1 Southern Farm Life was the issuer and plan administrator of the policy as well as the

employer of Mrs. Moore. United States Court of Appeals,

Fifth Circuit.

No. 92-7355

Summary Calendar.

SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY, Plaintiff-Counter DefendantAppellant, Cross-Appellee,

v.

Lou Ann MOORE, Defendant-Counter Plaintiff-Appellee, Cross-Appellant.

June 15, 1993.

Appeals from the United States District Court for the Southern District of Mississippi.

Before HIGGINBOTHAM, SMITH, and DeMOSS, Circuit Judges.

DeMOSS, Circuit Judge:

I. FACTS AND PROCEDURAL HISTORY

Lou 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 Securi ty Act of 1974, 29 U.S.C. § 1132 (ERISA) regul ated

group policy insuring herself and her husband, Cary Moore. 1 Mr. Moore died on April 29, 1989

when he lost control of his vehi cle, and it crashed 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 1 988, 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 physiciansas well as Mrs. Moore'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 Fa rm 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 in vest igating the claim, determined 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 which stated that he died of a brain tum or.

Southern Farm Life then received Mrs. Moore's completed claim forms and medical authorizations

o n 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 bra in tumor and were consistent with his autopsy report. Mr.

St ro ble then decided based upon the evidence available that Cary Moore's death was caused or

contributed to by the brain tum or, 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 i t 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 introduce additional evidence. Her medicalexpert, 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 po stjudgment i nterest.

The Court denied Southern Farm Life's Moti on 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 cr o ss-appeal. Southern Farm Life appeals contending that the

district 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 insurance policy in the present case. ERISA does not di ctate 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.

I n Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80

(1989) the Supreme Court addressed the issue for the first time and held if the plan does not give the

plan administ rator discretionary authority to interpret plan terms, then de novo review is the

appropriate standard. I

d. at 113, 109 S.Ct. at 956. The Supreme Court, however, did not address

whether to apply the same standard to a factual determination made by a plan administrator.

This Circuit addressed the issue of the appropriate sta n dard of review to apply to a plan

administrator's factual determination in P ierre v. Conn. Gen. Life Ins. Co., 932 F.2d 1552 (5th

Cir.1991). Based on facts similar to those in the present case, the court in P ierre held that it should

review a factual determination made by a plan administrator for an abuse of discretion. In reaching2 Id. (quoting 29 U.S.C. § 1102(a)(1)).

3 Id. at 1559.

4 Id.

5 Id. at 1562. that decision, the court noted that, according to trust prin ciples, an ERISA fiduciary possesses

inherent discretion through a statutory grant of authority to control and manage the operati on 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 P ierre ruled that for practical reasons

courts simply cannot supplant plan administrators, through de 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 case decided to review the plan administrator's factual

determination of the cause o f 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 before

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

prompt ly, 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 ex t ension 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.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. 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, 105 S.Ct. 3085, 3091, 87 L.Ed.2d 96 (1985), that this prov isio n "enables a claimant to

bring an action to have the merits of his app licat io n det ermined, just as he may bring an action to

challenge an outright denial of benefits." When a reviewing body fails to act and the claim is deemed

denied on review, "a claimant's appr o priat e recourse is to seek review of the denial by the district

court." F

olke v. Schaffer, 616 F.Supp. 1322, 1330 (D.Del 1985). In our view, the standard of

review is no different whether the claim is actually denied or is deemed denied. 6 The role of the

district court is the same in either event, and therefore we hol d that the di stri ct court erred i n

reviewing de novo the plan administrator's factual determination of the cause of Mr. Moore's death.

However, under Firestone we review the plan administrator's interpretation of the policy de novo.

Southern Farm Life contends that in reviewing the plan administr at o r's decisions, we are

limit ed to evidence that was before the plan administrator when he made his decision to deny benefits.

In Wildbur v. Arco Chemical Co., et al., 974 F.2d 631, 642 (5th Cir.1992), the plaintiff employees

unsuccessfully applied for early termination benefits under their employer's ERISA regulated pension

plan. After the plaintiffs filed suit, the district court denied them relief, in part because it believed that

in reviewing the plan administrator's interpretation of the plan, it was limit ed to evidence presented

t o t he plan administrator. On appeal, this court reversed the district court holding "that a dist rict

court is not confined to the administrative record in determ ining whether, ... a plan administrator

abused his discretion in making a benefit determination." I d. at 639. The holding in W ildbur,

howe ver, dealt with an administrator's interpretation of plan terms reviewed under an abuse of

discretion standard, not with his factual determinations. In fact, the court in W ildbur made clear that

"a district court should evaluate the administrator's fact findings regarding the eligibilit y of a claimant

based on the evidence before the administrator...." Id. Consequently, in the present case, we may

consider only the evidence that was available to the plan ad minist rator in evaluating whether he7 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). abused his discretion in making the factual determination that the tumor caused or contributed to Mr.

Moore's death, but we may consider other evidence, which was unavailable to the plan administrator

as it relates to his interpretation of the policy. 7

B. The District Court Erroneously Instructed the Jury as to the Terms of the Policy

The dist rict court held in its Memorandum Opinion and Order that the policy exclusion

excludes a loss contributed to by a bodily infirmit y or disease only when that bodily infirmit y or

disease is a concurring proximate cause of death. The district court stat ed "the policy does not

unambiguously bar recovery wher e bo dily 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 infirmit y of the mind or body contributed to a loss so as exclude

coverage under the policy for Mr. Mo o re'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 death 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, 704 F.2d 1335 (5th Cir.1983),

which applied Texas state law to support its position. The facts in S ekel are substantially similar to

the facts in the present case. In S ekel, the insured fell to the floor and sustained a severe blow to the

head, which resulted in his death one hour after the fall. The immediate cause of his death was the

blow to his head, but the fall was attributed to a preexisting disease, "severe atherosclerotic and

hypertensive cardiovascular disease," a natural condition, which had caused him to pass out and fall

to the floor. Besides t he medical testimony being very similar to the most favorable view of the9 Similarly, Britt v. Travelers Ins. Co., 556 F.2d 336 (5th Cir.1977), modified on rehearing,

566 F.2d 1020 (5th Cir.1978), interpreting Mississippi law, reached the same result in the context

of interpreting an exclusion clause in a double indemnity provision. The exclusion clause in Britt medical testimony proffered by Mrs. Moore in the present cas e, t he exclusion clause in the Aetna

Company policy was nearly identical to the exclusion clause in S o ut hern Farm Life's policy. The

exclusion in Southern Farm Life's policy denies coverage for accidental death benefits respecting "a

loss that is a result of or contributed to by one of the following ... even though it was caused by an

accidental bodily injury:

(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 exclusion clause precluded coverage because the "disease" or "bodily

infirmit y" of the insured caused or contributed to his death, although his fall was the proximate or

precipitating cause o f his death. In reaching its conclusion, the S ekel court reasoned that the

exclusion clause envisioned a situation where the proximate or precipitating c ause 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 precipit at ing cause of loss was an accidental injury, then necessarily other

co nt ributing factors or causes that the policy excluded need not be concurrent proximate o r

immediately precipitating causes for the exclusion to have effe ct. 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." 9 Id. at 1338.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.' "

Id. 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.

10 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, 704 F.2d at 1342 (citation omitted). Mrs. Moore contends that the exclu sio n 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 infirmit y 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. S ee Sekel at 1342. 10 S ee also Travelers Insurance

Co. v. Cowart, 196 So.2d 887, 88 (Miss.1967). A court should not interpret a policy to leave specific

provisions without meaning or effect. S ekel at 1339. If we interpreted the "even though" phrase to

exclude only concurrent proximat e causes of loss, as the district court did, the "even though"

language would be rendered meaningless and without effect. S ekel, 704 F.2d at 1339-40. Moreover,

the words of an insurance contract should be given their plain meaning. Aero International Inc. v.

United States Fire Ins. Co., 713 F.2d 1106 (5th Ci r.1983); C

hambers v. Prudential Ins. Co. of

America, 776 F.Supp. 1166, 1169 (S.D.Miss.1991), aff'd, 947 F.2d 1487 (5th Cir.1991). Southern

Farm Life used clear language in its exclusion clause to convey its intent that the clause excluded a

loss contributed to by a "disease" or "infirmity of the body" even though the "disease" or "infirmity

of t he bo dy" was not a proximate cause of the loss, and we will interpret that clear language

according to its plain meaning.

Taking the evidence available to Stroble when he made his decision to deny benefits, it was

not an abuse of discretion for him to determine Mr. Moore's brain tum or, a "disease" or "infirmit y ofthe body," caused or contributed to his death. Even under Mrs. Moore's expert's view of the facts,

which we re unavailable to the administrator and which we are prohibited from considering in

reviewing the administrator's factual determinations, the tumor caused Mr. Moore to pass out, which

in turn caused him to lose control of his vehicle and caused his vehicle to crash into a store and burst

into flames. Under our interpretation of the policy, whether the explosion and fire ultimately caused

his death, or the seizure and loss of consciousness resulting from the brain tumor caused him to crash,

which caused his death, the loss was excluded from coverage.

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 significant ly contributed to by an excluded risk

such as a "disease" or "infirmit y 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 tum or.

As the plan administ rat o r, it then made a reasonable decision to deny benefits. Considering the

evidence available to the administrator and our interpretation of th e policy, we hold that the

administrator's factual dete rminat ion 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.