Opinion ID: 6334161
Heading Depth: 2
Heading Rank: 2

Heading: Governing Contract for Insurance

Text: The primary issue on Fisher’s first appeal is whether the January 9 or February 19 Document was the governing contract of insurance between D&S and Aetna. The parties agree that a contract of insurance existed between D&S and Aetna for the policy year 2014, but disagree as to whether the January 9 Document is the governing policy, as Fisher claims, or the February 19 Document is the governing policy, as Aetna claims. “It is a basic tenet of contract law that, in order to be binding, a contract requires a ‘meeting of the minds’ and ‘a manifestation of mutual assent.’” Starke 21 v. SquareTrade, Inc., 913 F.3d 279, 288-89 (2d Cir. 2019) (quoting Express Indus. & Terminal Corp. v. N.Y. Dep’t of Transp., 93 N.Y.2d 584, 589 (N.Y. 1999)). “The manifestation of mutual assent must be sufficiently definite to assure that the parties are truly in agreement with respect to all material terms.” Id. at 289. As a general matter, courts look to the basic elements of the offer and acceptance to determine if there was an objective meeting of the minds sufficient to create a binding and enforceable contract. See Express Indus., 93 N.Y.2d at 589. “Where an offeree does not have actual notice of certain contract terms, he is nevertheless bound by such terms if he is on inquiry notice of them and assents to them through conduct that a reasonable person would understand to constitute assent.” Starke, 913 F.3d at 289 (emphasis in original). “In determining whether an offeree is on inquiry notice of contract terms, New York courts look to whether the term was obvious and whether it was called to the offeree’s attention.” Id. “While it may be the case that many users will not bother reading the additional terms, that is the choice the user makes; the user is still on inquiry notice.” Meyer v. Uber Techs., Inc., 868 F.3d 66, 79 (2d Cir. 2017). The district court (Woods, J.) found that Dunnegan was on inquiry notice of the terms of the February 19 Document. Fisher I, 2020 WL 2792994, at . We 22 review this factual finding for clear error. See Healy v. Rich Prod. Corp., 981 F.2d 68, 73 (2d Cir. 1992) (“A district court's findings with respect to the expression of the contracting parties’ intent will not be disturbed unless they are clearly erroneous.”); Nicosia v. Amazon.com, Inc., 834 F.3d 220, 238 (2d Cir. 2016) (“Whether particular notice was reasonable is ordinarily a question of fact for the jury.”). “Under the clear error standard, we may not reverse [a finding] even though convinced that had [we] been sitting as the trier of fact, [we] would have weighed the evidence differently.” Atl. Specialty Ins. Co. v. Coastal Env’t Grp. Inc., 945 F.3d 53, 63 (2d Cir. 2019) (alterations in original) (internal citations and quotations marks omitted). We agree with the district court’s (Woods, J.) finding that Fisher had reasonable notice of the terms of the February 19 Document. Under New York law, DFS regulates small business group health insurance plans in the state. Aetna was required to submit all of its New York small business policies for 2014 to DFS for approval. DFS approved the language of the 2014 Aetna NY Silver Plan on October 21, 2013. When Dunnegan signed and returned the January 9 Document, DFS had already approved of the language of the 2014 Aetna NY Silver Plan. The language of the February 19 Document did not differ from the 23 language approved by New York state in October 2013, so the terms of the insurance plan existed as of October 21, 2013. To determine whether D&S had inquiry notice of the terms of the February 19 Document, we consider whether the terms were “obvious” and “called to [D&S’s] attention.” Starke, 913 F.3d at 289. “This often turns on whether the contract terms were presented to the offeree in a clear and conspicuous way.” Id. The January 9 Document that D&S signed and executed stated that “[t]his preliminary rate sheet should be read in conjunction with the more detailed benefit descriptions, exclusions and limitations, and underwriting guidelines contained in your product brochures. For more information, please contact your licensed agent or Sales Representative.” No. 20-3148, App’x at 162. Additionally, the January 9 Document stated that D&S was purchasing an “NY Silver OAMC 2000 80/60 HSA PY” with plan ID 14018895. No. 20-3148, App’x at 160. Furthermore, D&S employees filled out applications for insurance with Aetna in December 2013 that stated “[t]he plan certificate of coverage will determine the rights and responsibilities of member(s). It will govern in the event they conflict with any benefits comparison, summary or other description of the plan.” No. 20-3148, App’x at 129. The same application also included the following 24 language: “I understand that this application will form a part of the Group Agreement or Group Policy issued by Aetna, and by my signature below I agree to be bound by the terms and conditions of that Group Agreement or Group Policy.” No. 20-3148, App’x at 126. Additionally, Dunnegan signed the contract with Oxford Health for D&S’s health insurance for 2013. That insurance plan was over 140 pages. In contrast, the January 9 Document is only five pages. Because the January 9 Document repeatedly indicated that additional terms existed and because Dunnegan, as a sophisticated party, was aware that the January 9 Document was incredibly short relative to the prior contract of insurance that he signed, it is “obvious” that the 2014 Aetna NY Silver Plan included additional terms than those found in the January 9 Document. Put simply, the terms of the February 19 Document were clearly called to D&S’s attention. Both the application for insurance and the January 9 Document indicated that additional terms existed. At any point, D&S could have called Aetna and requested the additional terms because the language of the plan had already been approved by DFS. The district court’s factual findings on inquiry notice are sound and far from the clear error required for this Court to reverse. See Anderson, 470 U.S. at 25 573–74 (“If the district court's account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently.”). We agree with the district court that the terms of the February 19 Document were obvious and were called to D&S’s attention. Therefore, Fisher, through D&S, was on inquiry notice of the terms of the February 19 Document and the February 19 Document governs the contract of insurance between the parties. 4 Fisher’s arguments to the contrary are unavailing. She argues that inquiry notice cannot apply in this case, relying on Starke, 913 F.3d 279. In Starke, the plaintiff bought a protection plan online for his CD player. Id. at 282. SquareTrade sent Starke a service contract via email containing a chart setting forth the material terms of the protection plan. Id. at 284. The body of the email 4We note, however, that, under New York law, inquiry notice calls for a highly fact-specific inquiry. See, e.g., Blossom v. Dodd, 4 Hand 264 (N.Y. 1870); Tri-City Renta-Car v. Vaillancourt, 304 N.Y.S.2d 682 (N.Y. App. Div. 1969). Accordingly, its application may not be appropriate in cases where the circumstances materially differ from those at issue here, where, for example, the offeree is an unsophisticated party, or where the relevant terms are not diligently and conspicuously called to the offeree’s attention by the offeror. 26 did not refer to arbitration, and the email “did not contain or refer to any attachments.” Id. at 285-86. The bottom of the e-mail included a hyperlink to “Terms and Conditions” which contained an arbitration clause. Id. at 285. SquareTrade never directed Starke’s attention to the Terms and Conditions hyperlink that contained the arbitration clause. Additionally, we found that the SquareTrade email did not signal to Starke that he should click on the link, and that he would be agreeing to the contract terms in the document to be found by clicking the hyperlink. Id. at 293. We held that based on the totality of the circumstances, Starke did not have inquiry notice of the arbitration clause. Starke is readily distinguishable. Starke involved an online consumer contract, not a small business health insurance plan. D&S was a sophisticated party who used a broker, Warner, to determine the best health insurance plan for them. Both D&S and Warner should have realized that the five-page January 9 Document could not possibly contain the full terms of the insurance contract. Unlike Starke, this case did not involve a hidden arbitration clause tucked away in a hyperlink. Here, the application for insurance and the January 9 Document stated on their face that additional terms existed. As the district court found, “it 27 is not credible that Dunnegan believed the [January 9] document constituted his entire Aetna insurance policy.” Fisher I, 2020 WL 2792994, at . Fisher also argues that the district court erred in its interpretation of New York Insurance Law § 3204. Section 3204 states: “Every policy of life, accident or health insurance, or contract of annuity, delivered or issued for delivery in this state, shall contain the entire contract between the parties, and nothing shall be incorporated herein by reference to any writing, unless a copy thereof is endorsed upon or attached to the policy or contract when issued.” N.Y. Ins. Law § 3204(a)(1). But this subsection “does not apply to a table or schedule of rates, premiums or other payments which is on file with the superintendent for use in connection with such policy or contract.” Id. § 3204(b). Fisher argued below that the contract Aetna provided violated New York law because New York law states that all contracts for insurance must contain the full terms of the contract, unless a contract is a “schedule of rates” “on file” with the state. Fisher argues that the January 9 Document did not fit this exception because it was not on file with the state, and that Aetna therefore violated Section 3204. The district court held that the exception in Section 3204(b) 28 applied because the January 9 Document was a “schedule of rates” that was on file with the state. Fisher is incorrect. The actual rates from the 2014 Aetna NY Silver Plan were on file with DFS. At trial, Karen Pribush, an Aetna sales manager, testified that the rates in the January 9 Document were filed with the State of New York for the plan at issue here. Additionally, Aetna’s 2014 rate filing is publicly available on the DFS website, which shows that the rates for the 2014 Aetna NY Silver Plan were filed in May 2013. 5 Therefore, the January 9 Document was a “schedule of rates” “on file with” DFS, and the exception in Section 3204(b) applies.