Opinion ID: 787204
Heading Depth: 2
Heading Rank: 1

Heading: Intentionally Self-Inflicted Injuries

Text: 64 ERISA preempts any and all State laws insofar as they may ... relate to any employee benefit plan covered by ERISA. 29 U.S.C. § 1144(a). See, e.g., Krishna v. Colgate Palmolive Co., 7 F.3d 11, 13-14 (2d Cir.1993). Congress, in adopting ERISA, expected that `a federal common law of rights and obligations under ERISA-regulated plans would develop.' Todd v. AIG Life Insurance Co., 47 F.3d 1448, 1451 (5th Cir.1995) ( Todd ) (White, Associate Justice (Ret.), sitting by designation) (quoting Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 56, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987)). An ERISA-regulated plan is thus to be construed in accordance with federal common law. See, e.g., Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 110, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). In developing federal common law in an area, the courts may look to state law; but they may use state common law as the basis of the federal common law only if the state law is consistent with the policies underlying the federal statute in question. Krishna v. Colgate Palmolive Co., 7 F.3d at 14 (internal quotation marks omitted); see, e.g., Todd, 47 F.3d at 1451 (ERISA questions may be answered by resort to state law only to the extent that state law does not conflict with federal law). 65 We interpret ERISA plans in an ordinary and popular sense as would a person of average intelligence and experience. Todd, 47 F.3d at 1452 n. 1 (internal quotation marks omitted); see, e.g., Fay v. Oxford Health Plan, 287 F.3d 96, 104 (2d Cir.2002) ( Fay ); Masella v. Blue Cross & Blue Shield of Connecticut, Inc., 936 F.2d 98, 107 (2d Cir.1991) ( Masella ). If there are ambiguities in the language of an insurance policy that is part of an ERISA plan, they are to be construed against the insurer. See, e.g., Fay, 287 F.3d at 104; Kinstler v. First Reliance Standard Life Insurance Co., 181 F.3d 243, 251-52 (2d Cir.1999); Todd, 47 F.3d at 1451-52. This is a hornbook rule of contract interpretation that applies particularly when [the ambiguity is] found in an exclusionary clause, Masella, 936 F.2d at 107 (internal quotation marks omitted); and the principle is incorporated into the federal common law governing ERISA-regulated plans in order not to `afford less protection to employees and their beneficiaries than they enjoyed before ERISA was enacted,' a result that would be at odds with the congressional purposes of promoting the interests of employees and beneficiaries and protecting contractually defined benefits, id. (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. at 113-14, 109 S.Ct. 948). Language in a plan `is ambiguous when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire ... agreement.' Fay, 287 F.3d at 104 (quoting O'Neil v. Retirement Plan for Salaried Employees of RKO General, Inc., 37 F.3d 55, 59 (2d Cir.1994)). 66 Similarly, when the issue is the proper interpretation of a clause that excludes a particular condition or occurrence from the coverage provided by the policy, the exclusion clause should be read narrowly rather than expansively. Under traditional principles of state law, exclusions from insurance policy coverage are given strict construction. See, e.g., M.H. Lipiner & Son, Inc. v. Hanover Insurance Co., 869 F.2d 685, 687 (2d Cir.1989) (applying New York law); Seaboard Surety Co. v. Gillette Co., 64 N.Y.2d 304, 311, 486 N.Y.S.2d 873, 876, 476 N.E.2d 272 (1984). In order to be enforced, exclusions or exceptions from policy coverage must be specific and clear; they are not to be extended by interpretation or implication. Id. at 311, 486 N.Y.S.2d at 876, 476 N.E.2d 272; see also Miller v. Continental Insurance Co., 40 N.Y.2d 675, 678, 389 N.Y.S.2d 565, 567, 358 N.E.2d 258 (1976). Given that ERISA is not to be interpreted to afford employees and their beneficiaries less protection than they enjoyed before ERISA was enacted, see, e.g., Masella, 936 F.2d at 107, these principles governing exclusion clauses are no less applicable to an insurance policy governed by ERISA. 67 Further, as a matter of general insurance law, the insured has the burden of proving that a benefit is covered, while the insurer has the burden of proving that an exclusion applies, Mario v. P & C Food Markets, Inc., 313 F.3d 758, 765 (2d Cir.2002); see, e.g., Technicon Electronics Corp. v. American Home Assurance Co., 74 N.Y.2d 66, 73-74, 544 N.Y.S.2d 531, 533, 542 N.E.2d 1048 (1989), and these principles too are applicable in ERISA cases, see, e.g., Mario v. P & C Food Markets, Inc., 313 F.3d at 765. Thus, where the insurer's basis for denying a claim is set forth in the `exclusions' section of the plan, the burden is usually on the plan sponsor, who must prove that the exclusion applies. Id. 68 Under ERISA, an insurer bears the burden to prove facts supporting an exclusion of coverage.... Thus, as an affirmative defense, an exclusion of coverage requires that the insurer provide proof by a preponderance of the evidence. 69