Barnett v. Aetna Life Ins. Co., 01-85-0526-CV
| Decision Date | 03 April 1986 |
| Docket Number | No. 01-85-0526-CV,01-85-0526-CV |
| Citation | 708 S.W.2d 911 |
| Parties | Lacy D. BARNETT, Appellant, v. AETNA LIFE INSURANCE COMPANY, Appellee. (1st Dist.) |
| Court | Texas Court of Appeals |
Maurice Amidei, Law Offices of Maurice Amidei, P.C., Houston, for appellant.
Larry D. Carlson, Baker & Botts, Dallas, for appellee.
Before SAM BASS, COHEN and HOYT, JJ.
Barnett sued to challenge Aetna's right to offset the amount of his Veterans Administration benefits from long-term disability payments. The trial court rendered a take-nothing judgment for Aetna. We affirm.
Barnett contends that the trial court erred in overruling his motion for judgment n.o.v. and in overruling his motion for new trial, because (a) the policy does not allow Aetna to deduct the amount of V.A. benefits from the long-term disability payments; (b) the deduction is prohibited by 38 U.S.C. § 3101(a) (1976); (c) there is no evidence to support the jury's finding or it was against the overwhelming weight of the evidence for the jury to find that appellant's disability commenced after April 1, 1967, the effective date of the policy.
Barnett began receiving long-term disability payments from Aetna in 1978 after suffering a job-related knee injury in 1977. Also in 1978, he began receiving V.A. benefits of $82 per month for a 20% disability due to a foot injury suffered in 1943, during World War II. Barnett was covered under the Aetna policy as an employee of Amoco Oil Company. During periods of total disability, the policy provided for monthly benefit payments equal to "60% of the employee's monthly rate of basic earnings if no other income benefits are payable for the given monthly period." The policy further provided:
If other income benefits are payable for a given monthly period, the amount of monthly benefit payable under this policy for the given monthly period shall be an amount equal to the excess, if any, of 60% of the employee's monthly rate of basic earnings over the amount of other income benefits payable for the given monthly period.
* * *
Other income benefits, referred to above, shall include only the following ...:
* * *
Any payment for a disability which commenced on or after the effective date of the employee's insurance under this policy, under the Federal Social Security Act or Railroad Retirement Act, or any similar act of any national government, or by any federal, state, provincial, municipal or other governmental agency or pursuant to any workmen's compensation law, compulsory benefit act or law, occupational disease law, or any other legislation of similar purpose, or the maritime doctrine of maintenance, wages, and cure. (Emphasis supplied.)
Barnett argues that the provision allows an offset only for benefits payable under a specifically named act. We disagree. The provision allows an offset for "any payment for a disability ... by any federal ... agency...." Further, the provision clearly states that "other income benefits" include payments for disability under "any similar act ... or any other legislation of similar purpose...." One purpose of the Social Security Act and the Railroad Retirement Act is to compensate persons suffering disabilities. This is also a purpose of Barnett's V.A. benefits. V.A. disability benefits are similar to disability benefits under the Railroad Retirement or Social Security Acts in that none of the three are contractual, none necessarily correlate with contributions made by or on behalf of the employee who receives the benefits, and Congress may withdraw all three at any time. See Hisquierdo v. Hisquierdo, 439 U.S. 572, 574-75, 99 S.Ct. 802, 804-05, 59 L.Ed.2d 1 (1979); Ex parte Johnson, 591 S.W.2d 453, 454-56 (Tex.1979).
Barnett relies on Gibson v. Connecticut General Life Insurance Co., 145 Ga.App. 799, 245 S.E.2d 49 (1978), which is distinguishable. The Georgia Court of Appeals held that V.A. benefits were not "other income benefits" that could be offset against disability benefits. The Gibson holding was based on policy language that defined "other income benefits" as benefits received "for loss of time from employment." Because V.A. benefits are not "for loss of time from employment," the court disallowed the offset. The policy in the present case has no such limiting language. Consequently, the reason for disallowing the offset in Gibson does not exist in this case.
Point of error number 1(a) is overruled.
Barnett next contends that the deduction violates the anti-assignment provision of 38 U.S.C. § 3101(a) (1976), which states:
Payments of benefits due or to become due under any law administered by the Veterans' Administration shall not be assignable except to the extent specifically authorized by law, and such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary.
We find that the offset here involved is not prohibited by § 3101. Barnett has at all times received and retained possession of his entire veteran's benefits. He has made no written or oral assignment of them to Aetna. Aetna is not Barnett's creditor, and the benefits have not been attached, levied upon, or seized under any legal or equitable process.
The cases relied upon by Barnett are distinguishable because each involved an act clearly prohibited by the terms of § 3101. Three of these were seizures of benefits under legal process rendered during divorce proceedings. See Ex parte Burson, 615 S.W.2d 192 (Tex.1981); Ex parte Johnson, 591 S.W.2d 453; and Eichelberger v. Eichelberger, 582 S.W.2d 395 (Tex.1979). Another, McJunkin v. Estate of McJunkin, 493 S.W.2d 278 (Tex.Civ.App.--Dallas 1973, writ ref'd n.r.e.), was a written assignment of benefits under a serviceman's life insurance policy. We agree that the court-ordered seizures and written assignments in these cases violated the statute.
Courts in Texas and elsewhere have reached the opposite result, however, on facts similar to those here. In Capps v. American Mutual Liability Insurance Co., 601 S.W.2d 816 (Tex.Civ.App.--Dallas 1980, no writ), and Voss v. Mutual of Omaha Insurance Co., 469 S.W.2d 602 (Tex.Civ.App.--San Antonio 1971, writ ref'd), insurance companies were allowed to set off both worker's compensation and social security benefits from the amounts they owed under group disability policies. While this case deals with an offset for veteran's benefits, we view Capps and Voss as persuasive authority because both the Federal Social Security Act and the Texas Worker's Compensation Act contain strong anti-assignment provisions very similar to that in § 3101 concerning veteran's benefits. 42 U.S.C. § 407(a) (Supp. I 1983) (); Tex.Rev.Civ.Stat.Ann. art. 8306, § 3(b) (Vernon Supp.1986) ("All compensation ... shall be exempt from garnishment, attachment, judgment and all other suits or claims, and no such right of action and no such compensation and no part thereof or of either shall be assignable, ... and any attempt to assign the same shall be void.")
Federal courts applying Texas and federal law have rejected the argument that an offset of worker's compensation and social security benefits violates the anti-assignment provisions within those acts. See Lamb v. Connecticut General Life Insurance Co., 643 F.2d 108, 110-112 (3rd Cir.), cert. denied, 454 U.S. 836, 102 S.Ct. 139, 70 L.Ed.2d 116 (1981); Smith v. Ethyl Corp., 417 F.Supp. 669 (S.D.Tex.1976). We find the Lamb case especially persuasive. In Lamb, the court stated that 42 U.S.C. § 407, the anti-assignment provision under the federal Social Security Act, 643 F.2d at 111 (quoting Hurd v. Illinois Bell Telephone Co., 136 F.Supp. 125, 142 (N.D.Ill.1955), aff'd, 234 F.2d 942 (7th Cir.1956)). The court continued:
Although it may appear inequitable that [Connecticut General] is, in a theoretical sense, receiving the benefit of cost-of-living increases under the Social Security Act by diminishing the...
To continue reading
Request your trial
-
Barnett v. Aetna Life Ins. Co.
...were not unconscionable. On the basis of these answers, the trial court entered judgment that Barnett take nothing. The court of appeals, 708 S.W.2d 911, affirmed, holding that the VA benefits were deductible under the In 1943, Lacy D. Barnett broke his right heel bone while serving aboard ......