Crose v. Humana Ins. Co., 15–50559.

Citation823 F.3d 344
Decision Date23 May 2016
Docket NumberNo. 15–50559.,15–50559.
PartiesEleanor CROSE, Individually and as Permanent Guardian of Ronald Crose, Plaintiff–Appellant v. HUMANA INSURANCE COMPANY, Defendant–Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Elizabeth Rose von Kreisler, Mark Lyndon Kincaid, George Brothers Kincaid & Horton, L.L.P., Austin, TX, for PlaintiffAppellant.

Carlos Ramon Soltero, Ellen Burkholder Cochran, Rachael Kelly Padgett, McGinnis, Lochridge & Kilgore, L.L.P., Austin, TX, for DefendantAppellee.

Appeal from the United States District Court for the Western District of Texas.

Before HIGGINBOTHAM, PRADO, and GRAVES, Circuit Judges.

JAMES E. GRAVES, JR.

, Circuit Judge:

Eleanor Crose appeals the district court's summary judgment for Humana Insurance Company on her claims for breach of contract and unfair insurance practices. Because summary judgment was warranted, we AFFIRM.

FACTS AND PROCEDURAL BACKGROUND

On June 23, 2013, while Eleanor Crose attended a concert, her husband Ronald Crose ingested ecstasy. Ms. Crose rejoined her husband at around midnight at a friend's home. When she arrived, Mr. Crose told her that he was nauseated and suffering from diarrhea; he also stated that he had experienced a terrible headache earlier in the evening that felt like “his head was going to explode.” Later that night, Mr. and Ms. Crose went on a walk, after which Ms. Crose went to bed and Mr. Crose went to play music.

The next morning, Ms. Crose found her husband lying down in the backyard, non-responsive with his face covered in vomit. Ms. Crose called for an ambulance and told the operator that she believed that Mr. Crose had overdosed. Emergency services transported him to a nearby hospital.

The emergency room doctor who initially treated Mr. Crose, Dr. Bogitch, provided an assessment, stating:

This is [a] gentleman who unfortunately, with very little past medical history, used [ecstasy] last night and was found down today with a large intraparenchymal hemorrhage with an unusual subarachnoid component as well as an entrapped ventricle and early uncal herniation

.

Dr. Bogitch also ordered a urine drug screen, which came back positive for amphetamines

(ecstasy), benzodiazepines (a prescription tranquilizer), and cannabinoids (marijuana).

Another physician, Dr. Hinze, examined Mr. Crose; his report stated:

I suspect that [Mr. Crose's stroke

] is due to uncontrolled hypertension likely from his ecstasy ingestion.... [Ecstasy ingestion] would account for his diaphoresis, nausea, vomiting, diarrhea and could produce a hypertensive state, which would exacerbate if not initiate his [stroke ].

Dr. Hinze's report also noted that Mr. Crose rarely drinks alcohol and has a history of smoking marijuana and taking ecstasy, but using ecstasy was an “unusual event.”

At all times relevant to this appeal, Mr. Crose had an individual health insurance policy with Humana. Mr. Crose submitted a claim with Humana under the policy to cover the cost of medical services and treatments provided to Mr. Crose as a result of his stroke. Humana denied the claim, citing the following exclusion in the policy: Causation Exclusions ... Loss due to being intoxicated or under the influence of any narcotic unless administered on the advice of a health care practitioner.

Ms. Crose filed suit claiming breach of contract, unfair insurance practices, and prompt payment violations under the Texas Insurance Code. Humana filed a motion for summary judgment, which the district court granted. Ms. Crose now appeals.

DISCUSSION

We review a district court's summary judgment de novo.” Health Care Serv. Corp. v. Methodist Hosps. of Dallas, 814 F.3d 242, 247 (5th Cir.2016)

. We review the facts in a “light most favorable to the non-moving party.” Cannon v. Jacobs Field Servs. N. Am., Inc., 813 F.3d 586, 590 (5th Cir.2016). Summary judgment is appropriate if the moving party shows “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Cass v. City of Abilene, 814 F.3d 721, 728 (5th Cir.2016) (citing Fed.R.Civ.P. 56(a) ). “A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Crownover v. Mid–Continent Cas. Co., 772 F.3d 197, 201 (5th Cir.2014).

I.

The parties agree that Texas law governs this case. Under Texas law, the elements of a breach of contract claim are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages to the plaintiff resulting from that breach.” Hunn v. Dan Wilson Homes, Inc., 789 F.3d 573, 579 (5th Cir.2015)

(citing Foley v. Daniel, 346 S.W.3d 687, 690 (Tex.App.-El Paso 2009, no pet.) ), cert. denied,–– U.S. ––––, 136 S.Ct. 592, 193 L.Ed.2d 470 (2015)

. Generally, “for an insurance company to be liable for a breach of its duty to satisfy a claim presented by its insured, the insured must prove that its claim falls within the insuring agreement of the policy.” Data Specialties, Inc. v. Transcont'l Ins. Co., 125 F.3d 909, 911 (5th Cir.1997). There is no dispute that the Croses are seeking benefits ordinarily covered by the Humana policy. Because the dispute is instead over the application of an exclusion, the burden shifts to Humana to show that the exclusion applies. Century Sur. Co. v. Hardscape Constr. Specialties, Inc., 578 F.3d 262, 265 (5th Cir.2009). For the exclusion to apply, Humana must show that the term “narcotic” includes ecstasy and that Mr. Crose's stroke was “due to ... being under the influence” of ecstasy. We begin with the definition of “narcotic.”

A.

“Insurance policies are controlled by rules of interpretation and construction which are applicable to contracts generally.” Nat. Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex.1995)

. Because “narcotic” is not defined by the policy, we are tasked with determining whether the term has “a definite or certain legal meaning.” Texas Indus., Inc. v. Factory Mut. Ins. Co., 486 F.3d 844, 846 (5th Cir.2007). In other words, the terms of an insurance policy must be given their plain and ordinary meaning unless there is evidence that the parties intended otherwise. Am. Nat'l Gen. Ins. Co. v. Ryan, 274 F.3d 319, 323 (5th Cir.2001). But, when a term is susceptible to multiple reasonable interpretations, then it is ambiguous. See

Potomac Ins. Co. of Illinois v. Jayhawk Med. Acceptance Corp., 198 F.3d 548, 550–51 (5th Cir.2000). If ambiguous, the term is to be “construed liberally in favor of the insured and strictly against the insurer.” Kelly Assocs., Ltd. v. Aetna Cas. & Sur. Co., 681 S.W.2d 593, 596 (Tex.1984). Because neither the Texas Supreme Court nor the Fifth Circuit has previously defined “narcotic” in insurance contracts, we must make an Erie guess to define the term. Amerisure Ins. Co. v. Navigators Ins. Co., 611 F.3d 299, 311 (5th Cir.2010).

Ms. Crose contends that the district court erred by finding that “narcotic” is not ambiguous and by rejecting her definitions of “narcotic,” derived from federal and state law, as well as pharmacological uses of the term, that she submitted to the district court. Those definitions limit “narcotic” to drugs derived from a plant and classify ecstasy as a “hallucinogen” instead of a “narcotic.” Humana counters that Ms. Crose's definitions are technical in nature, and therefore unreasonable. We agree with Humana.

Texas law dictates that the “terms [of an insurance policy be] given their ordinary and generally-accepted meaning unless the policy shows the words were meant in a technical or different sense.” Gilbert Tex. Const., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 126 (Tex.2010)

. This means that technical definitions of policy terms are unreasonable unless the policy provides otherwise. See, e.g.,

Horn v. State Farm Lloyds, 703 F.3d 735, 739 (5th Cir.2012) (accepting the plain meaning of the terms “any” and cases and rejecting technical definitions of the terms as unreasonable); Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 158–59 (Tex.2003) (rejecting a technical definition of the term “repair” as unreasonable). Concluding otherwise would “ignor[e] the policy['s] language or giv[e] the contract['s] text a meaning never intended.” Schaefer, 124 S.W.3d at 159 (internal quotations omitted).

The district court found that the ordinary and generally-accepted meaning of narcotic is [a] drug affecting mood or behaviour [sic] which is sold for non-medical purposes, esp. one whose use is prohibited or under strict legal control but which tends nevertheless to be extensively used illegally.” Neither party contends that the policy allows technical definitions of the term. Therefore, Ms. Crose's definitions of “narcotic,” which are derived from state and federal statutes and pharmacological uses of the term, are unreasonable. The district court did not err when it applied the ordinary meaning of narcotic. See Dynegy Midstream Servs., L.P. v. Apache Corp., 294 S.W.3d 164, 168 (Tex.2009)

(“A contract is not ambiguous simply because the parties disagree over its meaning.”).1

B.

Having defined “narcotic” to include ecstasy, we must now determine whether Humana met its burden to show that Mr. Crose's stroke was “due to ... being under the influence” of ecstasy. But first we must decide which theory of causation is derived from the exclusion's use of “due to.”

i.

In Utica National Insurance Co. v. American Indemnity Co., the Texas Supreme Court was tasked with interpreting “due to” in an insurance policy exclusion. 141 S.W.3d 198 (Tex.2004)

. The court determined that “due to” is “more than simple cause in fact ... [and] requires a more direct type of causation.” Id. at 203. While not specifically assigning a standard, the Texas Supreme Court did distinguish it from the lesser burden of causation derived from the phrase “arise out of” which requires only “but for causation.” Utica...

To continue reading

Request your trial
23 cases
  • Trevino v. HSBC Mortg. Servs., Inc. (In re Trevino)
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Southern District of Texas
    • January 31, 2020
    ...Chargo, P.A. , 869 F.3d 685, 691 (8th Cir. 2017) (citing Duffy v. Landberg , 215 F.3d 871, 875 (8th Cir. 2000) ).145 Crose v. Humana Ins. Co. , 823 F.3d 344 (5th Cir. 2016).146 Defs.' Ex. 7.147 Defs.' Ex. 8.148 PER Group, L.P. v. Dava Oncology, L.P. , 294 S.W.3d 378 (Tex. App.–Dallas 2009, ......
  • Windmill Run Assocs., Ltd. v. Fed. Nat'l Mortg. Ass'n (In re Windmill Run Assocs., Ltd.), CASE NO. 15–80319–G3–11
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Southern District of Texas
    • January 31, 2017
    ...or tendered performance; (3) breach of the contract; and (4) damages sustained as a result of the breach. Crose v. Humana Ins. Co. , 823 F.3d 344 (5th Cir. 2016).1. Valid Contract In the February PNL, the parties agreed that the loan documents, including, inter alia , the note, deed of trus......
  • In re Sanchez Energy Corp.
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Southern District of Texas
    • July 22, 2022
    ...... Ins. Co. v. ACE Am. Ins. Co. , 192 F.Supp.3d 712, 714. ... see Crose v. Humana Ins. Co. , 823 F.3d 344, 348 (5th. Cir. ......
  • Arnone v. Cnty. of Dall. Cnty.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • March 23, 2022
    ...Cir. 2020) ("[W]e are free to disregard dicta from prior panel opinions when we find it unpersuasive." (quoting Crose v. Humana Ins. Co. , 823 F.3d 344, 349 n.1 (5th Cir. 2016) )).70 McMillian , 520 U.S. at 786, 117 S.Ct. 1734 ; Daves , 22 F.4th at 533 (citing McMillian , 520 U.S. at 786, 1......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT