# Opposition Brief — Allstate Life Insurance v. Hibma

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_0434%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1997
- **Citation:** 520 U.S. 1282

## Text

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No. 96-1476

In The

Supreme Court of the United States

4
October Term, 1996

ALLSTATE LIFE INSURANCE COMPANY,
Petitioner,
v.

MICHAEL HIBMA, et al.,
Respondents.

On Petition for a Writ of Certiorari to the
Court of Appeals of the State of Arizona

RESPONDENTS’ BRIEF IN OPPOSITION

DANIEL R. SALCITO FRANK VERDERAME
HOFMANN, SALCITO & STEVENS Counsel of Record
302 East Coronado Road PLATTNER VERDERAME, P.C.
Phoenix, Arizona 85004 316 East Flower Street
(602) 254-5341 Phoenix, Arizona 85012-2624

(602) 266-2002

Attorneys for Respondents

70979

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(800) 3 APPEAL « (800) 5 APPEAL + (800) BRIEF 21 Mnigetat

ervices, inc.

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TABLE OF CONTENTS

Page
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Oe ND wkcdactensesccnest eneceesee 1
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B. Correction of Misstatements in the Petition ... 3
Ey. SE cusadadneveakskenseevaas 3
Reasons for Denying the Writ .................4.. 3

I. The Decision Below Is An Unpublished State

Court Memorandum Decision And Is Not

Binding On Anyone Except Allstate And The
IL beh eb cucuackunsyeecsaseksuduesse 3

II. The Unpublished Memorandum Decision Will Not
Create Confusion In Arizona Or Otherwise. ... a

Il. The Unpublished State Court Memorandum

Decision Will Not Create Conflict Among The
PRE GUIS. Sa Vewnbdanwiscndcienesees 4

IV. Review Of The Unpublished Decision Will Not

End Perceived Conflict In ERISA’s Plan
RG Seb evi a bb ae On sda kb owneeseead<s 5

V. The Unpublished Arizona Decision Determines

No Federal Questions, But Rather Ends Litigation
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I ia a a 7

ii

Contents

TABLE OF CITATIONS
Cases Cited:

Asarco, Inc. v. Industrial Comm’n, 594 P.2d 107 (Ariz.
Ct. App. 1979), appeal after remand, 619 P.2d 27

Blue Cross/Blue Shield of Florida, Inc. v. Weiner, 543
So.2d 794 (Fla. Ct. App. 1989), review denied, 553
So.2d 1164, cert. denied, 494 U.S. 1028 (1990), aff’d
by abstention in collateral proceeding, 730 F. Supp.
674 (D. Md. 1990), aff’d, 925 F.2d 81 (4th Cir. 1991),
cove, Ganted, FS U.S. SVG CIGSE) «oo on cccsacsss

First Interstate Bank v. Dep’t of Revenue, 916 P.2d 1149
(Ariz. Ct. App. 1995), review denied ............

Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1
GREE én usu ckacunkonndaneégenusataeaneeaaas

Harnischfeger Corp. v. Harbor Ins. Co., 927 F.2d 974
(7th Cir. 1991), rehearing denied, cert. denied, 112 S.
Ct. 189, 502 U.S. 864, 116 L. Ed. 2d 150 .......

Morrison v. Burlington Industries, 282 $.E.2d 458 (N.C.
SES wens bwddnundadkeskacwivasabnbekiekas

People of Territory of Guam v. Yang, 850 F.2d 507 (9th
Ce See. oun ckebescgaeaks deed bene biceess

Page

3,4

iil

Contents

Page
Sayble v. Blue Cross of Southern Calif., 256 Cal. Rptr.
820 (1989), overruled by Marshall v. Bankers Life &
Cas. Ins. Co., 2 Cal. 4th 1045, 10 Cal. Rptr. 2d 72,
cert. denied, 506 U.S. 1000 (1992) ............. 5
Turnbow v. Pacific Mut. Life Ins. Co., 765 P.2d 1160
(Nev. 1988), cert. denied, 490 U.S. 1102 (1989) .. 5

Rule Cited:

Ps ae SG He OD 6 oc ks ce acccdeenssseces 3

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Respondents, Prescott Glass Corporation, Michael Hibma,
Robert Hibma, and Sharon Hibma, on their own behalf and as
guardians of Michael Hibma, a minor, request that this Court
deny the petition for writ of certiorari seeking review of an
unpublished order of the Arizona Court of Appeals entered
March 14, 1996 and supplemented on May 21, 1996.

STATEMENT OF THE CASE

Respondents respectfully oppose the petition for writ of
certiorari because the order for which review is sought is an
unpublished memorandum decision and is binding only on the
parties thereto, i.e., Allstate and the Hibmas.

A. Procedural History

Respondents own a one-employee business in Prescott,
Arizona. They arranged for group health insurance for the family
and the one employee from Allstate Insurance Company. In
1988, the Hibmas’ son, Michael, was permanently and severely
injured in an accident. In 1989, Allstate terminated coverage of
the Hibmas. The Hibmas sued Allstate in Arizona Superior Court
for breach of contract and bad faith. Allstate contends that this
is an ERISA case and, hence, is preempted. The family contends
that this is a state common law matter. Allstate moved for
summary judgment, which was denied by the trial court. The
Arizona Court of Appeals affirmed in an unpublished opinion
“because that question turns on an unresolved question of fact.”
(Appendix to Petition for Writ of Certiorari, 7a). Before appeal,
the parties entered into a high-low agreement whereby Allstate
was to pay the Hibmas the low figure if the case was governed
by ERISA and the high figure if governed by state law. A
condition of payment for the high figure was that the ERISA
issue had to be decided “on the merits.” Because it was unclear
from the first Court of Appeals opinion whether the ERISA issue

2

was decided “on the merits,” both parties requested clarification
and the court issued a supplemental memorandum opinion.
Resolving any questions of fact in Allstate’s favor, the Court of
Appeals decided the ERISA issue on the merits and in the
Hibmas’ favor. It opined:

We now decide the issue on the merits. We
conclude under the circumstances of this
case, even assuming that Prescott Glass paid
all or part of the premiums for Hull [Prescott
Glass’ sole employee, other than the
Hibmas], ERISA does not apply... .

*. * *&

On the record as it most strongly favors
Allstate in this case, we can say that the
regulatory concerns of ERISA are not
implicated.

Appendix to Petition for Certiorari, 2a-4a.

The Court of Appeals also noted, cumulatively, that the
employer's role was “so negligible, so lacking in anything
meaningful to the enforcement of ERISA policy, that preemption

does not apply in this case.” (Appendix to Petition for Certiorari,
12a).

The Arizona Supreme Court denied Allstate’s petition for
review.

a

3

B. Correction of Misstatements in the Petition
1. Introduction

Petitioner’s introduction overstates the Arizona Court of
Appeals’ holding. The court simply held that ERISA does not
apply “under the circumstances of this case.” (Appendix to
Petition for Writ of Certiorari, 2a). The appellate decision does
not contain the broad language stated in the first sentence of the
Petition’s introduction. In addition, Allstate’s statement that
“(t]he ruling, moreover, was not confined to small or medium-
sized employers; it applies across the board to all employers” is
also incorrect. The ruling was confined to this particular
employer and Allstate.

REASONS FOR DENYING THE WRIT
I.

THE DECISION BELOW IS AN UNPUBLISHED
STATE COURT MEMORANDUM DECISION AND IS NOT
BINDING ON ANYONE EXCEPT ALLSTATE AND THE
HIBMAS.

The Arizona Rules of Civil Appellate Procedure provide
that memorandum decisions are not regarded as precedent and
they are not to be cited except to establish a res judicata defense,
collateral estoppel, or law of the case. Ariz. R. Civ. App. P.
28(c); First Interstate Bank v. Dep't of Revenue, 916 P.2d 1149,
1153 (Ariz. Ct. App. 1995), review denied, (stating that citing
an unpublished decision is improper and declining to consider
the decision); Asarco, Inc. v. Industrial Comm'n, 594 P.2d 107,
110 (Ariz. Ct. App. 1979), appeal after remand, 619 P.2d 27
(holding that memoranda decisions should not be cited as
authority).

4

Further, it is highly unlikely that the result in Hibma would
even occur again given its unique set of facts.

Il.

THE UNPUBLISHED MEMORANDUM DECISION
WILL NOT CREATE CONFUSION IN ARIZONA OR
OTHERWISE.

Arizona courts will not consider the unpublished decision
as precedent. First Interstate Bank, 916 P.2d at 1153; Asarco,
594 P.2d at 110. Other states will not consider an unpublished
Arizona decision as precedent, first, because they will not have
access to it, and, secondly, because state court decisions are not
binding precedent on other states. Morrison v. Burlington
Industries, 282 S.E.2d 458, 470 (N.C. 1981). Therefore,
Petitioner’s claim that review is necessary to resolve confusion
created by the unpublished opinion is unfounded.

Il.

THE UNPUBLISHED STATE COURT MEMORAN-
DUM DECISION WILL NOT CREATE CONFLICT
AMONG THE FEDERAL CIRCUITS.

Federal courts are not required to follow state precedent
unless it is published. Harnischfeger Corp. v. Harbor Ins. Co.,
927 F.2d 974, 976 (7th Cir. 1991), rehearing denied, cert. denied,
112 S. Ct. 189, 502 U.S. 864, 116 L. Ed. 2d 150. Moreover, the
Ninth Circuit does not consider its own unpublished opinions
as precedent. People of Territory of Guam v. Yang, 850 F.2d
507, 511 (9th Cir. 1988). If the Ninth Circuit will not rely on its
own unpublished opinion, it is highly unlikely it will consider
an unpublished state court opinion.

5
IV.

REVIEW OF THE UNPUBLISHED DECISION WILL
NOT END PERCEIVED CONFLICT IN ERISA’S PLAN
COVERAGE.

The decisions cited as evidence of a conflict are misleading,
as is Petitioner’s statement that “Arizona is one of the many
states” expressing dissatisfaction with ERISA. Petitioner cites
cases from seven states. Seven out of fifty hardly constitutes a
majority. Additionally, Petitioner notes that the state decisions
are contrary to the “law in the majority of the circuits.” The
conflict, if any, between state court decisions and the circuit
law could have been resolved on earlier petitions for certiorari;
however, this Court chose not to grant certiorari. Turnbow v.
Pacific Mut. Life Ins. Co., 765 P.2d 1160 (Nev. 1988), cert.
denied, 490 U.S. 1102 (1989); Blue Cross/Blue Shield of Florida,
Inc. v. Weiner, 543 So.2d 794 (Fla. Ct. App. 1989), review denied,
553 So.2d 1164, cert. denied, 494 U.S. 1028 (1990), aff’d by
abstention in collateral proceeding, 730 F. Supp. 674 (D. Md.
- 1990), aff’d, 925 F.2d 81 (4th Cir. 1991), cert. denied, 502 U.S.

816 (1991); Sayble v. Blue Cross of Southern Calif., 256 Cal.
Rptr. 820 (1989), overruled by Marshall v. Bankers Life & Cas.
Ins. Co., 2 Cal. 4th 1045, 10 Cal. Rptr. 2d 72, cert. denied, 506
U.S. 1000 (1992). Any conflict in how courts are determining
the existence of an ERISA plan would have been apparent in
the difference between Weiner and Marshall. Yet, the Court
declined review of both cases.

6
Vv.

THE UNPUBLISHED ARIZONA DECISION
DETERMINES NO FEDERAL QUESTIONS, BUT
RATHER ENDS LITIGATION BETWEEN TWO PARTIES.

Petitioner argues that unless the unpublished Arizona
decision is reversed, it will have “a significant adverse impact
on (literally) millions of insured employee benefit plans across
the country.” This statement is untrue. The only significant
adverse impact of this unpublished decision is on Allstate’s
pocketbook. The “practical effect” of the decision is not to “void
ERISA’s carefully crafted . . . enforcement schemes,” but rather,
to force Allstate to honor its settlement agreement with the
Hibmas. As the Arizona Court of Appeals put it: “The order of
the trial court is affirmed, and under the terms of the agreement
entered into between the parties, the Hibmas are entitled to
payment of the greater amount called for by the agreement.”
(Appendix to Petition for Writ of Certiorari, 4a).

This Court has already provided guidance to employers,
participants, beneficiaries, and administrators on the necessary
elements for ERISA coverage. See Fort Halifax Packing Co.,
Inc. v. Coyne, 482 U.S. 1, 9 (1986). No further guidance from
this Court is needed, especially on a case with a unique factual
background which formed the basis of the settlement agreement
between the parties.

7
CONCLUSION

For the foregoing reasons, the petition for writ of certiorari
should be denied.

Respectfully submitted,

FRANK VERDERAME

Counsel of Record

PLATTNER VERDERAME, P.C.
316 East Flower Street

Phoenix, Arizona 85012-2624
(602) 266-2002

DANIEL R. SALCITO
HOFMANN, SALCITO
& STEVENS

302 East Coronado Road
Phoenix, Arizona 85004
(602) 254-5341

Attorneys for Respondents

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_0434%3A2. Public record. Not legal advice.