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Christoff v. Paul Revere Life Insurance Co.

United States District Court, D. Minnesota

January 3, 2020

MATTHEW J. CHRISTOFF, Plaintiff,
v.
THE PAUL REVERE LIFE INSURANCE COMPANY, Defendant.

          MARK M NOLAN, FOR PLAINTIFF

          TERRANCE J. WAGENER, FOR DEFENDANT.

          MEMORANDUM OPINION & ORDER GRANTING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT

          JOHN R. TUNHEIM UNITED STATES DISTRICT JUDGE

         This case arises out of Defendant Paul Revere Life Insurance Company's ("Paul Revere") alleged breach of a long-term disability insurance contract issued to Plaintiff Matthew Christoff ("Christoff'). Beginning in early 2002, Christoff began collecting disability insurance in the amount of $2, 417 per month under the Paul Revere policy. On December 30, 2016, Paul Revere determined that Christoff was no longer disabled and ceased payment under the contract. Christoff filed this breach-of-contract case on August 2, 2017.

         Paul Revere brings this Motion for Partial Summary Judgment on the issue of damages for claims relating to the loss of employer-provided health insurance, long-term care insurance, and a $50, 000 life-insurance policy (the "Spencer Stuart benefits"), and the lost opportunity to convert a Northwestern Mutual term-life insurance policy into a whole-life policy (the "Northwestern Mutual policy"). Paul Revere argues there is no genuine dispute of fact and it is entitled to summary judgment because the damages are (1) unrecoverable extra-contractual damages or, if not, the claimed damages are not recoverable consequential damages; and (2) Christoff cannot prove causation because the damages are too remote and speculative. Christoff argues that the damages are recoverable consequential damages and any questions regarding consequential damages are questions of fact for a jury.

         Because Christoff has failed to present any evidence regarding what the parties actually contemplated or reasonably ought to have foreseen regarding the Spencer Stuart benefits or Northwestern Mutual policy damages at the time of contracting in 1998, a necessary element of consequential damages, the Court will grant Paul Revere's motion.[1]

         BACKGROUND

         I. FACTUAL BACKGROUND

         In 1994, Christoff began working as a senior level executive search consultant in the Minneapolis, MN office of Spencer Stuart, a national and international executive-search firm based in Chicago, IL. (Aff of Mark M. Nolan ("Nolan Aff"), Ex. B ("Christoff Depo.") at 13, 15, 17, June 7, 2019, Docket. No. 68.) As part of its benefits package, Spencer Stuart provided Christoff with health-insurance coverage, long-term care insurance coverage, and a $50, 000 life-insurance policy, all of which were paid for by Spencer Stuart. (Aff of Janeen Frank ("2019 Frank Aff") ¶ 2, June 6, 2019, Docket No. 69.) Spencer Stuart also offered a long-term disability insurance group policy, insured by Cigna. Christoff v. Paul Revere Life Ins. Co., No. 17-3515 (JRT/TNL), 2018 WL 4381000, at *1 (D. Minn. Sept. 14, 2018). Christoff participated in the Cigna group plan. Id.

         In 1998, Spencer Stuart allowed Defendant Paul Revere to offer individual disability insurance policies to its employees to supplement the Cigna group policy. Id. These plans were separate and distinct from any offerings by Spencer Stuart in that (1) participation in the Paul Revere offering was completely voluntary for Spencer Stuart employees; (2) premiums on the Paul Revere policies were paid for individually by employees, using post-tax dollars; and (3) Spencer Stuart did not administer claims on the Paul Revere policies, instead Spencer Stuart employees completed Paul Revere forms and submitted claims directly to Paul Revere. Id. at *2. Christoff participated in the Paul Revere offering in addition to the Cigna offering. Id.

         Prior to and independent of all this, Christoff also purchased a convertible term-life insurance policy from Northwestern Mutual in 1996. The Northwestern Mutual policy had a face value of $1, 125, 000. (Nolan Aff, Ex. D at 10.)

         In late 2001, Christoff filed a disability claim under the Paul Revere policy and began collecting $2, 417 per month under the policy shortly thereafter. (Pl.'s Ex. List, Ex. A at 2, June 7, 2019, Docket No. 70.) Christoff also began, at some point, collecting disability under a separate long-term disability insurance plan offered by Unum Group. See (Pl.'s Ex. List, Ex. E at 1.) Unum Group is the parent company of Paul Revere. (Aff. of Dawn Mugford ¶ 1, Dec. 29, 2017, Docket No. 12.) Although not at issue in this litigation, the Unum policy is relevant here because so long as Christoff remained disabled under either the Unum or Paul Revere policies, Spencer Stuart continued paying premiums for Christoff s health insurance, long-term care insurance, and the $50, 000 life insurance policy discussed above. (2019 Frank Aff. at ¶ 3.)

         In 2009, Christoff and the Unum/Paul Revere Financial Services Unit ("FSU") began negotiations about a global settlement of Christoff s long-term disability claims under both policies. See (Pl.'s Ex. List, Ex. E at 1.) During these negotiations, Christoff s former counsel informed Unum/Paul Revere by letter dated October 22, 2009 that Christoff risked losing "health care and related benefits" from Spencer Stuart should Christoff accept a settlement. (Pl.'s Ex. List, Ex. F, at 1.) Christoff s former counsel noted that he was raising the issue to "indicate the financial impact on [Christoff]" if he were to accept a settlement offer. (Id. at 2.) The risk of loss regarding the Spencer Stuart benefits was also noted in an August 2016 claims note kept by Unum/Paul Revere. (Pl.'s Ex. List, Ex. G at 1.) The 2016 Claims note states "prior FSU review indicates that settlement should not be considered . . . due to loss of health benefits if settlement taken." (Id.)

         A global settlement was not reached, and Paul Revere continued paying disability benefits to Christoff under the policy until December 30, 2016. (Pl.'s Ex. List, Ex. A at 1.) On that day, Paul Revere notified Christoff that it had ceased payments after it determined that Christoff was no longer disabled under the terms of the policy. (Id.) Allegedly as a result, Christoff lost the ability to convert his term-life Northwestern Mutual policy into a whole-life policy and Spencer Stuart ceased paying premiums for Christoff s ...


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