National Production Workers Union Insurance Trust v. Cigna Corp.
665 F.3d 897
7th Cir.2011Background
- The Trust sought group accident and life policies with a $100,000 total death benefit and a beneficiary arrangement favoring the Trust, as owner and beneficiary.
- Mondo, the Trust's broker, issued an RFP to insurers including LINA, seeking a policy where the Trust owns and is a beneficiary.
- LINA's proposal and initial policy drafts omitted the Trust’s desired provision, but the Trust moved forward and signed the group insurance application and subscription agreements.
- The Trust paid nine consecutive premiums; the final policy retained a different beneficiary provision from what the Trust desired.
- In 2004, after Knight's death, LINA paid the decedent’s beneficiaries; the Trust demanded half the benefit, which LINA refused, citing policy terms.
- LINA terminated the policy effective September 30, 2004; the Trust filed suit in 2005; the district court granted summary judgment for LINA and dismissed Cigna for lack of personal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there mutual assent to form a contract? | Trust asserts no meeting of the minds due to Heindl's letter. | LINA argues objective conduct shows mutual assent and contract formed. | Mutual assent existed; contract enforced. |
| Did Mondo's agency bind the Trust to the policies? | Agency ended after procurement; LINA knew or should have known of deviations. | Mondo remained Trust's agent; Trust accepted terms via signatures and premium payments. | Mondo remained agent; Trust bound by final policy. |
| Does unjust enrichment lie where a contract governs the relationship? | Unjust enrichment claim should survive despite contract. | Contract governs; unjust enrichment not viable when a contract exists. | Unjust enrichment claim barred by contract. |
| Did LINA perform under the contract to support its breach counterclaim? | Trust contends LINA failed to perform by not paying as beneficiary. | LINA paid beneficiaries and remained on risk; termination letter approved proper cessation. | LINA performed; breach counterclaim succeeds. |
| Is Cigna subject to personal jurisdiction given the claims against LINA? | Cigna exercises control over LINA; jurisdiction should attach. | Claims against Cigna are duplicative of those against LINA; no jurisdiction standard met. | Cigna dismissed; claims moved with LINA dismissal. |
Key Cases Cited
- Voelker v. Porsche Cars N. Am., Inc., 353 F.3d 516 (7th Cir. 2003) (mutual assent and contract formation require objective evidence)
- Acad. Chicago Publishers v. Cheever, 144 Ill.2d 24 (Ill. 1991) (mutual assent assessed by objective conduct; subjective intent irrelevant)
- Laserage Tech. Corp. v. Laserage Labs., Inc., 972 F.2d 802 (7th Cir. 1992) (contract existence determined by expressed conduct, not inner thoughts)
- Echo, Inc. v. Whitson Co., 121 F.3d 1099 (7th Cir. 1997) (contract existence when basic facts are undisputed is a question of law)
- Schoonover v. Am. Family Ins. Co., 214 Ill.App.3d 33 (Ill. App. 1991) (insured charged with knowledge of issued policy contents)
- Pekin Life Ins. Co. v. Schmid Family Irrevocable Trust, 359 Ill.App.3d 674 (Ill. App. 2005) (agency authority and knowledge imputation in insurance matters)
- Maxton v. Garegnani, 255 Ill.App.3d 291 (Ill. App. 1994) (insured charged with knowledge of policy terms)