Donatelli v. Home Ins. Co.

• Decision Date: 11 June 1993
• Docket Number: No. 92-2591,92-2591
• Citation: 992 F.2d 763
• Parties: Doloros DONATELLI, Plaintiff-Appellant, v. The HOME INSURANCE COMPANY, Defendant-Appellee, Cooper Industries, Inc., Defendant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 763

992 F.2d 763

Doloros DONATELLI, Plaintiff-Appellant, v. The HOME INSURANCE COMPANY, Defendant-Appellee, Cooper Industries, Inc., Defendant.

No. 92-2591.

United States Court of Appeals,

Eighth Circuit.

Submitted Jan. 13, 1993.

Decided April 26, 1993.

Order Denying Petition for Rehearing

and Suggestion for Rehearing En Banc

April 26, 1993.

Rehearing and Rehearing En Banc Denied

June 11, 1993.

Rudolfo Rivera, Clayton, MO, argued (Sidney Fortus, on the brief), for plaintiff-appellant.

John S. McCollough, St. Louis, MO, argued (Eugene K. Buckley, on the brief), for defendant-appellee.

Before LOKEN, HANSEN, Circuit Judges, and MURPHY, ^* District Judge.

LOKEN, Circuit Judge.

Doloros Donatelli appeals the dismissal of her claim for a $500,000 accidental death benefit under The Home Insurance Company's group life policy covering the employees of Cooper Industries, Inc. Donatelli argues that the district court erred in granting summary judgment dismissing her state law claim as preempted by ERISA, and in dismissing her ERISA claim for benefits after a trial on the merits. ¹ We affirm.

Donatelli's late husband, Joseph Donatelli, Jr., an employee of Cooper Industries, took his own life on January 22, 1989. Mrs. Donatelli filed a claim for accidental death benefits which The Home denied based upon a policy exclusion for any loss caused by "suicide (in Missouri suicide ... while sane)." Donatelli commenced this action in September 1990. Count I of her complaint alleged a diversity breach of contract claim under Missouri law; Count II alleged the wrongful denial of ERISA benefits under 29 U.S.C. § 1132. Both claims were based upon Donatelli's contention that there is coverage because Joseph Donatelli was insane when he committed suicide.

The district court first granted partial summary judgment dismissing Donatelli's state law claim, concluding that "causes of action premised on common or state law that involve an employee benefit plan ... are preempted by ERISA's comprehensive civil enforcement scheme." The court then conducted a three-day trial of Donatelli's ERISA benefits claim; the parties introduced the record before The Home when it denied Donatelli's claim, plus additional testimony by experts concerning whether Joseph Donatelli was sane when he committed suicide. Applying the de novo standard of review, the district court found that Mr. Donatelli was sane and entered judgment in favor of The Home. This appeal followed.

I. The State Law Claim.

The parties agree that Mo.Rev.Stat. § 376.620 as judicially construed mandated the policy provision that death by suicide while insane is a covered accidental death. Donatelli argues that this statute is a state law "which regulates insurance" and therefore her breach of contract claim is "saved" from ERISA preemption by 29 U.S.C. § 1144(b)(2)(A). We disagree.

In Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 52-57, 107 S.Ct. 1549, 1555-58, 95 L.Ed.2d 39 (1987), the Supreme Court held that the civil enforcement provisions of § 1132(a) are the exclusive remedy for beneficiaries seeking to enforce their rights under an ERISA plan. Donatelli concedes that The Home's group life policy is covered by ERISA and that she seeks to recover benefits under that policy. Her state law claim seeks to enforce a contractual remedy that is preempted by § 1132 as construed in Pilot Life. If "saved" from ERISA preemption, the Missouri suicide statute will govern the interpretation of The Home's policy, but that does not affect the preemption of state law remedies by § 1132. Thus, the district court correctly granted summary judgment dismissing Donatelli's state law claim for breach of the insurance contract.

II. The ERISA Claim.

Donatelli contends that the district court erred in dismissing her § 1132 claim for accidental death benefits. She argues that The Home's denial of benefits was arbitrary and capricious and an abuse of discretion because its denial letter misinterpreted the Missouri law of insanity, because The Home failed adequately to explain its denial, and because it ignored overwhelming evidence demonstrating that Joseph Donatelli was insane when he committed suicide. In addition, Donatelli argues that The Home's denial is not entitled to a deferential standard of review because of The Home's inherent conflict of interest in administering this insurance-funded plan.

These arguments fundamentally misconstrue the judicial review conducted by the district court. A deferential standard of review is applied if the plan gives the fiduciary discretionary authority to determine eligibility for benefits. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956, 103 L.Ed.2d 80 (1989). Here, neither party has identified any provision of the plan giving The Home such discretion. When such discretion is lacking, the district court conducts a de novo review that is not limited to the fiduciary's explanation of its denial. See Farley v. Benefit Trust Life Ins. Co., 979 F.2d 653, 660 (8th Cir.1992). If it is necessary for adequate de novo review of the fiduciary's decision, the district court may allow the parties to introduce evidence in addition to that presented to the fiduciary. See, e.g., Quesinberry v. Life Ins. Co. of North Amer., 987 F.2d 1017, 1021-1027 (4th Cir.1993) (en banc); Luby v. Teamsters Health, Welfare & Pension Trust Funds, 944 F.2d 1176, 1184-85 (3d Cir.1991). However, to ensure expeditious judicial review of ERISA benefit decisions and to keep district courts from becoming substitute plan administrators, the district court should not exercise this discretion absent good cause to do so. See Davidson v. Prudential Ins. Co. of Amer., 953 F.2d 1093, 1095 (8th Cir.1992). In this case, the district court did not abuse its discretion in...