Dutka ex rel. Estate of T.M. v. Aig Life Ins. Co.

• Decision Date: 24 June 2009
• Docket Number: No. 08-20515.,08-20515.
• Citation: 573 F.3d 210
• Parties: Guardian Nora DUTKA, As Guardian for the ESTATE OF T.M., a Minor and the Estate of J.M., a Minor, Plaintiff-Appellant, v. AIG LIFE INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

573 F.3d 210

Guardian Nora DUTKA, As Guardian for the ESTATE OF T.M., a Minor and the Estate of J.M., a Minor, Plaintiff-Appellant, v. AIG LIFE INSURANCE COMPANY, Defendant-Appellee.

No. 08-20515.

United States Court of Appeals, Fifth Circuit.

June 24, 2009.

James Kevin Tarrant (argued), Houston, TX, for Dutka.

Charles Tynan Buthod, Aaron Kyle Harris (argued), Baker Botts, LLP, Houston, TX, for AIG Ins. Co.

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

Before HIGGINBOTHAM, GARZA and PRADO, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

The beneficiaries of decedent Istvan Macsai appeal a summary judgment in favor of insurer AIG in their action to recover accidental death insurance under ERISA. We affirm the denial of benefits.

I

On September 15, 2005, Macsai was piloting a private plane with two passengers on a reconnaissance flight of deer hunting sites near Cleveland, Texas. The nature of the mission required flight at low altitude. Macsai failed to maintain adequate air speed resulting in a stall/spin from which, at low altitude, there was not time to recover. The crash killed both Macsai and the two passengers.

Mr. Macsai's beneficiaries claimed benefits under an accidental death benefit plan Macsai had enrolled in through his employer, Continental Airlines. The insurer, AIG, originally denied the claim and Plaintiffs sought administrative review. The ERISA Appeals Committee of AIG reviewed and upheld the denial, finding that the accident fell under the Plan's exclusion for losses "caused in whole or in part by, or resulting in whole or in part from ... the Insured Person being under the influence of drugs or intoxicants."

Plaintiffs then sought district court review of the denial under ERISA, 29 U.S.C. 1132(a)(1)(B). On cross motions for summary judgment, the district court ruled that AIG did not abuse its discretion in determining that the Plan's intoxication exclusion applied. It based its ruling on the "uncontroverted evidence" in an NTSB accident report, FAA toxicology report, and the opinion of an expert engaged by AIG. Plaintiffs now appeal, challenging the district court's standard of review and its factual findings.

II

The parties dispute both the standard of review that was applied by the district court in reviewing AIG's decision and that which should be applied by this Court in reviewing the ruling of the district court. The law, however, is straightforward on this score. The Supreme Court in Firestone Tire and Rubber Co. v. Bruch held that a district court reviewing a denial of benefits under ERISA is to apply a de novo review unless the plan gives the administrator "discretionary authority to determine eligibility for benefits or to construe the terms of the plan."¹ While the parties here contest the existence of a discretion clause in the plan, this Circuit reads Bruch as speaking only to questions of law; thus, with or without a discretion clause, a district court rejects an administrator's factual determinations in the course of a benefits review only upon the showing of an abuse of discretion.²

The district court in this case reviewed a factual determination. AIG denied the claim because it determined that the decedent's intoxication was a cause of the crash. In the ERISA context, we have considered the question of the cause of death to be a factual determination.³ Accordingly, the district court did not err in employing an abuse of discretion standard to review AIG's similar determination that the crash was caused in part by the decedent's intoxication.⁴

On appeal, this Court reviews the district court's grant of summary judgment de novo.⁵ Thus, we consider the district court's decision using its same perspective — reviewing the administrator's legal interpretations de novo, and giving discretion to its factual determinations.

III

In applying the abuse of discretion standard to an administrator's factual determinations we analyze whether the administrator acted arbitrarily or capriciously.⁶ If the determination is supported by substantial evidence, it is not arbitrary and capricious.⁷ "Substantial evidence is `more than a scintilla, less than a preponderance, and is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'"⁸

Under this standard, the plan administrator did not abuse its discretion in finding that the crash was caused by the pilot's intoxication. This is not to say there were not weaknesses in the evidence, as pointed out by Appellants. The FAA forensic toxicology report showed the chemicals in the decedent's blood at the time they were tested, over fifty days after the accident. The evidence presented by Appellee's expert Dr. Lage was not unequivocal as to the content of drugs present in the decedent's blood at the time of the accident, particularly as to cocaine. He opined that the decedent "had recently illegally used cocaine, had used alcohol, and had taken the prescription drug Propoxyphene within a few hours of his death." However, he also reasoned that based on the levels of Benzoylecgonine present in decedent's urine at the time of the toxicology report, he "[could] not rule that cocaine may have been present in his blood at the time of his death." It betrays logic to jump from inability to rule out cocaine use to opining to "a reasonable degree of medical certainty" that the decedent "used cocaine ... within a few hours of his death."

Despite this gap in Dr. Lage's reports, the FAA toxicology report did disclose the presence of chemicals in the decedent's body consistent with the use of multiple drugs around the time of the accident. Dr. Lage's reports, at the least, explained the relationship of the chemicals in the decedent's blood and urine to his use of particular drugs. His reports also conclusively show that the decedent had a therapeutic dose of the narcotic Propoxyphene in his...