Laasmar v. Phelps Dodge Corp. Life

• Decision Date: 06 May 2010
• Docket Number: 07-1286.,No. 07-1267,07-1267
• Citation: 605 F.3d 789
• Parties: Ronald LaASMAR and Sandra LaAsmar, Plaintiffs-Appellees-Cross-Appellants,v.PHELPS DODGE CORPORATION LIFE, ACCIDENTAL DEATH & DISMEMBERMENT AND DEPENDENT LIFE INSURANCE PLAN, a benefit plan provided by Phelps Dodge Corporation, a New York corporation, and Metropolitan Life Insurance Company, Defendants-Appellants-Cross-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

605 F.3d 789

Ronald LaASMAR and Sandra LaAsmar, Plaintiffs-Appellees-Cross-Appellants,v.PHELPS DODGE CORPORATION LIFE, ACCIDENTAL DEATH & DISMEMBERMENT AND DEPENDENT LIFE INSURANCE PLAN, a benefit plan provided by Phelps Dodge Corporation, a New York corporation, and Metropolitan Life Insurance Company, Defendants-Appellants-Cross-Appellees.

Nos. 07-1267, 07-1286.

United States Court of Appeals Tenth Circuit.

May 6, 2010.

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Jack M. Englert, Jr. (Michael S. Beaver of Holland & Hart LLP, Greenwood Village, CO, and Lowell D. Kass of Metropolitan Life Insurance Company, Long Island City, NY, with him on the briefs), Holland & Hart LLP, Greenwood Village, CO, for Defendants-Appellants-Cross-Appellees.

William D. Meyer, Hutchinson Black and Cook, LLC, Boulder, CO, for Plaintiffs-Appellees-Cross-Appellants.

Before BRISCOE, Chief Judge, EBEL and MURPHY, Circuit Judges.

EBEL, Circuit Judge.

“Probably it is true to say that in the strictest sense and dealing with the region of physical nature there is no such thing as an accident. On the other hand, the average man is convinced that there is, and so certainly is the man who takes out a policy of accident insurance.” Landress v. Phoenix Mut. Life Ins. Co., 291 U.S. 491, 499, 54 S.Ct. 461, 78 L.Ed. 934 (1934) (Cardozo, J., dissenting) (quotations, citations omitted).

Plaintiffs Ronald and Sandra LaAsmar's adult son Mark had accidental death insurance as part of an employee benefit plan governed by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § § 1001-1461. In this case, we must decide whether Mark LaAsmar's death, in a one-vehicle crash, was the result of an “accident” covered under the plan. Defendant Metropolitan Life Insurance Company (“MetLife”), the plan's administrator, denied the LaAsmars' claim for accidental death benefits because, at the time of the crash, Mark LaAsmar's blood alcohol level was almost three times the limit permitted under Colorado law. The district court overturned that decision. Having jurisdiction under 28 U.S.C. § 1291 and reviewing MetLife's denial of benefits de novo, we AFFIRM.

I. BACKGROUND

Mark LaAsmar began working for Phelps Dodge Corporation in January 2004. Through Defendant Phelps Dodge Corporation Life, Accidental Death and Dismemberment and Dependent Life Insurance Plan (“Plan”), LaAsmar obtained both life insurance and accidental death and dismemberment (“AD & D”) coverage. The Plan contracted with Defendant Metropolitan Life Insurance Company (“MetLife”) to provide these benefits; MetLife was also the Plan's claims administrator.

According to the terms of that Plan, Mark LaAsmar's AD & D insurance provided “additional security by paying [his] beneficiary a benefit in addition to life insurance if [he] die[d] as a result of an accident.” (Aplt.App. at 81.) The accident had to be “the sole cause of the injury,” “the sole cause of the covered loss,” and “[t]he covered loss [had to] occur[ ] not more than one year after the date of the accident.” ( Id. at 82.)

In the early morning hours of July 25, 2004, LaAsmar died in a single-vehicle crash in Grand County, Colorado. His death certificate identified him as the “apparent driver” of the vehicle, a pickup truck owned by LaAsmar. ( Id. at 179.) The vehicle's other occupant, Patrick O'hotto, also died in the crash. The Colorado State Patrol report on the incident indicated that, at the time of the crash, LaAsmar's truck was traveling sixty miles per hour on a straight two-lane rural road where the posted speed limit was forty miles per hour. The truck traveled off the right side of the road and rolled four and one-quarter times. Neither occupant was wearing a seat belt; they were both ejected from the vehicle and were pronounced dead at the scene. LaAsmar's death certificate indicated that the “immediate cause” of his death was “[h]ead and internal injuries” which were due to “[b]lunt force trauma” as a consequence of an “MVA,” or motor vehicle accident. ( Id. at 179.) It was the opinion of the Colorado state trooper investigating the crash that alcohol was involved. And the toxicology report indicated that LaAsmar had a blood alcohol content (“BAC”) of 0.227g/100 ml, which is almost three times Colorado's legal limit of .08 see Colo.Rev.Stat. § 42-4-1301(2)(a).

Mark LaAsmar's parents, Plaintiffs Ronald and Sandra LaAsmar, were his beneficiaries. They filed a claim with MetLife for life and AD & D benefits. MetLife paid the LaAsmars life insurance benefits, but denied AD & D benefits for several reasons: 1) because Mark LaAsmar's extreme intoxication contributed to the crash, the motor vehicle “accident” was not the “sole cause” of his death; 2) because the crash was the reasonably foreseeable result of driving while intoxicated, it was not an “accident” covered under the Plan; and 3) these circumstances fell within the Plan's exclusion from AD & D coverage for a “loss caused by or contributed to by ... [i]njuring oneself on purpose” (Aplt.App. at 83).

The LaAsmars then filed suit for breach of contract in Colorado state court, naming both the Plan and MetLife as defendants. Defendants removed the action to federal court, asserting ERISA preemption; the parties now agree that ERISA governs the lawsuit, and we therefore construe the LaAsmars' suit as a private civil enforcement action to recover benefits under a plan, pursuant to 29 U.S.C. § 1132(a)(1)(B).¹ Both sides moved for summary judgment, stipulating that “no trial [was] necessary and that the Court should determine the Plaintiffs' claim based solely upon the administrative record before the Court.” (Aplt.App. at 39).² Reviewing de novo MetLife's decision to deny AD & D benefits, the district court reversed that determination after concluding, among other things, that Mark LaAsmar's crash did constitute an “accident” under the Plan. ( Id. at 47-48.)

In appeal No. 07-1267, MetLife and the Plan timely appeal the district court's order requiring that accidental death benefits be paid to the LaAsmars. The LaAsmars cross-appeal, No. 07-1286, from the district court's failure to rule on their requests for an award of attorney's fees and prejudgment interest.

II. AD & D BENEFITS

A. Standard of Review

We review summary judgment orders de novo, using the same standards applied by the district court. See Kellogg v. Metro. Life Ins. Co., 549 F.3d 818, 825 (10th Cir.2008). Where, as here, the parties in an ERISA case both moved for summary judgment and stipulated that no trial is necessary, “summary judgment is merely a vehicle for deciding the case; the factual determination of eligibility for benefits is decided solely on the administrative record, and the non-moving party is not entitled to the usual inferences in its favor.” Bard v. Boston Shipping Ass'n, 471 F.3d 229, 235 (1st Cir.2006) (internal quotation omitted). Further, we accord no deference to the district court's decision. See Sandoval v. Aetna Life & Cas. Ins. Co., 967 F.2d 377, 380 (10th Cir.1992).

“Like the district court, we must first determine the appropriate standard to be applied to [MetLife's] decision to deny benefits.” Weber v. GE Group Life Assurance Co., 541 F.3d 1002, 1010 (10th Cir.2008). We determine de novo what that standard should be. See Rasenack ex rel. Tribolet v. AIG Life Ins. Co., 585 F.3d 1311, 1315 (10th Cir.2009).

“[A] denial of benefits” covered by ERISA “is to be reviewed under 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, 103 L.Ed.2d 80 (1989). Where the plan gives the administrator discretionary authority, however, “we employ a deferential standard of review, asking only whether the denial of benefits was arbitrary and capricious.” Weber, 541 F.3d at 1010 (internal citation, quotation omitted). Under this arbitrary-and-capricious standard, our “review is limited to determining whether the interpretation of the plan was reasonable and made in good faith.” Kellogg, 549 F.3d at 825-26 (internal alterations, quotations omitted). As the party arguing for the more deferential standard of review, it is MetLife's burden to establish that this court should review its benefits decision at issue here under an arbitrary-and-capricious standard. See Gibbs ex rel. Estate of Gibbs v. CIGNA Corp., 440 F.3d 571, 575 (2d Cir.2006).

1. Whether procedural irregularities warrant de novo review

The district court held that the terms of the Plan did not delegate discretion to MetLife to make benefits decisions.³ This presents a difficult question, but one we need not decide. Assuming, without deciding, that the Plan vested MetLife with such discretion, there were “procedural irregularities” here-MetLife's failure to comply with ERISA-mandated time limits in deciding the LaAsmars' administrative appeal-that require us to apply the same de novo review that would be required if discretion was not vested in MetLife.

The LaAsmars filed their claims with MetLife on September 8, 2004, seeking life and AD & D benefits. MetLife initially denied the claim for AD & D benefits in a letter dated October 19, 2004.

The Plan explicitly provided that the LaAsmars could administratively appeal that decision to MetLife, giving them sixty days from the receipt of the initial denial to do so. The LaAsmars timely sought an administrative appeal with MetLife in a letter dated December 7, 2004.

The Plan further provided that, having received a request for an administrative appeal, MetLife “will review [the] claim and write to [the claimant] with its final and binding decision within 60 days of receiving [the] review request letter,” or in this case, by approximately February 4, 2005.⁴ (Aplt.App. at 89.)

The Plan's sixty-day deadline for MetLife to decide the...