Walters v. Monarch Life Ins.Co. ( 1997 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
OCT 23 1997
TENTH CIRCUIT
PATRICK FISHER
Clerk
SAM J. WALTERS, D.C.,
Plaintiff/Counter-
Defendant/Appellant,
v. No. 96-3296
(D.C. No. D.C. No. 91-2396-GTV)
MONARCH LIFE INSURANCE (D. Kan.)
COMPANY,
Defendant/Counter-
Claimant/Appellee.
ORDER AND JUDGMENT*
Before BRORBY, HOLLOWAY, and EBEL, Circuit Judges.
Following a jury trial at which he recovered $44,000 on a breach of contract claim
arising from a disability insurance policy issued by Monarch Life Insurance Co., Sam J.
Walters filed a motion for reinstatement to his rights under the policy, which Monarch
had previously terminated. The district court denied that motion, concluding that the jury
verdict indicated that Walters had not been disabled for the full period for which he
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. This court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
claimed coverage, and thus that he was not entitled to reinstatement. After an
unsuccessful appeal on other grounds, Walters filed in the district court a motion under
Fed. R. Civ. P. 60(b) for a declaration that his insurance coverage had not lapsed. The
district court concluded that, under the law of the case, that issue was governed by its
prior ruling that Walters was not entitled to reinstatement, and accordingly denied the
motion. Walters now appeals. We have jurisdiction under 28 U.S.C. § 1291. We affirm.
BACKGROUND
The factual background of this case is discussed in our published opinion
concerning Walters’ prior appeal. See Walters v. Monarch Life Ins. Co., 57 F.3d 899,
901 (10th Cir. 1995). In brief, Walters was insured under a disability insurance policy
issued by Monarch. (Aplt. App. at 629-34, 652-55.) Walters claimed a disability under
the policy after a parasailing accident that occurred in June 1988. (Id. at 707-12.)
Monarch paid benefits on that claim for almost three years, and waived policy premiums
during this time as well. (Id. at 660.) However, Monarch terminated these benefits in
September 1991 after determining that Walters was not disabled and had not been for a
substantial period of time. (Id. at 42.) At this time, Monarch also informed Walters that
it was removing the premium waiver. (Id. at 660.)
Walters then sued Monarch in state court, and Monarch removed the action to
federal court. Monarch also filed counter-claims for the return of benefits paid, alleging
that Walters had fraudulently filed his disability claims. After a three-week jury trial, the
-2-
jury awarded Walters $44,066.43 in damages, an amount representing about 25% of the
total benefits Monarch would owe Walters were he totally disabled for the entire time
period. (Id. at 192-93.)
The procedural background of the issue before us is somewhat more complicated.
Walters filed three post-trial motions. First, Walters filed a “Motion to Correct Entry of
Judgment” under Fed. R. Civ. P. 60(a), claiming that his rights under the disability policy
should be reinstated. (Id. at 197-200.) The district court ruled that a motion under Rule
60(a) was not a proper procedure for addressing substantive concerns about the jury
verdict, but invited Walters to seek equitable relief on that issue if he so desired. (Id. at
217-18.) Walters did not appeal that decision.
Walters next filed a “Motion for Judgment as a Matter of Law,” claiming that the
$44,000 verdict was inconsistent with the evidence, as Walters had claimed he was
entitled to $176,265.72 in damages. (Aplee. App. at 1-13.) The district court denied that
motion, ruling that the jury verdict was consistent with the evidence, as the jury could
have concluded that Walters was only disabled for a portion of the time period during
which he claimed disability. (Aplt. App. at 216.) We affirmed that decision on appeal.
Walters, 57 F.3d at 905.
Finally, on July 29, 1993, Walters filed a motion for reinstatement of his rights
under the Monarch disability insurance policy. (Aplt. App. at 223-50.) In an order dated
April 4, 1994, the district court denied that motion, concluding that Walters was not
-3-
entitled to reinstatement because the jury verdict for less than the full amount claimed
indicated that Walters had not proved he was disabled for the entire time period at issue,
and thus that Walters was not entitled to the remedy of reinstatement. (Id. at 294-98.) On
April 14, 1994, Walters filed a notice of cross-appeal on this issue.1 (Id. at 298A)
Oral argument on Monarch’s appeal and Walters’ cross-appeal was held on March
3, 1995. Walters never briefed the reinstatement issue in connection with that appeal, and
never alerted this court to the district court’s April 4, 1994 ruling on his motion for
reinstatement. On June 6, 1995, we issued an opinion affirming the district court
judgment in all respects. We denied Walters’ motion for rehearing on the reinstatement
issue, concluding that Walters had failed to bring the relevant district court order to this
court’s attention. (Id. at 593.)
Following our decision on appeal, Monarch filed in the district court a “Motion for
Declaratory Ruling that Plaintiff’s Disability Insurance Policy Has Lapsed for Non-
Payment of Premiums.” (Aplee. Supp. App. at 15-38.) Walters then filed a “Cross-
Motion for Declaratory Ruling that Plaintiff’s Disability Insurance Policy Has Not Lapsed
1
Monarch had filed its notice of appeal from the jury verdict on July 26, 1993
(Aplt. App. at 221), and Walters had filed his first notice of cross-appeal on August 9,
1993, (id. at 292). Following the district court’s ruling on the reinstatement issue,
Monarch filed a second notice of appeal on April 29, 1994, to avoid any argument that its
first notice of appeal was premature. (Id. at 298C.) In an order dated June 3, 1993, this
court consolidated all four appellate docket numbers issued in response to the various
notices of appeal. (Id. at 298G.)
-4-
for Non-Payment of Premiums.” (Aplt. App. at 323-29.) The district court denied both
motions in an order issued on August 5, 1996. (Id. at 341-46.)
Neither party stated a procedural basis for the declaratory rulings sought; however,
the district court treated the motions as filed under Fed. R. Civ. P. 60(b) for relief from
judgment.2 The district court ruled that the issue of lapse was determined in its April 4,
1994, ruling on Walters’ motion for reinstatement, and that any further consideration of
the issue was barred under the law of the case doctrine. Accordingly, the court denied
both motions. Walters now appeals.
DISCUSSION
Standard of Review
We review the district court decision not to grant relief under Fed. R. Civ. P. 60(b)
for abuse of discretion. See Orner v. Shalala, 30 F.3d 1307, 1309 (10th Cir. 1994).
However, “‘[a] district court would necessarily abuse its discretion if it based its ruling
(under Rule 60(b)) on an erroneous view of the law or on a clearly erroneous assessment
of the evidence.’” Id. (quoting Lyons v. Jefferson Bank & Trust, 994 F.2d 716, 727 (10th
Cir. 1993), quoting in turn Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990)).
The issue of whether the law of the case doctrine bars reconsideration of the status of
2
Walters does not argue that the district court erred in treating his motion as a Fed.
R. Civ. P. 60(b) motion. (Aplt.’s Br. at 8.)
-5-
Walters’ insurance policy is a question of law. See Wilmer v. Board of Cty. Comm’rs, 69
F.3d 406, 409 (10th Cir. 1995).
I.
Walters’ Reinstatement Claim
The district court properly denied Walters’ request for relief under Fed. R. Civ. P.
60(b). Among the grounds upon which a party may obtain relief under Rule 60(b) are
“mistake, inadvertence, surprise, or excusable neglect,” Fed. R. Civ. P. 60(b)(1), and “any
other reason justifying relief from the operation of the judgment,” id. 60(b)(6). The
district court need not specify which clause of Rule 60(b) serves as the basis for its
decision, see Pelican Production Corp. v. Marino, 893 F.2d 1143, 1146 (10th Cir. 1990),
and in this case the district court did not specify which clause Walters’ motion was based
on, (Aplt. App. (D. Ct. Order) at 345). Rather, the court concluded that, regardless of
which clause Walters’ claim was based on, the claim was barred by the law of the case
doctrine. (Id. at 345-46.) We agree.
In his Rule 60(b) motion, Walters sought a declaration that his insurance policy
had not lapsed. However, the district court had previously ruled in its April 4, 1994 order
that Walters was not entitled to reinstatement of the policy. (Id. at 297-98.) Walters filed
a notice of appeal from that ruling, but never briefed or argued the issue to this court. As
we noted in denying Walters’ petition for rehearing, Walters thus forfeited his right to
appellate consideration of the reinstatement issue. (Id. at 593.) In its April 4, 1994 order,
-6-
the district court determined that the jury had not found that Walters was disabled for the
entire time period at issue, and thus that he was not entitled to reinstatement. The issue of
whether Walters’ policy lapsed also turns on whether he was disabled for the entire time
period at issue. Accordingly, the district court properly concluded that the law of the case
doctrine prevented Walters from relitigating the issue of whether he was still entitled to
the benefits of his insurance policy. See Pittsburg & Midway Coal Mining Co. v.
Watchman, 52 F.3d 1531, 1536 n.4 (10th Cir. 1995) (holding that the law of the case
doctrine “prevent[s] the relitigation of [issues] in subsequent proceedings in the same
case” except in rare cases).
Walters now argues that the issue of reinstatement to the policy is distinct from the
issue of whether his policy lapsed, and thus that the law of the case doctrine should not be
applied. Even if these issues were distinct, however, Walters would not prevail because
he never raised the non-lapse issue prior to the Rule 60(b) motion currently on appeal. As
the district court noted in its order denying Walters’ motion, Walters “had every
opportunity to litigate these issues to this court and on appeal to the Tenth Circuit.”
(Aplt. App. at 346.) Walters did not take the opportunity to litigate non-lapse as a distinct
issue, and thus has no viable claim for relief on that basis under Rule 60(b).
Accordingly, the district court did not abuse its discretion in denying Walters’
motion for relief under Fed. R. Civ. P. 60(b).
-7-
CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the district court.
ENTERED FOR THE COURT
David M. Ebel
Circuit Judge
-8-