Green v. Life Ins. Co. of N. Am.

• Decision Date: 11 June 2014
• Docket Number: No. 13–60049.,13–60049.
• Citation: 754 F.3d 324
• Parties: Lindsey GREEN; Brenda Green, Plaintiffs–Appellants, v. LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant–Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

754 F.3d 324

Lindsey GREEN; Brenda Green, Plaintiffs–Appellants,

v.LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant–Appellee.

No. 13–60049.

United States Court of Appeals,Fifth Circuit.

June 11, 2014.

Judy M. Guice, Esq. (argued), Judy M. Guice, P.A., Sarah Courtney Reese, Biloxi, MS, for Plaintiffs–Appellants.

Cameron S. Hill, Esq. (argued), Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., Chattanooga, TN, Ceejaye S. Peters, Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., Jackson, MS, for Defendant–Appellee.

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

Before STEWART, Chief Judge, and DeMOSS and CLEMENT, Circuit Judges.

CARL E. STEWART, Chief Judge:

Lindsey Green and Brenda Green (collectively “Plaintiffs”) appeal the district court's grant of summary judgment in favor of Life Insurance of North America (“LINA”) upholding LINA's denial of life insurance benefits to Plaintiffs, beneficiaries of the two policies at issue. Plaintiffs also appeal the modification of a discovery order. We AFFIRM both of these decisions.

FACTS AND PROCEDURAL HISTORY

Joshua Green (“Green”), husband of Lindsey Green and son of Brenda Green, died while operating a boat on July 16, 2010. Around 8:20 p.m., he called his wife to say he was on his way home. When he did not arrive, she called the police. The Coast Guard found Green in his boat the next morning. He had died because of a head injury sustained when his boat struck the support legs of a landing light at Keesler Air Force Base.¹ The police report and radio log on the incident noted that Green had a blood alcohol content of .243, there were empty beer bottles and cans in the boat, he had not been using his running lights,² and when he had spoken to his wife he sounded intoxicated. Sunset on July 16, 2010 occurred at 7:59 p.m. and civil twilight, the point at which terrestrial objects become indistinguishable, was 8:26 p.m. The official death certificate declared the death to be accidental, occurring when Green struck a concrete piling. It listed the immediate causes of death as (1) contusions of the brain, (2) depressed skull fracture, and (3) violent impact to the top of the head. It listed as a significant other condition acute alcohol intoxication.

A. Green's Life Insurance Policies

Plaintiffs sought to recover on two Accidental Death and Dismemberment (“AD & D”) policies Green held with Life Insurance Company of North America (“LINA”) through his employer, Northrop Grumman Corporation. The policies are governed by the Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seq. (“ERISA”). LINA is the issuer, insurer, claims administrator, and plan administrator ³ of the two policies. The policyholder is the Trustee of the Group Insurance Trust for Employers in the Manufacturing Industry, and Northrop Grumman is the subscriber of the policy. The policies defined a “Covered Accident” as:

[A] sudden, unforeseeable, external event that results, directly and independently of all other causes, in a Covered Injury or Covered Loss and meets all of the following conditions: 1. occurs while the Covered Person is insured under the policy; 2. is not contributed to by disease, Sickness, mental or bodily infirmity; 3. is not otherwise excluded under the terms of this policy.

The policies included as a “Common Exclusion” from recovery number 8:

[O]perating any type of vehicle while under the influence of alcohol or any drug, narcotic or other intoxicant including any prescribed drug for which the Covered Person has been provided a written warning against operating a vehicle while taking it. Under the influence of alcohol, for purposes of this exclusion, means intoxicated, as defined by the law of the state in which the Covered Accident occurred.

B. Procedural History

LINA initially denied Plaintiffs' claims for three reasons: (1) Green's death was not a “Covered Accident” because he operated a vehicle while intoxicated; (2) Green's death was not a “Covered Accident” because he operated a boat at night without the aid of lights; and, (3) Green was legally intoxicated and the policies excluded recovery for any injury caused by operating a vehicle under the influence of alcohol or drugs. Plaintiffs appealed alleging that LINA: (1) misinterpreted Mississippi and federal law, which required foreseeability to be viewed from the standpoint of the insured; (2) misinterpreted the policy's definition of vehicle; (3) ignored Green's cause of death; and (4) relied on an invalid blood sample. After notifying Plaintiffs that they would require an extension to address Plaintiffs' arguments, LINA denied this appeal nearly three months later. LINA reiterated that Green intentionally operated his boat while intoxicated, making the risk of injury or death substantially certain, foreseeable, and not independent of all causes. Separately, LINA relied on the policies' exclusion of coverage for any accident involving the operation of a vehicle while intoxicated.

On June 3, 2011, Plaintiffs filed suit in federal district court seeking recovery. Throughout the discovery process, LINA was reluctant to provide certain documents. The magistrate judge issued an order compelling discovery but later modified it. The district court affirmed this decision. Both parties filed motions for summary judgment. The district court granted LINA's motion for summary judgment and denied Plaintiffs'. Plaintiffs timely appealed both the modified discovery order and grant of summary judgment to LINA. We address each in turn.

DISCUSSION

A. Discovery Order

The magistrate judge reconsidered and modified the original discovery order after LINA demonstrated that the order would require a review of 25,000 claims. The modified order required LINA to produce: (1) any policies or procedures which could have been utilized but limited to current and past policies and procedures for three years prior to the incident; and, (2) claims demonstrating LINA's interpretation of Northrop Grumman plans' intoxication exclusion for participants similarly situated to Green since 2007. The AD & D guide, policies, and manuals Plaintiffs sought had not been used since 2002 and, because outdated policies and procedures were irrelevant under ERISA, see29 C.F.R. § 2560.503–1(m)(8), the magistrate judge did not order their production. The district court affirmed this decision.

We review a district court's decision to limit discovery for abuse of discretion. Crosby v. La. Health Serv. & Indem. Co., 647 F.3d 258, 261 (5th Cir.2011). A district court abuses its broad discretion when its decision is based on an erroneous view of the law, but we will only vacate a court's judgment if it affected the substantial rights of the appellant. Id. The appellant must prove both abuse of discretion and prejudice. Id. We have instructed district courts to “monitor discovery closely” in ERISA cases and to limit discovery if “the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, ... and [ inter alia ] the importance of the discovery in resolving the issues.” Id. at 264 (internal quotation marks and citations omitted). Given these considerations, we hold that there was no error in modifying this discovery order.

B. The Policies

1. Standard of Review

“Standard summary judgment rules control in ERISA cases.” Cooper v. Hewlett–Packard Co., 592 F.3d 645, 651 (5th Cir.2009) (internal quotation marks omitted). We review a “district court's grant of summary judgment de novo, applying the same standards as the district court.” Id. Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “When parties file cross-motions for summary judgment, we review each party's motion independently, viewing the evidence and inferences in the light most favorable to the nonmoving party.” Duval v. N. Assur. Co. of Am., 722 F.3d 300, 303 (5th Cir.2013) (internal quotation marks omitted).

If the plan gives the administrator discretionary authority to determine eligibility for benefits or to construe the plan's terms, we review a decision to deny benefits only for abuse of discretion. Atkins v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, 694 F.3d 557, 566 (5th Cir.2012). If there is no such grant of discretion, our review is de novo. Id. “Whether the district court employed the appropriate standard in reviewing an eligibility determination made by an ERISA plan administrator is a question of law” that we review de novo. Ellis v. Liberty Life Assur. Co. of Bos., 394 F.3d 262, 269 (5th Cir.2004). However, “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.” Dutka ex rel. Estate of T.M. v. AIG Life Ins. Co., 573 F.3d 210, 212 (5th Cir.2009).

Plaintiffs argue that the district court erred when it reviewed LINA's determination for abuse of discretion only. The district court relied on language in the summary plan description (“SPD”) to grant LINA discretion to interpret the policy's terms. Plaintiffs argue that this was improper in light of the Supreme Court's decision in CIGNA Corp. v. Amara, ––– U.S. ––––, 131 S.Ct. 1866, 179 L.Ed.2d 843 (2011) and our decision in Koehler v. Aetna Health Inc., 683 F.3d 182 (5th Cir.2012). LINA contends that the plan does confer discretion when read as a whole, specifically relying on the language in both the SPD and in the “claims provisions” section of the plan. The “claims provisions” section contains a “proof of loss” subsection, which states “[w]ritten or authorized electronic proof of loss satisfactory to Us must be given....” Plaintiffs respond that there is a circuit split over whether this “satisfactory to Us” language is sufficient to confer discretion and that it is not sufficient in this case...