Eddy v. Colonial Life Ins. Co.

Opinion

 [*748]  WALD, Chief Judge

Joan Eddy appeals from a district court ruling that the Colonial Life Insurance Company ("Colonial Life" or "Chubb") did not breach its fiduciary duty to her son, James Peter Eddy, despite Eddy's claim that he received misleading information which resulted in the termination of his health and life insurance coverage. We hold that the district court erroneously construed Chubb's fiduciary duty to Eddy; accordingly, we reverse the district court's decision and remand for further proceedings.

I. Background

In May 1986, James Peter Eddy was diagnosed as "HIV-positive," that is, as infected with the virus that causes Acquired Immune Deficiency Syndrome (AIDS). Eddy's doctors told him that he had one year to live. Undaunted, Eddy continued to work at Unitag, a Washington, D.C. travel agency, where he served as [**2]  office manager. In the summer of 1987, his condition worsened. He developed symptoms often associated with AIDS - fevers, vomiting, weight loss; he underwent medical treatment for those symptoms; and, at his doctor's direction, he scheduled exploratory surgery for Monday, September 14. Trial Transcript ("Tr.") at 13-14.

At his office on September 10, Eddy received a memorandum. Its brevity belied its gravity:

Unitag's group health insurance policy [offered by Colonial Life] will terminate September 14, 1987. Any health costs you have incurred prior to September 14, 1987 will be covered by our present policy. However, no expenses incurred on or after September 14, 1987 will be covered[; they will instead] be your responsibility.

Four Seas has not made it clear whether they will cover you immediately or not. So for your convenience, Nabil [Mounla, Finance Director] has found a company willing to cover individuals for short temporary periods. An information booklet and application are enclosed.

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