863 F.3d 1036
8th Cir.2017Background
- Phillip Donaldson, a Schwan’s delivery driver, died on impact when his truck was struck by an oncoming vehicle while he was performing regular delivery duties.
- The employer-sponsored Blanket Accident Insurance Policy (an ERISA plan) covered accidental death “when traveling on business” and included Hazard H-12: “24-Hour Accident Protection While On A Trip (Business Only).”
- National Union denied the claim under Hazard H-12, invoking an exception stating coverage does not apply to "any such conveyance the Insured Person has been hired to operate." National Union concluded Donaldson was hired to operate the conveyance he was driving, so the exception barred coverage.
- Mrs. Michele Donaldson exhausted administrative remedies, sued after denial, and the district court upheld National Union’s denial on a stipulated record. Mrs. Donaldson appealed.
- The core factual overlap: Donaldson was both operating a conveyance (his truck) and was struck by another conveyance (the oncoming vehicle). The dispute turned on whether the exception’s phrase “any such conveyance” refers to the conveyance the insured was operating or to the conveyance that caused the injury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hazard H-12’s exception (“any such conveyance the Insured Person has been hired to operate”) bars coverage when insured was operating one vehicle and struck by another | Donaldson: "any such conveyance" refers to the vehicle that caused the injury (the striking vehicle), so coverage applies because she was not hired to operate that vehicle | National Union: "any such conveyance" encompasses any conveyance involved, including the one Donaldson was hired to operate, so the exception excludes coverage | Court: Phrase ambiguous; both interpretations reasonable. Defer to administrator’s interpretation under abuse-of-discretion standard; affirmed denial of benefits |
| Whether plan administrator abused discretion in denying benefits given ambiguity and conflict of interest (insurer is also administrator) | Donaldson: Denial unreasonable because textual reading favors coverage; administrator’s conflict should weigh against denial | National Union: Interpretation reasonable; conflict of interest exists but record provides no evidence of biased claims practices, so only some weight given | Court: Abuse-of-discretion standard applies; given ambiguity and reasonable administrator interpretation, no abuse of discretion; conflict given only modest weight |
| Whether National Union’s reading renders other Policy language meaningless (e.g., "struck by") | Donaldson: Defendant’s reading makes "struck . . . by" meaningless | National Union: Uses other provisions of Hazard H-12 applicable to being struck; no language rendered meaningless | Held: Court finds defendant’s reading does not nullify the language; other provisions cover the facts, so interpretation stands |
| Whether administrator’s interpretation conflicts with ERISA or shows inconsistent past interpretation | Donaldson: Suggests interpretation contravenes plan intent or ERISA protections | National Union: No conflict with ERISA; no evidence of inconsistent positions | Held: No indication of ERISA conflict or inconsistent interpretation; factors support reasonableness |
Key Cases Cited
- Hampton v. Reliance Standard Life Ins. Co., 769 F.3d 597 (8th Cir. 2014) (abuse-of-discretion standard where plan grants discretionary authority)
- Manning v. American Republic Ins. Co., 604 F.3d 1030 (8th Cir. 2010) (consider conflict of interest when insurer evaluates and pays claims)
- Darvell v. Life Ins. Co. of N. Am., 597 F.3d 929 (8th Cir. 2010) (deference to reasonable administrator interpretation when multiple meanings exist)
- King v. Hartford Life & Accident Ins. Co., 414 F.3d 994 (8th Cir. 2005) (factors for assessing reasonableness of plan interpretation)
- Finley v. Special Agents Mut. Benefit Assoc., Inc., 957 F.2d 617 (8th Cir. 1992) (same analytical framework for plan interpretation)
- Ingram v. Terminal R.R. Ass'n of St. Louis Pension Plan for Nonschedule Emps., 812 F.3d 628 (8th Cir. 2016) (administrator’s reasonable choice among interpretations not an abuse)
- West v. Local 710, Int’l Bro. of Teamsters Pension Plan, 528 F.3d 1082 (8th Cir. 2008) (deference to reasonable fiduciary interpretations)
- Maytag Corp. v. Int’l Union, United Auto., Aerospace & Agric. Implement Workers of Am., 687 F.3d 1076 (8th Cir. 2012) (extrinsic evidence may resolve plan ambiguity, but none presented here)