Eleanor Crose v. Humana Insurance Company , 823 F.3d 344 ( 2016 )

Case: 15-50559 Document: 00513516793 Page: 1 Date Filed: 05/23/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
May 23, 2016
No. 15-50559
Lyle W. Cayce
Clerk
ELEANOR CROSE, Individually and as Permanent Guardian of Ronald
Crose,
Plaintiff - Appellant
v.
HUMANA INSURANCE COMPANY,
Defendant - Appellee
Appeal from the United States District Court
for the Western District of Texas
Before HIGGINBOTHAM, PRADO, and GRAVES, Circuit Judges.
JAMES E. GRAVES, JR., Circuit Judge:
Eleanor Crose appeals the district court’s summary judgment for
Humana Insurance Company on her claims for breach of contract and unfair
insurance practices. Because summary judgment was warranted, we
AFFIRM.
FACTS AND PROCEDURAL BACKGROUND
On June 23, 2013, while Eleanor Crose attended a concert, her husband
Ronald Crose ingested ecstasy. Ms. Crose rejoined her husband at around
midnight at a friend’s home. When she arrived, Mr. Crose told her that he was
nauseated and suffering from diarrhea; he also stated that he had experienced
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No. 15-50559
a terrible headache earlier in the evening that felt like “his head was going to
explode.” Later that night, Mr. and Ms. Crose went on a walk, after which Ms.
Crose went to bed and Mr. Crose went to play music.
The next morning, Ms. Crose found her husband lying down in the
backyard, non-responsive with his face covered in vomit. Ms. Crose called for
an ambulance and told the operator that she believed that Mr. Crose had
overdosed. Emergency services transported him to a nearby hospital.
The emergency room doctor who initially treated Mr. Crose, Dr. Bogitch,
provided an assessment, stating:
This is [a] gentleman who unfortunately, with very little past
medical history, used [ecstasy] last night and was found down
today with a large intraparenchymal hemorrhage with an unusual
subarachnoid component as well as an entrapped ventricle and
early uncal herniation.
Dr. Bogitch also ordered a urine drug screen, which came back positive for
amphetamines (ecstasy), benzodiazepines (a prescription tranquilizer), and
cannabinoids (marijuana).
Another physician, Dr. Hinze, examined Mr. Crose; his report stated:
I suspect that [Mr. Crose’s stroke] is due to uncontrolled
hypertension likely from his ecstasy ingestion . . . . [Ecstasy
ingestion] would account for his diaphoresis, nausea, vomiting,
diarrhea and could produce a hypertensive state, which would
exacerbate if not initiate his [stroke].
Dr. Hinze’s report also noted that Mr. Crose rarely drinks alcohol and has a
history of smoking marijuana and taking ecstasy, but using ecstasy was an
“unusual event.”
At all times relevant to this appeal, Mr. Crose had an individual health
insurance policy with Humana. Mr. Crose submitted a claim with Humana
under the policy to cover the cost of medical services and treatments provided
to Mr. Crose as a result of his stroke. Humana denied the claim, citing the
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following exclusion in the policy: “Causation Exclusions . . . Loss due to being
intoxicated or under the influence of any narcotic unless administered on the
advice of a health care practitioner.”
Ms. Crose filed suit claiming breach of contract, unfair insurance
practices, and prompt payment violations under the Texas Insurance Code.
Humana filed a motion for summary judgment, which the district court
granted. Ms. Crose now appeals.
DISCUSSION
“We review a district court’s summary judgment de novo.” Health Care
Serv. Corp. v. Methodist Hosps. of Dallas, 814 F.3d 242, 247 (5th Cir. 2016).
We review the facts in a “light most favorable to the non-moving party.”
Cannon v. Jacobs Field Servs. N. Am., Inc., 813 F.3d 586, 590 (5th Cir. 2016).
Summary judgment is appropriate if the moving party shows “that there is no
genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Cass v. City of Abilene, 814 F.3d 721, 728 (5th Cir. 2016)
(citing Fed. R. Civ. P. 56(a)). “A genuine issue of material fact exists when the
evidence is such that a reasonable jury could return a verdict for the non-
moving party.” Crownover v. Mid-Continent Cas. Co., 772 F.3d 197, 201 (5th
Cir. 2014).
I.
The parties agree that Texas law governs this case. Under Texas law,
the elements of a breach of contract claim are: “(1) the existence of a valid
contract; (2) performance or tendered performance by the plaintiff; (3) breach
of the contract by the defendant; and (4) damages to the plaintiff resulting from
that breach.” Hunn v. Dan Wilson Homes, Inc., 789 F.3d 573, 579 (5th Cir.
2015) (citing Foley v. Daniel, 346 S.W.3d 687, 690 (Tex. App.—El Paso 2009,
no pet.)), cert. denied, 136 S. Ct. 592 (2015). Generally, “for an insurance
company to be liable for a breach of its duty to satisfy a claim presented by its
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insured, the insured must prove that its claim falls within the insuring
agreement of the policy.” Data Specialties, Inc. v. Transcont’l Ins. Co., 125 F.3d
909, 911 (5th Cir. 1997). There is no dispute that the Croses are seeking
benefits ordinarily covered by the Humana policy. Because the dispute is
instead over the application of an exclusion, the burden shifts to Humana to
show that the exclusion applies. Century Sur. Co. v. Hardscape Constr.
Specialties, Inc., 578 F.3d 262, 265 (5th Cir. 2009). For the exclusion to apply,
Humana must show that the term “narcotic” includes ecstasy and that Mr.
Crose’s stroke was “due to . . . being under the influence” of ecstasy. We begin
with the definition of “narcotic.”
A.
“Insurance policies are controlled by rules of interpretation and
construction which are applicable to contracts generally.” Nat. Union Fire Ins.
Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995).
Because “narcotic” is not defined by the policy, we are tasked with determining
whether the term has “a definite or certain legal meaning.” Texas Indus., Inc.
v. Factory Mut. Ins. Co., 486 F.3d 844, 846 (5th Cir. 2007). In other words, the
terms of an insurance policy must be given their plain and ordinary meaning
unless there is evidence that the parties intended otherwise. Am. Nat’l Gen.
Ins. Co. v. Ryan, 274 F.3d 319, 323 (5th Cir. 2001). But, when a term is
susceptible to multiple reasonable interpretations, then it is ambiguous. See
Potomac Ins. Co. of Illinois v. Jayhawk Med. Acceptance Corp., 198 F.3d 548,
550-51 (5th Cir. 2000). If ambiguous, the term is to be “construed liberally in
favor of the insured and strictly against the insurer.” Kelly Assocs., Ltd. v.
Aetna Cas. & Sur. Co., 681 S.W.2d 593, 596 (Tex. 1984). Because neither the
Texas Supreme Court nor the Fifth Circuit has previously defined “narcotic”
in insurance contracts, we must make an Erie guess to define the term.
Amerisure Ins. Co. v. Navigators Ins. Co., 611 F.3d 299, 311 (5th Cir. 2010).
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Ms. Crose contends that the district court erred by finding that “narcotic”
is not ambiguous and by rejecting her definitions of “narcotic,” derived from
federal and state law, as well as pharmacological uses of the term, that she
submitted to the district court. Those definitions limit “narcotic” to drugs
derived from a plant and classify ecstasy as a “hallucinogen” instead of a
“narcotic.” Humana counters that Ms. Crose’s definitions are technical in
nature, and therefore unreasonable. We agree with Humana.
Texas law dictates that the “terms [of an insurance policy be] given their
ordinary and generally-accepted meaning unless the policy shows the words
were meant in a technical or different sense.” Gilbert Tex. Const., L.P. v.
Underwriters at Lloyd’s London, 327 S.W.3d 118, 126 (Tex. 2010). This means
that technical definitions of policy terms are unreasonable unless the policy
provides otherwise. See, e.g., Horn v. State Farm Lloyds, 703 F.3d 735, 739 (5th
Cir. 2012) (accepting the plain meaning of the terms “any” and “cases” and
rejecting technical definitions of the terms as unreasonable); Am. Mfrs. Mut.
Ins. Co. v. Schaefer, 124 S.W.3d 154, 158-59 (Tex. 2003) (rejecting a technical
definition of the term “repair” as unreasonable). Concluding otherwise would
“ignor[e] the policy[’s] language or giv[e] the contract[’s] text a meaning never
intended.” Schaefer, 124 S.W.3d at 159 (internal quotations omitted).
The district court found that the ordinary and generally-accepted
meaning of narcotic is “[a] drug affecting mood or behaviour [sic] which is sold
for non-medical purposes, esp. one whose use is prohibited or under strict legal
control but which tends nevertheless to be extensively used illegally.” Neither
party contends that the policy allows technical definitions of the term.
Therefore, Ms. Crose’s definitions of “narcotic,” which are derived from state
and federal statutes and pharmacological uses of the term, are unreasonable.
The district court did not err when it applied the ordinary meaning of narcotic.
See Dynegy Midstream Servs., L.P. v. Apache Corp., 294 S.W.3d 164, 168 (Tex.
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2009) (“A contract is not ambiguous simply because the parties disagree over
its meaning.”). 1
B.
Having defined “narcotic” to include ecstasy, we must now determine
whether Humana met its burden to show that Mr. Crose’s stroke was “due to
. . . being under the influence” of ecstasy. But first we must decide which theory
of causation is derived from the exclusion’s use of “due to.”
i.
In Utica National Insurance Co. v. American Indemnity Co., the Texas
Supreme Court was tasked with interpreting “due to” in an insurance policy
exclusion. 141 S.W.3d 198 (Tex. 2004). The court determined that “due to” is
“more than simple cause in fact . . . [and] requires a more direct type of
causation.” Id. at 203. While not specifically assigning a standard, the Texas
Supreme Court did distinguish it from the lesser burden of causation derived
from the phrase “arise out of” which requires only “but for causation.” Utica
1 Ms. Crose also argues that the South Carolina Supreme Court’s decision defining
narcotic to exclude methamphetamine in Hutchinson v. Liberty Life Insurance Co., 743
S.E.2d 827 (S.C. 2013), is persuasive. We reject, however, another court’s interpretation of
a term if that definition would cause a conflict with the law of the forum state. See, e.g., Sport
Supply Group, Inc. v. Columbia Casualty Co., 335 F.3d 453, 462 n.8 (5th Cir. 2003). Applying
Hutchinson to this case requires that we disregard Texas’s explicit command to apply the
ordinary meaning of an undefined term absent evidence that the parties intended otherwise.
Since no such evidence exists, we may not do so.
Nor is Metropolitan Life Insurance Co. v. Main, 383 F.2d 952 (5th Cir. 1967), binding
or persuasive. In Main, the primary issues were whether the insured’s death was accidental
and whether any disease or mental infirmity contributed to the insured’s death. 383 F.2d at
958. As Ms. Crose points out, the Main court did state that certain drugs were not narcotics.
Id. But, this classification of the drugs appears in the opinion’s statement of facts and is not
relevant to the exclusions being applied. In fact, it is unclear why the panel includes the
statement that certain drugs are not narcotics or habit-forming drugs other than to be
thorough. Thus, the statement is dicta, and not binding. See United States v. Lipscomb, 619
F.3d 474, 481 n.5 (5th Cir. 2010) (King, J. concurring) (“We are free to disregard dicta from
prior panel opinions when we find it unpersuasive.”).
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National, 141 S.W.3d at 203 (internal citations and quotations omitted).
Therefore “due to” calls for a more direct causal nexus than “but for” causation.
Similarly, in Likens v. Hartford Life & Accident Insurance Co., we
determined that an intoxication exclusion in an insurance policy required the
insurance company to show that intoxication was a proximate cause of the
excluded loss. 688 F.3d 197, 202 (5th Cir. 2012). In that case, the insured’s
survivors argued that a fall precipitating the insured’s death could be
attributed to the insured’s clumsiness, and that because intoxication could not
be proven to be the sole cause of the fall, the exclusion should not apply. Id. at
201. We disagreed and interpreted the exclusion, which stated that the policy
did not cover injuries “sustained as a result of being legally intoxicated from
the use of alcohol” to mean that the insurance company need only show that
intoxication was a “significant” or “substantial” cause of the fall, not the only
cause. Id. at 202–03. We noted that because the standard of causation was not
precisely defined, we would interpret the phrase “as a result of” to require
proximate causation as this interpretation favored the insured. Id. at 202.
Reading Utica National and Likens together, the district court concluded
that “due to” should be read as requiring a proximate cause analysis. We agree
this is the appropriate standard of causation in this case. Although the Texas
Supreme Court has not precisely defined the standard of causation for the term
“due to” in an exclusionary clause, see Utica National, 141 S.W.3d at 203, we
follow our approach in Likens and interpret this phrase in a manner that favors
the insured, and hold that “due to” requires a showing of proximate causation. 2
2 Although the proximate standard of causation was not adopted by the Court of
Appeals of Texas in Seitel Data, Ltd. v. Simmons, 362 S.W.3d 782, 792 (Tex. App.—
Texarkana 2012, no pet.), the court rejected the “tort theory” of proximate causation, which
is not at issue in the present case. Rather, we refer to proximate cause in terms of its
application within insurance law, where the foreseeability element is not required. See
Stroburg v. Ins. Co. of N. Am., 464 S.W.2d 827, 831 (Tex. 1971); 46 Tex. Jur. 3d Ins. Contracts
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Humana must therefore show that Mr. Crose’s use of narcotics was a
“significant” or “substantial” cause of his stroke, but not that it was the only
cause. 3
ii.
We now turn to whether Humana met its burden to show that Mr.
Crose’s stroke was “due to . . . being under the influence” of ecstasy. To meet
this burden, Humana must show that the ingestion of ecstasy was a significant
cause of Mr. Crose’s stroke. We conclude that Humana has done so in several
ways.
First, there is ample evidence in the record that ecstasy can lead to a
stroke. For example, an expert witness for Ms. Crose stated in his report that
ecstasy causes hypertension and that “hypertension is the most common
attributable risk factor” associated with strokes. The same report included
medical journal articles confirming that a short- and long-term side effect of
ecstasy use is hypertension. A second expert report included testimony stating
that the “use of ecstasy can increase the odds of suffering an ischemic stroke
or intracerebral hemorrhages.” Humana’s expert also testified and included
attachments to his report showing that ecstasy can cause a stroke. 4
Second, Mr. Crose’s medical records strongly suggest that his ingestion
of ecstasy contributed to his stroke. The emergency room physician that
& Coverage § 776. In addition, the court in Seitel was not interpreting an exclusionary
provision of an insurance contract, wherein ambiguous terms should be interpreted so as to
favor the insured. See Likens, 688 F.3d at 202; Kelly Assocs., Ltd. v. Aetna Cas. & Sur. Co.,
681 S.W.2d 593, 596 (Tex. 1984).
3 Ms. Crose alternatively argues that Humana has the burden to show that no other
cause resulted in Mr. Crose’s stroke. This argument, however, necessarily fails because
Humana need not show that ecstasy was the sole cause of Mr. Crose’s stroke.
4 Ms. Crose also asserts that Humana failed to carry its burden on causation because
it did not submit expert testimony showing that Mr. Crose’s stroke was caused by his ecstasy
ingestion. Humana’s expert report, including attachments showing a causal connection
between ecstasy use and strokes, conclusively rebuts this argument.
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treated Mr. Crose, Dr. Bogitch, stated in his assessment that Mr. Crose had
“very little past medical history” and no family history of strokes. Dr. Bogitch
also stated that Mr. Crose had used ecstasy the night before he was admitted,
and arrived at the hospital with “a very large . . . hemorrhage.” Another
physician, Dr. Hinze, “suspect[ed] that [Mr. Crose’s stroke was] due to
uncontrolled hypertension likely from his ecstasy ingestion . . . [which] would
account for his [symptoms] and could produce a hypertensive state, which
would exacerbate if not initiate his [stroke].” Mr. Crose’s medical records show
that an otherwise healthy man, with no medical or family history of strokes,
took ecstasy, which led to hypertension and eventually a stroke.
Finally, the temporal proximity between an otherwise healthy man
taking ecstasy and then experiencing severe headaches and having a stroke is
relevant proof of causation. See Guevara v. Ferrer, 247 S.W.3d 662, 667-68
(Tex. 2007). The record therefore results in a clear causal line: 1) ecstasy
causes hypertension, 2) hypertension is the leading cause of stroke, 3) Mr.
Crose ingested ecstasy, 4) he then presented side effects of hypertension, and
5) shortly after presenting these symptoms, Mr. Crose had a stroke which his
doctors noted was caused by hypertension. Because it is undisputed that Mr.
Crose used ecstasy prior to his stroke and his medical records show that Mr.
Crose had no medical or family history of hypertension or strokes, the ingestion
of ecstasy was a significant cause of Mr. Crose’s stroke. 5
5 Humana argues that the Croses waived appeal of their unfair insurance practice
claims because they failed to address them in their opening brief. The Croses contend that
they are not required to specifically brief the unfair insurance practice claims because they
are intertwined with the breach of contract claim. We have consistently held that failure to
brief an issue in the opening brief abandons that issue on appeal. See, e.g., Akuna Matata
Invs., Ltd. v. Texas Nom Ltd. P’ship, 814 F.3d 277, 282 n.6 (5th Cir. 2016); United States v.
Thames, 214 F.3d 608, 611 n.3 (5th Cir. 2000). This rule is applied regardless of whether the
claims are intertwined or related. Therefore, given our precedent, the Croses have waived
their appeal of the district court’s dismissal of the unfair insurance practice claims.
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CONCLUSION
The judgment of the district court is AFFIRMED.
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