Duhon v. Texaco, Inc.

• Citation: 15 F.3d 1302
• Decision Date: 22 February 1994
• Docket Number: No. 92-4843,92-4843
• Parties: 17 Employee Benefits Cas. 2364 Clifford DUHON, Plaintiff-Appellee, Cross-Appellant, v. TEXACO, INC., et al., Defendants-Appellants, Cross-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1302

15 F.3d 1302

17 Employee Benefits Cas. 2364

Clifford DUHON, Plaintiff-Appellee, Cross-Appellant, v. TEXACO, INC., et al., Defendants-Appellants, Cross-Appellees.

No. 92-4843.

United States Court of Appeals Fifth Circuit.

Feb. 22, 1994.

Suggestion for Rehearing En Banc

Denied March 22, 1994.

Michael W. Campbell, Caffery, Oubre, Dugas & Campbell, New Iberia, LA, for defendants-appellants.

Mark J. Ostrich, New Orleans, LA, for plaintiff-appellee.

Appeals from the United States District Court for the Western District of Louisiana.

Before JOHNSON, JOLLY, and JONES, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

This case presents us with a rather typical question pertaining to ERISA benefits: the plaintiff, Clifford Duhon, claims he was improperly denied long-term disability benefits by his employer and moved for summary judgment in the district court. The district court granted summary judgment in favor of Duhon. It found that the evidence was insufficient because the plan administrator determined disability based only on the reports of medical doctors when the opinion of a vocational rehabilitation expert was required. The district court ordered the plan administrator to pay Duhon all past due benefits as well as future benefits. On appeal, we attempt to wade through the procedural thicket of the case and focus on the central inquiry that should be made in these cases: Did the decision of the plan administrator denying long-term disability benefits to Duhon constitute an abuse of discretion? Because we find that it did not, we reverse the district court's grant of the plaintiff's summary judgment motion and remand the case for further proceedings.

I

Appellee Clifford Duhon, now sixty-six years old, was employed by appellant Texaco Trading and Transportation, Inc. ("Texaco") from July 1985 through February 1989 as a truck driver. On March 1, 1989, Duhon ended his employment as a truck driver because of a degenerative back condition. That date marked his separation from work for purposes of Texaco's employee benefits plan; he began receiving disability payments of $652.35 per month. Under Texaco's disability plan, an employee may receive disability payments for the first twenty-four months after the disability begins if the employee is unable to perform the normal duties of his regular job assignment or a comparable one. Neither party disputes that Duhon qualified for these disability payments for the first twenty-four months following his separation from work. After this initial twenty-four month period passes, disability payments cease under the plan "if the employee is able to perform any job for which he or she is, or may become, qualified by training, education, or experience." (Emphasis ours).

Three doctors evaluated Duhon's condition in 1991 in order to determine if his disability benefits should continue beyond the initial twenty-four month period. Duhon was first evaluated by his family physician, Dr. Charles Ray, who executed a disability statement concluding that Duhon was unable to work as a truck driver and that his condition was permanent. Dr. Jacob Lahasky, also a general practitioner, next examined Duhon at Texaco's request. Dr. Lahasky executed a disability statement in which he concluded that Duhon should not drive trucks or do any heavy lifting. He also stated that Duhon's condition was permanent. Finally, in July 1991, Duhon was seen by an orthopedist, Dr. Thomas Ford, at Texaco's request. Dr. Ford's report concluded that Duhon had degenerative lumbar disc disease, which rendered him unable to squat, stoop, bend, or lift more than twenty-five pounds. Dr. Ford agreed with the two general practitioners that Duhon could not return to work as a truck driver, but stated that Duhon was capable of doing "sedentary to light work."

In October 1991, in accordance with the terms of the plan, the plan administrator and Texaco's chief medical officer reviewed all of the medical evidence and determined that Duhon did not qualify for continuing long-term disability payments beyond the initial twenty-four month period. Duhon appealed the decision to the plan administrator, but the appeal was denied. He then filed suit in federal district court against Texaco and the plan administrator, claiming a violation of ERISA. Shortly after filing suit, Duhon moved for summary judgment. The court granted Duhon's motion for summary judgment, and additionally ordered Texaco to pay Duhon $652.35 for each month since it terminated his disability payments, plus interest, and to continue paying those benefits to Duhon every month thereafter. The court denied Duhon's request for attorney's fees. Texaco now appeals the summary judgment granted in favor of Duhon. ¹

II

In his motion for summary judgment, Duhon argued that additional information was required before the plan administrator could properly determine that Duhon was not disabled and deny him benefits under the plan. Duhon pointed out that the plan required the administrator to find that Duhon was or may have become "qualified by training, education or experience" to perform "any job." He argued that the mere fact that a medical doctor had concluded that he was capable of doing "sedentary to light work" did not mean that he was "qualified by training, education or experience" to do any such job. The district court agreed, finding that "Dr. Ford's statement that Duhon was physically capable of performing sedentary work says nothing as to whether Duhon was or could become qualified to perform such a job." District Court's Memorandum Ruling at 4.

Summary judgment is appropriate if "the record discloses 'that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' " Rodriguez v. Pacificare, Inc., 980 F.2d 1014, 1019 (5th Cir.1993) (quoting Fed.R.Civ.P. 56(c)). We review a district court's grant of summary judgment de novo, FDIC v. Ernst & Young, 967 F.2d 166, 169 (5th Cir.1992), and apply the same standard of review as did the district court. Rodriguez, 980 F.2d at 1019. In this case, where the district court's only task was to review the decision of the plan administrator, the only summary judgment question before the district court was one of law: what was the proper standard of review to be applied to the plan administrator's denial of benefits, and, under that standard, should the denial be upheld?

III

A

We must begin our inquiry with a determination of the standard of review to be applied to the plan administrator's denial of benefits. The plaintiff couched his argument, and the court couched its holding, in terms that failed to speak to the standard of review to be applied in analyzing the decision of the plan administrator. The district court entered summary judgment ordering benefits be paid to Duhon, which reversed the plan administrator's denial of those benefits. A denial of ERISA benefits by a plan administrator challenged under Sec. 502(a)(1)(B) of ERISA, 29 U.S.C. Sec. 1132(a)(1)(B), is reviewed by the courts under a de novo standard unless the plan gives the administrator "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, 956, 103 L.Ed.2d 80 (1989). Challenges to the plan administrator's interpretation of plan terms, like the one presented in this case, are reviewed under an abuse of discretion or "arbitrary and capricious" standard if the plan grants the administrator the authority to make a final and conclusive determination of the claim. Id. Texaco correctly asserts that its plan grants such authority to the administrator, and, thus, the administrator's decision is subject to an abuse of discretion standard of review. The plan addresses the discretion of the plan administrator in Article 8.04, which states that "[t]he decisions of the Plan Administrator shall be final and conclusive with respect to every question which may arise relating to either the interpretation or administration of this Plan." Additionally, the section entitled "Claims Procedure" provides in part that "[a]fter you undergo the necessary physical examination(s) and upon review of all facts in the case, the Plan Administrator will make the decision to authorize or deny payments."

Applying the Bruch analysis to this language, it is clear that the plan administrator has the discretionary authority to make a final and conclusive determination of the claim. This court has not imposed a linguistic template to satisfy this requirement, Wildbur v. ARCO Chemical Co., 974 F.2d 631 (5th Cir.), modified, 979 F.2d 1013 (5th Cir.1992), but in this case the plan's plain language provides that the administrator may make an independent and final determination of eligibility. See also, Lowry v. Bankers Life & Casualty Retirement Plan, 871 F.2d 522, 524-25 (5th Cir.1989).

Duhon argues that any discretion afforded Texaco under the abuse of discretion standard of review is limited because of Texaco's conflict of interest as both the administrator of its own plan and the payor of the disability benefits. He cites Bruch, where the Court stated that "if a benefit plan gives discretion to an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a facto[r] in determining whether there is an abuse of discretion." Bruch, 489 U.S. at 115, 109 S.Ct. at 957 (citation and internal quotes omitted). Duhon contends that the conflict of interest in this case is so great that the abuse of discretion standard of review should be transformed into a de novo standard of review. He states in his brief, without more, that "[t]he history of this claim indicates the conflict indeed influenced the decision and the processing of the claim."

We fail to find Duhon's argument on this point fully convincing. Texaco's plan administrator was apparently also an...