Jimenez v. Sun Life Assurance Company of Canada, 081512 FED5, 11-30872
|Opinion Judge:||PER CURIAM|
|Party Name:||ANTONIO JIMENEZ, III, Plaintiff-Appellee v. SUN LIFE ASSURANCE COMPANY OF CANADA; JOHN MEYER; ALLEN CARR, Defendants-Appellants|
|Judge Panel:||Before HIGGINBOTHAM, GARZA, and CLEMENT, Circuit Judges.|
|Case Date:||August 15, 2012|
|Court:||United States Courts of Appeals, Court of Appeals for the Fifth Circuit|
Appeal from the United States District Court for the Western District of Louisiana No. 6:10-CV-01307
Antonio Jimenez III filed suit against Sun Life Assurance Company of Canada ("Sun Life"), the claims fiduciary for an employee benefit plan governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001–1461, and two of its employees. Jimenez alleged that Sun Life wrongfully denied his claim for long-term disability benefits under the plan, and he sought damages and other relief under ERISA and Louisiana law. After the parties filed cross-motions for summary judgment, the district court granted summary judgment for Jimenez on the issue of coverage and made its judgment final pursuant to Federal Rule of Civil Procedure 54(b). Sun Life appealed. For the following reasons, we REVERSE and RENDER on the coverage issue and REMAND to the district court for further proceedings consistent with this opinion.
Antonio Jimenez was seriously injured in a one-car accident in Lafayette Parish, Louisiana. According to the police report, his car left the road for over 300 feet, hit several obstructions, and flipped upside down. Jimenez was immediately taken to the hospital for treatment of his injuries. Eventually, Jimenez claimed that he had lost control of his vehicle when he was forced to swerve off the two-lane road by two vehicles racing toward him, one in each lane.1 In the police report, the investigating officer noted as contributing factors and conditions of the incident (1) a violation for careless operation and (2) a suspicion that alcohol was involved.
When medical staff admitted Jimenez to the hospital, they observed that he "was intoxicated and presents a poor historian." The medical staff also noted that Jimenez claimed to "often drink up to a case a day when he is off call" from his job as a coiled tubing operator on offshore oil wells. A police officer asked a nurse to take a blood sample from Jimenez to measure his blood alcohol content ("BAC"). The police sent the blood sample to a crime lab, which found that Jimenez's BAC was 0.15, nearly twice the legal limit in Louisiana. Both parties concede that Jimenez was rendered disabled by the accident and is now unable to perform his job.
At the time of the accident, Jimenez was an employee of Coiled Tubing Company in Lafayette, a division of Smith International, Inc. ("Smith International"). Smith International, which is headquartered in Texas, maintains a Long Term Disability Plan for covered employees. The Plan consists of a group long-term disability insurance policy issued to Smith International by Sun Life. Smith International also maintains a Short Term Disability Plan for its employees. Jimenez received benefits under the Short Term Plan.
When his Short Term benefits expired, Jimenez filed a claim for Long Term Disability Benefits under Smith International's insurance policy with Sun Life ("the Policy"). Notably, the Policy states that it "is delivered in Texas and is subject to the laws of that jurisdiction." Under the Policy, Smith International pays the premium to provide its employees with long term disability coverage, and Sun Life pays benefits to employees in accordance with the Policy's terms. The Policy expressly excludes from coverage losses "due to . . . committing or attempting to commit an assault, felony or other illegal act."
Sun Life initially denied Jimenez's claims for benefits by letter. Sun Life stated that its review of Jimenez's medical records revealed that his BAC indicated that he had been operating a vehicle while under the influence at the time of the accident.2 Sun Life then invoked the "illegal acts" exclusion in the policy:
Your policy states:
Exclusions[:] No LTD benefit will be provided for any Total or Partial Disability that is due to:
4. committing or attempting to commit an assault, felony or other illegal act.
Because the documentation submitted with your claim indicated that your injuries were the result of the accident in which you were operating a vehicle under the influence, the group policy excludes any disability resulting from such accident. Therefore, your claim is denied.
The letter also notified Jimenez of his right to request that Sun Life review its initial denial and to bring a subsequent ERISA suit following an adverse determination on review.
Jimenez timely requested an administrative appeal through counsel. He first noted that he had not been charged with or convicted of a driving while intoxicated offense. He then contended that Sun Life could not deny coverage under the "illegal acts" exclusion because the Policy did not contain a specific "intoxication" exclusion. Jimenez also asserted that "driving under the influence" did not constitute an "illegal act" under the exclusion based on an application of the "rule of ejusdem generis." Lastly, he asserted that even if driving under the influence were an "illegal act" under the Policy, Sun Life could not establish causation. That is, Jimenez argued that Sun Life could not prove by a preponderance of the evidence that but for his intoxication offense Jimenez's injuries would not have occurred. Instead, Jimenez argued that his accident occurred because he had swerved off the road to avoid a head-on collision with two cars racing down the street.
Sun Life initially responded by invoking its statutory right to a 45-day extension of its deadline to decide Jimenez's administrative appeal. Sun Life subsequently informed Jimenez that it needed "additional time" to decide his appeal because it needed "additional information" from the police and the district attorney's office regarding the accident. Sun Life acknowledged its statutory deadline for deciding Jimenez's administrative appeal, but it stated that its deadline was tolled until it received the requisite information to complete its review.
As part of its investigation of the appeal, Sun Life engaged a medical expert to assess Jimenez's medical records. The expert concluded that based on the crime lab's analysis of Jimenez's BAC, "[a]ssuming normal toxicokinetics, with a reasonable degree of medical certainty, it would be reasonable to conclude that at [the time of the accident], the claimant's [BAC] was above 0.08%." The expert's report also included a chart listing the progressive effects of increased BAC levels, which indicated that Jimenez's BAC at the time of the accident would have impaired his reflexes, reaction time, and gross motor control.
Eventually, Jimenez was indicted for driving while under the influence of an alcoholic beverage ("DUI") and for careless operation of a vehicle.3 The next week, Sun Life denied Jimenez's administrative appeal, finding (1) that his medical records, his indictment for DUI, and the medical expert's report all indicated that he was committing an illegal act at the time of his accident and (2) that the expert report indicated that his level of intoxication and impairment contributed to the accident. Accordingly, Sun Life denied Jimenez's claim for long-term disability benefits under the Policy pursuant to its "illegal acts" exclusion.
Jimenez filed suit in the district court against Sun Life and two of its employees who reviewed his claim. He asserted causes of action under both Louisiana law and ERISA. Sun Life filed motions for partial summary judgment on (1) the applicability of ERISA to Jimenez's claims and (2) the merits of its decision to deny coverage to Jimenez pursuant to the Policy's "illegal acts" exclusion. The company argued that the Policy gave it discretion to interpret the terms of the Policy and to make benefit determinations; accordingly, it asserted that the district court could only overturn its decision to deny Jimenez's claim if its decision was not supported by substantial evidence in the administrative record. Sun Life contended that its decision to deny Jimenez's claim was supported by substantial evidence because ample evidence supported its conclusion that Jimenez's illegal act of DUI contributed to the accident that caused his disability.
Eventually, Jimenez admitted that ERISA governs the Sun Life policy, and he filed a cross-motion for partial summary judgment on the merits of Sun Life's decision to deny his claim for benefits under the Policy and on his request for attorney's fees. He contended that Sun Life had no discretion to interpret the terms of the Policy, thereby requiring the district court to review Sun Life's decision to deny his claim de novo. He also alleged that La. R.S. 22:975 prevented Sun Life from interpreting the Policy's "illegal acts" exclusion to allow it to deny coverage when a claimant's disability was caused by his commission of a misdemeanor.
At the hearing on the cross-motions for summary judgment, the district court announced that it would grant summary judgment for Jimenez on the issue of coverage. The district court subsequently entered a written judgment granting summary judgment for Jimenez on the coverage issue, which the court made final and appealable under Federal Rule of Civil Procedure 54(b). Although the court's judgment does not state the basis for its decision, the court's comments at the hearing reveal that it primarily granted judgment for Jimenez because it found that the application of the "illegal acts" exclusion to Jimenez was inequitable. This appeal followed.4
On appeal, Sun Life claims that the district court erred by concluding that it improperly denied Jimenez's claim for benefits based on the "illegal acts" exclusion in the Policy. Sun Life contends that the Policy gave it discretion to interpret the terms of the...
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