Mansker v. TMG Life Ins. Co.

• Citation: 54 F.3d 1322
• Decision Date: 02 May 1995
• Docket Number: 94-3130,Nos. 94-2554,s. 94-2554
• Parties: Bernice V. MANSKER, Individually and as Special Administratrix of the Estate of Michael Mansker, Deceased, Appellee, v. TMG LIFE INSURANCE COMPANY, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 1322

54 F.3d 1322

Bernice V. MANSKER, Individually and as Special Administratrix of the Estate of Michael Mansker, Deceased, Appellee, v. TMG LIFE INSURANCE COMPANY, Appellant.

Nos. 94-2554, 94-3130.

United States Court of Appeals,

Eighth Circuit.

Submitted Feb. 17, 1995.

Decided May 2, 1995.

Marshall Ney, Little Rock, AR, argued for appellant (T. Scott Clevenger, on the brief).

George Ellis, Benton, AR, argued for appellee.

Before McMILLIAN, Circuit Judge, HEANEY, Senior Circuit Judge, and MORRIS SHEPPARD ARNOLD, Circuit Judge.

McMILLIAN, Circuit Judge.

TMG Life Insurance Co. (TMG) appeals from a final judgment entered in the United States District Court ¹ for the Eastern District of Arkansas granting summary judgment in favor of Bernice V. Mansker (appellee). Mansker v. TMG Life Ins. Co., No. LR-C-93-481 (E.D.Ark. May 19, 1994) (judgment). Pursuant to the district court's judgment, TMG is required to pay benefits to cover medical expenses resulting from fatal injuries suffered by appellee's son, Michael Mansker (Mansker). For reversal, TMG argues that the district court erred in holding that (1) Mansker's injuries did not "arise from his employment" under the group health insurance policy issued by TMG to Mansker's employer (the policy) and (2) issues of whether Mansker's hospital bills were "medically necessary" and "reasonable and customary" were properly before the district court. TMG also separately appeals the district court's award of attorney's fees and prejudgment interest. Id. (Aug. 15, 1994) (amended order awarding attorney's fees); id. (Aug. 11, 1994) (order stating amount of judgment with interest). For the reasons discussed below, we reduce the rate of prejudgment interest from 6% to 5.28%, affirm the judgment of the district court as modified, and affirm the award of attorney's fees.

Background

The underlying facts are not in dispute. Mansker was a construction crew supervisor for Dick Mooney, Inc. (Mooney), of Benton, Arkansas. Mansker's permanent address was in Benton, but he occasionally lived with his girlfriend in Vilonia, Arkansas, or in his motorhome. Mansker often used his motorhome to stay close to a job site. His employer would compensate him at a hotel rate if Mansker stayed in his motorhome and the job location would otherwise require him to stay away from home.

From February 1 through February 7, 1993, Mansker worked at a construction site in Springdale, Arkansas, 340 miles from Benton. The weekend before the Springdale job was to begin, Mansker brought his motorhome to Springdale and left it there. From February 1 to February 5, Mansker stayed at his girlfriend's house in Vilonia and commuted to Springdale. On Friday, February 5, Mansker and his girlfriend went to stay in the motorhome in Springdale, where they planned to stay through the weekend. Mansker worked all day Saturday and all day Sunday, finishing at 5:30 p.m. on Sunday, February 7, 1993. At approximately 8:30 p.m. on Sunday, February 7, 1993, after taking a shower, Mansker attempted to light the gas stove in his motorhome. The stove exploded, severely burning him. Mansker was airlifted to Arkansas Children's Hospital (the hospital), where he stayed in the burn unit until his death on April 18, 1993.

At all times in question, Mansker was covered by the policy issued by TMG to Mooney. Appellee, as administrator of Mansker's estate, sought coverage from TMG for Mansker's hospital bills. TMG denied coverage on grounds that an exclusion clause in the policy, which barred recovery for injuries "arising from any employment," applied to Mansker's injuries. ²

On June 9, 1993, appellee, individually and as administrator of Mansker's estate, filed the present lawsuit in state court. The complaint alleged that TMG owed benefits in the amount of Mansker's hospital bills, minus any deductible or co-payment, plus interest. TMG removed the case to federal district court on grounds that the policy is governed by the Employee Retirement Income and Security Act of 1974 (ERISA), 29 U.S.C. Secs. 1001-1461. The parties filed cross-motions for summary judgment. TMG argued that the injuries sustained by Mansker were excluded from coverage as a matter of law. Appellee argued that she was entitled to reimbursement for Mansker's medical expenses as a matter of law, and specifically demanded payment in the amount of $476,420.77. In response to appellee's motion and statement of undisputed material facts, TMG maintained that an issue remained as to whether appellee had "exhausted her administrative remedies prior to filing suit." Appellee subsequently submitted affidavits supporting her contention that the amount sought was "medically necessary," "reasonable and customary," as required under the policy. At a hearing on the cross-motions, the district court orally ruled from the bench, holding that the "arising from any employment" exclusion clause did not apply to the facts of the present case, and that TMG was liable for the full amount requested by appellee. Judgment was so entered. Mansker v. TMG Life Ins. Co., No. LR-C-93-481 (E.D.Ark. May 19, 1994). Thereafter, appellee moved to have the judgment reduced to a sum certain, for an award of prejudgment interest, and for an award of attorney's fees. The district court granted appellee's motions, reducing the judgment to a total sum of $502,356, including prejudgment interest calculated at a rate of 6% and postjudgment interest calculated at a rate of 5.28%. Id. (Aug. 11, 1994) (order). The district court also awarded appellee attorney's fees based upon 275 hours of work at a rate of $200 per hour. Id. (Aug. 15, 1994) (amended order). These appeals followed.

Discussion

Application of "Arising From Employment" Clause

TMG first argues that the district court erred in holding, as a matter of law, that the "arising from any employment" clause in the policy did not apply to Mansker's injuries. Because the policy itself does not contain a definition of the term "arising from any employment," the parties directed the district court to analogous state law for guidance. The district court therefore considered Arkansas case law interpreting the phrase "arising out of and in the course of employment" in the state workers' compensation law, Ark.Code Ann. Sec. 11-9-401(a)(1), to determine whether the "arising from any employment" exclusion in the policy applied to Mansker's injuries. The district court recognized the possibility that, under the facts of the present case, Mansker's injuries might be treated by the Arkansas workers' compensation commission, and by the Arkansas state courts, to "arise out of" his employment for purposes of applying Sec. 11-9-401(a)(1). ³ The district court nevertheless held that Mansker's injuries did not arise from his employment for purposes of applying TMG's policy because the words "arising from any employment," in their plain meaning, simply do not connote as broad a meaning as has been liberally applied in Arkansas' so-called "traveling salesperson" workers' compensation cases. The district court therefore granted appellee's motion for summary judgment and held that TMG was liable to pay benefits covering Mansker's medical expenses. Transcript of Motion Hearing (May 17, 1994) at 33-34.

We review a grant of summary judgment de novo. The question before the district court, and this court on appeal, is whether the record, when viewed in the light most favorable to the non-moving party, shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986); Get Away Club, Inc. v. Coleman, 969 F.2d 664, 666 (8th Cir.1992); St. Paul Fire & Marine Ins. Co. v. FDIC, 968 F.2d 695, 699 (8th Cir.1992). Where the unresolved issues are primarily legal rather than factual, summary judgment is particularly appropriate. Crain v. Board of Police Comm'rs, 920 F.2d 1402, 1405-06 (8th Cir.1990). Upon de novo review, we hold that the district court did not err in holding that Mansker's injuries are covered by the policy.

In fashioning federal common law under ERISA, including principles that govern the legal effect of plan terms, courts may look to state law for guidance so long as the state law is not contrary to the provisions of ERISA. Brewer v. Lincoln Nat'l Life Ins. Co., 921 F.2d 150, 153, 154 (8th Cir.1990) (Brewer ), cert. denied, 501 U.S. 1238, 111 S.Ct. 2872, 115 L.Ed.2d 1038 (1991). In Brewer, this court held that it could not apply the so-called "contra insurer rule," a principle of Missouri state law, to ascertain the meaning of a certain term in an ERISA plan, because that state law principle conflicted with the provisions of ERISA. Id. at 153. Thus, in the absence of guidance from state law, this court was compelled to "look elsewhere, first at ERISA itself." Id. at 154. The court then went on to hold:

[The insurer] was required to furnish plan descriptions "written in a manner calculated to be understood by the average plan participant...." 29 U.S.C Sec. 1022(a)(1). ⁴

It would be improper and unfair to allow experts to define terms that were specifically written for and targeted toward laypersons. This requirement provides a source from which we may fashion a federal common law rule; the terms should be accorded their ordinary, and not specialized, meanings.

Id. (emphasis added).

In the present case, we need look no further than Brewer. In applying the federal common law rule announced in Brewer, we must accord the term "arising from any employment" its ordinary, not specialized, meaning. Id. To rely on the specialized legal definition of the term "arising out of employment," as it has been liberally applied in Arkansas workers' compensation "traveling...