Robert Fier v. Unum Life Insurance Co. of Ame

Filing

FILED PER CURIAM OPINION (DAVID R. THOMPSON, ROBERT E. COWEN and BARRY G. SILVERMAN) AFFIRMED. FILED AND ENTERED JUDGMENT. [7598784]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT



ROBERT B. FIER,



Defendant-Appellee.

UNUM LIFE
AMERICA,

Plaintiff-Appellant,
v.
INSURANCE CO. OF



No. 09-17520
D.C. No.
2:06-cv-01162RLH-LRL
OPINION

Appeal from the United States District Court
for the District of Nevada
Roger L. Hunt, Chief District Judge, Presiding
Submitted December 8, 2010*
San Francisco, California
Filed January 4, 2011
Before: David R. Thompson, Robert E. Cowen, and
Barry G. Silverman, Circuit Judges.**
Per Curiam Opinion

*The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
**The Honorable Robert E. Cowen, Senior United States Circuit Judge
for the Third Circuit, sitting by designation.

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COUNSEL
Steven J. Parsons, Las Vegas, Nevada, and Douglas K.
deBries, Sacramento, California, for the plaintiff-appellant.
Von S. Heinz, Las Vegas, Nevada, for the defendant-appellee.

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FIER v. UNUM LIFE INSURANCE CO.

OPINION
PER CURIAM:
Robert B. Fier appeals the district court’s denial of benefits
under two insurance policies that he purchased from Unum
Life Insurance Company of America (Unum) while working
at the Boyd Group. Fier v. Unum Life Ins. Co. of Am., No.
2:06-cv-01162-RLH-LRL, 2009 WL 3644187 (D. Nev. Nov.
3, 2009). Both policies are maintained pursuant to the
Employee Retirement Income Security Act of 1974 (ERISA),
29 U.S.C. § 1001 et seq. We have jurisdiction under 28
U.S.C. § 1291. Reviewing the district court’s legal conclusions de novo and its factual findings for clear error, Metro.
Life Ins. Co. v. Parker, 436 F.3d 1109, 1113 (9th Cir. 2006),
we affirm.
I.
Fier began repairing casino slot machines for the Boyd
Group in 1987, later earning a promotion to a managerial
position. After his promotion, Fier enrolled in the Boyd
Group’s benefits program for managers, including the two
Unum policies at issue in this appeal: a Group Long Term
Disability Policy (the LTD policy) and a Group Life and
Accidental Death and Dismemberment Insurance Policy (the
AD&D policy).
In 1992, a drunk person shot Fier in the throat at a hunting
lodge in Utah. The shot severed Fier’s spinal cord at the C6
level, leaving him permanently quadriplegic. Fier was able to
return to work at the Boyd Group in early 1993. He worked
in a new position tailored to accommodate his many physical
limitations, but earned the same salary he received before the
accident. In 1997, the Boyd Group assigned Fier to a new
position and reduced his salary by $20,000.
Fier submitted a claim for benefits under the LTD policy in
March 1997. Between late 1997 and late 2004, Unum paid

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Fier a total of $152,069.02. In late 2004, Unum informed Fier
that his claim had not been payable since 1998, when Fier left
the Boyd Group and began earning a salary comparable to
what he received before the accident. Unum determined Fier
was ineligible for benefits under a paragraph in the LTD policy titled “Termination of Disability Benefits,” which provides:
Disability benefits will cease on the earliest of:
1.

the date the insured is no longer disabled;

2.

the date the insured dies;

3.

the end of the maximum benefit period;

4.

the date the insured’s current earnings exceed
80% of his pre-disability earnings.

Fier, 2009 WL 3644187, at *5. The district court found, and
Fier does not dispute, that he earned greater than eighty percent of his pre-disability earnings between 1993 and 1997,
and from 1998 onward. See id. at **7-8.
Fier filed suit in the District of Nevada for backpay of benefits from 1993 to 1997 and for a declaratory judgment that
he is entitled to continuing payment of benefits. The district
court found that Fier was ineligible for benefits from 1993 to
1997, and from 1998 onward, when his income exceeded
eighty percent of his pre-injury earnings.1 The court also
found that Fier was not currently insured under the LTD policy because he no longer worked at the Boyd Group. Finally,
the district court rejected Fier’s claim for benefits under the
1

Unum counterclaimed for reimbursement of approximately $140,000
in alleged overpayment under the LTD policy for the years 1998 to 2004.
The district court found Unum did not establish entitlement to reimbursement, and Unum does not appeal this ruling.

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AD&D policy, concluding he was ineligible because his
hands and feet were not physically severed from his body.
II.
1.

The Group Long Term Disability Policy

The district court correctly determined that Fier was ineligible for benefits under the LTD policy from 1993 to 1997, and
from 1998 onward.
We “interpret terms in ERISA insurance policies in an ordinary and popular sense as would a [person] of average intelligence and experience.” Evans v. Safeco Life Ins. Co., 916
F.2d 1437, 1441 (9th Cir. 1990) (internal quotations omitted).
We will “not artificially create ambiguity where none exists.”
Id. (internal quotations omitted).
[1] The LTD policy’s paragraph titled “Termination of
Disability Benefits” states that “[d]isability benefits will cease
on the earliest of: . . . the date the insured’s current earnings
exceed 80% of his pre-disability earnings.” Fier, 2009 WL
3644187, at *5. This provision unambiguously serves to terminate “disability benefits” at the time an insured person
earns greater than eighty percent of his pre-disability earnings.2
2
Fier argues that the LTD policy is ambiguous and that the district court
failed to apply the rule of contra proferentem, “under which ambiguities
in a contract are construed against the contract’s drafter.” See Scharff v.
Raytheon Co. Short Term Disability Plan, 581 F.3d 899, 905 (9th Cir.
2009), cert. denied, 130 S. Ct. 3508 (2010). However, to the extent the
LTD policy’s “Termination of Disability Benefits” paragraph creates any
ambiguity, it is as to whether the paragraph terminates only “disability”
benefits, or both “disability” and “partial disability” benefits. In Fier’s
case, both interpretations of the paragraph lead to the same result. If Fier
is “disabled,” as he contends, he is ineligible under the plain language of
the termination paragraph. If the paragraph does not apply to “partial disability” benefits, Fier is nevertheless ineligible because he does not meet
the definition of “partial disability,” which requires that an insured earn at
least twenty percent less than his pre-disability earnings. In either case,
Fier could not recover benefits between 1993 and 1997, and from 1998
onward.

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Fier was an insured person and received “disability benefits”
under the LTD policy from 1997 until 2004. He does not challenge the district court’s finding that he earned greater than
eighty percent of his pre-disability earnings from 1993 to
1997, and from 1998 onward. Under the plain terms of the
LTD policy, Fier is ineligible for continuing benefits, and he
is ineligible for backpay of benefits during the specified years.
[2] The district court was also correct in finding that Fier’s
coverage under the LTD policy terminated when he left the
Boyd Group in 1998. The LTD policy provides that “[a]n
employee will cease to be insured on the earliest of the following dates: . . . . 5. the date employment terminates.” Id. at
*9. Fier concedes that he left the Boyd Group, “causing the
LTD policy to possibly terminate.” Appellant’s Opening Br.
at 43. He maintains he is nevertheless eligible for benefits
under a separate provision of the policy stating that
“[t]ermination of this policy under any conditions will not
prejudice any payable claim which occurs while the policy is
in force.” Id. Fier’s argument is essentially an extension of his
contention that Unum’s obligation to pay benefits did not
cease under the “Termination of Disability Benefits” paragraph. See supra. But because Fier became ineligible for disability benefits in 1998, he does not have “any payable claim”
under which to demand additional benefits.
2.

The Group Life and Accidental Death and
Dismemberment Insurance Policy

Fier also challenges the district court’s conclusion that his
AD&D policy requires an insured to have his hands or feet at
least partially “cut off.” See Fier, 2009 WL 3644187, at *10.
The relevant portion of the policy provides for a lump sum
payment in the event an insured loses both hands or both feet.
The policy defines “loss” as follows:
For hands or feet, “loss” means dismemberment by
severance at or above the wrist or ankle joint.

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Id. at *9.
[3] Fier argues that although his hands and feet remain
physically attached to his body, he has lost them from a functional standpoint due to the “severance” of his spinal cord.
This circuit has not yet construed the terms “dismemberment
by severance” in an ERISA plan. We now interpret those
terms to require physical removal of the limbs.
[4] In Cunninghame v. Equitable Life Assurance Society of
the United States, 652 F.2d 306, 307 (2d Cir. 1981) (per
curiam), the plaintiff’s AD&D policy defined “loss” of hands
or feet as “dismemberment by severance at or above wrist or
ankle joints respectively.” As in Fier’s case, the plaintiff in
Cunninghame had suffered a severed spinal cord resulting in
paralysis. Id. The plaintiff urged the court to award benefits
because he had lost the use of his legs from a functional
standpoint. Id. The Second Circuit concluded the policy’s definition of “loss” was unambiguous and construed the terms
“dismemberment by severance” as follows:
The word “dismemberment” itself implies actual
separation; the noun derives from the transitive verb
“dismember,” defined as meaning “to cut or tear off
or disjoin the limbs, members, or part of” or “to tear
into pieces: take apart roughly or divide (a whole)
into sections or separate units” or, obsoletely, to
“lop” or “sever.” “Dismemberment” as a noun,
therefore, refers to “the act of dismembering or the
state of being dismembered: division into separate
parts or units.” Furthermore, “severance” is defined
as “the act or process of severing,” and derives from
“sever,” meaning “to put asunder,” “to join or disunite from one another,” “to keep separate or apart,”
“to divide or break up into parts,” “to cut in two:
sunder, cleave[.]” Thus, “dismemberment by severance” has to mean in our view some actual, physical
separation; the use of two words essentially express-

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ing the same idea strikes us as unambiguous draftsmanship by an abundantly cautious lawyer. And
when added to this phrase is the clause “at or above
wrist or ankle joints,” it would seem plain that the
policy had the limited scope which we ascribe to it.
Id. at 309 (internal citations to dictionary omitted). We agree
with and adopt this reasoning. Reading the AD&D policy’s
language in its “ordinary and popular sense,” Evans, 916 F.2d
at 1441, the terms “dismemberment by severance” are unambiguous and require “actual, physical separation.” See Cunninghame, 652 F.2d at 309. Because Fier did not suffer the
physical detachment of his limbs, Unum does not owe him
benefits under the AD&D policy.
AFFIRMED.