Clay County District Court File No. 14-CV-12-696
Jeffrey R. Hannig, Hannig Law Office, P.A., Fargo, North Dakota (for appellant).
Hal A. Shillingstad, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Minneapolis, Minnesota; and Tina M. Bengs (pro hac vice), Valparaiso, Indiana (for respondent).
Considered and decided by Connolly, Presiding Judge; Larkin, Judge; and Cleary, Judge.
Appellant challenges the district court's summary dismissal of his lawsuit seeking death benefits under a life-insurance policy issued to his spouse. Because appellant's suit is untimely under the terms of the policy, we affirm.
Jane Butler (decedent) worked as a teacher for the Moorhead school district until June 4, 2004, when she ceased active employment due to the effects of a brain tumor. The school district maintained an employee-benefit program that provided life-insurance coverage to eligible employees. Decedent was insured under the district's policy, and her spouse, appellant Malcolm Butler, is the named beneficiary.
Under the life-insurance policy, premium payments may be waived for individuals who are "totally disabled, " as that term is defined in the policy. On August 23, decedent filed a premium-waiver claim with respondent Sun Life Assurance Company of Canada asserting that she was totally disabled. Sun Life informed decedent that the policy required her to submit proof of claim, including evidence demonstrating her disability, within 30 days of her waiver request. On December 17, Sun Life denied decedent's claim because she failed to timely submit evidence supporting her premium-waiver request. Sun Life informed decedent that she had the right to appeal within 180 days. Decedent appealed, and Sun Life upheld the denial based on its determination that the evidence did not support a finding that decedent was "totally disabled." Sun Life informed decedent that she had exhausted all of her administrative remedies but that she had the right to file a civil lawsuit. Decedent did not pursue legal action against Sun Life.
After decedent's death on July 28, 2010, Butler filed a claim for death benefits with Sun Life. The school district informed Sun Life that decedent was retired at the time of her death. Sun Life therefore paid Butler the retiree life-insurance benefit of $25, 000 instead of the $50, 000 life-insurance benefit for active employees. Butler sued Sun Life for the additional $25, 000 under a breach-of-contract theory. Butler alleged that Sun Life breached the policy by denying decedent's premium-waiver claim. He further alleged that had Sun Life not improperly denied decedent's claim, he would be entitled to the higher life insurance benefit of $50, 000.
Sun Life moved for summary judgment, arguing, in part, that Butler's challenge to Sun Life's denial of decedent's premium-waiver claim was barred by the policy time limit on initiation of legal actions. Butler countered that the policy time limit was unreasonable and unenforceable. The district court granted Sun Life's motion for summary judgment, based on the failure of either decedent or Butler to file suit on the premium-waiver claim within the applicable policy time limit. This appeal follows.
The primary issue in this appeal concerns the timeliness of Butler's lawsuit and more specifically, whether the time limit under the policy is unreasonable and therefore unenforceable. Normally, the statute of limitations applicable to contract claims is six years. Minn. Stat. § 541.05, subd. 1(1) (2012). However, the policy in this case provides a shorter time limit.
"Parties may limit the time within which legal claims may be brought provided there is no statute specifically prohibiting the use of a different limitations period in such a case and the time fixed is not unreasonable." Peggy Rose Revocable Trust v. Eppich, 640 N.W.2d 601, 606 (Minn. 2002) (citing Henning Nelson Constr. Co. v. Fireman's Fund Am. Life Ins. Co., 383 N.W.2d 645, 650-51 (Minn. 1986); Prior Lake State Bank v. National Sur. Corp., 248 Minn. 383, 388, 80 N.W.2d 612, 616 (1957)). "Whether the contractual limitations period is reasonable depends upon the particular facts presented; what is acceptable in one case may be objectionable in another." Id. "S ...