Terry Sanchez v. Life Insurance Company

Filing

Terry Sanchez v. Life Insurance Company

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Case: 09-51010

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Date Filed: 09/01/2010

IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
September 1, 2010 N o . 09-51010 Lyle W. Cayce Clerk

T E R R Y S. SANCHEZ, PlaintiffSAppellant v. L IF E INSURANCE COMPANY OF NORTH AMERICA, D e fe n d a n t S A p p e lle e

A p p e a l from the United States District Court for the Western District of Texas U S D C No. 5:08-CV-527

B e fo r e CLEMENT, SOUTHWICK, and HAYNES, Circuit Judges. P E R CURIAM:* T h is appeal arises out of the 2007 death of Hector Javier Sanchez in a onec a r accident. At the time of his death, Hector was covered under a group

a c c id e n t policy underwritten by Life Insurance Company of North America (L I N A ) and subject to ERISA. Hector's wife, Terry Sanchez, submitted a claim u n d e r this policy following his death. LINA denied her claim. After exhausting h e r administrative remedies, Mrs. Sanchez filed suit under 29 U.S.C. §1132, a lle g in g that LINA abused its discretion when it denied her claim. On crossPursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
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motions for summary judgment, the district court found for LINA. Mrs. Sanchez a p p e a le d . We hold that LINA's decision that Mr. Sanchez's death did not

c o n s t it u t e a "Covered Accident" was not an abuse of discretion. Because this d e c is io n is determinative of coverage, we need not reach Mrs. Sanchez's question r e g a r d in g LINA's application of the policy's "Self-Inflicted Injury" exclusion. Accordingly, we AFFIRM the district court's entry of judgment in favor of LINA. F A C T S AND PROCEEDINGS M r . Sanchez's employer provided a group accident policy ("Policy") for its e m p lo y e e s . The Policy was underwritten by LINA and subject to the Employee R e t ir e m e n t Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"). It p r o v id e d accidental death and dismemberment benefits when "the Covered P e r s o n suffers a Covered Loss resulting directly and independently of all other c a u s e s from a Covered Accident." A "Covered Accident" is defined, in relevant p a r t, as a "sudden, unforeseeable, external event that results, directly and in d e p e n d e n t ly of all other causes, in a Covered Injury or a Covered Loss" that " is not contributed to by disease, Sickness, mental or bodily infirmity," and "is n o t otherwise excluded" by the Policy. The Policy excludes coverage for, among o t h e r things, "intentionally self-inflicted Injury, suicide or any attempt thereat w h ile sane or insane." On the night of January 6, 2007, Mr. Sanchez died in a one-car crash.1 He s p e n t the evening with a friend, Joe Arthur Gutierrez, drinking and watching a Dallas Cowboys' football game. He departed at approximately 10:30 p.m. and e x h ib it e d no signs of intoxication at that time. Forty-five minutes later, after M r . Sanchez had driven approximately twenty-three miles, five witnesses saw

We avoid the use of the generic term "accident" to prevent any confusion between it and "Covered Accident," a phrase defined in the Policy, the meaning of which is the central dispute in this appeal.

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his vehicle swerve to the left shoulder, swerve sharply to the right, and roll over s e v e r a l times. Sanchez was ejected from the vehicle. He was pronounced dead a t the scene shortly thereafter. The police report did not note any weather, road, o r vehicle conditions that may have contributed to the crash, nor did it indicate t h a t Mr. Sanchez had been driving irregularly or erratically prior to the crash. T h e autopsy report and death certificate indicated that Mr. Sanchez had died as a result of multiple injuries "sustained when the vehicle he was driving r e p o r t e d ly lost control and rolled over." Both ruled his death to be an "accident." A toxicology analysis of Mr. Sanchez's blood and vitreous humor showed that, a r o u n d the time of his death, his blood ethanol was 0.174% and vitreous ethanol w a s 0.170%.2 F o llo w in g Mr. Sanchez's death, Mrs. Sanchez filed a timely claim for a c c id e n ta l death benefits under the Policy. LINA denied the claim, determining t h a t the crash was not a "Covered Accident," as defined by the Policy, and that t h e "intentionally self-inflicted Injury" exclusion precluded coverage. LINA c o n c lu d e d that the crash was caused by Mr. Sanchez's driving under the in flu e n c e of alcohol and that such a crash was not "unforeseen," as required by t h e Policy. It also determined that Mr. Sanchez's voluntary decision to drink a la r g e amount of alcohol and drive contributed to the crash. M r s . Sanchez appealed these decisions, submitting an affidavit from Mr. G u t ie r r e z and asserting that statistics show that the majority of those who drive u n d e r the influence of alcohol will make it to their destinations without incident. In response, LINA obtained an opinion from a forensic consultant, Frederick F o c h t m a n , Ph.D., opining "with a reasonable degree of scientific certainty that

The State of Texas defines intoxication as "having an alcohol concentration of 0.08 or more." TEX. PENAL CODE ANN. § 49.01(2) (Vernon 2003).

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Mr. Sanchez's BAC and resultant impairment was a causative factor in the a c c id e n t that resulted in his death." LINA denied Mrs. Sanchez's appeal for the s a m e two reasons it denied her claim. A fte r receiving LINA's second denial of coverage, Mrs. Sanchez again a p p e a l e d . With her appeal, she submitted a report from a toxicologist, James G a r r io t t , Ph.D., stating that "the degree to which individuals are affected by a lc o h o l is largely a function of tolerance" and that Mr. Gutierrez's affidavit in d ic a te d that Mr. Sanchez had considerable alcohol tolerance. It further stated t h a t the use of alcohol does not constitute "an implicit attempt to harm [o n e s e lf]." In response, LINA obtained a second report from Dr. Fochtman, who c o n c lu d e d : "The obvious fact is that Mr. Sanchez did have an accident, and even D r . Garriott recognizes that a person with a BAC of 0.174% is at a greater risk o f having an accident due to impairment of driving-related skills. As I recall f r o m the report of the accident, there was no apparent reason provided for his s w e r v in g his vehicle and rolling over, therefore a strong indication of driver e r r o r ." LINA denied the second appeal. M r s . Sanchez then filed an ERISA claim against LINA under 29 U.S.C. § 1132, alleging that LINA had abused its discretion when it denied her claim. On cross-motions for summary judgment, the district court conducted a thorough a n a ly s is and concluded that LINA's interpretation of a "Covered Accident" was b o th legally correct and not an abuse of discretion. It further determined that L IN A 's interpretation of the self-inflicted injury exclusion was legally incorrect, b u t not an abuse of discretion. Mrs. Sanchez appealed. STANDARD OF REVIEW S t a n d a r d summary judgment rules control in ERISA cases. Vercher v. A le x a n d e r & Alexander Inc., 379 F.3d 222, 225 (5th Cir. 2004). We review the d is t r ic t court's decision to grant a motion for summary judgment de novo, 4

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"applying the same standards as the district court." Cooper v. Hewlett-Packard C o ., 592 F.3d 645, 651 (5th Cir. 2009). DISCUSSION A s noted above, LINA denied coverage on Mrs. Sanchez's claim because it d e t e r m in e d that Mr. Sanchez's death was not the result of a "Covered Accident": " [a ] sudden, unforeseeable, external event that results, directly and independent o f all other causes, in a Covered Injury or a Covered Loss." This circuit reviews p la n administrators' coverage decisions de novo unless the plan expressly gives d is c r e t io n a r y authority over these decisions to the plan administrator. Stone v. U N O C A L Termination Allowance Plan, 570 F.3d 252, 257 (5th Cir. 2009). Where discretion has been granted, we review coverage decisions only for abuse o f discretion. Id. We apply the later review here because LINA possesses "the a u t h o r it y , in its discretion, to interpret the terms of the plan documents and d e c id e questions of eligibility for coverage or benefits under the plan and to m a k e any related findings of fact." A plan administrator's factual

d e t e r m in a t io n s are always reviewed for abuse of discretion. Stone, 570 F.3d at 257. To determine whether a plan administrator has abused its discretion, the c o u r t applies a two-step analysis. Crowell v. Shell Oil Co., 541 F.3d 295, 312 (5 t h Cir. 2008). The first step is to determine whether the administrator's d e c is io n was "legally correct." Id. (citing Pickrom v. Belger Cartage Serv., Inc., 5 7 F.3d 468, 471 (5th Cir. 1995)). If it was, our inquiry ends, as a legally correct d e c is io n precludes any abuse of discretion. Id. If the administrator's

in t e r p r e t a t io n was not legally correct, we review it for abuse of discretion. Stone, 5 7 0 F.3d at 257. In cases where "we can more readily determine that the d e c is io n was not an abuse of discretion," we may proceed directly to the second

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prong of the analysis. Holland v. Int'l Paper Co. Ret. Plan, 576 F.3d 240, 246 n.2 ( 5 t h Cir. 2009) (collecting cases). We will follow this method of analysis and p r o c e e d immediately to the second prong. A n abuse of discretion occurs when a plan administrator's decision is not " b a s e d on evidence, even if disputable, that clearly supports the basis for its d e n ia l." Id. at 246 (quotation marks and citations omitted). This review is " s y n o n y m o u s with arbitrary and capricious review." Cooper, 592 F.3d at 652. A decision is arbitrary if it is "made without a rational connection between the k n o w n facts and the decision or between the found facts and the evidence." Meditrust Fin. Servs. Corp. v. Sterling CheMrs., Inc., 168 F.3d 211, 215 (5th Cir. 1 9 9 9 ) (quotation marks and citation omitted). "[R]eview of the administrator's d e c is io n need not be particularly complex or technical; it need only assure that th e administrator's decision fall[s] somewhere on a continuum of

r e a s o n a b le n e s s ¯ e v e n if on the low end." Corry v. Liberty Life Assurance Co. of B o s to n , 499 F.3d 389, 398 (5th Cir. 2007) (quotation marks and citation omitted). A s part of the abuse of discretion prong of the analysis, we must also c o n s id e r any conflicts of interest. Holland, 576 F.3d at 247. "[W]e weigh the c o n flic t of interest as a factor in determining whether there is an abuse of d is c r e t io n in the benefits denial, meaning we take account of several different c o n s id e r a t io n s of which conflict of interest is one." Id. (citing Crowell, 541 F.3d a t 312 ). See also Metro. Life Ins. Co. v. Glenn, 554 U.S. 104, __, 128 S. Ct. 2343, 2 3 5 0 S 5 1 (2008). Here, a conflict exists because LINA was responsible for both d e t e r m in in g eligibility and paying benefits. See, e.g., Glenn, 554 U.S. at __, 128 S . Ct. at 2350. This type of conflict, however, is a "minimal" one. Corry, 499 F .3 d at 398. Mrs. Sanchez has not put forth any evidence or argument regarding a n y other conflicts.

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First, we first address whether LINA's factual determination that Mr. S a n c h e z 's impaired driving caused his fatal crash was an abuse of discretion. There is ample evidence in the record¯including his reported blood alcohol level o f 0.174%¯that Mr. Sanchez was driving under the influence of alcohol and no e v id e n c e pointing to an alternate explanation for the crash. Both parties'

e x p e r t s agreed that individuals with a blood alcohol level of 0.174% "are at g r e a t e r risk of having an accident due to impairment of driving-related skills s u c h as reaction time." Evidence also exists that Mr. Sanchez did not appear to b e impaired when he chose to drive home, that he drove twenty-three miles w i t h o u t any documented problem, and that persons under the influence of a lc o h o l often drive without incident. Considering this evidence and LINA's " m in im a l" conflict of interest, we find that LINA did not abuse its discretion w h e n it determined that driving under the influence of alcohol contributed to M r . Sanchez's automobile crash. This decision is supported by evidence on the r e c o r d and "fall[s] somewhere on a continuum of reasonableness." Corry, 499 F .3 d at 398 (quotation marks and citation omitted). W e next evaluate whether LINA abused its discretion by interpreting the P o lic y 's definition of a "Covered Accident"¯"[a] sudden, unforeseeable, external ev en t"¯ n ot to include the single-car crash caused by Mr. Sanchez's driving under t h e influence of alcohol. In addition to the evidence noted above, the record also s h o w s the following: (1) Mr. Sanchez's blood alcohol level of 0.174% was more t h a n twice the legal limit for driving an automobile in Texas; (2) the medical e x a m in e r concluded that Mr. Sanchez's death was the result of multiple injuries a n d was an "accident"; (3) five witnesses reported that Mr. Sanchez's vehicle s w e r v e d sharply in the road and rolled over several times before ejecting him; (4 ) Mrs. Sanchez made an (unsupported) claim that most people who drive drunk a r e not involved in deadly accidents, making there "not a high likelihood Mr. 7

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Sanchez would be involved in an accident and die"; (5) Dr. Fochtman opined that a person with Mr. Sanchez's blood alcohol level would have "poor judgment, in c r e a s e d reaction time, muscle incoordination, loss of visual acuity, [] increased r is k taking" and be unable to drive safely; (6) Dr. Garriott submitted that "[t]he d e g r e e to which individuals are affected by alcohol is largely a function of t o le r a n c e " and "Mr. Sanchez had a considerable alcohol tolerance"; and (7) Dr. F o c h t m a n cited "volumes of references regarding the effects of alcohol producing im p a ir m e n t regardless of tolerance." B a s e d on all of the evidence in the record, and again considering LINA's m in im a l conflict of interest, we conclude that LINA did not abuse its discretion w h e n it determined that Mr. Sanchez's death was not the result of "[a] sudden, u n fo r e s e e a b le , [and] external event." Additional evidence regarding the

fo r e s e e a b ilit y of a fatal crash resulting from driving under the influence would h a v e strengthened LINA's decision.3 Its denial of coverage is nevertheless

" b a s e d on evidence, even if disputable, that clearly supports the basis for its d e n ia l." Holland, 576 F.3d at 246 (quotation marks and citations omitted). LINA's conclusion "fall[s] somewhere on a continuum of reasonableness¯even i f on the low end." Corry, 499 F.3d at 398 (quotation marks and citation

o m it t e d ). It was therefore not an abuse of discretion. Our resolution of this appeal is consistent with Davis v. Life Insurance Co. o f North America, 2010 WL 2102040 (5th Cir. May 26, 2010) (per curiam),4 which p r e s e n t s nearly identical facts. Davis, whose blood alcohol level was between
The weight of the evidence presented by both parties relates to the factual question of whether or not Mr. Sanchez's driving under the influence caused the crash. A lesser amount of evidence was presented on the issue of whether or not a crash in these circumstances was an "unforeseeable" event. Mrs. Sanchez included a now-moot request in her reply brief that oral argument in her appeal be combined with that in Davis.
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0.28% and 0.368%, died when the motorcycle he was driving left the road. Id. a t *1. No other persons or vehicles were involved in the crash and no weather, v e h ic le , or road conditions that may have contributed to the crash were noted, a lt h o u g h witnesses testified that Davis did not appear intoxicated. Id. LINA d e n ie d coverage on Davis's policy for the same reasons cited in this case: there w a s no "Covered Accident" and coverage was precluded by the self-inflicted in ju r y exclusion. Id. Finding that "[t]he policy does not define the term

`u n fo r e s e e a b le ,'" and that LINA interpreted that term "in a manner consistent w it h the term's plain meaning," we affirmed a grant of summary judgment to L IN A . Id. at *3 (citation omitted). L IN A also denied Mrs. Sanchez's claim because it determined that Mr. S a n c h e z 's death fell under the "intentionally self-inflicted Injury" exclusion in t h e Policy. Because our decision on LINA's interpretation of a "Covered

A c c id e n t " is determinative of coverage, we need not address this issue. See id. C O N C L U S IO N F o r the reasons set forth above, we AFFIRM the district court's entry of ju d g m e n t in favor of LINA.

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