Lachapelle v. Berkshire Life

• Court: Court of Appeals for the First Circuit
• Decided: April 29, 1998
• Docket: 97-2146
• Status: Published

Opinion

USCA1 Opinion

United States Court of Appeals

For the First Circuit

                                 No. 97-2146



                      RONALD R. LACHAPELLE,



                      Plaintiff, Appellant,



                                v.



                BERKSHIRE LIFE INSURANCE COMPANY,



                       Defendant, Appellee.


APPEAL FROM THE UNITED STATES DISTRICT COURT



                    FOR THE DISTRICT OF MAINE



           [Hon. D. Brock Hornby, U.S. District Judge]


Before



 Selya, Circuit Judge,



Bownes, Senior Circuit Judge,



and Lynch, Circuit Judge.


Mark L. Randall, with whom Daniel G. Lilley Law Offices, P.A.was on brief, for appellant.

     K. Douglas Erdmann, with whom William J. Kayatta, Jr. and Pierce Atwood were on brief, for appellee.


April 29, 1998


SELYA, Circuit Judge. Plaintiff-appellant Ronald R.

LaChapelle appeals from an order dismissing his civil action for

breach of contract and intentional infliction of emotional distress

against defendant-appellee Berkshire Life Insurance Company (the

Company).  For the reasons elucidated below, we affirm.

                                I

  The district court dismissed the appellant's suit on a

Rule 12(b)(6) motion.  Accordingly, we, like the trial court, must

accept as true the well-pleaded factual allegations of the

complaint, draw all reasonable inferences therefrom in the

plaintiff's favor, and determine whether the complaint, so read,

limns facts sufficient to justify recovery on any cognizable

theory.  See Dartmouth Review v. Dartmouth College, 889 F.2d 13, 16

(1st Cir. 1989).  In arriving at this determination, we

differentiate between well-pleaded facts, on the one hand, and

"bald assertions, unsupportable conclusions, periphrastic

circumlocution, and the like," on the other hand; the former must

be credited, but the latter can safely be ignored.  See Aulson v.

Blanchard, 83 F.3d 1, 3 (1st Cir. 1996).

  The operative pleading here is the amended complaint.  It

alleges that the appellant, a stockbroker, obtained a policy of

long-term disability insurance from the Company in 1986.  The

insurance contract contained a standard clause, tracking Me. Rev.

Stat. Ann. tit. 24-A,  2715 (West 1990), which required the

insured to file written proof of any insured loss with the Company

and to bring any legal action predicated on the policy within three

years of the accrual date.

  On February 4, 1991, the appellant was found floating in

the Androscoggin River and promptly hospitalized.  Doctors treated

him for frostbite, hypothermia, and amnesia.  They also performed

a psychiatric evaluation.  Following his discharge on February 8,

1991, the appellant admitted himself to another hospital because of

his emotional difficulties.  He stayed there for less than two

weeks.  Psychiatrists attributed his depression to severe stress,

resulting from career troubles and pending legal proceedings.

  The appellant furnished written proof of loss to the

Company, backed by medical evaluations declaring him to be totally

disabled from performing his usual occupation.  The Company honored

the claim and began paying benefits.  In due season, LaChapelle's

legal bedevilment bore bitter fruit and he pled guilty to criminal

charges of theft by misapplication of property.  The state court

imposed an incarcerative sentence and imprisoned the appellant in

June 1992.  That month, the Company informed him that it would

discontinue payments (presumably on the theory that his immurement,

not his depression, kept him from functioning as a stockbroker),

but that it might resume payments after his release.  The Company

also offered to settle all policy-related claims for $15,000.  The

appellant refused the settlement offer but took no immediate action

to contest the discontinuance of benefits.

     In 1995, the appellant filed another claim for disability

benefits, asserting that he was still unable to work as a result of

his original disability.  The Company denied this claim and the

appellant did not pursue it.  Two years later, however, he shifted

his focus and sued the Company on the ground that it had breached

the policy covenants by unilaterally terminating his benefits when

he went to prison in 1992.  He appended supplemental claims for

intentional infliction of emotional distress and violation of

Maine's late payment of claims statute, Me. Rev. Stat. Ann. tit.

24-A,  2436(1) (West 1990), directed to the same event.

     The Company moved to dismiss the complaint for failure to

state an actionable claim.  See Fed. R. Civ. P. 12(b)(6).  After

the appellant amended the complaint, the district court granted the

Company's motion.  The court concluded that the breach of contract

claim was time-barred by virtue of the insurance policy's internal

three-year limitations period and that the facts alleged in the

amended complaint were insufficient to ground an equitable

estoppel.  The court also held that the amended complaint failed to

state cognizable claims for either intentional infliction of

emotional distress or the untimely payment of an insurance claim.

     We review de novo a district court's allowance of a Rule

12(b)(6) motion to dismiss.  See Garita Hotel Ltd. Partnership v.

Ponce Fed. Bank, 958 F.2d 15, 17 (1st Cir. 1992).  Inasmuch as the

appellant premised federal jurisdiction on diversity of citizenship

and the existence of a controversy in the requisite amount, 28

U.S.C.  1332(a) (1994), we apply the substantive law of Maine. 

See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938); Woods-Leberv. Hyatt Hotels of P.R., Inc., 124 F.3d 47, 50 (1st Cir. 1997). 

Because the appellant has abandoned his claim under Me. Rev. Stat.

Ann. tit. 24-A,  2436(1), we focus exclusively on breach of

contract and intentional infliction of emotional distress.

                                II

     We first address the breach of contract claim.  Granting

a motion to dismiss based on a limitations defense is entirely

appropriate when the pleader's allegations leave no doubt that an

asserted claim is time-barred.  See, e.g., Street v. Vose, 936 F.2d

38, 39 (1st Cir. 1991); Kali Seafood, Inc. v. Howe Corp., 887 F.2d

7, 9 (1st Cir. 1989).  Here, the appellant concedes that the three-

year limitations period, if untolled, bars his contract claim.  He

maintains, however, that the doctrine of equitable estoppel,

correctly applied, halts the running of the limitations period and

vitiates any temporally oriented defense.  The district court did

not agree.  Nor do we.

     In Maine, "the gist of an estoppel barring the defendant

from invoking the defense of the statute of limitations is that the

defendant has conducted himself in a manner which actually induces

the plaintiff not to take timely legal action on a claim." 

Townsend v. Appel, 446 A.2d 1132, 1134 (Me. 1982).  Of course, the

lack of a timely filing cannot be attributed to the defendant's

conduct unless the plaintiff can demonstrate that he intended to

file suit during the permitted period, see id., that the

defendant's actions led him to refrain from doing so, see Robertsv. Maine Bonding & Casualty Co., 404 A.2d 238, 241 (Me. 1979), and

that his forbearance was objectively reasonable, see Hanusek v.

Southern Me. Med. Ctr., 584 A.2d 634, 636-37 (Me. 1990).

     The appellant was on clear notice of his burden.  His

original complaint in this case did not allege an estoppel, but he

filed an amended complaint in an effort to correct that

shortcoming.  Even then, he failed to sketch a factual predicate

that would warrant the application of equitable estoppel.  For

example, the appellant does not allege that he intended to sue

during the prescriptive period.  More importantly, as evidence of

conduct that ostensibly dissuaded him from taking timely legal

action, the appellant mentions only the Company's statement to the

effect that it might resume payments after his release.  As a

matter of law, this assertion is insufficient to induce a

reasonable person to sit on his rights.  See Townsend, 446 A.2d at

1134.

     We need not belabor the obvious.  The Company did not

mislead the appellant, but, rather, told him straightaway that it

intended to stop paying benefits.  It then acted on that stated

intention.  This should have been a reveille, not a lullaby.  By

that we mean it should have galvanized a reasonable person into

action, not lulled him into a false sense of security.  The

Company's additional statement   that it "might" subsequently

resume payments   conveyed no assurance and does not alter the

relevant calculus.  In all events, even if the appellant relied on

the Company's statement to his detriment, such reliance fails, as

a matter of law, to meet the standard of objective reasonableness

imposed under Maine law.  See Hanusek, 584 A.2d at 636-37; City of

Auburn v. Desgrosseilliers, 578 A.2d 712, 714 (Me. 1990).

     LaChapelle parries by asserting that, given his fragile

mental state, he could not be expected to appreciate and act upon

the Company's volte-face.  Under certain circumstances, perhaps,

the standard of objective reasonableness might yield to accommodate

a plaintiff with severe mental disabilities (especially if those

disabilities are known to the defendant).  But this is not such an

instance.  Though the appellant suffered from depression, he was

competent enough to bring his initial claim in a timely fashion, to

mull (and promptly reject) the insurer's settlement proposal, and,

three years later, to file another claim with the Company.  He does

not allege that his condition worsened over time (indeed, at oral

argument in this court, his counsel stated that it had not).  In

short, there is nothing of record here that suggests a lack of

capacity or a disability severe enough to warrant an exception to,

or a relaxation of, the rule of objective reasonableness.

     The appellant has one last arrow in his quiver.  In his

reply brief in this court, he attempts to repair his ruptured

breach of contract claim by arguing that, under the public policy

of Maine as expressed in Me. Rev. Stat. Ann. tit. 14,  853, his

imprisonment tolled the limitations period.  The attempt fails. 

For one thing, it seems fairly obvious that this statutory tolling

provision does not apply to actions brought on insurance policies. 

We need not resolve this point definitively, however, because the

argument is procedurally defaulted.  It is settled beyond

peradventure that "absent the most extraordinary circumstances,

legal theories not raised squarely in the lower court cannot be

broached for the first time on appeal."  Teamsters, Chauffeurs,

Warehousemen & Helpers Union, Local No. 59 v. Superline Transp.

Co., 953 F.2d 17, 21 (1st Cir. 1992); see also Sandstrom v.

ChemLawn Corp., 904 F.2d 83, 87 (1st Cir. 1990) (explaining that an

argument raised for the first time in a reply brief is procedurally

infirm).  There is nothing about this case that counsels against

enforcing this salutary principle.  Because the appellant failed to

raise the statutory tolling argument in the court below, we will

not entertain it here.

     We have said enough on this score.  For aught that

appears, the appellant simply neglected to bring suit against the

Company in a timeous fashion.  On these facts, neither equitable

estoppel nor any other tolling device is available to him.  Cf.Sandstrom, 904 F.2d at 87 (remarking that "equity, after all,

ministers to the vigilant, not to those who slumber upon their

rights").

                               III

     This leaves us with the appellant's tort claim.  To

recover for intentional infliction of emotional distress in Maine,

a plaintiff must show:

     (1) the defendant intentionally or recklessly

     inflicted severe emotional distress or was

     certain or substantially certain that such

     distress would result from his conduct; (2)

     the conduct was so extreme and outrageous as

     to exceed all possible bounds of decency and

     must be regarded as atrocious, and utterly

     intolerable in a civilized community; (3) the

     actions of the defendant caused the

     plaintiff's emotional distress; and (4) the

     emotional distress suffered by the plaintiff

     was severe so that no reasonable man could be

     expected to endure it.



Colford v. Chubb Life Ins. Co., 687 A.2d 609, 616 (Me. 1996)

(citations and internal quotations marks omitted), cert. denied,

117 S. Ct. 2433 (1997).

     Under Maine's jurisprudence, a court properly may

determine, as a matter of law, whether undisputed (or assumed)

facts suffice to state a claim for intentional infliction of

emotional distress.  See Gray v. State, 624 A.2d 479, 484 (Me.

1993).  If those facts would not allow a rational factfinder to

classify the defendant's conduct as extreme or outrageous, or if

any other element of the tort is lacking, then dismissal is proper.

     In this instance, the amended complaint, read favorably

to the appellant, falls short in two distinct respects.

     First, stripped of rhetorical flourishes, LaChapelle's

amended complaint alleges only the cessation of payments based upon

what he characterizes as the Company's legally problematic

interpretation of the policy.  Although other factors   the

appellant's depression, his fall from grace, and his incarceration

  lend color to this claim, they do not change its fundamental

nature.  In fine, the pleaded facts reflect no harm independent of

the denial of benefits.

     More is exigible.  Maine (unlike many other

jurisdictions) does not recognize a cause of action in tort for an

unembellished bad-faith breach of an insurance policy.  Thus, when

a plaintiff premises a claim for intentional infliction of

emotional distress on an insurer-insured relationship, the

plaintiff-insured must demonstrate that the defendant-insurer

caused some harm apart from the withholding of the payments called

for by the policy.  See Colford, 687 A.2d at 616 (explaining that,

to maintain such an action against a disability insurer, the

insured must demonstrate that the Company's actions "arose

independently of its denial of the disability claim"); see alsoMarquis v. Farm Family Mut. Ins. Co., 628 A.2d 644, 651 (Me. 1993)

(explaining that the insured must show, for example, that the

plaintiff "suffered some accompanying physical injury, or, the

contract was such that a breach of it will result in a serious

emotional disturbance").  The appellant's amended complaint does

not clear this hurdle.

     Second, the Company's conduct, even on the appellant's

version of it, cannot reasonably be construed as "so 'extreme and

outrageous' as to exceed all possible bounds of decency."  Colford,

687 A.2d at 616.  To be sure, the pleaded facts show cold-

heartedness and illustrate why indignant policyholders sometimes

question the mores of the insurance industry.  But the scenario

that the amended complaint depicts, though unattractive, cannot

fairly be said to reveal conduct that is atrocious, intolerable in

a civilized society, or sufficiently deplorable to trigger

liability for emotional distress.  See id. at 617.  Nor could we

say straightfacedly that the Company, by ceasing to pay LaChapelle

benefits after his confinement, could be "certain or substantially

certain" that severe emotional distress would result from its

actions.  See id. at 616.  There is thus no basis for a contention

that the Company "recklessly" or "intentionally" inflicted

emotional distress.  Id.

     In arguing for a contrary outcome, the appellant relies

principally upon Borden v. Paul Revere Life Ins. Co., 935 F.2d 370

(1st Cir. 1991).  His reliance is mislaid.  Borden stands for the

proposition that, under Rhode Island law, a bad-faith breach of an

insurance contract, without more, may support a claim for

intentional infliction of emotional distress.  Id. at 378.  Maine

law, unlike Rhode Island law, does not allow a cause of action for

intentional infliction of emotional distress to rest solely on a

bad-faith breach of an insurance contract.  See Colford, 687 A.2d

at 616; Marquis, 628 A.2d at 651.

                                IV

     We need go no further.  The doctrine of equitable tolling

is inapplicable on these facts and the limitations period contained

in the insurance policy therefore bars the appellant's breach of

contract claim.  Since the amended complaint fails to allege any

other viable claim under Maine law, it follows inexorably, as night

follows day, that the lower court appropriately dismissed the suit.



Affirmed.