Case Information
*1 Before HIGGINBOTHAM, SMITH, and DeMOSS, Circuit Judges.
DeMOSS, Circuit Judge:
I. FACTS AND PROCEDURAL HISTORY
Lоu Ann Moore, an employee of Southern Farm Bureau Life Insurance Company ("Southern Farm Life"), a Mississippi corporation, sought to recover accidental death benefits as a beneficiary of an Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132 (ERISA) regulated group policy insuring herself and her husband, Cary Moore. Mr. Moore died on April 29, 1989 when he lost control of his vehicle, and it сrashed into a shopping center building and burst into flames. The medical testimony is undisputed that Mr. Moore had a brain tumor, a malignant astrocytoma of high grade, and had been suffering from a condition which would cause him to lose consciousness. This condition first occurred in 1983. In fact, in March 1989, just over a month prior to his death, the Ridgeland Fire Department was called to Mr. Moore's house because he had fainted while walking in the street and, in June 1988, t he same fire department responded to a call at his house when he had a seizure. Lou Ann Moore was aware that her husband suffered from a condition that would periodically cause him to lose consciousness, and that he was being treated for this condition during 1983 and 1984 by doctors Robinson and Guarnaschelli. Both of these physicians *2 as well as Mrs. Moorе's medical experts agreed that the tumor caused Moore to lose consciousness or have a seizure which caused the accident.
On August 25, 1989, Mrs. Moore filed with Southern Farm Life, the plan administrator, a completed claim form to obtain accidental death benefits. On October 5, 1989, Joseph Stroble, senior vice-president of claims at Southern Farm Life, after investigating the claim, dеtermined that Mr. Moore's death was caused or contributed to by a brain tumor and therefore the death was excluded from coverage. The policy defined covered injury as "bodily injury caused by an accident resulting directly and independently of all other causes of loss covered by this policy." The policy also contained the following exclusion:
A loss that is the result of or contributed to by one of the following is not a covered loss even though it was caused by an accidental bodily injury:
(1) A disease or infirmity of the mind or body. Southern Farm Life commenced its investigation on May 1, 1989, after Mr. Stroble read a newspaper clipping indicating that a brain tumor caused Cary Moore's death. Southern Farm Life obtained Mr. Moore's death certificate and his autopsy report, both of whiсh stated that he died of a brain tumor. Southern Farm Life then received Mrs. Moore's completed claim forms and medical authorizations on August 25, 1989. After receiving the appropriate medical authorizations, Southern Farm Life obtained records from three physicians who had treated Mr. Moore since 1983. The reports showed Mr. Moore's prior treatment of a brain tumor and were consistent with his autopsy report. Mr. Stroble then decided based upon the evidence available that Cary Moore's death was caused or contributed to by the brain tumor, and therefore Southern Farm Life would not pay benefits because of the policy exclusion. When Stroble made his decision, neither Southern Farm Life nor Mr. Stroble had received opinions from any other physicians as to the cause of Mr. Moore's death. On October 10, 1989 Southern Farm Life filed a declaratory judgment action contending that the policy did not require it to pay benefits for Cary Moore's death, but failed to notify Lou Ann Moore that it was denying her claim. In response, Lou Ann Moore filed a counterclaim for policy benefits and an award of attorney's fees.
At trial, the district court allowed Mrs. Moore to intrоduce additional evidence. Her medical *3 expert, Dr. Lloyd White, testified after reviewing slides of the brain tissue, that although the tumor caused Mr. Moore to suffer a seizure or lose consciousness while driving his van, which resulted in the crash, he could not determine whether the tumor directly caused Mr. Moore's death. After a jury trial, the district court rendered judgment based on the jury's verdict for Lou Ann Moore in the amount of $75,000, the full policy amount, in addition to prejudgment and postjudgment interest. The Court denied Southern Farm Life's Motion for Judgment as a Matter of Law and denied Lou Ann Moore's counterclaim for an award of attorney's fees. Southern Farm Life filed a notice of appeal and Lou Ann Moore filed a notice of cross-appeal. Southern Farm Life appeals contending that the distriсt court erred by: (1) failing to review for an abuse of discretion Southern Farm Life's factual determination of the cause of Cary Moore's death, and (2) erroneously instructing the jury so as to increase Southern Farm Life's burden to prove that the death fit within an exclusion. Moore cross-appeals contending that the district court erred by refusing to award her attorney's fees. 793 F.Supp. 702 (S.D.Miss.1992).
II. DISCUSSION
A. The Proper Standard of Review
ERISA governs the insuranсe policy in the present case. ERISA does not dictate the appropriate standard of review for reviewing benefit determinations of plan administrators. Courts addressing this issue initially adopted the "arbitrary and capricious" standard of review.
In
Firestone Tire & Rubber Co. v. Bruch,
This Circuit addressed the issue of the appropriate standard of review to apply to a plan administrator's factual determination in Pierre v. Conn. Gen. Life Ins. Co., 932 F.2d 1552 (5th Cir.1991). Based on facts similar to those in the рresent case, the court in Pierre held that it should review a factual determination made by a plan administrator for an abuse of discretion. In reaching *4 that decision, the court noted that, according to trust principles, an ERISA fiduciary possesses inherent discretion through a statutory grant of authority to control and manage the operation of the plan. [2] The Court then noted the difficulty and uncertainty in applying de novo review on a "cold record" and reasoned that in "virtually all decisional review, some deference is given to the fact finder, whether it is a district court giving deference to an administrative body or an appellate court giving deference to the district court." [3] Accordingly, the Court in Pierre ruled that for practical reasons courts simply cannot supplant plan administrators, through dе novo review, as resolvers of mundane and routine fact disputes. [4] Ultimately, we held that "for factual determinations under ERISA plans, the abuse of discretion standard of review is the appropriate standard; that is, federal courts owe due deference to an administrator's factual conclusions that reflect a reasonable and impartial judgment." [5]
The district court in the present cаse decided to review the plan administrator's factual determination of the cause of Mr. Moore's death on a de novo basis, apparently because the plan administrator failed to provide Mrs. Moore with notice of the denial of her claim. Southern Farm Life concedes that it did not provide Lou Ann Moore or her lawyer notice of denial of her claim beforе filing the declaratory judgment action on October 11, 1989. However, it contends that failure to provide a written denial does not mean that the abuse of discretion standard announced in Pierre is not applicable.
Title 29 C.F.R. § 2560.503-1(h) promulgated pursuant to section 503 of ERISA, 29 U.S.C.
§ 1133 provides:
Decision on review. (1)(i) A decision by an appro priate named fiduciary shall be made promptly, and shall not ordinarily be made later than 60 days after the plan's receipt of a request for review, unless special circumstances ... require an extension of time for processing.... The decision on review shall be furnished to the claimant within the appropriate time described in paragraph (h)(1) of this section. If the decision on review is not furnished within such time, the claim shall be deemed denied on review. *5 29 C.F.R. § 2560.503-1(h)(1), (4).
The Supreme Court stated in
Massachusetts Mutual Life Insurance Co. v. Russell,
473 U.S.
134, 144,
Southern Farm Life contends that in reviewing the plan administratоr's decisions, we are
limited to evidence that was before the plan administrator when he made his decision to deny benefits.
In
Wildbur v. Arco Chemical Co., et al.,
B. The District Court Erroneously Instructed the Jury as to the Terms of the Policy
The district court held in its Memorandum Opinion and Order that the policy exclusion
excludes a loss contributеd to by a bodily infirmity or disease only when that bodily infirmity or
disease is a concurring proximate cause of death. The district court stated "the policy does not
unambiguously bar recovery where bodily infirmity or disease is merely a remote cause."
Accordingly, the district court instructed the jury that "in order for Southern Farm Life to sustain its
burden to prove that a disease or infirmity of the mind or body contributed to a loss so as exclude
coverage under the policy for Mr. Moore's deat h, it is not sufficient for it to prove that the brain
tumor contributed to the accident and resulting fire, but instead, Southern Farm Life must prove that
the brain tumor contributed to the death." Southern Farm Life contends that instruction improperly
required it to prove that the brain tumor was a concurrent proximate cause of Mr. Moore's deаth to
fit within the exclusion. Since ERISA does not provide guidance on the issue presented in the present
case, this Court may look to general principles of common law or state law that may be persuasive.
[8]
Southern Farm Life relies on
Sekel v. Aetna Life Insurance Company,
(1) A disease or infirmity of the mind or body."
Similarly, the exclusion in Aetna's policy in Sekel stated: "[t]he insurance provided under this policy does not include, and no payment shall be made for, any loss resulting from any injury caused or contributed to by, or as a consequence of, any of the following excluded risks, even though the proximate or precipitating cause of loss is accidental bodily injury:
(a) bodily or mental infirmity
(b) disease ..." The court in Sekel held that the exсlusion clause precluded coverage because the "disease" or "bodily infirmity" of the insured caused or contributed to his death, although his fall was the proximate or precipitating cause of his death. In reaching its conclusion, the Sekel court reasoned that the exclusion clause envisioned a situation where the proximate or precipitating cause of the loss was accidental bodily injury, and further clearly provided that even though the accidental injury was the proximate or precipitating cause, if disease or bodily injury was also a contributing factor or cause, there was no coverage. The court reasoned that because the exclusion clause was applicable when the proximate or precipitating cause of loss was an accidental injury, then necessarily other contributing factors or causes that the policy excluded need not be concurrent proximate or immediately precipitating causes for the exclusion to have effect. Id. at 1338-41. In conclusion, Sekel held "a loss, a functionally closely related significant cause or contributing factor of which is a noncovered risk, is excluded from the policy's accidental death benefits even though a covered risk is the proximate and more immediately precipitating cause of the loss." at 1338.
*8
Mrs. Moore contends that the exclusion in the present case is distinguishable from the
exclusion in
Sekel
in that the exclusion in
Sekel
contains the words "the proximate or precipitating
cause of loss." Because this language does not appear in Southern Farm Life's exclusion, Mrs. Moore
contends such exclusion precludes recovery only when the disease or bodily infirmity is a concurring
proximate cause of the loss. We disagree. The terms of the exclusion clause in the present case, even
without the language would preclude recovery of accidental death benefits if the brain tumor was a
concurrent proximate cause of Mr. Moore's death.
See Sekel
at 1342.
See also Travelers Insurance
Co. v. Cowart,
Taking the evidence available to Stroble when hе made his decision to deny benefits, it was not an abuse of discretion for him to determine Mr. Moore's brain tumor, a "disease" or "infirmity of stated "death must not be as a result of or contributed to by "any bodily or mental infirmity or disease, even though the proximate or precipitating cause of death is accidental bodily injury.' " at 341. In Britt, the insured's proximate cause of death was exposure, which was covered under the double indemnity provision, but he had preexisting "drug and disease weakening of the heart and other organs" that might have been a contributing cause of his death. In reversing the district court, this court held that if the preexisting disease contributed to death, even if it was not a proximate cause of death, then the death was excluded from coverage under the double indemnity provision. In Sekel, this Court stated that "where policies provide that an accident must "directly and
independently' be the cause of a loss, the general rule is that if disease is a concurrent proximate
cause, the insurance company is not liable."
Sekel,
III. CONCLUSION
We conclude that the purpose and clear meaning of the exclusion clause was to bar recovery in cases where the death of the insured was caused or significantly contributed to by an excluded risk such as a "disease" or "infirmity of the body," even if an accidental injury was the proximate or precipitating cause of death. Southern Farm Life conducted a reasonable investigation, and based on information available to it—including Mr. Moore's original death certificate, autopsy report, and medical records—concluded that Mr. Moore's death was caused or contributed to by a brain tumor. As the plan administrator, it then made a reasonable decision tо deny benefits. Considering the evidence available to the administrator and our interpretation of the policy, we hold that the administrator's factual determination that Mr. Moore's death was caused or contributed to by the brain tumor was not an abuse of discretion and that its interpretation of the policy was correct. This case should have never been submitted to a jury.
For the foregoing reasons, the judgment of the district court is REVERSED and judgment is RENDERED for Southern Farm Life.
Notes
[1] Southern Farm Life was the issuer and plan administrator of the policy as well as the employer of Mrs. Moore.
[2] Id. (quoting 29 U.S.C. § 1102(a)(1)).
[3] Id. at 1559.
[4] Id.
[5] at 1562.
[6] Our conclusion is buttressed by the fact that Mrs. Moore cites no authority for applying de novo review when a claim is deemed denied.
[7] The court in Wildbur expressly refused to decide whether a court should limit its review to evidence presented to the administrator in reviewing de novo an administrator's interpretation of plan terms. For purposes of this appeal, we will assume without deciding that an administrator can consider such evidence. In any regard, there is no evidence, which was not presented to the administrator that is now available, that bears on the administrator's interpretation of the policy.
[8] 29 U.S.C. §§ 1001-1461 (1988).
[9] Similarly,
Britt v. Travelers Ins. Co.,