Opinion ID: 3013556
Heading Depth: 3
Heading Rank: 2

Heading: Was There a 10% or More Change in the

Text: “Composition of the Group”? Because the doctrine of reasonable expectations applies, we reject the District Court’s conclusion that the terms of the policy clearly and unambiguously permitted MetLife to change its rates and, therefore, that the two-year rate guarantee was unenforceable. The District Court also concluded, however, that, even if it were to consider the two-year rate guarantee, MetLife’s unilateral rate change was permissible because there was a 10% change in the “composition of the group,” a phrase contained in the reservation of rights provision of the revised proposal, when the ratio of UPMC employees enrolled in the 5 One further comment. While we recognize that Bensalem, its progeny, and the leading Pennsylvania Supreme Court cases such as Collister and Tonkovic are all coverage cases, we do not consider it an expansion of the doctrine of reasonable expectations to apply it to this dispute; indeed, the same logic that motivates the application of the doctrine in coverage cases motivates its application here. 10 High Option versus Low Option plans changed from 60/40 to 90/10. UPMC argues that this change was not a change in the composition of the group, but rather a change in members’ coverage choices. At the least, it argues, the term “composition of the group” is ambiguous, and should have been submitted to the jury for interpretation. UPMC also argues that the composition of the group did not change because MetLife knew of the 90/10 split before it issued the policy.6 MetLife, for its part, successfully argued to the District Court that the phrase should be construed in accordance with its dictionary meaning and, so construed, the evidence showed that the composition of the group had changed by more than 10% and M etLife could raise its rates notwithstanding any rate guarantee. We agree with UPMC, at least to the extent that “composition of the group” is ambiguous enough that it should have been left to the jury to determine what the parties meant by that phrase when they used it. UPMC’s arguments in that regard and whether a change in the High/Low Option ratio was, in fact, a change in the “composition of the group” as that term was used in the revised proposal should not have been so quickly dismissed by the District Court. This dispute will be for a jury to decide. Because we are reversing the grant of summary judgment on liability, it follows that we will vacate the award of damages and pre- and post-judgment interest to MetLife. We note, however, that if, following trial, there is to be an award of post-judgment interest, that award is to be calculated in 6 UPMC argues, as well, that MetLife’s right to change the rates based on a change in the composition of the group expired on December 31, 1999 when the August 26th revised proposal expired. This may be a self-defeating argument: if the proposal expired on December 31, then so did the rate guarantee included therein. But it just may have legs if one considers the expiration date as the date MetLife’s offer exploded, not the date the terms therein were no longer enforceable if UPMC were to accept the offer. 11 accordance with 28 U.S.C. § 1961 and not in accordance with Pennsylvania law.