a h as he ldth at whe n “ no writ te n c on tra ctco nt ro ls th e in te res t ra te . . . th e le ga l ra te of p rejud gm en t i nt eres t i s 6 pe rcen t p er an nu m .” Rho de n v . Mil le r , 49 5 S o. 2 d 5 4, 5 8 (Ala . 19 86 ). The rel ev an t l ife in su ran ce p ol ic y pro vi si on at i ss ue in th is cas e p ro vi de s as fo ll ows : W e wil l fi gu re the in te res t ra te fro m th e d at e o f th e In su redPers on ’s de ath u nt il th e d at e o f OurPaym en t. The in te res t ra te wil l b e 3 .5% p er y ear, o r gr eat er, i f th e in te res t ra te , if an y , [si c] requ ire d b y law wh ere th is Po li cy

is is su ed . The Co urt n ot es th atMeg a’s arg um en t t ha t t he pro pe r rat e o f in te res t t o b e ap pl ie d was 3.5 %, no t 6 %, was al so th e subjec t o f Meg a’s Ru le 59 m ot io n b el ow. 15Inde nyin g M eg a’s Ru le 59 m ot io n re ga rd in g t he ap pl ic ab le in te res t ra te , th e

di st ric t co urt co nc lu de d tha t p ol ic y lan gu ag e reg ard in g t he ap pl ic ab le in su ran ce rat e was po or ly w or de d andco nf us in g. Co ns tru in g t hi s p ol ic y lan gu ag e to ge th er wit h t he Alab am a st atut e an d c as e la w reg ard in g p re-ju dg m en t i nt eres t ra te s res ul ts in co nc lu si on s s us cep ti bl e to m or e th anon e res ul t. As aco ns eque nc e, th e di st ric t co urt co nc lu de d tha t t he po li cy lan gu ag e reg ard in g the ap pl ic ab le in te res t was am bi gu ou s, co ns tru edth e la ng ua ge in fav orof t he in su red , andco nc lu de d t ha t th e p ol ic y lan gu ag e p ro vi de d fo r th e h ig he r in te res t ra te —6 %—av ai labl e u nd er Alab am a la w. Fo r th e rea so ns di sc us se d abo ve in sec ti on III(C ) reg ard in g a m bi gu ou s co nt ractlan gu ag e, th e Co urt fi nd s n o e rro r in th e d is tri ctco urt’s d et erm in at io n o f th e ap pl ic ab le in te res t ra te . IV. Con cl us io n Fo r th e fo reg oi ng reas on s, we fi ndMeg a’s ap pe al to be wit ho utm eri t an d affi rm th e jud gm en t o f th e d is tri ctco urt. Bas edon th is rul in g, Pi en io zek ’s app eal reg ard in g h is am en de d c ro ss -cl ai m is m oo t an d re qu ire s n o c on si de rat io n. AFFIRMED.

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