Reply Brief — Burak v. General American Life Insurance

$ — Bapreme Court, us.

EILED

JUL 26 1983

JOSEPH F. SPANIOL, JR.

CLERK

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1987

PAMELA J. BURAK, Petitioner,

v.

GENERAL AMERICAN LIFE INSURANCE COMPANY,

R spondent.

REPLY IN SUPPORT OF PETITION

FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

SAMUEL LEE ANDERSON

323 South College Avenue,

Suite 3

Fort Collins, CO 80524

(303) 482-4011

Counsel of Record

KENT N. CAMPBELL

323 South College Avenue,

Suite 3

Fort Collins, CO 80524

(303) 482-4011

Counsel for Petitioner

TABLE OF CONTENTS

Page

peo Be BF yo s.r il

REPLY TO OPPOSITION TO GRANTING THE WRIT .... 1

I. Respondent Misapprehends That The

Unlitigated Coverage Issues Were Raised By

The Complaint Under Notice Pleading And

That The Tenth Circuit Order Directing

Entry Of Judgment For Respondent Deprives

Petitioner Of A Full Trial On These Issues

And Conflicts With a Prior Decision Of

pi AAS Ll eens Oe l

II. The Other Circuit Courts of Appeals With

Which The Tenth Circuit Is In Conflict

Remanded The Proceedings For Resolution

ee a ee 5

Ill. The Decision Below Does Create An Intra-

Circuit Conflict On The Same Issue .............. 5

6G BE Ue ghee Vane ere rah Ware gre Cea eee 6

TABLE OF AUTHORITIES

Cases:

UNITED STATES SUPREME COURT DECISIONS:

Conley v. Gibson, 335 U.S. 412 (1997) 2. ces...

Fountain v. Filson, 336 U.S. 681 (1949) .............

Hormel v. Helvering, 312 U.S. 552 (1941) ...........

Kern County Land Company v. Occidental Petroleum

Corporation, 441 U.S. 582 (1973) ..............

Mourning v. Family Publications Service, Inc.,

621 DS 396 OTS hiss coeinesaue eee

United States v. Mitchell, 403 U.S. 190 (1971) .......

CIRCUIT COURTS OF APPEALS DECISIONS:

Abrams v. Occidental Petroleum Corp., 450 F.2d 157

(aa Cr. 1078-S S e eeeeee,

Angello v. Metropolitan Life Insurance Company,

430 F.2d 7 (Sch Git. 1970s cise ss.

Eagle v. Loutstana and Southern Life Insurance

Company, 464 F.2d 607 (10th Cir. 1972) ........

International Longshoremen’s and Warehousemen'’s

Union v. Kuntz, 334 F.2d 165 (9th Cir. 1964) ...

Sayre v. City of Cleveland, 493 F.2d 64 (6th Cir. 1974),

cert. dented, 419 U.S. 837 (1974) ..............

Stein v. Oshinsky, 348 F.2d 999 (2d Cir. 1965), cert.

menigl, 362 WS. AF CDS cee

STATUTE:

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si

Sona

RULES:

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CD a k's occ a's'n nc cee'd cee cclesseeeisscen 3

hss dv bw cece une ncbessacnacacen. 2

MISCELLANEOUS:

2A J. Moore, Federal Practice (2d ed. 1987) ............. 2

-iii-

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1987

PAMELA J. BURAK, Pe#ttioner,

v.

GENERAL AMERICAN LIFE INSURANCE COMPANY,

Respondent.

REPLY IN SUPPORT OF PETITION

FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

REPLY TO OPPOSITION TO GRANTING THE WRIT

I.

Respondent Misapprehends That The Unlitigated

Coverage Issues Were Raised By The Complaint Under

Notice Pleading And That The Tenth Circuit Order

Directing Entry Of Judgment For Respondent Deprives

Petitioner Of A Full Trial On These Issues And Conflicts

With A Prior Decision Of This Court

Respondent seeks to distinguish the Court's decisions in Foun-

tain v. Filson, 336 U.S. 681 (1949) and Horme/ v. Helvering, 312

U.S. 552 (1941) by arguing that petitioner's complaint was defi-

cient for not having specifically alleged that (1) the insurance policy

endorsement was inconspicuous and (2) the insured was unaware

of the endorsement.

Petitioner's complaint alleged there was coverage under the

policy. The aforementioned issues concern — indeed, determine

— coverage. The issues are embraced within the allegation that there

was coverage and petitioner is entitled to the policy proceeds. Thus,

the complaint was sufficient to raise these issues.

When petitioner mentioned the issue of endorsement incon-

spicuousness in oral argument before the court of appeals, it was

error to deprive her of an opportunity to present the facts material

to that claim by, in essence, ordering summary judgment against

her. See Fountain, 336 U.S. at 683. Fountain tequites petitionet

be given the chance to litigate these issues in the trial court.'

The Court’s decision in Horme/ turned on broad principles of

‘fundamental justice,’’ not the fact that the case involved ques-

tions of tax law. See Horme/, 312 U.S. at 557-60. It also requires

this case be remanded to the trial court.

Respondent misapprehends rules of notice pleading. The

modern objectives of notice pleading are satisfied by a ‘‘gener-

alized summary of the case that affords fair notice [which is] all

that can be expected.’’ 2A J. Moore, Federal Practice, 48.03 (2d

ed. 1987); Comley v. Gibson, 355 U.S. 41 (1987). The pleading

rules are designed to ‘‘reduce the pleading requirements to a

minimum.’’ Moore at 48.02. The real importance of the plead-

ing rules is ‘‘that they make pleadings, in and of themselves,

relatively unimportant.’’ Jd. ‘‘Cases are to be decided on the

merits.”’ Id.

Respondent would have the courts deny petitioner’s right to

try meritorious issues on the basis that she did not set out in detail

in her complaint the facts on which she bases hex claim. This is con-

trary to law and enlightened modern federal practice. See Conley,

' The only difference between this case and Fountain (which difference is not of

significance insofar as the conflict with the instant case is concerned) is that sum-

mary judgment there had been directed by the appellate court against the defen-

dant thereby wrongfully depriving her of the opportunity to litigate her defense

to the claim. Here the plaintiff was wrongfully deprived by the Tenth Circuit of

an opportunity to litigate certain claims. In both cases a fundamental deprivation

of rights occurred through a misapplication of Fed. R. Civ. P. 56 through the grant

of summary judgment to an appellant desp’e that factual issues had become

apparent on appeal.

a.

355 U.S. at 47. All the rules require is ‘‘a short and plain state-

ment of the claim."’ /d@.; Fed. R. Civ. P. 8(a).

All pleadings are to be construed *‘as to do substantial justice."’

Conley, supra; Fed. R. Civ. P. 8(f). Respondent would have peti-

tioner’s complaint be construed to work a substantial injustice.

The Tenth Circuit's decision conflicts with this Court's holding

in Fountain and the reasoning underlying Horme/. Respondent has

not shown otherwise. Nor has respondent cited authority upholding

the disposition of a case by an appellate court by ordering summary

judgment be entered for the appellant where factual issues have been

pointed out during oral argument on appeal as occurred here.

In Kern County Land Company v. Occidental Petroleum Cor-

poration, 411 U.S. 582 (1973), the Court only decided a narrow

question concerning construction of a provision of the Securities

Exchange Act of 1934, §16(b). Certiorari was not granted to decide

the issue presented here, nor did the Court's opinion mention the

propriety of the appellate court's grant of summary judgment to

the appellant.

Unlike here, the court of appeals in the Kern County case

observed that ‘‘inquiry at the argument failed to reveal any new

facts that might be adduced by [the parties against whom the

appellate court directed summary judgment] at an evidentiary hear-

ing.’’ Abrams v. Occidental Petroleum Corp., 450 F.2d 157, 166

(2d Cir. 1971), aff'd sub nom. Kern County Land Company +.

Occidental Petroleum Corporation, 411 U.S. 582 (1973). The

appellate court also noted that certain factual conflicts had no

‘‘dispositive significance,’’ i@., whereas here the questions of (1)

whether the endorsement was inconspicuous and unenforceable and

(2) whether the endorsement was brought to decedent's attention

are dispositive issues which the trial court should decide initially.

In Mourning v. Family Publications Service, Inc., 411 U.S. 356

(1973), also relied on by respondent, certiorari was granted “‘to

resolve whether the Federal Reserve Board exceeded its authority

under Section 105 of the Truth in Lending Act in promulgating

that portion of Regulation Z commonly referred to as the ‘Four

Installment Rule." *’ 411 U.S. at 358 (footnote omitted). The Court

was not asked to nor did it decide the question of whether an

appellate court can grant an appellant summary judgment in

De

circumstances similar to this case. Further, there was no indication

in the Court's opinion or that of the appellate court of a material

factual question to be tried. Jd. ; 449 F.2d 235 (Sth Cir. 1971). That

alone distinguishes the case.

The other United States Supreme Court decision relied on by

respondent, United States v. Mitchell, 403 U.S. 190 (1971), merely

decided an issue of federal income taxation on community income

to a married woman in a community property state despite the

exercise of her statutory right of exoneration. There was no discussion

ot consideration of whether the appellate court acted properly when

it reversed the trial court's grant of summary judgment but did not

remand for trial. Moreover, there was no mention of any material

factual issues in the appellate court's opinion requiring resolution

in the trial court, unlike here. Angello v. Metropolitan Life Insurance

Company, 430 F.2d 7 (Sth Cir. 1970), rev'd sub mom. United States

v. Mitchell, 403 U.S. 190 (1971).

The same is true of the other authorities relied on by respon-

dent. Sayre v. City of Cleveland, 493 F.2d 64 (6th Cir. 1974), cert.

denied, 419 U.S. 837 (1974) (finding no facts in dispute); Stern

v. Oshinsky, 348 F.2d 999, 1002 (2d Cir. 1965), cert. denied, 382

U.S. 957 (1965) (stating ‘Plaintiffs’ attorney has consistently main-

tained that all the facts are . . . before the court; he did not indicate

in argument that any facts warranting a different decision could be

alleged or proved. Under these circumstances, we perceive no reason

for not bringing this litigation to an end."’); International Long-

shoremen's and Warehousemen's Union v. Kuntz, 334 F.2d 165,

168 (9th Cir. 1964) (absence of any genuine issues of material fact

“demonstrated conclusively ,"’ according to the court's opinion).

Petitioner has been deprived of her Seventh Amendment right

to trial by jury of the aforementioned coverage issues. Petitioner

waived her right to jury trial only as to the double indemnity claim

which was tried May 29, 1985. By then the trial court had already

granted her summary judgment on the underlying life insurance

coverage. She has therefore not waived her jury demand as to the

aforementioned coverage issues which remain to be tried in view

of the Tenth Circuit's construction of the policy endorsement

effective date language.

Petitioner's right to jury trial is not precluded by the Employee

-4.

Retirement Income Security Act (‘‘ERISA’’), 29 U.S.C. §1001 e¢

seq. This action does not attack in any manner the integrity or

administration of the group insurance plan that decedent's employer

provided for its employees. Rather, the essence of the action is simply

to pursue a claim for the proceeds petitioner asserts is due her as

beneficiary of the policy in question. Thus, there is no basis for a

conclusion that Congress intended that every claim against an

insurance company under its group insurance plan should be litigated

with exclusive ERISA remedies. ERISA is not controlling here and

does not preempt petitioner's right to jury trial.

The Other Circuit Courts Of Appeals With Which The

Tenth Circuit Is In Conflict Remanded The Proceedings

For Resolution Of Material Factual Issues

Respondent expends g-eat effort trying to factually distinguish

this case from the numerous other circuit courts of appeals’ deci-

sions which are in conflict with the instant case. The reasons by which

respondent tries to distinguish the cases were not the controlling

facts in those cases.

Moreover, respondent overlooks that this petition presents the

same simple question decided differently in the other circuits,

namely, whether a federal court of appeals can direct summary judg-

ment in an appellant's favor after the appellee has raised material

factual issues during oral argument on appeal.

As to this issue, there is a direct conflict among the circuits.

This Court should resolve the conflict.

Ill.

The Decision Below Does Create An Intra-Circuit Con-

flict On The Same Issue

Respondent urges there is no intra-circuit conflict because the

Tenth Circuit in Eagle v. Louisiana and Southern Life Insurance

Company, 464 F.2d 607 (10th Cir. 1972) was faced with material

-5-

factual issues concerning coverage and in this case the court allegedly

just had to interpret and construe policy language which respon-

dent urges presented a pure question of law.

This overlooks that the defendant insurers in Eag/e contended

that the terms of the policy entitled them to summary judgment,

afguing that the outcome was controlled by ‘‘unchallenged

documentary evidence."’ Jd. at 608. Nevertheless, the Eag/e panel

decided the case was not a proper one for summary judgment,

explaining that the rights of the parties required determination after

a ‘‘full-fledged trial of the merits.’’ Jd. at 609. This was due to the

fact that a controversy raged between the parties over whether the

decedent's employer had elected to participate in the policy and

whether anything further remained to be done. Jd. at 608.

This is not unlike the controversy that exists here over (1)

whether decedent's employer ever made decedent aware of the policy

endorsement dealing with the effective date of coverage and (2)

whether the endorsement language was so inconspicuous as to violate

public policy. In both cases resolution of the factual disputes con-

trols the outcome despite the documentary evidence regarding the

effective dates of coverage.

Although the trial court here made detailed factual findings

on the endorsement language itself, it never made findings on the

two above-mentioned issues which require resolution and should

have resulted in a remand from the Tenth Circuit.

Respondent has failed to distinguish Eag/e as to the issue

presented. There is a direct intra-circuit conflict which requires this

Court's resolution.

CONCLUSION

The Tenth Circuit should have remanded this case to the trial

court for resolution of the factual issues, one of which, due to the

procedural posture of the case, was first mentioned on appeal. This

Court is respectfully requested to direct the Tenth Circuit to remand

the case to the district court for a trial of the aforementioned coverage

issues which, if ultimately decided in petitioner's favor, would render

the endorsement unenforceable and allow coverage to decedent's

widow beneficiary.

Le

Respectfully submitted,

SAMUEL LEE ANDERSON

323 South College Avenue,

Suite 3

Fort Collins, CO 80524

(303) 482-4011

Counsel of Record

KENT N. CAMPBELL

323 South College Avenue

Suite 3

Fort Collins, CO 80524

(303) 482-4011

Counsel for Petitioner