MATTHEW J. LEVY and JASON D. LEVY, Plaintiffs-Appellants, υ. WEST COAST LIFE INSURANCE COMPANY, Defendant-Appellee.
No. 22-1033
United States Court of Appeals For the Seventh Circuit
ARGUED MAY 24, 2022 – DECIDED AUGUST 10, 2022
Before EASTERBROOK, WOOD, and BRENNAN, Circuit Judges.
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 21 C 4062 — Matthew F. Kennelly, Judge.
The beneficiaries—Levy‘s two sons—sued West Coast Life, seeking damages for breach of contract as well as a declaratory judgment. Their claims rested on
I
In 2001, Benita Levy, then a 37-year-old single mother of two, purchased a 20-year term life insurance policy (the “Policy“) from West Coast Life. The Policy provided a $3 million benefit payable upon her death and named her only two sons, Matthew and Jason (“the Levys“), as beneficiaries.
The Levys filed a lawsuit against West Coast Life for breach of contract and for a declaration that West Coast Life was legally obligated to pay them the benefit. (They initiated their suit in Illinois state court, but West Coast Life timely removed to federal court. See
That part of the Code forbids an insurer from canceling a policy within six months of a policyholder‘s failure to pay a premium by its due date (calculated to include a 31-day grace period) unless the insurer provides a prescribed notice to the policyholder. See
West Coast Life‘s late-2018 notice (the “Notice“) incorporated much of the statutory language just quoted, as we explain in more detail below. Even so, the Levys alleged that it failed to comply with
West Coast Life responded to the suit with a motion to dismiss for failure to state a claim upon which relief could be granted. See
At a hearing held on December 15, 2021, the Levys explained that they never meant to suggest that the Notice was sent to the wrong address. (They conceded, in fact, that West Coast Life sent it to the correct address.) Since the wrong-address theory was the only reason the district court had not granted West Coast Life‘s motion in its entirety, and since the Levys were pursuing no such theory, the Levys asked the court to dismiss their complaint in full so as to generate an appealable final judgment.
After a protracted and confused exchange between the parties and the court, the court suggested that the best course of action, to ensure finality and appealability, would be for the Levys voluntarily to dismiss any claims that remained, see
II
We begin with a couple of preliminary points. First, we remind the parties, the district courts, and the bar as a whole that
At one time, the absence of such a document might have had adverse implications for our appellate jurisdiction. But the Federal Rules of Appellate Procedure now address this situation. See Bankers Trust Co. v. Mallis, 435 U.S. 381, 384 (1978) (explaining that the separate-document requirement is not “such a categorical imperative that the parties are not free to waive it.“);
That does not mean, however, that district courts should feel free to ignore Rule 58; indeed,
Even though we have no
The second preliminary point is somewhat messier. West Coast Life argues that we may not reach the merits of the breach-of-contract claim because the Levys voluntarily
dismissed that claim and have thus waived appellate review. West Coast Life cites various cases in which this court has articulated what we will call the voluntary-dismissal rule: a party that has received exactly what it requested (such as a judgment following a voluntary dismissal of a claim) cannot expect to obtain relief on that claim on appeal. See, e.g., Chavez v. Illinois State Police, 251 F.3d 612, 628 (7th Cir. 2001); Fairley v. Andrews, 578 F.3d 518, 521 (7th Cir. 2009); Palka v. City of Chicago, 662 F.3d 428, 436 (7th Cir. 2011).
There was some suggestion in the briefs and at oral argument that the voluntary-dismissal rule addresses a problem of appellate jurisdiction. This is not so, though we can hardly fault the parties for thinking so. Our decisions have not always been as clear as they should be. See, e.g., Chavez, 251 F.3d at 628. In Fairley, however, we sought to clarify matters. 578 F.3d at 521. We explained that “[t]he only prerequisites to appellate jurisdiction are a final judgment and a timely notice of appeal.” Id. (citing
The problem that some voluntary dismissals present on appeal is that “[l]itigants aren‘t aggrieved when the judge does what they want.” Fairley, 578 F.3d at 521. Thus, “if plaintiffs consented to the entry of judgment against them, we must affirm.” Id. In other words, there are cases in which no relief on appeal is possible because the party has not been aggrieved. This implicates Article III jurisdiction, not appellate jurisdiction. It is difficult to see how a party has an “injury in
fact” for purposes of Article III standing to sue when it receives exactly the judgment it requests. See Spokeo, Inc. v. Robins, 578 U.S. 330, 338–40 (2016). This is distinct from the question of appellate jurisdiction.
In light of the way the case unfolded here, we conclude that the voluntary-dismissal rule does not preclude our review of the merits in this case. The Levys can easily show continuing injury-in-fact, as they got far less than what they wanted. The district court ruled adversely to them with respect to most of their breach-of-contract theories and their entire request for declaratory relief. The fact that they voluntarily abandoned one last contractual argument does not transform this into an agreed disposition.
The transcript of the December 15, 2021 hearing supports our view of the proceedings. The court began the hearing by stating, “there‘s, you know, what I think can fairly be referred to as a slice of the original claims that are left, and it‘s the thing based on the address.” (Emphasis added.) The Levys repeatedly expressed their “understanding [that] the only part of this case that‘s left is a claim that [West Coast Life] violated the code by sending this to the wrong address and [that they] are withdrawing any such claim.”1 And the court reassured
them, although perhaps with a hint of exasperation: “See, the wonderful thing about court reporters is that you have now said that about four times. That‘s about as clear as it can be. The court reporter got it all. I‘m confident of that.”
No one can read this and think that the Levys had acquiesced to the court‘s November 6 rejection of their contract theories. What happened is evident: the court understood that their wrong-address theory was abandoned, and it dismissed the rest of the theories supporting the breach-of-contract claim for the reasons it had expressed in its November 6th order. We are thus free to reach the merits of the Levys’ arguments.
III
We review “a district court‘s dismissal under Rule 12(b)(6) de novo, construing the complaint in the light most favorable to the plaintiff, accepting as true all well-pleaded facts and drawing reasonable inferences in the plaintiff‘s favor.” Bilek v. Federal Ins. Co., 8 F.4th 581, 586 (7th Cir. 2021) (internal quotations omitted).
We agree with the district court that the Levys’ complaint falls short. Their chief contention is that the Notice did not adequately alert the policyholder (their mother) to the consequences of nonpayment. But the single-page, double-sided Notice addresses the consequences of nonpayment in three places. The front side of the Notice contains the following language: “If we do not receive your payment by 02/09/2019, your policy will terminate and lapse.” The back side contains
a similar admonition, roughly halfway down the page: “If a payment is not made within the grace period as described in the policy, your policy will terminate and lapse unless otherwise provided.” Finally, the first sentence on the back side of the Notice reads:
Unless we receive your payment as requested in this notice by the stated due date or within the contractually specified grace period thereafter, your policy will terminate and lapse, at which time the policy and all payments thereon will become forfeited and void, except as to the right, if any, to a surrender value, paid-up policy, or non-forfeiture benefit as may be provided for by the policy.
(Emphasis added.)
The italicized language follows the statute almost verbatim. See
The Levys complain that this language appears on the back side of the Notice. But
The Levys also complain that the Notice addresses the consequences of nonpayment in three different statements. This, they contend, makes the Notice confusing. But nothing in
The three statements are also consistent with respect to the payment due date. Under the Policy, policyholders have a 31-day grace period after the due date to make a premium payment before the Policy is forfeited. Thus, the relevant date for purposes of the consequences of nonpayment is 31 days after the due date. All three statements refer to that date in one way or another. The first refers to “02/09/2019” (the due date, January 9, 2019, plus 31 days); the second states that payment must be received “by the stated due date or within the contractually specified grace period thereafter“; and the third warns that the Policy will lapse “if a
In short, the Notice adequately alerts policyholders to the consequences of nonpayment, and so the Levys cannot state a breach-of-contract claim on that basis. Their next contention is that
the policyholder that she may pay her premiums to the company or its agents. Because the Notice does not specify that payment may be made to an agent, the Levys argue that it does not comply with
We reject that argument, although our reasons differ from the district court‘s. The district court reasoned that the use of the disjunctive means that a notice must state either (1) that policyholders must pay the company or (2) that policyholders must pay the company‘s agent. The Levys read it differently. They assert that a notice must state that policyholders must pay either (1) the company or (2) its agents. In other words, they say, the disjunctive modifies the policyholders’ payment options, not the options the insurer has in drafting the notice.
West Coast Life offers a different and more persuasive interpretation, which views the pertinent language in its statutory context.
West Coast Life highlights the use of the singular “person” in the first sentence. It argues that it would be incoherent for the second sentence of
sentence already specifies to whom payment must be made, the next sentence should not be read as creating a competing requirement. Instead, the phrase “the company or its agents” should be read as alluding to the earlier requirement that the notice identify “the person to whom [the premium] is payable.”
We find West Coast Life‘s interpretation to be the better way to understand the statute. There was no need for the Notice to mention the company‘s agents as alternate payees, and so the Levys cannot state a breach-of-contract claim on this basis. For what it‘s worth, it seems the Illinois Appellate Court would agree. See Time Ins. Co. v. Vick, 620 N.E.2d 1309, 1316-17 (Ill. App. Ct. 1993) (concluding that a similarly worded notice “comports with the requirements of
As for the court‘s dismissal of the declaratory-judgment claim, we “review a district court‘s decision not to declare
IV
We AFFIRM the judgment of the district court.