731 F.3d 360
5th Cir.2013Background
- ERISA plan administered by Newman for Lowe’s Business Travel Accident Insurance; Gerber Life insured; Porter sues for benefits denial.
- Elizabeth Porter, Lowe’s Administrative Manager, died Feb 24, 2008 en route after responding to an alarm; she left home for a bonafide trip to perform duties.
- Plan excludes injuries during travel to and from work; coverage only for bonafide business trips.
- Newman denied Porter’s claim Oct 22, 2008 after investigations and employer confirmations of job duties.
- District court found denial legally incorrect and an abuse of discretion; court entered judgment for Porter; appellate court reverses in favor of defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the administrator correctly interpreted bonafide trip and travel-to-work exclusion. | Porter argues Elizabeth was on a bonafide trip beyond ordinary commute. | Plan language excludes travel to and from work; trip must be bona fide for business. | No abuse of discretion; administrator’s interpretation reasonable. |
| Whether there was a plan-implication conflict of interest affecting the decision. | Conflicts may bias denial; there is no basis for bias. | No conflict; administrator equally administers and insures; discretion intact. | No conflict; no abuse based on conflict of interest. |
| Whether the district court properly evaluated the administrator’s legal correctness or proceeded to abuse-of-discretion review. | District court properly found legal error and abuse of discretion. | Court could bypass legal correctness and assess abuse of discretion directly. | Court properly conducted abuse-of-discretion review and found no abuse. |
Key Cases Cited
- Crowell v. Shell Oil Co., 541 F.3d 295 (5th Cir. 2008) (two-step abuse-of-discretion framework; consider legal correctness and, if needed, discretion)
- Gosselink v. AT&T, Inc., 272 F.3d 722 (5th Cir. 2001) (factors for abuse of discretion including good faith and internal consistency)
- Holland v. Int’l Paper Co. v. Ret. Plan, 576 F.3d 240 (5th Cir. 2009) (explains when reviewing court may bypass legal correctness and examine discretion)
- Winters v. Costco Wholesale Corp., 49 F.3d 550 (9th Cir. 1995) (contra proferentem not applicable when plan grants discretion to interpret)
- Duffer v. American Home Assurance Co., 512 F.2d 793 (5th Cir. 1975) (discusses scope of commute exclusions and effect of qualifying language)