Court Opinion

ID: 6956686
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:38:45.623257+00
Date Added: 2024-06-11T16:08:17.564258
License: Public Domain

CUDAHY, Circuit Judge,
dissenting:
“A little neglect may breed mischief ... for want of a nail the shoe was lost; for want of a shoe the horse was lost; and for want of a horse the rider was lost.”1
In this case, my mis-speaking of “insurance policies” instead of “annuities” in the original opinion is the lost nail. The resulting lost rider is apparently the Phoenix Home Life Mutual Insurance Company. The mistaken reference to “insurance policies” instead of to their close relative, “annuities,” opened the door for Transamerica to make an extraordinarily convenient argument in its petition for rehearing. It was a brand-new argument (never made in the district court or on appeal) but nonetheless just the thing for attacking an opinion that mislabeled “annuities” as their cousin, “insurance policies.” For on rehearing, Transamerica contended that only the “placed the funds of a client” branch of the exclusion applied to annuities. By necessary implication, the “placed or obtained coverage” branch must apply only to insurance policies. The majority has adopted this convenient, but waived and erroneous, basis for deciding the case on rehearing.
Briefly, with respect to waiver, of course a judgment may be affirmed on any ground raised in the district court, even if the appellee fails to argue that ground on appeal. See, e.g., 5 C.J.S. Appeal and Error § 716 (1993); 5 Am.Jur.2d Appellate Review §§ 828, 829 (1995) (“An appellate court may affirm a judgment on any ground that is properly raised below.”). But the majority does not, and cannot, claim that its ground for decision was raised and considered by the district court, nor, of course, was it raised on appeal. There is the further and even more serious problem here that bifurcation of the exclusion between insurance policies and annuities is not an unargued ground for affirmance on appeal but a new ground specially introduced to support a rehearing petition. This is certainly out of bounds. See, e.g., Board of Election Comm’rs of Chicago v. Libertarian Party of Illinois, 591 F.2d 22, 25 n. 5 (7th Cir.1979) (“new arguments are not entertained for the first time on rehearing”).
Aside from waiver, the language of the exclusion does not support the surmise that “placed or obtained coverage” was intended to apply only to insurance policies while “placed the funds of a client” was intended to apply to annuities. The only hint of this is that “coverage” is often associated with “risk” and therefore with “insurance.” But this is only a hint. The majority has offered no authority or analysis supporting its basic contention that the two branches of the exclusion must apply to different categories of contracts. For the language does not support this dichotomy, and it could easily have been established by clear language — perhaps even containing the words “annuities” and “insurance policies.”
Even if the language were more supportive of the majority position, the majority has offered no possible reason why the exclusion would extend only to placement by specific *401insureds in the case of insurance policies but would extend to placement by all insureds in the case of annuities. This distinction between categories of contracts is not only unsupported by the language but is equally unsupported by logic or reason. The claimed distinction is irrational.
I would therefore reverse the district court judgment and hold that the exclusion does not apply. Based on principles of waiver, the new arguments on rehearing should be disregarded and the conclusions reached on the original appeal should be reaffirmed. Those conclusions were based on the issues as presented by the parties, were unanimously accepted by the panel and were unaffected by the misnaming of “annuities” as “insurance policies.”
If the principles of waiver are disregarded, it is unclear which branch of the exclusion applies, and the exclusion is ambiguous. It should therefore be construed against the drafter, Transamerica, and in favor of Phoenix — the same result as reached by the original opinion.
It would be possible to pursue the foregoing and related arguments at greater length but the majority opinion already contains a lot of my material (by permission of course). I certainly have no quarrel with what is graciously attributed to me, but I must respectfully dissent from the conclusions reached thereafter.

. Maxims ... prefixed to Benjamin Franklin's Poor Richard's Almanac.