Todd v. AIG Life Insurance , 47 F.3d 1448 ( 1995 )

United States Court of Appeals,
Fifth Circuit.
No. 94-10420.
Nancy J. TODD, Plaintiff-Appellee, Cross-Appellant,
v.
AIG LIFE INSURANCE COMPANY, et al., Defendants-Appellants, Cross-
Appellee.
Nancy J. TODD, Plaintiff-Appellee, Cross-Appellant,
v.
GROUP ACCIDENT INSURANCE PLAN FOR EMPLOYEES OF E-SYSTEMS, INC.,
et al., Defendants-Appellants, Cross-Appellee.
March 29, 1995.
Appeals from the United States District Court for the Northern
District of Texas.
Before WHITE, Associate Justice (Ret.),* BARKSDALE and PARKER,
Circuit Judges.
WHITE, Associate Justice (Ret.):
This case, a suit for recovery of benefits under the Employee
Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001
et seq., involves the construction of an accidental death insurance
policy and arises from the unfortunate death by asphyxiation of
appellee's husband. The insurer refused to pay the policy's
benefits after concluding that the death was not accidental. The
district court granted summary judgment in appellee's favor,
finding that the loss resulted from an accident within the terms of
the policy, holding that liability extended beyond the insurer to
*
The Honorable Byron R. White, Associate Justice of the
United States Supreme Court, (Ret.), sitting by designation,
pursuant to 28 U.S.C. § 294(a).
1
the employee welfare benefit plan and its administrator, and
awarding attorneys' fees. The defendants appealed. We affirm the
district court's judgment regarding policy coverage but reverse on
the extended liability issue and remand for a proper determination
of attorneys' fees.
I.
Richard A. Todd was found dead at his home in Rockwall, Texas,
on April 25, 1991. The cause of death was determined to be
autoerotic asphyxiation, the practice of limiting the flow of
oxygen to the brain during masturbation in an attempt to heighten
sexual pleasure. When found, Todd was lying on his bed with a
studded dog collar around his neck; the collar, in turn, was
attached to two leather leashes of differing lengths, one of which
passed over Todd's back and attached to an ankle. Apparently, Todd
gradually tightened the collar around his neck by pulling on the
leashes, thereby reducing the supply of oxygen reaching his brain.
Instead of simply restricting the flow of oxygen enough to increase
his sexual gratification, however, Todd tightened the collar to the
point at which he passed out. Todd apparently designed the system
of leashes to loosen the ligature in the event he became
unconscious; unfortunately, the collar failed to release and
ultimately terminated the flow of oxygen permanently. The autopsy
report listed the cause of death as "asphyxia due to ligature
strangulation," ruling the manner of death "accidental."
At the time of his death, Todd was covered by an "Accidental
Death and Dismemberment Insurance" policy provided by his employer,
2
E-Systems, Inc., as part of an employee welfare benefit plan
falling within the ambit of ERISA. AIG Life Insurance Company
issued the E-Systems policy, which was administered by the Group
Accident Insurance Plan ("GAI"), with David V. Roberts serving as
the plan administrator.
Appellee, Nancy J. Todd, was the decedent's wife and his
beneficiary under the policy. Shortly after her husband's death,
appellee presented her claim for benefits to the E-Systems employee
welfare benefit plan and AIG through a claims processing
organization, the American International Adjustment Company
("AIAC"). In an October 1991 letter written on behalf of AIG, an
AIAC claims examiner denied appellee's claim, finding that "[t]he
circumstances of [Todd's] death point to the fact that he was
risking his life by his actions" and explaining that "[a] death
[cannot] be considered accidental ... [i]f from the viewpoint of
the Insured, his conduct was such that he should have anticipated
that in all reasonable probability he would be killed."
After the ERISA Appeals Review Committee upheld the claims
examiner's decision, appellee filed suit against AIG and AIAC in
Texas state court, alleging various state common law and statutory
claims. The case was removed to the United States District Court
for the Northern District of Texas based upon the applicability of
ERISA. Faced with the contention that all of her state law claims
were preempted by that statute, 29 U.S.C. § 1144(a); Pilot Life
Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S. Ct. 1549, 95 L. Ed. 2d 39
(1987), appellee amended her complaint to allege a claim for
3
failure to pay benefits under the insurance policy pursuant to
ERISA, 29 U.S.C. § 1132(a)(1)(B). She also joined as parties the
GAI Plan and its administrator, alleging that these defendants
breached their fiduciary duties under ERISA, 29 U.S.C. §§ 1104(a)
and 1109(a). Cross-motions for summary judgment were filed. The
district court observed that "the parties are in agreement on the
underlying facts," and that the case posed strictly the legal
question whether the policy covered Todd's death. Memo. Op. 1.
The court filed an opinion and entered final judgment in favor of
appellee on all issues.
Appellants present three issues on appeal: whether Todd's
death was covered by the AIG accidental death insurance policy,
whether the ERISA employee welfare benefit plan and its
administrator can be held liable for the benefits owed by the
insurer, and whether the district court's calculation of attorneys'
fees was proper. We consider each in turn.
II.
Summary judgment is appropriate if the record discloses "that
there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law."
Fed.R.Civ.P. 56(c). We review a district court's grant of summary
judgment de novo and must evaluate the facts in the light most
favorable to the non-moving party. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89
L. Ed. 2d 538 (1986). In the ERISA context, in turn, "a denial of
benefits challenged under § 1132(a)(1)(B) is to be reviewed under
4
a de novo standard unless the benefit plan gives the administrator
or fiduciary discretionary authority to determine eligibility for
benefits or to construe the terms of the plan." Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S. Ct. 948, 956, 103
L. Ed. 2d 80 (1989). See also Schultz v. Metropolitan Life Ins. Co.,
872 F.2d 676, 678 (5th Cir.1989). No such grant of authority was
included in the E-Systems policy, so we accord no deference to the
administrator's ultimate determination. Cf. Pierre v. Connecticut
General Life Ins. Co., 932 F.2d 1552, 1553 (5th Cir.) (concluding
that a plan administrator's findings concerning facts underlying
the claim for benefits should be reviewed for abuse of discretion),
cert. denied, 502 U.S. 973, 112 S. Ct. 453, 116 L. Ed. 2d 470 (1991).
A.
The first issue in this case is whether, on the facts before
it, the district court erred in ruling the death to be accidental
within the meaning of the policy insuring the plan. Preliminarily,
we note that it is undisputed that federal law governs this issue,
including the construction of the policy provisions. Congress, in
adopting ERISA, expected that "a federal common law of rights and
obligations under ERISA-regulated plans would develop." Pilot
Life, 481 U.S. at 56, 107 S.Ct. at 1558; see also Firestone, 489
U.S. at 110, 109 S.Ct. at 954. In ascertaining the applicable
federal common law, this court has explained, we may " "draw
guidance from analogous state law.' " Brandon v. Travelers Ins.
Co., 18 F.3d 1321, 1325 (5th Cir.1994) (quoting McMillan v.
Parrott, 913 F.2d 310, 311 (6th Cir.1990)). We must nevertheless
5
bear in mind that, "[i]n so doing, [we] may use state common law as
a basis for new federal common law ... only to the extent that
state law is not inconsistent with congressional policy concerns."
Thomason v. Aetna Life Ins. Co., 9 F.3d 645, 647 (7th Cir.1993);
see also Heasley v. Belden & Blake Corp., 2 F.3d 1249, 1257 n. 8
(3rd Cir.1993); Jamail, Inc. v. Carpenters District Council of
Houston Pension & Welfare Trusts, 954 F.2d 299, 304 (5th Cir.1992).
We also note that the district court held that, in construing
the language of ERISA plans, federal law must follow the rule of
contra proferentem, which directs that when plan terms remain
ambiguous after applying ordinary principles of contract
interpretation, courts are to construe them strictly in favor of
the insured.1 This ruling comports with this court's holdings in
ERISA cases. Ramsey v. Colonial Life Ins. Co. of America, 12 F.3d
472, 479 (5th Cir.1994); Hansen v. Continental Ins. Co., 940 F.2d
971, 982 (5th Cir.1991). Other circuits also apply the rule in
ERISA cases where construction of insurance documents is involved,
e.g. Heasley, 2 F.3d at 1257-58; McNeilly v. Bankers United Life
Assurance Co., 999 F.2d 1199, 1201 (7th Cir.1993); Delk v. Durham
Life Ins. Co., 959 F.2d 104, 106 (8th Cir.1992);2 Kunin v. Benefit
1
Of course, the language of insurance contracts should be
given their ordinary and generally accepted meaning if there is
one, see, e.g., Hardester v. Lincoln Nat'l Life Ins. Co., 33 F.3d
330, 334 (4th Cir.1994). "We interpret ERISA plans in an
ordinary and popular sense as would a person of average
intelligence and experience." Meredith v. Allsteel Inc., 11 F.3d
1354, 1358 (7th Cir.1993).
2
The company relies on Brewer v. Lincoln Nat'l Life Ins.
Co., 921 F.2d 150, 153-54 (8th Cir.1990), cert. denied, 501 U.S.
1238, 111 S. Ct. 2872, 115 L. Ed. 2d 1038 (1991), to oppose the
6
Trust Life Ins. Co., 910 F.2d 534, 539-40 (9th Cir.), cert. denied,
498 U.S. 1013, 111 S. Ct. 581, 112 L. Ed. 2d 587 (1990); see also
Glocker v. W.R. Grace & Co., 974 F.2d 540, 544 (4th Cir.1992).3
At long last, we turn to the relevant provisions of the
insurance policy involved here. First, the policy defines "injury"
as "bodily injury caused by an accident occurring while this policy
is in force as to the Insured Person and resulting directly and
independently of all other causes in loss covered by this policy."
Second is a schedule of benefits payable:
Accidental Death and Dismemberment Indemnity: When injury
results in any of the following losses to an Insured Person
within 365 days of the date of the accident, the Company will
pay in one sum the indicated percentage of the Principal
Sum....
This provision is followed by a list of possible losses and
corresponding benefits; death of the insured entitles the
beneficiary to payment of the entire value of the policy. The
policy contains various exclusions from coverage, including loss
due to "suicide or any attempt thereat," but there is no general
application of contra proferentem in ERISA cases. Besides
ignoring the controlling precedents in this Circuit, it also
fails to mention the Eighth Circuit decision in Delk, cited above
in the text, as well as the Ramsey court's reliance on Delk in
applying contra proferentem in the ERISA context.
3
The district court also observed, Memo. Op. 11, that it is
the company's burden clearly to exclude those acts it does not
intend to cover, and that acts that are not expressly omitted or
excluded are covered. Applied literally, there being no
exclusion for autoerotic acts or for intentionally inflicted
injuries, no more would have been required to decide this case.
As will be seen, however, the district court did not take this
course, although it did make much of the fact that insurance
companies are aware, because of claims made against them, that
autoerotic practices exist and pose some risk of death.
7
exclusion for self-inflicted injury.
1.
We deal first with AIG's submission, presented to the district
court and renewed here, that as a matter of federal law governing
ERISA employee benefit plans the court should announce a per se
rule that death or other bodily injury caused by autoerotic
activity is never the result of an accident within the meaning of
an accidental death or injury policy insuring such a plan. The
essence of the argument is that common to all such activities is
the intentional strangulation for the purpose of inducing asphyxia,
which in this case led to death. "The "injury,' " it is said, "was
the strangulation and the resulting asphyxia," and it could not
have been "caused by an accident" because the injury was plainly
intentionally inflicted. Brief of Appellants 12. So viewed, there
is no ambiguity in the policy language and hence no room for the
contra proferentem rule in cases such as this.
The district court, having noted the variety and ambiguity of
dictionary and case-law definitions of the words "accident" and
"accidental," and having reviewed the sparse history and current
knowledge of autoeroticism, did not believe that the cases dealing
with such activities warranted such a per se rule. We also are not
impressed with AIG's submission. It is true that Todd intended to
strangle himself to reduce the flow of blood and oxygen to the
brain thereby creating the condition of asphyxia, a word denoting
a shortage of oxygen reaching the brain or other bodily tissue.
That condition need not result in the loss of consciousness, which
8
it will, of course, if prolonged for more than a few moments. The
longer the asphyxia lasts, the greater the injury, and it need last
only a few minutes for death to ensue. In this case, even if we
assume that Todd intended the degree of injury from asphyxia that
would cause him to lose consciousness, it is plain enough that this
condition is not an injury that necessarily leads to death. It is
commonplace for those who suffer from such a condition to regain
consciousness and survive without any permanent damage. What
killed Todd was not the mere loss of consciousness from the
temporary lack of oxygen in his brain; it was the further injury
to the brain and other bodily functions caused by the prolonged
lack of oxygen-laden blood. To claim that such additional injury
was intended is to aver that Todd intended to die, which AIG
expressly agrees he did not. See Brief of Appellants 15.
Perhaps bodily injuries "intentionally" inflicted by the
insured are not caused by accident, even without a policy exclusion
of intentional injuries; but in our view the injuries that caused
death in this case, and very likely in other similar cases, were
not intentionally inflicted. The claimed basis for announcing a
per se rule of federal law—that death by autoerotism of the kind
involved in this case cannot be accidental—is thus untenable.
It is true that the federal courts of appeals to have dealt
with cases of this kind have denied recovery under the applicable
insurance policy. But none of those cases, which AIG cites in
support of its per se rule proposition, purports to lay down any
federal law governing ERISA insurance cases. None of them involved
9
an ERISA plan; each of them was a diversity action controlled by
state law which dictated either that the death was not accidental
or that a self-inflicted injury exclusion barred recovery under the
policy.4
2.
Of course, the central question in this case remains to be
decided: whether, even though Todd did not intend or expect to
die, the injury that killed him was or was not an "accident" within
the meaning of the policy.5 That word, without more, the district
4
See Sims v. Monumental General Ins. Co., 960 F.2d 478, 480
(5th Cir.1992) (insurance policy expressly excluded any loss
(including death) "resulting directly or indirectly, wholly or
partly from ... an intentionally self-inflicted injury"); Sigler
v. Mutual Benefit Life Ins. Co., 506 F. Supp. 542, 545 (S.D.Iowa
1981) (explaining that the elements of an intentionally
self-inflicted injury were met where the decedent's "voluntary
acts were intended to temporarily restrict his air supply to
heighten the sensations of masturbation"), aff'd, 663 F.2d 49
(8th Cir.1981); International Underwriters, Inc. v. Home Ins.
Co., 662 F.2d 1084, 1087 (4th Cir.1981) (applying Virginia law
and concluding that, "[b]ecause the decedent voluntarily placed
his neck in the [hangman's-type] noose and tightened the same to
the point where he lost consciousness, we think his death was the
natural result of a voluntary act unaccompanied by anything
unforeseen except death or injury"); Runge v. Metropolitan Life
Ins. Co., 537 F.2d 1157, 1159 (4th Cir.1976) (same).
5
Cases in this area have often debated whether there exists
a valid distinction between various formulations of accidental
death policies, particularly those that refer to injuries by
"accidental means." The Texas Supreme Court has concluded that
such phrases as " "accidental death' and "death by accidental
means,' as those terms are used in insurance policies, must be
regarded as legally synonymous unless there is a definition in
the insurance contract itself which requires a different
construction." Republic Nat'l Life Ins. Co. v. Heyward, 536
S.W.2d 549, 557 (Tex.1976). The court in Wickman v. Northwestern
Nat'l Ins. Co. came to the same conclusion. 908 F.2d 1077, 1085-
86 (1st Cir.), cert. denied, 498 U.S. 1013, 111 S. Ct. 581, 112
L. Ed. 2d 586 (1990). Because most recent cases seem to reject the
accidental means distinction, and because the parties have not
pressed the issue in this case, we do not believe any debate on
10
court observed, has no single, generally accepted meaning either in
the dictionaries, the cases construing it, or in common parlance.
Hence, after considering the published writings about autoerotic
practices, the court turned to the cases dealing with such
activities for help.
One of the few cases dealing specifically with deaths from
autoeroticism, Sims v. Monumental General Insurance Company, 960
F.2d 478 (1992), came from this Circuit. It was not an ERISA case
and was governed by Louisiana law. Recovery was denied under an
accidental death policy, not because the death was not accidental,
an issue the court carefully avoided, but because the policy
expressly did not cover losses, including death, "resulting
directly or indirectly, wholly or partly from ... [an]
intentionally self inflicted injury."6 We noted that recovery had
also been denied by the Fourth Circuit in two similar cases,
International Underwriters, Inc. v. Home Ins. Co., 662 F.2d 1084
(1981), and Runge v. Metropolitan Life Ins. Co., 537 F.2d 1157
(1976), on the ground that, under Virginia law, the deaths were not
accidental; we also explained that, in another similar case,
Kennedy v. Washington Nat'l Ins. Co, 136 Wis. 2d 425, 401 N.W.2d
842, 846 (1987), the Wisconsin Court of Appeals had ruled that a
death from autoeroticism was accidental and covered by the
this point affects our decision.
6
The district court in the case before us stated that had
the policy before it contained an adequate self-inflicted injury
exclusion, which the insurer could have included in its policy
but did not, recovery would have been denied.
11
insurance policy at issue. The Sims court neither agreed nor
disagreed with these three cases.
The essence of the two Fourth Circuit cases rejecting coverage
was explained as follows:
[D]eath was the natural result of a voluntary act
unaccompanied by anything unforeseen except death or
injury.... [The decedent] is bound to have foreseen that
death or serious bodily injury could have resulted when he
voluntarily induced unconsciousness with a noose around his
neck. We are thus of opinion that his death was not an
accident under Virginia law....
International Underwriters, 662 F.2d at 1087 (emphasis added).
Sims also noted Sigler v. Mutual Benefit Life Ins. Co., 663 F.2d 49
(8th Cir.1981). That decision rejected coverage for an autoerotic
death based both on a self-inflicted injury exclusion in the policy
and on its view, relying on Runge, supra, that the death was not
accidental "since a reasonable person would have recognized that
his action could result in his death." Id. at 49 (emphasis added).
In Kennedy, the Wisconsin case, the sole issue was whether the
term "accidental death" in the insurance policy included death by
autoerotic asphyxiation. The intermediate appellate court held
that the death was accidental. In doing so, based on decisions of
the Wisconsin Supreme Court, it rejected the notion that death
could not be accidental if it was a foreseeable or the natural
result of a force or event voluntarily set in motion by the
insured. In the court's view, it was not enough that the act might
or could have caused the injury or death; only "when an insured
participates in some act where serious injury or death is highly
probable or an inevitable result"—only when it can be concluded
12
that the insured, in effect, intended that result—can the result of
his conduct be held not to be accidental. Id. 401 N.W.2d at 846.
As the court saw it, autoerotic activity may be risky but death is
not a normal, expected result of this behavior; it was not of such
a nature that Kennedy knew or should have known that it probably
would have resulted in death. Ibid.
The district court in the instant case also discussed the
decision by the Texas Court of Civil Appeals in Connecticut General
Life Insurance Company v. Tommie, 619 S.W.2d 199 (1981), another
case that involved a claim that a death from autoerotic activity
was accidental and covered by the applicable insurance policy. The
plaintiff relied on two experts, both of whom testified that death
is not the normal or expected result of the kind of autoerotic
activity in the case and that death would not be reasonably
expected.7 The court affirmed the jury verdict that the death was
accidental, ruling that it could be otherwise only " "when the
consequences of the act are so natural and probable as to be
7
"Dr. Norton testified that she encountered from time to
time in her medical practice the same type of auto-erotic
activity as Mr. Tommie was engaged in, and that while some forty
deaths per year were reported in the United States as a result of
such activity, death is not the normal expected result of that
behavior, but would be considered unusual or unexpected. Dr.
Montgomery also agreed that death in those circumstances would
not be reasonably expected. Dr. Norton further testified that it
was likely that Mr. Tommie had engaged in the practice for
several years, considering his age and the fact that such
behavior generally begins in young men during pubescence or
shortly thereafter." Tommie, 619 S.W.2d at 202. We note here
that while a ruling on the cross motions for summary judgment was
awaited, appellee filed a designation of expert witnesses,
indicating that her witnesses would testify as the experts had in
Tommie.
13
expected by any reasonable person' " and were, in effect, intended
by the insured. Id. at 202 (quoting Freeman v. Crown Life Ins.
Co., 580 S.W.2d 897 (Tex.Civ.App.1979)). This ruling was based on
the Texas Supreme Court decision in Republic Nat'l Life Ins. Co. v.
Heyward, 536 S.W.2d 549, 557 (Tex.1976), which held: "[I]njuries
are "accidental' and within the coverage of an insurance policy ...
if, from the viewpoint of the insured, the injuries are not the
natural and probable consequence of the action or occurrence which
produced the injury; or in other words, if the injury could not
reasonably be anticipated by [the] insured, or would not ordinarily
flow from the action or occurrence which caused the injury."
After the review of these autoerotic death cases, which were
governed by state law and which produced inconsistent results, the
district court sought help from two ERISA cases that did not
involve autoerotic activity. In Brown v. American International
Life Assurance Co., 778 F. Supp. 912 (S.D.Miss.1991), an arsonist,
a participant in an ERISA plan, died in the fire she had lit. The
court ruled her death accidental because she plainly had the
subjective expectation that she would survive and because, on the
facts presented, this expectation was not unreasonable. Id. at
918.
The second ERISA case that impressed the district court was
Wickman v. Northwestern Nat'l Ins. Co., 908 F.2d 1077 (1st Cir.),
cert. denied, 498 U.S. 1013, 111 S. Ct. 581, 112 L. Ed. 2d 586 (1990).
There the deceased had climbed over a bridge guardrail and was
holding on with one hand when he fell and later died from his
14
injuries. The court of appeals affirmed the judgment below that
the death was not caused by an accident. The magistrate had found
that serious bodily injury was substantially certain to happen and
that "Wickman knew or should have known that serious bodily injury
was a probable consequence substantially likely to occur as the
result" of his conduct. Id. at 1081. This finding, the court of
appeals said, "equates with a determination either that Wickman
expected the result, or that a reasonable person in his shoes would
have expected the result, and that any other expectation would be
unreasonable." Id. at 1089. The district court in the case before
us quoted the above passages from Wickman and ruled that as a
matter of law Todd's death from autoerotic conduct was not
substantially certain to happen and that he reasonably expected to
survive. Memo.Op. 19-20.8
8
We note here that a definition of the word "accident" more
favorable to the insured appealed to the United States District
Court for the Western District of Arkansas in Parker v. Danaher
Corp., 851 F. Supp. 1287 (1994), a decision rendered a short time
after the judgment of the district court in the present case and
not cited by any of the briefs before us here. (An appeal in the
case was dismissed on motion of the appellants on May 31, 1994.)
Other than the instant case, Parker is the only case we found in
which a federal court has interpreted and applied an accidental
injury clause in an insurance policy issued in connection with an
ERISA employee benefit plan where the claimed loss was a death
connected with autoerotic activity.
The Parker court examined in some detail the cases
involving claims under accidental death policies in which
the fatalities resulted from autoerotic activities. It
noted that these cases were not ERISA cases and apparently
found nothing in them persuasive enough to decide the case
before it. It also examined the First Circuit's decision in
Wickman, supra, and found that opinion wanting. It
preferred to follow what it deemed to be the teaching of the
Eighth Circuit that ERISA plans and insurance policies
connected therewith be interpreted as an ordinary plan
15
Having surveyed the authorities upon which the decision was
based, we affirm the judgment of the district court that Todd's
death was accidental and within the coverage of the policy insuring
the employee benefit plan. That Todd neither intended nor expected
to die as the result of his autoerotic conduct AIG does not
dispute. Indeed, it did not invoke the policy's provision
excluding coverage for suicide. Nor does it question the averments
in Mrs. Todd's affidavit filed with her motion for summary judgment
participant would—meaning that the language should be given
its ordinary rather than a specialized meaning. As the
court saw it, under this approach "the common man in the
street regards an accident as being something unintended,
not according to the usual course of things, or not as
expected." Id. at 1295. Because "it is undisputed that the
insured did not expect to die ... in the common
understanding of man Timothy Parker's death would be
regarded as accidental." Id. (emphasis added). As we
understand the opinion, under this view it is enough for the
plaintiff to prove that the insured expected to survive
without proving the reasonableness of that expectation. The
court thought this approach wholly consistent with, if not
dictated by, Brewer v. Lincoln Nat'l Life Ins. Co., 921 F.2d
150 (8th Cir.1990). Interestingly enough, this was without
the help of the contra proferentem doctrine, which the court
ruled inapplicable in ERISA cases by reason of the Eighth
Circuit's decision in Brewer. But see Delk, 959 F.2d at
106.
We observe also that the Parker definition of accident
is not inconsistent with some dictionary definitions. See,
e.g., Webster's Ninth New Collegiate Dictionary 49 (9th ed.
1985) (defining "accident" as "an unforeseen and unplanned
event or circumstance") Moreover, the First Circuit, in
Wickman, seemed to indicate that the narrower definition had
some support in the common law and took pains to explain it
away. 908 F.2d 1077, 1087-88. Although Mrs. Todd was
familiar with Wickman, we fail to find an argument for this
more favorable definition in her written papers in the
record before the district court, and the argument is not
presented here. Indeed, in both courts, Mrs. Todd was and
is content to submit that her husband's death was not only
unintended and unexpected, but also that his expectation was
quite reasonable.
16
that Todd was gainfully employed at the time of his death and that
the Todds had been married for many years, had two children, were
planning a family vacation soon, and were building a new house.
The district court's finding that Todd did not expect to die is
well founded.
The district court held, however, and the parties agree, that
the deceased's expectation of survival, without more, is not
enough. In this respect, the court adopted the essentials of the
Wickman approach. That expectation must be reasonable; and, as we
see it and as we think the district court saw it, the expectation
would be unreasonable if the conduct from which the insured died
posed such a high risk of death that his expectation of survival
was objectively unrealistic. The district court concluded that the
risk of death involved in the conduct at issue must reach the level
of "substantial certainty" before the resulting death could be
deemed nonaccidental. That language was borrowed from the
magistrate judge's opinion in Wickman; but the district court also
quoted the magistrate's words, which surely have the same import,
describing the triggering risk to be that death was substantially
likely to occur from the insured's volitional act, which the court
of appeals in turn observed was the equivalent of "highly likely to
occur."
We think the district court description of what is and is not
an accident fell within the rules for construing insurance
contracts, including the principle of contra proferentem. That is,
what the district court did is consistent with, if not necessarily
17
compelled by, the rule that we interpret such policies in favor of
the insured. The district court here followed the essence of
Wickman: for death under an accidental death policy to be deemed
an accident, it must be determined (1) that the deceased had a
subjective expectation of survival, and (2) that such expectation
was objectively reasonable, which it is if death is not
substantially certain to result from the insured's conduct. This
holding was appropriate.
AIG, as it did in the district court, relies on the Fourth
Circuit cases and Sigler from the Eighth Circuit to furnish the
applicable standard, and asserts here that such a standard is
really no different from the Wickman rendition. Under those cases,
however, it need be only foreseeable that death "could" result, not
that death was "highly likely." Of course, AIG's position that the
versions are indistinguishable means that it is content with the
Wickman approach.
This leaves us with the question whether the district court
erred in holding that, as a matter of law, the autoerotic conduct
in this case did not risk death to a "substantial certainty" (or
its equivalents). In our opinion, there was no error. The record
is silent on whether and how often Todd had previously practiced
this conduct without dying. But the materials before the court
clearly indicated that the likelihood of death from autoerotic
activity falls far short of what would be required to negate
coverage under the policy we have before us.
In a treatise on autoerotic deaths, the authors observe that
18
"[a]utoerotic or sexual asphyxia refers to the use of asphyxia to
heighten sexual arousal, more often than not with a nonfatal
outcome." Hazelwood, Dietz & Burgess, Autoerotic Fatalities 49
(1983).9 Similarly, the experts in the Tommie case testified that
death from the practice would be considered unusual, see 619 S.W.2d
at 202, and the court in the Kennedy case ruled that the risk of
death from autoerotic practice is "not of such a nature that [the
decedent] knew or should have known that it probably would result
in death. Death was not a normal expected result of the behavior."
401 N.W.2d at 845. In addition, an article by Jane Brody in the
New York Times of March 27, 1984, observes that, according to
researchers, "[i]n a small but significant number of cases" of
autoeroticism, "the person dies before he can restore his oxygen
supply."
We cannot say the trial judge erred in his final ruling on
this phase of the case. AIG complains that it was error to grant
summary judgment to Mrs. Todd but does not allege that there was a
factual dispute that required a trial; it asks only that we
reverse and order judgment for AIG on its claim that no death from
autoeroticism can be deemed an accident. This left to the judge to
decide as a matter of law whether the risk of death from autoerotic
9
"The empirical study of autoerotic fatalities based on
submitted cases was initiated by Roy Hazelwood in the Behavioral
Science Unit of the FBI Academy at about the same time as Park
Dietz was tracing the history of the subject while at Johns
Hopkins and the University of Pennsylvania. Ann Burgess, who had
been conducting studies of victims of sexual assault, proposed
that we collaborate. This book is the product of that
collaboration." Hazelwood, Dietz & Burgess, Autoerotic
Fatalities, ix.
19
activity in general is sufficient to deny coverage as
nonaccidental. As we see it, the trial court ruled correctly.
We add this postscript to this part of the case. It may be
that all this writing is necessary to affirm this part of the
judgment for appellee, but it is doubtful that it should have any
longlasting significance for deciding cases like this. The life
insurance companies have ample ways to avoid judgments like this
one.
B.
After concluding that appellee was entitled to payment of
benefits for Todd's death under the E-Systems accidental death
insurance policy, the district court went on to hold that liability
for those payments also extends, by virtue of a breach of fiduciary
duty, to the GAI Plan itself and to Roberts, the E-Systems plan
administrator. The court determined that, "[b]ased on the
overwhelming amount of evidence that Mr. Todd's death was
"accidental' within the parameters of the policy as drafted this
Court finds that the Plan Administrator did abuse his discretion in
denying Plaintiff's request for benefits under the policy."
Memo.Op. 21. The court noted that the policy included no specific
grant of discretionary authority to the administrator to construe
plan terms, and it focused upon the claims examiner's apparent
reliance, in part, upon a conclusion that Todd engaged in "risky
behavior" when no such caveat is stated or explained in the policy.
Because appellee did not seek damages greater than the amount of
benefits denied, see Massachusetts Mutual Life Ins. Co. v. Russell,
20
473 U.S. 134, 105 S. Ct. 3085, 87 L. Ed. 2d 96 (1985), the district
court concluded that both GAI and Roberts were proper parties. The
appellants argue that the district court erred in entering judgment
against Roberts and the GAI Plan because there was no evidence of
a breach of fiduciary duty on their part. We agree.
ERISA requires that a fiduciary, such as a plan administrator:
[S]hall discharge his duties with respect to a plan solely in
the interest of the participants and beneficiaries and (A) for
the exclusive purpose of: (i) providing benefits to
participants and their beneficiaries; and (ii) defraying
reasonable expenses of administering the plan; [and] (B) with
the care, skill, prudence, and diligence under the
circumstances that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims....
29 U.S.C. § 1104(a)(1). The statute then provides that "[a]ny
person who is a fiduciary with respect to a plan who breaches any
of the responsibilities, obligations, or duties imposed upon
fiduciaries ... shall be personally liable to make good to such
plan any losses to the plan resulting from such breach...." 29
U.S.C. § 1109(a). However, ERISA also provides that "[a]ny money
judgment ... against an employee benefit plan shall be enforceable
only against the plan as an entity and shall not be enforceable
against any other person unless liability against such person is
established in his individual capacity...." 29 U.S.C. §
1132(d)(2).
We have already concluded that the administrator made an
erroneous decision in denying benefits in this case. We disagree
with the district court, however, that the administrator's reading
of the policy in this case (through the claims examiner) "is
21
tantamount to rewriting the policy" and that his behavior
"constitutes a blatant abuse of discretion" that rises to the level
of a breach of fiduciary duty. Memo. Op. 21. Initially, it is
important to note that our review of the record reveals no evidence
that Roberts, as plan administrator, was personally involved in
this case in any way. Moreover, as we discuss above, the claims
examiner was required to make some determination of the risk
involved in the autoerotic activity in evaluating whether Todd's
death resulted from an "accident" within the meaning of the policy.
Indeed, the examiner's letter recited language substantially
similar to that employed by courts deciding similar cases. We
disagree with the conclusion reached, but not with the examiner's
basic analytical approach. Every erroneous benefits determination
does not rise to the level of a breach of fiduciary duty, and
appellee has failed to demonstrate that Roberts breached the
statutory standard prescribed by ERISA.
Appellants also contend that the GAI Plan, as the employee
welfare benefit plan maintained by E-Systems, is not a fiduciary
under ERISA because it is only the source of benefits—i.e., a
conduit for payment by AIG—and performs no fiduciary functions.
Again, although the record is rather sparse on this point, we
agree. ERISA defines the term "fiduciary" as follows:
[A] person is a fiduciary with respect to a plan to the extent
(i) he exercises any discretionary authority or discretionary
control respecting management of such plan or exercises any
authority or control respecting management or disposition of
its assets, (ii) he renders investment advice for a fee or
other compensation, direct or indirect, with respect to any
moneys or other property of such plan, or has any authority or
responsibility to do so, or (iii) he has any discretionary
22
authority or discretionary responsibility in the
administration of such plan.
29 U.S.C. § 1002(21)(A). Given that an ERISA plan as an entity
cannot have discretionary authority over itself, we conclude that
the GAI Plan does not fall within the statutory definition of a
fiduciary and therefore cannot be liable for breach of duty.
C.
Under ERISA, "the court in its discretion may allow a
reasonable attorneys' fee and costs of action to either party." 29
U.S.C. § 1132(g)(1). Such an award, as the statute states, is
purely discretionary; the Fifth Circuit reviews the district
court's decision only for an abuse of discretion. Salley v. E.I.
DuPont de Nemours & Co., 966 F.2d 1011, 1016 (5th Cir.1992). The
court has generally required, however, that the following five
factors be considered in deciding whether to award attorneys' fees
to a party under § 1132(g)(1):
[A] court should consider such factors as the following: (1)
the degree of the opposing parties' culpability or bad faith;
(2) the ability of the opposing parties to satisfy an award of
attorneys' fees; (3) whether an award of attorneys' fees
against the opposing party would deter other persons acting
under similar circumstances; (4) whether the parties
requesting attorneys' fees sought to benefit all participants
and beneficiaries of an ERISA plan or to resolve a significant
legal question regarding ERISA itself; and (5) the relative
merits of the parties' position.
Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255, 1266 (5th
Cir.1980). While other circuits have asserted that a presumption
exists under ERISA in favor of awarding costs and attorneys' fees,
that is not the law in the this Circuit. Harms v. Cavenham Forest
Industries, Inc., 984 F.2d 686, 694 (5th Cir.1993). In this case,
23
the district court does not appear to have considered the Bowen
factors in making its award. Indeed, the court simply awarded the
amounts requested in counsel's affidavit (one third of the amount
of judgment, or $40,000, plus an additional $15,000 for this
appeal).
The appellants object to the award of attorneys' fees in this
case on a narrower ground, arguing that the district court abused
its discretion in making the award without considering the amount
of time expended and the hourly rate. The Supreme Court has
endorsed the "lodestar" method for calculating attorneys' fees
under federal "fee shifting" statutes. See Hensley v. Eckerhart,
461 U.S. 424, 433, 103 S. Ct. 1933, 1939, 76 L. Ed. 2d 40 (1983). The
standards set forth in that case, the Court explained, "are
generally applicable in all cases in which Congress has authorized
an award of fees to a "prevailing party.' " Id. at 433 n. 7, 103
S. Ct. at 1939 n. 7. Of course, ERISA does not use the "prevailing
party" language in its attorneys' fees provision. In later cases,
however, the Supreme Court has consistently emphasized that the
lodestar calculation provides an appropriate, objective basis on
which to make an initial estimate of the value of a lawyer's
services. See, e.g., Pennsylvania v. Delaware Valley Citizens'
Council for Clean Air, 478 U.S. 546, 564, 106 S. Ct. 3088, 3097, 92
L. Ed. 2d 439 (1986). And this court has approved the use of the
lodestar calculation in ERISA cases, even if it has not been
explicitly required. See, e.g., Salley, 966 F.2d at 1017.
In an ERISA case, the determination of attorneys' fees
24
requires the district court to apply a two-step analysis. The
court must first determine whether the party is entitled to
attorneys' fees by applying the five factors enumerated in Bowen.
If the court concludes that the party is entitled to attorneys
fees, it must then apply the loadstar calculation to determine the
amount to be awarded. This calculation is accomplished by
multiplying the number of hours expended on the matters at issue in
the case by a reasonable hourly rate. See Delaware Valley
Citizens' Council, 478 U.S. at 564, 106 S.Ct. at 3097; see also
Salley, 966 F.2d at 1017. This two-step analysis in ERISA cases
does not permit the award of a percentage of the recovery, such as
is customary in contingent fee cases. Therefore, we find that the
district court abused its discretion by failing to apply both the
Bowen factors and the loadstar calculation. Accordingly, we vacate
the district court's order concerning attorneys' fees and remand
for a proper determination of the amount, if any, to which appellee
is entitled through the application of the two-step analysis
articulated above.
III.
In summary, we hold that Todd's death resulted from a "bodily
injury caused by an accident" within the meaning of the accidental
death insurance policy at issue; we AFFIRM the district court's
judgment on this point. We REVERSE the district court's decision,
however, insofar as it holds the GAI Plan and Roberts liable for
the payment of benefits to appellee. Finally, we VACATE the
court's judgment on attorneys' fees and REMAND for recalculation.
25
It is so ordered.
26