Marsh v. Greyhound Lines, Inc., 73-2051.

• Decision Date: 14 January 1974
• Docket Number: No. 73-2051.,73-2051.
• Citation: 488 F.2d 278
• Parties: Elton D. MARSH, Plaintiff-Appellee, v. GREYHOUND LINES, INC., and Western Greyhound Pension Trust, Defendants, Western Greyhound Pension Trust, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

488 F.2d 278 (1974)

Elton D. MARSH, Plaintiff-Appellee, v. GREYHOUND LINES, INC., and Western Greyhound Pension Trust, Defendants Western Greyhound Pension Trust, Defendant-Appellant.

No. 73-2051.

United States Court of Appeals, Fifth Circuit.

January 14, 1974.

Sam Sparks, John A. Grambling, El Paso, Tex., Stanley H. Neyhart, San Francisco, Cal., for defendant-appellant.

Jack L. Brewster, El Paso, Tex., for plaintiff-appellee.

Before BELL, DYER and CLARK, Circuit Judges.

BELL, Circuit Judge:

Appellee filed this diversity action claiming disability retirement benefits from appellant Pension Trust. The Trust provides various long term security benefits for employees of Greyhound Lines, Inc., and is governed by a Board of Trustees consisting equally of union and employer representatives. Appellee sought benefits under a provision allowing payments whenever an eligible employee becomes permanently physically disqualified from his particular job.¹

For 22 years prior to March, 1968 appellee had been a bus driver for Greyhound. At that time he was in an accident which was entirely the fault of another driver. He did not return to duty as a bus driver, and shortly after the accident commenced work as an over-the-road tractor trailer driver. Subsequently he sought a disability pension, claiming that a hypertension problem had been so aggravated by the accident as to make driving passenger vehicles unbearable. This initial application was denied because of his failure to supply full medical information, particularly a specialist's examination normally required in the absence of an obvious disability. More than two years later, appellee again initiated claims procedures. He submitted reports of three specialists, plus that of his general practitioner. It was on the basis of the G.P.'s report that he held current Department of Transportation authorization to drive trucks in interstate commerce, despite the opinion of two of the specialists that he was disabled from all commercial driving. The Trustees again denied the application.

This appeal, from a judgment entered upon a jury verdict,² raises several issues justifying, in appellant's view, either a new trial or judgment in its favor. However, we need consider only one issue, that of the sufficiency of the evidence to support the jury's verdict. On this ground we reverse and direct the entry of judgment for appellant.

I.

To decide this case we must determine the applicable legal standards for testing the Trust's liability, and must review the evidence on this issue in the light of the standard for directed verdicts.

Concerning the first question, we note that the Plan provides that "all decisions of the Trustees in administering the Plan shall be final." This provision of course will not be permitted to accord complete and unbridled discretion to the Trust. See e. g., Hainline v. General Motors Corp., 6 Cir. , 1971, 444 F.2d 1250. However, Texas law, which governs this diversity case, is fairly clear that such a provision is to be given effect by requiring a showing of bad faith before the courts will interfere with a decision of the Trustees. See Neuhoff Bros. Packers Management Corp., v. Wilson, 1970, Tex., 453 S.W.2d 472. Appellee does not dispute that this is the applicable standard. However, he does contend that bad faith may be established not only by direct evidence, such as evidence of unreasonable requirements, refusal to consider favorable information, or the use of standards more strict than those applied to others similarly situated, but that bad faith may also be inferred from an adverse decision which has no basis in fact. Recognizing that direct evidence of bad faith could easily be concealed in the Trust's internal procedures and the Trustees' private opinions, we agree with appellee's interpretation.

The second element of the standard we must apply concerns the question of when a factual dispute should be submitted to a jury. In this regard we are of course constrained by Boeing Co. v. Shipman, 5 Cir. , 1969, 411 F.2d 365 (en banc), which states:

"On motions for directed verdict and for judgment notwithstanding the verdict the Court should consider all of the evidence — not just that evidence which supports the non-mover\'s case — but in the light and with all reasonable inferences most favorable to the party opposed to the motion. If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict, granting of the motions is proper. On the other hand, if there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motions should be denied, and the case submitted to the jury. A mere scintilla of evidence is insufficient to present a question for the jury."

411 F.2d at 374.

Combining the standards of Neuhoff and Boeing, we conclude that our inquiry must be whether the evidence is such that reasonable men, considering all the evidence, could conclude that the Trustees acted in bad faith. Since we find no direct evidence of bad faith, our principal inquiry may be more narrowly defined as whether the evidence is such that reasonable men, considering all the evidence, could conclude that the Trustees' decision had no basis in fact. If the evidence so strongly and overwhelmingly supports the conclusion that the decision had a factual basis that reasonable men could not decide to the contrary, then appellant was entitled to a directed verdict. As already intimated, we are of the opinion that the evidence is of such a nature.

We base our conclusion on documentary evidence the validity and credibility of which is unchallenged, and rely both on appellee's persistent failure to provide medical evidence reasonably required by the Trustees, and on the fact that the medical evidence actually submitted to the Trust did not establish that appellee was permanently disabled.

II.

The Plan clearly requires that a disability pension applicant "submit acceptable medical evidence of permanent physical disqualification from his job." (Emphasis added). Paragraph 7-A(6). The same Paragraph also states that, "Medical evidence submitted must be satisfactory to the Board of Trustees." Finally, Paragraph 20-A provides that:

"Each Employe and retired Employe shall furnish to the Board of Trustees any information or proof requested by it and reasonably required to administer the Pension Plan. Failure on the part of any Employe or Retired Employe to comply with such request promptly, completely and in good faith shall be sufficient grounds for denying, suspending or discontinuing benefits to such person."

Against this background we will review appellee's responses to the Trust's requests for information.

Appellee's initial application, in June, 1968, included a "Physician's Statement of Disability," on a form provided by the Trust, executed by appellee's family doctor, Dr. Goodloe. This statement contained a diagnosis of "hypertensive cardiovascular disease" and "anxiety neurosis," and stated that appellee was unable to work with the public and would never again be able to work for Greyhound. The Trust's Administrator, Bezore, notified appellee that this was "insufficient to establish permanent disqualification from employment as a bus driver." After a request for clarification from appellee's attorney, Bezore replied:

"We would suggest that we be furnished all objective tests reports and a statement from all doctors treating Mr. Marsh since 1962. If there is an absence of objective evidence of disability, we suggest a full report from another qualified expert, not a general practitioner, in the area of the particular illness upon which disqualification is being requested."

Appellee then supplied a statement by Dr. Goodloe that he had been seeing appellee "for elevated blood pressure since February, 1962," along with a report of his blood pressure on nine dates. No information about treatment or permanence was included, and there was no specialist's examination. Bezore replied that this did not "establish permanent disqualification," and offered to provide assistance upon request. Appellee through his attorney, then refused to supply additional information, on the grounds the text of the Plan did not specifically require a specialist's report. Shortly thereafter, in December, 1968, appellee's application was denied, for failure to comply with the Plan by refusing to supply reasonably requested information.

In January, 1971, appellee's attorney sought to submit a new application, and requested "comments and suggestions as to supporting documentation." Bezore responded with the following:

"Medical information should be current and should include a full report from a specialist covering history of the disability and all treatment, including dates, since last date of employment with Greyhound, physical findings, current diagnosis, clinical course and lab and x-ray course. The doctor need not confine his answer to the form provided but may attach his report

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