PAUL M. PRUSKY, as trustee of the Windsor Securities, Inc. Profit Sharing Trust v. Prudential Insurance Company of America

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 02-1004
___________
PAUL M. PRUSKY, as trustee of the
Windsor Securities, Inc. Profit
Sharing Trust,
Appellant
v.
PRUDENTIAL INSURANCE COMPANY
OF AMERICA
___________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
District Court Judge: Berle M. Schiller
(Civil Action No. 00-cv-02783)
___________
Submitted Under Third Circuit L.A.R. 34.1(a)
July 16, 2002
Before: SCIRICA, ALITO, and FUENTES, Circuit Judges.
(Opinion Filed: August 1, 2002)
________________________
OPINION OF THE COURT
________________________ FUENTES, Circuit Judge:
This case involves a contract dispute between Paul M. Prusky ("Prusky") and the
Prudential Insurance Company ("Prudential") over a life insurance policy that allowed
Prusky to invest portions of his insurance premiums into certain sub-accounts in an
investment fund. During a bench trial before the District Court, Prusky alleged that
Prudential breached their contract by unilaterally changing the cut-off time for
transferring funds to the sub-accounts from 4:15 p.m. to 4:00 p.m. The District Court
entered judgment in favor of Prudential, finding that the cut-off time for making transfers
is not a term of the contract. Prusky now appeals, contending that transfer notices take
effect under the contract on the date Prudential receives them, regardless of their time of
receipt.
Because we find that Prusky waived the right to present the argument he now
offers on appeal, we will affirm the Judgment of the District Court.
I.
We write for the parties only and thus state the facts in summary. Prusky, as
trustee of the Windsor Securities, Inc. Profit Sharing Trust, owns a life insurance contract
(the "Contract") issued by Prudential. Under the terms of the Contract, Prusky can invest
portions of his insurance premiums into various "sub-accounts." Prudential then invests
each sub-account in a specific portfolio of the Prudential Series Fund (the "Series
Fund"), a separate entity. According to Prudential, the Contract allows Prusky to transfer
funds between the different sub-accounts on every business day, provided the transfer is
reported to Prudential before a certain transfer cut-off time. On appeal, Prusky alleges

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that there is no transfer cut-off time. Prusky’s investments in the sub-accounts are
evaluated each day at the Series Fund’s valuation time.
The parties agree that, when the Contract was purchased, the parties understood
that the transfer cut-off deadline and valuation time for the Series Fund were 4:15 p.m.
New York City time. Ap. at 2a. However, on June 16, 2000, the board of directors of
the Series Fund adopted a resolution that changed the Series Fund’s valuation time to the
close of the regular trading session of the New York Stock Exchange ("NYSE"), which
is generally 4:00 p.m. On that same day, Prudential moved the transfer cut-off deadline
to the Series Fund’s valuation time.
Prusky filed his original complaint in June 2000 and his amended complaint in
November 2000. His amended complaint claimed that the Contract guaranteed Prusky
the right to a 4:15 p.m. transfer cut-off time and that Prudential had breached the
Contract by changing the cut-off time to 4:00 p.m. Prusky sought injunctive and
declaratory relief forcing Prudential to honor the 4:15 p.m. cut-off time for transfers
between the sub-accounts. Following a bench trial on the merits, the District Court
found that Prudential had not breached the contract and entered judgment in its favor on
October 30, 2001. In reaching its decision, the court concluded that the cut-off time for
making transfers among the sub-accounts is not a term of the Contract. Ap. at 46a.
In November 2001, Prusky filed a motion to amend the District Court’s findings of
fact, conclusions of law, and judgment. In his motion, Prusky contended for the first
time that the Contract "mandates that a transfer will be effected at any time on the date
received and not on a subsequent date." Ap. at 365a (emphasis in original). The District
Court denied Prusky’s reconsideration motion on December 3, 2001. Prusky now
appeals from the final judgment entered on October 30, 2001, and from the order
denying his motion for amendment of the court’s findings of fact, conclusions of law, and
judgment.
II.
The District Court exercised jurisdiction over this matter based upon the diversity
of the parties. See 28 U.S.C. 1332(a)(1). We have appellate jurisdiction pursuant to 28
U.S.C. 1291. We review a district court’s findings of fact for clear error, Scully v. US
WATS, Inc., 238 F.3d 497, 505 (3d Cir. 2001), and its conclusions of law de novo,
Henglein v. Colt Industries Operating Corp., 260 F.3d 201, 208 (3d Cir. 2001).
III.
On appeal, Prusky contends that the District Court erred in concluding that the
Contract does not provide a deadline for effecting transfers. He claims that the plain
language of the Contract provides that transfer notices take effect on the date Prudential
receives them, regardless of the time of their receipt. Prudential responds that, because
Prusky is now offering an interpretation of the contract different from and contrary to the
one that he presented at trial, he has waived the right to argue in favor of this conflicting
interpretation on appeal. We agree.
"Generally, ’absent compelling circumstances an appellate court will not consider
issues that are raised for the first time on appeal.’" Ross v. Hotel Employees and
Restaurant Employees Intern. Union, 266 F.3d 236, 242 (3d Cir. 2001) (quoting
Patterson v. Cuyler, 729 F.2d 925, 929 (3d Cir.1984), overruled on other grounds
recognized in Carter v. Rafferty, 826 F.2d 1299 (3d Cir.1987)). "[A]rguments asserted
for the first time on appeal are deemed to be waived . . . absent exceptional circumstances
(e.g., the public interest requires that the issues be heard or manifest injustice would
result from the failure to consider such issues)." Brown v. Philip Morris Inc., 250 F.3d
789, 799 (3d Cir. 2001).
Prusky’s position at trial was that the transfer cut-off time is 4:15 p.m. under the
Contract. In his Complaint, he stated that, "[u]nder the Contract, transfers between and
among sub-accounts become effective at the close of the then-current valuation period,
which at the time Prudential sold the Contract, was 4:15 p.m." Ap. at 75a. In his closing
argument at trial, Prusky’s counsel remarked, "We know that the parties intended in 1997
that the transfer would take effect on the date that the transfer request is received at the
home office, if it were received by 4:15 [p.m. New York Time]." Ap. at 173a. Prusky
maintains, however, that his current position on appeal (that there is no transfer cut-off
time) is not inconsistent with his stance at trial because his position at trial relied upon

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his previous understanding that a separate prospectus constituted part of the Contract an
understanding that, according to Prusky, was later rejected by the District Court. Thus,
Prusky contends that, because his position at trial depended upon his belief that the
prospectus was a part of the Contract, that position does not contradict his current
position, which is based on a different understanding of what constitutes the Contract.
Because we find that it is and always has been clear under the express language of
the Contract that the Contract consists of only the policy and any attached copy of an
application, we cannot accept Prusky’s argument. The Contract plainly states, "This
policy and any attached copy of an application, including an application requesting a
change, form the entire contract." Ap. at 189a (emphasis added). In describing the
contract as "the policy and attached application," (Ap. at 13a.), the District Court simply
recited the express language of the Contract. We find that it would be improper to
consider the court’s description of the Contract as a critical finding with significant
ramifications to the parties’ understanding of the case. Because Prusky had ample
opportunity prior to final judgment to present to the District Court the theory he now
offers on appeal, and because we see no compelling circumstances justifying an
exception to the general waiver rule, we conclude that Prusky has waived his right to
introduce that theory here.
IV.
For the reasons stated above, we will affirm the Judgement of the District Court.
_____________________________
/s/ Julio M. Fuentes
Circuit Judge

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