Christoff v. Paul Revere Life Insurance Company, The

Background

Matthew J. Christoff brought a breach-of-contract action against The Paul Revere Life Insurance Company. Under the policy, Christoff began receiving $2,417 per month in disability benefits in early 2002. Paul Revere determined on December 30, 2016, that Christoff was no longer disabled and stopped making payments.

Christoff sought damages beyond the disability payments. The damages addressed in this motion concerned employer-provided health-insurance coverage, long-term-care insurance, and a $50,000 life-insurance policy that Spencer Stuart had provided, as well as the alleged loss of an opportunity to convert a Northwestern Mutual term-life policy into a whole-life policy. The opinion states that Christoff claimed the loss of those benefits resulted from Paul Revere’s decision to stop paying disability benefits.

Motion and parties’ arguments

Paul Revere moved for partial summary judgment under Rule 56, which allows judgment before trial when there is no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment under the law. The motion concerned damages claims identified as claims two through five in Christoff’s discovery response: reimbursement of health-insurance premiums, a comparable $50,000 life-insurance policy, a comparable long-term-care policy, and $1,125,000 for the lost opportunity to convert part of the Northwestern Mutual policy.

Paul Revere argued that these damages were unrecoverable extra-contractual damages or, alternatively, were not recoverable consequential damages. It also argued that Christoff could not prove causation because the damages were too remote and speculative. Christoff argued that the damages were recoverable consequential damages and that related questions should be decided by a jury.

Legal standard

Because the case was in federal court based on diversity jurisdiction, the court applied Minnesota law to the substantive contract issues. Under Minnesota law, contract damages generally seek to place the nonbreaching party in the position that performance would have produced.

The court explained that general damages naturally and necessarily result from a breach. Consequential damages are a natural but not necessary result of a breach. To recover consequential damages, a party must show that the damages were a natural result of the breach, were actually contemplated or reasonably foreseeable when the parties made the contract, and are monetary and capable of definite calculation.

The court focused on the second requirement: whether the parties contemplated or reasonably should have foreseen the claimed damages when they entered the Paul Revere contract in 1998. Although foreseeability is often a fact question for a jury, the nonmoving party must still present some evidence that would allow a reasonable jury to find foreseeability.

Court’s reasoning

The court found that Christoff presented no evidence about what the parties actually contemplated or reasonably should have foreseen in 1998 regarding either the Spencer Stuart benefits or the Northwestern Mutual policy. Christoff relied on evidence that Paul Revere was informed in 2009—about eleven years after contracting—that he risked losing the Spencer Stuart benefits. The court concluded that this did not provide evidence of what the parties contemplated or should have foreseen at the time of contracting. Christoff presented no evidence at all concerning contemplation or foreseeability of the Northwestern Mutual policy damages.

The court rejected Christoff’s argument that all consequential-damages questions automatically had to go to a jury. Because Christoff had the burden of proving damages at trial, he needed to provide concrete evidence supporting an essential element of the claims. The court also rejected reliance on Christoff’s statement that he might produce evidence through trial cross-examination.

The court stated that causation did not need to be addressed because the lack of evidence on consequential damages was dispositive. In a footnote, the court said that if it had reached causation, it likely would have found a genuine factual dispute and denied the motion on that issue.

Disposition

The court held that no genuine dispute of fact remained concerning the required contemplation or reasonable foreseeability of the claimed consequential damages. It ruled that Paul Revere was entitled to judgment as a matter of law on Christoff’s claims for consequential damages relating to the Spencer Stuart benefits and the Northwestern Mutual policy.

The court granted The Paul Revere Life Insurance Company’s Motion for Partial Summary Judgment. The order addressed the specified damages claims; it did not state that the entire breach-of-contract case was dismissed or enter a ruling on the causation issue.