Nunn v. Massachusetts Casualty Insurance, 758 F.3d 109

MCIC seeks rehearing and the prior decision on Nunn v. Massachusetts Casualty Insurance Co. is withdrawn; the case is remanded for further proceedings.
Plaintiffs Nunn and Vaden, former NBA referees, purchased MCIC supplemental disability policies based on Lucas's presentations in 1996 about a policy to age 65 with own-occupation coverage.
Lucas described coverage as lasting to age 65, tax-free, regardless of disability duration, and emphasized own-occupation disability; policies delivered later did not match his described terms.
After injuries in 1996, plaintiffs received benefits for 60 months, then payments stopped; they sued in 2010 seeking breach of contract and/or reformation.
District court granted summary judgment, applying Connecticut law for statute of limitations and Pennsylvania law for contract interpretation; court held no reasonable expectations-supported reformation and that claims were time-barred.
This court agrees that the Pennsylvania reasonable expectations doctrine governs reform, and that the accrual/times-bar issues require remand for Pennsylvania-law analysis of reformation and potential breach depending on reform outcome.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Pennsylvania's reasonable expectations doctrine governs reformation claims.	Nunn and Vaden rely on reasonable expectations from Lucas's representations.	District court applied Pennsylvania law only if necessary; the written policy controls.	Governing doctrine is Pennsylvania's reasonable expectations.
Whether failure to read the policy defeats reasonable expectations.	Insurers’ agents created reasonable expectations that were inconsistent with the written contract.	Written terms should control; reliance on agent is not enough.	Failure to read does not defeat reasonable expectations when agent-induced expectations are inconsistent with the policy.
Whether Connecticut or Pennsylvania law governs accrual and timeliness of breach claims.	Connecticut six-year limitations applies; accrual occurs at discovery of breach.	Pennsylvania law governs contract interpretation and reform; accrual depends on reform outcome.	Pennsylvania substantive law governs interpretation and reform; accrual hinges on reform or breach under Pennsylvania terms; remand appropriate.
Whether summary judgment on reformation was proper under Pennsylvania law.	Evidence supports reasonable expectations through age 65; reformation should be granted.	No genuine dispute on the applicable law or facts to support reformation.	District court erred in granting summary judgment; remand to resolve reformation under PA law.

Rempel v. Nationwide Life Ins. Co., 471 Pa. 404 (Pa. 1977) (insured can rely on insurer-agent representations when inconsistent with written policy)
Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300 (Pa. 1983) (clear policy exclusion enforced when insured did not rely on misrepresentation)
Tonkovic v. State Farm Mut. Auto. Ins. Co., 513 Pa. 445 (Pa. 1987) (burden on insurer to disclose changes when policy differs from insured’s requested coverage)
Tran v. Metropolitan Life Ins. Co., 408 F.3d 130 (3d Cir. 2005) (two-camp framework for reasonable expectations doctrine in PA law)
Bensalem Twp. v. Intl. Surplus Lines Ins. Co., 38 F.3d 1303 (3d Cir. 1994) (default rule to interpret policy language but consider totality of transaction for expectations)
West v. Lincoln Ben. Life Co., 509 F.3d 160 (3d Cir. 2007) (insurance-coverage expectations and insurer representations)