Kevin Witasick, Sr. v. Minnesota Mutual Life Insuranc, 2015 U.S. App. LEXIS 17286

Background

Kevin Witasick held disability and business overhead expense (BOE) policies originally issued by Minnesota Life and later administered by Standard Insurance; he made claims that were paid but disputed certain business expenses.
After protracted negotiations, Witasick and Standard executed a settlement: Standard paid over $4 million and Witasick signed a mutual release and covenant not to sue covering all claims—known, unknown, past and future—relating to the policies.
While settlement negotiations proceeded, the U.S. Government indicted Witasick on fraud-related charges; the government relied in part on documents Witasick had submitted to Standard and a Standard employee testified; Witasick was convicted on most counts (not mail fraud) and sentenced to 15 months.
In November 2011 Witasick sued Standard and Minnesota Life alleging over twenty claims, some premised on the policies and some on Standard’s cooperation with the prosecution.
The District Court granted defendants’ motion to dismiss on March 25, 2013, in a memorandum opinion but did not enter a separate Rule 58 judgment document; judgment was deemed entered 150 days later (Aug. 22, 2013).
Witasick filed an unusual “contingent notice of appeal” on the last permissible day; the Third Circuit found it functionally adequate and limited its review to the March 25, 2013 order.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the appeal was timely and whether appellate jurisdiction exists	Witasick filed a contingent notice on the last day and intended to preserve appeal rights	Judgment was entered March 25 and notice filed too late; docket entries cannot substitute for Rule 58 separate judgment	Court held judgment deemed entered Aug 22, 2013; the contingent notice filed Sept 23, 2013 was the functional equivalent of a valid notice of appeal, so jurisdiction existed
Whether the scope of appeal included other district court orders	Witasick sought to preserve rights generally	Defendants argued appeal limited to March 25 order	Court held appeal limited to the March 25, 2013 order specified in the notice
Whether the complaint is barred by the settlement and release	Witasick argued some claims (e.g., malicious prosecution) survive or arose after settlement	Defendants argued the release and covenant not to sue waived all claims—known and unknown—related to the policies and prior conduct	Court held the settlement and broad release/covenant barred all claims in the complaint; dismissal affirmed
Whether settlement must be pleaded as a defense before being considered on Rule 12(b)(6) dismissal	Witasick contended releases are affirmative defenses that must be pled	Defendants pointed to the executed settlement attached to the record and argued it defeats the complaint	Court held courts may consider settlement agreements on dismissal when the release appears on the face of the complaint or record; no pleading deficiency barred dismissal

Key Cases Cited

Bowles v. Russell, 551 U.S. 205 (2007) (timely filing of notice of appeal is jurisdictional)
LeBoon v. Lancaster Jewish Cmty. Cntr. Ass’n, 503 F.3d 217 (3d Cir. 2007) (separate document requirement for Rule 58 judgments)
In re Cendant Corp. Sec. Litig., 454 F.3d 235 (3d Cir. 2006) (criteria for treating an order as a separate document under Rule 58)
Smith v. Barry, 502 U.S. 244 (1992) (Rules on notice of appeal construed liberally; functional equivalence)
Theriot v. ASW Well Serv. Inc., 951 F.2d 84 (5th Cir. 1992) (minute entries and utility docket not separate documents for Rule 58)
Santomenno v. John Hancock Life Ins. Co., 677 F.3d 178 (3d Cir. 2012) (standard of review for Rule 12(b)(6) dismissals)
Blunt v. Lower Merion Sch. Dist., 767 F.3d 247 (3d Cir. 2014) (courts may consider settlement agreements when dismissing complaints)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleading)
Malleus v. George, 641 F.3d 560 (3d Cir. 2011) (applying Twombly/Twombly plausibility standard)