Loguidice v. Metropolitan Life Insurance

United States Court of Appeals
For the First Circuit

No. 02-2538

BRENDA LOGUIDICE,

Plaintiff, Appellant,

v.

METROPOLITAN LIFE INSURANCE COMPANY
and STEVEN ANASTASIA,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Frank H. Freedman, U.S. District Judge]

Before

Lipez, Circuit Judge,
Porfilio,* Senior Circuit Judge,
and Howard, Circuit Judge.

Kenneth R. Behrend, with whom Behrend & Ernsberger, P.C., were
on brief, for appellant.
B. John Pendleton, Jr., with whom McCarter & English, LLP,
were on brief, for appellees.

July 14, 2003

*Of the Tenth Circuit, sitting by designation.
 HOWARD, Circuit Judge. Plaintiff Brenda Loguidice

appeals the district court's entry of summary judgment in favor of

defendants Metropolitan Life Insurance Company ("MetLife") and

Steven Anastasia on the ground that her claims against them were

brought after the expiration of the applicable Massachusetts

statute of limitations. The principal issue is whether Loguidice

has adduced evidence from which a fact finder could conclude that

her otherwise untimely claims are saved by the Commonwealth's

"discovery rule." While we are troubled by the alleged events

giving rise to this lawsuit, we see no basis for applying the

discovery rule to Loguidice's claims. We therefore affirm the

district court's judgment.

I.

We primarily take the facts from the first of the

district court's two summary judgment rulings, see infra,

construing the record in the light most favorable to Loguidice and

resolving all factual disputes in her favor. E.g., Dwan v. City of

Boston, 329 F.3d 275, 277 (1st Cir. 2003). In any event, most of

the following facts are undisputed.

At some point in 1991, Loguidice, a nurse and the

divorced mother of two, received a letter from MetLife's South East

Home Office in Tampa, Florida. The letter encouraged Loguidice to

learn more about a "retirement plan" that MetLife had designed

especially for nurses. At the time, nurses frequently lacked

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retirement plans at their places of employment. Loguidice

expressed interest in learning more about MetLife's program. In

November 1991, Anastasia, who was then an account representative

working out of MetLife's Tampa office, visited Loguidice in her

home in Agawam, Massachusetts.

During the meeting, Anastasia held himself out as a

specialist in retirement programs designed to meet the needs of

nurses. He presented Loguidice with a scripted sales pitch, using

a folder of information (including newspaper articles and

promotional materials) that was arranged so as to emphasize to

nurses the importance of retirement planning and the strengths of

MetLife. Within the twenty-two pages of material that comprised

the folder, there is very little mention of life insurance. This

is more than a little surprising because Anastasia's objective was

to sell Loguidice a whole life insurance policy.1

At some point during the meeting, the issue of life

insurance did come up. Loguidice conceded in her deposition that

Anastasia informed her (after she had told him that she did not

want or need life insurance) that there was a life insurance

component to the plan. Documentary evidence reveals that Anastasia

also asked Loguidice a number of the health and lifestyle questions

1
A whole life insurance policy provides a death benefit and
builds cash value (which is available to the insured during her
lifetime) as premiums are paid. MetLife whole life policyholders
also are eligible to receive dividends if MetLife declares any.

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that typically are asked in connection with applications for life

insurance. Nonetheless, Anastasia's emphasis was at all times on

the retirement planning in which Loguidice had expressed an

interest. At the conclusion of the meeting, Loguidice signed a

document with the heading "Application for Life Insurance" that

authorized MetLife to deduct $100 per month from her checking

account to pay the premiums on a whole life policy with a face

value of $52,096. Because Loguidice was rushing to bring the

meeting to a conclusion, she did not read the application.

Instead, she merely signed on the signature line at which Anastasia

was pointing.

After making the sale, Anastasia left Loguidice with a

brochure titled "Nurses Insured Retirement Plan." The brochure

mirrored the folder in that it emphasized retirement planning and

barely even hinted that "the plan" was, in actuality, a life

insurance policy. For example, the brochure stated that

"Metropolitan's Nurses Insured Retirement Plan is a convenient way

for you to accumulate cash for the future you deserve," and that

"we can help you build a solid foundation of financial security

with our Nurses Insured Retirement Plan, which can help you

accumulate the money you need, tax-deferred, for your retirement

years." The closest the brochure came to indicating that the plan

was no more than a whole life policy is a statement included in an

itemized summary of five benefits of the "new [our emphasis]

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Insured Retirement plan": "[The plan provides t]ax deferred

accumulation while providing a life insurance benefit."

Two weeks after their initial meeting, Anastasia returned

to Loguidice's home to deliver "the plan" she had purchased.

Anastasia had with him a folder containing the same documents that

he had used in his previous presentation. On a computer print-out

near the back, Anastasia had highlighted the anticipated value of

"the plan" when Loguidice turned 65 -- $66,699 -- under a column

titled "Illustrative Cash Value." During this second meeting

(which was quite brief), Anastasia showed Loguidice the highlighted

figure. But Anastasia did not review the details of the actual

insurance policy that Loguidice had purchased. Instead, he tucked

the policy itself into a sleeve in the back of the folder and left

the folder with Loguidice. Loguidice did not look at the folder

again until after she had filed suit some four and one-half years

later.

For approximately the next two and one-half years,

Loguidice made her monthly $100 premium payments. During this

time, Loguidice did not know that she was making premium payments

on a whole life insurance policy. Rather, she thought that she was

contributing to a "retirement plan" with a life insurance

component. Then, in May 1994, Loguidice read a newspaper article

detailing an impending class-action settlement involving MetLife

and nurses who had purchased whole life policies after being led to

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believe that they were investing in retirement or savings plans.

Shortly thereafter, Loguidice stopped paying her monthly premiums

and called MetLife to ask that her policy be cancelled. MetLife

did not cancel Loguidice's policy. Instead, per language in the

policy governing unpaid premiums, MetLife began using the cash

value that had accumulated in the policy to pay Loguidice's

premiums as they became due. On September 18, 1996, with its

accumulated cash value exhausted, the policy lapsed.

Loguidice opted out of the class-action settlement and,

in May 1996, initiated this diversity action in the United States

District Court for the Western District of Pennsylvania. Her

complaint asserted claims for breach of contract; breach of the

duty of good faith and fair dealing; fraud and deceit; negligent

supervision; negligent misrepresentation; negligence per se; breach

of fiduciary duty; and violation of various Massachusetts consumer

protection statutes.2 Following a transfer to the district court

from which this appeal was taken and the close of discovery,

MetLife moved for summary judgment, challenging the viability of

the claims on evidentiary and, as to Loguidice's tort and statutory

claims, statute of limitations grounds. Anastasia, acting pro se,

joined in MetLife's motion. On March 16, 1999, the court granted

the motion on all claims except those for fraud and deceit, breach

2
The parties reasonably have agreed that Massachusetts law
governs this dispute, so we follow their lead. See Foster-Miller,
Inc. v. Babcock & Wilcox Canada, 210 F.3d 1, 8 (1st Cir. 2000).

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of fiduciary duty, and violation of one of the consumer protection

statutes identified in the complaint, Mass. Gen. Laws Ann. ch. 93A.

As to these claims, the court concluded that the evidence was

sufficient to warrant a trial and that the claims were brought

within the applicable limitations period. In reaching the latter

conclusion, the court determined that the claims, while sounding in

tort, were essentially contractual in nature. See Hendrickson v.

Sears, 310 N.E.2d 131, 132 (Mass. 1974) (observing that the "gist

of the action or the essential nature of the plaintiff's claim"

rather than "the form of proceeding" determines the applicable

statute of limitations) (internal quotation marks omitted).

Therefore, the court decided, the claims were governed by the six-

year statute of limitations generally applicable to actions for

contractual damages, Mass. Gen. Laws Ann. ch. 260, §2 (1992), and

not the three-year statute generally used in tort actions and

contract actions for personal injuries, Mass. Gen. Laws Ann. ch.

260, § 2A (1992), or the four-year statute usually applied to

actions under ch. 93A, Mass. Gen. Laws Ann. ch. 260, § 5A (1992).

Because the claims were brought four and one-half years after

Anastasia delivered the policy to Loguidice, they were timely under

the court's reasoning.

In March 2002, MetLife filed a second motion for summary

judgment on Loguidice's remaining claims, which the district court

treated as having been filed on behalf of Anastasia as well. The

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motion contended that two decisions handed down by the Appeals

Division of the Massachusetts District Court after the initial

summary judgment decision required the court to revisit its earlier

statute of limitations ruling. The cases in question had held that

the two-year limitations period in Mass. Gen. Laws Ann. ch. 175, §

181 (1998) (permitting, inter alia, persons induced to purchase

insurance policies based on misrepresentations concerning their

terms to sue and recover premiums), applies to all claims mirroring

the cause of action set forth in the statute, even if those claims

are brought under the common law or Mass. Gen. Laws Ann. ch. 93A.

See Grande v. PFL Life Ins. Co., No. 9663, 2000 WL 1376676 at *2

(Mass. App. Div. Sep. 27, 2000) (applying the Hendrickson rule and

emphasizing that the "gravamen of [the] complaint" and not the form

in which it designates its claims controls for statute of

limitations purposes) (internal quotation marks and citation

omitted); see also Slingsby v. Metropolitan Ins. Co., No. 9708,

2001 WL 389347, at *2 (Mass. App. Div. Apr. 4, 2001)(following

Grande).

The district court did not accept MetLife's contention

that these cases obliged it to reconsider its prior ruling because

neither decision issued from a court capable of establishing

controlling Massachusetts law. Nonetheless, concluding that

"plaintiff's remaining claims are plainly founded upon allegations

of misrepresentations made in the sale of products governed by

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[Mass. Gen. Laws Ann. ch. 175, § 181]," the court granted MetLife

and Anastasia summary judgment on those claims, which were filed

well more than two years after Loguidice received her policy.

Loguidice v. Metropolitan Life Ins., Civ. No. 97-10060-FHF, slip

op. at 5 (D. Mass. Oct. 11, 2002) (memorandum and order)

("Loguidice II"). In so ruling, the court did not respond to

Loguidice's alternative argument, made in opposition to both of

MetLife's summary judgment motions, that its claims were saved by

Massachusetts' "discovery rule" even if the two-, three-, and/or

four-year limitations periods in, respectively, Mass. Gen. Laws

Ann. ch. 175, § 181, Mass. Gen. Laws. ch. 260, § 2A, and/or Mass.

Gen. Laws Ann. ch. 260, § 5A, were deemed applicable. Loguidice

appeals from the judgment in favor of MetLife and Anastasia on her

fraud and deceit, breach of fiduciary duty, and Mass. Gen. Laws

Ann. ch. 93A claims.

II.

Loguidice leads with an argument that the district court

did violence to the purpose of Mass. Gen. Laws Ann. ch. 175, § 181

by applying its two-year limitations period to her claims for fraud

and deceit, breach of fiduciary duty, and violations of Mass. Gen.

Laws Ann. ch. 93A. Loguidice constructs her argument logically:

her claims are for the unlawful victimization of a consumer; but

for § 181, these claims would be subjected to longer limitations

periods; § 181 is part of a consumer protection statute; therefore,

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it would undermine the statute's consumer-friendly design to apply

its relatively short limitations period in these circumstances.

Whatever merit Loguidice's syllogism might possess, it

neglects to account for the fact that, irrespective of Mass. Gen.

Laws Ann. ch. 175, § 181, her fraud and deceit, breach of fiduciary

duty, and Mass. Gen. Laws Ann. ch. 93A claims are time-barred

(absent application of the discovery rule, which we discuss infra)

unless the district court was correct when it initially found the

gist of these claims to be contractual and thus governed by the

six-year limitations period specified in Mass. Gen. Laws Ann. ch.

260, § 2. The reason is that Loguidice did not bring these claims

until four and one-half years after receiving her insurance

contract. The claims are thus presumptively untimely under not

only § 181, but also under Mass. Gen. Laws Ann. ch. 260, § 2A and

Mass. Gen. Laws Ann. ch. 260, § 5A.

We regard as telling Loguidice's failure to defend the

district court's initial statute of limitations ruling, even in the

face of MetLife's argument that we should affirm regardless whether

we deem Mass. Gen. Laws Ann. ch. 175, § 181 applicable (or even

reach the issue). See, e.g., Houlton Citizens' Coalition v. Town

of Houlton, 175 F.3d 178, 184 (1st Cir. 1999) (appeals court may

affirm entry of summary judgment on "any ground revealed by the

record"). As we understand it, the court's initial decision to

apply the six-year statute of limitations to the fraud and deceit,

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breach of fiduciary duty, and Mass. Gen. Laws Ann. ch. 93A claims

was driven by its understanding that aspects of these claims arose

out of the defendants' failure to do as they promised in the

alleged agreement reached with Loguidice to provide her with a

retirement plan. See Loguidice v. Metropolitan Life Ins., Civ. No.

97-10060-FHF, slip op. at 7-8 (D. Mass. March 16, 1999) (memorandum

and order) ("Loguidice I") (citing Barber v. Fox, 632 N.E.2d 1246,

1249 (Mass. App. Ct. 1994) (applying six-year statute of

limitations to fraud and breach of fiduciary duty claims arising

out a defendant's alleged failure to perform under an agreement to

convey land)). In other words, the court elected to apply a

contract-based limitations period to the claims because plaintiff

had made allegations challenging defendants' conduct after

Loguidice purchased a MetLife plan.

The problem with this reasoning is that, of the three

claims that survived the district court's initial summary judgment

ruling (the correctness of which Loguidice does not dispute), only

the breach of fiduciary duty claim can be read to condemn post-

purchase conduct. See Compl. ¶¶ 55(b) and 56(b) (alleging, inter

alia, that defendants breached their fiduciary duty to Loguidice by

failing to use the money Loguidice gave them for the purposes for

which it was entrusted -- to fund a retirement plan). Moreover, by

the time discovery was completed and the parties had filed their

summary judgment papers, Loguidice had abandoned the post-purchase-

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conduct component of this claim, arguing only that Anastasia (and,

by extension, MetLife) had breached a fiduciary duty to her

"during" and "at the time of the sale" of the insurance policy.

Loguidice Mem. Opp'n Summ. J. at 46, 49. The alleged breaches of

legal duties here, having been committed by the defendants prior to

the formation of any agreement, are essentially tortious (thus,

Loguidice's fraud-in-the-inducement claim); they are not properly

regarded as contractual in "gist." Hendrickson, 310 N.E.2d at 132.

Accordingly, regardless whether the two-year limitations period in

Mass. Gen. Laws Ann. ch. 175, § 181 or the three- or four-year

limitations periods in, respectively, Mass. Gen. Laws Ann. ch. 260,

§§ 2A and 5A are deemed applicable (a matter of state law that we

need not and do not decide), Loguidice's claims are untimely unless

saved by the Massachusetts discovery rule.

The Massachusetts discovery rule applies to tort actions

and actions under Mass. Gen. Laws Ann. 93A. See Szymanski v.

Boston Mutual Life Ins. Co., 778 N.E.2d 16, 20 (Mass. App. Ct.

2002). The rule

operates to toll a limitations period until a prospective
plaintiff learns or should have learned that he has been
injured, [and] may arise in three circumstances: where a
misrepresentation concerns a fact that was "inherently
unknowable" to the injured party, where a wrongdoer
breached some duty of disclosure, or where a wrongdoer
concealed the existence of a cause of action through some
affirmative act done with the intent to deceive.

Patsos v. First Albany Corp., 741 N.E.2d 841, 846 (Mass. 2001)

(citation omitted). Loguidice invokes the first and second of

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these circumstances, contending that (1) the wrong visited upon her

was inherently unknowable (because of the complexity of the product

involved) until she read about MetLife's "scam" in the newspaper,

and (2) defendants, whom Loguidice contends were her fiduciaries,

failed to discharge their obligations to disclose facts that would

have put her on notice of her claims. In pressing the latter

argument, Loguidice invokes a principle of Massachusetts law that

treats a fiduciary's failure to disclose facts giving notice of a

claim as a fraudulent concealment sufficient to toll the running of

the relevant limitations period under Mass. Gen. Laws Ann. ch. 260,

§ 12 (1997) (tolling limitations periods where a "person liable to

a personal action conceals the cause of such action from the

knowledge of the person entitled to bring it"). Neither assertion

persuades us.

Loguidice's argument that the wrongs she suffered were

inherently unknowable until she read the newspaper article about

the class-action settlement is undercut by our unwillingness to

hand down expansive interpretations of state law at the request of

diversity plaintiffs. See, e.g., New Life Brokerage Servs., Inc.

v. Cal-Surance Assocs., Inc., ___ F.3d ___, No. 02-2348, slip op.

at 8 (1st Cir. June 24, 2003). Loguidice concedes that she did not

read through the folder Anastasia left with her when he delivered

her "plan" until after instituting this litigation. Had she looked

at the materials in the folder earlier, a reasonable fact finder

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would have to conclude, she would have learned that there was

nothing in the folder that could have constituted part of the

retirement plan she thought that she had purchased other than the

life insurance policy, which was distinctively so labeled. The

Massachusetts courts require plaintiffs seeking to invoke the

discovery rule to read the monthly statements sent by their

securities broker, see Patsos, 741 N.E.2d at 846-47, and seemingly

assume that they also must read their insurance policies, any

illustrations that accompany the policies, and their annual

statements, see Szymanski, 778 N.E.2d at 21-25. We therefore have

no reason to expect that the Massachusetts courts would forgive

Loguidice's failure to read through her folder. Because such a

read-through would have put Loguidice on inquiry notice of her

claims, the discovery rule does not save those claims. See Patsos,

741 N.E.2d at 846-47.

Loguidice's fraudulent concealment argument falters on

procedural grounds. The argument did not surface in connection

with either of her summary judgment submissions. Rather, it was

raised for the first time in a motion asking the district court to

reconsider its entry of judgment on her fraud and deceit, breach of

fiduciary duty, and Mass. Gen. Laws Ann. ch. 93A claims. This was

too late. See DiMarco-Zappa v. Cabanillas, 238 F.3d 25, 33 (1st

Cir. 2001) (issues first raised on a motion for reconsideration are

forfeit); CMM Cable Rep, Inc. v. Ocean Coast Properties, Inc., 97

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F.3d 1504, 1525-27 (1st Cir. 1996) (same).3

III.

If the facts alleged are true, the defendants' sales

tactics were shameful. But Loguidice failed to press any viable

claims she might have had as a result of these tactics until after

the relevant statute(s) of limitations had run. Because the

discovery rule does not save Loguidice's claims, we affirm the

judgment that was entered for defendants.

Affirmed.

3
In her reply brief, Loguidice appears to suggest that her
substantive claim for breach of fiduciary duty was sufficient to
preserve her argument in favor of tolling on the basis of
fraudulent concealment. We disagree. "Overburdened trial judges
cannot be expected to be mind readers. If claims are merely
insinuated rather than actually articulated in the trial court, we
will ordinarily refuse to deem them preserved for appellate
review." McCoy v. Massachusetts Inst. of Tech., 950 F.2d 13, 22
(1st Cir. 1991). Loguidice has failed to present us with any
developed argument against application of this rule, and we do not
see any basis for excusing her procedural default.

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