Tobi Davis v. Life Insurance Company of North America

Case: 09-50853 Document: 00511122444 Page: 1 Date Filed: 05/26/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
May 26, 2010
No. 09-50853 Lyle W. Cayce
Summary Calendar Clerk
TOBI DAVIS,
Plaintiff - Appellant
v.
LIFE INSURANCE COMPANY OF NORTH AMERICA,
Defendant - Appellee
Appeal from the United States District Court
for the Western District of Texas
USDC No. 6:08-CV-230
Before HIGGINBOTHAM, CLEMENT, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
Tobi Davis alleges that the Life Insurance Company of North America
(“LINA”) wrongfully denied benefits under a plan covered by the Employee
Retirement Income Security Act of 1974. See 29 U.S.C. §§ 1001-1461. After the
denial, Ms. Davis sought relief in district court, which granted summary
judgment in favor of LINA. She appeals, claiming wrongful denial of benefits.
Finding no abuse of discretion, we AFFIRM.
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
Case: 09-50853 Document: 00511122444 Page: 2 Date Filed: 05/26/2010
No. 09-50853
FACTS AND PROCEDURAL HISTORY
The underlying facts of this case are not in dispute. Tobi Davis’s husband,
Carl Chester Davis, was killed when his motorcycle crashed on October 7, 2006.
At the time of the crash, Mr. Davis was operating the motorcycle with a blood
alcohol level above the state limit of 0.08%. Mr. Davis was driving above the
sixty-miles-per-hour speed limit, and his motorcycle left the road at a curve in
the road. No other vehicles were involved. The cause of death was listed as
“multiple blunt force injuries.” The crash occurred in daylight, with clear or
cloudy weather and a dry road surface.
The forensic toxicologist hired by LINA determined Mr. Davis’s blood
alcohol content to be between 0.28% and 0.368%. He reported that at this level
of intoxication, Mr. Davis would have a delayed response time and would be
more likely to take greater risks. Further, an individual with that blood alcohol
level would have impaired sensory-motor skills, attention, judgment, and
control, as well as “reduced visual acuity, reduced peripheral vision, increased
reaction time, and disturbances of perception of motion and dimensions.”
The toxicologist considered lay witness statements that Mr. Davis did not
appear intoxicated, concluding that “regardless of tolerance [to the effects of
alcohol,] at a BAC of 0.28% Mr. Davis would have been impaired to the extent
that it likely was a causative factor in his crash leading to his death.”
Through his employer, Mr. Davis had group life and accident insurance
with LINA. He had life insurance coverage, as well as three types of accidental
death and dismemberment (“AD&D”) coverage – basic, voluntary, and
supplemental. The basic benefits were paid for by Mr. Davis’s employer as an
employee benefit, and Mr. Davis had opted to pay for the additional voluntary
and supplemental coverage.
After her husband’s death, Ms. Davis filed a timely claim with LINA for
life insurance benefits and the three types of AD&D benefits. LINA paid
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$105,000 in life insurance benefits, but denied all AD&D benefits. The basic
AD&D benefits were denied because the policy contained an explicit exclusion
for intoxication. The voluntary and supplemental benefits were denied because
the death did not meet the definition of a “Covered Loss” under the policy.
Ms. Davis twice appealed the denial of the voluntary and supplemental
AD&D benefits, and LINA again denied coverage. In each denial, LINA
explained that Mr. Davis’s death did not meet the definition of a “Covered
Accident” under the policy. In one of the three denial letters, LINA also cited the
self-inflicted injury exclusion.
After LINA’s final denial of coverage, Ms. Davis filed suit in the United
States District Court for the Western District of Texas. On August 25, 2009, the
district court granted LINA’s motion for summary judgment.
DISCUSSION
We review the district court’s grant of summary judgment de novo and
apply the same standards as the district court. Cooper v. Hewlett-Packard Co.,
592 F.3d 645, 651 (5th Cir. 2009). When an insurance plan has granted the
administrator discretionary authority to construe the plan’s terms, the standard
is one of examining for an abuse of discretion. Id. at 651-52.
The district court identified the two-step inquiry for this review, which
first is to examine whether the plan administrator’s decision was legally correct,
and if it was not, then to evaluate whether the administrator’s discretion was
abused. Stone v. UNOCAL Termination Allowance Plan, 570 F.3d 252, 257 (5th
Cir. 2009). When we may more readily evaluate the exercise of discretion, we
may skip the first step in the analysis. Holland v. Int’l Paper Co. Retirement
Plan, 576 F.3d 240, 246 n.2 (5th Cir. 2009). We take the latter approach.
“Abuse of discretion review is synonymous with arbitrary and capricious
review.” Cooper, 592 F.3d at 652 (citing Meditrust Fin. Servs. Corp. v. Sterling
Chems., Inc., 168 F.3d 211, 214 (5th Cir. 1999)). We will affirm the
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administrator’s decision if it is supported by “substantial evidence.” Id.Evidence is considered substantial where it is “more than a scintilla, less than
a preponderance, and is such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” Ellis v. Liberty Life Assurance Co.
of Boston, 394 F.3d 262, 273 (5th Cir. 2005) (citation omitted). An arbitrary
decision is one “made without a rational connection between the known facts and
the decision.” Meditrust, 168 F.3d at 215 (quotation marks and citation omitted).
“A plan administrator abuses its discretion where the decision is not based on
evidence, even if disputable, that clearly supports the basis for its denial.”
Holland, 576 F.3d at 246 (quotations marks and citations omitted).
A conflict of interest occurs where, as here, the same entity bears
responsibility for determining eligibility and for paying benefits. Metropolitan
Life Ins. Co. v. Glenn, 554 U.S. 105, 128 S. Ct. 2343, 2349 (2008). That conflict
is weighed as a factor in deciding if the administrator has abused its discretion.
Id. at 2350.
Ms. Davis contends that the administrator’s interpretation of the plan
contradicts its plain meaning and constitutes an abuse of discretion. She cites
Todd v. AIG Life Insurance Company, 47 F.3d 1448 (5th Cir. 1995). Though
Todd involved similar coverage, the relevant terms were different. The court in
Todd interpreted the term “accidental” in an AD&D policy. Id. at 1452. Other
cited AD&D cases also involve different terms. E.g., Wickman v. Nw. Nat’l Ins.
Co., 908 F.2d 1077 (1st Cir. 1990).
Here, the AD&D policy provided coverage to a “Covered Loss resulting
directly and independently of all other causes from a Covered Accident.” The
policy defines 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 . . . .”
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The policy does not define the term “unforeseeable.” We conclude that the
administrator has interpreted “unforeseeable” in a manner consistent with the
term’s plain meaning. See, e.g., Black’s Law Dictionary 649 (8th ed. 2004)
(defining foreseeability as a “quality of being reasonably anticipatable”). Mr.
Davis was driving with a blood alcohol content that was, according to the
toxicologist’s estimates, somewhere between three and a half and four and a half
times the legal limit. Considering the toxicologist’s findings as to the effects of
such severe intoxication, it was reasonable to decide that a foreseeable
consequence of riding a motorcycle in that condition would be a serious accident.
The administrator’s conflict of interest does not alter our conclusion. We
take into account various factors in judging the reasonableness of the decision.
Glenn, 128 S. Ct. at 2351. We find the administrator’s conclusion a reasonable
one for which no evidence or inference exists that it was affected by a conflict.
Because we hold the administrator did not abuse its discretion in denying
coverage because the death was not a “Covered Accident,” we do not address the
applicability of any other policy exclusions.
AFFIRMED.
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