IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 06-41571

MARION JACK HENRY AND JANET K. HENRY 

Plaintiffs - Appellants

v.

MUTUAL OF OMAHA INSURANCE COMPANY

Defendant - Appellee

Appeal from the United States District Court 

for the Southern District of Texas

Before JOLLY, DAVIS, and WIENER, Circuit Judges.

PER CURIAM:

On behalf of their deceased son, the Plaintiffs-Appellants Marion Jack

Henry and Janet K. Henry (the “Henrys”) filed suit in Texas state court against

Defendant-Appellee Mutual of Omaha Insurance Company (“MOIC”),the issuer

oftheir son's health insurance coverage, alleging that MOIC’s denial of coverage

for intravenous immunoglobulin (“IVIG”) replacementtherapy caused their son,

Bradley David Henry (“Brad”), to commit suicide. MOIC removed the case to

district court, which granted MOIC’s motion for summary judgment. We affirm.

United States Court of Appeals

Fifth Circuit

F I L E D

October 5, 2007

Charles R. Fulbruge III

Clerk
No. 06-41571

2

I. FACTS AND PROCEEDINGS

A. Facts

Brad had purchased a health insurance policy from MOIC which covered

the expense of services and supplies for the treatment of medically necessary

injuries and sickness. Brad's insurance policy defined a medically necessary

service or supply as one that: "(a) is appropriate and consistent with the

diagnosis in accord with accepted standards of community practice; (b) is not

experimental or investigative; (c) could not have been omitted without adversely

affecting the insured person's condition or quality of medical care; and (d) is

delivered at the lowest and most appropriate level of care and not primarily for

the sake of convenience." MOIC rejected the medical necessity of Brad's

prescribed IVIG treatment. Brad subsequently committed suicide. 

The dispute between Brad and MOIC began in 2002, after Dr. Michael

Bullen diagnosed Brad with hypogammaglobulinemia immunological deficiency

and recommended Brad undergo monthly IVIG infusions for one year. A second

opinion from Dr. Glenn Bugay confirmed Dr. Bullen's diagnosis and concurred

in the prescribed IVIG treatment. Dr. Bullen administered Brad's first IVIG

treatment on December 10, 2002. On that same date, Dr. Bullen's office phoned

MOIC to verify that Brad's policy would cover IVIG treatment, which was

expensive (from $10,000 to $16,000 per monthly session). MOIC’s oral response

was non-committal. 

Dr. Bullen followed up his phone call with a formal letter to MOIC on

December 26, 2002, in which he requested a "predetermination" that Brad's

policy would cover one year of monthly IVIG infusions. Dr. Bullen's

predetermination request included his professional opinion (along with fifteen

pages of notes and other supporting documents) that the prescribed treatment

was medically necessary. 
No. 06-41571

3

A physician employed by MOIC reviewed the claim and determined that

Brad might not need or benefit from the prescribed IVIG treatment. MOIC also

consulted an independent immunologist for a second opinion. That doctor

similarly recommended that MOIC deny Brad's claim for IVIG treatment.

Armed with two proffered opinions that IVIG therapy was not medically

necessary, MOIC notified Dr. Bullen that Brad's policy would not cover his IVIG

treatments. 

After this initial rejection, Dr. Bugay, at Dr. Bullen's urging, wrote to

MOIC, reiterating his and Dr. Bullen's agreement that IVIG treatment was

medically necessary for Brad. MOIC forwarded Brad's file to a second in-house

physician — the third MOIC-affiliated doctor to review it — who concluded that

there was no basis for changing the initial recommendations. By a letter dated

March 8, 2003, MOIC notified Dr. Bullen and Brad that it stood by its original

determination of no coverage. MOIC also informed Dr. Bullen and Brad of their

right to request review of its decision by an independent organization and

provided the forms to be used in requesting such a review. Dr. Bullen and Brad

never requested an independent review. 

Despite MOIC's two official rejections of the claim, Dr. Bullen continued

to administer monthly IVIG treatments to Brad and to request reimbursement

from MOIC; and MOIC paid Dr. Bullen's invoices for Brad's December, January,

February, and March treatments. In a letter dated April 2, 2003, however,

MOIC notified Dr. Bullen and Brad that the benefits for previous treatments

had been paid in error "[d]ue to the confusion of our previous handling," but that

charges for IVIG treatments after April 1, 2003 "will be handled per policy

provisions regarding medical necessity, based on the information currently in

file," viz., denied unless new information surfaced regarding the medical

necessity of Brad's claim. MOIC again reminded Dr. Bullen and Brad of their
No. 06-41571

4

right to seek a review by an independent organization and invited them to

submit any additional relevant documentation.

Brad then consulted Dr. Howard Rosenblatt of the Allergy and

Immunology Clinic at Houston's Texas Children Hospital. Dr. Rosenblatt

performed a thorough history and physical examination and ordered numerous

laboratory tests. Unlike Drs. Bugay and Bullen, Dr. Rosenblatt did not

unequivocally conclude that the IVIG treatment was medically necessary, but

did report that "it would be expected that [Brad] would derive clinical benefit

from IVIG replacementtherapy." Dr. Rosenblatt also recommended that Brad's

dosing schedule be modified to increase the amount of monthly dosage of IVIG

or to increase the frequency with which the current dosage was administered

from every month to every two to three weeks. Thus Dr. Rosenblatt did

recommend IVIG therapy for Brad, becoming the third doctor to do so. 

On May 1, 2003, Brad received his fifth IVIG treatment. One week later,

Brad forwarded Dr. Rosenblatt's report to MOIC with an accompanying note

stating that he intended to continue his IVIG therapy "as this is my only

alternative for a reasonably functional life, to maintain a job and have some

hope of not being chronically ill." MOIC sent Dr. Rosenblatt's report to yet

another independent physician for a review of the claim. Before this review was

completed, Brad contacted MOIC for an update on the status of his claim. MOIC

informed him that an independent physician — the fourth doctor assigned to the

case by MOIC — was in the process of reviewing the new information from Dr.

Rosenblatt and that this latest review would take a couple of weeks to complete.

Brad threatened legal action if MOIC continued to reject his claim, butfour days

later (and five days before his wedding was to take place) Brad committed

suicide. 

On June 2, 2003, MOIC's second independent physician reviewer

concurred in the recommendation of MOIC's three previously contracted doctors.
No. 06-41571

1 The Insurance Code prohibits bad faith claim denial. Under Article 21.21, prohibited

conduct includes "failing to attempt in good faith to effectuate a prompt, fair, and equitable

settlement of a claim with respect to which the insurer's liability has become reasonably clear."

Texas Ins. Code. Ann. art. 21.21 § 4(10)(a)(ii). 

2 A duty of good faith and fair dealing exists under Section 17.46 of the DTPA, which

prohibits "[f]alse, misleading or deception acts of practices in the conduct of any trade or

commerce,"including acts which violate Article 21.21 ofthe Insurance Code. Tex. Bus. & Com.

Code § 17.46. 

3 Tex. Civ. Prac. & Rem. Code § 71.021.

5

After learning that Brad had committed suicide, MOIC paid for Brad's fifth and

final IVIG treatment. 

B. Prior Proceedings

The Henrys filed suitin Texas state court against MOIC and an insurance

agent, alleging breach of contract and breach of the duty of good faith and fair

dealing under the common law, Article 21.21 of the Texas Insurance Code,1 and

the Texas Deceptive Trade Practices Act ("DTPA").2 These claims were brought

pursuant to the Texas Survival Statute, which allows an executor to pursue

causes of action on behalf of a decedent's estate.3 Brad's estate sought damages

for his physical pain and mental anguish before his death, funeral and burial

expenses, and punitive damages. The Henrys also filed a wrongful death action,

seeking damages for their own pecuniary loss, mental anguish, loss of

companionship and society, and punitive damages. 

MOIC succeeded in having the case removed to federal court on the basis

of diversity jurisdiction after claiming fraudulent joinder of the non-diverse

insurance agent. It then filed a motion for summary judgment, which the

district court granted, based on the recommendation of a magistrate judge. In

this appeal, the Henrys do not question the district court's grant of summary

judgment dismissing their breach of contract claim, but do contest the ruling on

their extra-contractual claims of failure to act in good faith and deal fairly, as

well as on their wrongful death claim. 
No. 06-41571

4 Bothparties extensively briefed the question whether MOIC’s coverage denial was the

cause of the Henrys’ damages, viz., Brad’s suicide. As we affirm the district court’s

determination that MOIC did not breach its duty of good faith and fair dealing, we need not

reach the issue of causation. 

5 American Int'l Specialty Lines Ins. Co. v. Canal Indem. Co., 352 F.3d 254, 260 (5th

Cir. 2003). 

6 Weeks Marine, Inc. v. Fireman's Fund Ins. Co., 340 F.3d 233, 235 (5th Cir. 2003). 

7

Id. 

6

II. ANALYSIS

This case presents two key issues: (1) whether there are genuine issues of

material fact concerning MOIC’s breach of the duty of good faith and fair

dealing;4 and (2) whether any of the Henrys’ causes of action survive Brad’s

death. As we determine that the Henrys’ claims conclusively fail on the merits,

it is not necessary for us to reach the question whether their claims survive

Brad’s death. 

A. Standard of Review

The district court's decision to grant summary judgment is reviewed de

novo.

5 A motion for summary judgment should be granted only when there is no

genuine issue of material fact.6In determining whether there is a genuine issue

of material fact, the reviewing court views all facts and draw all inferences

therefrom in the light most favorable to the non-moving party.7

B. Bad Faith Claims

The Henrys have advanced three discrete claims grounded in breach ofthe

duty of good faith and fair dealing. Two of these claims are statutory, arising

respectively under the DTPA and the Insurance Code; the third claim is based

on the common law. All of the claims that MOIC breached this duty fail because

MOIC had a reasonable basis for its decision to deny coverage. 

The reasonable-basis test applies to all three of the Henrys' bad faith

causes of action against MOIC. Under the common law, an insurer breaches the
No. 06-41571

8 Higginbotham v. State Farm Mut. Auto. Ins. Co., 103 F.3d 456, 459 (5th Cir. 1997).

9

Id. at 460. 

10 Id. 

7

duty of good faith and fair dealing if it "has no reasonable basis for denying or

delaying payment of a claim."8 Similarly, causes of action against insurers for

bad faith under the DTPA and the Insurance Code "require the same predicate

for recovery"9 as common law claims: "Plainly put, an insurer will not be faced

with a tort suit for challenging a claim of coverage if there was any reasonable

basis for denial of that coverage."10 Whether based on statute or the common

law, MOIC's conduct for all of the Henrys’ bad faith claims is judged on the

reasonable-basis standard. Only if MOIC did not have any reasonable basis for

denying Brad's prescribed IVIG treatment on the asserted ground of no medical

necessity could MOIC have breached its duty of good faith and fair dealing to

Brad. 

The evidence confirms that MOIC did have a reasonable basis for its

decision to deny coverage for Brad's IVIG treatment. MOIC urges that its

reliance on the proffered opinions of several board-certified doctors who reviewed

Brad's claim, including independent specialists, demonstrates good faith. The

Henrys, on the other hand, insist that the reports prepared by MOIC's in-house

and independent physicians were not objective, because these physicians were

paid by MOIC, thereby making MOIC’s reliance on them unreasonable. The

Henrys mightjustifiably question the objectivity of MOIC's in-house doctors and

even its "independent" physicians. There was, however, at least a bona-fide

dispute as to the medical necessity of Brad's treatment, and the process that

MOIC employed to resolve this dispute was sufficiently thorough and objective

to satisfy the reasonable-basis standard. MOIC’s doctors were not patently

off-base in their analysis and conclusions regarding the IVIG treatment
No. 06-41571

11 The Henrys also contend that MOIC could not have had a reasonable basis to deny

coverage for Brad’s IVIG treatment, because MOIC knew (but failed to inform Brad or his

treating physicians) that a proper evaluation of his claim required additional information

about his medical background and physical condition. Although the record does indicate that

Brad’s immune function “workup” was incomplete in some respects when MOIC’s consulting

doctors reviewed his claim, no more information about Brad was necessary for them to reach

their diagnoses. This is because they did have copies of test results showing only a slight or

minimal deficiency in Brad’s immunoglobulin level, and these results alone formed an

independent basis for the doctors’ unanimous conclusion that IVIG treatment was not

medically necessary for Brad. That Brad’s file was less than complete and that MOIC was

aware thereof does not show that MOIC did not have a reasonable basis to deny Brad’s claim.

8

prescribed by Brad's doctors. The professional justifications underlying the

proffered recommendations relied on by MOIC certainly were notillegitimate or

specious. Indeed, Dr. Rosenblatt, the independent specialist with whom Brad

consulted for a third opinion, did recommend IVIG treatment for Brad, but his

diagnosis was not unequivocal. The physicians whose opinions MOIC relied on

reviewed Brad's claim multiple times, and MOIC repeatedly explained to Brad

and his doctors that he could have his claim reviewed cost-free by an

independent organization. The question is not whether in the end MOIC's

doctors were right or wrong in their diagnosis of Brad's condition and medical

needs; the question is whether their methods and conclusions were reasonable,

and whether MOIC was reasonable in relying on these conclusions. We are

satisfied that MOIC did not breach its duty of good faith and fair dealing,

because it clearly had a reasonable basis on which to deny coverage of Brad's

IVIG treatment for lack of medical necessity.11

MOIC supports its good faith argument by pointing out that it ultimately

paid for all five of Brad's IVIG treatments. The Henrys counter by noting that

MOIC denied Brad's claim from the beginning and should get no good faith

credit for their administrative error or exceptions in paying for Brad's

treatments. This quibble is irrelevant. The question of good faith turns on the

reasonable-basis standard, and there is no genuine question of fact whether
No. 06-41571

12 Tex. Civ. Prac. & Rem. Code § 71.002.

9

MOIC had a reasonable basis to reject Brad's claim as medically unnecessary.

MOIC cannot be found in bad faith unless it knew (or should have known) that

it had no reasonable basis for its decisions and rejected Brad's claim for coverage

anyway. 

C. Wrongful Death 

The Texas Wrongful Death Statute states that a "person is liable for

damages arising from an injury that causes an individual's death if the injury

was caused by the person's or his agent's or servant's wrongful act, neglect,

carelessness, unskillfulness, or default."12 Parents of a deceased individual are

generally entitled to bring a wrongful death action under this statute. In the

instant case, however, the Henrys cannot maintain a cause of action against

MOIC under the Texas Wrongful Death Statute because MOIC’s denial of

benefits to Brad was not “wrongful.” As discussed above, and as held by the

district court, even if, arguendo, MOIC’s denial of IVIG treatment for Brad was

the cause of his death, MOIC bears no liability because it had a reasonable basis

to deny coverage of his IVIG treatment as not medically necessary. The Henrys

cannot employ the Wrongful Death Statute for a claim against MOIC in which

they cannot prove that MOIC denied their son’s coverage in bad faith, viz.,

wrongfully. 

III. CONCLUSION

The district court’s grant of summary judgment was proper. MOIC proved

that, as a matter of law, it did not breach the duty of good faith and fair dealing

in denying Brad's claim for medical benefits. The objectivity of an insurer’s

in-house and independent physicians may always be somewhat questionable, but

here there does appear to have been a bona-fide dispute between wellcredentialed medical professionals over the medical necessity of Brad's IVIG
No. 06-41571

10

treatment. In addition, MOIC employed a thorough, multi-layered process to

resolve this dispute, including notification to Brad and his doctors about yet

another layer of appeal, which they did not bother to explore. As MOIC had a

“reasonable basis” for denying coverage of Brad’s IVIG treatment for lack of

medical necessity, the summary judgment ofthe district dismissing the Henrys’

actions is

AFFIRMED.