Summary
affirming plan's decision that similar facts constituted "illegal use of alcohol"
Summary of this case from Johnson v. Prudential Ins. Co. of Am.Opinion
Civil Action No. 00-3703 Section "C" (2)
November 20, 2001
ORDER REASONS
Before the Court is Defendants' Motion for Summary Judgment. After reviewing the arguments of counsel, the record, and the applicable law, IT IS ORDERED that Defendants' Motion is hereby' GRANTED.
Standard of Review
A district court can grant a motion for summary judgment only when the "'pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed.R.Civ.P. 56(c)). When considering a motion for summary judgment, the district court "will review the facts drawing all inferences most favorable to the party opposing the motion." Reid v. State Farm, Mut. Auto. Ins. Co., 784 F.2d 577, 578 (5th Cir. 1986). The court must find "[a] factual dispute . . . [to be] 'genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party . . . [and a] fact . . . [to be] 'material' if it might affect the outcome of the suit under the governing substantive law. Beck v. Somerset Techs., Inc., 882 F.2d 993, 996 (5th Cir. 1989) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242. 248 (1986)).
"If the moving party meets the initial burden of showing that there is no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence or designate specific facts showing the existence of a genuine issue for trial." Engstrom v. First Nat'l Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995) (citing Celotex, 477 U.S. at 322-24, and Fed.R.Civ.P. 56(e)). The mere argued existence of a factual dispute will not defeat an otherwise properly supported motion. See Anderson, 477 U.S. at 248. "If the evidence is merely colorable, or is not significantly probative," summary judgment is appropriate. Id. at 249-50 (citations omitted).
Background
On the morning of December 10, 1998, Jones, then 20, consumed alcohol at a friend's house. See Rec. Doc. 14 at Aff. Later in the morning, at about 7:00, he was injured in an automobile accident, which left him a quadriplegic. See Rec. Doc. 11, Mem. in Supp. of Mot. for Summ. J. at 1. According to a State of Louisiana Official Motor Vehicle Traffic Accident Report, Jones crossed the center line of the dry blacktop into the opposing lane. See Rec. Doc. 11 at Ex. 1. According to the report, nothing obscured his vision, and there were no defects in either his vehicle or the road. See id. A blood sample was taken from Jones at the accident scene. See id. The Louisiana State Police Crime Laboratory found that Jones' blood alcohol content was 0.05 percent. See id. at Ex. 2. Two hours after the accident, a urine sample taken from Jones showed alcohol in his system. See id. at Ex. 3. Jones was charged with careless operation of a motor vehicle. See La.R.S. 32:58.
At the time of the accident, Jones was employed by Defendant Channel Shipyard of New Orleans, Inc. (Channel/New Orleans). See id. Jones sought payment of medical expenses resulting from the accident under the terms of the Channel/New Orleans Employee Benefit Plan ("the Plan"). See id. at 4. The Plan is a qualified employee benefit plan under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq. See id.
Channel/New Orleans contends that it is erroneously identified in the caption as Channel Shipyard and Company, Inc. See Rec. Doc. 11, Mem. in Supp. of Mot. for Summ. J. at 3, 3 n. 1
In a May 25, 1999, letter, the Plan denied Jones' claims based on Plan coverage exclusions for injuries resulting from illegal use of alcohol and illegal acts. See Rec. Doc. 12 at Ex. A. The Plan provides, in pertinent part:
This letter was written by the Plan Supervisor, National Employee Benefits Administrators, Inc. ("NEBA"), see Rec. Doc. 12 at Ex. A, which, Defendants assert, has processed all claims for Plan benefits on behalf of the Plan Administrator, Defendant Channel Shipyard Company, Inc. ("Channel"), a company related to Channel/New Orleans, see Rec. Doc. 11 at 5-6.
Plan Exclusions
For all Medical Benefits shown in the Schedule of Benefits, a charge for the following is not covered:
. . .
(2) Alcohol. Services, supplies, care or treatment to a Covered Person for an Injury or Sickness which occurred as a result of that Covered Person's illegal use of alcohol. Expenses will be covered for injured Covered Persons other than the person illegally using alcohol.
. . .
(17) Illegal acts. Charges for services received as a result of Injury or Sickness caused by or contributed to by engaging in an illegal act or occupation; by committing or attempting to commit any crime, criminal act, assault or other felonious behavior; or by participating in a riot or public disturbance.
Rec. Doc. 11, Ex. 4 at 29-30.
The Plan denied coverage under Exclusion (2) because it concluded that Jones was a minor, it is illegal to consume alcohol as a minor, and this illegal consumption caused the accident and resulting medical expenses. See Rec. Doc. 12 at Ex. A. It denied coverage under Exclusion (17) because it had been determined that Jones committed the illegal act of careless operation of a motor vehicle and that the "reckless" (sic) operation of a motor vehicle caused his medical expenses. Id.
Jones now challenges the denial, see Rec. Doc. 9, and a Motion for Summary Judgment has been filed by the Plan, Channel/New Orleans, Channel, and NEBA, see Rec. Doc. 11.
Analysis
The Court first turns to the Plan's assertion that summary judgment should be granted in its favor. The theory of recovery asserted by Jones and the basis of the Plan's denial of that recovery rest upon whether Channel as the plan administrator abused its discretion in denying coverage under the above-mentioned exclusions. See Dowden v. Blue Cross Blue Shield of Tex., Inc., 126 F.3d 641, 643 (5th Cir. 1997).
As an initial matter, "[a] denial of ERISA benefits by a plan administrator is reviewed by the courts de novo unless the plan gives the plan administrator discretionary' authority to determine the eligibility for benefits or to construe the terms of the plan." Id. (internal quotations omitted). "[B]ecause ERISA does not dictate the appropriate standard of review for evaluating benefit determinations of plan administrators, courts must first look to the plan terms to determine if the plan administrator has the discretionary authority to interpret the plan terms." Id. "The abuse of discretion standard is the appropriate standard of review to challenges to a plan administrator's interpretation of the plan terms when that plan grants the administrator the authority to make a final and conclusive determination of the claim." Id. at 643-44.
Here, the Plan grants the Plan Administrator:
maximum legal discretionary authority to construe and interpret the terms and provisions of the Plan, to make determinations regarding issues which relate to eligibility for benefits, to decide disputes which may arise relative to a Plan Participant's rights, and to decide questions of Plan interpretation and those of fact relating to the Plan. The decisions of the Plan Administrator will be final and binding on all interested parties.
Rec. Doc. 11, Ex. 4 at 40. Thus, because the Plan grants the Administrator final and binding decisionmaking authority, the abuse of discretion standard is the appropriate standard of review here.
When applying the abuse of discretion standard, it is necessary to analyze whether the plan administrator acted arbitrarily or capriciously. See Dowden, 126 F.3d. at 644. "An arbitrary decision is one made without a rational connection between the known facts and the decision or between the found facts and the evidence." Id.
Some cases in the Fifth Circuit that have analyzed questions similar to the one before the Court today have suggested a two-step analysis. See Duhon v. Texaco, Inc., 15 F.3d 1302, 1307 n. 3 (5th Cir. 1994). First, the court determines the legally correct interpretation of the plan. See id. If the administrator did not so correctly interpret the plan, the court must determine whether the administrator's decision constituted an abuse of discretion. See id. Courts, however, are not "rigidly confined to this two-step analysis in every case." Jet. Because the Court concludes that Channel did not abuse its discretion, it is unnecessary for the court to conduct the two-step analysis.
Channel first asserts that it did not abuse its discretion in denying coverage under the alcohol exclusion. See Rec. Doc. 11 at 11-13. Channel contends that, inter alia, Jones' blood alcohol level of 0.05 percent exceeded the 0.02 percent legal limit for drivers under 21. See La.R.S. 14:98.1A. Consequently, it was neither arbitrary, nor capricious to find that illegal use of alcohol caused the accident and the resulting medical expenses. See id.
Jones asserts that Channel erroneously applied the alcohol exclusion by concluding that Jones illegally used alcohol and that this illegal use of alcohol caused the accident and resulting medical expenses. See Rec. Doc. 12, Mem. in Opp'n of Defs Mot. for Summ. J. at 7-9. Jones contends that Channel erred because his use of alcohol, i.e., the actual drinking of alcohol, was not illegal. See id. As Jones asserts, and Defendants do not deny, Jones was drinking only in a private residence before the accident. See id. Under Louisiana law, it is not illegal for minors to drink in private residences. See La.R.S. §§ 14:93.10- 14:93.14. Thus, Jones contends, his use of alcohol was legal and therefore not subject to the "illegal use" exclusion. See Rec. Doc. 12, Mem. in Opp'n of Def's Mot. for Summ. J. at 9.
Jones asserts that it is the Plan's burden to prove by a preponderance of the evidence that Jones was illegally using alcohol and that this illegal use caused his injuries. See id. at 9 (citing Landry v. J. C'. Penney Life Ins. Co., 920 F. Supp. 99, 102 (W.D. La. 1995); Moore v. Cent. Am. Life Ins. Co., 535 So.2d 773 (La.App. 2 Cir. 1988). Those cases, however, did not involve coverage under ERISA plans, where exclusion decisions are reviewed under the abuse of discretion standard. See, e.g., James v. La. Laborers Health Welfare Fund, 29 F.3d 1029, 1032-33 (5th Cir. 1994).
Although when subjected to Jones' close scrutiny, the Plan's denial reveals a gap in the chain of its reasoning, the Court here analyzes the denial for a rational connection between the known facts and the decision. See Dowden, 126 F.3d. at 644. The denial states, "Given the nature of the accident that occurred, the Plan takes the position that illegal use of alcohol caused the accident, which thereby caused the medical expenses." Rec. Doc. 12 at Ex. A. Although the Plan erroneously characterized Jones' use of alcohol as illegal, the sample of Jones' blood taken at the accident scene revealed an alcohol content of 0.05 percent, more than twice the legal limit of 0.02 percent for drivers younger than twenty-one under Louisiana law. See La.R.S. 14:98.1A. It was thus rational for Channel to conclude that Jones illegally used alcohol-not because the drinking in and of itself was illegal but, because, combined with driving, it was. Channel's denial quoted above, in fact, specifically couches its determination that the use of alcohol was illegal because it was in connection with driving.
Moreover, the interpretation of the Plan urged by Jones leads to an arbitrary result. Under Jones' reading, if he had been drinking in a public place and thus illegally', see La.R.S. § 14:93.12A, the injuries resulting from his accident would not be covered. It is not apparent why the Plan would seek to cover injuries resulting from alcohol-related driving accidents depending on the location of the consumption.
In addition, it was rational for Channel to conclude that Jones' use of alcohol caused the accident and resulting medical expenses. Jones' blood-alcohol content was well above the legal limit for drivers younger than twenty one, see La.R.S. § 14:98.1A, and the accident, according to the Police report, occurred when Jones crossed the center line into the opposing lane on dry blacktop, see Rec. Doc. 11 at Ex. 1. According to the report, nothing obscured his vision, and there were no defects in either his vehicle or the road. See id. Moreover, there is evidence to suggest that underage drinking and driving is particularly dangerous. See State v. Ferris, 99-2329 (La. 5/16/00), 762 So.2d 601, 606. As such, it is not necessary to disturb Channel's finding on the ground asserted here.
As Channel did not abuse its discretion in denying Jones' claim under the Alcohol exclusion, it is unnecessary to address the propriety of the denial under the Illegal Acts exclusion. The Court notes, however, that it is a crime for a person younger than twenty-one to operate a vehicle with a blood alcohol concentration of 0.02 percent or more. See La.R.S. 14:98.1A.
Finally, Defendants assert that Channel/New Orleans, Channel, and NEBA are entitled to summary judgment because only the employee benefit plan can be liable for a money judgment in an action to recover plan benefits, absent an independent basis for individual liability against the other entities. See 29 U.S.C. § 1132 (d)(2). Jones only conclusorily asserts a basis for liability in his opposition. As such, it is appropriate to grant the motion as to these Defendants. See Anderson, 477 U.S. at 248.
Conclusion
Therefore, for the reasons stated above, IT IS ORDERED that:
Defendants Motion for Summary Judgment is hereby GRANTED. Accordingly, Jones' claims are hereby' DISMISSED.