UNUM Life Insurance Company of America v. Mohedano et al
MEMORANDUM OPINION AND ORDER Denying 49 Sealed Event, Granting 47 Sealed Event (Signed by Judge George C Hanks, Jr) Parties notified.(lusmith, 3)
United States District Court
Southern District of Texas
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
UNUM LIFE INSURANCE COMPANY
SANDRA MOHEDANO, et al,
February 23, 2017
David J. Bradley, Clerk
CIVIL ACTION NO. 3:13-CV-446
MEMORANDUM OPINION AND ORDER
This case stems from a dispute over the employee benefit account of Candido Paul
Mohedano, Jr. Mohedano enrolled through his employer in both basic and supplemental
life insurance and—at issue here—accidental death and dismemberment (“AD&D”)
insurance. Plaintiff Unum Insurance Company of America (“Unum”) issued the policies.
Mohedano died during an altercation with his wife and plan beneficiary, Sandra
Unum filed a Complaint against Sandra, Robert Mohedano (decedent’s
brother), and Candido Paul Mohedano, Sr.1 (together, “The Mohedanos”). Unum notified
the Mohedanos that it was unable to approve the AD&D benefit. The Mohedanos filed
an amended answer and counterclaim, seeking declaratory relief. Unum and the
Mohedanos then each filed motions for summary judgment.
For the reasons stated below, Unum’s motion for summary judgment (Dkt. 47)
will be granted and Mohedanos’ motion for summary judgment (Dkt. 49) will be denied.
Joined as temporary administer of the estate of Candido Paul Mohedano, Junior.
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The following summary of events is based on undisputed evidence contained in
the administrative record. Candido Paul Mohedano, Jr. was employed by Enterprise
Products Company (“Enterprise”). Enterprise participated in the Select Group Insurance
Trust Policy No. 29200 (Transportation and Public Utilities Industry Fund), issued by
Unum. Mohedano became eligible for several types of benefits under this policy through
his employment with Enterprise.
He enrolled for basic and supplemental life2 and
AD&D benefits (together, “the Plan”).3 Mohedano designated his wife Sandra and his
brother Robert as the primary and contingent beneficiaries, respectively.
A. Terms of the Plan
The Summary of Benefits cover page lists Maine as the governing jurisdiction.
The “Accidental Death and Dismemberment Insurance Benefit Information” explains that
beneficiaries “will receive payment when Unum approves your death claim providing
you meet certain conditions.” Under the terms of the policy, “[t]he benefit will be paid
only if an accidental bodily injury results in one or more of the covered losses
[including loss of life].”
Under “WHAT ACCIDENTAL LOSSES ARE NOT
COVERED UNDER YOUR PLAN?,” Unum states that the plan “does not cover any
accidental losses caused by, contributed to by, or resulting from: . . . an attempt to
commit or commission of a crime . . . [or] being intoxicated.” The Glossary defines the
Basic Policy 298603 (basic life: $261,000; basic AD&D: $300,000).
Supplemental Policy 298604 (supplemental life: $100,000; supplemental AD&D: $392,000).
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ACCIDENTAL BODILY INJURY means bodily harm caused solely by
external, violent and accidental means and not contributed to by any other
INTOXICATED means that your blood alcohol level equals or exceeds
the legal limit for operating a motor vehicle in the state where the accident
Administrator (here, Enterprise) administers, and is the named fiduciary of the Plan.
Enterprise has legal authority to delegate its duties.
The insurer (here, Unum)
administers the benefits, which are provided in accordance with the Summary of
Benefits. Under “YOUR RIGHTS UNDER ERISA,” the employee may appeal a denial
Under “DISCRETIONARY ACTS,” Enterprise delegates discretionary
authority to Unum to:
[M]ake benefit determinations under the Plan. . . . Benefit determinations
include determining eligibility for benefits and the amount of any benefits,
resolving factual disputes, and interpreting and enforcing the provisions of
the Plan. All benefit determinations must be reasonable and based on the
terms of the Plan and the facts and circumstances of each claim.
Once you are deemed to have exhausted your appeal rights under the Plan,
you have the right to seek court review under Section 502(a) of ERISA of
any benefit determinations with which you agree. The court will determine
the standard of review it will apply in evaluating those decisions.
B. Candido Mohedano, Jr.’s Death
On September 7, 2013, Sandra Mohedano shot and killed her husband Candido
Mohedano, Jr. The shooting occurred after Candido, Sandra, and Candido’s brother Bill
had returned home from drinking at a karaoke lounge. Sandra was charged with murder.
The trial was held in the 122nd Judicial District Court of Galveston County, Texas.
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Sandra testified about a history of abuse at the hands of Candido. According to Sandra,
she and Candido began to argue in the car on the night of the shooting. She testified to
the following: 1) he violently attacked her once they pulled into the driveway; 2) she ran
into the home, grabbed the shotgun, and warned the approaching Candido to stop; 3)
Candido told her, “You’re dead now, bitch,” and continued approaching; and 4) the
shotgun accidentally discharged. Candido died from a single shot to the chest.
Bill sat in the back seat of the car when the shooting occurred. He testified to the
following: 1) there was no argument on the way home, but that Sandra began attacking
Candido in the driveway; 2) she threatened to kill both Candido and Bill before running
inside; 3) she grabbed the shotgun with one hand and confronted Candido; and 4) she
then shot and killed him.
In addition to the testimony of Sandra and Bill, the jurors heard from the 911
dispatcher, law enforcement and medical first responders, the investigators, and medical
and laboratory personnel. The doctor performing the autopsy testified that Candido’s
blood sample contained an alcohol content of .217 grams percent, almost three times the
legal driving limit in Texas. The jury returned a ‘not guilty’ verdict.
C. Unum’s Denial of AD&D Benefits to Candido’s Beneficiaries
Prior to the trial, Unum determined that it owed basic and supplemental life
benefits to the beneficiary.
It brought a Complaint pursuant to 29 U.S.C. §
1132(a)(3)(B)(ii) seeking interpleader, depositing the benefit funds into the Court’s
registry. These funds were eventually distributed to Robert and Sandra Mohedano.
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Unum notified the beneficiaries that it could not determine whether AD&D benefit
could be paid until Unum reviewed the completed trial transcript. The Mohedanos filed
an Answer and Counterclaim, seeking declaratory relief. Once the trial concluded, Unum
notified the Mohedanos that the AD&D benefits were not payable. Unum determined
that: 1) Candido was the aggressor in the events leading to his death; 2) his aggressive
behavior contributed to his death; and 3) that Candido was engaged in the crimes of
assault and terroristic threat at the time of his death.
Upon Unum’s determination, the Mohedanos filed an amended Answer and
Counterclaim, seeking declaratory relief.
The Mohedanos also appealed the
determination to Unum pursuant to the terms of the policy.
They called Unum’s
determination arbitrary, capricious, and self-serving. They refuted Unum’s claim that
Sandra Mohedano was acquitted based on self-defense.
They noted inconsistencies
between Sandra’s testimony and the evidence. They provided affidavits from two friends
of Candido; a detective’s report; and medical records in support of these claims. Unum
denied the Mohedanos’ claim for a second time. Specifically, Unum determined the
Mr. Mohedano’s death cannot be considered an accidental bodily injury
because it was contributed to by another cause; his violent behavior and
assault on his wife. He should have reasonably expected death or serious
bodily injury could occur when he attacked or attempted to attack his wife,
especially since she told him a few weeks earlier she would shoot him if he
attacked her again. She was in possession of a firearm during the altercation
in which he was the aggressor.
The policy excludes coverage for tosses caused by, contributed to by or
resulting from attempting to commit or committing a crime. Mr. Mohedano
was attempting to commit or was committing the crimes of assault and
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terroristic threat when he attacked his wife just prior to her fatally shooting
him in self-defense.
It also appears the policy exclusion for being intoxicated apples in this
situation. Mr. Mohedano was intoxicated at the time of his death. His
intoxication appears to have caused, contributed to or resulted in a change
in his behavior during which he became violent with his wife. This violence
caused her to use a firearm against him to defend herself.
Dkt. 48-9. Unum then answered the Mohedano’s counterclaim, seeking to have its
determination upheld. The parties agree this case is governed by ERISA. They therefore
submitted cross motions for summary judgment based on the administrative record for
the Court’s review.
Standard of Review
A. Motion for Summary Judgment
“Standard summary judgment rules control in ERISA cases.”
Alexander & Alexander Inc., 379, F.3d 222, 225 (5th Cir. 2004). A movant seeking
summary judgment must establish that there is no genuine dispute about any material fact
and the law entitles it to judgment. Fed. R. Civ. P. 56(c). The movant must “demonstrate
the absence of a genuine issue of material fact.” Little v. Liquid Air Corp., 37 F.3d 1069,
1075 (5th Cir. 1994) (en banc). If the movant meets this burden, nonmovant must then
present admissible evidence creating genuine issues of material fact for trial. Id. “An
issue is genuine if there is sufficient evidence for a reasonable fact finder to return a
verdict for the nonmovant, and material if it would affect the outcome of the lawsuit
under the governing substantive law.” Humana Health Plan, Inc. v. Nguyen, No. CV H13-1793, 2016 WL 4718194, at *1 (S.D. Tex. Sept. 8, 2016) (citing Anderson v. Liberty
Lobby, Inc., 106 S. Ct. 2505, 2510 (1986)).
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B. ERISA Denial of Benefits Claim
Congress enacted ERISA “to promote the interests of employees and their
beneficiaries in employee benefit plans, and to protect contractually defined benefits.”
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113 (1989). Under ERISA, a
beneficiary whose claim is denied may seek judicial review. 29 U.S.C. § 1132(a)(1)(B).
A participant or fiduciary pursuing enforcement of the terms of the plan may also seek
judicial review. 29 U.S.C. § 1132(a)(3)(B)(ii).
The parties disagree on the appropriate standard of review. The Plan in issue
states that Maine is the governing jurisdiction. Maine allows discretionary clauses like
the one contained in the Plan. As discussed below, an Administrator’s determinations
made pursuant to a discretionary clause are reviewed for abuse of discretion. However,
the Mohedanos assert that the Court should apply a de novo rather than ‘abuse of
discretion’ standard of review. In support, they assert that: 1) the Court exercises its
subject matter jurisdiction due to the diversity of citizenship between the parties; 2) under
either diversity or federal question jurisdiction, Texas—rather than Maine—law controls;
3) under Texas law, discretionary clauses are prohibited and therefore void; and 4) due to
the absence of a valid discretionary clause, the Court should apply a de novo review. The
Court addresses these arguments in turn.
i. Subject Matter Jurisdiction and Choice of Law
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The Court exercises federal question jurisdiction over the case pursuant to 28
U.S.C. § 1331 and 29 U.S.C. § 1132(e).4 The Mohedanos argue that Texas Law—rather
than Maine law, as specified in the Plan—should control pursuant to the Court’s federal
question jurisdiction. The Fifth Circuit has not addressed choice of law in the ERISA
context under federal question jurisdiction. However, it has held that it is appropriate to
apply “federal common law choice of law principles when [exercising] federal question
jurisdiction over a case.” Jimenez v. Sun Life Assur. Co. of Can., 486 F. App’x 398, 406
(5th Cir. 2012). Jimenez described “three possible approaches to resolving this choice of
Under each approach, the Mohedanos bear the burden of
establishing that this Court should not enforce the Plan’s choice of law provision. See Id.
The Mohedanos’ motion for summary judgment relies upon the Restatement
(Second) of Conflict of Laws. Under Section 187(2), the law chosen by the parties would
(a) the chosen state has no substantial relationship to the parties or the
transaction and there is no other reasonable basis for the parties’ choice, or
(b) application of the law of the chosen state would be contrary to a
fundamental policy of a state which has a materially greater interest than
the chosen state in the determination of the particular issue . . . .
Subject matter jurisdiction based on diversity of citizenship may also be available, but the
Court need not consider that here.
These three approaches include: enforcing the policy’s choice of law provision unless it is
unreasonable or fundamentally unfair; applying Section 187 of the Restatement (Second) of
Conflict of Laws; and enforcing the policy’s choice of law absent a clear showing that the clause
is unreasonable under the circumstances. Jimenez, 486 F. App’x at 407-08 (citations omitted).
The Fifth Circuit has employed the latter two approaches in cases involving admiralty law and
international disputes. Id.
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Restatement of Conflict of Laws (Second) § 187 (Am. Law Inst. 1971).
The Mohedanos do not prevail on a 187(2)(a) argument. Despite assertions to the
contrary, Maine does have a relationship to the transaction. Unum, the issuer of the Plan,
is incorporated in Maine. Its principal place of business is in Maine. Its signees endorsed
the Plan in Maine. Correspondence from Unum originated in, and was returned to,
Maine. The Plan’s cover page notes in bold that Maine is the governing jurisdiction.
The § 187(2)(b) analysis is a closer call. Maine law allows discretionary clauses
like the one contained in the Plan here, while Texas law does not. Applying Maine law
would therefore be contrary to the Texas statute prohibiting discretionary clauses. 28
TEX. ADMIN. CODE § 3.1203 (2010) (“[A] discretionary clause in any form . . . is
The Mohedanos must therefore demonstrate that this policy is
‘fundamental’, and that Texas has a ‘materially greater interest’ than Maine in
determining whether to allow the discretionary clause. The Mohedanos aver that “Texas
bears the most significant relationship to the parties and the transaction, and has the
materially greater interest.” In support, they refer to the following facts: the policy holder
and his beneficiaries live in Texas. The employer participating in the Plan is domiciled in
Texas; benefits will be paid in Texas; and the case is being litigated in Texas.
After considering the arguments, the Court finds that the Mohedanos fail to show
that the discretionary clause prohibition is a fundamental policy, or that Texas’s interest
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in determining whether to allow discretionary clauses is materially greater than Maine’s. 6
The Court therefore Court applies Maine law. The discretionary clause is therefore valid.
ii. Discretionary Clauses and the Proper Standard of Review
The Supreme Court of the United States held that “a denial of benefits challenged
under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan
gives the Administrator or fiduciary discretionary authority to determine eligibility for
benefits or to construe the terms of the plan.” Bruch, 489 U.S. at 115. Where the plan
grants the Administrator discretionary authority, the determination will only be reversed
if the reviewing court finds that the Administrator abused its discretion. Id.
Having determined that the Plan’s discretionary clause is valid, the Court therefore
reviews Unum’s denial of benefits for an abuse of discretion.7
The Court further finds that the Mohedanos failed to meet their burden under the two
alternative approaches to show that applying Maine law is unreasonable or fundamentally unfair.
In the Fifth Circuit, the Administrator’s findings of fact are always reviewed for an abuse of
discretion. Meditrust Fin. Servs. Corp. v. Sterling Chemicals, Inc., 168 F.3d 211, 213 (5th Cir.
1999) (“Regardless of the Administrator’s ultimate authority to determine benefit eligibility,
however, factual determinations made by the Administrator during the course of a benefits
review will be rejected only upon the showing of an abuse of discretion.”) (citing Pierre v.
Conn.t Gen. Life Ins. Co., 932 F.2d 1552, 1562 (5th Cir. 1991)). District courts continue to
follow this mandate regarding factual determinations even where the discretionary clause is void.
See Curtis v. Metro. Life Ins. Co., CIVIL ACTION NO. 3:15-CV-2328-B, 2016 WL 2346739, at
*10 (N.D. Tex. May 4, 2016). Unum’s factual determinations—and not its interpretation of the
Plan—are at issue here (i.e., was he intoxicated, was he committing a crime, was his death an
accident). The Court would likely reach the same conclusion applying a de novo review to
Unum’s denial of benefits.
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The Fifth Circuit recently summarized the contours of the ‘abuse of discretion’
standard of review when reviewing an ERISA denial of benefits claim:8
We reach a finding of abuse of discretion only when the plan Administrator
acted arbitrarily or capriciously. A decision is arbitrary if it is made
without a rational connection between the known facts and the decision.
Even though the Administrator's decision to deny benefits must be
supported by substantial evidence, substantial evidence is merely 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.
Ultimately, a court's review of the Plan Administrator's decision need not
be particularly complex or technical; it need only assure that the
Administrator's decision falls somewhere on a continuum of
reasonableness—even if on the low end. Obviously, no court may
substitute its own judgment for that of the plan Administrator.
McCorkle v. Metro. Life Ins. Co., 757 F.3d 452, 457–58 (5th Cir. 2014) (footnotes
omitted) (citations omitted) (internal quotation marks omitted). McCorkle makes clear
that a district court reviewing for abuse of discretion in an ERISA denial of claims case
acts in a “very narrowly restricted” appellate role. Id. at 456.
The Mohedanos argue that Unum’s determination not to grant the AD&D benefits
to Candido’s beneficiaries was improper. They also argue that Unum has an inherent
conflict of interest that “severely prejudiced its decision to deny benefits.” Dkt. 49, p. 20.
“A conflict of interest exists when the plan Administrator ‘both evaluates claims for
benefits and pays benefits claims.’” Burell v. Prudential Ins. Co. of Am., 820 F.3d 132,
138 (5th Cir. 2016) (quoting Truitt v. Unum Life Ins. Co. of Am., 729 F.3d 497, 508 (5th
The ‘abuse of discretion’ analysis actually involves a first, threshold step of determining
whether the determination was legally correct. The Court may bypass this first step. Because
the parties did not argue whether Unum’s determination was legally correct, the Court elects to
bypass this issue and directly engage in the ‘abuse of discretion’ analysis. See McCorkle v.
Metro. Life Ins. Co., 757 F.3d 452, 457 n.10 (5th Cir. 2014).
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Cir. 2013)). However, such a conflict is “‘but one factor among many that a reviewing
judge must take into account’ in determining whether an abuse of discretion occurred.”
Id. (quoting Holland v. Int’l Paper Co. Ret. Plan, 576 F.3d 240, (5th Cir. 2009). The
Court has considers Unum’s conflict of interest as one factor in its analysis.
As to the ultimate issue, Unum insists that it did not abuse its discretion in denying
the AD&D benefits. The Court agrees. A substantial amount—if not a preponderance—
of the evidence indicates that Candido’s death was not accidental. It is undisputed that
Candido and Sandra engaged in a physical altercation while in their parked car in the
driveway; that Candido was inebriated; that Sandra went inside the home and grabbed the
shotgun; and that continued to approach Sandra despite her warning that he should stop.
It was therefore reasonable that Unum determined that: 1) Candido’s aggressive behavior
led to his death; 2) his behavior constituted the crime of assault; and 3) his intoxication
further contributed to his behavior. Once Unum arrived at any of these three factual
determinations, it had little discretion to take any action other than denying AD&D
benefits based upon the clear language of the Plan. There was a rational connection
between the known facts and Unum’s decision to deny benefits. The Court therefore
finds that Unum did not abuse its discretion in denying the benefits.
IV. Conclusion and Order
As to Unum’s motion for summary judgment, the Court finds that Unum
demonstrated the absence of a genuine issue of material fact. The Court further finds that
the Mohedanos did not meet their responsive burden to provide admissible evidence
creating such an issue. Unum’s motion for summary judgment is therefore GRANTED.
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As to the Mohedanos’ motion for summary judgment, the Court finds that the Mohedanos
failed to meet their initial burden to demonstrate the absence of a genuine issue of
material fact. Their motion is DENIED.
SIGNED at Galveston, Texas, this 23rd day of February, 2017.
George C. Hanks Jr.
United States District Judge
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