Ferragamo v. Chubb Life

• Court: Court of Appeals for the First Circuit
• Decided: September 3, 1996
• Docket: 96-1065
• Status: Published

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT

                                 ____________________



          No. 96-1065



                                   PAUL FERRAGAMO,



                                Plaintiff - Appellant,



                                          v.



                       CHUBB LIFE INSURANCE COMPANY OF AMERICA,



                                Defendant - Appellee.



                                 ____________________



                     APPEAL FROM THE UNITED STATES DISTRICT COURT



                          FOR THE DISTRICT OF MASSACHUSETTS



                     [Hon. Morris E. Lasker, U.S. District Judge]
                                             ___________________



                                 ____________________



                                        Before



                               Torruella, Chief Judge,
                                          ___________



                                Boudin, Circuit Judge,
                                        _____________



                           and Barbadoro,* District Judge.
                                           ______________



                                _____________________



               Maria  A.  Luise,  with whom  Frank  Mondano  and  Balliro &
               ________________              ______________       _________

          Mondano were on brief for appellant.
          _______

               Paul M. Sanford,  with whom Medeiros  Karmen & Sanford  Inc.
               _______________             ________________________________

          was on brief for appellee.


____________________



                                  September 3, 1996

                                 ____________________


____________________



          *  Of the District of New Hampshire, sitting by designation.



Per  Curiam.   On  December  14,  1981, appellant  Paul
                    Per  Curiam
                    ___________



          Ferragamo ("Ferragamo")  was insured by United  Life and Accident



          Insurance  Company ("United  Life")  pursuant to  a policy  which



          entitled  Ferragamo to benefit payments in the event of his total



          disability.2   At  that time  he  owned and  operated  Northshore



          Recycling, a scrap metal recycling business.  Shortly thereafter,



          Ferragamo submitted  a claim for total  disability benefits based



          on an  accident  suffered  while  at  work  which  caused  severe



          injuries to his  left leg and ankle.  As  required by the policy,



          he  proceeded  to  file  monthly reports  regarding  his  injury.



          Relying on  these reports  and the information  contained therein



          establishing that Ferragamo remained totally disabled and was not



          working for pay  or profit, appellee Chubb Life Insurance Company



          of  America ("Chubb"),  United Life's  successor,  paid Ferragamo



          total  disability benefits  of $2,400  per month from  April 1982



          until June 1993,3 as  well as social  insurance benefits of  $750



          per month  over the initial five year period of his claim.  Chubb



          also  waived the further payment of premiums pursuant to a policy



          provision.



                    Although   the   monthly  reports   requested  detailed



          information  from  Ferragamo regarding  the  nature  of any  work



                              
          ____________________



          2  We present the facts in the light most favorable to the jury's

          verdict.  See,  e.g., Coastal  Fuels of P.R.,  Inc. v.  Caribbean
                    ___   ____  _____________________________     _________

          Petroleum Corp., 79 F.3d  182, 186, petition for cert.  filed, 65
          _______________                     _________________________

          U.S.L.W. 3034 (July 2, 1996).


3   The disputed period  is limited to  the period after  January

          1988.



                                         -2-



activities,4 he continuously represented  that he was not working



          or earning  any income other  than "investment income."5   During



          the course of Ferragamo's  eleven- year claimed disability, Chubb



          attempted  to verify the nature of his disability in a variety of



          ways including telephone contacts, personal interviews, reviewing



          his income  tax returns, independent medical  evaluations, and by



          "spot-checks" of Ferragamo's activities by private investigators.



          These  efforts  eventually  revealed that,  while  Ferragamo  was



          claiming total  disability, he was actually  engaging in numerous



          and  varied  physical  and  work  activities,  including  playing



          racquetball with  his trial lawyer, signing  public records under



          oath  to the  effect that  he  was working  as a  builder, filing



          federal income tax  returns where  he stated under  oath that  he



          received  significant profits  from his  real  estate development



          business,  operating a  construction company  known as  Ferragamo



          Development which purchased, developed, and sold over $10,000,000



          in  real estate, and disclosing to various persons, including his



          doctors, creditors, banks and various  town officers, that he was



          a  self-employed real  estate  developer, contractor  or  builder



          earning from $100,000 to $250,000 per year.  To mention only some



          of  the   discovered  evidence,   Ferragamo  fully  developed   a

                              
          ____________________



          4  The inquiries included  questions regarding his occupation and

          duties, whether he was self-employed, whether he  had returned to

          work on either  a part-time  or full-time basis,  what his  daily

          activities consisted  of, the amount  of his monthly  income, and

          whether he was partially or totally disabled.



          5   Ferragamo  signed each  report below  the statement  that: "I

          certify that  the foregoing  statements and answers  are complete

          and true to the best of my knowledge."



                                         -3-



$6,000,000  condominium  complex  in  Swampscott,  Massachusetts,



          where he would be  at the job site  almost continuously each  day



          from 7:00-7:30 AM to 4:00-5:00 PM.  He not only drove his pick-up



          truck  to  work, but  at times  operated  a front-end  loader and



          climbed  down inside the newly dug foundation holes to check them



          out.   He was also fully  active in all aspects  of the planning,



          financing, supervision and sale of this project.



                    In addition  to the Swampscott condominium,  during the



          time of  his alleged total  disability Ferragamo also  engaged in



          various land  transactions including  those involving a  340 acre



          tract in  Littleton, New  Hampshire, two  lots in  North Andover,



          Massachusetts, two  in Salem,  and others in  Lynnfield, Peabody,



          Revere, and Swampscott, as well as at Chuebeque Island, Maine.



                    Predictably  upon  learning  the  above,  Chubb stopped



          disability payments  under the policy, and  incredibly, Ferragamo



          sued seeking  damages for breach of  contract, negligence, unfair



          and deceptive trade practices  pursuant to Mass. Gen. L.  ch. 93,



          negligent  infliction  of  emotional  distress,  and  intentional



          infliction of emotional distress.  Chubb denied these allegations



          and  counterclaimed   alleging   fraud,  deceit   and   negligent



          misrepresentation.



                    A  trial  was  held  at  which  the  above  facts  were



          presented to the jury.   At the  close of plaintiff's case  Chubb



          moved  for judgment pursuant to Fed. R.  Civ. P. 50, which motion



          was denied by the  district court on all counts  except regarding



          Chapter 93A, on   which ruling was reserved.   Thereafter, at the


-4-



close of the  evidence, Chubb  renewed the Rule  50 motion,  with



          similar  results.   The  jury  found  for  Chubb  on  all  counts



          including on  Chubb's counterclaim in the  amount of $192,401.71.



          Pursuant to special interrogatories the jury ruled that Chubb had



          not  breached  the policy  contract,  that  Ferragamo engaged  in



          misrepresentations  regarding his  claim, and that  after January



          1988, he  engaged in fraud in  this respect.   The district court



          then dismissed Ferragamo's chapter 93A claim.



                    Ferragamo raised three issues on appeal which under the



          circumstances  of this  case border  on the  frivolous:   (1) the



          admission into evidence of the investigator's reports which Chubb



          relied on in suspending Ferragamo's benefits; (2) the limiting of



          the cross-examination of Chubb's expert; and (3) the instructions



          given  to  the  jury  regarding  the  deceit   count  of  Chubb's



          counterclaim.



                    The challenged reports  were clearly admissible  within



          the discretion of the trial court, see Sinai v. New England Tel &
                                             ___ _____    _________________



          Tel. Co., 3 F.3d 471, 475 (1st Cir. 1993), cert. denied, ___ U.S.
          ________                                   ____________



          ___, 115  S. Ct. 597  (1994), because  they were relevant  to the



          issue  of whether  Chubb had reasonably  investigated Ferragamo's



          eligibility for  benefits before terminating them.   See Teishing
                                                               ___ ________



          v. SER-Jobs For Progress, Inc., 19 F.3d 755, 762 (1st Cir. 1994).
             ___________________________



          This  question  was put  at  issue  not  only by  the  nature  of



          Ferragamo's claim, but also  by the door that  was opened by  his



          counsel  in  the direct  examination of  his own  expert witness.



          Sinai,  3 F.3d at  475-76.  Furthermore,  considering the copious
          _____


-5-



independent  evidence heard  by  the  jury regarding  Ferragamo's



          activities, any error committed is at best harmless.  See Almonte
                                                                ___ _______



          v.  National Union Fire  Ins. Co.,  787 F.2d  763, 771  (1st Cir.
              _____________________________



          1986).



                    A trial court's discretion in limiting the conduct of a



          trial, although not limitless, is certainly ample enough to allow



          the curbing of the cross-examination of  Chubb's expert under the



          circumstances  of this trial.   See Fed. R.  Evid. 611(b) (noting
                                          ___



          that "cross examination  should be limited to  the subject matter



          of direct  examination").   On direct examination  Chubb's expert



          testified regarding its insurance  practices in August 1993, when



          Chubb  suspended   Ferragamo's  insurance  benefits.     He  also



          testified regarding  the reasonableness of Chubb's  actions as to



          the  period of time that  lapsed from the  time the investigative



          reports  were  received  to   the  suspension  of  the  benefits.



          Ferragamo's lawyer extensively fished outside these waters before



          the trial court properly ended the expedition.



                    Finally, in regard to the claim that the district court



          erred in  its jury instructions, it is  beyond reasonable dispute



          that Ferragamo did not make these objections after the charge was



          given  but  before  the  jury  retired  to  deliberate.    It  is



          elementary that the failure  to object to a jury charge  after it



          is given and  before the jury retires to  deliberate, is fatal to



          any claim of  error on  appeal.  Fed.  R. Civ.  P. 51; Scarfo  v.
                                                                 ______



          Cabletron  Sys., Inc., 54  F.3d 931, 940 (1st  Cir. 1995).  While
          _____________________



          there  are extraordinary  exceptions  to this  black-letter rule,


-6-



see, e.g., id., such  is not the present case.  Thus, we dwell no
          ___  ____  ___



          longer on this or any other alleged error.



                    We  can perceive  no appealable  error by  the district



          court.  In fact  the record shows actions by  appellant for which



          he could very well be held accountable before another forum.



          Considering  the  totally   meritless  nature  of   this  appeal,



          appellant is hereby ordered to show cause within 10 days from the



          issuance of this decision why he should not be held to pay double



          costs  and  attorney's fees  on  appeal.   See  28 U.S.C.    1919
                                                     ___



          (1994);  Fed. R. App. P. 38; Cronin  v. Town of Amesbury, 81 F.3d
                                       ______     ________________



          257, 261 (1st Cir. 1996).



                    The decision of the district court is affirmed.
                                                          ________


-7-