Law School Site - Case Brief
Conley v. Pitney Bowles, 34
F.3d 714 (8th Cir. 1994).
Exception when one promise is
dependent on prior performance of the other--
Conley (P) was injured and received disability benefits from
Pitney Bowles (D), his employer. Subsequently, D notified P that
his disability benefits would be discontinued. P sued. D removed
the case to federal court because it involved benefits governed by
the federal ERISA statute. D moved for summary judgment on the
ground that P had not exhausted his administrative remedies. P
responded that D's notification letter did not contain an
explanation of the applicable appeals procedures. The district
court granted summary judgment for D. P appeals.
(2) Issue. When a benefits
contract requires a claimant to exhaust administrative remedies,
may the employer avoid liability to the claimant even though the
employer did not fully comply with the notice requirements in the
(3) Held. No. Judgment
(a) ERISA does not require
exhaustion of administrative remedies, but the provisions of the
plan do. However, the plan also requires D to provide P with
explicit instructions of the appeal procedures. This D failed to
(b) In bilateral contracts for an
agreed exchange of performances, when one party's performance is
to be rendered prior to that
of the other, it is a constructive
condition precedent to the latter's duty. This performance becomes
a condition precedent to the other's duty.
(c) In this case, D was required
to inform P of the appeal procedure when denying him benefits.
This requirement necessarily preceded P's duty to exhaust
administrative remedies. The requirement to explain appeals
procedures furthers the same goals that exhaustion of remedies
does. P had a contractual right to information on the appeals
procedure. D's failure to provide such information excuses P's
subsequent failure to exhaust remedies.
P consulted an attorney and
provided him with a copy of the benefits plan, which clearly set
forth the claim appeal procedure. This opinion favors form over
Bell v. Elder,
782 P.2d 545 (Utah Ct. App. 1989),
the seller of real estate was required to furnish culinary water
to the property being sold. The buyers sought rescission when the
sellers failed to first supply the water, despite the sellers'
promise to provide the water when requested. The contract did not
specify a time for the sellers to provide the water. The court
held that neither party could claim a breach by the other until
the party claiming the breach tendered performance of its
concurrent obligation. This rule reflected public policy and
common sense that installation of culinary water prior to the
buyers completing the purchase would be a waste.
All participants in the study group must always follow
the BSL Honor Code.