Green v. Life Insurance Co. of North America , 754 F.3d 324 ( 2014 )

Case: 13-60049 Document: 00512660335 Page: 1 Date Filed: 06/11/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 13-60049 United States Court of Appeals
Fifth Circuit
FILED
June 11, 2014
LINDSEY GREEN; BRENDA GREEN,
Lyle W. Cayce
Plaintiffs-Appellants, Clerk
v.
LIFE INSURANCE COMPANY OF NORTH AMERICA,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of Mississippi
Before STEWART, Chief Judge, and DeMOSS and CLEMENT, Circuit Judges.
CARL E. STEWART, Chief Judge:
Lindsey Green and Brenda Green (collectively “Plaintiffs”) appeal the
district court’s grant of summary judgment in favor of Life Insurance of North
America (“LINA”) upholding LINA’s denial of life insurance benefits to
Plaintiffs, beneficiaries of the two policies at issue. Plaintiffs also appeal the
modification of a discovery order. We AFFIRM both of these decisions.
Case: 13-60049 Document: 00512660335 Page: 2 Date Filed: 06/11/2014
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FACTS AND PROCEDURAL HISTORY
Joshua Green (“Green”), husband of Lindsey Green and son of Brenda
Green, died while operating a boat on July 16, 2010. Around 8:20 p.m, he called
his wife to say he was on his way home. When he did not arrive, she called the
police. The Coast Guard found Green in his boat the next morning. He had
died because of a head injury sustained when his boat struck the support legs
of a landing light at Keesler Air Force Base. 1 The police report and radio log
on the incident noted that Green had a blood alcohol content of .243, there were
empty beer bottles and cans in the boat, he had not been using his running
lights, 2 and when he had spoken to his wife he sounded intoxicated. Sunset on
July 16, 2010 occurred at 7:59 p.m. and civil twilight, the point at which
terrestrial objects become indistinguishable, was 8:26 p.m. The official death
certificate declared the death to be accidental, occurring when Green struck a
concrete piling. It listed the immediate causes of death as (1) contusions of the
brain, (2) depressed skull fracture, and (3) violent impact to the top of the head.
It listed as a significant other condition acute alcohol intoxication.
A. Green’s Life Insurance Policies
Plaintiffs sought to recover on two Accidental Death and
Dismemberment (“AD&D”) policies Green held with Life Insurance Company
of North America (“LINA”) through his employer, Northrop Grumman
Corporation. The policies are governed by the Employee Retirement Income
Security Act, 29 U.S.C. § 1001, et seq. (“ERISA”). LINA is the issuer, insurer,
claims administrator, and plan administrator 3 of the two policies. The
1 Both parties agree the light was not lit.
2 Both parties agree that running lights are merely navigational, indicating the size,
position, or course of the boat. There is no evidence in the record that he had a spotlight on
board, which would have shone light on the path in front of him.
3 Although in the administrative record LINA disclaimed any responsibility for the
plan’s summary description booklet, a responsibility of the plan’s administrator, LINA does
not challenge that it is considered a plan administrator for these policies on appeal.
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policyholder is the Trustee of the Group Insurance Trust for Employers in the
Manufacturing Industry, and Northrop Grumman is the subscriber of the
policy. The policies defined a “Covered Accident” as:
[A] sudden, unforeseeable, external event that results,
directly and independently of all other causes, in a
Covered Injury or Covered Loss and meets all of the
following conditions: 1. occurs while the Covered
Person is insured under the policy; 2. is not
contributed to by disease, Sickness, mental or bodily
infirmity; 3. is not otherwise excluded under the terms
of this policy.
The policies included as a “Common Exclusion” from recovery number 8:
[O]perating any type of vehicle while under the
influence of alcohol or any drug, narcotic or other
intoxicant including any prescribed drug for which the
Covered Person has been provided a written warning
against operating a vehicle while taking it. Under the
influence of alcohol, for purposes of this exclusion,
means intoxicated, as defined by the law of the state
in which the Covered Accident occurred.
B. Procedural History
LINA initially denied Plaintiffs’ claims for three reasons: (1) Green’s
death was not a “Covered Accident” because he operated a vehicle while
intoxicated; (2) Green’s death was not a “Covered Accident” because he
operated a boat at night without the aid of lights; and, (3) Green was legally
intoxicated and the policies excluded recovery for any injury caused by
operating a vehicle under the influence of alcohol or drugs. Plaintiffs appealed
alleging that LINA: (1) misinterpreted Mississippi and federal law, which
required foreseeability to be viewed from the standpoint of the insured; (2)
misinterpreted the policy’s definition of vehicle; (3) ignored Green’s cause of
death; and (4) relied on an invalid blood sample. After notifying Plaintiffs that
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they would require an extension to address Plaintiffs’ arguments, LINA denied
this appeal nearly three months later. LINA reiterated that Green
intentionally operated his boat while intoxicated, making the risk of injury or
death substantially certain, foreseeable, and not independent of all causes.
Separately, LINA relied on the policies’ exclusion of coverage for any accident
involving the operation of a vehicle while intoxicated.
On June 3, 2011, Plaintiffs filed suit in federal district court seeking
recovery. Throughout the discovery process, LINA was reluctant to provide
certain documents. The magistrate judge issued an order compelling discovery
but later modified it. The district court affirmed this decision. Both parties
filed motions for summary judgment. The district court granted LINA’s motion
for summary judgment and denied Plaintiffs’. Plaintiffs timely appealed both
the modified discovery order and grant of summary judgment to LINA. We
address each in turn.
DISCUSSION
A. Discovery Order
The magistrate judge reconsidered and modified the original discovery
order after LINA demonstrated that the order would require a review of 25,000
claims. The modified order required LINA to produce: (1) any policies or
procedures which could have been utilized but limited to current and past
policies and procedures for three years prior to the incident; and, (2) claims
demonstrating LINA’s interpretation of Northrop Grumman plans’
intoxication exclusion for participants similarly situated to Green since 2007.
The AD&D guide, policies, and manuals Plaintiffs sought had not been used
since 2002 and, because outdated policies and procedures were irrelevant
under ERISA, see 29 C.F.R. § 2560.503–1(m)(8), the magistrate judge did not
order their production. The district court affirmed this decision.
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We review a district court’s decision to limit discovery for abuse of
discretion. Crosby v. La. Health Serv. & Indem. Co., 647 F.3d 258, 261 (5th
Cir. 2011). A district court abuses its broad discretion when its decision is
based on an erroneous view of the law, but we will only vacate a court’s
judgment if it affected the substantial rights of the appellant. Id. The
appellant must prove both abuse of discretion and prejudice. Id. We have
instructed district courts to “monitor discovery closely” in ERISA cases and to
limit discovery if “the burden or expense of the proposed discovery outweighs
its likely benefit, considering the needs of the case, . . . and [inter alia] the
importance of the discovery in resolving the issues.” Id. at 264 (internal
quotation marks and citations omitted). Given these considerations, we hold
that there was no error in modifying this discovery order.
B. The Policies
1. Standard of Review
“Standard summary judgment rules control in ERISA cases.” Cooper v.
Hewlett–Packard Co., 592 F.3d 645, 651 (5th Cir. 2009) (internal quotation
marks omitted). We review a “district court’s grant of summary judgment de
novo, applying the same standards as the district court.” Id. Summary
judgment is appropriate when “there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a). “When parties file cross-motions for summary judgment, we review
each party’s motion independently, viewing the evidence and inferences in the
light most favorable to the nonmoving party.” Duval v. N. Assur. Co. of Am.,
722 F.3d 300, 303 (5th Cir. 2013) (internal quotation marks omitted).
If the plan gives the administrator discretionary authority to determine
eligibility for benefits or to construe the plan’s terms, we review a decision to
deny benefits only for abuse of discretion. Atkins v. Bert Bell/Pete Rozelle NFL
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Player Ret. Plan, 694 F.3d 557, 566 (5th Cir. 2012). If there is no such grant of
discretion, our review is de novo. Id. “Whether the district court employed the
appropriate standard in reviewing an eligibility determination made by an
ERISA plan administrator is a question of law” that we review de novo. Ellis
v. Liberty Life Assur. Co. of Bos., 394 F.3d 262, 269 (5th Cir. 2004). However,
“with or without a discretion clause, a district court rejects an administrator’s
factual determinations in the course of a benefits review only upon the showing
of an abuse of discretion.” Dutka ex rel. Estate of T.M. v. AIG Life Ins. Co., 573
F.3d 210, 212 (5th Cir. 2009).
Plaintiffs argue that the district court erred when it reviewed LINA’s
determination for abuse of discretion only. The district court relied on
language in the summary plan description (“SPD”) to grant LINA discretion to
interpret the policy’s terms. Plaintiffs argue that this was improper in light of
the Supreme Court’s decision in CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011)
and our decision in Koehler v. Aetna Health Inc., 683 F.3d 182 (5th Cir. 2012).
LINA contends that the plan does confer discretion when read as a whole,
specifically relying on the language in both the SPD and in the “claims
provisions” section of the plan. The “claims provisions” section contains a
“proof of loss” subsection, which states “[w]ritten or authorized electronic proof
of loss satisfactory to Us must be given . . . .” Plaintiffs respond that there is a
circuit split over whether this “satisfactory to Us” language is sufficient to
confer discretion and that it is not sufficient in this case. 4 See Gross v. Sun
4 Plaintiffs also argue that LINA’s conflict of interest, failure to comply with ERISA
procedures, such as denying the appeal outside of the 60 day window, and per se policy
against covering alcohol-related incidents demand a de novo standard of review. These
arguments are unavailing. This court and the Supreme Court have been clear that a conflict
of interest does not change the standard of review but affects only the amount of deference
given under an abuse of discretion standard of review. Metro. Life Ins. Co. v. Glenn, 554 U.S.
105, 115–19 (2008); Firman v. Life Ins. Co. of N. Am., 684 F.3d 533, 539 (5th Cir. 2012). The
same is true for the procedural irregularities and LINA’s alleged per se practices. See Glenn,
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Life Assur. Co. of Can., 734 F.3d 1, 12–13 (1st Cir. 2013) (discussing at length
the circuit split on this issue); see also Cosey v. Prudential Ins. Co. of Am., 735
F.3d 161, 168 & n.3 (4th Cir. 2013) (holding that the court “now join[s] the
circuits that decline to impose an abuse-of-discretion standard of review” based
on this language, and therefore, disagreeing with the “minority of circuits” that
have concluded that the language does confer discretion).
We need not decide this issue because even under a de novo standard of
review Plaintiffs’ claims are unavailing. Therefore, we assume without
deciding that the standard of review for these policies is de novo.
2. Green’s Accident
LINA determined that the circumstances of Green’s death were not
covered by the policies on two separate grounds: (1) the policies’ exclusion
precluded coverage for an accident occurring while an insured operated a
vehicle while intoxicated; and (2) the accident was not a “Covered Accident” as
defined by the policies because it was a foreseeable result of Green’s actions.
Because we conclude that LINA properly applied the policy exclusion we need
not address whether the accident was a “Covered Accident” as defined by the
policies.
Plaintiffs argue that this case is identical to Firman and that because
LINA applied a per se policy excluding coverage for any death involving
554 U.S. at 118–19; Firman, 684 F.3d at 539. Further, LINA adequately refutes Plaintiffs’
allegations and establishes its compliance with ERISA. To the extent Plaintiffs rely on a
Tenth Circuit case, LaAsmar v. Phelps Dodge Corp. Life Accidental Death & Dismemberment
and Dependent Life Ins. Plan, 605 F.3d 789 (10th Cir. 2010), for the proposition that a delay
in deciding an appeal justifies a de novo standard of review, the reasoning from that case is
inapplicable here. LINA complied with ERISA regulations for seeking an extension and
informed Plaintiffs of the delay. In any event, this court rejects “arguments to alter the
standard of review based on procedural irregularities in ERISA benefit determinations, such
as delays in making a determination,” without a showing of “potential wholesale or flagrant
violations that evidence an utter disregard of the underlying purpose of the plan.” Atkins v.
Bert Bell/Pete Rozelle NFL Player Ret. Plan, 694 F.3d 557, 567 (5th Cir. 2012) (internal
quotation marks omitted).
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alcohol, regardless of any policy exclusions, they should be able to recover.
Plaintiffs’ argument misses the mark. This case is not identical to Firman.
First, Green’s plan included an explicit exclusion for alcohol-related deaths
whereas the plan in Firman did not. The application of such an exclusion does
not amount to a per se practice or abuse of discretion. Second, unlike the plan
in Firman, Green’s policy clearly defined a “Covered Accident.” A major point
of contention in Firman was that LINA interpreted “accident” to mean
“unforeseeable,” which the court concluded was a broader definition than
necessary. 684 F.3d at 542–43. Here, the definition in the policies included
the term “unforeseeable.” Finally, unlike Firman there is evidence in addition
to Green’s blood alcohol content that supports the denial of benefits. This
additional evidence includes the toxicologist’s report and Green’s actions the
night of the accident, which include operating a boat at night without lights.
Therefore, we conclude that Firman is distinguishable from this case and does
not dictate the result.
Plaintiffs next argue that the exclusion is inapplicable because it
requires the operation of a “vehicle” while intoxicated and “vehicle” is a term
that does not unambiguously include a boat—which is what Green was
operating when the accident occurred. Plaintiffs urge that “vehicle” must be
defined according to Mississippi law, and because it is ambiguous, it must be
construed in favor of Green. Plaintiffs note that under Mississippi law, a
vehicle is something that must be used “upon a highway,” and therefore,
cannot include a boat. See Miss. Code Ann. § 63-3-103(a). Additionally,
Plaintiffs assert that Mississippi also clearly distinguishes between “vehicles”
and “watercrafts.” See Miss. Code Ann. § 63-3-103(b). Finally, Plaintiffs argue
that federal law recognizes that a “vessel” is not a “vehicle,” and therefore,
LINA’s conclusion that the exclusion applies is erroneous.
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“Federal common law governs rights and obligations stemming from
ERISA-regulated plans, including the interpretation” of policy provisions at
the heart of this dispute. Provident Life & Accident Ins. Co. v. Sharpless, 364
F.3d 634, 641 (5th Cir. 2004). 5 “When construing ERISA plan provisions,
courts are to give the language of an insurance contract its ordinary and
generally accepted meaning if such a meaning exists.” Id. We “interpret the
contract language in an ordinary and popular sense as would a person of
average intelligence and experience, such that the language is given its
generally accepted meaning if there is one.” Wegner v. Standard Ins. Co., 129
F.3d 814, 818 (5th Cir. 1997) (internal quotation marks omitted). “Only if the
plan terms remain ambiguous after applying ordinary principles of contract
interpretation are we compelled to apply the rule of contra proferentum and
construe the terms strictly in favor of the insured.” Id.Mississippi law does not apply to the interpretation of “vehicle” as
utilized in Green’s policies’ exclusion. The exclusion explicitly states that
benefits will not be paid “for any Covered Injury or Covered Loss, which,
directly or indirectly, in whole or in part, is caused by or results from the
following . . . operating any type of vehicle while under the influence of alcohol
. . . .” The next sentence of this exclusion states: “[u]nder the influence of
alcohol, for purposes of this exclusion, means intoxicated, as defined by the law
of the state in which the Covered Accident occurred.” Contrary to Plaintiffs
repeated assertions, this does not mean that Mississippi law applies to the
interpretation of the word “vehicle.” Mississippi law very clearly applies to
interpret “intoxicated” and not “vehicle.”
5“[W]e may draw guidance from analogous state law,” however, such guidance can
only be used “to the extent that it is not inconsistent with congressional policy concerns.”
Wegner v. Standard Ins. Co., 129 F.3d 814, 818 (5th Cir. 1997) (internal quotation marks
omitted).
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We hold that the plain meaning of the word “vehicle” as used in Green’s
policies is unambiguous and broad enough to encompass a boat. The common
and generally accepted meaning of “vehicle” is that it is “a means of carrying
or transporting something.” See Webster’s Third New International Dictionary
2538 (2002); 6 see also Black’s Law Dictionary 1693 (9th ed. 2009) (defining
vehicle as “an instrument of transportation or conveyance” and “any
conveyance used in transporting passengers or things by land, water, or air”).
The usage of the word “vehicle” in the policies unambiguously reinforces this
generally accepted meaning of “vehicle.” The exclusion explicitly refers to “any
type of vehicle,” evidencing a clear intent for the broadest definition of this term
to apply. (emphasis added). The general definitions section defines an
“[a]ircraft” as “a vehicle.” In another section the policies refer to an
“Automobile” and define it extensively as “a self-propelled, private passenger
motor vehicle with four or more wheels which is a type both designed and
required to be licensed for use on the highway of any state or country.” If the
word “vehicle” was to have the interpretation Plaintiffs desire—namely as a
device that may be transported on a highway—then there was no reason to
include this definition for “Automobile.” Simply referring to it as a “vehicle”
would have sufficed. An ordinary person reading this exclusion provision in
these specific policies would conclude that the term “vehicle” encompasses a
boat.
Plaintiffs are correct that Mississippi and federal law define “vehicle”
and “motor vehicle” differently in other contexts. 7 However, this fails to create
ambiguity concerning the term “vehicle” as used in these policies. In the
ERISA context, this court is not bound to construe the terms in favor of the
Webster’s cites as examples: a locomotive, airplane, and submarine. See id.6
Specifically, Plaintiffs cite In re Greenway, 71 F.3d 1177, 1180 (5th Cir. 1996) (per
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curiam), 1 U.S.C. § 4, and Miss. Code Ann. § 63-3-103(a).
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insured unless there is ambiguity. See Wegner, 129 F.3d at 818. Because there
is no ambiguity here and the plain meaning of “vehicle” includes a boat, LINA
correctly interpreted “vehicle” to include a boat. Therefore, we hold that LINA
properly denied coverage to Plaintiffs as Green’s death fell within the policies’
explicit exclusion for accidents involving the operation of a vehicle while
intoxicated.
CONCLUSION
For the aforementioned reasons, we AFFIRM the district court’s grant of
summary judgment to LINA and its denial of summary judgment to Plaintiffs.
We also AFFIRM the modification of the discovery order.
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