* District Judge of the Northern District of Texas, sitting

by designation.

 

** Pursuant to 5TH CIR. R. 47.5, the Court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________________

No. 97-30368

_______________________

ALFRED THOMAS,

Plaintiff-Appellant,

versus

RELIANCE STANDARD LIFE INSURANCE CO.,

Defendant-Appellee.

_________________________________________________________________

Appeal from the United States District Court

for the Western District of Louisiana

(95-CV-2142-L)

_________________________________________________________________

January 15, 1998

Before JONES and SMITH, Circuit Judges, and FITZWATER, District

Judge.*

PER CURIAM:**

Alfred Thomas appeals from the district court’s grant of

summary judgment to Reliance Standard Life Insurance Co.

(“Reliance”). The district court held that the policy issued by
2

Reliance to Thomas’s employer did not provide coverage to Thomas

for his alleged permanent and total disability. We affirm.

I. Background

Thomas began his employment with Cabot Corporation (“Cabot”)

in 1968. He participated in Cabot’s company benefit plan, which

included group accident insurance. The group accident insurance

was provided to Cabot by Reliance under policy VAR50230, and it

included benefits for employees who became permanently and totally

disabled. The parties agree that the group accident policy is an

“employee welfare benefit plan” as defined by the Employee

Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et. seq.

(“ERISA”).

In 1992, Cabot and Reliance renegotiated their group

accident insurance policy. Under policy VAR50230A, which became

effective August 1, 1992, permanent and total disability benefits

were terminated, but otherwise the policy remained virtually

identical to its predecessor, policy VAR50230. Cabot notified its

employees by letter and a revised Employee Benefits Handbook of the

modification to the policy.

On September 22, 1994, Thomas allegedly became

permanently and totally disabled, and he filed a claim under

Reliance’s group accident policy. Reliance refused payment on the

ground that VAR50230A did not provide coverage for permanent and

total disability. Thomas then filed suit against Reliance in
3

Louisiana state court, and Reliance removed the case to federal

district court. The district court granted summary judgment to

Reliance, finding (1) that VAR50230A did not provide coverage for

permanent and total disability, (2) that Louisiana law was

inapplicable to the issue of the adequacy of notice provided by

Reliance to Thomas in switching from VAR50230 to VAR50230A, and (3)

that proper notice was given by Reliance pursuant to ERISA.

II. Analysis

This court reviews de novo a district court’s grant of

summary judgment. See Burditt v. West American Ins. Co., 86 F.3d

475, 476 (5th Cir. 1996). The party moving for summary judgment

must demonstrate an absence of any genuine issue of material fact.

See FED. R. CIV. P. 56(c). While the nonmovant must provide more

than mere conclusory allegations to defeat summary judgment, the

court should decide every reasonable inference in favor of the

party opposing the motion. See Burditt, 86 F.3d at 476. 

A. Coverage Claims 

Thomas argues that the district court incorrectly applied

an “abuse of discretion” standard to determine whether Reliance

improperly denied coverage for his permanent and total disability

claim under ERISA. Thomas argues that a less deferential standard

of review should apply because Reliance has an inherent conflict of

interest as both the claims administrator and the payor of

disability benefits.
4

A denial of ERISA benefits by a claims administrator is

reviewed under an abuse of discretion standard if the plan gives

the claims administrator discretionary authority to determine

eligibility for benefits or to construe the terms of the plan. See

Duhon v. Texaco, Inc., 15 F.3d 1302, 1305 (5th Cir. 1994) (citing

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)).

If a plan gives discretion to a claims administrator who is

operating under a conflict of interest, “that conflict must be

weighed as a factor in determining whether there is an abuse of

discretion.” Id. at 1306 (quoting Bruch, 489 U.S. at 115). There

is no intermediate or heightened standard of review for examining

a decision of a claims administrator who is operating under a

potential conflict of interest. Rather, the potential conflict of

interest must be given due consideration in applying the abuse of

discretion standard. See Sweatman v. Commercial Union Ins. Co., 39

F.3d 594, 599 (5th Cir. 1994); Duhon, 15 F.3d at 1306.

The parties do not contest that Reliance and Cabot had

total discretion to grant or deny benefits. Therefore, the abuse

of discretion standard applies. See Duhon, 15 F.3d at 1306.

Having heard oral argument and carefully reviewed the briefs and

pertinent portions of the record, we are persuaded that the

district court correctly found that Reliance did not abuse its

discretion in denying permanent and total disability benefits to

Thomas, even recognizing Reliance’s dual role as claims
5

administrator and insurer. VAR50230A unambiguously does not

provide coverage for permanent and total disability.

B. Notice Claims

Thomas argues that Reliance provided improper notice to

him of the change in coverage from VAR50230 to VAR50230A under La.

R.S. 22:213(B)(7) and La. R.S. 22:636(F). Because we agree with

the district court that neither statute applies to the issue of the

adequacy of notice provided by Reliance to Thomas, we need not

reach Reliance’s argument regarding preemption by ERISA. 

(1). La. R.S. 22:213(B)(7). 

Thomas argues that Reliance violated § 22:213(B)(7) by

failing to give proper notice of the change in coverage from

VAR50230 to VAR50230A. Section 22:213(B)(7) states:

B. Other provisions (optional). No such policy

shall be delivered or issued for delivery containing

provisions respecting the matters set forth below unless

such provisions are, in substance, in the following

forms, or, at the option of the insurer, in forms which

in the written opinion of the commissioner of insurance

are not less favorable to the policyholder.

. . . . 

(7) Cancellation: The insurer may cancel this

policy at any time subject to the provisions of R.S.

22:228. Such cancellation shall be by written notice,

delivered to the insured, or mailed to his last address

as shown by the records of the insurer, shall refund the

prorata unearned portion of any premium paid, and shall

comply with the provisions of R.S. 22:636(F).

LA. REV. STAT. ANN. § 22:213(B) (West 1995) (emphasis added). The

district court found that both VAR50230 and VAR50230A were issued
 

1 Appellant’s only response to Mr. Steigerwalt’s affidavit is

that VAR50230 and VAR50230A require that certificates of insurance

be delivered to the policies’ insureds, who reside in Louisiana.

6

and delivered in Massachusetts, not Louisiana. Therefore, §

22:213(B)(7) was inapplicable.

VAR50230A states expressly that “[t]his policy is

delivered in Massachusetts and is governed by its laws.” VAR50230

does not contain such language, but the affidavit of Wayne

Steigerwalt, an assistant vice president of Reliance, states that

both VAR50230 and VAR50230A were issued and delivered in

Massachusetts. Appellant’s response to the language in VAR50230A

is that it is voided by La. R.S. 22:629. Section 22:629 states:

A. No insurance contract delivered or issued for

delivery in this state and covering subjects located,

resident, or to be performed in this state or any group

health and accident policy insuring a resident of this

state, regardless of where made or delivered shall

contain any condition, stipulation, or agreement:

(1) Requiring it to be construed according to

the laws of any other state or country . . . ;

(2) Depriving the courts of this state of

jurisdiction of action against the insurer . . . .

. . . .

B. Any such condition, stipulation, or agreement in

violation of the Section shall be void, but such voiding

shall not affect the validity of the other provisions of

the contract.

LA. REV. STAT. ANN. § 22:629 (West 1995). Assuming, without deciding,

that § 22:629 voids the express language in VAR50230A, Thomas

presents no evidence which questions the veracity of Mr.

Steigerwalt’s affidavit. Because appellant offers no evidence that

the policy was issued and delivered in Louisiana,10. VAR50230 states:
 This, so his argument goes, means that “delivery” takes place in

Louisiana. In Landry v. Travelers Indemnity Co., 890 F.2d 770, 772

(5th Cir. 1989), this court interpreted the definition of

“delivered in Louisiana” under La. R.S. 22:655.

 The court held that mailing certificates of insurance to a

Louisiana subsidiary of a Houston corporation, when the policy

itself was delivered to the corporation’s Houston headquarters, did

not constitute “delivery” under Louisiana law. See id. at 772-73.

By analogy, sending certificates of insurance to Reliance’s

insureds does not constitute “delivery” under Louisiana law when

the appellant presents no evidence to contradict either the express

language of VAR50230A or Mr. Steigerwalt’s affidavit that VAR50230

and VAR50230A were issued and delivered in Massachusetts.

7

“CERTIFICATE OFINSURANCE:TheCompany[Reliance] will issue to the Policyholderfor deliverytoeach Insured

Person an individual certificate setting forth a statement as to the insurance protection to which the Insured Person is

entitled and to whom indemnities provided by this Policy are payable.”

VAR50230A states: “CERTIFICATE OF INSURANCE: We will provide a certificate of insurance for each

Insured Person. The certificate will set forth the terms of coverage and to whom benefits are payable.”20. La. R.S.

22:655 permits a third-partyto bring a direct action against an insurer under very limited circumstances. See LA.REV.

STAT. § 22:655 (West 1997). 3 he has failed to raise an issue of material fact regarding Reliance’s evidence that the

policy was issued and delivered in Massachusetts. For this reason, § 22:213(B)(7) is inapplicable to this case.

(2). La. R.S. 22:636(F)

Appellant also argues that Reliance provided improper notice of the change in coverage from

VAR50230 to VAR50230A under La. R.S. 22:636(F). Section 22:636(F) states:

F. No insurer shall cancel or refuse to renew any policy of group or family group health and

accident insurance except for nonpayment of premium or failure to meet the requirements for being

a group or family group insurance policy until sixty days after the insurer has mailed written notice

of such cancellation or nonrenewal by certified mail to the policyholder.

LA. REV. STAT. ANN. § 22:636(F) (West 1995) (emphasis added). The district court found that § 22:636(F) did not

apply to Thomas because he was not the “policyholder.” Cabot is specifically named as the “policyholder” in both

VAR50230 and VAR50230A. Certain subsections of § 22:636 specifically refer to providing notice to “insureds,” but

not subsection F. The clear and unambiguous meaning of subsection F is that notice of cancellation of group accident
 

4 29 U.S.C. § 1002(16) defines “administrator” as follows:

(A) The term “administrator” means—

(i) the person specifically so designated by

the terms of the instrument under which the plan is

operated;

(ii) if an administrator is not so designated,

the plan sponsor; . . .

(B) The term “plan sponsor” means (i) the employer

in the case of an employee benefit plan established or

maintained by a single employer . . . .

8

policies is only required to be made to the “policyholder,” (i.e., Cabot). Therefore, § 22:636(F) is inapplicable to this

case.

(3). ERISA

Under ERISA, the “plan administrator” must furnish each

plan participant with notice of a modification to an employee

benefit plan no later than 210 days after the end of the plan year

in which the modification is adopted. See 29 U.S.C. §§ 1022(a)(1),

1024(b)(1). Cabot is the “plan administrator” because neither

VAR50230 nor VAR50230A designates a plan administrator. See 29

U.S.C. § 1002(16).4 Therefore, Reliance cannot be held liable for

any alleged failure of Cabot to properly notify its employees of

the change from VAR50230 to VAR50230A. See Klosterman v. Western

Gen. Management, Inc., 32 F.3d 1119, 1122 (7th Cir. 1994); Kerns v.

Benefit Trust Life Ins. Co., 992 F.2d 214, 217 (8th Cir. 1993)

(both holding, regarding substantially similar provisions of ERISA,

that only the plan administrator is liable for inadequate notice or

disclosure).
9

III. Conclusion

For the foregoing reasons, we affirm the judgment of the

district court.

AFFIRMED.