Offill v. Pennsylvania Life Insurance

243 F.R.D. 276, 2007 WL 1953380
CourtDistrict Court, S.D. Ohio
DecidedJuly 6, 2007
DocketNo. 3:04cv411
StatusPublished
Cited by2 cases

This text of 243 F.R.D. 276 (Offill v. Pennsylvania Life Insurance) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Offill v. Pennsylvania Life Insurance, 243 F.R.D. 276, 2007 WL 1953380 (S.D. Ohio 2007).

Opinion

DECISION AND ENTRY SUSTAINING DEFENDANT’S MOTION FOR LEAVE TO FILE COUNTERCLAIM (DOC. # 12), OVERRULING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT (DOC. # 13), AND OVERRULING DEFENDANT’S MOTION FOR DISMISSAL FOR FAILURE TO COMPLY WITH THIS COURT’S ORDERS (DOC. #20); CONFERENCE CALL SET

RICE, District Judge.

On or about February 1, 2000, Plaintiff Geraldine Offill (fka Geraldine Gillispie) (“Of-fill”) entered into a contract with Defendant Pennsylvania Life Insurance Company (“PennLife”) for the provision of disability insurance. Doc. # 1, Ex. A (Compl.) 113. Under the terms of the contract (“insurance policy” or “policy”), PennLife agreed to provide Offill certain benefits, in the event of her “total disability.” Id. (Policy) at 6, 9. On February 24, 2000, Offill was injured in an accident at her place of employment. Doe. # 14 (Offill Dep.) at 51. Unable to return to her previous job, she applied for and received social security disability benefits, as well as disability benefits pursuant to the terms of the insurance policy at issue in this case. Id. at 65-66 (as to social security).1 Upon later investigation, PennLife determined that Offill was not “totally disabled” as required by the terms of her policy, and terminated pay[278]*278ments of future benefits thereunder. Doc. # 13, Ex. E (PennLife Ltr, dated Mar. 3, 2004).

Offill brings this suit, alleging that Penn-Life breached its contract with her by ceasing to pay her disability benefits, as required by the insurance policy. Doc. # 1, Ex. A (Compl.).2 PennLife has filed three motions in this case. First, PennLife moves the Court for leave to file a counterclaim against Offill, based on evidence it recently acquired, indicating that she was not entitled to the benefits she previously received under the policy, and seeking recovery of those benefits. Doc. # 12. PennLife also moves the Court for summary judgment on Offill’s claim, asserting that its investigation clearly establishes that Offill is not “totally disabled,” which is a requisite for collection under the policy; thus, PennLife has no contractual obligation to pay future disability benefits thereunder. Doc. # 13. Finally, PennLife moves to dismiss the case for Of-fill’s alleged failure to comply with various Court orders. Doc. #20. The Court will discuss each of the Defendant’s Motions, in the order in which they were filed.

■I. MOTION FOR LEAVE TO FILE COUNTERCLAIM (DOC. # 12)

The Defendant first moves the Court for leave to file a counterclaim, in accordance with Federal Rule of Civil Procedure 13(f). Doc. # 12. The Defendant alleges that, during discovery, it received information from the Plaintiffs medical records, which indicates that the Plaintiffs disability was not the result of the February, 2000, accident, but rather was caused by her osteoporosis and chronic obstructive pulmonary disease. Doc. # 12 (Def.’s Mot. Leave File Counterclaim) (citing Doc. # 12, Ex. C (Conkin Deck); Doe. # 12, Ex. Cl (Pl.’s Med. Rees.)). The Defendant received the subject medical records from the Plaintiffs physicians, pursuant to its discovery requests, between April 25, 2006, and May 4, 2006. Doc. # 12, Ex. C (Conkin Deck) 11116-8. The Defendant filed the instant Motion on May 16, 2006. Doc. # 12.

Federal Rule of Civil Procedure 13(f) provides that “[wjhen a pleader fails to set up a counterclaim through oversight, inadvertence, or excusable neglect, or when justice requires, the pleader may by leave of court set up the counterclaim by amendment.” Fed.R.Civ.P. 13(f). The Defendant here asserts that the Court should sustain its motion based on the “when justice requires” standard of Rule 13(f). Doc. # 12 at 4-5.

The seminal Sixth Circuit case interpreting this Rule 13(f) language is Budd Co. v. Travelers Indem. Co., 820 F.2d 787 (6th Cir.1987). In Budd, the plaintiff sought declaratory judgment defining the parties’ liability for attorneys’ fees in related proceedings. Id. at 791. The defendant had notice that it had overpaid its pro rata share of attorneys’ fees at the time the complaint was filed, yet it did not seek leave to file a counterclaim until after the district court ruled on the propriety of the fee apportionment schedule. Id. at 791 & n. 2. The district court granted the defendant’s motion for leave to file a counterclaim; the plaintiff appealed, claiming that the district court had abused its discretion in granting the defendant’s motion. Id.

In affirming the district court’s decision, the court instructed that the decision to allow a party to amend in order to add a counterclaim “is a matter of judicial discretion.” Id. Further, the “when justice requires” clause of Rule 13(f) is “especially flexible and enables the court to exercise its discretion and permit amendment whenever it seems desirable to do so.” Id. at 791-92 (citation omitted).

In exercising its discretion under Rule 13(f), the district court must balance the equities, including whether the non-moving party will be prejudiced, whether additional discovery will be required, and whether the court’s docket will be strained. Courts appear particularly hesitant to deny amendment, even at late stages in the proceedings, when the interest in resolving all related issues militates in favor of such a result and no prejudice is demonstrated.

[279]*279Id. at 792 (internal quotation and citations omitted). Based on this reasoning, the appellate court ultimately concluded that the district court’s determination that the plaintiff would not be prejudiced by allowing the omitted counterclaim was not an abuse of discretion, since the defendant pointed to no evidence to the contrary. Id.; see also Schoen v. Grand River Navigation Co., 2007 WL 127913, *1, 2007 U.S. Dist. LEXIS 2019, *3-4 (E.D.Mich. Jan. 11, 2007) (allowing amended counterclaim, under reasoning set forth in Budd).

The Defendant asserts that the facts and circumstances of this case demonstrate that the Court should sustain its request for leave to file the subject counterclaim. In support of that contention, the Defendant asserts that its Motion was timely filed, that the Plaintiff will not be prejudiced if the Court grants the Motion, that no discovery beyond that initially contemplated will be necessary and that the omitted counterclaim arises out of the same core of operative facts and is, therefore, compulsory. Doc. # 12 (Def.’s Mot. Leave File Counterclaim) at 4-5. The Plaintiff provides no response.

In balancing the equities of this case, particularly considering that the Plaintiff has asserted no prejudice from such a decision, and in heeding the Sixth Circuit’s warning that this Court should be hesitant to deny amendment when the interest in resolving all related issues militates in favor of such a result and no prejudice is demonstrated, the Court SUSTAINS the Defendant’s Motion for Leave to File a Counterclaim (Doc. # 12). Same should be filed instanter.

II. MOTION FOR SUMMARY JUDGMENT (DOC. # 13)

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Cite This Page — Counsel Stack

Bluebook (online)
243 F.R.D. 276, 2007 WL 1953380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/offill-v-pennsylvania-life-insurance-ohsd-2007.