Source: https://casetext.com/case/conley-v-pitney-bowes
Timestamp: 2019-01-17 05:37:36
Document Index: 629922514

Matched Legal Cases: ['§ 1001', '§ 2560', '§ 152', '§ 237', '§ 8', '§ 11', '§ 657', '§ 152', '§ 232']

Conley v. Pitney Bowes, 34 F.3d 714 | Casetext
United States Court of Appeals, Eighth CircuitSep 13, 1994
Kinkead v. Southwestern Bell Corporation
…Exhaustion is a threshold legal issue we review de novo. See, e.g., Conley v. Pitney Bowes Corp., 34 F.3d 714…
Wert v. Liberty Life Assurance Co. of Boston, Inc.
…ERISA does not contain an express requirement that employees exhaust contractual remedies prior to bringing…
holding that exhaustion was not required when a claim denial notice did not advise the claimant of the appeal procedure and the claimant had no actual knowledge of that procedure
Summary of this case from Holmes v. Colo. Coal. for the Homeless Long Term Disability Plan
holding that employee was not required to exhaust available administrative remedies before bringing wrongful denial of benefits claim, and that the lower court improperly summarily entered judgment against plaintiff on all of his claims, including claims for wrongful discharge and breach of fiduciary duty based on failure to exhaust administrative remedies
Summary of this case from Wright v. Metropolitan Life Ins. Co.
finding failure to notify constituted a breach of explicit terms of policy
No. 93-3957.
Sheldon Weinhaus, St. Louis, MO, argued, for appellant.
Before MORRIS SHEPPARD ARNOLD, Circuit Judge, JOHN R. GIBSON, Senior Judge, and MELLOY, District Judge.
The Honorable Michael J. Melloy, Chief United States District Judge for the Northern District of Iowa, sitting by designation.
Donald E. Conley initiated this action in the Circuit Court of Butler County, Missouri, against his employer Pitney Bowes after he had been denied continued disability benefits for a claim arising from injuries suffered in an automobile accident. The company removed the case to the United States District Court for the Eastern District of Missouri because the suit related to benefits under the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (ERISA). The district court granted the defendants's motion for summary judgment, 839 F. Supp. 1364, and this appeal followed. At issue is whether a claimant must exhaust administrative procedures when, contrary to the requirements of his plan, the letter denying his benefits does not inform him of appeal procedures.
ERISA does not explicitly require exhaustion of administrative or plan remedies. The doctrine is, in this context, a creature either of contract or judicial invention. We have required exhaustion in ERISA cases only when it was required by the particular plan involved. See Anderson v. Alpha Portland Industries, Inc., 727 F.2d 177, 180 (8th Cir. 1984), aff'd, 752 F.2d 1293 (8th Cir. en banc 1985); cf. Kennedy v. Empire Blue Cross and Blue Shield, 989 F.2d 588, 594 (2nd Cir. 1993) ("exhaustion in the context of ERISA requires only those administrative appeals provided for in the relevant plan or policy."). We have declined to apply a broader, judicially-crafted exhaustion requirement in ERISA actions. See Anderson v. Alpha Portland Industries, Inc., 752 F.2d 1293 (8th Cir. en banc 1985) (exhaustion not required for retirees absent explicit plan language extending plan requirements to them). The appellant concedes that the plan which is the subject of the suit before us does contain, in fact, such a requirement.
The language of the plan requiring exhaustion is complimented, in this case, by language that requires that any notice of denial of benefits be accompanied by explicit instructions informing the plan participant of the procedures for appeal. Section 7.8(a) of the plan document requires that the plan administrator provide to "any person whose claim for benefits has been denied . . . a written notification of the denial. The written notification shall include . . . an explanation of the claim appeal procedure." This plan language comports with the requirements of 29 C.F.R. § 2560.503-1(f)(4), which dictates that the "[c]ontent of notice . . . to every claimant who is denied a claim for benefits . . . set forth . . . [a]ppropriate information as to the steps to be taken if the participant or beneficiary wishes to submit his or her claim for review."
The present case, therefore, may be distilled to one of contract. Two terms of an ERISA plan are the focus of this dispute, namely, an exhaustion clause and a clause requiring notice of appeal procedures. In deciding whether Mr. Conley's action can survive a motion for summary judgment, "we must begin by examining the language of the plan document. Each provision should be read consistently with the others and the terms must be construed to render none of them nugatory." Jacobs v. Pickands Mather Co., 933 F.2d 652, 657 (8th Cir. 1991).
One well-established rule of contract construction is that "[i]n bilateral contracts for an agreed exchange of performances, . . . where one party's performance is to be rendered prior in time to that of the other, it is a constructive condition precedent to the latter's duty." Lawrence P. Simpson, Handbook of the Law of Contracts § 152 (1965). See also Restatement (Second) of Contracts § 237 (1981) ("[I]t is a condition of each party's remaining duties to render performances to be exchanged under an exchange of promises that there be no material failure by the other party to render any such performance due at an earlier time."); E. Allan Farnsworth, Contracts § 8.2(B) (2d ed. 1990); John D. Calamari and Joseph M. Perillo, The Law of Contracts § 11-8 (1987); Corbin On Contracts § 657. Such a "performance is as much a condition precedent to the other's duty as though expressly made so." Simpson, § 152; See also, Loud v. Pomona Land Water Co., 153 U.S. 564, 577, 14 S.Ct. 928, 932, 38 L.Ed. 822 (1894) (agreement to convey land " after the making of the payment and full performance" rendered such payment and performance a condition precedent to the duty to convey. (emphasis in original)). Furthermore, "[w]here the consideration given by each party to a contract consists in whole or in part of promises, all the performances to be rendered by each party taken collectively are treated as performances to be exchanged under an exchange of promises, unless a contrary intention is clearly manifested." Restatement (Second) of Contracts § 232.
Application of these principles to the case at hand is straightforward. Because appellees were obligated to inform appellant of the appeal procedure at the time they denied him benefits, appellees performance had necessarily to precede exhaustion by the plaintiff. A defense under the exhaustion clause, therefore, may not be asserted absent performance of the notice clause, since they are presumed to be the subject of promises made in exchange for each other.
Costantino v. TRW, Inc., 13 F.3d 969, 975 (6th Cir. 1994). We recognize that judicially-created exhaustion requirements also may further these goals. We believe, however, that the freedom of contract between autonomous parties is a more important principle than even the very important judicially-created doctrine of exhaustion. Furthermore, where exhaustion is a bargained-for term of a contract, freedom of contract is not necessarily inconsistent with the principles underlying exhaustion requirements.
On appeal, the defendants-appellees further assert that Mr. Conley did not deny having actual knowledge of the plan's procedures. This argument, however, puts the cart before the horse. The defendants-appellees never alleged, either in their answer, their motion for summary judgment, or their memorandum in support of their motion, that Mr. Conley or his attorney had actual knowledge of the plan's appeals process. We do not think that Mr. Conley could be expected to deny something of which he had not been accused.
[16] JOHN R. GIBSON, Senior Circuit Judge, dissenting.